Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File No. 333-132456

Byrna Technologies Inc.
(Exact name of registrant as specified in its charter)

Delaware		71-1050654
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)
100 Burtt Road, Suite 115
Andover, MA 01810
(Address of Principal Executive Offices, including zip code)

(978) 868-5011
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001, par value per share	BYRN	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of October 10, 2023, the Company had 24,143,014 issued and 21,977,027 outstanding shares of common stock.

TABLE OF CONTENTS

		Page

PART 1 – FINANCIAL INFORMATION		2

Item 1.	Condensed Consolidated Financial Statements	2

	Condensed Consolidated Balance Sheets as of August 31, 2023 (unaudited) and November 30, 2022	2

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended August 31, 2023 and 2022 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended August 31, 2023 and 2022 (unaudited)	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended August 31, 2023 and 2022 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26

Item 4.	Controls and Procedures	26

PART II – OTHER INFORMATION		27

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

SIGNATURES		29

PART 1 – FINANCIAL INFORMATION

ITEM 1.

Condensed Consolidated Financial Statements

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Balance Sheets

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

	*August 31,*			*November 30,*
	*2023*			*2022*
	*Unaudited*
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	13,654		$	20,068
Accounts receivable, net		3,642			5,915
Inventory, net		16,687			15,462
Prepaid expenses and other current assets		963			1,200
Total current assets		34,946			42,645
LONG TERM ASSETS
Intangible assets, net		3,655			3,872
Deposits for equipment		1,520			2,269
Right-of-use asset, net		1,919			2,424
Property and equipment, net		3,638			3,309
Goodwill		2,258			2,258
Loan to joint venture		1,451			—
Other assets		204			272
TOTAL ASSETS	$	49,591		$	57,049

LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	4,558		$	7,708
Operating lease liabilities, current		653			757
Deferred revenue, current		651			458
Total current liabilities		5,862			8,923
LONG TERM LIABILITIES
Deferred revenue, non-current		139			340
Operating lease liabilities, non-current		1,367			1,792
Total liabilities		7,368			11,055

COMMITMENTS AND CONTINGENCIES (NOTE 21)

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. 24,143,014 shares issued and 21,977,027 shares outstanding as of August 31, 2023 and, 24,018,612 shares issued and 21,852,625 outstanding as of November 30, 2022		24			23
Additional paid-in capital		129,707			125,474
Treasury stock (2,165,987 shares purchased as of August 31, 2023 and November 30, 2022)		(17,500	)		(17,500	)
Accumulated deficit		(68,747	)		(61,383	)
Accumulated other comprehensive loss		(1,261	)		(620	)

Total Stockholders’ Equity		42,223			45,994

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	49,591		$	57,049

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Amounts in thousands except share and per share data)

(Unaudited)

	*For the Three Months Ended*						*For the Nine Months Ended*
	*August 31,*						*August 31,*
	*2023*			*2022*			*2023*			*2022*
Net revenue	$	7,085		$	12,422		$	27,004		$	32,018
Cost of goods sold		3,927			5,545			12,402			14,403
Gross profit		3,158			6,877			14,602			17,615
Operating expenses		7,267			8,283			21,522			25,045
LOSS FROM OPERATIONS		(4,109	)		(1,406	)		(6,920	)		(7,430	)
OTHER INCOME (EXPENSE)
Foreign currency transaction gain (loss)		(54	)		28			(238	)		(67	)
Interest income (expense)		239			(3	)		525			10
Loss from joint venture		(287	)		—			(625	)		—
Other expenses		(7	)		(3	)		(270	)		(183	)
LOSS BEFORE INCOME TAXES		(4,218	)		(1,384	)		(7,528	)		(7,670	)
Income tax (provision) benefit		124			(150	)		165			(82	)
NET LOSS		(4,094	)		(1,534	)		(7,363	)		(7,752	)

Foreign currency translation adjustment for the period		585			(639	)		(641	)		(624	)
COMPREHENSIVE LOSS	$	(3,509	)	$	(2,173	)	$	(8,004	)	$	(8,376	)

Net loss per share – basic and diluted	$	(0.19	)	$	(0.07	)	$	(0.34	)	$	(0.34	)
Weighted-average number of common shares outstanding - basic and diluted		21,960,163			21,751,879			21,895,815			22,704,565

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	*For the Nine Months Ended*
	*August 31,*
	*2023*			*2022*
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(7,363	)	$	(7,752	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		4,689			4,061
Depreciation and amortization		921			638
Provision for inventory		648			—
Operating lease costs		505			360
Loss from joint venture		625			—
Impairment loss		176			—
Changes in assets and liabilities:
Accounts receivable		1,968			(1,003	)
Deferred revenue		(8	)		167
Inventory		(2,317	)		(8,917	)
Prepaid expenses and other current assets		182			(85	)
Other assets		(97	)		142
Accounts payable and accrued liabilities		(3,027	)		(151	)
Operating lease liabilities		(530	)		(244	)
NET CASH USED IN OPERATING ACTIVITIES		(3,628	)		(12,784	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(342	)		(2,232	)
Equity method investment in joint venture		(520	)		—
Purchase of patent rights		—			(44	)
Cash paid for asset acquisition, net of cash acquired		—			(1,933	)
Loan to joint venture		(1,556	)		—
NET CASH USED IN INVESTING ACTIVITIES		(2,418	)		(4,209	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock option exercises		—			457
Repurchase of common stock		—			(15,000	)
Payment of taxes withheld on issuance of restricted stock units		(456	)		—
NET CASH USED IN FINANCING ACTIVITIES		(456	)		(14,543	)
Effects of foreign currency exchange rate changes		88			(407	)
NET DECREASE IN CASH AND CASH EQUIVALENTS FOR THE PERIOD		(6,414	)		(31,943	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		20,068			56,400
CASH AND CASH EQUIVALENTS END OF PERIOD	$	13,654		$	24,457

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Nine Months Ended August 31, 2023 and 2022

(Amounts in thousands except share numbers)

(Unaudited)

					*Additional*			*Treasury*									*Accumulated Other*
	*Common Stock*				*Paid-in*			*Stock*						*Accumulated*			*Comprehensive*
	*Shares*		$		*Capital*			*Shares*			$			*Deficit*			*Loss*			*Total*
Balance, May 31, 2023		24,032,248	$	23	$	128,425			(2,165,987	)	$	(17,500	)	$	(64,653	)	$	(1,846	)	$	44,449
Stock-based compensation		—		—		1,738			—			—			—			—			1,738
Issuance of common stock pursuant to vesting of restricted stock units		110,766		1		(456	)		—			—			—			—			(455	)
Net loss		—		—		—			—			—			(4,094	)		—			(4,094	)
Foreign currency translation		—		—		—			—			—			—			585			585
Balance, August 31, 2023		24,143,014	$	24	$	129,707			(2,165,987	)	$	(17,500	)	$	(68,747	)	$	(1,261	)	$	42,223

Balance, May 31, 2022		24,008,219	$	23	$	120,375			(1,779,958	)	$	(15,000	)	$	(59,716	)	$	(1	)	$	45,681
Issuance of common stock pursuant to vesting of restricted stock units		8,393		—		—			—			—			—			—			—
Stock-based compensation		—		—		2,689			—			—			—			—			2,689
Settlement of obligation to grant stock options		—		—		1,043			—			—			—			—			1,043
Net loss		—		—		—			—			—			(1,534	)		—			(1,534	)
Foreign currency translation		—		—		—			—			—			—			(639	)		(639	)
Balance, August 31, 2022		24,016,612	$	23	$	124,107			(1,779,958	)	$	(15,000	)	$	(61,250	)	$	(640	)	$	47,240

					*Additional*			*Treasury*									*Accumulated Other*
	*Common Stock*				*Paid-in*			*Stock*						*Accumulated*			*Comprehensive*
	*Shares*		$		*Capital*			*Shares*			$			*Deficit*			*Loss*			*Total*
Balance, November 30, 2022		24,018,612	$	23	$	125,474			(2,165,987	)	$	(17,500	)	$	(61,383	)	$	(620	)	$	45,994
Stock-based compensation		—		—		4,689			—			—			—			—			4,689
Issuance of common stock pursuant to vesting of restricted stock units		124,402		1		(456	)		—			—			—			—			(457	)
Net loss		—		—		—			—			—			(7,363	)		—			(7,363	)
Foreign currency translation		—		—		—			—			—			—			(641	)		(641	)
Balance, August 31, 2023		24,143,014	$	24	$	129,707			(2,165,987	)	$	(17,500	)	$	(68,747	)	$	(1,261	)	$	42,223

Balance, November 30, 2021		23,754,096	$	23	$	119,589			—		$	—		$	(53,498	)	$	(16	)	$	66,098
Issuance of common stock pursuant to exercise of stock options		250,250		—		457			—			—			—			—			457
Issuance of common stock pursuant to settlement of restricted stock units		12,266		—		—			—			—			—			—			—
Settlement of obligation to grant stock options						1,043															1,043
Reclassification of stock-based compensation plan modification		—		—		(1,043	)		—			—			—			—			(1,043	)
Stock-based compensation		—		—		4,061			—			—			—			—			4,061
Repurchase of common shares under Stock Buyback Plan		—		—		—			(1,779,958	)		(15,000	)		—			—			(15,000	)
Net loss		—		—		—			—			—			(7,752	)		—			(7,752	)
Foreign currency translation		—		—		—			—			—			—			(624	)		(624	)
Balance, August 31, 2022		24,016,612	$	23	$	124,107			(1,779,958	)	$	(15,000	)	$	(61,250	)	$	(640	)	$	47,240

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the three and nine months ended August 31, 2023 and 2022

1.	NATURE OF OPERATIONS

Byrna Technologies Inc. (the “Company” or “Byrna”) is a non-lethal defense technology company, specializing in next generation solutions for security situations that do not require the use of lethal force. Byrna personal security devices are non-lethal self-defense devices that are powered by CO2 and fire .68 caliber spherical kinetic and chemical irritant projectiles. The Company added pepper sprays to its non-lethal defense product line with an acquisition in May 2022. See Note 7, "Acquisitions" for additional information. These products are sold in both the consumer and security professional markets. The Company operates two manufacturing facilities, a 30,000 square foot facility in located in Fort Wayne, Indiana and a 20,000 square foot manufacturing facility located in Pretoria, South Africa.

