byrn20240831c

byrn20240831c_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended August 31, 2024

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

For the transition period from _________ to _________

Commission File No. 333-132456

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

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

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

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

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

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

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

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

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

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☐

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

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

As of October 11, 2024, the Company had 22,509,399 outstanding shares of common stock.

TABLE OF CONTENTS

		Page

PART 1 – FINANCIAL INFORMATION		2

Item 1.	Condensed Consolidated Financial Statements	2

	Condensed Consolidated Balance Sheets as of August 31, 2024 (unaudited) and November 30, 2023	2

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended August 31, 2024 and 2023 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended August 31, 2024 and 2023 (unaudited)	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended August 31, 2024 and 2023 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements	6

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

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26

Item 4.	Controls and Procedures	26

PART II – OTHER INFORMATION		27

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

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

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

SIGNATURES		29

PART 1 – FINANCIAL INFORMATION

ITEM 1.

Condensed Consolidated Financial Statements

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Balance Sheets

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

	*August 31,*			*November 30,*
	*2024*			*2023*
	*Unaudited*
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	20,077		$	20,498
Accounts receivable, net		2,128			2,945
Inventory, net		19,797			13,890
Prepaid expenses and other current assets		1,983			868
Total current assets		43,985			38,201
LONG TERM ASSETS
Intangible assets, net		3,401			3,583
Deposits for equipment		1,927			1,163
Right-of-use asset, net		2,404			1,805
Property and equipment, net		3,481			3,803
Goodwill		2,258			2,258
Loan to joint venture		—			1,473
Other assets		1,548			28
TOTAL ASSETS	$	59,004		$	52,314

LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	11,124		$	6,158
Operating lease liabilities, current		596			644
Deferred revenue, current		818			1,844
Total current liabilities		12,538			8,646
LONG TERM LIABILITIES
Deferred revenue, non-current		28			91
Operating lease liabilities, non-current		1,899			1,258
Total liabilities		14,465			9,995

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. 24,977,422 shares issued and 22,498,389 shares outstanding as of August 31, 2024, and 24,168,014 shares issued and 22,002,027 outstanding as of November 30, 2023		24			24
Additional paid-in capital		132,364			130,426
Treasury stock (2,479,033 and 2,165,987 shares purchased as of August 31, 2024 and November 30, 2023, respectively)		(20,747	)		(17,500	)
Accumulated deficit		(66,456	)		(69,575	)
Accumulated other comprehensive loss		(646	)		(1,056	)

Total Stockholders’ Equity		44,539			42,319

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	59,004		$	52,314

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Amounts in thousands except share and per share data)

(Unaudited)

	*For the Three Months Ended*						*For the Nine Months Ended*
	*August 31,*						*August 31,*
	*2024*			*2023*			*2024*			*2023*
Net revenue	$	20,854		$	7,085		$	57,777		$	27,004
Cost of goods sold		7,842			3,927			22,566			12,402
Gross profit		13,012			3,158			35,211			14,602
Operating expenses		12,184			7,267			32,633			21,522
INCOME (LOSS) FROM OPERATIONS		828			(4,109	)		2,578			(6,920	)
OTHER INCOME (EXPENSE)
Foreign currency transaction loss		(103	)		(54	)		(381	)		(238	)
Interest income		281			239			883			525
Loss from joint venture		(62	)		(287	)		(42	)		(625	)
Other income (expense)		3			(7	)		7			(270	)
INCOME (LOSS) BEFORE INCOME TAXES		947			(4,218	)		3,045			(7,528	)
Income tax benefit		78			124			75			165
NET INCOME (LOSS)		1,025			(4,094	)		3,120			(7,363	)

Foreign currency translation adjustment for the period		381			585			410			(641	)
COMPREHENSIVE INCOME (LOSS)	$	1,406		$	(3,509	)	$	3,530		$	(8,004	)

Basic net income (loss) per share	$	0.05		$	(0.19	)	$	0.14		$	(0.34	)
Diluted net income (loss) per share	$	0.04		$	(0.19	)	$	0.14		$	(0.34	)

Weighted-average number of common shares outstanding - basic		22,758,155			21,960,163			22,509,018			21,895,815
Weighted-average number of common shares outstanding - diluted		23,410,159			21,960,163			23,072,498			21,895,815

