Byrna Technologies Inc.

BYRNA TECHNOLOGIES INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months Ended August 31, 2025 and 2024

Byrna Technologies Inc. (the “Company” or “Byrna”) is a technology company, specializing in next generation alternatives to traditional firearms without the risk of taking a life. The Company's launchers can be used for self-defense and personal security by consumers in all50 states without a firearms license, subject to local regulations. The Company also sells accessories, pepper sprays, and other personal safety tools. Most of the sales are to consumers in the United States via the Company's e-commerce site, its Amazon storefront, itsfour Company owned brick and mortar locations, and through retailers, including big box stores. The Company's products also* maybe sold to private security and public security officers. Since2020,* the Company hasnot manufactured or sold any products to or for use by the military. The Company operates three manufacturing facilities: a 30,000 square foot facility located in Fort Wayne, Indiana; a 10,000 square foot facility located in Fort Wayne, Indiana; and a 20,000 square foot manufacturing facility located in Pretoria, South Africa. The facility in South Africa has ceased manufacturing operations during thethird quarter of2025.

As of* August 31, 2025*, the Company has incurred an accumulated deficit of approximately $50.5 million. The Company has funded operations through the issuance of the Company's common stock par value $0.001 per share (“Common Stock”) until reaching profitability. The Company generated net income of $6.3 million for thenine months ended* August 31, 2025*. The Company’s future success is dependent upon its ability to continue to raise sufficient capital or generate adequate revenues, to cover its ongoing operating expenses, and also to continue to develop and be able to profitably market its products.

These unaudited condensed consolidated financial statements for thethree andnine months ended* August 31, 2025and2024* include the accounts of the Company and its subsidiaries. These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form10-Q and therefore donot include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the United States of America (“GAAP”); however, such information reflects all adjustments consisting solely of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. All significant intercompany accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto together with management’s discussion and analysis of financial condition and results of operations contained in the Company's annual report on Form10-K for the year ended* November 30, 2024*. In the opinion of management, the accompanying unaudited condensed consolidated financial statements, the results of its operations for thethree andnine months ended* August 31, 2025and2024*, and its cash flows for thenine months ended* August 31, 2025and August 31, 2024* arenot necessarily indicative of results to be expected for the full year.

6

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

The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). ASUsnot discussed below were assessed and determined to be eithernot applicable or are expected to have minimal impact on the financial statements.

Accounting Pronouncements Issued butNot Adopted

The FASB issued ASU2023-07: Segment Reporting Topic280 - Improvements to Reportable Segment Disclosures. This update requires expanded annual and interim disclosures for significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. This update will be effective for fiscal years beginning after* December 15, 2023,and for interim periods within fiscal years beginning after December 15, 2024,and is to be applied retrospectively to all periods presented in the financial statements. The Company will reflect any needed changes in its annual financial statements for the year ended November 30, 2025,and believes the adoption of ASU2023*-07 willnot have a material impact on the consolidated financial statements other than expanded disclosures.

In2023, the FASB issued ASU2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures. This update standardizes categories for the effective tax rate reconciliation, requires disaggregation of income taxes and additional income tax-related disclosures. This update is required to be effective for the Company for fiscal years beginning after* December 15, 2024,which for the Company will be the year ended November 30, 2026.The Company is evaluating the effect that ASU2023*-09 will have on its financial statements and disclosures.

In* March 2024,the Financial Accounting Standards Board (FASB) issued ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses (as clarified by ASU2025-01). This guidance focuses on the disaggregation of income statement expenses. This update requires entities to provide more detailed disclosures about the components of significant expense categories, enhancing the transparency and decision-usefulness of financial statements. The objective is to provide users with a clearer understanding of the nature and variability of expenses reported in the income statement. The standard is effective for annual periods of fiscal years beginning after* December 15, 2026,and interim periods in years beginning after December 15, 2027,with early adoption permitted. The Company is currently assessing the impact of ASU2024*-03 on its financial statement disclosures. While the Company anticipates that the adoption of this standard will require additional disclosures, it doesnot expect it to have a material impact on the Company's financial position or results of operations.