On January 10, 2023, the Company created a new joint venture with Fusady S.A. ("Fusady") located in Uruguay, to expand the Company's operations and presence in South American markets. The Company holds 51% of the stock in the joint venture entity, Uldawer S.A. (soon to be renamed "Byrna LATAM"), and the remaining 49% of stock in Byrna LATAM is held by Fusady. See Note 8, "Investment in Joint Venture" for additional information.

The Company was incorporated under the laws of the state of Delaware on March 1, 2005.

2.	OPERATIONS AND MANAGEMENT PLANS

From inception to August 31, 2023, the Company has incurred an accumulated deficit of $68.7 million. The Company has funded operations through the issuance of common stock. The Company generated $27.0 million in revenue and net loss of $7.4 million for the nine months ended August 31, 2023. The Company is expected to continue to incur significant losses before the Company's revenues are sufficient to sustain its operations. The Company’s future success is dependent upon its ability to continue to raise sufficient capital or generate adequate revenues, to cover its ongoing operating expenses, and also to continue to develop and be able to profitably market its products.

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

3.	BASIS OF PRESENTATION

These condensed consolidated financial statements as of August 31, 2023 and for the three and nine months ended August 31, 2023 and 2022 include the accounts of the Company and its subsidiaries. These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the United States of America (“GAAP”); however, such information reflects all adjustments consisting solely of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto together with management’s discussion and analysis of financial condition and results of operations contained in the Company's annual report on Form 10-K for the year ended November 30, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements, the results of its operations for the three and nine months ended August 31, 2023 and 2022, and its cash flows for the nine months ended August 31, 2023 and 2022 are not necessarily indicative of results to be expected for the full year.

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

5.	RECENT ACCOUNTING GUIDANCE

Accounting Guidance Issued But Not Adopted

In January 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). The FASB issued the update to simplify the measurement of goodwill by eliminating step 2 from the goodwill impairment test. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 will be effective for the Company so long as it remains a smaller reporting company in its first quarter of 2024. Early adoption is permitted. The Company is currently evaluating the impact of adopting this update on the condensed consolidated financial statements. The Company does not expect the standard to have an impact on its consolidated financial statements. The Company expects the adoption of this update to simplify its annual goodwill impairment testing process, by eliminating the need to estimate the implied fair value of a reporting unit’s goodwill, if its respective carrying value exceeds fair value.

In 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The guidance changes the impairment model used to measure credit losses for most financial assets. A new forward-looking expected credit loss model will replace the existing incurred credit loss model and will impact the Company’s accounts and other receivables, including the loan receivable from Byrna LATAM. This is expected to generally result in earlier recognition of allowances for credit losses. ASU 2016-13 will be effective for the Company beginning in December 2023 since it is a smaller reporting company. Early adoption is permitted. The Company believes the adoption of ASU 2016-13 will not have a material impact on the condensed consolidated financial statements.

6.	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 or to bypass the qualitative assessment in any period and proceed directly to performing the quantitative goodwill impairment test. If the Company concludes, based on the qualitative assessment, that the carrying value of a reporting unit would more likely than not exceed its fair value, a quantitative assessment is performed which is based upon a comparison of the reporting unit’s fair value to its carrying value. The fair values used in this evaluation are estimated by the Company based upon future discounted cash flow projections for the reporting unit. An impairment charge is recognized for any amount by which the carrying amount of goodwill exceeds its fair value.

The Company performs its annual review for impairment during the third quarter of each year. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. The Company’s operations constitute a single reporting unit and goodwill is assessed for impairment at the Company as a whole. At August 31, 2023, the Company determined that there was no impairment of goodwill.

7.	ACQUISITIONS

Business Combination

Fox Labs International

On May 25, 2022, the Company acquired Fox Labs International, a producer of defensive pepper sprays, catering primarily to law enforcement and other security professionals (domestically and internationally). The cash consideration was $2.2 million. There were no acquisition-related expenses. As part of the transaction, the Company acquired 10 trademarks. The Company classified and designated identifiable assets acquired and assessed and determined the useful lives of the acquired intangible assets subject to amortization.

The estimated fair values of assets acquired and liabilities assumed on May 25, 2022 are as follows (in thousands):

Cash	$	300
Accounts receivable		38
Inventory		36
Trademarks		360
Customer list intangible		70
Accounts payable		(59	)
Deferred revenue		(14	)
Goodwill		1,442
Total acquired assets	$	2,173

8.	INVESTMENT IN JOINT VENTURE

In January 2023, the Company acquired a 51% ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company’s operations and presence in South American markets, for $0.5 million. The Company accounts for the investment in the joint venture using the equity method since the Company does not have voting control of Byrna LATAM. Additionally, the Company does not have substantive participating rights that would result in the Company having control of Byrna LATAM.

Investments in equity method investees are those for which the Company has the ability to exercise significant influence or exercise joint control with other investors but does not control and is not the primary beneficiary. Under this method of accounting, the Company’s investment is recorded initially at cost and subsequently adjusted for its proportionate share of the net earnings or losses. The Company's share of net income or net loss in Byrna LATAM can have a significant impact on the reported equity method investment activity and the carrying value on the investment. In the event that net losses of Byrna LATAM reduce the equity method investment carrying amount to zero, additional net losses may be recorded if other investments, which are not accounted for under the equity method, are at-risk even if the Company has not committed to provide financial support to Byrna LATAM. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. The Company recorded its share of the joint venture’s loss during the three and nine months ended August 31, 2023 of $0.3 million and $0.6 million, respectively, in the Consolidated Statements of Operations and Comprehensive Loss as other expense. The carrying value of the Company's investment in the joint venture at August 31, 2023 is $0.0 million and is recorded as investment in joint venture in the Consolidated Balance Sheet.

In January 2023, the Company loaned $1.6 million to Byrna LATAM. The loan bears interest at a rate equal to Secured Overnight Financing Rate ("SOFR") plus 3.0%. The interest rate on the loan was 8.3% as of August 31, 2023. The loan amount must be repaid within five years from the date of the loan, or January 10, 2028. Interest income related to the loan receivable totaled $0.04 million and $0.08 million for the three and nine months ended August 31, 2023, respectively, is included in interest income in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The loan receivable is recorded as loan to joint venture in the Consolidated Balance Sheet. During the three and nine months ended August 31, 2023, the cumulative net losses of Byrna LATAM exceeded the equity method investment by $0.1 million. The carrying basis of the loan receivable was reduced by the $0.1 million excess loss from $1.6 million to $1.5 million.

9.	REVENUE, DEFERRED REVENUE AND ACCOUNTS RECEIVABLE

The Company generates revenue through the wholesale distribution of its products and accessories to dealers/distributors, and sales to large end-users such as retail stores, security companies and law enforcement agencies, and through e-commerce portals to consumers. Revenue is recognized upon transfer of control of goods to the customer, which generally occurs when title to goods is passed and risk of loss transfers to the customer. Depending on the contract terms, transfer of control is upon shipment of goods to or upon the customer’s pick-up of the goods. Payment terms to customers other than e-commerce customers are generally 30-60 days for established customers, whereas new wholesale and large end-user customers have prepaid terms for their first order. The amount of revenue recognized is net of returns and discounts that the Company offers to its customers. Products purchased include a standard warranty that cannot be purchased separately. This allows customers to return defective products for repair or replacement within one year of sale. The Company also sells an extended warranty for the same terms over three years. The extended 3-year warranty can be purchased separately from the product and is classified as a service warranty. Since a warranty for the first year after sale is included and non-separable from all launcher purchases, the Company considers this extended warranty to represent a service obligation during the second and third years after sale. Therefore, the Company accumulates billings of these transactions on the balance sheet as deferred revenue, to be recognized on a straight-line basis during the second and third year after sale. The Company recognizes an estimated reserve based on its analysis of historical experience, and an evaluation of current market conditions.

The Company also has a 14-day money back guarantee, which allows for a full refund of the purchase price, excluding shipping charges, within 14 days from the date of delivery. The right of return creates a variable component to the transaction price and needs to be considered for any possible constraints. The Company estimates returns using the expected value method, as there will likely be a range of potential return amounts. The Company’s reserve for returns under the 14-day money back guarantee for the three and nine months ended August 31, 2023 and 2022 were immaterial.

The Company sells to dealers and retailers for whom there is no money back guarantee but who may request a return or credit for unforeseen reasons or who may have agreed discounts or allowances to be netted from amounts invoiced. The Company reserves for returns, discounts and allowances based on past performance and on agreement terms and reports revenue net of the estimated reserve. The Company's reserve for returns, discounts, and allowances for the three and nine months ended August 31, 2023 and 2022 were immaterial.

The Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and handling costs associated with the distribution of finished products to customers, are recorded in operating expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss and are recognized when the product is shipped to the customer.

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

Accounts Receivable

The Company records accounts receivables due from dealers/distributers, large end-users such as retail stores, security companies, and law enforcement agencies. Accounts receivable, net of allowances, was $3.6 million, $4.2 million, $5.9 million, $2.5 million, and $1.7 million as of August 31, 2023, May 31, 2023, November 30, 2022, May 31, 2022, and November 30, 2021, respectively.

An allowance for doubtful accounts receivable is maintained for potential credit losses based upon management's assessment of the expected collectability of all accounts receivables. The allowance for doubtful accounts was approximately $0.05 million, $0.01 million, $0.01 million, $0.01 million, and $0.01 million as of August 31, 2023, May 31, 2023, November 30, 2022, May 31, 2022, and November 30, 2021, respectively.

Deferred Revenue

The balance of deferred revenue, which primarily relates to amounts to be recognized under extended 3-year service warranty as of August 31, 2023 and 2022 totaled $0.8 million and $1.3 million, respectively. The balance was $0.6 million and $0.4 million as of May 31, 2023 and 2022, respectively. The balance was $1.3 million and $1.1 million as of the years ended November 30, 2022 and November 30, 2021, respectively. The Company recognized revenue included in the beginning balance of deferred revenue totaling $0.4 million and $0.5 million during the three and nine months ended August 31, 2023, respectively, and $0.02 million and $0.03 million during three and nine months ended August 31, 2022, respectively.

Revenue Disaggregation

The following table presents disaggregation of the Company’s revenue by distribution channel (in thousands):

	*Three Months Ended*				*Nine Months Ended*
	*August 31,*				*August 31,*
*Distribution channel*	*2023*		*2022*		*2023*		*2022*
Wholesale (dealer/distributors)	$	2,327	$	4,312	$	9,295	$	10,746
E-commerce		4,758		8,110		17,709		21,272
Total	$	7,085	$	12,422	$	27,004	$	32,018

10.

