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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

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

 For the fiscal year ended November 30, 2023

 OR

 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 organization)

 (I.R.S. Employer Identification No.)

 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 Capital Market

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

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No

 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

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

 The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter (May 31, 2023) was approximately $ 79,015,209 based upon a share valuation of $4.67 per share.

 As of February 1, 2024, the Company had 24,168,014 issued and 22,002,027 outstanding shares of common stock.

 Documents incorporated by reference: Portions of the Registrant's definitive proxy statement relating to its 2023 annual meeting of shareholders (the "2024 Proxy Statement") are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2024 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

 PAGE

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market Price for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Selected Financial Data

 Item 7.

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

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements

 Item 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibits

 Item 16.

 Form 10-K Summary

 Signatures

 FORWARD LOOKING STATEMENTS

 This Annual Report on Form 10-K (the "Report") and the documents we have filed with the Securities and Exchange Commission (the "SEC") that are incorporated by reference herein contain "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 Annual 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 "may," "will," "should," "could," "would," "expects," "plans," "anticipates," "believes," "goals," "sees," "estimates," "projects," "predicts," "intends," "think," "potential," "objectives," "optimistic," "strategy," 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. Our actual results could differ materially from those anticipated in forward-looking statements as a result of certain factors, including matters described in the section titled "Risk Factors." Moreover, new risks regularly emerge and it is not possible for our management to predict all risks, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this Report are based on information available to us on the date hereof. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained throughout this Report and the documents we have filed with the SEC.

 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. Forward-looking statements include, but are not limited to, statements about:

 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 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 recruit, retain and incentivize key management personnel;

 our ability to design, manufacture, market and sell new products and product lines;

 our ability to integrate the operations and product lines of companies that we acquire;

 risks related to 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;

 risks related to any 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;

 risks related to delayed cash collections or bad debt; and

 risks related to determinations or audits by taxing authorities, changes in government regulations, the impact of existing or future regulation by the U.S. Bureau of Alcohol, Tobacco, and Firearms ("BATF"), import and export regulators, and other federal or state authorities, or changes to the law in key international jurisdictions including South Africa or our inability to obtain needed exemptions from such existing or future regulation.

 Our financial statements are stated in United States dollars ($US) and are prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP").

 In this annual report, unless otherwise specified, all references to "common stock" refer to our common stock, par value $0.001 per share.

 References in this Report to the " Company, " " we, " " us, " or " our " refer to Byrna Technologies Inc. and its subsidiaries (formerly known as Security Devices International, Inc.) unless the context clearly requires otherwise.

 TRADEMARK NOTICE

 Byrna is a registered trademark of Byrna Technologies Inc. in the United States. This Report contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Report, including logos, artwork and other visual displays, may appear without the or symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names. All other brand names, trademarks, trade names and service marks appearing in this Report are the property of their respective owners. We do not intend our use or display of other companies' trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by any other companies.

 ITEM 1. BUSINESS

 Overview

 We are a less-lethal self-defense technology company, specializing in innovative, next generation 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 people to safely embrace life. We seek to fulfill our mission by developing easy-to-use self-defense tools that are designed to allow people to live more safely. We are also focused on providing law enforcement and private security customers with less-lethal alternatives to firearms that are intended to reduce the use of firearms and facilitate trust within the communities they serve.

 Our product portfolio includes:

 handheld personal security devices and shoulder-fired launchers designed for use by consumers and professional security customers without the need for a background check or firearms license;

 a line of projectiles that are fired by Byrna devices, including chemical irritant, kinetic and inert rounds;

 a line of self-defense aerosol products, including Byrna Bad Guy Repellent; and

 accessories and related safety products, including the Byrna Banshee, Byrna Shield, compressed carbon dioxide (CO2) canisters, sighting systems, holsters and Byrna-branded apparel.

 Our Byrna personal security devices are powerful and effective less-lethal self-defense devices that are powered by CO2 and fire.68 caliber spherical kinetic and chemical irritant projectiles that are designed to disable a threat from a standoff distance of up to 60 feet. We have designed our Byrna devices to function as a platform that can be enhanced, upgraded and customized in a modular fashion with our accessory products. Only Byrna projectiles are approved for use with Byrna launchers, which creates the potential for reoccurring sales of consumable products.

 Our products are sold in both the consumer and security professional markets. In the consumer market, our solutions are designed to provide ordinary civilians with an effective, less-lethal tool to disable, disarm and deter would-be assailants and to escape harm's way. In the professional market, our products are designed to provide domestic and international law enforcement agencies, corrections and custodial officers, private security professionals, private investigators and other professional security users with a practical, less-lethal option to address threats and resolve conflicts without the need to resort to lethal force. Our products can be purchased in most U.S. locations quickly, simply and discreetly, without the requirement for a license, background check or waiting period.

 Strategic Focus and Products

 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 flagship product, the Byrna SD is a compact, ergonomically designed, handheld personal security device with the size and form factor of a compact handgun. It is easy to use, has virtually no recoil and is designed to fire accurately with an effective range of 50 feet. The Byrna SD utilizes our patented technology and more than 60 custom designed parts. The Byrna SD comes with easily reloadable magazines that can hold five or seven.68 caliber projectiles. The Byrna SD is designed to provide a less-lethal alternative to a firearm, effective at a much safer stand-off distance than pepper spray or conductive energy devices, which have recommended maximum ranges of 10 feet and 20 feet, respectively. During 2023, we introduced the Byrna LE. With a more powerful valve design the LE has a higher average muzzle velocity of 330 feet per second and an effective range of 60 feet.

 In May 2021, we purchased certain assets of Mission Less Lethal, a U.S. manufacturer of.68 caliber, less-lethal, shoulder-fired launchers for law enforcement and other security professionals. By leveraging the technology and intellectual property acquired from Mission Less Lethal, we have introduced the Byrna TCR, an easy to use, tactical compact rifle that can fire 19 rounds in rapid succession at more than 325 feet per second using a standard 12-gram CO2 cartridge for propulsion, and we have also released the Byrna M-4, a full sized tactical rifle with either 120 round capacity in law enforcement form or two 20 round magazines in civilian form. These rifles are well suited to meet specific situational needs of security professionals, including law enforcement, private security and corrections customers.

 In May 2022, we acquired Fox Labs International, a producer of defensive pepper sprays, that catered primarily to law enforcement and other security professionals. This has enabled us to continue sales to the law enforcement market while using our ecommerce and dealership channels to offer professional quality chemical irritant self-defense spray to the consumer market under the name Byrna Bad Guy Repellent.

 On January 10, 2023, we created a new joint venture with Fusady S.A., an affiliate of Bersa S.A. ("Fusady") located in Uruguay, to expand our operations and presence in South American markets. We hold 51% of the stock in the joint venture entity, Byrna LATAM S.A. ("Byrna LATAM"), and the remaining 49% of stock in Byrna LATAM is held by Fusady.

 We offer a range of.68 caliber projectiles for different applications. Our chemical irritant projectiles include Byrna Max, which contains a pepper and tear gas blend, and Byrna Pepper, which contains a pepper and PAVA blend. These chemical irritant projectiles are designed to cause burning sensation on an assailant's eyes and skin and to temporarily cause a sensation of impairment of their respiratory system upon contact, with quick-acting, incapacitating effects. We also offer Byrna Kinetic, a lower-cost, hard plastic projectile that can be used for self-defense or training, and Byrna Pro Training, a projectile filled with inert powder to simulate use of chemical irritant rounds for training. During 2021, we introduced the Eco-Kinetic line of projectiles which are environmentally safe, fully biodegradable and highly accurate rounds for both safety and recreational uses. During 2023 we introduced our less lethal 12 gauge kinetic round that uses patented fin-stabilized projectiles designed to be fired from any 12 gauge shotgun with standard cylinder or improved cylinder bore choke with increased speed and accuracy at up to 100 feet of range.

 Additionally, we offer the Byrna Shield, a ballistic-rated backpack that can be fitted with multiple armor panels and utilizes a patented deployment system to protect the wearer from both the front and back. We also market a range of accessories that allow our users to customize, carry, load, power and maintain their Byrna launchers. These accessories include laser sights, flashlight attachments, spare magazines, barrel extensions, holsters and CO2 cartridges. Finally, we offer our customers apparel featuring the Byrna brand and emphasizing our Live Safe motto. Together, our projectiles, accessories and apparel provide us with an attractive source of ongoing revenue from our base of Byrna owners.

 Marketing and Sales

 We sell our products into the consumer market through our Byrna e-commerce store, Side Hustle dealer program, premier dealers, and a network of over 1,300 local, regional and national outdoor and sporting goods stores, either directly or through distributors. We also sell our products through an Amazon storefront. In the professional security market, we seek to drive purchases through our Train the Trainer program developed for police and security officers, with a focus on educating them on the proper use of force and de-escalation methods.

 Our international sales are fulfilled primarily by select distribution partners that have expertise in their local markets. International sales represented 5.8% of revenue in our fiscal year 2023 and 19.1% of revenue in fiscal year 2022; we see the potential to continue increasing our international sales mix as foreign law enforcement customers are showing growing interest in Byrna devices serving as a less-lethal, secondary security device, and the Byrna approach is increasingly seen as a favorable de-escalation solution.

 Our marketing efforts are focused on creating brand awareness for Byrna by utilizing promotional specials and banner ads and driving traffic to our e-commerce store through the use of digital marketing tools. In early 2020, we implemented a nationwide reseller and distribution network of brick-and-mortar outlets and engaged third-party firms to market our products to dealers in the outdoor and sporting goods sectors.

 In June 2020, and then again in April 2021, Byrna was highlighted on a popular national news program. Commencing in September 2023, we pivoted away from traditional social media channels, some of which prohibited us from advertising, in favor of a more targeted approach via celebrity endorsement, talk radio, and non-social media online advertising efforts. These high-profile events and advertisement strategies led to significant increases in orders in our e-commerce channels and further raised our brand recognition nationally. We believe these events demonstrated the positive and rapid impacts that additional visibility of our products and brand can have on our sales. Our current marketing strategy includes engaging key influencers in relevant markets to highlight the benefits of our security solutions to their respective networks of followers, engaging in public dialogues about firearm regulation, school safety and the expansion of police programs and training in the use of less-lethal weapons, and expanding our use of targeted digital marketing tools.

 Manufacturing, Suppliers and Distribution

 We operate two manufacturing facilities. In the United States, we opened a 14,000 square foot facility in 2020 located in Fort Wayne, Indiana and in 2022 we moved to a new 30,000 square foot facility nearby in order to expand capacity. We utilize our Fort Wayne facility to fulfill domestic demand for our launchers. To satisfy production demand in international markets, we operate a 20,000 square foot manufacturing facility located in Pretoria, South Africa. Both facilities utilize a human capital-oriented model with highly-skilled manual assembly of precision components. With the expansion of both facilities, we believe that we have sufficient capacity to meet our production needs for at least the next two years, and that additional capacity is available to us on commercially reasonable terms.

 We rigorously test 100% of our products at our production facilities before shipment to ensure our products meet stringent quality and performance standards. We also conduct long-term testing of our launchers during the development phase. We measure in-field quality by the rate of returns requested by our customers.

 Our Byrna SD and LE include a significant number of distinct parts, including many custom designed parts. We source these components from third-party suppliers in the U.S. and overseas. Historically, our projectiles have been sole-sourced from third-party suppliers in South Africa. However, we established the capability to manufacture projectiles in our own facilities, thereby, improving quality and availability while reducing dependence on third parties.

 Research and Development

 We conduct research and development activities to enhance existing products and develop new products at our headquarters, in Andover, Massachusetts. Our design team is comprised of experts in the fields of mechanical design, precision manufacturing and CO2-powered propulsion. We are currently focused on executing the commercial introduction of a series of new launchers. These new launchers are expected to benefit from our innovations in the areas of greater and more controlled muzzle velocity, improved cold weather performance, more efficient utilization of CO2, improved triggers, higher capacity magazines, improved sighting systems, yet keeping the product compact and ergonomic. We are also investing engineering resources to develop proprietary projectiles both for the consumer and law enforcement markets. In particular, we have designed an accurate and effective long range less lethal projectile to be fired from a 12-gauge shotgun. We introduced this product in January 2023.

 Intellectual Property

 Our success and ability to compete effectively depends, in part, on our ability to protect our proprietary technology and to establish and adequately protect our intellectual property rights. To establish and protect our proprietary rights, we rely upon a combination of patent, copyright, trade secret and trademark laws and contractual restrictions such as confidentiality agreements, licenses and intellectual property assignment agreements. We maintain a policy requiring certain of our employees, contractors, consultants and other third parties to enter into confidentiality and proprietary rights agreements as needed to control access to our proprietary information.

 We have numerous issued utility and design patents. We are currently prosecuting several newly filed provisional patents. We have several granted trademarks as well as trademarks which have been filed and are currently being prosecuted. We further obtained one patent and one trademark through the acquisition of Mission Less Lethal in May 2021, two patents and four trademarks through the acquisition of Ballistipax Holdings Inc. ("Ballistipax") and several trademarks through the acquisition of Fox Labs. In addition, through the acquisition of Mission Less Lethal, we now hold exclusive rights to use all of the intellectual property of Kore Outdoor, Inc. (the previous owner of Mission Less Lethal) for less-lethal applications.

 Competition

 Our less-lethal security products compete with manufacturers of:

 conductive energy devices, including Axon Enterprise, Inc., which sells the TASER device;

 other handheld CO2-powered launchers of chemical irritant projectiles, including United Tactical Systems, LLC, which sells products under the PepperBall brand; and

 remote restraint devices, including Wrap Technologies, Inc.

 In addition, manufacturers of traditional firearms may introduce products competitive with ours. Many of our existing and potential competitors benefit from strong brand recognition, broad product lines, well-established distribution, loyal resellers and customers and significant financial resources. We expect to encounter new competitors as the less-lethal security market grows and as we enter new markets both domestically and internationally. We believe our Byrna line of products is competitive in terms of price, quality, appearance, features, performance and reliability, but we must continue to innovate and increase brand awareness in order to stay competitive.

 Regulatory Matters

 The manufacture, sale, and purchase of weapons, ammunitions, and explosives are subject to extensive federal, state, local, and foreign laws. We are also subject to the rules and regulations of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives ("BATF"), and various state and international agencies that regulate the manufacture, export, import, distribution and sale of ammunition and explosives. Such regulations may adversely affect demand for our products by imposing limitations that increase the costs or limit the availability of our products. In order to manufacture, sell, import and export our 40mm products and certain components, we are required to obtain and maintain several Federal Firearms License ("FFL") and Federal Explosive License ("FEL") licenses and permits. The Byrna SD is a new product and may be subject to future legislation or regulation. Because it uses CO2, rather than gunpowder or other explosives to launch projectiles, the Byrna SD is not currently a "firearm" regulated by the BATF. It is, however, subject to certain state and local regulations related to "pepper spray" or "tear gas" devices. Re-characterization of the Byrna SD as a firearm or other changes to or new interpretations of existing regulations could impact our ability to manufacture or sell the Byrna SD and its projectiles, or limit their market, which could impact our sales and demand for Byrna products. Similarly changes in laws related to the domestic or international use of chemical irritants by civilians or law enforcement could impact both our sales and the size of the reachable market.

 We are subject, both directly and indirectly, to the adverse impact of existing and potential future government regulation of our products, technology, operations and markets. For example, the development, production, (re-)exportation, importation, and transfer of our products and technology is subject to U.S. and foreign export control, sanctions, customs, import and anti-boycott laws and regulations, including the Export Administration Regulations (the "EAR") (collectively, "Trade Control Laws"). If one or more of our products or technology, or the parts and components we buy from others, is or becomes subject to the International Traffic in Arms Regulations (the "ITAR") or national security controls or other controls under the EAR, this could significantly impact our operations, for example by severely limiting our ability to sell, (re-)export, or otherwise transfer our products and technology, or to release controlled technology to foreign person employees or others in the United States or abroad. We may not be able to obtain licenses and other authorizations required under the applicable Trade Control Laws. The failure to satisfy the requirements under the Trade Control Laws, including the failure or inability to obtain necessary licenses or qualify for license exceptions, could delay or prevent the development, production, (re-)export, import, and/or in-country transfer of our products and technology, which could adversely affect our revenues and profitability.

 Failure by us, our employees, or others working on our behalf to comply with the applicable Trade Control Laws could result in administrative, civil, or criminal liabilities, including fines, suspension, debarment from bidding for or performing government contracts, or suspension of our export privileges, which could have a material adverse effect on us. We transact with suppliers and others who are exposed to similar risks. Violations of the Trade Control Laws or other applicable laws and regulations could materially adversely affect our products, technology, brand, growth efforts, employees, and business.

 In addition, our failure to comply with applicable rules and regulations may result in the limitation of our growth or business activities and could result in the revocation of licenses necessary for our business. The importation of materials and components we use in manufacturing our products and export of finished goods are also subject to extensive federal and international laws and regulations. The handling of our technical data and the international sale of our products may also be regulated by the U.S. Department of State and Department of Commerce. These agencies can impose civil and criminal penalties, including preventing us from exporting our products, for failure to comply with applicable laws and regulations.

 We believe that existing federal, state, and local legislation relating to the regulation of firearms and ammunition do not have a material adverse effect on our sales of products. However, the regulation of firearms and ammunition may become more restrictive in the future, and any such developments might have a material adverse effect on our business, operating results, financial condition, and cash flows.

 Human Capital

 As of November 30, 2023, we had 106 employees. We believe that our employee relations are good, and that our human capital meets the needs of our business. None of our employees is represented by a collective bargaining agreement and we have never experienced any work stoppage. Our future performance depends significantly upon the continued service of our key engineering, technical and senior management personnel and our continued ability to attract and retain skilled employees.

 Environmental Compliance

 Our facilities are subject to federal, state, local and foreign environmental laws and regulations. Compliance with these provisions has not had, nor do we expect such compliance will have, any material adverse effect upon our capital expenditures, earnings, or competitive position. We believe that we are not subject to any material costs for compliance with any environmental laws.

 Corporate History

 We were incorporated in Delaware on March 1, 2005 under the name Security Devices International Inc. On February 26, 2020, we filed an amendment to our Certificate of Incorporation with the Secretary of State of Delaware changing our name, effective March 4, 2020, to Byrna Technologies Inc. Effective December 19, 2019, we dissolved our wholly-owned subsidiary Security Devices International Canada Corp ("SDICC"). We currently have one wholly-owned subsidary, Byrna South Africa (Pty) Ltd. ("Byrna South Africa"). On May 5, 2020, we acquired all of the issued and outstanding equity interests of Roboro Industries Pty LTD ("Roboro") and, as a result, Roboro became our wholly-owned subsidiary. During the year ended November 30, 2021, we utilized Roboro exclusively as a manufacturing and assembly supplier for our products until such operations were assumed by Byrna South Africa following the acquisition. On March 10, 2023, the Company dissolved the Roboro legal entity. On April 27, 2021, we effected a 10-for-1 reverse stock split of our common stock (the "Reverse Stock Split") with exercise prices for our outstanding warrants and stock options appropriately adjusted.