In* July 2025,the Financial Accounting Standards Board (FASB) issued ASU2025*-05, which addresses the measurement of credit losses for accounts receivable and contract assets. This update introduces a practical expedient that allows entities to assume that current conditions will remain unchanged until the maturity of the asset, simplifying the estimation of expected credit losses. ASU2025-05 is effective for annual reporting periods beginning after* December 15, 2025,and for interim periods thereafter, requiring prospective application to estimates of expected credit losses post-adoption. The Company is currently evaluating the impact that ASU2025*-05 will have on its financial statements and disclosures. While it is too early to determine the specific effects, the Company anticipates that the adoption* may*improve the relevance and usability of the financial information provided to users without having a material impact on its consolidated financial position or results of operations.

7

Goodwill resulting from a business combination isnot amortized but is reviewed for impairment annually or more frequently when events or changes in circumstances occur that would more likely thannot 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 thannot, reduce the fair value of a reporting unit or to bypass the qualitative assessment in any period and proceed directly to performing the quantitative goodwill impairment test. If the Company concludes, based on the qualitative assessment, that the carrying value of a reporting unit would more likely thannot 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 assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment orone 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 level as a whole.

Marketable debt securities consist of U.S. Treasury Securities and Corporate Bonds. Management determines the appropriate classification of these securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. The Company classifies its investments as available-for-sale pursuant to ASC320, Investments—Debt Securities. Investments are recorded at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive income in stockholders’ equity and a component of total comprehensive income in the consolidated statements of operations and comprehensive income, until realized. Realized gains and losses are included in investment income on a specific-identification basis. The Company estimates expected credit losses for investments when unrealized losses exist. Unrealized losses that are credit related are recognized in net income and unrealized losses that arenot credit related are recognized in accumulated other comprehensive income. For thethree andnine months ended* August 31, 2025*, there were realized gains on investments of less than $0.1 million. For thethree andnine months ended* August 31, 2025*, there were net unrealized gains on marketable debt securities of less than $0.1 million.

The following table summarizes our marketable securities and available-for-sale investments as of* August 31, 2025 (*in thousands):

The following table summarizes our marketable securities and available-for-sale investments as of* November 30, 2024 (*in thousands):

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, athree-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

● Level1- Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

● Level2- Inputs (other than quoted prices included in Level1) 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.

● Level3- 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.

The following table summarizes the fair value of marketable debt securities by level within the fair value hierarchy as of* August 31, 2025:*

The following table summarizes the fair value of marketable debt securities by level within the fair value hierarchy as of* November**30,* 2024:

8

In* January 2023,the Company acquired a 51% ownership interest in Byrna LATAM S.A. ("Byrna LATAM"), a corporate joint venture formed to expand the Company’s operations and presence in South American markets, for $0.5 million. The Company accounted for the investment in the joint venture using the equity method since the Company didnot* have voting control of Byrna LATAM. Additionally, the Company didnot have substantive participating rights that would result in the Company having control of Byrna LATAM.

On* August 19, 2024,the Company sold its 51% ownership interest to Fusady S.A. for $1 (the “LATAM Share Purchase Agreement”) and entered into an exclusive distribution, manufacturing and licensing agreement with Byrna LATAM (the “LATAM Licensing Agreement”). This LATAM Licensing Agreement allows Byrna LATAM to exclusively manufacture the Byrna SD launcher and ammunition in certain South American countries and requires Byrna LATAM to pay the Company a royalty on Byrna products manufactured. The amount of royalty earned during thethree* andnine months ended* August 31, 2025* and outstanding as of* August**31,* 2025, was $0.3 million and $1.1 million, respectively. The amount outstanding as of* August 31, 2025* and* November 30, 2024*, wasnot material. The LATAM Share Purchase Agreement also includes put and call rights based on defined triggers which expire on* August 19, 2029.*