PROPERTY AND EQUIPMENT

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

	*August 31,*		*November 30,*
	*2023*		*2022*
Computer equipment and software	$	818	$	328
Furniture and fixtures		268		392
Leasehold improvements		990		910
Machinery and equipment		2,980		2,531
		5,056		4,161
Less: accumulated depreciation		1,418		852
Total	$	3,638	$	3,309

The Company recognized approximately $0.7 million and $0.4 million in depreciation expense during the nine months ended August 31, 2023 and 2022, respectively. The Company recognized approximately $0.3 million and $0.2 million in depreciation expense during the three months ended August 31, 2023 and 2022, respectively. Depreciation expense is presented in the operating expenses and within cost of goods sold in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss.

Management identified certain property and equipment items that are no longer being used in production. The Company recorded an impairment loss during the nine months ended August 31, 2023 and 2022 for certain machinery and equipment assets that are no longer in use totaling $0.2 million in the other expenses line in the accompanying Condensed Consolidated Statement of Operations and Comprehensive Loss.

At August 31, 2023 and November 30, 2022, the Company had deposits of $1.5 million and $2.3 million, respectively, with vendors primarily for supply of machinery (molds) and equipment where the vendors have not completed the supply of these assets and is presented as Deposits for equipment in the Condensed Consolidated Balance Sheets.

11.

INVENTORY

The following table summarizes inventory (in thousands):

	*August 31,*		*November 30,*
	*2023*		*2022*
Raw materials	$	6,405	$	7,228
Work in process		1,129		701
Finished goods		9,153		7,533
Total	$	16,687	$	15,462

12.

INTANGIBLE ASSETS

The components of intangible assets were as follows:

		*Balance at August 31, 2023*							*Balance at November 30, 2022*
	*Estimated Useful Lives in Years*	*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*		*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*
Patents	10-17	$	3,931	$	(659	)	$	3,272	$	3,931	$	(468	)	$	3,463
Trademarks	Indefinite		360		—			360		360		—			360
Customer List	2		70		(47	)		23		70		(21	)		49
Total		$	4,361	$	(706	)	$	3,655	$	4,361	$	(489	)	$	3,872

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 Condensed Consolidated Statements of Operations and Comprehensive Loss. Total intangible assets amortization expense for the nine months ended August 31, 2023 and 2022 were $0.2 million and $0.2 million, respectively. Total intangible assets amortization expense for the three months ended August 31, 2023 and 2022 were $0.1 million and $0.1 million, respectively.

Estimated future amortization expense related to intangible assets as of August 31, 2023 are as follows (in thousands):

Fiscal Year Ending November 30,
2023 (three months)	$	72
2024		270
2025		254
2026		254
2027		254
Thereafter		2,191
Total	$	3,295

13.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The Company’s accounts payable and accrued liabilities consist of the following (in thousands):

	*August 31,*		*November 30,*
	*2023*		*2022*
Trade payables	$	1,750	$	3,804
Accrued sales and use tax		690		896
Accrued people costs		1,189		1,912
Accrued professional fees		289		349
Other accrued liabilities		640		747
Total	$	4,558	$	7,708

14.

LINES OF CREDIT

On January 19, 2021, the Company entered into a $5.0 million revolving line of credit with a bank ("Revolving Note"). The revolving line of credit bears interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50%, subject to a floor of 4.00%. The interest rate on the revolving line of credit was 8.75% as of August 31, 2023. The revolving line of credit is secured by the Company’s accounts receivable and inventory. The line of credit is subject to an unused fee of 0.25% paid once annually. The line of credit expires on January 19, 2024.

Also on January 19, 2021, the Company entered into a $1.5 million equipment financing line of credit with a bank ("Nonrevolving Equipment Line"). The line of credit bears interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50%, subject to a floor of 4.00%. The interest rate on the equipment financing line of credit was 8.75% as of August 31, 2023. The line of credit is secured by the Company’s equipment. The line of credit is subject to an unused fee of 0.25% paid once annually. The line of credit expires on January 19, 2024.

As of August 31, 2023, there was no outstanding balance on the Revolving Note and the Company had not drawn on the Nonrevolving Equipment Line during the nine months ended August 31, 2023 and 2022. Debt issuance costs related to the line of credit were less than $0.1 million presented as part of Other Assets in the Condensed Consolidated Balance Sheets. Amortization of $0.02 million for the nine months ended August 31, 2023 and 2022 and less than $0.01 million for the three months ended August 31, 2023 and 2022 is included in Interest expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

15.

STOCKHOLDERS’ EQUITY

Authorized Shares and Increase in Stock Compensation Plan

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

Stock Buyback Plan

On February 15, 2022, the Company's Board of Directors approved a plan to buy back up to $10.0 million worth of shares of the Company's common stock from the open market (“Stock Buyback Plan”). The Company's Stock Buyback Plan was used to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. The Company completed the full $10.0 million for the repurchases under the Stock Buyback Plan during March 2022.

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

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

16.

STOCK-BASED COMPENSATION

2020 Plan

On October 23, 2020, the Company's Board of Directors approved and on November 19, 2020 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 was 2,500,000. On April 26, 2022, the Company’s Board of Directors approved and on June 17, 2022 the Company's stockholders approved the increase of the number of shares of common stock available for issuance under the 2020 Plan by 1,300,000 shares to a total of 3,800,000 shares. 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

Stock-based compensation costs are recognized as expense over the employee's requisite service period, on a straight-line basis. Total stock-based compensation expense was $4.7 million and $4.1 million for the nine months ended August 31, 2023 and 2022, respectively. Total stock-based compensation expense was $1.7 million and $2.7 million for the three months ended August 31, 2023 and 2022. respectively. Total stock-based compensation expense was recorded in Operating expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss.

Restricted Stock Units

During the nine months ended August 31, 2023 and 2022, the Company granted 9,805 and 376,555 RSUs, respectively. Stock-based compensation expense for the RSUs for the nine months ended August 31, 2023 and 2022 was $3.4 million and $2.4 million, respectively. The Company recorded stock-based compensation expense of $1.3 million and $1.7 million for the RSUs during the three months ended August 31, 2023 and 2022, respectively.

As of August 31, 2023, there was $0.8 million of unrecognized stock-based compensation cost related to unvested RSUs which is expected to be recognized over a weighted average of 1.1 years.

The following table summarizes the RSU activity during the nine months ended August 31, 2023:

	*RSUs*
Unvested and outstanding as of November 30, 2022		1,314,909
Issued		(213,636	)
Granted		9,805
Forfeited		(611,576	)
Unvested and outstanding at August 31, 2023		499,502

Of the 213,686 restricted stock units issued, 89,234 units were returned to the Company in exchange for the Company paying for the payroll withholding taxes. For the nine months ended August 31, 2023, restricted stock units of 124,402, net, were issued.

Stock Options

During the nine months ended August 31, 2023 and 2022, the Company granted options to employees and directors to purchase 249,999 and 994,750 shares of common stock, respectively. The Company recorded stock-based compensation expense for options granted to its employees and directors of $1.3 million and $1.7 million during the nine months ended August 31, 2023 and 2022, respectively. The Company recorded stock-based compensation expense for options granted to its employees and directors of $0.4 million and $1.7 million during the three months ended August 31, 2023 and 2022 respectively.

As of August 31, 2023, there was $2.9 million of unrecognized stock-based compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 1.8 years.

Stock Option Valuation

The fair value of stock options at the date of grant was estimated using the Black Scholes option pricing model. The expected volatility is based upon historical volatility of the Company's stock. The expected term for the options is based upon observation of actual time elapsed between employees. The assumption that the Company used to determine the grant-date fair value of stock options granted for the nine months ended August 31, 2023 were as follows:

Risk free rate		3.63% - 3.79%
Expected dividends	$	0.0
Expected volatility		76.1% - 77.0%
Expected life (in years)		6.5
Market price of the Company’s common stock on date of grant	$	6.35 - 6.37

The following table summarizes option activity under the 2020 Plan during the nine months ended August 31, 2023:


				*Weighted-Average*
	*Stock*			*Exercise Price Per Stock*
	*Options*			*Option*
Outstanding, November 30, 2022		1,297,750		$	6.75
Granted		249,999			8.96
Forfeited		(95,250	)		8.14
Outstanding, August 31, 2023		1,452,499		$	6.96
Exercisable, August 31, 2023		601,498		$	5.01

17.

EARNINGS PER SHARE

For the three and nine months ended August 31, 2023 and 2022, the Company recorded net loss available to common shareholders. As such, because the dilution from potential common shares was antidilutive, the Company used basic weighted-average common shares outstanding, rather than diluted weighted-average common shares outstanding when calculating diluted loss per share for the three and nine months ended August 31, 2023 and 2022.

The following table sets forth the allocation of net loss for the three and nine months ended August 31, 2023 and 2022, respectively:

	*For the Three Months Ended*						*For the Nine Months Ended*
	*August 31,*						*August 31,*
	*2023*			*2022*			*2023*			*2022*
Net loss available to common shareholders	$	(4,094	)	$	(1,534	)	$	(7,363	)	$	(7,752	)

Weighted-average number of shares used in computing net loss per share, basic and diluted		21,960,163			21,751,879			21,895,815			22,704,565
Net loss per share - basic	$	(0.19	)	$	(0.07	)	$	(0.34	)	$	(0.34	)

The Company’s potential dilutive securities, which may include stock options and unvested restricted stock units have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

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

	*For the Three Months Ended*				*For the Nine Months Ended*
	*August 31,*				*August 31,*
	*2023*		*2022*		*2023*		*2022*
Options		1,452,499		1,310,783		1,452,499		1,310,783
RSUs		499,502		1,154,659		499,502		1,154,659
Total		1,952,001		2,465,442		1,952,001		2,540,442

18.

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 pays royalties to the Company's Chief Technology Officer ("CTO") for sales on fintail projectiles. The Company expensed $0.01 million and $0 for royalties due to the Company's CTO during the nine months ended August 31, 2023 and 2022, respectively, and expensed less than $0.01 million and $0 due to the Company's CTO during the three months ended August 31, 2023 and 2022, respectively. Balances payable to the CTO for royalties were $0.01 million and $0 as of August 31, 2023 and November 30, 2022 respectively.

