OVERVIEW
The following discussion and analysis is intended to help you understand us, our operations and our financial performance. It should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes, which are included in Item 1 of this report.
Byrna Technologies Inc. designs, manufactures, retails and distributes less-lethal personal security solutions intended for situations that do not require the use of lethal force. Our mission is to empower individuals to protect themselves and others, and our product strategy emphasizes ease of use, effectiveness, and reliability in both consumer and professional safety environments. We also develop tools intended to serve as alternatives to traditional firearms for law enforcement and private security customers with the goal of reducing firearm related incidents and supporting de-escalation practices. Our strategy includes positioning Byrna® as a consumer lifestyle brand associated with personal confidence and safety, while expanding our product portfolio to broaden market reach and drive sales growth from both new and existing customers.
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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 demand for less-lethal products in the United States and internationally continues to rise and that this category will remain a growing segment of the broader security market. We plan to meet this demand by manufacturing and distributing our Byrna® SD, Byrna LE and most recently our Byrna CL launchers, along with continued expansion of our accessory and ammunition offerings.
On July 31, 2024, our Board of Directors approved a plan to buy back up to $10 million worth of shares of our common stock (the “Stock Buyback Program”). The Stock Buyback Program is intended to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. The Stock Buyback Program will expire on the sooner of the two-year anniversary of its initiation or until we reach the aggregate limit of $10 million for the repurchases under the program.
Beginning in fiscal year 2025, we also reorganized our operations into two reportable sales channels, Direct‑to‑Consumer (“DTC”) and Wholesale (dealer/distributor), to align with our expanded omnichannel strategy, the opening of Company‑operated retail stores, and increased penetration into national retail chains and international distributors.
The Company operates primarily in the United States, South Africa and Canada through wholly owned subsidiaries.
RESULTS OF OPERATIONS
Three months ended May 31, 2026 as compared to three months ended May 31, 2025:
Net Revenue
The Company presents revenue net of returns, allowances, and discounts. Net revenues were $16.4 million in the second fiscal quarter of 2026 which represents a decrease of $12.1 million, or 42.5%, as compared to the prior year period revenues of $28.5 million. The decrease was primarily driven by lower direct-to-consumer sales, via Amazon and the Company's website, which decreased by $5.8 million, or 34.5%, from $16.8 million in the second fiscal quarter of 2025 to $11.0 million in the same fiscal quarter of 2026, as well as lower wholesale dealer and distributor sales, which decreased by $6.3 million, or 53.8%, from $11.7 million in the second fiscal quarter of 2025 to $5.4 million in the same fiscal quarter of 2026. Sales to international markets, including Canada, decreased from $3.5 million in the three months ended May 31, 2025 to $1.2 million in the three months ended May 31, 2026, which includes a net reduction of $0.3 million related to the reversal of previously recognized royalty revenue under the LATAM Licensing Agreement, which unfavorably impacted international revenue for the period.
Segment Results
Direct‑to‑Consumer (DTC)
DTC revenue decreased to $11.0 million in the second fiscal quarter of 2026 compared to $16.8 million in the prior year period, primarily driven by a decline in online conversion rates across the Company's direct-to-consumer channels, including both Amazon and the Company's website.
Wholesale (Dealer/Distributor)
Wholesale revenue decreased to $5.7 million in the second fiscal quarter of 2026 compared to $10.9 million in the prior year period, primarily reflecting elevated dealer and distributor stocking orders and new store load-in orders in the second fiscal quarter of 2025 associated with the launch of the Byrna CL, which did not repeat in the current year period.