In* January 2023,the Company loaned $1.6 million to Byrna LATAM. The loan bore interest at a rate equal to Secured Overnight Financing Rate ("SOFR") plus 3.0%. Interest income related to the loan receivable was less than $0.1 million for thethree* andnine months ended* August 31, 2025and2024*. The interest income is included in interest income in the Condensed Consolidated Statements of Operations and Comprehensive Income. On* August 19, 2024,the loan was amended to fix the loan amount at $1,431,112 plus accrued interest of $203,373 for a total loan amount of $1,634,485. The loan bears an annual rate of interest of 5% per annum. The loan is to be repaid intwelve* equal monthly installments beginning on* August 19, 2025.The loan receivable was recorded as loan to joint venture in the Consolidated Balance Sheets until the consummation of the LATAM Share Purchase Agreement at which time the Company recorded the current portion of the loan as part of Prepaid expenses and other current assets and the non-current portion is recorded as part of the Other assets on the Condensed Consolidated Balance Sheet as of August 31, 2025* and* November 30, 2024*. The loan amount outstanding as of* August 31, 2025* was $1.6 million, all of which is recorded as part of Prepaid expenses in the consolidated balance sheet. The loan amount outstanding as of* November 30, 2024*, was $1.7 million. $0.7 million was recorded as part of Prepaid expenses and $1.0 million was recorded as part of Other assets in the consolidated balance sheet.

Advertising costs are expensed as incurred and reported in Operating Expenses in the Condensed Consolidated Statements of Operations and Comprehensive Income, and include costs of advertising, tradeshows, and other activities designed to enhance demand for the Company's products. The Company recorded advertising costs of approximately $4.0 million and $11.9 million for thethree andnine months ended* August 31, 2025*, respectively. The Company recorded advertising costs of approximately $3.2 million and $8.6 million for thethree andnine months ended* August 31, 2024*, respectively.

The Company generates most of its revenue through e-commerce portals to consumers, as well as wholesale distribution of its products and accessories to dealers/distributors and retail stores. The Company also sells products to large end-users such as private security companies and law enforcement agencies. The Company doesnot manufacture or sell any products regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives or for military applications. Revenue is recognized upon the transfer of control of goods to the customer, which occurs when the Company has satisfied its performance obligation by making the goods available to the customer’s designated carrier in accordance with the Company’s shipping terms. Under the Company’s standard terms, which are Ex-Works (EXW), title and risk of loss pass to the customer once the goods are picked, packed, and loaded into the carrier’s trailer at the Company’s facility and the order is marked as shipped in the Company’s ERP system. At that point, the Company has a present right to payment, the customer has obtained legal title, and the carrier—acting as the customer’s agent—has physical possession of the goods. Accordingly, revenue is recognized as of the date goods are loaded into the carrier’s trailer, regardless of when the carrier physically removes the trailer from the Company’s premises. Payment terms to customers other than e-commerce customers are generally30-60 days for established customers, whereas new wholesale and large end-user customers have prepaid terms for theirfirst 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 withinone year of sale. The Company also sells an extended warranty for the same terms over three years. The extended3-year warranty can be purchased separately from the product and is classified as a service warranty. Since a warranty for thefirst year after sale is included and non-separable from all launcher purchases, the Company considers this extended warranty to represent a service obligation during thesecond andthird 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 thesecond andthird year after sale. The Company recognizes an estimated reserve for warranty based on its analysis of historical experience, and an evaluation of current market conditions.

During thesecond quarter of2025, the Company offered a complimentary five-year extended warranty with the purchase of any launcher during the month of* May.The Company determined the standalone selling price of thefive*-year extended warranty and, in accordance with ASC606, allocated a portion of the total transaction price to the warranty using the relative standalone selling price method. The amount allocated to thefive-year extended warranty is recorded as deferred revenue and is recognized on a straight-line basis over thefive-year warranty period. Revenue related to thefive andthree-year extended warranty was immaterial.

The Company offers e-commerce customers a14-day money-back guarantee, which allows for a full refund of the purchase price, excluding shipping charges, within14 days from the date of delivery. The right of return creates a variable component to the transaction price and needs to be considered for any possible constraints. The Company estimates returns using the expected value method, as there will likely be a range of potential return amounts. The Company’s reserve for returns under the14-day money back guarantee for thethree andnine months ended* August 31, 2025and2024* was immaterial. For customer purchases made through Amazon, certain Byrna products are designated as non-returnable, including Byrna launchers, CO₂ tubes, chemical irritant projectiles, and pepper sprays. All other Byrna accessories sold on Amazon are subject to Amazon’s standard return policy, which generally permits returns within30 days of delivery. The Company evaluates expected returns from Amazon sales using the same expected value method applied to its direct-to-consumer sales. The Company’s reserve for Amazon-related returns for thethree andnine months ended* August 31, 2025and2024* was immaterial.