In January 2022, the Company and the CTO agreed to waive all future rights and entitlements under a certain purchase and sale agreement, including without limitation any right, title, or interest in the intellectual property or royalty fees except for those on the fintail projectiles in December 2021 in exchange for 200,000 RSUs. Refer to Note 21, "Commitments and Contingencies - Royalty Payments," for additional information.

The Company subleases office premises at its Massachusetts headquarters to a corporation owned and controlled by the Chief Executive Officer ("CEO") of the Company beginning July 1, 2020, with no stated termination date. Sublease payments received were $0.06 million and $0.03 million for the nine months ended August 31, 2023 and 2022, respectively. Sublease payments received were less than $0.01 million for the three months ended August 31, 2023 and 2022, 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. The Company’s sales to Bersa S.A. were less than $0.06 million and $0.1 million for the three and nine months ended August 31, 2023, respectively. The Company had accounts receivable, which are due within one year as of August 31, 2023, from Bersa S.A. of $2.2 million and $4.0 million as of August 31, 2023 and November 30, 2022 respectively.

19.

LEASES

Operating Leases

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

In 2019, the Company entered into a real estate lease for office space in Andover, Massachusetts. In August 2021, the lease was amended to include additional space and extend the term of the existing space by one year. The new lease expiration date is February 29, 2028. The base rent is approximately $0.02 million per month.

The Company leases office and warehouse space in South Africa that expires in December 2024. The base rent is approximately $0.07 million per month.

The Company leases warehouse and manufacturing space in Fort Wayne, Indiana. The lease expires on July 31, 2025. The base rent is approximately $0.01 million per month. Commencing in August 2022, the Company sub-leases the former Fort Wayne facility. The amount received from the sub-lease is immaterial. In November 2021, the Company entered into a lease which commenced in August 2022. The lease expires on July 31, 2027. The base rent is approximately $0.02 million per month.

The Company also leases office space in Las Vegas, Nevada, which expires on January 31, 2027. The base rent is less than $0.01 million per month.

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.

As of August 31, 2023 and 2022, the elements of lease expense were as follows (in thousands):

	*Three Months Ended*		*Nine Months Ended*
	*August 31, 2023*		*August 31, 2023*
Lease Cost:
Operating lease cost	$	165	$	499
Short-term lease cost		1		9
Total lease cost	$	166	$	508

Other Information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	166	$	516
Operating lease liabilities arising from obtaining right-of-use assets	$	—	$	—

Operating Leases:
Weighted-average remaining lease term (in years)				3.8
Weighted-average discount rate				9.3	%

Future lease payments under non-cancelable operating leases as of August 31, 2023 are as follows (in thousands):

Fiscal Year Ending November 30,
2023 (three months)	$	165
2024		680
2025		584
2026		527
2027		263
Thereafter		184
Total lease payments		2,403
Less: imputed interest		383
Present value of operating lease liabilities	$	2,020
Operating lease liabilities, current	$	653
Operating lease liabilities, non-current	$	1,367

20.

INCOME TAXES

For the three months ended August 31, 2023 and 2022, the Company recorded an income tax expense (benefit) of $(0.1) million and $0.2 million, respectively. For the three months ended August 31, 2023 and 2022, the effective tax rate was 2.8% and 10.8%, respectively. For the nine months ended August 31, 2023 and 2022, the Company recorded an income tax expense (benefit) of $(0.2) million and $0.08 million, respectively. For the nine months ended August 31, 2023 and 2022, the effective tax rate was 2.2% and 1.1%, respectively. The Company’s tax rate differs from the statutory rate of 21.0% due to the effects of state taxes net of federal benefit, the foreign tax rate differential as a result of Byrna South Africa, effects of permanent non-deductible expenses, the recording of a valuation allowance against the deferred tax assets generated in the current period, and other effects.

21.

COMMITMENTS AND CONTINGENCIES

Royalty Payment

Pursuant to the Purchase and Sale Agreement, dated April 13, 2018 and further amended on December 19, 2019, the Company was committed to a minimum royalty payment of $0.03 million per year. Royalties on CO2 pistols were to be paid for so long as patents remain effective beginning at 2 ½% of the agreed upon net price of $167.60 (“Stipulated Net Price”) for the first year and reduced by 0.1% each year thereafter until it reaches 1%. For each substantially new product in this category, the rate would begin again at 2 ½%. Royalties on the fintail projectiles (and any improved versions thereof) will be paid so long as patents remain effective at a rate of 4% of the agreed upon Stipulated Net Price for fintail projectile products.

On January 7, 2022, the Company and the CTO agreed to waive all future rights and entitlements under such agreement, including without limitation any right, title, or interest in the intellectual property or royalty fees except for those on the fintail projectiles. In exchange for the royalty termination, the Company agreed to grant 200,000 RSU's under the 2020 Plan. The RSU’s had an original vest date of January 7, 2024. On June 7, 2023, the Company and the CTO agreed to immediately accelerate the 200,000 RSUs, which resulted in $0.5 million in accelerated stock compensation expense recorded during the three and nine months ended August 31, 2023 and 2022. The Company recognized stock compensation expense of $0.9 million and $0.6 associated with the RSUs during the nine months ended August 31, 2023 and 2022, respectively. The Company recognized stock compensation expense of $0.5 million and $0.6 associated with the RSUs during the three months ended August 31, 2023 and 2022, respectively. The Company expensed $0.01 million and $0 for royalties due to the Company's CTO during the three and nine months ended August 31, 2023 and 2022 respectively.

Legal Proceedings

In the ordinary course of our business, the Company may be subject to certain other 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.

22.

SEGMENT AND GEOGRAPHICAL DISCLOSURES

The CEO, who is also the Chief Operating Decision Maker, evaluates the business as a single entity, which includes reviewing financial information and making business decisions based on the overall results of the business. As such, the Company’s operations constitute a single operating segment and one reportable segment.

The tables below summarize the Company’s revenue for the three and nine months ended August 31, 2023 and 2022, respectively, by geographic region (in thousands):

Revenue:
Three Months Ended	*U.S.*		*South Africa*		*Europe/South America/Asia*		*Canada*		*Total*
August 31, 2023	$	6,784	$	115	$	32	$	154	$	7,085
August 31, 2022		10,347		704		1,342		29		12,422

Nine Months Ended	*U.S.*		*South Africa*		*Europe/South America/Asia*		*Canada*		*Total*
August 31, 2023	$	24,780	$	326	$	1,239	$	659	$	27,004
August 31, 2022		27,140		2,061		2,765		52		32,018

23.

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.

Currency Risk

The Company held its cash balances within banks in the U.S. in U.S. dollars and with banks in South Africa in U.S. dollars and South African rand. The Company’s operations are conducted in the U.S. and South Africa. The value of the South African rand against the U.S. dollar may fluctuate with changes in economic conditions.

During the three and nine months ended August 31, 2023, in comparison to the prior year period, the U.S. dollar was weaker in relation to the South African rand, and upon the translation of the Company’s subsidiaries’ revenues, expenses, assets and liabilities held in South African rand, respectively. As a result, the Company recorded a translation adjustment loss of $0.6 million and $0.6 million related to the South African rand during the nine months ended August 31, 2023 and 2022, respectively. The Company recorded a translation adjustment gain of $0.6 million and a loss of $0.6 million related to the South African rand during the three months ended August 31, 2023 and 2022, respectively.

The Company’s South African subsidiary revenues, cost of goods sold, operating costs and capital expenditures are denominated in South African rand. Consequently, fluctuations in the U.S. 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 U.S. dollars. The Company is not using any forward or option contracts to fix the foreign exchange rates. Using a 10% fluctuation in the U.S. exchange rate, the impact on the loss and stockholders’ equity (deficit) 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, cash equivalents, accounts receivable, and the loan receivable from Byrna LATAM. The Company maintains cash with high credit quality financial institutions located in the U.S. and South Africa. The Company maintains cash and cash equivalent balances with financial institutions in the U.S. in excess of amounts insured by the Federal Deposit Insurance Corporation.

The Company provides credit to its customers in the normal course of its operations. It carries out, on a continuing basis, credit checks on its customers.

The Company loaned $1.6 million to Byrna LATAM, which was formed in January 2023 as a joint venture in South America. The ability to collect on the loan depends on the financial operations of Byrna LATAM.

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this quarterly report on Form 10-Q (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Byrna Technologies Inc. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” "may," “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important risk factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on Form 10-K for the year ended November 30, 2022 filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 9, 2023 (the “2022 10-K”), the Company’s subsequent filings with the SEC, which can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, including but not limited to our ability to design, introduce and sell new products, services and features, the impact of any regulatory proceedings or litigation, our ability to protect our intellectual property and compete with existing and new products, the impact of stock compensation expense, dividends, warrant exercises and related accounting, impairment expense and income tax expense on our financial results, our ability to manage our supply chain and avoid production delays, shortages or other factors, including product mix, cost of parts and materials and cost of labor that may impact our gross margins, our ability to retain and incentivize key management personnel, product defects, the success of our entry to new markets, customer purchase behavior and negative media publicity or public perception of our brand or products, restrictions or prohibitions imposed by advertising platforms, loss of customer data, breach of security or an extended outage related to our e-commerce storefronts, including a breach or outage by our third party cloud based storage providers, exposure to international operational risks, delayed cash collections or bad debt, determinations or audits by taxing authorities, changes in government regulations, the impact of existing or future regulation by the Bureau of Alcohol, Tobacco, and Firearms, import and export regulators, or other federal or state authority, or changes in international law in key jurisdictions including South America and South Africa or our inability to obtain needed exemptions from such existing or future regulation.

OVERVIEW

The following discussion and analysis is intended to help you understand us, our operations and our financial performance. It should be read in conjunction with our condensed consolidated financial statements and the accompanying notes, which are included in Item 1 of this report.

Byrna Technologies is a designer, manufacturer, retailer and distributor of innovative technological solutions for security situations that do not require the use of lethal force. Our mantra is Live Safe, and our core mission is to empower individuals to safely and fully engage in life and adventure. Our design team’s directive is to build easy-to-use self-defense tools to enhance the safety of our customers and their loved ones at home and outdoors. We are also focused on developing tools that can be used instead of firearms by professional law enforcement and private security customers to reduce shootings and facilitate trust between police and the communities they seek to serve. Our strategy is to establish Byrna® as a consumer lifestyle brand associated with the confidence people can achieve by knowing they can protect themselves, their loved ones and those around them. We believe we have a significant opportunity to leverage the Byrna brand to expand our product line, broaden our user base and generate increasing sales from new and existing customers.