 On January 10, 2023, we created a new joint venture with Fusady S.A., an affiliate of Bersa S.A. ("Fusady") located in Uruguay, to expand our operations and presence in South American markets. We hold 51% of the stock in the joint venture entity, Byrna LATAM S.A. ("Byrna LATAM"), and the remaining 49% of stock in Byrna LATAM is held by Fusady.

 ITEM 1A. RISK FACTORS

 Summary of Risk Factors

 Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading " Risk Factors " and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC before making an investment decision regarding our common stock.

 We have a limited operating history on which you can evaluate our business.

 We have a history of operating losses and we cannot guarantee that we will be able to achieve or sustain profitability.

 If we are unable to successfully implement our business plan for the sale of our products, our revenue growth could be slower than we expect and our business, operating results and financial condition could be adversely affected.

 We may not be able to effectively manage our future growth.

 Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

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

 The failure to attract and retain key personnel could have an adverse effect on our operating results.

 We depend on the sale of our personal security devices.

 Sale of our personal security devices and kits depends on the continued availability of our ammunition, some of which is dependent on sole source suppliers.

 Our business depends on maintaining and strengthening our brand and generating and maintaining demand for our products, and a reduction in such demand could harm our results of operations.

 We are dependent on our relationships with key third-party suppliers for our business.

 We are dependent on the quality of parts supplied by and quality controls of our third-party suppliers.

 Higher costs or unavailability of components, freight, materials and accessories, including ammunition, could adversely affect our financial results.

 If we are unable to successfully design and develop or acquire new and appealing products, our business may be harmed.

 Our business could be harmed if we are unable to accurately forecast consumer preferences and retail trends that affect demand for our products.

 We rely on a limited number of third parties for shipping, transportation, logistics, marketing and sales of our products and components. A loss of any of such third-party relationships would have a material adverse effect on our operating results.

 If we deliver products with defects, we may be subject to product recalls or negative publicity, our credibility may be harmed, market acceptance of our products may decline, and we may be exposed to liability.

 Our business relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return.

 Our business depends on our ability to prevent or mitigate the effects of a cybersecurity attack.

 Conducting a portion of our operations through joint ventures exposes us to risks and uncertainties, many of which are outside of our control, and such risks could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 As we seek to expand our business globally, growth opportunities may be impacted by greater political, economic and social uncertainty and the continuing and accelerating globalization of businesses could significantly change the dynamics of our competition, customer base and product offerings.

 Sales transacted at our retail store may be paid for with cash which increases the risk of theft and related legal liability.

 The markets for security products and less-lethal defense technology are in a state of technological change which could have a material adverse impact on our business, financial condition and results of operations.

 The less-lethal defense technology industry and security products markets are highly competitive and our success depends upon our ability to effectively compete with numerous worldwide business.

 Expansion of sales of our product to schools, law enforcement and other governmental or quasi-governmental entities may require expenditure of resources and lengthen our sale cycle.

 Our performance is influenced by a variety of economic, social, and political factors.

 We are subject to extensive regulation and could incur fines, penalties and other costs and liabilities under such requirements.

 Changes in government policies and legislation could adversely affect our financial result.

 Health and safety risks could expose us to potential liability and adversely affect our operating results and financial condition.

 We are exposed to operating hazards and uninsured risks that could adversely impact our operating results and financial condition.

 Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, and export controls and trade sanctions, could result in fines or criminal penalties if we expand our business abroad.

 If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations would be harmed.

 If we are unable to protect our intellectual property, we may lose a competitive advantage or incur substantial litigation costs to protect our rights.

 We may be subject to intellectual property infringement claims, which could cause us to incur litigation costs and divert management attention from our business.

 We may not maintain qualification for listing on Nasdaq, which may impair your ability to sell your shares.

 The market price of our common stock may be volatile, which could result in substantial losses for purchasers.

 Exercise of options or vesting of restricted stock units may have a dilutive effect on your percentage ownership and may result in a dilution of your voting power and an increase in the number of shares of common stock eligible for future resale in the public market, which may negatively impact the trading price of our shares of common stock.

 Our directors, executive officers, and significant stockholders may be able to influence us.

 If our analyst coverage decreases or results in negative reports about our business, our stock price and trading volume could decline.

 Our charter documents and Delaware law could make it more difficult for a third party to acquire us and discourage a takeover.

 Our Bylaws, as amended, provide exclusive forum provisions applicable to substantially all disputes between us and our stockholders as well as claims brought under the Securities Act of 1933, which could limit our stockholders ' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

 We do not intend to pay dividends on our common stock for the foreseeable future.

 Any future litigation could have a material adverse impact on our results of operations, financial condition and liquidity.

 Our business depends on our ability to prevent or mitigate the effects of commercial crime including theft by employees, forgery and electronic crime.

 Epidemic and pandemic diseases (including the COVID-19 pandemic) could have a material adverse effect on our business, financial condition, results of operations, cash flows, and ability to comply with regulatory requirements.

 Our revenues and profits depend on the level of customer spending for our products, which is sensitive to general economic conditions and other factors.

 Tariffs, sanctions, restrictions on imports or other trade barriers between the United States and various countries, most significantly China, may impact our revenue and results of operations.

 Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible sanctions and other penalties.

 Substantial future sales, or the perception or anticipation of future sales, of shares of our common stock could cause our stock price to decline.

 The ongoing requirements of being a public company may strain our resources, divert management ' s attention, and affect our ability to attract and retain executive management and qualified board members.

 Our business could be harmed if we are unable to accurately forecast our results of operations.

 Climate change and associated changes to laws and regulations may increase our operating costs and adversely affect our business and financial results.

 Matters relating to the employment market and prevailing wage standards may adversely affect our business.

 Risk Factors

 Investing in our common stock involves a high degree of risk. These risks include, but are not limited to, those described below, each of which may be relevant to an investment decision. If any of the following risks or other risks actually occur, our business, financial condition, results of operations, and future prospects could be materially harmed. In that event, the market price of our common stock could decline, and you could lose part or all of your investment. The risks and uncertainties described below are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. See " Cautionary Note Regarding Forward-Looking Statements " above.

 Risks Related to Our Business

 We have a limited operating history on which you can evaluate our business.

 We have a limited operating history on which you can evaluate our business. Although our corporate entity has existed since 2005, we have only been manufacturing and selling the Byrna launchers, our largest source of revenue, since April 2019. Moreover, we have introduced several new products during the past few years, including product lines acquired through acquisitions and sourced from third-party manufacturers with whom we had no prior experience. Most of our senior management team are relatively new to their positions. As a result, our business may be subject to many of the problems, expenses, delays, and risks inherent in the rapid growth of a relatively new business and the integration of key personnel and infrastructure.

 We have a history of operating losses and we cannot guarantee that we will be able to achieve or sustain profitability.

 We have recorded a net loss in all fiscal years since our inception. Our net loss for the years ended November 30, 2023 and 2022 was $8.2 million and $7.9 million, respectively, and our accumulated deficit at November 30, 2023 was $69.6 million. There can be no assurance that we will not experience net losses in the future and there can be no assurance of continued profitability.

 If we are unable to successfully implement our business plan for the sale of our products, our revenue growth could be slower than we expect and our business, operating results and financial condition could be adversely affected.

 There can be no assurance that our revenues or revenue growth can be sustained and revenues are not expected to grow at the rates experienced in certain prior years. Revenue growth that we have achieved or may achieve may not be indicative of future operating results. The Byrna line of handheld personal security devices are relatively new products and their long-term adoption by the U.S. consumer market, and by potential other markets including law enforcement, private security, and international markets, remains unknown. We have experienced product development and production delays, as well as unanticipated costs associated with the development and manufacture of new products and material and component availability and costs, air freight availability and costs, volatile demand levels related to unexpected publicity and civil unrest, and backlogs and order cancellations due to our inability to timely fulfill orders, and cancellations of orders. Given our limited sales history, number of new products introduced and planned, these types of factors and events may continue to affect the long term success and growth of our business and ability to sustain our revenues or revenue growth. Further, performance failures, new legislation or regulation, competition, or negative publicity could stall or prevent the success of existing and new products in the market and our generation of revenue. In addition, we have increased and may increase further our operating expenses in order to fund increases in our manufacturing, distribution, and sales and marketing efforts and increase our administrative resources in anticipation of future growth. To the extent that increases in such expenses precede or are not followed by timely increases in our revenues, our business, operating results, margins, growth rates, and financial condition may be materially adversely affected.

 We may not be able to effectively manage our future growth.

 We have experienced rapid growth in our headcount and operations over the last several years, integration of which will continue to place significant demands on our management and our operational and financial infrastructure. Additional growth in the future could increase that demand. We have a limited history operating our business at its current scale. We may experience difficulties in managing this growth and building the appropriate processes and controls. Continued growth (including our expansion in Ft. Wayne, international expansion, and growth associated with new product introduction and successful marketing campaign) may increase the strain on our resources, and we could experience operating difficulties, including difficulties in sourcing, logistics, recruiting, maintaining internal controls, marketing, designing innovative products, and meeting consumer needs. If we do not adapt to meet these evolving challenges, the strength of our brand may erode, the quality of our products may suffer, we may not be able to deliver products on a timely basis to our customers, and our corporate culture may be harmed.

 We must effectively integrate, develop and motivate a large number of new employees in various locations around the country, in South America, and in South Africa, and we must maintain the beneficial aspects of our corporate culture. We intend to continue to make substantial investments in research and development, marketing and sales, our general and administrative organizations, and our international operations. To attract top talent, we have had to offer, and believe we may need to improve and will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees. In addition, fluctuations in the price of our common stock can make it more difficult or costly to use equity compensation to motivate, incentivize and retain our employees. We face significant competition for talent from other high-growth companies, which include both publicly traded and privately-held companies. The risks of over-hiring or over-compensating employees and the challenges of integrating a rapidly growing employee base into our corporate culture may increase our expenses. We may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business and operating results could be adversely affected.

 As we grow our business, slower growing or reduced demand for our products, increased competition, a decrease in the growth rate of our overall market, failure to develop and successfully market new products, or the maturation of our business or market could harm our business. We expect to make significant investments in research and development and sales and marketing, expand our operations and infrastructure, design and develop or acquire new products, and enhance our existing products. If our sales do not increase at a sufficient rate to offset these increases in our operating expenses, our margins and profitability may decline in future periods.

 Additionally, if we do not effectively manage the growth of our business and operations, the quality of our products and customer service could suffer, which could negatively affect our brand, operating results and overall business. We have made changes in the past, and will make changes in the future, to our features, products and services that our customers or potential customers may not like, find useful or agree with. We may also decide to discontinue certain features, products or services, or charge for certain features, products or services that are currently free or increase fees for any of our features, products or services. If customers or potential customers are unhappy with these changes, they may decrease or end their engagement on our website, or reduce or stop purchasing our products or services. In addition, they may choose to take other types of action against us such as organizing boycotts or protests focused on our company, our products or any of our services, or filing lawsuits against us. Any of these actions could negatively impact our customer growth, engagement and our brand, which would harm our business. To effectively manage this growth, we will need to continue to improve our operational, financial and management controls, and our reporting systems and procedures by, among other things:

 •

 improving our information technology infrastructure to maintain and improve ease of use, access by consumers, and information security;

 •

 enhancing information and communication systems to ensure that our employees and offices are well-coordinated and can effectively communicate with each other and our growing base of retail customers, vendors, and suppliers;

 •

 enhancing our internal controls to ensure the security of our data and timely and accurate reporting of all of our operations; and

 •

 appropriately documenting our information technology systems and our business and control processes.

 Continuing systems enhancements and improvements are likely to require significant capital expenditures and allocation of valuable management and employee resources. If we fail to implement these improvements in a timely manner or effectively, our ability to manage our expected growth and comply with the rules and regulations that are applicable to publicly reporting companies will be impaired.

 Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

 We may be subject to proceedings or claims that may arise in the ordinary course of the business, which could include product and service warranty claims, which could be substantial. If our products fail to perform as warranted and we fail to quickly resolve product quality or performance issues in a timely manner, our reputation may be tarnished, potential sales may be lost, and we may be forced to pay damages. The occurrence of product defects and the inability to correct errors could result in the delay or loss of market acceptance of our products, material warranty expense, diversion of technological and other resources from our product development efforts, and the loss of credibility with customers, manufacturer's representatives, distributors, dealers and end-users, any of which could have a material adverse effect on our business, operating results and financial conditions.

 Our products are used in activities and situations that involve risk of personal injury. Our products expose us to potential product liability, warranty liability, and personal injury claims and litigation relating to the use or misuse of our products, including allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product or activities associated with the product, negligence, and strict liability. If successful, any such claims could have a material adverse effect on our business, operating results, and financial condition. Defects in our products may result in a loss of sales, recall expenses, delay in market acceptance, and damage to our reputation and increased warranty costs, which could have a material adverse effect on our business, operating results, and financial condition. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products.

 We maintain general liability insurance that includes product liability coverage in amounts that we believe are reasonable, but there is no assurance that we will be able to maintain such insurance on acceptable terms, if at all, in the future and product liability claims may exceed the amount of insurance coverage.

 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. During 2023, advertising and social media platforms prohibited advertising of any Byrna product and imposed significant restrictions on our ability to advertise on certain platforms. 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.

 The failure to attract and retain key personnel could have an adverse effect on our operating results.

 Our success depends substantially on the efforts and abilities of our senior management and key personnel. The competition for qualified management and key personnel is intense. The loss of services of one or more of our key employees or the inability to hire, train, and retain additional key personnel could delay the development and sale of our products, disrupt our business, and interfere with our ability to execute our business plan.

 In addition, our ability to maintain our competitive position is dependent to a large degree on the efforts and skills of our senior management team, including Bryan Ganz, our President, Chief Executive Officer and member of the Board of Directors, and David North, our Chief Financial Officer. The loss of the services of one or more of our key personnel could materially and adversely affect our operations.

 We depend on the sale of our personal security devices.

 Although we do sell certain other products and we expect to introduce new products, including products being developed and products acquired in connection with acquisitions, our revenue has been derived mainly from the sale of the Byrna SD and its successor, the Byrna LE. The sale of such personal security devices is influenced by a variety of economic, social, and political factors, including without limitation the level of confidence of consumers in our products and in the security and reliability of online shopping and e-commerce on which we significantly rely, which may result in volatile sales. Sales of the Byrna SD, including it's ammunition and accessories, represents most of our revenue. There can be no assurances of continued demand for the Byrna SD, and any change in the factors that impact demand and sales that are likely to materially and adversely affect our prospects.

 Sale of our personal security devices and kits depends on the continued availability of our ammunition, some of which is dependent on sole source suppliers.

 Our introductory product is purchased most often as a "kit" including the Byrna SD launcher and samples of our various projectiles. Unavailability of projectiles could delay shipment of kits and materially and adversely affect our operations. Moreover, our "razor/razor blade model" which anticipates future orders of ammunition from the owners of our personal security devices could be materially impacted by the unavailability of projectiles. See "We are dependent on our relationships with key third-party suppliers for our business" below. We have experienced actual and threatened shortages of our projectiles and third-party products due to pandemic related factors that affected our suppliers as well as competition and other business specific considerations. Such situations may require a quick pivot on our packaging or bundling of products, marketing or product mix or, even legal action. There are human capital and monetary costs associated with such adaptations, and there is no guarantee that we will be able to successfully meet such challenges in the future or that they will not materially increase costs of production or operations and negatively impact our financial results.

 Our business depends on maintaining and strengthening our brand and generating and maintaining demand for our products, and a reduction in such demand could harm our results of operations.

 The Byrna name and brand image are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business. Our success depends on the value and reputation of our brand, which, in turn, depends on factors such as the quality, design, performance, functionality, and durability of our products, the image of our e-commerce platform and retail presence, our communication activities, including advertising, social media, brand ambassadors, and public relations, and our management of the customer experience, including direct interfaces through customer service. Maintaining, promoting, and positioning our brand are important to expanding our customer base, and will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high quality customer experiences. We intend to make substantial investments in these areas in order to maintain and enhance our brand, however such investments may not be successful. Ineffective marketing, negative publicity, social media advertising restrictions, product diversion to unauthorized distribution channels, product or manufacturing defects, counterfeit products, unfair labor practices, failure to protect the intellectual property rights in our brand, and inability to provide satisfactory customer service experience as we rapidly expand our business, are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us. Furthermore, these factors could cause our customers to lose the personal connection they feel with the Byrna brand. We believe that maintaining and enhancing our brand image in our current markets and in new markets where we have limited brand recognition is important to expanding our customer base. If we are unable to maintain or enhance our brand in current or new markets, our growth strategy and results of operations could be harmed.

 We are dependent on our relationships with key third-party suppliers for our business.

 We rely on certain third-party suppliers for our business, including sole source suppliers. Our future operating results depend upon our ability to obtain timely delivery of a sufficient amount and a reliable quality of all components on commercially reasonable terms. Failure of a supplier's business or consolidation within the industry could further limit our ability to purchase key components at all (in the case of sole source suppliers) or in sufficient quantities and on commercially reasonable terms. Demands of competitors, including those with larger operations and stronger bargaining power or those or willing to pay a higher price or to accept lower standards, could also limit our ability to purchase key components in sufficient quantities on commercially reasonable terms. Failure of our suppliers to provide sufficient quantities of components on favorable terms, meet quality standards, or deliver components on a timely basis has occurred in the past due to industry shortages of certain raw materials or for reasons related to the COVID-19 pandemic, and could occur in the future for similar or other reasons. Such failures could delay or stop our production, result in possible lost sales and seriously threaten our liquidity and revenues.

 We are dependent on the quality of parts supplied by and quality controls of our third-party suppliers.

 The Byrna SD contains over 80 parts and we rely on third-party suppliers to deliver parts and materials that comply with our specifications. While we test 100% of our finished products, we do not test 100% of the components and materials they contain. We use randomized statistical inspection for components and materials and these protocols, while we believe them to be reliable, have inherent limitations and may miss parts that do not meet specifications. If those parts pass our completed launcher testing but subsequently cause failures of the products in which they are installed, we may need to undertake product recalls or implement protocols for improved performance or safety, which could negatively impact our reputation and business. Moreover, if any such part failure resulted in a physical injury, it could also subject us to the risks of potential product liability actions and, if our stock price were impacted, security class actions.