Cost of Goods Sold
Cost of goods sold was $14.6 million in the second fiscal quarter of 2026 compared to $10.9 million in the prior year period, an increase of $3.7 million, or 33.6%, despite a 42.5% decline in revenue over the same period. The increase in cost of goods sold against significantly lower revenue was primarily driven by a $5.9 million inventory write-down and a $3.5 million impairment charge related to the write-off of ammunition production machinery, equipment, and production-specific leasehold improvements, both recorded in the second fiscal quarter of 2026 in connection with the Company's decision to permanently cease in-house ammunition production at its Fort Wayne, Indiana facility. Of the $5.9 million inventory write-down, $3.8 million related to ammunition raw materials associated with the Fort Wayne plant shutdown and the remainder related to launcher components that due to a strategic decision, will either not be reworked and therefore scrapped, or for which expected future demand and marketability had declined, as well as other slow-moving inventory. Excluding the inventory write-down and impairment charge, cost of goods sold decreased compared to the prior year period, driven by lower sales volumes across the Company's web, wholesale, Amazon, and international channels, as well as improved freight costs compared to the prior year period, which included elevated air freight usage and tariff impacts, and lower product costs. These favorable impacts were partially offset by lower average selling prices, driven primarily by a shift in sales mix toward lower-priced channels. Cost of goods sold attributable to Direct-to-Consumer ("DTC") was $8.1 million in the second fiscal quarter of 2026, compared to $5.7 million in the prior year period. Cost of goods sold attributable to Wholesale was $6.5 million in the second fiscal quarter of 2026, compared to $5.3 million in the prior year period. During the three months ended May 31, 2026, the Company received tariff refunds of approximately $1.1 million related to previously paid tariffs, which are reflected as a reduction of cost of goods sold in the current period. The Company may be entitled to additional tariff refunds for prior period tariff payments; however, as such amounts are not yet determinable or realizable, they have not been recognized in the financial statements. Subsequent to May 31, 2026, the Company received an additional tariff refund of approximately $2.3 million, which will reduce cost of goods sold in the fiscal third quarter of 2026.
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. Cost of goods sold includes costs associated with the production and procurement of products, including labor and overhead, inbound freight, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $1.8 million during the second fiscal quarter of 2026, or 10.9% of net revenue, compared to gross profit of approximately $17.6 million, or 61.6% of net revenue, in the prior-year period. The decrease in gross margin was primarily driven by a $5.9 million inventory write-down and a $3.5 million impairment charge related to the write-off of ammunition production machinery, equipment, and production-specific leasehold improvements, both recorded in the second fiscal quarter of 2026 in connection with the Company's decision to permanently cease in-house ammunition production at its Fort Wayne, Indiana facility. Of the $5.9 million inventory write-down, $3.6 million related to ammunition raw materials associated with the Fort Wayne plant shutdown and the remainder related to launcher components that due to a strategic decision, will either not be reworked and therefore scrapped, or for which expected future demand and marketability had declined, as well as other slow-moving inventory. These decreases to gross profit were partially offset by a $1.1 million refund of previously paid tariffs, recorded as a reduction of cost of goods sold during the period (see Note 11, Inventory). Excluding the inventory write-down and impairment charge, the decrease in gross margin was driven by lower sales volume across the Company's web, wholesale, Amazon, and international channels, as well as a shift in sales mix toward lower-priced wholesale channels. These unfavorable impacts were partially offset by lower product costs and improved freight costs compared to the prior year period, which included elevated air freight usage and tariff impacts.
Operating Expenses
Operating expenses were $14.6 million in the second fiscal quarter of 2026, a decrease of $0.4 million, as compared to the prior year period expenses of $14.2 million. The current period includes a $1.0 million charge related to the write-off of deposits for equipment associated with the Fort Wayne ammunition production facility that had not yet been placed in service at the time the Company committed to permanently cease in-house ammunition production. Excluding this charge, operating expenses decreased by $1.3 million compared to the prior year period, primarily driven by lower variable expenses and employee compensation costs, partially offset by an increase of $1.2 million in marketing expenses to support business growth and an increase of $0.2 million in professional fees largely attributable to higher accounting, audit, legal, and recruitment-related costs.
Other Income (Expense)
We recorded less than $0.1 million of foreign currency transaction gain during the three months ended May 31, 2026, compared to $0.1 million of foreign currency transaction loss during the three months ended May 31, 2025. We recorded less than $0.1 million of interest income during the three months ended May 31, 2026, compared to $0.1 million in the three months ended May 31, 2025.