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

We believe that the United States, along with many other parts of the world, is experiencing a significant spike in the demand for less-lethal products and that the less-lethal market will be one of the faster growing segments of the security market over the next decade. We plan to respond to this demand for less-lethal products through the serial production and distribution of the Byrna® SD and expansion of the Byrna product line.

On January 10, 2023, the Company created a new joint venture with Fusady S.A. ("Fusady") located in Uruguay, to expand the Company's operations and presence in South American markets. The Company holds 51% of the stock in the joint venture entity, Uldawer S.A. (soon to be renamed "Byrna LATAM"), and the remaining 49% of stock in Byrna LATAM is held by Fusady.

RESULTS OF OPERATIONS

Three months ended August 31, 2023 as compared to three months ended August 31, 2022:

Net Revenue

Revenues were $7.1 million in the third quarter of 2023 which represents a decrease of $5.3 million as compared to the prior year period revenues of $12.4 million. The decrease was primarily attributed to challenges in our direct-to-consumer marketing efforts, resulting from advertising bans on social media platforms, and reduced international sales to South Africa, Asia, and Latin America. E-commerce sales, through our website and Amazon, decreased $3.3 million to $4.8 million during the third quarter of 2023 from $8.1 million during the third quarter of 2022. Sales to domestic dealers/distributors decreased $0.1 million, or 8.7% to $1.7 million during the third quarter 2023 from $1.8 million during the third quarter of 2022. Sales to customers in Canada increased to $0.2 million during the third quarter of 2023 from $0.03 million during the third quarter of 2022. In addition, Fox Labs, which we acquired on May 25, 2022, sales decreased to $0.3 million during the third quarter of 2023 from $0.4 million during the third quarter of 2022. International sales, which are characterized by infrequent but very large orders, decreased by $1.8 million from $2.0 million during the third quarter of 2022 to $0.2 million during the third quarter of 2023.

Cost of Goods Sold

Cost of goods sold was $3.9 million in the third quarter of 2023 compared to $5.5 million in the prior year period. This $1.6 million decrease is due to the decrease in sales volume, offset by increases in reserves for excess and obsolete inventory of $0.6 million.

Gross Profit

Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of products, such as labor and overhead, inbound freight costs, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $3.2 million in the third quarter of 2023, or 44.6% of net revenue, as compared to gross profit of approximately $6.9 million, or 55.4% of net revenue, in the prior year period. The decrease in gross profit as a percentage of sales is primarily due to $0.6 million of charges to costs of goods sold for inventory write-downs and additions to reserves for excess and obsolete inventory recorded during the third quarter of 2023.

Operating Expenses

Operating expenses were $7.3 million in the third quarter of 2023, a decrease of $1.0 million, as compared to the prior year period expenses of $8.3 million. The decrease is due to managed cost reduction as detailed below.

Marketing expenses decreased by $1.1 million from $2.4 million in the third quarter of 2022 to $1.3 million in the third quarter of 2023. Payroll related costs, including non-cash stock compensation, increased $0.4 million from $4.0 million in the third quarter of 2022 to $4.4 million in the third quarter of 2023 due to primarily a $0.4 million increase in stock compensation.

Loss from Operations

The reduction in gross profit, offset partly by the reduction in operating expenses, resulted in an increase in loss from operations of $2.7 million to $4.1 million for the third quarter of 2023 compared to $1.4 million for the third quarter of 2022.

Other Income (Expense)

We recorded $0.05 million of foreign currency transaction loss during the third quarter of 2023 compared to $0.02 million of foreign currency transaction gain during the third quarter of 2022. We recorded $0.2 million of interest income during the third quarter of 2023 compared to $0 of interest in the third quarter of 2022. We recorded a loss of $0.3 million from our South American joint venture investment that was formed during the first quarter of 2023.

Income Tax Provision

For the three months ended August 31, 2023 and 2022, we recorded an income tax benefit of $0.1 million and an income tax expense of $0.2 million, respectively. For the three months ended August 31, 2023 and 2022, the effective tax rate was 2.8% and 10.8%, respectively. Our tax rate differs from the statutory rate of 21.0% due to the effects of state taxes net of federal benefit, the foreign tax rate differential as a result of Byrna South Africa, effects of permanent non-deductible expenses, the recording of a valuation allowance against the deferred tax assets generated in the current period, and other effects.

Net Loss

Net loss increased by $2.6 million from $1.5 million for the third quarter of 2022 to $4.1 million for the third quarter of 2023.

Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide an additional financial metric that is not prepared in accordance with GAAP (non-GAAP) with presenting non-GAAP adjusted EBITDA. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance. We believe that this non-GAAP financial measure helps us to identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we exclude in the calculations of the non-GAAP financial measure.

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

This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures, because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other non-GAAP measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.

Adjusted EBITDA

Adjusted EBITDA is defined as net (loss) income as reported in our condensed consolidated statements of operations and comprehensive (loss) income excluding the impact of (i) depreciation and amortization; (ii) income tax provision (benefit); (iii) interest income (expense); (iv) stock-based compensation expense, (v) impairment loss and (vi) one time, non-recurring other expenses or income. Our Adjusted EBITDA measure eliminates potential differences in performance caused by variations in capital structures (affecting finance costs), tax positions, the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We also exclude certain one-time and non-cash costs. Reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, is as follows (in thousands):

	For the Three Months Ended
	August 31,
	2023			2022
Net loss	$	(4,094	)	$	(1,534	)

Adjustments:
Interest (income) expense		(239	)		3
Income tax provision (benefit)		(124	)		150
Depreciation and amortization		301			250
Non-GAAP EBITDA		(4,156	)		(1,131	)

Stock-based compensation expense		1,738			2,689
Non-cash incentive compensation expense		—			(1,415	)
Severance/Separation		—			138
Other expenses		—			3
Non-GAAP adjusted EBITDA	$	(2,418	)	$	284

Nine months ended August 31, 2023 as compared to nine months ended August 31, 2022:

Net Revenue

Revenues were $27.0 million in the nine months ended August 31, 2023 which represents a decrease of $5.0 million or 15.7% as compared to the prior year period revenues of $32.0 million. The decrease was primarily attributed to challenges in our direct-to-consumer marketing efforts, resulting from advertising bans on social media platforms, and reduced international sales to South Africa, Asia, and Latin America. E-commerce sales, through our website and Amazon, decreased $3.6 million to $17.7 million during the nine months ended August 31, 2023 from $21.3 million during the nine months ended August 31, 2022. Sales to domestic dealers/distributors increased $0.7 million from $5.5 million in the nine months ended August 31, 2022 to $6.2 million in the nine months ended August 31, 2023. Sales to customers in Canada increased to $0.7 million during the nine months ended August 31, 2023 from $0.05 million from the prior year. In addition, Fox Labs, which we acquired on May 25, 2022, sales increased to $0.8 million during the nine months ended 2023 from $0.4 million during the nine months ended August 31, 2022. International sales, which are characterized by infrequent but very large orders, decreased by $3.3 million from $4.8 million during the nine months ended August 31, 2022 to $1.5 million during the nine months ended August 31, 2023.

Cost of Goods Sold

Cost of goods sold was $12.4 million in the nine months ended August 31, 2023 compared to $14.4 million in the prior year period. This $2.0 million decrease is due to the decrease in sales volume, offset by increases in reserves for excess and obsolete inventory of $0.6 million.

Gross Profit

Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of products, such as labor and overhead, inbound freight costs, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $14.6 million in the nine months ended August 31, 2023, or 54.1% of net revenue, as compared to gross profit of approximately $17.6 million, or 55.0% of net revenue, in the prior year period. The decrease is attributable to reductions in net revenue and $0.6 million of charges to costs of goods sold for inventory write-downs and additions to reserves for excess and obsolete inventory recorded during the nine months ended 2023.

Operating Expenses

Operating expenses were $21.5 million in the nine months ended August 31, 2023, a decrease of $3.5 million, as compared to the prior year period expenses of $25.1 million. The decrease is due to a managed cost reduction as detailed below.

Payroll related costs, excluding stock compensation, decreased $1.0 million from $8.5 million in the nine months ended August 31, 2022 to $7.5 million in the nine months ended August 31, 2023 while stock based and related incentive compensation costs increased from $4.1 million during the nine months ended August 31, 2022 to $4.7 million during the nine months ended August 31, 2023. Marketing expenses decreased by $1.8 million from $3.9 million in the nine months ended August 31, 2022 to $2.1 million in the nine months ended August 31, 2023. Insurance costs decreased $0.4 million to $0.6 million during the nine months ended August 31, 2023 from $1.0 million during the nine months ended August 31, 2022 due to negotiation of improved contract terms.

Loss from Operations

The reduction in operating expenses, partly offset by the reduction in gross profit, resulted in a decrease in loss from operations of $0.5 million to $6.9 million during the nine months ended August 31, 2023 compared to $7.4 million during the nine months ended August 31, 2022.

Other Income (Expense)

We recorded $0.2 million of foreign currency transaction loss during the nine months ended August 31, 2023 compared to $0.07 million of foreign currency transaction loss during the nine months ended August 31, 2022. We recorded $0.5 million of interest income during the nine months ended August 31, 2023 compared to $0.01 of interest income in the nine months ended August 31, 2022. We recorded a loss of $0.6 million from our South American joint venture investment that was formed during the nine months ended August 31, 2023. Other expenses of $0.3 million during the nine months ended August 31, 2023 and $0.2 million during the nine months ended August 31, 2022 are primarily related to fixed asset impairment and disposals.

Income Tax Provision

For the nine months ended August 31, 2023 and 2022, we recorded an income tax benefit of $0.2 million and an income tax expense of $0.1 million, respectively. For the nine months ended August 31, 2023 and 2022, the effective tax rate was 2.2% and 1.1%, respectively. Our tax rate differs from the statutory rate of 21.0% due to the effects of state taxes net of federal benefit, the foreign tax rate differential as a result of Byrna South Africa, effects of permanent non-deductible expenses, the recording of a valuation allowance against the deferred tax assets generated in the current period, and other effects.

Net Loss

Net loss was $7.4 million during the nine months ended August 31, 2023, an improvement of $0.4 million compared to the net loss of $7.8 million during the nine months ended August 31, 2022.