 Higher costs or unavailability of components, freight, materials and accessories, including ammunition, could adversely affect our financial results.

 Delays in delivery caused by industry allocations, material shortages (such as plastic or resins), or obsolescence have occurred in recent years, including as a result of the COVID-19 pandemic, may continue and could occur in the future. Such delays may take weeks or months to resolve and may result in increased costs as well as production and product fulfillment delays. In addition, in some cases, parts obsolescence may require a product re-design to ensure quality replacement components. These delays could cause significant delays in manufacturing and loss of sales, leading to adverse effects significantly impacting our financial condition or results of operations and could injure our reputation.

 Our freight and import costs and the timely delivery of our products could be adversely impacted by a number of factors which could reduce the profitability of our operations, including: higher fuel costs; port closures; theft in transit; permit or customs clearance issues; increased government regulation or changes for imports of foreign products into the United States; delays created by terrorist attacks or threats, public health issues (including new pandemics and epidemics), national disasters or work stoppages; climate change related effects on the availability of raw materials, the operations of our suppliers, or on transportation systems or routes, and other matters. Any interruption of supply for any material components of our products could significantly delay the shipment of our products and have a material adverse effect on our revenues, profitability and financial condition. Additional compliance with existing or new regulations related to climate change could increase production costs of our suppliers and indirectly lead to increased cost to us of components, materials, or accessories. International or domestic geopolitical or other events, including the imposition of new or increased tariffs and/or quotas by the U.S. government on any of these raw materials or components, could adversely impact the supply and cost of these raw materials or components, and could adversely impact the profitability of our operations. In addition, due to rapidly increasing demand for our products, we have faced significant challenges, including production backlogs and resulting customer complaints. All of the forgoing could negatively impact our financial results.

 If we are unable to successfully design and develop or acquire new and appealing products, our business may be harmed.

 To maintain and increase sales we must continue to introduce new products and improve or enhance our existing products or new products. The success of our new and enhanced products depends on many factors, including anticipating consumer preferences, finding innovative solutions to consumer problems or acquiring new solutions through mergers and acquisitions, differentiating our products from those of our competitors, and maintaining the strength of our brand. The design and development of our products as well as acquisitions of other businesses are costly and we typically have several products in development at the same time. Problems in the design or quality of our products, or delays in product introduction, may harm our brand, business, financial condition, and results of operations.

 Our business could be harmed if we are unable to accurately forecast consumer preferences and retail trends that affect demand for our products.

 To ensure adequate inventory supply, we forecast inventory needs and often place orders with our manufacturers before we receive firm orders from our retail partners or customers. If we fail to accurately forecast demand, we may experience excess inventory levels or a shortage of product.

 If we underestimate the demand for our products, we or our suppliers may not be able to scale to meet our demand, and this could result in delays in the shipment of our products and our failure to satisfy demand, as well as damage to our reputation and retail partner relationships. If we overestimate the demand for our products, we could face inventory levels in excess of demand, which could result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would harm our gross margins. In addition, failures to accurately predict the level of demand for our products could cause a decline in sales and harm our results of operations and financial condition.

 We rely on a limited number of third parties for shipping, transportation, logistics, marketing and sales of our products and components. A loss of any of such third-party relationships might have a material adverse effect on our operating results.

 We rely on third parties to ship, transport, and provide logistics for our products and components. Our dependence on a limited number of third parties for these services leaves us vulnerable due to our need to secure these parties' services on favorable terms. Loss of, or an adverse effect on, any of these relationships or failure of any of these third parties to perform as expected could have a material and adverse effect on our operations, sales, revenue, margins, liquidity, reputation and financial and operating results.

 If we deliver products with defects, we may be subject to product recalls or negative publicity, our credibility may be harmed, market acceptance of our products may decline, and we may be exposed to liability.

 We sell complex products including products that are new to the market and without a long performance history. These products may contain certain design and manufacturing defects including defects in materials and components that we purchase from third parties. There can be no assurance we will be able to detect and fix all defects in the products we sell. Accordingly, our products may experience quality and service problems from time to time that could result in decreased sales and operating margin and harm to our reputation.

 Our business relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return.

 We rely upon business relationships for the manufacturing and distribution of certain products. Our business depends upon our ability to manufacture and sell our products to our customers. We currently do not have the capabilities to manufacture some of our products and product components on our own and are required to enter into agreements with third parties of such services. We also rely upon third parties for materials and components, as well as shipping, certain marketing and sales-related services. There can be no assurance that such business relationships can be maintained, will be extended or renewed, or will achieve their goals. If we are unable to enter into business relationships for distribution and sales or if any of our current business relationships are terminated or fail to achieve their goals, our business, operating results and financial condition could be materially adversely affected.

 Our business depends on our ability to prevent or mitigate the effects of a cybersecurity attack.

 Our information technology systems, including third-party run e-commerce and payment service systems, may be subject to cyber-attacks, security breaches or computer hacking including a ransomware attack encrypting corporate information technology equipment, a directed attack against us or a data breach or cyber incident happening to a third-party network and affecting us. Regardless of our efforts, there may still be a breach, and the costs to eliminate, mitigate or address the threats and vulnerabilities before or after a cyber-incident could be significant. Any such breaches or attacks could result in interruptions, delays or cessation of operations and loss of existing or potential suppliers or customers. In addition, breaches of our information technology systems or security measures (including those of our third-party partners) and the unauthorized dissemination of sensitive personal, proprietary or confidential information about our business, our business partners, customers or other third parties could expose us to significant potential liability and reputational harm, materially damage our customer and business partner relationships, and subject us to significant reputational, financial, legal, and operational consequences. Moreover, any such breach or attack could result in litigation against us by customers or other third parties whose data is compromised by any such attack.

 Conducting a portion of our operations through joint ventures exposes us to risks and uncertainties, many of which are outside of our control, and such risks could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 With respect to our Byrna LATAM joint venture in South America, any differences in views among the joint venture participants may result in delayed decisions or in failures to agree on major issues. We also cannot control the actions of our joint venture partners, including any nonperformance, default or bankruptcy of our joint venture partners. As a result, we may be unable to control the quality of products produced by the joint venture or achieve consistency of product quality as compared with our other operations. In addition to net sales and market share, this may have a material negative impact on our brand and how it is perceived thereafter. Moreover, if our partners also fail to invest in the joint venture in the manner that is anticipated or otherwise fail to meet their contractual obligations, the joint venture may be unable to adequately perform and conduct its operations, requiring us to make additional investments or perform additional services to ensure the adequate performance and delivery of products and/or services to the joint venture's customers, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

 As we seek to expand our business globally, growth opportunities may be impacted by greater political, economic and social uncertainty and the continuing and accelerating globalization of businesses could significantly change the dynamics of our competition, customer base and product offerings.

 Our efforts to grow our business depend in part upon access to, and our success in developing, market share and operating profitably in, additional geographic markets including but not limited to the South America, and South Africa. In some cases, countries in these regions have greater political and economic volatility, greater vulnerability to infrastructure and labor disruptions and differing local customer product preferences and requirements than our other markets. Operating and seeking to expand business in a number of different regions and countries exposes us to multiple and potentially conflicting cultural practices, business practices and legal and regulatory requirements that are subject to change, including those related to tariffs and trade barriers, investments, property ownership rights, taxation and repatriation of earnings and advanced technologies. Such expansion efforts may also use capital and other of our resources that could be invested in other areas. Expanding business operations globally also increases exposure to currency fluctuations which can materially affect our financial results. Although we are taking measures to adapt to these changing circumstances, our business, financial condition, results of operations and cash flows could be materially adversely affected should these efforts prove unsuccessful.

 Sales transacted at our retail store may be paid for with cash which increases the risk of theft and related legal liability.

 We recently opened a small retail store within our Las Vegas sales and marketing office. Customers purchasing product at the store may choose to pay in cash. Though cash receipts are expected to be immaterial in amount and are deposited promptly at a local bank branch, acceptance of cash by our employees and possession of cash on our premises increase the risk of theft and potential related legal liabilities.

 Risks Related to Our Industry

 The markets for security products and less-lethal defense technology are in a state of technological change which could have a material adverse impact on our business, financial condition and results of operations.

 The markets for security products and less-lethal defense technology, in which our products and services are included, are associated with rapidly changing technology, which could result in product obsolescence or short product life cycles. Accordingly, our success is dependent upon our ability to anticipate technological and other changes and to successfully identify, obtain, develop and market new products that satisfy evolving customer requirements. There can be no assurance that we will successfully develop new products or enhance and improve our existing products or that any new products and enhanced and improved existing products will achieve market acceptance. Further, there can be no assurance that competitors will not market products that have perceived advantages over our products or which render the products currently sold by us obsolete or less marketable.

 We must commit significant resources to developing new products before knowing whether our investments will result in products the market will accept. To remain competitive, we may be required to invest significantly greater resources then currently anticipated in research and development and product enhancement efforts.

 The less-lethal defense technology industry and security products markets are highly competitive and our success depends upon our ability to effectively compete with numerous worldwide businesses.

 We face competition from a number of businesses, including worldwide businesses, many of which have substantially greater financial resources, operating scale, and a broader range of product offerings than we do. In the law enforcement market, in particular, we face competitors who have long-term, established relationships with security professionals who subscribe to an integrated suite of their products, some of which offer features that our current products do not support, and who may have made substantial investments in their hardware, creating a barrier to entry for our competing product. Such competition could adversely affect our ability to win new contracts and sales and renew existing contracts. We operate in a period of intense competition in some key markets, which could affect the profitability of the contracts and sales we do win. If we cannot successfully compete in our industry and business segments, our business, financial condition and results of operations could suffer.

 Expansion of sales of our product to schools, law enforcement and other governmental or quasi-governmental entities may require expenditure of resources and lengthen our sale cycle.

 Generally, entities such as schools, law enforcement and other governmental or quasi-governmental entities consider a wide range of issues before committing to purchase less-lethal defense products, including product benefits, training costs, the cost to use our products in addition to, or in place of, other products, budget constraints and product reliability, safety and efficacy. Such considerations may result in a sales cycle that is longer than and different from sales process related to dealers and consumers. Adverse publicity surrounding our products or the safety of such products also could lengthen our sales cycle with these customers. In addition, if we successfully expand sales of our products to these customers, we could encounter challenges related to funding of law enforcement and other governmental and quasi-governmental entities generally, states and municipalities that fund such entities and the recent changes in public sentiment around police funding. We may incur substantial selling costs and expend significant effort in connection with the evaluation of our products by such potential customers before they place an order. If these potential customers do not ultimately purchase our products, we will have expended significant resources and received no revenue in return.

 Our performance is influenced by a variety of economic, social, and political factors.

 Our performance is influenced by a variety of economic, social, and political factors. General economic conditions and consumer spending patterns can negatively impact our operating results. Economic uncertainty, unfavorable employment levels, declines in consumer confidence, increases in consumer debt levels, increased commodity prices, and other economic factors may affect consumer spending on discretionary items and adversely affect the demand for our products. In times of economic uncertainty, consumers tend to defer expenditures for discretionary items, which could negatively affect demand for our products. Any substantial deterioration in general economic conditions that diminish consumer confidence or discretionary income could reduce our sales and adversely affect our operating results.

 Political and social factors can affect our performance. Concerns about elections, as well as firearm-related incidents and social reaction thereto, and legislature and policy shifts resulting from those elections can affect the demand for our products. In addition, speculation about control of firearms, firearm products, and ammunition at the federal, state, and local level and heightened fears of terrorism and crime can affect consumer demand for our products. Often, such concerns result in an increase in near-term consumer demand and subsequent softening of demand when such concerns subside. Inventory levels in excess of customer demand may negatively impact operating results and cash flow.

 Federal and state legislatures frequently consider legislation relating to the regulation of CO2 fired launchers. If such legislation develops, we could find it difficult, expensive, or even impossible to comply with them, impeding new product development and distribution of existing products. Conversely, new legislation could increase the demand for less-lethal weapons beyond our current forecasts and strain or exceed production capability, which could harm our reputation and adversely impact our business.

 Risks Related to Regulation

 We are subject to extensive regulation and could incur fines, penalties and other costs and liabilities under such requirements.

 We are subject to numerous federal, state and local environmental, health and safety legislation and other applicable regulations, laws, and measures relating to the manufacture and sale of our products. There can be no assurance that we will not experience difficulties with our efforts to comply with applicable regulations as they change in the future or that our continued compliance efforts (or failure to comply with applicable requirements) will not have a material adverse effect on our results of operations, business, prospects and financial condition. Our continued compliance with present and changing future laws could restrict our ability to sell our products and expand our operations.

 Changes in government policies and legislation could adversely affect our financial results.

 The manufacture, sale, purchase, possession and use of weapons (including CO2 powered launchers and chemical irritant devices), ammunitions, firearms, and explosives are subject to federal, state, local, and foreign laws. If such regulation becomes more expansive in the future, it could have a material adverse effect on our business, operating results, financial condition, and cash flows. Our products are relatively new and may be subject to certain laws and regulations, including those related to CO2 powered launchers, "pepper spray" or "tear gas" devices, and future legislation or regulation. New legislation, regulations, or changes to or new interpretations of existing regulations could impact our ability to manufacture or sell products and our projectiles, or limit their market, which could impact our cost of sales and demand for Byrna products. Similarly changes in laws related to the domestic or international use of chemical irritants by civilians or law enforcement could impact both our cost of sales and the size of the reachable market.

 We may be subject, both directly and indirectly, to the adverse impact of existing and potential future government regulation of our products, technology, operations and markets. For example, the development, production, (re-)exportation, importation, and transfer of our products and technology is subject to U.S. and foreign export control, sanctions, customs, import and anti-boycott laws and regulations, including the Export Administration Regulations (the "EAR") (collectively, "Trade Control Laws"). If one or more of our products or technology, or the parts and components we buy from others, is or becomes subject to the International Traffic in Arms Regulations (the "ITAR") or national security controls or other controls under the EAR, this could significantly impact our operations, for example by severely limiting our ability to sell, (re-)export, or otherwise transfer our products and technology, or to release controlled technology to foreign person employees or others in the United States or abroad. We may not be able to obtain licenses and other authorizations required under the applicable Trade Control Laws. The failure to satisfy the requirements under the Trade Control Laws, including the failure or inability to obtain necessary licenses or qualify for license exceptions, could delay or prevent the development, production, (re-)export, import, and/or in-country transfer of our products and technology, which could adversely affect our revenues and profitability.

 Failure by us, our employees, or others working on our behalf to comply with the applicable Trade Control Laws could result in administrative, civil, or criminal liabilities, including fines, suspension, debarment from bidding for or performing government contracts, or suspension of our export privileges, which could have a material adverse effect on us. We transact with suppliers and others who are exposed to similar risks. Violations of the Trade Control Laws or other applicable laws and regulations could materially adversely affect our products, technology, brand, growth efforts, employees, and business.

 Health and safety risks could expose us to potential liability and adversely affect our operating results and financial condition.

 Health and safety issues related to our products may arise that could lead to litigation or other action against us, to regulation of certain of its product components, or to negative publicity. We may be required to modify our technology and may not be able to do so. We may also be required to pay damages that may adversely affect our financial condition. Even if these concerns prove to be baseless, the resulting negative publicity could affect our ability to market certain of our products and, in turn, could harm our business and results from operations.

 We are exposed to operating hazards and uninsured risks that could adversely impact our operating results and financial condition.

 Our business is subject to a number of risks and hazards including loss of parts or finished goods in inventory or shipment, labor disputes and changes in the regulatory environment. Such occurrences could delay or halt production or sale of goods, result in damage to equipment, personal injury or death, monetary losses and possible legal liability. Although we currently maintain freight and inventory insurance and general liability insurance in amounts which we consider adequate, the nature of these risks is such that liabilities might exceed policy limits, the liabilities and hazards might not be insurable, or we may elect in the future not to insure against such liabilities due to high premium costs or other reasons, in which event we could incur significant costs that could have a materially adverse effect upon our financial position.

 Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, and export controls and trade sanctions, could result in fines or criminal penalties if we expand our business abroad.

 We, our business partners, and the industries in which we operate are subject to continuing scrutiny by regulators, other governmental authorities and private sector entities or individuals in the United States, South Africa, South America, the European Union, China, and other jurisdictions, which may lead to enforcement actions, adverse changes to our business practices, fines and penalties, or the assertion of private litigation claims and damages that could be material. For example, the expansion of our business internationally exposes us to export controls, trade sanctions import and export clearance requirements, customs, tariffs, anti-corruption legislation, anti-boycott requirements and other obligations and restrictions imposed by the United States and other governments. The U.S. Departments of Justice, Commerce, Treasury, State, U.S. Customs and Border Protection, and other U.S. and foreign agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of export controls, trade sanctions, import and export clearance requirements, customs regulations, anti-corruption legislation, including the Foreign Corrupt Practices Act, anti-boycott requirements and other federal statutes, sanctions and regulations and, increasingly, similar or more restrictive foreign laws, rules and regulations, which may also apply to us. By virtue of these laws and regulations, and under laws and regulations in other jurisdictions, we may be obliged to limit our business activities, we may incur costs for becoming and staying compliant, and we may be subject to enforcement actions or penalties for noncompliance, including fines, suspension, debarment from bidding for or performing government contracts, or suspension of our export privileges, which could materially adversely affect our business, operations, products, technology, brand, growth efforts, employees, and business partners. In recent years, U.S. and foreign governments have increased their oversight and enforcement activities with respect to these laws and we expect the relevant agencies to continue to increase these activities. A violation of these laws, sanctions or regulations could result in restrictions on our exports, civil and criminal fines or penalties and could adversely impact our business, operating results, and financial condition. There can be no assurance that the risk management and compliance programs we adopt will mitigate legal and compliance risks.

 If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations would be harmed.

 Our reputation and our customers' willingness to purchase our products depend in part on our suppliers', manufacturers', and retail partners' compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our suppliers, manufacturers, and retail partners and cannot guarantee their compliance with ethical and lawful business practices. If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.

 Risks Related to our Intellectual Property

 If we are unable to protect our intellectual property, we may lose a competitive advantage or incur substantial litigation costs to protect our rights.

 Our future success depends upon our proprietary technology. Our protective measures, including patent and trade secret protection and nondisclosure agreements, may prove inadequate to protect our proprietary rights. The right to stop others from misusing our trademarks, service marks, patents, designs and copyright in commerce depends to some extent on our ability to show evidence of enforcement of our rights against such misuse in commerce. Our efforts to stop improper use, if insufficient, may lead to loss of trademark and service mark rights, brand loyalty, and notoriety among our customers and prospective customers. The scope of any patent that we have or may obtain may not prevent others from developing and selling competing products. The validity and breadth of claims covered in technology patents involve complex legal and factual questions, and the resolution of such claims may be highly uncertain, and expensive. In addition, our patents may be held invalid upon challenge, or others may claim rights in or ownership of our patents.