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

	*For the Nine Months Ended*
	*August 31,*
	*2024*			*2023*
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period	$	3,120		$	(7,363	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation expense		2,615			4,689
Depreciation and amortization		1,113			921
Provision for inventory		—			648
Operating lease costs		483			505
Amortization of debt issuance costs		4			—
Loss from joint venture		42			625
Impairment loss		—			176
Changes in assets and liabilities:
Accounts receivable		817			1,968
Deferred revenue		(1,089	)		(8	)
Inventory		(5,907	)		(2,317	)
Prepaid expenses and other current assets		(1,199	)		182
Other assets		—			(97	)
Accounts payable and accrued liabilities		4,966			(3,027	)
Operating lease liabilities		(486	)		(530	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		4,479			(3,628	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(1,382	)		(342	)
Equity method investment in joint venture		—			(520	)
Loan to joint venture		—			(1,556	)
NET CASH USED IN INVESTING ACTIVITIES		(1,382	)		(2,418	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock option exercises		149			—
Repurchase of common stock		(3,247	)		—
Payment of taxes withheld on issuance of restricted stock units		(826	)		(456	)
NET CASH USED IN FINANCING ACTIVITIES		(3,924	)		(456	)
Effects of foreign currency exchange rate changes		406			88
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS FOR THE PERIOD		(421	)		(6,414	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		20,498			20,068
CASH AND CASH EQUIVALENTS END OF PERIOD	$	20,077		$	13,654

Supplemental schedule of noncash operating activities:
Operating lease liabilities arising from obtaining right-of-use assets	$	1,146			—
Reclassification of interest receivable from accounts receivable to other assets	$	203			—
Recapitalization of loan receivable in connection with the divesture of the joint venture	$	119			—

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three and Nine Months Ended August 31, 2024 and 2023

(Amounts in thousands except share numbers)

(Unaudited)

					*Additional*			*Treasury*									*Accumulated Other*
	*Common Stock*				*Paid-in*			*Stock*						*Accumulated*			*Comprehensive*
	*Shares*		$		*Capital*			*Shares*			$			*Deficit*			*Loss*			*Total*
Balance, May 31, 2024		24,964,787	$	24	$	131,550			(2,187,892	)	$	(17,753	)	$	(67,481	)	$	(1,027	)	$	45,313
Stock-based compensation		—		—		819			—			—			—			—			819
Issuance of common stock pursuant to exercise of stock options		12,635		—		21			—			—			—			—			21
Issuance of common stock pursuant to vesting of restricted stock units		—		—		(26	)		—			—			—			—			(26	)
Repurchase of common stock		—		—		—			(291,141	)		(2,994	)		—			—			(2,994	)
Net income		—		—		—			—			—			1,025			—			1,025
Foreign currency translation		—		—		—			—			—			—			381			381
Balance, August 31, 2024		24,977,422	$	24	$	132,364			(2,479,033	)	$	(20,747	)	$	(66,456	)	$	(646	)	$	44,539

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

					*Additional*			*Treasury*									*Accumulated Other*
	*Common Stock*				*Paid-in*			*Stock*						*Accumulated*			*Comprehensive*
	*Shares*		$		*Capital*			*Shares*			$			*Deficit*			*Loss*			*Total*
Balance, November 30, 2023		24,168,014	$	24	$	130,426			(2,165,987	)	$	(17,500	)	$	(69,575	)	$	(1,056	)	$	42,319
Stock-based compensation		—		—		2,615			—			—			—			—			2,615
Issuance of common stock pursuant to exercise of stock options		220,067		—		149			—			—			—			—			149
Issuance of common stock pursuant to vesting of restricted stock units		589,341		—		(826	)		—			—			—			—			(826	)
Repurchase of common stock		—		—		—			(313,046	)		(3,247	)		—			—			(3,247	)
Net income		—		—		—			—			—			3,120			—			3,120
Foreign currency translation		—		—		—			—			—			—			410			410
Balance, August 31, 2024		24,977,422	$	24	$	132,364			(2,479,033	)	$	(20,747	)	$	(66,456	)	$	(646	)	$	44,539

Balance, November 30, 2022		24,018,612	$	23	$	125,474			(2,165,987	)	$	(17,500	)	$	(61,383	)	$	(620	)	$	45,994
Stock-based compensation				—		4,689			—			—			—			—			4,689
Issuance of common stock pursuant to vesting of restricted stock units		124,402		1		(456	)		—			—			—			—			(

SEC Form 10-Q filed by Byrna Technologies Inc.