Non-GAAP Financial Measures

Adjusted EBITDA

Adjusted EBITDA is defined as net (loss) income as reported in our condensed consolidated statements of operations and comprehensive (loss) income excluding the impact of (i) depreciation and amortization; (ii) income tax provision (benefit); (iii) interest income (expense); (iv) stock-based compensation expense, (v) impairment loss, and (vi) one time, non-recurring other expenses or income. Our Adjusted EBITDA measure eliminates potential differences in performance caused by variations in capital structures (affecting finance costs), tax positions, the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We also exclude certain one-time and non-cash costs. Reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, is as follows (in thousands):

	For the Nine Months Ended
	August 31,
	2023			2022
Net loss	$	(7,363	)	$	(7,752	)

Adjustments:
Interest expense (income)		(525	)		(10	)
Income tax provision (benefit)		(165	)		82
Depreciation and amortization		921			638
Non-GAAP EBITDA		(7,132	)		(7,042	)

Stock-based compensation expense		4,689			4,061
Impairment loss		176			—
Severance/Separation		52			556
Other expense		—			183
Non-GAAP adjusted EBITDA	$	(2,215	)	$	(2,242	)

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Summary

Cash and cash equivalents as of August 31, 2023 totaled $13.7 million a decrease of $6.4 million from $20.0 million of cash and cash equivalents as of November 30, 2022.

Operating Activities

Cash used in operating activities was $3.6 million for the nine months ended August 31, 2023 compared to cash used in operations of $12.8 million during the prior year period. Net loss was $7.4 million and $7.8 million for the three and nine months ended August 31, 2023 and 2022, respectively. Significant changes in noncash and working capital activity are as follows:

Non-cash activity includes stock-based and related incentive compensation expenses of $4.7 million for the nine months ended August 31, 2023 compared to $4.1 million for the nine months ended August 31, 2022; depreciation and amortization expense of $0.9 million for the nine months ended August 31, 2023 compared to $0.6 million for the nine months ended August 31, 2022; provision for inventory of $0.6 million for the nine months ended August 31, 2023 compared to $0 million for the nine months ended August 31, 2022, operating lease costs of $0.5 million for the nine months ended August 31, 2023 compared to $0.4 million for the nine months ended August 31, 2022, and $0.6 million of joint venture investment loss in the nine months ended August 31, 2023 compared to zero during the nine months ended August 31, 2022.

Inventory increased during the nine months ended August 31, 2023 by $2.3 million, compared to $8.9 million for the nine months ended August 31, 2022. Accounts receivable decreased by $2.0 million during the nine months ended August 31, 2023 as compared to an increase of $1.0 million for the nine months ended August 31, 2022. Accounts payable and accrued liabilities decreased during the nine months ended August 31, 2023 by $3.0 million, compared to $0.2 million nine months ended August 31, 2022. Prepaid expenses and other current assets decreased by $0.2 million during the nine months ended August 31, 2023 compared to an increase of $0.1 million during the nine months ended August 31, 2022. Operating lease liabilities decreased by $0.5 million during the nine months ended August 31, 2023 compared to a decrease of $0.2 million during the nine months ended August 31, 2022

Investing Activities

Cash used in investing activities was $2.4 million for the nine months ended August 31, 2023 compared to $4.2 million for the nine months ended August 31, 2022. The current year investing activities primarily relates to the investment in the joint venture and the corresponding loan. The prior year investing activities relate to the purchase of property and equipment and the Fox Labs acquisition.

Financing Activities

Cash used in financing activities was $0.4 million during the nine months ended August 31, 2023, compared to cash used of $14.5 million for the nine months ended August 31, 2022. During the nine months ended August 31, 2023, the Company paid taxes of $0.4 million related to payroll taxes withheld on the vesting of restricted stock units. The prior year amount was primarily composed of stock repurchased of $15.0 million offset by stock option exercises of $0.5 million during the nine months ended August 31, 2022.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 5, “Recent Accounting Guidance,” in the Notes to condensed consolidated financial statements included in Item 1 of this report for a discussion of recently issued and adopted accounting standards.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our condensed consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are outlined in Note 4, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the 2022 Form 10-K. During the three and nine months ended August 31, 2023, there were no significant changes to our critical accounting policies from those described in our 2022 Form 10-K, except as follows.

Investment in Joint Venture

Investments in equity method investees are those for which we have the ability to exercise significant influence but does not control and is not the primary beneficiary. Under this method of accounting, our investment is recorded initially at cost and subsequently adjusted for our proportionate share of the net earnings or losses. We evaluate our equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

In January 2023, we acquired a 51% ownership interest in Byrna LATAM, a corporate joint venture formed to expand our operations and presence in South American markets, for $0.5 million. We account for the investment in the joint venture using the equity method because the Company does not have voting control of Byrna LATAM. Additionally, we do not have substantive participating rights that would result in us having control of Byrna LATAM.

We recorded our share of the joint venture’s loss during the three and nine months ended August 31, 2023 of $0.3 million and $0.6 million, respectively, in the Consolidated Statements of Operations and Comprehensive Loss as other expense. The carrying value of our investment in the joint venture at August 31, 2023 is $0 due to losses exceeding original investment. During the three and nine months ended August 31, 2023, the cumulative net losses of Byrna LATAM exceeded the equity method investment by $0.1 million. The carrying basis of the loan receivable was reduced by the $0.1 million excess loss from $1.6 million to $1.5 million. In January 2023, we loaned $1.6 million to Byrna LATAM, which is recorded as loan to joint venture in the Consolidated Balance Sheets.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of August 31, 2023 pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934. Disclosure controls and procedures are designed to ensure that material information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that material information is accumulated and communicated to the Company’s management, including its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s CEO and CFO concluded that as of August 31, 2023, our disclosure controls and procedures were effective.

Changes in Internal Controls Over Financial Reporting

There were no changes that occurred during the third quarter of 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

In the normal course of business, the Company occasionally becomes involved in various legal proceedings. The results of any such proceedings cannot be predicted with certainty because such matters are inherently uncertain. Significant damages or penalties may be sought in some matters, and some matters may require years to resolve. In our opinion, at this time, any liability from such proceedings would not have a material adverse effect on the business or financial condition of the Company.

ITEM 1A.

RISK FACTORS

Factors that could cause our actual results to differ materially from those in this report include the “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended November 30, 2022, filed with the SEC on February 9, 2023, and in Part II, Item 1A of our Quarterly Report on 10-Q for the fiscal quarter ended May 31, 2023, filed with the SEC on July 11, 2023. Except for the risk factor set forth, as of the date of this Report, there have been no material changes to the risk factors disclosed in our 2022 Form 10-K.

Restrictions imposed by advertising and social media platforms that we use may result in decreased sales and market presence.

Our direct-to-consumer sales rely to a significant degree on advertising that we place on advertising platforms, including social media platforms. Recently, Meta has prohibited advertising of any Byrna product and Google has imposed significant restrictions on our ability to advertise on its platform. Any prohibitions or restrictions on advertising imposed by these or other platforms, or any changes in the algorithms used by such platforms, may result in reduced direct-to-consumer sales, reduced traffic to our website and a decreased market presence, which could have a material adverse effect on our business, operating results, and financial condition.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

No.	Description of Exhibit
31.1*	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	Inline XBRL Instance Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished.

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Byrna Technologies Inc.

Date: October 12, 2023		/s/ Bryan Ganz
	Name:	Bryan Ganz
	Title:	Chief Executive Officer, President and Director
		(Principal Executive Officer)

Date: October 12, 2023		/s/ David North
	Name:	David North
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14(A) AND 15D-14(A)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bryan Ganz, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Byrna Technologies Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 12, 2023	By:	/s/ Bryan Ganz
		Bryan Ganz
		Chief Executive Officer, President, and Director (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECURITIES EXCHANGE ACT RULES 13A-14(A) AND 15D-14(A)

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David North, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Byrna Technologies Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 12, 2023	By:	/s/ David North
		David North
		Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Byrna Technologies Inc. (the “Company”) for the quarter ended nine months ended August 31, 2023, as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certify pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: October 12, 2023	By:	/s/ Bryan Ganz
		Bryan Ganz Chief Executive Officer, President, and Director (Principal Executive Officer)

	By:	/s/ David North
		David North Chief Financial Officer (Principal Financial and Accounting Officer)

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Aug. 31, 2023	Oct. 10, 2023
Document Information [Line Items]
Entity Central Index Key	0001354866
Entity Registrant Name	Byrna Technologies Inc.
Amendment Flag	false
Current Fiscal Year End Date	--11-30
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 31, 2023
Document Transition Report	false
Entity File Number	333-132456
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	71-1050654
Entity Address, Address Line One	100 Burtt Road, Suite 115
Entity Address, City or Town	Andover
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01810
City Area Code	978
Local Phone Number	868-5011
Title of 12(b) Security	Common stock, $0.001, par value per share
Trading Symbol	BYRN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		21,977,027

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Aug. 31, 2023	Nov. 30, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 13,654	$ 20,068
Accounts receivable, net	3,642	5,915
Inventory, net	16,687	15,462
Prepaid expenses and other current assets	963	1,200
Total current assets	34,946	42,645
LONG TERM ASSETS
Intangible assets, net	3,655	3,872
Deposits for equipment	1,520	2,269
Right-of-use asset, net	1,919	2,424
Property and equipment, net	3,638	3,309
Goodwill	2,258	2,258
Loan to joint venture	1,451	0
Other assets	204	272
TOTAL ASSETS	49,591	57,049
CURRENT LIABILITIES
Accounts payable and accrued liabilities	4,558	7,708
Operating lease liabilities, current	653	757
Deferred revenue, current	651	458
Total current liabilities	5,862	8,923
LONG TERM LIABILITIES
Deferred revenue, non-current	139	340
Operating lease liabilities, non-current	1,367	1,792
Total liabilities	7,368	11,055
COMMITMENTS AND CONTINGENCIES (NOTE 21)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued	0	0
Common stock, $0.001 par value, 50,000,000 shares authorized. 24,143,014 shares issued and 21,977,027 shares outstanding as of August 31, 2023 and, 24,018,612 shares issued and 21,852,625 outstanding as of November 30, 2022	24	23
Additional paid-in capital	129,707	125,474
Treasury stock (2,165,987 shares purchased as of August 31, 2023 and November 30, 2022)	(17,500)	(17,500)
Accumulated deficit	(68,747)	(61,383)
Accumulated other comprehensive loss	(1,261)	(620)
Total Stockholders’ Equity	42,223	45,994
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 49,591	$ 57,049