 We may be subject to intellectual property infringement claims, which could cause us to incur litigation costs and divert management attention from our business.

 While we believe that our products and intellectual property do not infringe upon the proprietary rights of third parties and undertake efforts to design around existing third-party patents or designs that we are aware of, a substantial portion of our commercial success depends upon us not infringing the intellectual property rights of others. We may become subject to claims by third parties that our technology infringes their intellectual property rights. Although all reasonable efforts are made to avoid third-party patents, there is no assurance that, were a lawsuit to be brought by a third party, we would prevail. We may also become subject to these claims through indemnities that we provide to manufacturer's representatives, distributors, dealers, retail partners, and certain service providers and consultants.

 Any intellectual property infringement claims against us, with or without merit, could be costly and time-consuming to defend and divert our management's attention from our business. If our products were found to infringe a third party's proprietary rights, we could be required to enter into costly royalty or licensing agreements to be able to sell our products, and any allegation of infringement could cause certain reputational damage for us and the Byrna brand. Royalty and licensing agreements, if required, may not be available on terms acceptable to us or at all.

 Risks Related to our Securities

 We may not maintain qualification for listing on Nasdaq, which may impair your ability to sell your shares.

 Our common stock is currently listed on the Nasdaq Capital Market. The Nasdaq Capital Market requires listed companies to meet certain listing criteria including total number of stockholders, Board of Directors independence, minimum stock price, total value of public float, and in some cases total stockholders' equity and market capitalization requirements. If for any reason our common stock does not maintain eligibility for listing on the Nasdaq Capital Market, we may list our common stock elsewhere, such as one of the OTC markets, which are generally considered less liquid and more volatile than a national securities exchange, and could mean that certain institutional investors could no longer hold or purchase our stock, and as a result, a purchaser of our common stock may find it more difficult to dispose of, or to obtain accurate quotations as to the price of their shares. This could materially and adversely affect the liquidity of our common stock.

 The market price of our common stock may be volatile, which could result in substantial losses for purchasers.

 The market price for our common stock has been and may continue to be volatile in response to factors including the following:

 actual or anticipated fluctuations in our quarterly or annual operating results;

 changes in our financial or operational estimates or projections;

 conditions in markets generally;

 changes in the economic performance or market valuations of companies similar to ours; and

 general economic or political conditions in the United States or elsewhere.

 In addition, if we are unable to successfully meet investor expectations, even if by only a small margin, there could be significant impact on the market price of our common stock.

 In some cases, following periods of volatility in the market price of a company's securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our business operations and reputation.

 Exercise of options or vesting of restricted stock units may have a dilutive effect on your percentage ownership and may result in a dilution of your voting power and an increase in the number of shares of common stock eligible for future resale in the public market, which may negatively impact the trading price of our shares of common stock.

 The exercise of some or all of our outstanding options and the vesting of restricted stock units, could result in significant dilution in the percentage ownership interest of our existing stockholders and in a significant dilution of voting rights and earnings per share.

 Our directors, executive officers, and significant stockholders may be able to influence us.

 Our directors, executive officers, and other holders of more than 5% of our common stock, together with their affiliates, currently own, in the aggregate a significant percentage of our outstanding common stock. As a result, these stockholders, acting together, may have the ability to influence the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. In addition, these stockholders, acting together, may be able to influence the management and affairs of our company. Accordingly, this concentration of ownership might decrease the market price of our common stock by:

 delaying, deferring, or preventing a change in control of the company;

 impeding a merger, consolidation, takeover, or other business combination involving us; or

 discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the company.

 If our analyst coverage decreases or results in negative reports about our business, our stock price and trading volume could decline.

 The trading market for our common stock will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. We have attracted limited research coverage to date. If coverage of our stock continues to be limited or declines, trading volume may not increase materially which could cause stock price or trading value to decline. Further, if analysts publish information about our common stock who have had relatively little experience with us or our industry, this may affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates. In the event we obtain additional securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease to regularly cover us or fail to publish reports, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

 Our charter documents and Delaware law could make it more difficult for a third party to acquire us and discourage a takeover.

 Our Certificate of Incorporation, as amended, Bylaws, as amended, and Delaware law contain certain provisions that may have the effect of deterring or discouraging, among other things, a non-negotiated tender or exchange offer for shares of common stock, a proxy contest for control of our company, the assumption of control of our company by a holder of a large block of common stock, and the removal of the management of our company. Such provisions also may have the effect of deterring or discouraging a transaction which might otherwise be beneficial to stockholders. Our Certificate of Incorporation, as amended, also may authorize our board of directors, without stockholder approval, to issue one or more series of preferred stock, which could have voting and conversion rights that adversely affect or dilute the voting power of the holders of common stock. Delaware law also imposes conditions on certain business combination transactions with "interested stockholders." Our Certificate of Incorporation, as amended, authorizes our Board of Directors to fill vacancies or newly created directorships. A majority of the directors then in office may elect a successor to fill any vacancies or newly created directorships. Such provisions could limit the price that investors might be willing to pay in the future for shares of our common stock and impede the ability of the stockholders to replace management.

 The elimination of monetary liability against our directors, officers, and employees under Delaware law and the existence of indemnification rights to our directors, officers, and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers, and employees. We also expect to enter into contractual indemnification obligations under employment agreements with our executive officers. The foregoing indemnification obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against our directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit our company and our stockholders.

 Our Bylaws, as amended, provide exclusive forum provisions applicable to substantially all disputes between us and our stockholders as well as claims brought under the Securities Act of 1933, which could limit our stockholders ' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

 Our Bylaws, as amended, provide that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware) is the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation; (b) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee, or agent of the Corporation to the Corporation or the Corporation's stockholders; (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, the Certificate of Incorporation, or Bylaws; or (d) any action asserting a claim governed by the internal affairs doctrine.

 In addition, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint against us asserting a cause of action arising under the Securities Act of 1933, as amended. These choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our Certificate of Incorporation, as amended, to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions or multiple jurisdictions, which could result in expensive and protracted litigation with potentially conflicting outcomes that could exhaust our insurance coverage leaving us exposed to substantial legal expenses and judgments, or otherwise harm our business, results of operations, and financial condition.

 We do not intend to pay dividends on our common stock for the foreseeable future.

 We currently intend to retain any future earnings and do not expect to pay any dividends on our common stock in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our Board of Directors may deem relevant. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

 General Risk Factors

 Any future litigation could have a material adverse impact on our results of operations, financial condition and liquidity.

 From time to time, we may be subject to litigation including product liability claims, intellectual property claims, employment-related claims, commercial disputes, regulatory and enforcement action and stockholder class and derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. In addition, our reputation could be adversely affected by negative publicity surrounding such events regardless of whether or not claims against us are successful. A successful claim brought against us in excess of available insurance or not covered by insurance or indemnification agreements, or any claim that results in significant adverse publicity against us, could have a material adverse effect on our business and our reputation. Furthermore, the litigation process can put material or excessive demands on the time of management and employees, interfering with performance of regular responsibilities and stressing or delaying business operations, and the outcome of litigation is inherently uncertain. We can provide no assurances that these matters will not have a material adverse effect on our business.

 Our business depends on our ability to prevent or mitigate the effects of commercial crime including theft by employees, forgery and electronic crime.

 Our internal protocols and controls cannot prevent all instances of theft, forgery, electronic crime or other criminal activity by dishonest employees or external fraudsters. Our money, securities and other property may be vulnerable to theft, damage, and manipulation both on our premises and in transit through a variety of criminal acts including forgery of authorized signatures on business checks, fraudulent manipulation of our computer systems, those of our third-party partners (including e-commerce and payment service systems), or those of third-party financial institution. Such activities could include an employee or hacker transferring unauthorized funds to an outside account, fraudulent electronic funds transfer instructions sent to our bank, receipt of counterfeit currency, social engineering fraud, or mismanagement or theft by persons handling funds of our qualified employee benefit plan. While we have limited coverage against forgery and employee dishonesty under our general liability policy and persons handling funds for our qualified employee benefit plan will be bonded, we do not currently have a comprehensive commercial crime insurance policy to provide broad protection from financial losses related to business-related crime. Moreover, insofar as we have limited coverage in our general insurance policy, deductibles may apply separately to related losses, a single limit may apply to a series of related losses, such coverage is likely to be inadequate to cover a material theft of this nature, particularly if a series of acts occurs over time prior to being discovered, and such coverage may not cover or be inadequate to cover certain types of losses including such indirect or consequential losses as investigative expense coverage, business interruption, loss of potential income, and legal fees, fines and penalties.

 Epidemic and pandemic diseases (including the COVID-19 pandemic) could have a material adverse effect on our business, financial condition, results of operations, cash flows, and ability to comply with regulatory requirements.

 Outbreaks of epidemic, pandemic, or contagious diseases, such as COVID-19, could cause disruptions in our business and the businesses of third parties who we depend upon for materials and manufacturing, marketing and other services. These disruptions could include disruptions in our ability to receive materials, manufacture our products, distribute our products, market our products, or obtain services. These disruptions have caused, and could cause further, closures of our facilities or the facilities of our suppliers, manufacturers and dealers, as well as cancellation of events that present significant marketing opportunities such as industry conventions, and trade shows. Any disruption of the businesses of our suppliers, manufacturers or dealers would likely impact our sales and operating results. In addition, a significant outbreak of epidemic, pandemic, or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products. Any of these events could have a material adverse effect on our business, financial condition, results of operations, or cash flows. Additionally, such outbreaks could disrupt our ability to timely file periodic reports required by the Securities and Exchange Commission or the stock exchanges on which our common stock is listed, which may lead to the delisting or downgrading of our common stock on such stock exchanges.

 Our revenues and profits depend on the level of customer spending for our products, which is sensitive to general economic conditions and other factors.

 Our products are discretionary items for customers. Therefore, the success of our business depends significantly on economic factors and trends in consumer spending. There are a number of factors that influence consumer spending, including actual and perceived economic conditions, consumer confidence, disposable consumer income, consumer credit availability, unemployment, and tax rates in the markets where we sell our products. Consumers also have discretion as to where to spend their disposable income and may choose to purchase other items or services if we do not continue to provide high-quality products at appropriate price points. As global economic conditions continue to be volatile and economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to declines. Any of these factors could harm discretionary consumer spending, resulting in a reduction in demand for our products, decreased prices for our products, and harm to our business and results of operations.

 Tariffs, sanctions, restrictions on imports or other trade barriers between the United States and various countries, most significantly China, may impact our revenue and results of operations.

 Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward internationally operating companies, and resulting tariffs, export controls, trade sanctions, sanctions blocking statutes, or other trade barriers, or changes to tax or other laws and policies, have been and may continue to be disruptive and costly to our business, and these can interfere with our expanding international sales, supply chain, production costs, customer relationships, and competitive position. For example, general trade tensions between the United States and China began escalating in 2018, with multiple rounds of U.S. tariffs on Chinese-made goods taking effect. These tariffs currently affect some of the components of our products we import from China, and we may be required to raise our prices on those products due to the tariffs or share the cost of such tariffs with our customers, which could harm our operating performance. We work closely with third parties who monitor, evaluate and keep us informed about the potential impact of the effective and proposed tariffs as well as other recent changes in foreign trade policy on our supply chain, costs, sales and profitability and seek to implement strategies to mitigate such impact, including reviewing sourcing options and working with our vendors and merchants to seek to minimize product coming from China both in existing and new product development and select suppliers in low cost regions where tariff issues are less challenging. Notwithstanding these efforts, it is possible that further tariffs may be imposed on our other imports, or that our business will be impacted by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing us to raise prices or make changes to our operations, any of which could materially harm our revenue or operating results. Further escalation of specific trade tensions, such as those between the United States and China, or in global trade conflict more broadly could be harmful to global economic growth, and related decreases in confidence or investment activity in the global markets would adversely affect our business performance. We do business in emerging market jurisdictions, such as South Africa and South America, where economic, political and legal risks are heightened.

 Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible sanctions and other penalties.

 Our business is subject to a number of federal, state, local and foreign laws and regulations governing data privacy and security, including with respect to the collection, storage, use, transmission and protection of personal information.

 In addition, a number of U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of sensitive personal information, such as social security numbers, financial information and other personal information. For example, all 50 states now have data breach laws that require timely notification to individual victims, and at times regulators, if a company has experienced the unauthorized access or acquisition of sensitive personal data. State law developments, which may impose substantial penalties for violations, could impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.

 The interpretation and enforcement of these laws and regulations are uncertain and subject to change, and it may require substantial costs to assess, monitor and implement compliance with any additional requirements. Failure to comply with applicable law, including international data protection laws and regulations could result in government enforcement actions (which could include substantial civil or criminal penalties), private litigation or adverse publicity and could negatively affect our operating results and business.

 Substantial future sales, or the perception or anticipation of future sales, of shares of our common stock could cause our stock price to decline.

 Our stock price could decline as a result of substantial sales of our common stock, or the perception or anticipation that such sales could occur, particularly sales by our directors, executive officers, and significant stockholders, a large number of shares of our common stock becoming available for sale, or the perception in the market that holders of a large number of shares intend to sell their shares.

 We may in the future register shares of common stock that we have issued or may issue under our equity compensation plans and shares of common stock that have been issued upon the conversion of certain convertible securities. Accordingly, these shares will be able to be freely sold in the public market upon issuance as permitted by any applicable securities laws, applicable vesting requirements, and the lock-up agreements described above to the extent such shares are held by our executive officers and directors.

 The ongoing requirements of being a public company may strain our resources, divert management ' s attention, and affect our ability to attract and retain executive management and qualified board members.

 As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the Nasdaq Capital Market listing standards and other applicable securities laws, rules, and regulations. Our compliance of these laws, rules, and regulations increases our legal and financial compliance costs, makes some activities more difficult, time-consuming, or costly, and increased demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and our internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures, and our internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management's attention may be diverted from other business concerns and our costs and expenses will increase, which could harm our business and results of operations. Although we have already hired additional employees to comply with these requirements, we will need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses. Further, because we previously were listed on the Canadian Stock Exchange, we remain subject to the continuing disclosure rules of the Ontario Securities Commission ("OSC"), which requires us to make somewhat duplicative filings related to certain matters on SEDAR and SEDI and pay annual fees in certain Canadian jurisdictions until such time as the OSC releases us from those obligations. These requirements are costly, and increase demand on our management, systems and resources.

 In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from sales-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal, administrative, or other proceedings against us and our business may be harmed.

 As a result of disclosure of information in filings required of us as a public company, our business and financial condition will become more visible, which could be advantageous to, or harm our relationships with, our competitors, suppliers, manufacturers, retail partners, and customers. These disclosures may also make it more likely that we will experience an increase in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims are resolved in our favor the time and resources necessary to resolve them could divert the resources of our management and harm our business and results of operations.

 Our business could be harmed if we are unable to accurately forecast our results of operations.

 We may not be able to accurately forecast our results of operations and growth rate. Forecasts may be particularly challenging as we expand into new markets and geographies and develop and market new products for which we have no or limited historical data. Our historical sales, expense levels, and profitability may not be an appropriate basis for forecasting future results. Our lack of historical data related to new products makes it particularly difficult to make forecasts related to such products. The lead times and reliability of our suppliers may be affected by global events in the future. These corrections of forecast require a very quick pivot and adjustments to the supply chain, production and marketing. If we are unable to make these changes quickly or at all our inventory, production and sales may be materially affected.

 Failure to accurately forecast our results of operations and growth rate could cause us to make operating decisions that we may not be able to correct in a timely manner. Consequently, actual results could be materially different than anticipated. Even if the markets in which we compete expand, we cannot assure you that our business will grow at similar rates, if at all.

 Climate change and associated changes to laws and regulations may increase our operating costs and adversely affect our business and financial results.

 Climate change has been identified as resulting in an increase in average temperatures in key places we operate, including in Indiana, Las Vegas, South America, and South Africa. Projected increases in temperature in these locations may impact us in a number of ways including increasing the costs of maintaining comfortable working environments, increasing the risk of fires, increasing the risk of illness and absence as well as turnover, and a corresponding risk of severe storm weather that could lead to flooding and damage to our facilities or the homes and commuting routes of our employees. Climate change is also resulting in extreme rainfall variability and droughts in areas in South Africa which may impact the availability of clean water, cause erosion of transportation routes and effect the health of our employees, each of which could have negative impacts on our operations and could require capital investments to protect their health and maintain safe working conditions. Our Nevada facility is located in a desert where water is scarce and the hot temperatures require heavy use of air conditioning. While we have not experienced any shortages of energy or water in the past, we may in the future.

 In addition to the specific threat climate change may pose to our operations around the country and abroad, rising temperatures and sea levels, along with increased incidence of extreme weather events, pose a threat to the global economy and may affect our business operations both directly and indirectly. Increased flooding and fires may interfere with transportation routes and indirectly increase our costs. Public expectations for reductions in greenhouse gas emissions could result in increased energy, transportation and raw material costs, and may require us to make additional investments in facilities and equipment. Our energy and transportation costs also may rise and negatively impact our operating costs. As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations.

 The availability and costs of materials, components, and operating and freight costs of our suppliers and suppliers of third-party manufactured products may be similarly impacted by climate change. Our suppliers may pass down such increased costs by raising the price of goods. Further, while we do not anticipate our production facilities being directly affected by existing and future climate change laws, it is impossible to predict whether future laws may negatively impact our operations and we do anticipate them affecting the operations of suppliers of certain of our components and raw materials. The costs of compliance with such future regulation could materially impact the prices charged by certain of our suppliers and even whether they stay in business. Consequential increases in costs of components or materials or reduction of suppliers could materially impact our business and cost of operations.

 Matters relating to the employment market and prevailing wage standards may adversely affect our business.

 Our ability to meet our labor needs on a cost-effective basis is subject to numerous external factors, including the availability of qualified personnel in the workforce in the local markets in which we operate, unemployment levels within those markets, prevailing wage rates, which have increased significantly, health and other insurance costs and changes in employment and labor laws. In the event prevailing wage rates continue to increase in the markets in which we operate, we may be required to concurrently increase the wages paid to our employees to maintain the quality of our workforce and customer service. To the extent such increases are not offset by price increases, our profit margins may decrease as a result. If we are unable to hire and retain employees capable of meeting our business needs and expectations, our business and brand image may be impaired. Any failure to meet our staffing needs or any material increase in turnover rates of our employees may adversely affect our business, results of operations and financial condition.