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Income Tax Provision
For the three months ended May 31, 2026 and May 31, 2025, we recorded $2.7 million of income tax benefit and $0.9 million of income tax expense, respectively. For the three months ended May 31, 2026 and 2025, the effective tax rate was 21.2% and 23.3%, respectively. The effective tax rate for the three months ended May 31, 2026 reflects discrete excess tax benefits related to the vesting of stock‑based compensation awards, which more than offset tax expense on pre‑tax income. Our tax rate differs from the statutory rate of 21.0% due to the effects of state income taxes net of the federal benefit, foreign tax rate differentials related to the Company’s South Africa operations, permanent non deductible expenses, discrete items related to share based compensation, and other items.
Net Loss
Net loss was $10.1 million for the three months ended May 31, 2026, a decrease of $12.5 million compared to net income of $2.4 million for the three months ended May 31, 2025.
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide an additional financial metric that is not prepared in accordance with GAAP (non-GAAP) with presenting non-GAAP adjusted EBITDA. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance. We believe that this non-GAAP financial measure helps us to identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we exclude in the calculations of the non-GAAP financial measure.
Accordingly, we believe that this non-GAAP financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.
This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures, because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other non-GAAP measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.
Adjusted EBITDA
Adjusted EBITDA is defined as net (loss) income as reported in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income excluding the impact of (i) depreciation and amortization; (ii) income tax provision (benefit); (iii) interest income (expense); (iv) stock-based compensation expense, (v) impairment loss and (vi) one-time, non-recurring other expenses or income. Our Adjusted EBITDA measure eliminates potential differences in performance caused by variations in capital structures (affecting finance costs), tax positions, the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We also exclude certain one-time and non-cash costs. Reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, is as follows (in thousands):
| Line item | For the Three Months EndedMay 31, 2026 | For the Three Months EndedMay 31, 2025 |
|---|---|---|
| Net (loss) income | $(10,088) | $2,427 |
| Adjustments: | ||
| Interest income | (42) | (116) |
| Income tax (benefit) expense | (2,662) | 898 |
| Depreciation and amortization | 727 | 252 |
| Non-GAAP EBITDA | (12,065) | 3,461 |
| Stock-based compensation expense | 836 | 722 |
| Impairment loss on property and equipment | 4,506 | — |
| Write-down of ammunition inventory | 3,605 | — |
| Inventory reserve — strategic product rationalization | 2,324 | — |
| Severance/Officer recruiting | 189 | 116 |
| Non-GAAP adjusted EBITDA | $(605) | $4,299 |
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Six months ended May 31, 2026 as compared to six months ended May 31, 2025:
Net Revenue
The Company presents revenue net of returns, allowances, and discounts. Net revenues were $45.4 million in the six months ended of May 31, 2026 which represents a decrease of $9.3 million, or 16.9%, as compared to the prior year period revenues of $54.7 million. The decrease was driven by lower wholesale dealer and distributor sales, which decreased by $1.7 million, or 9.4%, from $18.0 million to $16.3 million. Direct to consumer sales, via Amazon and our website, declined in the six months ended May 31, 2026, decreasing by $7.6 million, or 20.7%, to $29.1 million from $36.7 million in the six months ended May 31, 2025. Sales to international markets, including Canada, decreased from $5.5 million in the six months ended May 31, 2025 to $2.6 million in the six months ended May 31, 2026, which includes a net reduction of $0.1 million related to the reversal of previously recognized royalty revenue under the LATAM Licensing Agreement, which unfavorably impacted international revenue for the period.
Segment Results
Direct‑to‑Consumer (DTC)
DTC revenue decreased to $29.1 million in the six months ended May 31, 2026 compared to $36.7 million in the prior year period, primarily driven by a decline in online conversion rates across the Company's direct-to-consumer channels, including Amazon and the Company's website.
Wholesale (Dealer/Distributor)
Wholesale revenue decreased to $16.3 million in the six months ended May 31, 2026 compared to $18.0 million in the prior year period, primarily reflecting elevated dealer and distributor stocking orders and new store load-in orders in the second fiscal quarter of 2025 associated with the launch of the Byrna CL, which did not repeat in the current year period.