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Aug. 31, 2023	Nov. 30, 2022
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	24,143,014	24,018,612
Common stock, shares outstanding (in shares)	21,977,027	21,852,625
Treasury stock, shares (in shares)	2,165,987	2,165,987

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022
Net revenue	$ 7,085	$ 12,422	$ 27,004	$ 32,018
Cost of goods sold	3,927	5,545	12,402	14,403
Gross profit	3,158	6,877	14,602	17,615
Operating expenses	7,267	8,283	21,522	25,045
LOSS FROM OPERATIONS	(4,109)	(1,406)	(6,920)	(7,430)
OTHER INCOME (EXPENSE)
Foreign currency transaction gain (loss)	(54)	28	(238)	(67)
Interest income (expense)	239	(3)	525	10
Loss from joint venture	(287)	0	(625)	0
Other expenses	(7)	(3)	(270)	(183)
LOSS BEFORE INCOME TAXES	(4,218)	(1,384)	(7,528)	(7,670)
Income tax (provision) benefit	124	(150)	165	(82)
NET LOSS	(4,094)	(1,534)	(7,363)	(7,752)
Foreign currency translation adjustment for the period	585	(639)	(641)	(624)
COMPREHENSIVE LOSS	$ (3,509)	$ (2,173)	$ (8,004)	$ (8,376)
Net loss per share – basic and diluted (in dollars per share)	$ (0.19)	$ (0.07)	$ (0.34)	$ (0.34)
Weighted-average number of common shares outstanding - basic and diluted (in shares)	21,960,163	21,751,879	21,895,815	22,704,565

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Aug. 31, 2023	Aug. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$ (7,363)	$ (7,752)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	4,689	4,061
Depreciation and amortization	921	638
Provision for inventory	648	0
Operating lease costs	505	360
Loss from joint venture	625	0
Impairment loss	176	0
Changes in assets and liabilities:
Accounts receivable	1,968	(1,003)
Deferred revenue	(8)	167
Inventory	(2,317)	(8,917)
Prepaid expenses and other current assets	182	(85)
Other assets	(97)	142
Accounts payable and accrued liabilities	(3,027)	(151)
Operating lease liabilities	(530)	(244)
NET CASH USED IN OPERATING ACTIVITIES	(3,628)	(12,784)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(342)	(2,232)
Equity method investment in joint venture	(520)	0
Purchase of patent rights	0	(44)
Cash paid for asset acquisition, net of cash acquired	0	(1,933)
Loan to joint venture	(1,556)	0
NET CASH USED IN INVESTING ACTIVITIES	(2,418)	(4,209)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock option exercises	0	457
Repurchase of common stock	0	(15,000)
Payment of taxes withheld on issuance of restricted stock units	(456)	0
NET CASH USED IN FINANCING ACTIVITIES	(456)	(14,543)
Effects of foreign currency exchange rate changes	88	(407)
NET DECREASE IN CASH AND CASH EQUIVALENTS FOR THE PERIOD	(6,414)	(31,943)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	20,068	56,400
CASH AND CASH EQUIVALENTS END OF PERIOD	$ 13,654	$ 24,457

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock, Common [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Nov. 30, 2021	23,754,096		0
Balance at Nov. 30, 2021	$ 23	$ 119,589	$ 0	$ (53,498)	$ (16)	$ 66,098
Stock-based compensation	$ 0	4,061	$ 0	0	0	4,061
Issuance of common stock pursuant to vesting of restricted stock units (in shares)	12,266		0
Issuance of common stock pursuant to vesting of restricted stock units	$ 0	0	$ 0	0	0	0
Net Income (Loss) Attributable to Parent	0	0	0	(7,752)	0	(7,752)
Foreign currency translation adjustment for the period	0	0	0	0	(624)	(624)
Settlement of obligation to grant stock options		1,043				1,043
Issuance of common stock pursuant to exercise of stock options (in shares)	250,250		0
Issuance of common stock pursuant to exercise of stock options	$ 0	457	$ 0	0	0	457
Reclassification of stock-based compensation plan modification	$ 0	(1,043)	$ 0	0	0	(1,043)
Repurchase of common shares under Stock Buyback Plan (in shares)	0		(1,779,958)
Repurchase of common shares under Stock Buyback Plan	$ 0	0	$ (15,000)	0	0	(15,000)
Balance (in shares) at Aug. 31, 2022	24,016,612		(1,779,958)
Balance at Aug. 31, 2022	$ 23	124,107	$ (15,000)	(61,250)	(640)	47,240
Balance (in shares) at May. 31, 2022	24,008,219		(1,779,958)
Balance at May. 31, 2022	$ 23	120,375	$ (15,000)	(59,716)	(1)	45,681
Stock-based compensation	$ 0	2,689	$ 0	0	0	2,689
Issuance of common stock pursuant to vesting of restricted stock units (in shares)	8,393		0
Issuance of common stock pursuant to vesting of restricted stock units	$ 0	0	$ 0	0	0	0
Net Income (Loss) Attributable to Parent	0	0	0	(1,534)	0	(1,534)
Foreign currency translation adjustment for the period	0	0	0	0	(639)	(639)
Settlement of obligation to grant stock options	$ 0	1,043	$ 0	0	0	1,043
Balance (in shares) at Aug. 31, 2022	24,016,612		(1,779,958)
Balance at Aug. 31, 2022	$ 23	124,107	$ (15,000)	(61,250)	(640)	47,240
Balance (in shares) at Nov. 30, 2022	24,018,612		(2,165,987)
Balance at Nov. 30, 2022	$ 23	125,474	$ (17,500)	(61,383)	(620)	45,994
Stock-based compensation	$ 0	4,689	$ 0	0	0	4,689
Issuance of common stock pursuant to vesting of restricted stock units (in shares)	124,402		0
Issuance of common stock pursuant to vesting of restricted stock units	$ 1	(456)	$ 0	0	0	(457)
Net Income (Loss) Attributable to Parent	0	0	0	(7,363)	0	(7,363)
Foreign currency translation adjustment for the period	$ 0	0	$ 0	0	(641)	(641)
Balance (in shares) at Aug. 31, 2023	24,143,014		(2,165,987)
Balance at Aug. 31, 2023	$ 24	129,707	$ (17,500)	(68,747)	(1,261)	42,223
Balance (in shares) at May. 31, 2023	24,032,248		(2,165,987)
Balance at May. 31, 2023	$ 23	128,425	$ (17,500)	(64,653)	(1,846)	44,449
Stock-based compensation	$ 0	1,738	$ 0	0	0	1,738
Issuance of common stock pursuant to vesting of restricted stock units (in shares)	110,766		0
Issuance of common stock pursuant to vesting of restricted stock units	$ 1	(456)	$ 0	0	0	(455)
Net Income (Loss) Attributable to Parent	0	0	0	(4,094)	0	(4,094)
Foreign currency translation adjustment for the period	$ 0	0	$ 0	0	585	585
Balance (in shares) at Aug. 31, 2023	24,143,014		(2,165,987)
Balance at Aug. 31, 2023	$ 24	$ 129,707	$ (17,500)	$ (68,747)	$ (1,261)	$ 42,223

Note 1 - Nature of Operations

9 Months Ended

Aug. 31, 2023

Note 1 - Nature of Operations (Details Textual)	Aug. 31, 2023 ft² a	Jan. 10, 2023
Number of Facilities	2
Byrna LATAM [Member]
Equity Method Investment, Ownership Percentage		51.00%
Byrna LATAM [Member] \| Fusady [Member]
Equity Method Investment, Ownership Percentage		49.00%
Fort Wayne, Indiana [Member]
Area of Real Estate Property (Square Foot) \| ft²	30,000
Pretoria South Africa [Member]
Area of Real Estate Property (Square Foot) \| a	20,000

Note 6 - Goodwill (Details Textual) $ in Thousands	9 Months Ended
Note 6 - Goodwill (Details Textual) $ in Thousands	Aug. 31, 2023 USD ($)
Goodwill, Impairment Loss	$ 0

Note 7 - Acquisitions (Details Textual) - Fox Labs International [Member] $ in Thousands	May 25, 2022 USD ($)
Business Combination, Consideration Transferred, Total	$ 2,200
Business Combination, Acquisition Related Costs	$ 0

Note 7 - Acquisitions - Business Combination (Details) - USD ($) $ in Thousands	Aug. 31, 2023	Nov. 30, 2022	May 25, 2022
Goodwill	$ 2,258	$ 2,258
Fox Labs International [Member]
Cash			$ 300
Accounts receivable			38
Inventory			36
Accounts payable			(59)
Deferred revenue			(14)
Goodwill			1,442
Total acquired assets			2,173
Fox Labs International [Member] \| Customer Lists [Member]
Customer list intangible			70
Fox Labs International [Member] \| Trademarks [Member]
Trademarks			$ 360

Note 8 - Investment in Joint Venture (Details Textual) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 10, 2023	Jan. 31, 2023	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022
Payments to Acquire Equity Method Investments					$ 520	$ (0)
Income (Loss) from Equity Method Investments			$ (287)	$ 0	(625)	$ 0
Byrna LATAM [Member]
Loans and Leases Receivable, Related Parties		$ 1,600	$ 1,500		$ 1,500
Financing Receivable, Interest Rate at Period End			8.30%		8.30%
Financing Receivable, Term (Year)		5 years
Interest Income, Financing Receivable, before Allowance for Credit Loss			$ 40		$ 80
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity			100		100
Increase (Decrease) in Notes Receivable, Related Parties, Current					100
Byrna LATAM [Member] \| London Interbank Offered Rate (LIBOR) 1 [Member]
Loans Receivable, Basis Spread on Variable Rate		3.00%
Byrna LATAM [Member]
Equity Method Investment, Ownership Percentage	51.00%
Payments to Acquire Equity Method Investments	$ 500
Income (Loss) from Equity Method Investments			(300)		(600)
Equity Method Investments			$ 0		$ 0