 Further, we rely on the ability to attract and retain labor on a cost-effective basis. The availability of labor in the markets in which we operate has declined in recent years and competition for such labor has increased. Our ability to attract and retain a sufficient workforce on a cost-effective basis depends on several factors. We may not be able to attract and retain a sufficient workforce on a cost-effective basis in the future. In the event of increased costs of attracting and retaining a workforce, our profit margins may decline as a result.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 We will provide the disclosure required under this Item 1C in our annual report for the year ending November 30, 2024 which is the first annual report for a fiscal year ending on or after December 15, 2023, the date on which disclosure under Item 106 of Regulation S-K is required.

 ITEM 2. PROPERTIES

 Our corporate headquarters is located at 100 Burtt Road, Suite 115, Andover, MA. We also have a manufacturing and distribution center located at 2033 Kelsey Court, Fort Wayne, IN. We also have properties located in Pretoria, South Africa where we manufacture some of our products, and Las Vegas, Nevada which houses a sales and marketing center as well as a retail store. All of our properties are leased.

 ITEM 3. LEGAL PROCEEDINGS

 To the knowledge of our management, there is no material litigation currently pending against us, any of our officers or directors in their capacity as such or against any of our property.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT ' S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Market Information

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

 Holders

 On February 1, 2024, there were 170 holders of record of our common stock.

 Dividends

 We have not paid any cash dividends on our common shares to date and do not currently intend to pay cash dividends. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition of the Company. The payment of any future cash dividends will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future.

 Stock Repurchases

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

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

 On October 6, 2022, our Board of Directors approved a plan to buy back up to an additional $2.5 million worth of shares of our common stock. We completed the full $2.5 million repurchase of shares during November 2022. See Note 13, "Stockholders' Equity—Stock Buyback Plan", in the Notes to Consolidated Financial Statements included in Item 8 of this Report for further discussion.

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

 ITEM 6. [RESERVED]

 ITEM 7. MANAGEMENT ' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to those statements which are included in Item 8 of this report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under " Cautionary Note Regarding Forward-Looking Statements " and " Risk Factors " and elsewhere in this report. Some of the numbers included herein have been rounded for the convenience of presentation.

 OVERVIEW

 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, less-lethal way to protect themselves and their loved ones from threats to their person or property.

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

 On January 10, 2023, we created a new joint venture with Fusady S.A. ("Fusady") located in Uruguay, to expand our operations and presence in South American markets. We hold 51% of the stock in the joint venture entity, Byrna LATAM, and the remaining 49% of stock in Byrna LATAM is held by Fusady. Refer to Note 6, "Investment in Joint Venture" for additional information.

 RESULTS OF OPERATIONS

 Revenue of $42.6 million during the fiscal year ended November 30, 2023 was $5.4 million lower than prior year revenue of $48.0 mainly due to a decrease in international sales of $6.7 million. The majority of revenue continues to be in high margin direct online sales via Amazon and the Company's website, as these e-commerce sales accounted for 70.1% of total net revenue in the current fiscal year and 63.6% of total revenue in the prior fiscal year. In addition, the Company had experienced growth in its dealer sales channel as well as sales into Canada. Sales of Fox Labs branded products, which the Company acquired at the end of the second quarter of 2022, continued to increase during the fiscal year ended November 30, 2023.

 The Company maintained gross margin profitability consistent with the prior year. To offset the decline in revenues, the Company has reduced marketing spend, personnel costs, and professional fees. This decrease in operating expenses offset most of the decrease in gross profit due to the decline in revenue during the fiscal year, so that loss from operations was
 $7.8 million for the fiscal year
 November 30, 2023 as compared to
 $7.7 million for the fiscal year ended
 November 30, 2022.

 Year ended November 30, 2023, as compared to year ended November 30, 2022:

 Net Revenue

 Revenues were $42.6 million for the year ended November 30, 2023 which represents a decrease of $5.4 million or 11.2% compared to the prior year period revenues of $48.0 million. The decrease was primarily due to international sales that decreased by 73.2% or $6.7 million from $9.2 million during the fiscal year ended November 30, 2022 to $2.5 million for the fiscal year ended November 30, 2023. The decrease was driven by sales in South Africa, South America, and Asia, which are characterized by infrequent but very large orders. Direct sales via the Company's website decreased by $1.5 million from $25.1 million for the fiscal year ended November 30, 2022 to $23.5 million for the fiscal year ended November 30, 2023. However, sales via Amazon increased from $5.4 million during the fiscal year ended November 30, 2022 to $6.4 million for the fiscal year ended November 30, 2023. Sales to domestic dealers/distributors, in combination with sales to security companies and law enforcement agencies increased by 20.7% from $7.6 million during November 30, 2022 to $9.1 million for the fiscal year ended November 30, 2023. In addition, sales of pepper spray from Fox Labs, which the Company acquired on May 25, 2022, increased to $1.1 million for the fiscal year ended November 30, 2023 compared to $0.8 million during the fiscal year ended November 30, 2022.

 Cost of Goods Sold

 Cost of goods sold was $19.0 million in the fiscal year ended November 30, 2023 compared to $21.8 million in the fiscal year ended November 30, 2022. This $2.8 million decrease is primarily due to the decrease in sales volume.

 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 inbound freight costs, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $23.6 million for the fiscal year ended November 30, 2023, or 55.5% of net revenue, as compared to gross profit of $26.3 million, or 54.7% of net revenue, in the prior year. Gross margin profitability remained consistent in the proportion of lower margin dealer/distributor sales, which were off-set by lower freight costs due to improvements in supply chain management.

 Operating Expenses

 Operating expenses were $31.4 million for the fiscal year ended November 30, 2023, as compared to operating expenses in the prior fiscal year of $34.0 million. This $2.6 million decrease is primarily due to two factors. First, in 2023, management made the strategic decision to reduce marketing expenditures as it evaluated more impactful marketing platforms, resulting in a decrease in marketing expenditure of $0.9 million from $5.5 million for fiscal year 2022 to $4.6 million in fiscal year 2023. Also, the decline in revenues required cost deductions in personnel costs, professional fees, and other operating costs. Total employee compensation costs decreased $0.3 million from $16.2 million for fiscal year 2022 to $15.9 million in fiscal year 2023. Professional fees decreased by $0.7 million from $1.8 million in fiscal year 2022 to $1.1 million for fiscal year 2023. Other operating costs, including administrative expenses, decreased by $0.5 million from $6.1 million for fiscal year 2022 to $5.6 million for fiscal year 2023.

 Loss from Operations

 The decrease in revenue, off-set by the decrease in operating expenses resulted in a slight increase of $0.1 million in loss from operations of $7.8 million in the fiscal year ended November 30, 2023 as compared to a loss from operations of $7.7 million in the fiscal year ended November 30, 2022.

 Interest Income/Expense

 Interest income for the fiscal year ended November 30, 2023 was $0.7 million compared to $0.2 million for the fiscal year ended November 30, 2022. The increase in interest income is primarily due to higher interest rates on the Company's cash and cash equivalents.

 Loss from Joint Venture

 Since the inception of the Byrna LATAM joint venture in January 2023, the Company's proportionate share of Byrna LATAM's losses is 51%. The Company's share of the joint venture's loss for the fiscal year ended November 30, 2023 is $0.6 million.

 Other Expenses

 Other expenses in the year ended November 30, 2023 includes $0.05 million investment losses. Other expenses in the year ended November 30, 2022 included investment losses of $0.06 million.

 Income Tax Provision

 Our effective income tax rate was 2.06% for the year ended November 30, 2023 compared to an effective income tax rate of 3.1% for the year ended November 30, 2022. Our income tax provision was $0.2 million for the fiscal year ended November 30, 2023 compared to an income tax provision of $0.2 million for the fiscal year ended November 30, 2022. Our tax rate differs from the statutory rate of 21.0% primarily due to the recording of a valuation allowance against deferred tax assets generated by net operating losses, and also due to the foreign tax rate differential for Byrna South Africa, as well as effects of permanent non-deductible expenses and other effects.

 We are subject to income tax in the U.S., as well as various state and international jurisdictions. The federal and state tax authorities can generally reduce a net operating loss (but not create taxable income) for a period outside the statute of limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period within the statute of limitations.

 Non-GAAP Financial Measures

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

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

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

 Non-GAAP Adjusted EBITDA

 Non-GAAP Adjusted EBITDA is defined as net loss as reported in our consolidated statements of operations and comprehensive loss excluding the impact of (i) depreciation and amortization; (ii) income tax provision; (iii) interest (income) expense; (iv) stock-based compensation expense; (v) severance/separation expense; (vi) other income; and (vii) other financing expenses. Our non-GAAP 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 non-GAAP Adjusted EBITDA to net loss, the most directly comparable GAAP measure, is as follows (in thousands):

 For the Year Ended

 2023

 2022

 $

 (8,192

)

 $

 (7,885

)

 Adjustments:

 Interest income, net

 (693

)

 (201

)

 Income tax provision

 Depreciation and amortization

 1,262

 NON-GAAP EBITDA

 (7,458

)

 (6,997

)

 Stock-based compensation

 5,375

 5,424

 Severance/separation expense

 NON-GAAP adjusted EBITDA

 $

 (2,001

)

 $

 (1,017

)

 LIQUIDITY AND CAPITAL RESOURCES

 Cash Flow Summary

 Cash and cash equivalents as of November 30, 2023 totaled $20.5 million, an increase of approximately $0.4 million from $20.1 million of cash as of November 30, 2022.

 Operating Activities

 Cash provided by operating activities was $3.9 million for the fiscal year ended November 30, 2023, compared to $13.8 million cash used in operating activities for the fiscal year ended November 30, 2022. Net loss was $8.2 million for the fiscal year ended November 30, 2023 compared to $7.9 million for the fiscal year ended November 30, 2022. Significant changes in noncash and working capital activity are as follows:

 Our non-cash activity adds back several non-cash items to net loss to calculate cash provided by operations during the fiscal year ended November 30, 2023. These include stock-based compensation expense of $5.4 million during the fiscal year ended November 30, 2023 compared to $5.4 million for the fiscal year ended November 30, 2022; operating lease costs of $0.7 million during the fiscal year ended November 30, 2023 compared to $0.4 million for the fiscal year ended November 30, 2022; depreciation and amortization of $1.3 million during the fiscal year ended November 30, 2023 compared to $0.9 million during the fiscal year ended November 30, 2022; allowance for bad debt of $0.5 million during the fiscal year ended November 30, 2023 compared to $0.0 million for the fiscal year ended November 30, 2022; provision for inventory of $0.5 million during the fiscal year ended November 30, 2023 compared to $0.2 million for the fiscal year ended November 30, 2022; and loss from joint venture of $0.6 million during the fiscal year ended November 30, 2023 compared to $0.0 million for the fiscal year ended November 30, 2022.

 During the fiscal year ended November 30, 2023, the cost and liquidity management of the Company was reflected in the generation of cash for working capital needs. Inventory decreased $0.5 million during the fiscal year ended November 30, 2023 compared to an increase of $9.2 million during the fiscal year ended November 30, 2022. The decrease in inventory was a planned measure to return inventory stock to adequate levels to meet demand needs. Accounts receivable decreased by $2.2 million during the fiscal year ended November 30, 2023 compared to an increase of $4.3 million during the fiscal year ended November 30, 2022 due to a significant decrease in international sales to international distributors and related accounts receivable. Accounts payable and accrued liabilities increased $0.6 million for the fiscal year ended November 30, 2023 compared to an increase of $0.7 million for the fiscal year ended November 30, 2022. Deferred revenue decreased $0.4 million during the fiscal year ended November 30, 2023 compared to a decrease of $0.3 million during the fiscal year ended November 30, 2022.

 Investing Activities

 During the fiscal year ended November 30, 2023, $3.0 million was used for investing activities, including a $1.6 million loan to Byrna LATAM, $0.5 million investment in the joint venture, and $0.9 million to purchase property and equipment. In comparison, $5.1 million was used for investing activities during the fiscal year ended November 30, 2022, including $1.9 million paid for the Fox Labs International acquisition and $3.3 million to purchase property and equipment.

 Financing Activities

 Cash flows used in financing activities was $0.4 million during the fiscal year ended November 30, 2023 compared to $17.0 million during the fiscal year ended November 30, 2022. The fiscal year ended November 30, 2023 amount was primarily due to tax payments of $0.5 million related to payroll taxes withheld on the vesting of restricted stock units and $0.03 million received from proceeds associated with the sale of common stock compared to $17.5 million of repurchases of the Company's common stock and $0.5 million from proceeds from the sale of common stock during the fiscal year ended November 30, 2022.

 MATERIAL CASH REQUIREMENTS FROM CONTRACTUAL OBLIGATIONS

 Leases

 As of November 30, 2023, we reported current and long-term operating lease liabilities of $0.6 million and $1.3 million, respectively. These balances represent our contractual obligation to make future payments on our leases, discounted to reflect our cost of borrowing. All leases are for real estate. In the event that we vacate a location, we may be obliged to continue making lease payments. Where possible, we mitigate this risk by including clauses allowing for the termination of lease agreements. See Note 17, "Leases", in the Notes to Consolidated Financial Statements included in Item 8 of this Report for further discussion.

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

 OFF-BALANCE SHEET ARRANGEMENTS

 The Company had no off-balance sheet arrangements as of November 30, 2023 and 2022.

 RECENT ACCOUNTING PRONOUNCEMENTS

 See Note 4, "Summary of Significant Accounting Policies," in the Notes to Consolidated Financial Statements included in Item 8 of this Report for a discussion of recently issued and adopted accounting standards.

 CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

 Revenue Recognition

 Product Sales

 The Company generates revenue through the wholesale distribution of its products and accessories to dealers/distributors, large end-users such as retail stores, security companies and law enforcement agencies, and through e-commerce portals to consumers. Revenue is recognized upon transfer of control of goods to the customer, which generally occurs when title to goods is passed and risk of loss transfers to the customer. Depending on the contract terms, transfer of control is upon shipment of goods to or upon the customer's pick-up of the goods. 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 therefore, must be classified as a service warranty. Since a warranty for the first year after sale is included and non-separable from all launcher purchases, the Company considers this extended warranty to represent a service obligation during the second and third years after sale. Therefore, the Company accumulates billings of these transactions on the balance sheet as deferred revenue, to be recognized on a straight-line basis during the second and third year after sale. The Company recognizes an estimated returns and discounts allowance based on its analysis of historical experience, and an evaluation of current market conditions.

 The Company also provides to its e-commerce consumers a 14-day money back guarantee, which allows for a full refund of the purchase price, excluding shipping charges, within 14 days from the date of delivery. The right of return creates a variable component to the transaction price and needs to be considered for any possible constraints. The Company estimates returns using the expected value method, as there will likely be a range of potential return amounts. The Company's returns under the 14-day money back guarantee for the year ended November 30, 2023 and November 30, 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 fiscal years ended November 30, 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 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.

 Inventory Valuation

 Inventories, which are principally comprised of raw materials and finished goods, are stated at the lower of cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Inventory costs include labor, overhead, subcontracted manufacturing costs and inbound freight costs. The Company reviews inventories for obsolete items to determine adjustments that it estimates will be needed to record inventory at lower of cost or net realizable value.

 Income Taxes

 The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

 Deferred tax assets are recognized to the extent the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

 The Company records uncertain tax positions on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records uncertain tax positions as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of November 30, 2023 and 2022, the Company has not recorded any uncertain tax positions in our consolidated financial statements.

 The Company recognizes interest and penalties related to income taxes on the income tax expense line in the accompanying Consolidated Statement of Operations and Comprehensive Loss. As of November 30, 2023 and 2022, no accrued interest or penalties related to income taxes are included in the Consolidated Balance Sheets.

 The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company's tax years are still open under statute from November 30, 2020 to the present. The resolution of tax matters is not expected to have a material effect on the Company's consolidated financial statements.

 Business Combination

 Assets and liabilities acquired in business combinations are accounted for at fair value. The Company records the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the acquisition dates. The excess, if any, of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. If the fair value of the assets and liabilities acquired exceed the fair value of the purchase consideration, negative goodwill is recognized in the statement of operations. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from the utilization of trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is not to exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

 Goodwill resulting from a business combination is not amortized but is reviewed for impairment annually or more frequently when events or changes in circumstances occur that would more than likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has the option to perform a qualitative assessment over goodwill when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit. If the Company concludes, based on the qualitative assessment, that the carrying value of a reporting unit would more likely than not exceed its fair value, a quantitative assessment is performed which is based upon a comparison of the reporting unit's fair value to its carrying value. The fair values used in this evaluation are estimated by the Company based upon future discounted cash flow projections for the reporting unit. An impairment charge is recognized for any amount by which the carrying amount of goodwill exceeds its fair value.

 The Company performs its review for impairment during the 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.

 Stock-Based Compensation

 The Company accounts for all stock-based payment awards granted to employees and non-employees as stock-based compensation expense at their grant date fair value. The Company's stock-based payments include stock options and restricted stock units. The Company values simple restricted stock units (RSUs) at the quoted price on date of grant and RSUs with certain market triggers using the Monte Carlo model for valuation. The Company values stock options using the Black Scholes model. The measurement date for employee awards is the date of grant, and stock-based compensation costs are recognized as expense over the employees' requisite service period, on a straight-line basis. The measurement date for non-employee awards is the date of grant and stock-based compensation costs for non-employees are recognized as expense over the vesting period on a straight-line basis. Stock-based compensation is classified in the accompanying Consolidated Statements of Operations and Comprehensive Loss based on the function to which the related services are provided, which is included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Forfeitures are accounted for as they occur.

 To determine the grant-date fair value of our stock-based payment awards, we use a Black-Scholes or the quoted stock price on the date of grant, unless the awards are subject to market conditions, in which case we use the Monte Carlo simulation model. Due to our limited history, the expected term of the Company's stock options granted to employees has been determined utilizing the method as prescribed by the SEC's Staff Accounting Bulletin, Topic 14. The expected term for stock options granted to non-employees is equal to the contractual term of the options. The risk-free interest rate is determined by reference to the US Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future.

 Impairment of Long-lived Assets

 Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 Not applicable.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 Reference is made to Pages F-1 through F-28 of this Report.

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 Not applicable.

 ITEM 9A. 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 November 30, 2023 pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date in ensuring that information required to be filed in this annual report was recorded, processed, summarized and reported within the time period required by the rules and regulations of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 Management ' s Report on Internal Controls over Financial Reporting

 Our management is responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

 Management assessed the effectiveness of the Company's internal control over financial reporting as of November 30, 2023. Management based this assessment on criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included an evaluation of the design of the Company's internal control over financial reporting. Based on this evaluation management concluded that as of November 30, 2023 our internal control over financial reporting was effective based on those criteria.