Cost of Goods Sold
Cost of goods sold was $26.3 million in the six months ended May 31, 2026 compared to $21.2 million in the prior year period. This increase of $5.0 million, or 23.8%, despite a 16.9% decline in revenue over the same period. The increase in cost of goods sold against significantly lower revenue was primarily driven by a $5.9 million inventory write-down and a $3.5 million impairment charge related to the write-off of ammunition production machinery, equipment, and production-specific leasehold improvements, both recorded in the second fiscal quarter of 2026 in connection with the Company's decision to permanently cease in-house ammunition production at its Fort Wayne, Indiana facility. Of the $5.9 million inventory write-down, $3.8 million related to ammunition raw materials associated with the Fort Wayne plant shutdown and the remainder related to launcher components that due to a strategic decision, will either not be reworked and therefore scrapped, or for which expected future demand and marketability had declined, as well as other slow-moving inventory. Excluding the inventory write-down and impairment charge, cost of goods sold decreased compared to the prior year period, driven by lower sales volumes across the Company's web, international, and wholesale channels, as well as improved freight costs compared to the prior year period, which included elevated air freight usage and tariff impacts, and improved labor and fixed cost absorption. These favorable impacts were partially offset by lower average selling prices, driven primarily by a shift in sales mix toward lower-priced channels. Cost of goods sold attributable to Direct-to-Consumer ("DTC") was $14.4 million in the six months ended May 31, 2026, compared to $12.6 million in the prior year period. Cost of goods sold attributable to Wholesale was $11.9 million in the six months ended May 31, 2026, compared to $8.6 million in the prior year period. During the six months ended May 31, 2026, the Company received tariff refunds of approximately $1.1 million related to previously paid tariffs, which are reflected as a reduction of cost of goods sold in the current period. The Company may be entitled to additional tariff refunds for prior period tariff payments; however, as such amounts are not yet determinable or realizable, they have not been recognized in the financial statements. Subsequent to May 31, 2026, the Company received an additional tariff refund of approximately $2.3 million, which will reduce cost of goods sold in the fiscal third quarter of 2026.
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. Cost of goods sold includes costs associated with the production and procurement of products, including labor and overhead, inbound freight, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $19.2 million during the six months ended May 31, 2026, or 42.2% of net revenue, compared to gross profit of approximately $33.5 million, or 61.2% of net revenue, in the prior-year period. The decrease in gross margin was primarily driven by a $5.9 million inventory write-down and a $3.5 million impairment charge related to the write-off of ammunition production machinery, equipment, and production-specific leasehold improvements, both recorded in the second fiscal quarter of 2026 in connection with the Company's decision to permanently cease in-house ammunition production at its Fort Wayne, Indiana facility. Of the $5.9 million inventory write-down, $3.6 million related to ammunition raw materials associated with the Fort Wayne plant shutdown and the remainder related to launcher components that due to a strategic decision, will either not be reworked and therefore scrapped, or for which expected future demand and marketability had declined, as well as other slow-moving inventory. These decreases to gross profit were partially offset by a $1.1 million refund of previously paid tariffs, recorded as a reduction of cost of goods sold during the period (see Note 11, Inventory). Excluding the inventory write-down and impairment charge, the decrease in gross margin was driven by lower sales volume across the Company's web, international, and wholesale channels, as well as a shift in sales mix toward lower-priced wholesale channels and lower average selling prices. These unfavorable impacts were partially offset by improved freight costs compared to the prior year period, which included elevated air freight usage and tariff impacts, and improved labor and fixed cost absorption.
Operating Expenses
Operating expenses were $31.1 million in the six months ended May 31, 2026, an increase of $2.6 million, as compared to the prior year period expenses of $28.5 million. The current period includes a $1.0 million charge related to the write-off of deposits for equipment associated with the Fort Wayne ammunition production facility that had not yet been placed in service at the time the Company committed to permanently cease in-house ammunition production. Excluding this charge, operating expenses increased by $1.6 million compared to the prior year period, primarily driven by a decrease of $0.9 million in employee compensation costs and a decrease of $0.8 million in variable expenses, which decreased in proportion to sales volume, partially offset by an increase of $2.5 million in marketing expenses to support business growth and an increase of $0.8 million in professional fees largely attributable to higher accounting, audit, legal, and recruitment-related costs.