Note 10 - Property and Equipment - Summary of Cost and Accumulated Depreciation (Details) - USD ($) $ in Thousands	Aug. 31, 2023	Nov. 30, 2022
Property, plant and equipment, gross		$ 4,161
Less: accumulated depreciation		852
Total	$ 3,638	3,309
Minimum [Member]
Property, plant and equipment, gross	5,056
Less: accumulated depreciation	1,418
Total	3,638
Computer Equipment and Software [Member]
Property, plant and equipment, gross		328
Computer Equipment and Software [Member] \| Minimum [Member]
Property, plant and equipment, gross	818
Furniture and Fixtures [Member]
Property, plant and equipment, gross		392
Furniture and Fixtures [Member] \| Minimum [Member]
Property, plant and equipment, gross	268
Leasehold Improvements [Member]
Property, plant and equipment, gross		910
Leasehold Improvements [Member] \| Minimum [Member]
Property, plant and equipment, gross	990
Machinery and Equipment [Member]
Property, plant and equipment, gross		$ 2,531
Machinery and Equipment [Member] \| Minimum [Member]
Property, plant and equipment, gross	$ 2,980

Note 11 - Inventory - Summary of Inventory (Details) - USD ($) $ in Thousands	Aug. 31, 2023	Nov. 30, 2022
Raw materials	$ 6,405	$ 7,228
Work in process	1,129	701
Finished goods	9,153	7,533
Total	$ 16,687	$ 15,462

Note 12 - Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Thousands	Aug. 31, 2023	Nov. 30, 2022
Intangible assets, gross carrying amount	$ 4,361	$ 4,361
Intangible assets, accumulated amortization	(706)	(489)
Intangible assets, net carrying amount	3,655	3,872
Intangible assets, net carrying amount	3,655	3,872
Trademarks [Member]
Intangible assets, gross carrying amount	360	360
Intangible assets, net carrying amount	360	360
Intangible assets, net carrying amount	360	360
Patents [Member]
Intangible assets, gross carrying amount	3,931	3,931
Intangible assets, accumulated amortization	(659)	(468)
Intangible assets, net carrying amount	3,272	3,463
Intangible assets, net carrying amount	$ 3,272	3,463
Patents [Member] \| Minimum [Member]
Finite lived intangible assets, useful life (Year)	10 years
Patents [Member] \| Maximum [Member]
Finite lived intangible assets, useful life (Year)	17 years
Customer Lists [Member]
Finite lived intangible assets, useful life (Year)	2 years
Intangible assets, gross carrying amount	$ 70	70
Intangible assets, accumulated amortization	(47)	(21)
Intangible assets, net carrying amount	23	49
Intangible assets, net carrying amount	$ 23	$ 49

Note 12 - Intangible Assets - Estimated Future Amortization Expense (Details) $ in Thousands	Aug. 31, 2023 USD ($)
2023 (three months)	$ 72
2024	270
2025	254
2027	254
Thereafter	2,191
Total	$ 3,295

Note 13 - Accounts Payable and Accrued Liabilities - Summary of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Aug. 31, 2023	Nov. 30, 2022
Trade payables	$ 1,750	$ 3,804
Accrued sales and use tax	690	896
Accrued people costs	1,189	1,912
Accrued professional fees	289	349
Other accrued liabilities	640	747
Total	$ 4,558	$ 7,708

Note 14 - Lines of Credit (Details Textual) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 19, 2021	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022
Debt Issuance Costs, Line of Credit Arrangements, Gross		$ 100		$ 100
Amortization of Debt Issuance Costs		$ 10	$ 10	$ 20	$ 20
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 5,000
Line of Credit Facility, Interest Rate at Period End		8.75%		8.75%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
Long-Term Line of Credit, Total		$ 0		$ 0
Revolving Credit Facility [Member] \| Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Revolving Credit Facility [Member] \| Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	0.50%
Equipment Financing Line of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,500
Line of Credit Facility, Interest Rate at Period End		8.75%		8.75%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
Long-Term Line of Credit, Total		$ 0	$ 0	$ 0	$ 0
Equipment Financing Line of Credit [Member] \| Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Equipment Financing Line of Credit [Member] \| Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	0.50%

Note 15 - Stockholders' Equity (Details Textual) - USD ($) $ in Millions			1 Months Ended			9 Months Ended
	Oct. 06, 2022	Apr. 28, 2022	Nov. 30, 2022	May 31, 2022	Mar. 31, 2022	Aug. 31, 2022	Jun. 17, 2022	Jun. 16, 2022	Feb. 15, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized (in shares)							50,000,000	300,000,000
Treasury Stock, Value, Acquired, Cost Method						$ 15.0
Stock Buyback Plan [Member]
Stock Repurchase Program, Authorized Amount									$ 10.0
Treasury Stock, Value, Acquired, Cost Method			$ 2.5	$ 5.0	$ 10.0
Stock Repurchase Program, Authorized Amount, Addition	$ 2.5	$ 5.0

Note 16 - Stock-based Compensation - Summary of RSU Activity (Details) - Restricted Stock Units (RSUs) [Member] - shares	9 Months Ended
	Aug. 31, 2023	Aug. 31, 2022
Unvested and outstanding (in shares)	1,314,909
Issued (in shares)	(213,636)
Granted (in shares)	9,805	376,555
Forfeited (in shares)	(611,576)
Unvested and outstanding (in shares)	499,502

Note 16 - Stock-based Compensation - Valuation Assumptions (Details) - Share-Based Payment Arrangement, Option [Member]	9 Months Ended
	Aug. 31, 2023 $ / shares
Expected dividends	0.00%
Expected life (in years) (Year)	6 years 6 months
Minimum [Member]
Risk free rate	3.63%
Expected volatility	76.10%
Market price of the Company’s common stock on date of grant (in dollars per share)	$ 6.35
Maximum [Member]
Risk free rate	3.79%
Expected volatility	77.00%
Market price of the Company’s common stock on date of grant (in dollars per share)	$ 6.37

Note 16 - Stock-based Compensation - Summary of Stock Option Activity (Details)	9 Months Ended
	Aug. 31, 2023 $ / shares shares
Outstanding, stock options (in shares) \| shares	1,297,750
Outstanding, weighted-average exercise price per stock option (in dollars per share) \| $ / shares	$ 6.75
Granted, stock options (in shares) \| shares	249,999
Granted, weighted-average exercise price per share (in dollars per share) \| $ / shares	$ 8.96
Forfeited, stock options (in shares) \| shares	(95,250)
Forfeited, weighted-average exercise price per share (in dollars per share) \| $ / shares	$ 8.14
Outstanding, stock options (in shares) \| shares	1,452,499
Outstanding, weighted-average exercise price per stock option (in dollars per share) \| $ / shares	$ 6.96
Exercisable, stock options (in shares) \| shares	601,498
Exercisable, weighted-average exercise price per share (in dollars per share) \| $ / shares	$ 5.01

Note 18 - Related Party Transactions (Details Textual) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jan. 07, 2022	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022	Aug. 01, 2023	Nov. 30, 2022
Revenue from Contract with Customer, Excluding Assessed Tax		$ 7,085	$ 12,422	$ 27,004	$ 32,018
Chief Technology Officer [Member] \| Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	200,000
Chief Executive Officer [Member]
Related Party Transaction, Amounts of Transaction		10	10	60	30
Bersa S.A [Member]
Revenue from Contract with Customer, Excluding Assessed Tax		60		100
Accounts Receivable, after Allowance for Credit Loss		2,200		2,200			$ 4,000
Andre Buys [Member] \| Chief Technology Officer [Member]
Royalty Expense		10	0	$ 10	$ 0
Accounts Payable						$ 10	$ 0
Andre Buys [Member] \| Chief Technology Officer [Member] \| Maximum [Member]
Royalty Expense		$ 10	$ 0
Fusady [Member] \| Each of Four Individual Investors [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		25.00%		25.00%
Bersa S.A [Member] \| Each of Four Individual Investors [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		25.00%		25.00%

Note 19 - Leases (Details Textual) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
Note 19 - Leases (Details Textual) - USD ($) $ in Thousands	Aug. 31, 2022	Aug. 31, 2023
Wilmington/Andover, Massachusetts [Member]
Operating Lease, Monthly Base Rent Expense		$ 20
Lease Expiration Date		Feb. 29, 2028
SOUTH AFRICA
Lease Expiration Date		Dec. 31, 2024
SOUTH AFRICA \| Lease for Larger Facility [Member]
Operating Lease, Monthly Base Rent Expense		$ 70
Fort Wayne, Indiana [Member] \| Fort Wayne Facility Member
Operating Lease, Monthly Base Rent Expense		$ 10
Lease Expiration Date	Jul. 31, 2027	Jul. 31, 2025
Fort Wayne, Indiana [Member] \| Former Fort Wayne Facility Member
Operating Lease, Monthly Base Rent Expense	$ 20
Las Vegas, Nevada [Member]
Lease Expiration Date		Jan. 31, 2027
Las Vegas, Nevada [Member] \| Maximum [Member]
Operating Lease, Monthly Base Rent Expense		$ 10

Note 19 - Leases - Future Lease Payments Under Non-cancelable Operating Leases (Details) - USD ($) $ in Thousands	Aug. 31, 2023	Nov. 30, 2022
2023 (three months)	$ 165
2024	680
2025	584
2026	527
2027	263
Thereafter	184
Total lease payments	2,403
Less: imputed interest	383
Present value of operating lease liabilities	2,020
Operating lease liabilities, current	653	$ 757
Operating lease liabilities, non-current	$ 1,367	$ 1,792

Note 21 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands			3 Months Ended		9 Months Ended
	Jun. 07, 2023	Apr. 13, 2018	Aug. 31, 2023	Aug. 31, 2022	Aug. 31, 2023	Aug. 31, 2022	Jan. 07, 2022
Restricted Stock Units (RSUs) [Member]
Share-Based Payment Arrangement, Expense			$ 1,300	$ 1,700	$ 3,400	$ 2,400
Restricted Stock Units (RSUs) [Member] \| Chief Technology Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)							200,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Accelerated Vesting, Number (in shares)	200,000
Share-Based Payment Arrangement, Accelerated Cost			500	500	500
Share-Based Payment Arrangement, Expense			500	600	900	600
CO2 Pistols [Member]
Initial Royalty, Percentage of Net Price		2.50%
Net Price Per Unit		167.60
Reduction in Royalty, Percentage Per Year		0.10%
Minimum Royalty Percentage		1.00%
Initial Royalty Percentage for New Products in Category		2.50%
Fintail Projectiles [Member]
Initial Royalty, Percentage of Net Price		4.00%
Andre Buys [Member]
Other Commitment, to be Paid, Year One		$ 30
Andre Buys [Member] \| Chief Technology Officer [Member]
Royalty Expense			$ 10	$ 0	$ 10	$ 0

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