 Changes in Internal Controls Over Financial Reporting

 Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the fiscal year ended November 30, 2023. Based on that evaluation, management concluded that there were no changes to our internal control over financial accounting and reporting that occurred during the fiscal year ended November 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial accounting and reporting.

 ITEM 9B. OTHER INFORMATION

 None.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 None.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2024 Annual Meeting of Stockholders. The information required by this Item relating to our executive officers is included in Item 1, "Business — Executive Officers" of this report.

 ITEM 11. EXECUTIVE COMPENSATION

 The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2024 Annual Meeting of Stockholders.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2024 Annual Meeting of Stockholders.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2024 Annual Meeting of Stockholders.

 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2024 Annual Meeting of Stockholders.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a) The following documents are filed as part of this Report:

 (1) Financial Statements

 F-1 to F-28

 (2) Financial Statements Schedules

 None.

 CONSOLIDATED FINANCIAL STATEMENTS

 YEARS ENDED November 30, 2023 and 2022

 Together with Report of Independent Registered Public Accounting Firm

 Page
 No

 Report of Independent Registered Public Accounting Firm (PCAOB ID 274)

 Consolidated Balance Sheets as of November 30, 2023 and 2022

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

 Consolidated Statements of Cash Flows for the years ended November 30, 2023 and 2022

 Consolidated Statements of Changes in Stockholders' Equity for the years ended November 30, 2023 and 2022

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Board of Directors and Stockholders of

 Byrna Technologies Inc.

 Opinion on the Financial Statements

 We have audited the accompanying consolidated balance sheets of Byrna Technologies Inc. and Subsidiaries (the "Company") as of November 30, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of November 30, 2023 and 2022, and the results of their consolidated operations and their consolidated cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matter

 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 Investment in Joint Venture

 As discussed in Note 6 to the financial statements, on January 10, 2023, the Company acquired a 51% ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company's operations and presence in South American markets, for $0.5 million. In addition, the Company loaned the joint venture approximately $1.6 million. The Company evaluated whether or not the entity should be consolidated under the variable interest and voting rights models and concluded that Byrna LATAM should not be consolidated. The Company concluded that it has joint control of Byrna LATAM in that it does not have voting control of Byrna LATAM and does not have substantive participating rights that would result in the Company having control of Byrna LATAM.

 We identified the consolidation analysis as a critical audit matter because the consolidation analysis, and specifically the determination of joint control, involved an interpretation of especially complex accounting principles generally accepted in the United States of America. The evaluation of management's determination of joint control required an increased extent of effort.

 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. We obtained an understanding, evaluated the design and implementation of the Company's process and controls, and assessed whether the process and controls enable the Company to properly account for the transaction in accordance with generally accepted in the United States of America. We read transaction agreements, traced and agreed the facts included in the Company's accounting position memo to the agreements, evaluated the assumptions used to arrive at the determined conclusion. We consulted with our consolidation subject matter experts to assess the reasonableness of the Company's accounting conclusions. We evaluated whether the assumptions were consistent with evidence obtained in other areas of the audit.

 /s/ EisnerAmper LLP

 We have served as the Company's auditor since 2020.

 EISNERAMPER LLP

 Iselin, New Jersey

 BYRNA TECHNOLOGIES INC. Consolidated Balance Sheets

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

 2023

 2022

 ASSETS

 CURRENT ASSETS

 Cash and cash equivalents

 $
 20,498

 $
 20,068

 Accounts receivable, net

 2,945

 5,915

 Inventory, net

 13,890

 15,462

 Prepaid expenses and other current assets

 1,200

 Total current assets

 38,201

 42,645

 Deposits for equipment

 1,163

 2,269

 Right-of-use-asset, net

 1,805

 2,424

 Property and equipment, net

 3,803

 3,309

 Intangible assets, net

 3,583

 3,872

 Goodwill

 2,258

 2,258

 Investment in joint venture

 —

 —

 Loan to joint venture

 1,473

 —

 Other assets

 TOTAL ASSETS

 $
 52,314

 $
 57,049

 LIABILITIES

 CURRENT LIABILITIES

 Accounts payable and accrued liabilities

 $
 6,158

 $
 7,708

 Operating lease liabilities, current

 Deferred revenue

 1,844

 Total current liabilities

 8,646

 8,923

 LONG TERM LIABILITIES

 Deferred revenue, non-current

 Operating lease liabilities, non-current

 1,258

 1,792

 Total Liabilities

 9,995

 11,055

 COMMITMENTS AND CONTINGENCIES (NOTE 19)

 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. 24,168,014 shares issued and 22,002,027 outstanding as of November 30, 2023 and, 24,018,612 shares issued and 21,852,625 outstanding as of November 30, 2022

 Additional paid-in capital

 130,426

 125,474

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

)

)

 Accumulated deficit

 ( 69,575
)

 ( 61,383
)

 Accumulated other comprehensive loss

 ( 1,056
)

 ( 620
)

 Total Stockholders' Equity

 42,319

 45,994

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 $
 52,314

 $
 57,049

 See accompanying notes to consolidated financial statements.

 Consolidated Statements of Operations and Comprehensive Loss

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

 Years Ended November 30,

 2023

 2022

 Net revenue

 $
 42,644

 $
 48,036

 Cost of goods sold

 ( 18,997
)

 ( 21,758
)

 Gross profit

 23,647

 26,278

 Operating expenses

 31,437

 34,009

 LOSS FROM OPERATIONS

 ( 7,790
)

 ( 7,731
)

 OTHER INCOME (EXPENSE)

 Foreign currency transaction loss

 ( 270
)

 ( 87
)

 Interest income, net

 Loss from joint venture

 ( 603
)

 —

 Other expenses

 ( 57
)

 ( 34
)

 LOSS BEFORE INCOME TAXES

 ( 8,027
)

 ( 7,651
)

 Income tax provision

 ( 165
)

 ( 234
)

 NET LOSS

)

)

 Foreign exchange translation adjustment

 ( 436
)

 ( 604
)

 COMPREHENSIVE LOSS

 $
 ( 8,628
)

 $
 ( 8,489
)

 Net loss per share – basic and diluted

 $
 ( 0.37
)

 $
 ( 0.35
)

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

 21,919,624

 22,364,201

 See accompanying notes to consolidated financial statements.

 BYRNA TECHNOLOGIES INC. Consolidated Statements of Cash Flows

 (Amounts in thousands)

 Years Ended November 30,

 2023

 2022

 CASH FLOWS FROM OPERATING ACTIVITIES

 $
)

 $
)

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

 Stock-based compensation expense

 5,375

 5,424

 Amortization of debt issuance costs

 Operating lease costs

 Depreciation and amortization

 1,262

 Allowance for bad debt

 —

 Provision for inventory

 Loss on disposal of property, plant, and equipment

 Loss from joint venture

 —

 Changes in assets and liabilities, net of acquisition:

 Accounts receivable

 2,189

 ( 4,254
)

 Deferred revenue

 ( 414
)

 ( 342
)

 Inventory

 ( 9,170
)

 Prepaid expenses and other current asserts

 Other assets

 Accounts payable and accrued liabilities

 Operating lease liabilities

 ( 689
)

 ( 244
)

 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

 3,892

 ( 13,826
)

 CASH FLOWS FROM INVESTING ACTIVITIES

 Purchases of property and equipment

 ( 903
)

 ( 3,253
)

 Equity method investment in joint venture

 ( 520
)

 —

 Loan to joint venture

 ( 1,556
)

 —

 Cash paid for acquisitions, net of cash acquired

 —

 ( 1,883
)

 NET CASH USED IN INVESTING ACTIVITIES

 ( 2,979
)

 ( 5,136
)

 CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from stock option exercises

 Payment of taxes withheld on issuance of restricted stock units

 ( 456
)

)

 NET CASH USED IN FINANCING ACTIVITIES

 ( 422
)

 ( 17,044
)

 Effects of foreign currency exchange rate changes

 ( 61
)

 ( 326
)

 NET CHANGE IN CASH AND CASH EQUIVALENTS FOR THE YEAR

 ( 36,332
)

 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

 20,068

 56,400

 CASH AND CASH EQUIVALENTS, END OF YEAR

 $
 20,498

 $
 20,068

 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 INCOME TAXES PAID

 INTEREST PAID

 —

 —

 See accompanying notes to consolidated financial statements.

 Consolidated Statement of Changes in Stockholders ' Equity

 (Amounts in thousands, except share numbers)

 Accumulated

 Additional

 Other

 Paid-

 Treasury

 Accumulated

 Comprehensive

 Common Stock

 in Capital

 Stock

 Deficit

 Loss

 Total

 Shares (Issued)

 $

 $

 Shares

 $

 $

 $

 $

 Balance, November 30, 2021

 23,754,096

 $

 $
 119,589

 —

 $
 —

 $
 ( 53,498
)

 $
 ( 16
)

 $
 66,098

 Issuance of common stock pursuant to exercise of stock options

 252,250

 —

 —

 —

 —

 —

 Issuance of common stock pursuant to vesting of restricted stock units

 12,266

 —

 —

 —

 —

 —

 —

 —

 Reclassification of stock-based compensation due to modification

 —

 —

 ( 1,043
)

 —

 —

 —

 —

 ( 1,043
)

 Settlement of obligation to grant stock options

 —

 —

 1,043

 —

 —

 —

 —

 1,043

 Stock-based compensation

 —

 —

 5,424

 —

 —

 —

 —

 5,424

 Repurchase of common shares under Stock Buyback Plan

 —

 —

 —

 ( 2,165,987
)

)

 —

 —

)

 —

 —

 —

 —

 —

)

 —

)

 Foreign currency translation

 —

 —

 —

 —

 —

 —

 ( 604
)

 ( 604
)

 Balance, November 30, 2022

 24,018,612

 $

 $
 125,474

 ( 2,165,987
)

 $
)

 $
 ( 61,383
)

 $
 ( 620
)

 $
 45,994

 Issuance of common stock pursuant to exercise of stock options

 25,000

 —

 —

 —

 —

 —

 Issuance of common stock pursuant to vesting of restricted stock units

 124,402

 ( 1
)

 —

 —

 —

 —

 —

 Payment of taxes withheld on issuance of restricted stock units

 —

 —

 ( 456
)

 —

 —

 —

 —

 ( 456
)

 Stock-based compensation

 —

 —

 5,375

 —

 —

 —

 —

 5,375

 —

 —

 —

 —

 —

)

 —

)

 Foreign currency translation

 —

 —

 —

 —

 —

 —

 ( 436
)

 ( 436
)

 Balance, November 30, 2023

 24,168,014

 $

 $
 130,426

 ( 2,165,987
)

 $
)

 $
 ( 69,575
)

 $
 ( 1,056
)

 $
 42,319

 See accompanying notes to consolidated financial statements.

 1.

 NATURE OF OPERATIONS

 Byrna Technologies Inc. (the "Company" or "Byrna") is a less-lethal defense technology company, specializing in next generation solutions for security situations that do not require the use of lethal force. Byrna personal security devices are less-lethal self-defense devices that are powered by CO2 and fire.68 caliber spherical kinetic and chemical irritant projectiles. The Company added pepper spray aerosols to their less-lethal defense product line due to an acquisition in 2022. See Note 5, "Business Combinations" for additional information. These products are sold in both the consumer and security professional markets. The Company operates two manufacturing facilities, a 30,000 square foot facility in located in Fort Wayne, Indiana and a 20,000 square foot manufacturing facility located in Pretoria, South Africa.

 On January 10, 2023, the Company created a new joint venture with Fusady S.A. ("Fusady") located in Uruguay, to expand the Company's operations and presence in South American markets. The Company holds 51 % of the stock in the joint venture entity, Byrna LATAM (formerly known as Uldawer S.A. prior to its legal entity re-naming in October 2023), and the remaining 49 % of stock in Byrna LATAM is held by Fusady. See Note 6, "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 November 30, 2023, the Company had incurred a cumulative loss of $ 69.6 million. The Company has funded operations through the issuance of common stock. The Company generated $ 42.6 million in revenue and net loss of a $ 8.2 million for the year ended November 30, 2023. It is expected that the Company will incur significant losses before the Company's revenues sustain its operations. The Company's future success is dependent upon its ability to raise sufficient capital or generate adequate revenue, to cover its ongoing operating expenses, and also to continue to develop and be able to profitably market its products. The Company believes that existing cash and cash expected to be provided by future operating activities are adequate to satisfy its working capital, capital expenditure requirements, and other contractual obligations for at least the next 18 months.

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

 3.

 BASIS OF PRESENTATION

 These consolidated financial statements for the years ended November 30, 2023 and 2022 include the accounts of the Company and its subsidiaries. These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). All significant intercompany accounts and transactions have been eliminated in consolidation.

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

 4.

 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 a)

 Use of Estimates

 The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to the Company's consolidated financial statements. Significant estimates include assumptions about stock-based compensation expense, valuation for deferred tax assets, incremental borrowing rate on leases, valuation and carrying value of goodwill and other identifiable intangible assets, useful life of long-lived assets, allowance for doubtful accounts, inventory reserves, and allowance for sales returns.

 F-

 b)

 Business Combinations

 Assets and liabilities acquired in a business combination are accounted for at fair value. The Company records the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values at the acquisition dates. The excess, if any, of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. If the fair value of the assets and liabilities acquired exceed the fair value of the purchase consideration, negative goodwill is recognized in the statement of operations. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from the utilization of trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

 Goodwill resulting from a business combination is not amortized but is reviewed for impairment annually or more frequently when events or changes in circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company has the option to perform a qualitative assessment over goodwill when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit. If the Company concludes, based on the qualitative assessment, that the carrying value of a reporting unit would more likely than not exceed its fair value, a quantitative assessment is performed which is based upon a comparison of the reporting unit's fair value to its carrying value. The fair values used in this evaluation are estimated by the Company based upon future discounted cash flow projections for the reporting unit. An impairment charge is recognized for any amount by which the carrying amount of goodwill exceeds its fair value.

 The Company performs its review for impairment during the 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.

 c)

 Investment in Joint Venture

 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.

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

 d)

 Cash and Cash Equivalents

 Cash and cash equivalents include bank deposits and short-term, highly liquid investments. Investments acquired with maturity dates of three months or less are considered cash equivalents.

 e)

 Allowance for Doubtful Accounts Receivable

 The Company provides an allowance for its accounts receivable for estimated losses that may result from its customers' inability to pay. The Company determines the amount of the allowance by analyzing known uncollectible accounts, aged receivables, economic conditions, historical losses, and changes in customer payment cycles and its customers' creditworthiness. Amounts later determined and specifically identified to be uncollectible are charged or written off against this allowance. To minimize the likelihood of uncollectability, the Company reviews its customers' creditworthiness periodically. Material differences may result in the amount and timing of expense for any period if the Company were to make different judgments or utilize different estimates.

 F-

 f)

 Inventories

 Inventories, which are principally comprised of raw materials and finished goods, are stated at the lower of cost or net realizable value. Cost is determined on a standard cost basis that approximates the first -in, first -out (FIFO) method. Inventory costs include labor, overhead, subcontracted manufacturing costs and inbound freight costs. The Company reviews inventories for obsolete items to determine adjustments that it estimates will be needed to record inventory at lower of cost or net realizable value.

 g)

 Property and Equipment

 Property and equipment are recorded at cost and reflected net of accumulated depreciation and amortization. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, primarily three to seven years for computer equipment and software, furniture and fixtures, and machinery and equipment. Leasehold improvements are amortized over the lesser of the useful lives of three to seven years or lease terms. Expenditures for major renewals and betterments to property and equipment are capitalized, while expenditures for maintenance and repairs are charged as an expense as incurred. Upon retirement or disposition, the applicable property amounts are deducted from the accounts and any gain or loss is recorded in the Consolidated Statements of Operations and Comprehensive Loss. Useful lives are determined based upon an estimate of either physical or economic obsolescence or both.

 h)

 Intangible Assets

 The perpetual, irrevocable, exclusive and non-exclusive permit to use technology with respect to the cost of patent rights is capitalized and amortized over the estimated useful life, currently estimated to be 10 to 17 years. Customer list acquired is amortized over the estimated useful life of two years. Trademarks have an indefinite life as the Company intends to renew the trademarks indefinitely. These assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

 Finite-lived and indefinite-lived intangible assets are tested for impairment annually during the third quarter of each fiscal year, or more frequently if events or changes in circumstances indicate that it is more likely than not that an intangible asset is impaired. If the carrying amount of a finite-lived intangible asset or an indefinite-lived intangible asset exceeds its fair value, an impairment expense is recognized in an amount equal to that excess. If an impairment expense is recognized, the adjusted carrying amount becomes the asset's new accounting basis.

 i)

 Impairment of Long-Lived Assets

 Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. There were no impairments of long-lived assets during the years ended November 30, 2023 and 2022, respectively.

 j)

 Fair Value of Financial Instruments

 The Company determines fair value based on its accounting policy for fair value measurement (i.e. exit price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date). See note 4 (u). The Company has not used derivative financial instruments such as forwards to hedge foreign currency exposures. The Company measures equity investments, including investments in marketable equity securities, at fair value and recognizes unrealized gains (losses) through net income (loss). The Company uses quoted prices in active markets for identical assets (consistent with the Level 1 definition in the fair value hierarchy) to measure the fair value of its marketable equity securities on a recurring basis.

 F-

 k)

 Leases

 The Company determines if an arrangement is a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset. Right-of-use (ROU) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. ROU assets are based on the measurement of the lease liability and also include any lease payments made prior to or on lease commencement and exclude lease incentives and initial direct costs incurred, as applicable.

 As the implicit rate in the Company's leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The lease terms may include options to extend or terminate the lease when the Company is reasonably certain it will exercise such options. Lease costs for the Company's operating leases are recognized on a straight-line basis over the reasonably assured lease term. Variable lease payments include lease operating expenses. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense is included in operating expenses on the consolidated statements of operations.

 The Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for any lease and non-lease components as a single lease component. The Company has also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less and does not include an option to purchase the underlying asset that the Company is reasonably certain to exercise.

 l)

 Revenue Recognition

 Product Sales

 The Company generates revenue through the wholesale distribution of its products and accessories to dealers/distributors, large end-users such as retail stores, security companies and law enforcement agencies, and through e-commerce portals to consumers. Revenue is recognized upon transfer of control of goods to the customer, which generally occurs when title to goods is passed and risk of loss transfers to the customer. Depending on the contract terms, transfer of control is upon shipment of goods to or upon the customer's pick-up of the goods. 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 therefore, must be classified as a service warranty. Since a warranty for the first year after sale is included and non-separable from all launcher purchases, the Company considers this extended warranty to represent a service obligation during the second and third years after sale. Therefore, the Company accumulates billings of these transactions on the balance sheet as deferred revenue, to be recognized on a straight-line basis during the second and third year after sale. The Company recognizes an estimated returns and discounts allowances based on its analysis of historical experience, and an evaluation of current market conditions.