Other Income (Expense)
We recorded $0.2 million and $0.2 million of foreign currency transaction loss during the six months ended May 31, 2026 and 2025, respectively. We recorded $0.1 million of interest income during the six months ended May 31, 2026 compared to $0.3 million in the six months ended May 31, 2025.
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Income Tax Provision
For the six months ended May 31, 2026 and May 31, 2025, we recorded $2.7 million of income tax benefit and $1.0 million of income tax expense, respectively. For the six months ended May 31, 2026 and May 31, 2025, the effective tax rate was 23.1% and 17.2%, respectively. The effective tax rate for the six months ended May 31, 2026 reflects discrete excess tax benefits related to the vesting of stock‑based compensation awards, which more than offset tax expense on pre‑tax income. Our tax rate differs from the statutory rate of 21.0% due to the effects of state income taxes net of the federal benefit, foreign tax rate differentials related to the Company’s South Africa operations, permanent non deductible expenses, discrete items related to share based compensation, and other items.
Net Loss
Net loss was $9.3 million for the six months ended May 31, 2026, a decrease of $13.4 million compared to net income of $2.4 million for the six months ended May 31, 2025.
Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide an additional financial metric that is not prepared in accordance with GAAP (non-GAAP) with presenting non-GAAP adjusted EBITDA. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance. We believe that this non-GAAP financial measure helps us to identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we exclude in the calculations of the non-GAAP financial measure.
Accordingly, we believe that this non-GAAP financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.
This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures, because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other non-GAAP measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.
Adjusted EBITDA
Adjusted EBITDA is defined as net (loss) income as reported in our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income excluding the impact of (i) depreciation and amortization; (ii) income tax provision (benefit); (iii) interest income (expense); (iv) stock-based compensation expense, (v) impairment loss and (vi) one-time, non-recurring other expenses or income. Our Adjusted EBITDA measure eliminates potential differences in performance caused by variations in capital structures (affecting finance costs), tax positions, the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We also exclude certain one-time and non-cash costs. Reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, is as follows (in thousands):
| Line item | For the Six Months EndedMay 31, 2026 | For the Six Months EndedMay 31, 2025 |
|---|---|---|
| Net (loss) income | $(9,287) | $4,089 |
| Adjustments: | ||
| Interest income | (130) | (303) |
| Income tax (benefit) expense | (2,666) | 1,038 |
| Depreciation and amortization | 1,362 | 437 |
| Non-GAAP EBITDA | $(10,721) | 5,261 |
| Stock-based compensation expense | 1,371 | 1,562 |
| Impairment loss on property and equipment | 4,506 | — |
| Write-down of ammunition inventory | 3,605 | — |
| Inventory reserve — strategic product rationalization | 2,324 | — |
| Severance/Officer recruiting | 521 | 246 |
| Non-GAAP adjusted EBITDA | $1,606 | $7,069 |
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flow Summary
Cash and cash equivalents as of May 31, 2026 totaled $9.4 million, a decrease of $4.3 million from $13.7 million of cash and cash equivalents as of November 30, 2025.
Operating Activities
Cash used in operating activities was $3.0 million for the six months ended May 31, 2026 compared to cash used in operations of $9.2 million during the prior year period. Net loss was $9.3 million for the six months ended May 31, 2026, compared to net income of $4.1 million for the six months ended May 31, 2025. Significant changes in noncash and working capital activity are as follows:
Non-cash activity includes stock-based compensation expense of $1.4 million for the six months ended May 31, 2026, compared to $1.6 million for the six months ended May 31, 2025; depreciation and amortization expense of $1.4 million for the six months ended May 31, 2026, compared to $1.0 million for the six months ended May 31, 2025; a $3.5 million impairment charge related to the write-off of ammunition production machinery, equipment, and production-specific leasehold improvements and a $1.0 million write-off of deposits for equipment, both recorded in connection with the Company's decision to permanently cease in-house ammunition production at its Fort Wayne, Indiana facility; and a $5.9 million inventory write-down, of which $3.8 million related to ammunition raw materials associated with the Fort Wayne plant shutdown and the remainder related to a reserve for slow-moving and excess inventory. In addition to the non-cash activities mentioned above, the Company recognized a deferred tax asset of $3.3 million for the six months ended May 31, 2026, compared to a tax provision of $1.0 million for the six months ended May 31, 2025.
Inventory used cash of $3.6 million during the six months ended May 31, 2026, reflecting net inventory purchases during the period after excluding non-cash inventory reserves and impairment charges recorded in connection with the Company's decision to permanently cease in-house ammunition production at its Fort Wayne, Indiana facility and reserves for slow-moving and excess inventory, compared to a use of cash of $12.3 million for the six months ended May 31, 2025, with the significant decrease in cash used driven by lower inventory purchasing activity in the current period. Accounts receivable decreased by $6.1 million during the six months ended May 31, 2026 as compared to an increase of $3.9 million for the six months ended May 31, 2025. Accounts payable and accrued liabilities decreased during the six months ended May 31, 2026 by $6.8 million compared to an increase of $1.3 million for the six months ended May 31, 2025. Prepaid expenses and other current assets decreased by $0.7 million during the six months ended May 31, 2026 compared to an increase of $0.6 million during the six months ended May 31, 2025. Operating lease liabilities decreased by $0.4 million during the six months ended May 31, 2026 compared to a decrease of $0.2 million during the six months ended May 31, 2025. Deferred revenues decreased $0.2 million during the six months ended May 31, 2026 compared to a decrease of $1.5 million for the six months ended May 31, 2025.
Investing Activities
Cash flows used in investing activities was $0.4 million for the six months ended May 31, 2026 compared to $0.6 million cash used for the six months ended May 31, 2025. The prior year period investing activities primarily relates to purchases of property and equipment, acquisition of Federal Firearms Licenses, and proceeds from sale of marketable securities while the current period relates to purchases of property and equipment and proceeds from the sale of marketable debt securities. Purchases of property and equipment during the six months ended May 31, 2026 amounted to $1.1 million, as compared to $3.6 million during the six months ended May 31, 2025. Sales of marketable debt securities amounted to $0.8 million during the six months ended May 31, 2026 compared to $3.0 million during the six months ended May 31, 2025.
Financing Activities
Cash flows used in financing activities was $1.1 million for the six months ended May 31, 2026, compared to cash provided by financing activities of $0.1 million for the six months ended May 31, 2025. The current year amount was primarily composed of taxes paid on issuances of restricted stock units of $0.2 million and payments of $1.0 million for repurchases of common stock. The prior year amount was primarily composed of proceeds from stock option exercises and taxes paid on issuances of restricted stock units.
We require significant capital to meet our obligations as they become due. Throughout the next twelve months, we expect to fund our operations primarily from cash generated from operations. The Company also has access to an existing credit facility, as discussed in Note 24, Credit Facility, which may be used, but is not currently anticipated to be drawn, to provide additional liquidity if needed. We may pursue additional equity offerings or debt financings to provide working capital and satisfy debt obligations. There can be no assurance as to the availability or terms upon which such financing and capital might be available in the future. If we are required to raise additional capital to support our operations and are unable to secure additional funding, we may be forced to curtail or suspend our business plans.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
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RECENT ACCOUNTING PRONOUNCEMENTS
See Note 5, “Recent Accounting Guidance,” in the Notes to unaudited condensed consolidated financial statements included in Item 1 of this report for a discussion of recently issued and adopted accounting standards.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our unaudited condensed consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are outlined in Note 4, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the 2025 10-K. During the three and six months ended May 31, 2026, there were no significant changes to our critical accounting policies from those described in our 2025 10-K.
FILINGSOURCEITEMBOUNDARYBEGIN Item 3. Quantitative and Qualitative Disclosures about Market Risk FILINGSOURCEITEMBOUNDARYENDITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
FILINGSOURCEITEMBOUNDARYBEGIN Item 4. Controls and Procedures FILINGSOURCEITEMBOUNDARYENDITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of May 31, 2026 pursuant to Rule 13a-15(b) of the Exchange Act. Disclosure controls and procedures are designed to ensure that material information that we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that material information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our CEO and CFO concluded with reasonable assurance, that as of May 31, 2026, our disclosure controls and procedures were effective.