 The Company also provides to its e-commerce consumers a 14 -day money back guarantee, which allows for a full refund of the purchase price, excluding shipping charges, within 14 days from the date of delivery. The right of return creates a variable component to the transaction price and needs to be considered for any possible constraints. The Company estimates returns using the expected value method, as there will likely be a range of potential return amounts. The Company's returns under the 14 -day money back guarantee for the years ended November 30, 2023 and 2022 was $ 0.07 million and $ 0.05 million, respectively.

 The Company sells to dealers and retailers for whom there is no money back guarantee but who may request a return or credit for unforeseen reasons or who may have agreed discounts or allowances to be netted from amounts invoiced. The Company reserves for returns, discounts and allowances based on past performance and on agreement terms and reports revenue net of the estimated reserve. The Company's reserve for returns, discounts, and allowances for the years ended November 30, 2023 and 2022 was $ 0.1 million and $ 0.02 million, respectively.

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

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

 Contract Liabilities

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

 m)

 Marketing and Advertising

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

 n)

 Research and Development

 Research and development ("R&D") costs are expensed as incurred and are included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss. R&D costs were $ 0.6 million and $ 0.5 million during the years ended November 30, 2023 and 2022, respectively.

 o)

 Incomes Taxes

 The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

 Deferred tax assets are recognized to the extent the Company believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, it would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

 F-

 The Company records uncertain tax positions on the basis of a two -step process in which ( 1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and ( 2) for those tax positions that meet the more-likely-than- not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records uncertain tax positions as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of November 30, 2023 and 2022, the Company has not recorded any uncertain tax positions in the consolidated financial statements.

 If incurred, the Company recognizes interest and penalties related to income taxes on the income tax expense line in the accompanying Consolidated Statement of Operations and Comprehensive Loss. As of November 30, 2023 and 2022, no accrued interest or penalties related to income taxes are included in the Consolidated Balance Sheets.

 The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company's tax years are still open under statute from November 30, 2020 to the present. The resolution of tax matters is not expected to have a material effect on the Company's consolidated financial statements.

 p)

 Loss Per Share

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

 q)

 Stock-Based Compensation

 The Company accounts for all stock-based payment awards granted to employees and directors as stock-based compensation expense at their grant date fair value,which the Company uses Black-Scholes valuations, Monte Carlo models, and other market valuations to determine fair value.

 The Company's stock-based payments include stock options and restricted stock units. The measurement date for employee awards is the date of grant, and stock-based compensation costs are recognized as expense over the employees' requisite service period, on a straight-line basis. The measurement date for director awards is the date of grant and stock-based compensation costs for non-employees are recognized as expense over the vesting period on a straight-line basis. Stock-based compensation is classified in the accompanying Statements of Operations and Comprehensive Loss based on the function to which the related services are provided, which is included in operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss. Forfeitures are accounted for as they occur.

 The fair value of each stock option grant is estimated on the date of grant by using either the Black-Scholes or the quoted stock price on the date of grant, unless the awards are subject to market conditions in which case the Company uses the Monte Carlo simulation model. Due to the Company's limited history, the expected term of the Company's stock options granted to employees has been determined utilizing the method as prescribed by the Security and Exchange Commission's ("SEC's") Staff Accounting Bulletin, Topic 14. The expected term for stock options granted to non-employees is equal to the contractual term of the options. The risk-free interest rate is determined by reference to the US Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future.

 r)

 Foreign Currency Transactions

 Foreign currency transactions are transactions denominated in a currency other than a subsidiary's functional currency. A change in the exchange rates between a subsidiary's functional currency and the currency in which a transaction is denominated increases or decreases the expected amount of functional currency cash flows upon settlement of the transaction. That increase or decrease in expected functional currency cash flows is recorded as other income (expense), in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

 F-

 s)

 Foreign Currency Translation

 The Company maintains its books and records in US Dollars, which is its functional and reporting currency. Assets and liabilities of the Company's international subsidiaries in which the local currency is the functional currency are translated into US Dollars at period-end exchange rates. Income and expenses are translated into US Dollars at the average exchange rates during the period. The resulting translation adjustments, including adjustments on intercompany loans that are considered permanent, are included in the Company's Consolidated Balance Sheets as a component of accumulated other comprehensive loss. The Company considers intercompany loans to be of a permanent or long-term nature if management expects and intends that the loans will not be repaid. For the fiscal years ended November 30, 2023 and 2022, all intercompany loan arrangements were determined to be permanent based on management's intention as well as actual lending and repayment activity. Therefore, the foreign currency transaction gains or losses associated with the intercompany loans were recorded in accumulated other comprehensive loss in the Consolidated Balance Sheets for the fiscal years ended November 30, 2023 and 2022.

 t)

 Other Comprehensive Loss

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

 u)

 Fair Value Measurement

 The Company follows a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three -tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

 Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

 Level 2 - Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument's anticipated life.

 Level 3 - Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

 v)

 Recent Accounting Pronouncements

 Accounting Pronouncements Issued but Not Adopted

 In January 2017, the 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 beginning in December 2023. Early adoption is permitted. Adoption of ASU 2017 - 04 is not expected to have a material impact on the Company's consolidated financial statements.

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

 F-

 5.

 BUSINESS COMBINATIONS

 Fox Labs International

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

 Cash

 $

 Accounts receivable

 Inventory

 Trademarks

 Customer list intangible

 Accounts payable

 ( 59
)

 Deferred revenue

 ( 14
)

 Goodwill

 1,442

 Net assets acquired

 $
 2,173

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

 F-

 6.

 INVESTMENT AND LOAN IN JOINT VENTURE

 On January 10, 2023, the Company acquired a 51 % ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company's operations and presence in South American markets, for $ 0.5 million. The Company accounts for the investment in the joint venture using the equity method since the Company does not have voting control of Byrna LATAM. Additionally, the Company does not have substantive participating rights that would result in the Company having control of Byrna LATAM.

 The Company recorded its share of the joint venture's loss during the twelve months ended November 30, 2023 of $ 0.6 million in the Consolidated Statements of Operations and Comprehensive Loss as loss from joint venture. The carrying value of the Company's investment in the joint venture at November 30, 2023 is $ 0.0 million and is recorded as investment in joint venture in the Consolidated Balance Sheet.

 On January 10, 2023, the Company loaned $ 1.6 million to Byrna LATAM. The loan bears interest at a rate equal to Secured Overnight Financing Rate ("SOFR") plus 3.0 %. The interest rate on the loan was 8.3 % as of November 30, 2023. The loan amount must be repaid within five years from the date of the loan, or January 10, 2028. Interest income related to the loan receivable totaled $ 0.1 million for the twelve months ended November 30, 2023 and is included in interest income in the Consolidated Statements of Operations and Comprehensive Loss. The interest receivable on the loan is recorded in the Consolidated Balance Sheet under prepaid expenses and other current assets. During the twelve months ended November 30, 2023, the cumulative net losses of Byrna LATAM exceeded the equity method investment by $ 0.1 million. The carrying basis of the loan receivable was reduced by the $ 0.1 million excess loss from $ 1.6 million to $ 1.5 million.

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

 November 30, 2023

 Current assets

 $ 3,357

 Non-current assets

 Current liabilities

 Other non-curren liabilities

 3,250

 Year Ended

 November 30, 2023

 Net revenue

 $ 500

 Gross profit

 (947)

 Management regularly evaluates its investment in Byrna LATAM for impairment. Based on evaluations, management concluded that its investment in Byrna LATAM was not impaired in 2023.

 7.

 REVENUE, DEFERRED REVENUE AND ACCOUNTS RECEIVABLE

 Deferred Revenue

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

 Deferred revenue balance, November 30, 2021

 $
 1,125

 Net additions to deferred revenue

 30,817

 Reductions in deferred revenue for revenue recognized during the fiscal year

 ( 31,144
)

 Deferred revenue balance, November 30, 2022

 Net additions to deferred revenue

 31,049

 Reductions in deferred revenue for revenue recognized during the fiscal year

 ( 29,912
)

 Deferred revenue balance, November 30, 2023

 $
 1,935

 Less current portion

 1,844

 Deferred revenue, non-current

 $

 Revenue Disaggregation

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

 Years Ended

 Geographical Market

 2023

 2022

 U.S. Domestic

 $
 40,182

 $
 38,856

 South Africa

 2,569

 Europe/South America/Asia

 1,013

 6,431

 Canada

 1,047

 Total

 $
 42,644

 $
 48,036

 Years Ended

 Distribution channel

 2023

 2022

 Wholesale (dealer/distributors)

 $
 12,737

 $
 17,504

 E-commerce

 29,907

 30,532

 Total

 $
 42,644

 $
 48,036

 Accounts Receivable

 The Company records accounts receivables due from dealers/distributors, large end-users such as retail stores, security companies and law enforcement agencies. Accounts receivable, net of allowances, was $ 2.9 million, $ 5.9 million, and $ 1.7 million as of November 30, 2023, 2022 and 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 receivable. As of November 30, 2023, 2022 and 2021, the allowance for doubtful accounts receivable was $ 0.6 million, $ 0.02 million, and $ 0.01 million, respectively.

 F-

 8.

 INVENTORY

 The Form 10 -K for the fiscal year ended November 30, 2022 incorrectly reported the balances of raw materials, work in process, and finished goods. The amounts presented below are the original reported balances and the adjusted balances as of November 30, 2022. These changes had no impact on previously reported consolidated balance sheets, consolidated results of operations, or shareholders' equity.

 November 30, 2022

 November 30, 2022

 As Previously Reported

 Adjustment

 As Revised

 Raw materials

 $
 7,228

 $

 $
 7,940

 Work in process

 Finished goods

 7,533

 ( 781
)

 6,752

 Total

 $
 15,462

 $
 —

 $
 15,462

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

 As Revised

 2023

 2022

 Raw materials

 $
 7,543

 $
 7,940

 Work in process

 2,439

 Finished goods

 3,908

 6,752

 Total

 $
 13,890

 $
 15,462

 The Company reviews inventory for excess and obsolete products and makes provisions based on its estimate of the probability that the material will not be consumed or that it will be sold below cost. The inventory reserves were $ 0.7 million and $ 0.7 million at November 30, 2023 and 2022, respectively.

 9.

 PROPERTY AND EQUIPMENT

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

 Estimated Useful

 Lives in Years

 2023

 2022

 Computer equipment and software

 3 - 5

 $

 $

 Furniture and fixtures

 Leasehold improvements

 3 - 7

 Machinery and equipment

 5 - 7

 3,425

 2,531

 5,504

 4,161

 Less: accumulated depreciation and amortization

 1,701

 Total

 $
 3,803

 $
 3,309

 The Company recognized approximately $ 1.0 million and $ 0.6 million in depreciation expense during the years ended November 30, 2023 and 2022, respectively. Depreciation expense is presented in the operating expenses and within cost of goods sold in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

 At November 30, 2023 and 2022, the Company deposited $ 1.2 million and $ 2.3 million, respectively, with vendors primarily for supply of molds and equipment where the vendors have not completed supply of these assets. The Company placed $ 1.2 million and $ 0.5 million of molds and equipment deposits and software deposits, respectively, from November 30, 2022 into service during fiscal year November 30, 2023. The Company placed $ 0.9 million of molds and equipment deposits from November 30, 2021 into service during fiscal year November 30, 2022. The deposits are presented in the Consolidated Balance Sheets as deposits for equipment.

 10.

 INTANGIBLE ASSETS

 The components of intangible assets were as follows (in thousands):

 As of November 30, 2023

 As of 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

 $
 ( 723
)

 $
 3,208

 $
 3,931

 $
 ( 468
)

 $
 3,463

 Trademarks

 Indefinite

 —

 —

 $

 Customer List

 ( 55
)

 ( 21
)

 $

 Total

 $
 4,361

 $
 ( 778
)

 $
 3,583

 $
 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 Consolidated Statements of Operations and Comprehensive Loss. Total intangible assets amortization expense for the years ended November 30, 2023 and 2022 were $ 0.3 million and $ 0.3 million, respectively.

 Estimated future amortization expense related to intangible assets as of November 30, 2023 are as follows (in thousands):

 Fiscal Year Ending November 30,

 2024

 $

 2025

 2026

 2027

 2028

 Thereafter

 1,938

 Total

 $
 3,223

 F-

 11.

 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

 Accounts payable and accrued liabilities consist of the following (in thousands):

 2023

 2022

 Trade payables

 $
 2,617

 $
 3,804

 Accrued sales and use tax

 Personnel costs

 2,173

 1,912

 Accrued professional fees

 Other accrued liabilities

 $
 6,158

 $
 7,708

 12.

 LINES OF CREDIT

 On January 19, 2021, the Company entered into a $ 5.0 million revolving line of credit with a bank. The revolving line of credit bears interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50 %, subject to a floor of 4.00 %. The interest rate on the revolving line of credit was 7.50 % on November 30, 2023. The revolving line of credit is secured by the Company's accounts receivable and inventory. The line of credit is subject to an unused fee of 0.25 % paid once annually. The line of credit expired on January 19, 2024.

 Also on January 19, 2021, the Company entered into a $ 1.5 million equipment financing line of credit with a bank. The line of credit bears interest at a rate equal to the Wall Street Journal Prime Rate plus 0.50 %, subject to a floor of 4.00 %. The interest rate on the equipment financing line of credit was 7.50 % on November 30, 2023. The line of credit is secured by the Company's equipment. The line of credit is subject to an unused fee of 0.25 % paid once annually. The line of credit expired on January 19, 2024.

 As of November 30, 2023 and 2022, there was no outstanding balance on the revolving line of credit and the Company had not drawn on the equipment financing line of credit. Debt issuance costs related to the lines of credit were $ 0.1 million. Debt issuance costs of $ 0.1 million are being amortized over the term of the debt and are presented as part of Other Assets in the Consolidated Balance Sheets. Amortization of $ 0.03 million for the years ended November 30, 2023 and 2022 is included in Interest income, net in the Consolidated Statements of Operations and Comprehensive Loss.

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

 13.

 STOCKHOLDERS' EQUITY

 Authorized Shares

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

 Stock Buyback Plan

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

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

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

 No repurchases were made during the fiscal year ended November 30, 2023. The following table summarizes repurchases made during the fiscal year ended November 30, 2022:

 Number of

 Average Cost

 Shares

 Cost of Shares

 per Share

 Shares purchased - February 2022

 296,168

 $
 2,653,571

 $
 9.0

 Shares purchased - March 2022

 754,081

 7,346,422

 9.7

 Shares purchased - May 2022

 729,709

 4,999,993

 6.9

 Shares purchased - October 2022

 324,992

 2,065,076

 6.4

 Shares purchased - November 2022

 61,037

 434,920

 7.1

 Total

 2,165,987

 $
 17,499,982

 $
 8.1

 F-

 14.

 STOCK-BASED COMPENSATION

 2020 Plan

 On October 23, 2020, the Board 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

 Total stock-based compensation expense was $ 5.4 million and $ 5.4 million for the years ended November 30, 2023 and 2022, respectively. Total stock-based compensation expense was recorded in Operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

 During the first half of 2022, the Board of Directors authorized granting of RSUs in excess of the limit stipulated under the 2020 Plan. Additionally, the Company agreed to grant 200,000 RSUs to the former Chief Technology Officer ("CTO") in exchange for his waiver of rights to future royalty payments. See Note 19, "Commitments and Contingencies - Royalty Payments," for additional information. Because these awards were then contingent on shareholder approval at the next annual shareholder meeting, these RSUs were not considered granted under Accounting Standards Codification ("ASC") 718, Compensation - Stock Compensation ("ASC 718") and were treated as obligation to issue RSU's and were remeasured at the end of each reporting period until the settlement date on June 17, 2022 and August 3, 2022, which were the dates that the plan limit was increased (for the RSUs to the former CTO).

 Additionally, on March 23, 2022, the Board of Directors approved the issuance of RSU Amendment Agreements to each grantee of the double trigger RSUs in which 50 % of the RSUs ( 778,750 RSUs) were exchanged for stock options. The original RSUs that were cancelled were issued in 2020 and 2021. In accordance with ASC 718, a cancellation of an award accompanied by the concurrent grant of a replacement award shall be accounted for as a modification of the terms of the cancelled award. Similarly, because these stock options were then not considered granted under ASC 718, they were therefore treated as obligation to issue stock options and were remeasured at the end of each reporting period until the settlement date on June 17, 2022.

 On June 17, 2022, the Company settled the obligation to issue RSUs and options by issuing the related RSUs and stock options and reclassified the fair value of the issuances at June 17, 2022 of $ 1.0 million from accounts payable and accrued liabilities to additional paid-in capital. Additionally, the amounts recognized as employee incentive expense totaling $ 1.4 million during fiscal year end 2022 was reclassified to stock compensation expense. The non-cash expense associated with these rewards were valued at the grant date of June 17, 2022, using a Monte Carlo model for double trigger RSUs and a Black Scholes model for simple employment period vesting stock options.

 Restricted Stock Units

 During the years ended November 30, 2023 and 2022, the Company granted 102,720 and 536,805 RSUs, respectively. Stock-based compensation expense for the RSUs for the years November 30, 2023 and 2022, was $ 3.6 million and $ 2.6 million, respectively.

 During the year ended November 30, 2023, the Company accelerated the vesting of 200,000 RSUs held by the Company's former CTO. The acceleration of these 200,000 RSUs resulted in $ 0.5 million of a tax payment for which the Company withheld 89,182 shares from the former CTO in exchange. The acceleration of these RSUs was considered an equity award modification and resulted in an immaterial stock-based compensation expense.

 During the year ended November 30, 2022, the Company accelerated the vesting of 3,874 RSUs to a former director and 8,392 RSUs to current board members for 2021 services. The acceleration of these RSUs were considered an equity award modification and resulted in an immaterial stock-based compensation expense.

 As of November 30, 2023, there was $ 1.1 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.

 RSU Valuation

 The assumptions that the Company used to determine the grant-date fair value of RSUs granted for the year ended November 30, 2022 are presented in the table below. The Company did not grant RSUs for the year ended November 30, 2023 that required a Monte Carlo simulation model.