Changes in Internal Controls Over Financial Reporting
There were no changes that occurred during the second quarter of 2026 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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FILINGSOURCEITEMBOUNDARYBEGIN Item 1. Legal Proceedings FILINGSOURCEITEMBOUNDARYENDITEM 1. LEGAL PROCEEDINGS
In the normal course of business, we occasionally become involved in various legal proceedings. The results of any such proceedings cannot be predicted with certainty because such matters are inherently uncertain. Significant damages or penalties may be sought in some matters, and some matters may require years to resolve. In our opinion, at this time, any liability from such proceedings would not have a material adverse effect on our business or financial condition.
FILINGSOURCEITEMBOUNDARYBEGIN Item 1A. Risk Factors FILINGSOURCEITEMBOUNDARYENDITEM 1A. RISK FACTORS
Factors that could cause our actual results to differ materially from those in this report include the “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended November 30, 2025, filed with the SEC on February 5, 2026, as amended on March 30, 2026. There have been no material changes to the risk factors disclosed in our 2025 Form 10-K.
FILINGSOURCEITEMBOUNDARYBEGIN Item 2. Unregistered Sales of Equity Securities and Use of Proceeds FILINGSOURCEITEMBOUNDARYENDITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On July 31, 2024, our Board of Directors approved a program to buy back up to $10 million worth of shares of our Common Stock from the open market during a period of two years (the “Stock Buyback Program”). The Stock Buyback Program is intended to return capital to shareholders and to minimize the dilutive impact of stock options and other share-based awards. During the three months ended May 31, 2026, no shares of common stock were repurchased. See Note 15 of our notes to condensed consolidated financial statements for information regarding the Stock Buyback Program.
FILINGSOURCEITEMBOUNDARYBEGIN Item 3. Defaults Upon Senior Securities FILINGSOURCEITEMBOUNDARYENDITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
FILINGSOURCEITEMBOUNDARYBEGIN Item 4. Mine Safety Disclosures FILINGSOURCEITEMBOUNDARYENDITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
FILINGSOURCEITEMBOUNDARYBEGIN Item 5. Other Information FILINGSOURCEITEMBOUNDARYENDITEM 5. OTHER INFORMATION.
Insider Adoption or Termination of Trading Arrangements:
During the fiscal quarter ended May 31, 2026, none of our directors or officers informed us of the adoption, modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.
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FILINGSOURCEITEMBOUNDARYBEGIN Item 6. Exhibits FILINGSOURCEITEMBOUNDARYENDITEM 6. EXHIBITS.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| No. | Description of Exhibit |
|---|---|
| 10.1# | Offer Letter, dated March 1, 2026, between Byrna Technologies Inc. and Conn Davis (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 March 3, 2026. |
| 10.2# | Advisory Agreement, effective March 2, 2026, between Byrna Technologies Inc. and Bryan Ganz (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 3, 2026). |
| 10.3# | Offer Letter, dated March 17, 2026, between Byrna Technologies Inc. and Luan Pham (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 March 19, 2026). |
| 10.4# | Separation Agreement and General Release, dated as of June 17, 2026, by and between Byrna Technologies Inc. and Luan Pham (incorporated by reference to Exhibit 10.1 to the Company’s Amendment to Current Report on Form 8-K/A filed with the Securities and Exchange Commission on June 18, 2026). |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2* | Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1** | Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.INS* | Inline XBRL Instance Document |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished.
Management contract or compensatory plan or arrangement.
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Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
- Byrna Technologies Inc.
- Date: July 9, 2026 /s/ Conn Davis
- Name: Conn Davis
- Title: Chief Executive Officer
- (Principal Executive Officer)
- Date: July 9, 2026 /s/ Laurilee Kearnes
- Name: Laurilee Kearnes
- Title: Chief Financial Officer
- (Principal Financial Officer and Principal Accounting Officer)
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