 (Monte Carlo simulation model)

 2023

 2022

 Risk free rate

 —

 3.35
 %

 Expected dividends

 —

 0.00
 %

 Expected volatility

 —

 %

 Expected life (in years)

 —

 1.1

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

 —

 $
 7.69 - 8.24

 The following table summarizes the RSU activity during the year ended November 30, 2023:

 RSUs

 Outstanding, November 30, 2021

 1,594,120

 Granted

 536,805

 Settled

 ( 12,266
)

 Cancelled

 ( 778,750
)

 Forfeited

 ( 25,000
)

 Outstanding, November 30, 2022

 1,314,909

 Granted

 102,720

 Settled

 ( 213,636
)

 Cancelled

 —

 Forfeited

 ( 625,743
)

 Outstanding, November 30, 2023

 578,250

 Of the 213,636 restricted stock units issued, 89,234 units were returned to the Company in exchange for the Company paying for the payroll withholding taxes. For the twelve months ended November 30, 2023, restricted stock units of 124,402, net, were issued.

 Stock Options

 During the years ended November 30, 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 $ 1.8 million and $ 2.8 million during the years ended November 30, 2023 and 2022, respectively.

 As of November 30, 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 1.6 years.

 Stock Option Valuation

 The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and non-employees for the years ended November 30, 2023 and 2022 were as follows:

 2023

 2022

 Risk free rate

 3.63
 %

 3.34
 %

 Expected dividends

 %

 %

 Expected volatility

 %

 78.44
 %

 Expected life (in years)

 6.5

 6.5

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

 $
 8.96

 $
 7.70

 Exercise price

 $
 8.96

 $
 7.70

 F-

 The following table summarizes option activity under the 2020 Plan during the years ended November 30, 2023 and 2022:

 Weighted-Average

 Stock

 Exercise Price Per Stock

 Options

 Option

 Outstanding, November 30, 2021

 586,783

 $
 3.48

 Granted

 994,750

 5.51

 Exercised

 ( 252,250
)

 1.84

 Expired

 ( 5,533
)

 0.88

 Forfeited

 ( 26,000
)

 9.59

 Outstanding, November 30, 2022

 1,297,750

 $
 6.75

 Granted

 249,999

 8.96

 Exercised

 ( 25,000
)

 1.45

 Expired

 ( 30,333
)

 7.70

 Forfeited

 ( 107,750
)

 8.09

 Outstanding, November 30, 2023

 1,384,666

 $
 7.12

 Exercisable, November 30, 2023

 672,256

 $
 5.82

 Exercisable, November 30, 2022

 267,001

 $
 1.63

 The stock options outstanding at the end of the year had weighted-average contractual life as follows:

 2023

 2022

 (years)

 (years)

 Total outstanding options

 6.90

 7.39

 Total exercisable options

 5.29

 2.13

 F-

 15.

 EARNINGS PER SHARE

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

 2023

 2022

 $
)

 $
)

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

 21,919,624

 22,364,201

 Net loss per share - basic and diluted

 $
 ( 0.37
)

 $
 ( 0.35
)

 The Company's potential dilutive securities, which include stock options and RSUs have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

 2023

 2022

 Stock Options

 1,384,666

 1,297,750

 Restricted Stock

 578,250

 1,314,909

 Total

 1,962,916

 2,612,659

 F-

 16.

 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 terminated the royalty payments to the Company's former CTO in December 2021 and the Company granted 200,000 RSUs during the fiscal year ended November 30, 2022 in exchange to waive all future rights and entitlements to the former CTO. During the fiscal year ended November 30, 2023, the Company and the former CTO agreed to immediately accelerate the 200,000 RSUs, which resulted in $ 0.5 million in accelerated stock compensation expense. Refer to Note 19, "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 $ 0.03 million and $ 0.03 million during the years ended November 30, 2023, 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 $ 4.0 million for the fiscal years ended November 30, 2023 and 2022. The Company had accounts receivable, which are due within one year as of November 30, 2023, from Bersa S.A. of $ 1.6 million and $ 4.0 million as of November 30, 2023 and November 30, 2022 respectively.

 17.

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

 The Company leases office and warehouse space in South Africa that expires in November 2024. The base rent is approximately $ 0.01 million per month. In December 2022, the Company early terminated and fully exited the associated lease with no penalties incurred. The Company entered into a new lease for a larger facility in November 2022. The base rent is approximately $ 0.07 million per month.

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

 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.

 F-

 As of November 30, 2023 and 2022, the elements of lease expense were as follows (in thousands):

 2023

 2022

 Lease Cost:

 Operating lease cost

 $

 $

 Short-term lease cost

 Total lease cost

 $

 $

 Other Information:

 Cash paid for amounts included in the measurement of operating lease liabilities

 $

 $

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

 $
 —

 $
 1,698

 Operating Leases:

 Weighted-average remaining lease term (in years)

 3.5

 4.2

 Weighted-average discount rate

 9.5
 %

 9.5
 %

 The Form 10 -K for the fiscal year ended November 30, 2022 incorrectly reported operating lease costs of $ 2,421. The amount presented above for operating lease costs in 2022 are revised to the corrected amount of $ 568. This change had no impact on previously reported consolidated balance sheets, consolidated results of operations, or shareholders' equity.

 F-

 Future lease payments under non-cancelable operating leases as of November 30, 2023 are as follows (in thousands):

 Fiscal Year Ended November 30,

 2024

 $

 2025

 2026

 2027

 2028

 Thereafter

 —

 Total lease payments

 2,239

 Less: imputed interest

 Total lease liabilities

 $
 1,902

 Operating lease liabilities, current

 $

 Operating lease liabilities, non-current

 $
 1,258

 18.

 INCOME TAXES

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

 Year Ended November 30,

 2023

 2022

 United States

 $
 ( 7,170
)

 $
 ( 8,185
)

 Foreign

 ( 857
)

 Total

 $
 ( 8,027
)

 $
 ( 7,651
)

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

 Year Ended November 30,

 2023

 2022

 Current expense:

 Federal

 $
 —

 $
 —

 State

 Foreign

 —

 Total current expense:

 Deferred expense (benefit):

 Federal

 State

 Foreign

 ( 124
)

 Total deferred expense (benefit)

 ( 120
)

 Total income tax provision (benefit)

 $

 $

 F-

 A reconciliation of the Company's statutory income tax rate to the Company's effective income tax rate is as follows:

 Year Ended November 30,

 2023

 2022

 Income at US statutory rate

 21.00
 %

 21.00
 %

 State income taxes

 0.86
 %

 ( 1.20
)%

 Permanent differences

 ( 6.65
)%

 ( 2.79
)%

 Foreign rate differential

 0.59
 %

 (0.49
)%

 Valuation allowance

 ( 17.83
)%

 ( 16.96
)%

 Other

 ( 0.02
)%

 ( 2.62
)%

 Total

 ( 2.05
)%

 ( 3.06
)%

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

 2023

 2022

 Net operating loss carryforwards

 $
 6,551

 $
 6,515

 Stock compensation

 1,835

 1,192

 Inventory reserve

 Bad debt reserve

 —

 Accrued payroll

 Warranty reserve

 Foreign tax credit carryforwards

 Unrealized losses

 Deferred revenue

 Lease liability

 R&E capitalization

 —

 Equity investments

 —

 Subtotal deferred tax assets

 10,329

 9,031

 Valuation allowance

 ( 9,271
)

 ( 7,839
)

 Total deferred tax assets

 1,058

 1,192

 Depreciation and amortization

 ( 678
)

 Right of use asset

 ( 390
)

 Total deferred tax liabilities

 ( 1,068
)

 1,063

 Net deferred tax assets (liabilities)

 $
 ( 10
)

 $

 The Company notes $ 0.04 million of a United States state refundable tax credit awarded in fiscal year 2023 has been booked above the income tax line in accordance with US GAAP principles. As of November 30, 2023, the Company had federal and state net operating losses ("NOLs") carryforwards of approximately $ 27.8 million and $ 7.3 million, respectively, which begin to expire in 2025 for federal and state purposes. The federal NOL carryforwards include approximately $ 13.2 million, which do not expire. The Company had foreign NOL carryforwards of $ 0.3 million which can be carried forward indefinitely. Deferred tax assets, which are offset by deferred tax liabilities, are presented in other assets in the accompanying Consolidated Balance Sheets.

 Future realization of the tax benefits of existing temporary differences and NOL carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of November 30, 2023 and 2022, respectively, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the worldwide deferred tax assets will not be realized. Accordingly, the Company maintained a full valuation allowance as of November 30, 2023 and 2022 and a full valuation allowance on the US deferred tax assets as of November 30, 2023 and 2022.

 Additionally, a deferred tax liability has been established in the United States entity during the fiscal year ended
 November 30, 2023 relating to tax basis in excess of book basis on an indefinite lived intangible. At
 November 30, 2023 and 2022, the Company recognized valuation allowances of
 $ 9.3 million and
 $ 7.8 million, respectively, related to its deferred tax assets created in those respective years. The net increase of
 $ 1.4 million and
 $ 1.2 million in the valuation allowance reflects the net increase in gross deferred tax asset between
 November 30, 2023 and 2022 and the prior fiscal years, respectively.

 Pursuant to Internal Revenue Code Section 382, use of NOL carryforwards may be limited if the Company experiences a cumulative change in ownership of greater than 50% in a moving three -year period. Ownership changes could impact the Company's ability to utilize the NOL carryforwards remaining at an ownership change date. The Company last completed a Section 382 analysis regarding whether an ownership change had occurred for Company through November 30, 2021. Based on the analysis, the cumulative ownership change is 17.08 %. As a result, no resulting limitation of NOL carryforwards has been considered in determining the full valuation allowance against the related deferred tax assets as noted above.

 The Tax Cuts and Jobs Act of 2017 requires taxpayers to capitalize and amortize, rather than deduct, research and experimental, or R&E, expenditures under section 174 for tax years beginning after December 31, 2021. This rule became effective for the Company during the fiscal year ended November 30, 2023 and resulted in the capitalization for income tax purposes of R&E costs of $ 2.0 million. The Company will amortize these costs for tax purposes over five years if the R&E was performed in the U.S. and over 15 years if the R&E was performed outside the U.S.

 F-

 19.

 COMMITMENTS AND CONTINGENCIES

 Royalty Payment

 Pursuant to the Purchase and Sale Agreement between the Company and its former CTO dated April 13, 2018 and further amended on December 19, 2019, the Company was committed to a minimum royalty payment of $ 0.025 million per year. Royalties on CO2 pistols were to be paid for so long as patents remain effective beginning at 2 % 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 %. Royalties on the fintail projectiles (and any improved versions thereof) will be paid so long as patents remain effective at a rate of 4 % of the agreed upon Stipulated Net Price for fintail projectile products.

 On January 7, 2022, the Company and its former CTO agreed to waive all future rights and entitlements under such agreement, including without limitation any right, title, or interest in the intellectual property or royalty fees except for those on the fintail projectiles. In exchange for the royalty termination, the Company agreed to grant 200,000 RSU's upon stockholder's approval and renegotiation of the employment contract of the increase in the number of shares of common stock available for issuance under the 2020 Plan. This was approved on August 3, 2022. Refer to Note 14, "Stock-based Compensation" for additional information. The RSU's vests in two years from January 7, 2022. In June 2023, the Company and the former CTO agreed to accelerate the vesting of the 200,000 RSUs. As a result, the Company recognized stock compensation expense of $ 1.0 million and $ 0.3 million associated with the RSUs during the years ended November 30, 2023 and 2022, respectively.

 Legal Proceedings

 In the ordinary course of its 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.

 F-

 20.

 SEGMENT AND GEOGRAPHICAL DISCLOSURES

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

 The tables below (in thousands) summarize the Company's revenue, long-lived assets and total assets as of November 30, 2023 and 2022, respectively by geographic region. The Company's long-lived assets consist of intangible assets, property and equipment, right of use assets, and deposits for equipment:

 Revenue

 US

 South Africa

 Europe/South America/Asia

 Canada

 Total

 2023

 $
 40,182

 $

 $
 1,013

 $
 1,047

 $
 42,644

 2022

 38,856

 2,569

 6,431

 48,036

 Long-lived assets

 US

 South Africa

 Total

 2023

 $
 9,632

 $

 $
 10,354

 2022

 10,828

 1,046

 11,874

 Total Assets

 US

 South Africa

 Total

 2023

 $
 46,388

 $
 5,926

 $
 52,314

 2022

 $
 46,308

 $
 10,741

 57,049

 21.

 FINANCIAL INSTRUMENTS

 The Company is exposed to risks that arise from its use of financial instruments. This note describes the Company's objectives, policies and processes for managing those risks and the methods used to measure them.

 i)

 Currency Risk

 The Company held its cash balances within banks in the US in US dollars and with banks in South Africa in US dollars and South African rand. The value of the South African rand against the US dollar may fluctuate with the changes in economic conditions.

 F-

 During the years ended November 30, 2023 and 2022, the US dollar weakened in relation to the South African rand, and upon the translation of the Company's subsidiaries' revenues, expenses, assets and liabilities, and intercompany loan held in South African rand, respectively. As a result, the Company recorded a translation adjustment loss of $ 0.4 million and $ 0.6 million primarily related to the South African rand during the years ended November 30, 2023 and 2022, respectively.

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

 The Company 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.

 22.

 SUBSEQUENT EVENTS

 On January 19, 2024, the revolving line of credit and financing line of credit were terminated and not renewed. Based on the liquidity position of the Company, the Company's management does not believe the lines of credit are necessary to support the operations during fiscal year 2024.

 F-

 (3) Exhibits.

 The following exhibits are filed as part of this Annual Report on Form 10-K. Where such filing is made by incorporation by reference to a previously filed document, such document is identified.

 Exhibit No.

 Description

 3.1

 Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2021).

 3.2

 Certificate of Amendment to the Certificate of Incorporation, dated April 28, 2021 (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 28, 2021).

 3.3

 Certificate of Amendment to the Certificate of Incorporation, dated June 17, 2022 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 17, 2022).

 3.4

 Amended and Restated By-laws dated April 19, 2021 (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2021).

 3.5

 Certificate of Designations of Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 15, 2020).

 3.6

 Amendment to the Certificate of Designations of Series A Convertible Preferred Stock, dated January 15, 2021 (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 25, 2021).

 4.1

 Description of Capital Stock (incorporated herein by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2021).

 4.2

 Form of Common Stock Purchase Warrant (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 23, 2018).

 4.3

 Common Stock Purchase Warrant, dated January 15, 2020 (incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 22, 2020).

 10.1#

 Byrna Technologies Inc. 2020 Amended and Restated 2020 Equity Incentive Plan (incorporated herein by reference to Annex B to the Company's Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on May 6, 2022).

 10.2#

 Consulting Agreement dated June 15, 2016 between the Company and Northeast Industrial Partners, LLC, as amended by Extension Agreement to Consulting Agreement, dated May 1, 2017, between the Company and Northeast Industrial Partners, LLC (incorporated herein by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 28, 2018).

 10.3#

 Form of Incentive Stock Option Award Agreement under the Byrna Technologies Inc. 2020 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-1 filed with the Securities Exchange Commission on June 1, 2021).

 10.4#

 Form of Nonqualified Stock Option Award Agreement under the Byrna Technologies Inc. 2020 Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-1 filed with the Securities Exchange Commission on June 1, 2021).

 10.5

 Purchase and Sale Agreement by and among the Company and Andre Buys of South Africa, dated April 13, 2018 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 16, 2018).

 E-1

 10.6

 Amendment to Purchase and Sale Agreement by and among the Company and Andre Buys of South Africa, dated December 19, 2019 (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities Exchange Commission on January 8, 2020).

 10.7

 Manufacturing Supply Agreement by and between the Company and Micron Products, Inc. dated August 11, 2017 (incorporated herein by reference to Exhibit 10.5 to the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 28, 2018).

 10.8

 License and Supply Agreement by and between the Company and Safariland, LLC dated May 1, 2017 (incorporated herein by reference to Exhibit 10.9 to the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on March 28, 2018).

 10.9

 Securities Purchase Agreement, by and among the Company, Northeast Industrial Partners, LLC, and the purchasers party thereto, dated April 22, 2019 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2019).

 10.10

 Securities Purchase Agreement, by and among the Company, Northeast Industrial Partners, LLC, and the purchasers party thereto, dated July 22, 2019 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2019).

 10.11

 Purchase and Sale Agreement by and among by and among the Company and Andre Buys of South Africa, dated April 13, 2018 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 8, 2020).

 10.12

 Amendment to Purchase and Sale Agreement by and among the Company and Andre Buys of South Africa, dated December 19, 2019 (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 8, 2020).

 10.13

 Stock Purchase Agreement, dated as of May 5, 2020, by and among the Company, Roboro, the Sellers and the Seller Representative (incorporated by reference to Exhibit 10.26 to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 18, 2020).

 E-2

 10.14

 Asset Purchase Agreement by and among the Company, Kore Outdoor (US) Inc. and Kore Outdoor Inc., dated as of May 12, 2021 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 21, 2021).

 10.15#

 Form of Indemnification Agreement by and between the Registrant and each of its officers and directors (incorporated by reference to Exhibit 10.17 to the Amendment to the Company's Registration Statement on Form S-1 filed with the Securities and Exchange Commission on July 12, 2021).

 10.16

 Asset Purchase Agreement by and between Byrna Technologies Inc. and Fox Labs International, Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K wiled with the Securities and Exchange Commission on May 25, 2022).

 10.22#

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

 21.1

 List of Registrant's Subsidiaries*

 23.1

 Consent of Independent Registered Public Accounting Firm*

 31.1

 Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).*

 31.2

 Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).*

 32.1

 Certification of the Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350**

 97.1

 Byrna Technologies Inc. Clawback Policy*

 101.INS

 101.SCH

 101.CAL

 101.LAB

 101.PRE

 101.DEF

 *

 Filed herewith

 **

 Furnished herewith

 #

 Management contract or compensatory plan or arrangement

 Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby agrees to provide the Securities and Exchange Commission, upon request, copies of any omitted exhibits or schedules to this exhibit.

 E-3

 Item 16. FORM 10-K SUMMARY

 Not applicable.

 SIGNATURES

 Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 Byrna Technologies Inc.

 By:

 /s/ Bryan Ganz

 Name:

 Bryan Ganz

 Title:

 Chief Executive Officer, President and Director

 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 Name

 Position

 Date

 /s/ Bryan Ganz

 Chief Executive Officer, President and Director

 Bryan Ganz

 (Principal Executive Officer)

 /s/ David R. North

 Chief Financial Officer

 David R. North

 (Principal Financial Officer and Principal Accounting Officer)

 /s/ Herbert Hughes

 Chairman

 Herbert Hughes

 /s/ Leonard Elmore

 Director

 Leonard Elmore

 /s/ Chris Lavern Reed

 Director

 Chris Lavern Reed

 /s/ Emily Rooney

 Director

 Emily Rooney