The Company doesnot offer a money-back guarantee to dealers or retailers. These customers* mayrequest a return or credit for unforeseen reasons or mayhave agreed discounts or allowances to be netted from amounts invoiced. Accordingly, 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 thethree* andnine months ended* August 31, 2025and2024* was immaterial.

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

The Company has granted Byrna LATAM an exclusive license under the LATAM Licensing Agreement to manufacture, market, sell, and distribute Byrna products within specified territories. Under the LATAM Licensing Agreement, Byrna LATAM is authorized to use the Byrna® trademark and logo for marketing and sales of approved products, subject to the terms outlined in the LATAM Licensing Agreement. In consideration for these rights, Byrna LATAM is required to pay the Company a royalty fee based on quantities and values of licensed products manufactured. The Company recognizes revenue as the licensed products are manufactured as reported to the Company by Byrna LATAM. The LATAM Licensing Agreement establishes minimum revenue requirements for designated countries. There isno minimum guaranteed royalty fee unless otherwise stipulated by the minimum revenue provisions of the LATAM Licensing Agreement.

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 $8.9 million, $2.6 million and $2.9 million as of* August 31, 2025*,* November 30, 2024*, and* November 30, 2023*, respectively. Accounts receivable also includes royalty receivables. The amount of royalty receivable included in accounts receivable was $1.1 million, not material, andnil as of* August 31, 2025*,* November 30, 2024*, and* November 30, 2023*, respectively.

Allowance for Expected Credit Losses

The Company estimates the balance of its allowance for expected credit losses. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions. Account balances are written off against the allowance when it is determined that the receivable willnot be recovered. As of* August 31, 2025*,* November 30, 2024*, and* November 30, 2023*, the total allowance for credit losses recorded was less than $0.1 million, $0.3 million and $0.6 million, respectively.

9

Deferred Revenue

The balance of deferred revenue, which relate to advance payments, unfulfilled e-commerce orders and amounts to be recognized under extendedthree-year andfive-year service warranty, as of* August 31, 2025* and* August 31, 2024* was $0.3 million and $0.8 million, respectively, and $1.8 million and $1.9 million as of* November 30, 2024and2023*, respectively.

Revenue Disaggregation

The Company presents revenues net of returns, allowances, and discounts. The following table presents disaggregation of the Company’s net revenue by distribution channel (in thousands):

The Company presents revenues net of returns, allowances, and discounts. The following table presents disaggregation of the Company’s net revenue by revenue stream (in thousands):

The following table summarizes inventory (in thousands):

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

The Company recognized $1.4 million and $0.9 million in depreciation expense during thenine months ended* August 31, 2025and August 31, 2024*, respectively. The Company recognized $0.6 million and $0.4 million in depreciation expense during thethree months ended* August 31, 2025and2024,* respectively. Depreciation expense is presented in the operating expenses and within cost of goods sold in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

At* August 31, 2025* and* November 30, 2024*, the Company had deposits of $2.6 million and $2.7 million, respectively, with vendors primarily for supply of machinery (molds) and equipment where the vendors havenot completed the supply of these assets and is presented as Deposits for equipment in the Condensed Consolidated Balance Sheets.

10

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

The trademarks have an indefinite life and are assessed annually for impairment. All other intangible assets are finite-lived.

Intangible assets amortization expenses are recorded within operating expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. Total intangible assets amortization expense for thenine months ended* August 31, 2025and August 31, 2024* were $0.2 million and $0.1 million, respectively. Total intangible assets amortization expense was less than $0.1 million for thethree months ended* August 31, 2025and2024.*

Estimated future amortization expense related to intangible assets as of* August 31, 2025* are as follows (in thousands):

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

11

Stock Buyback Program

On* July 31, 2024,the Company's Board of Directors approved a plan to buy back up to $10 million worth of shares of Common Stock (the “Stock Buyback Program”). The Company's Stock Buyback Plan 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 thetwo*-year anniversary of its initiation or until the Company reaches the aggregate limit of $10 million for the repurchases under the program. The repurchased shares are recorded as part of treasury stock and are accounted for under the cost method. In thenine months ended* August 31, 2025*, the Company repurchased 3,927 shares of common stock for $0.05 million. No shares were repurchased during thethree months ended* August 31, 2025.As of August 31, 2025*,353,157 shares of common stock have been repurchased for $3.8 million.

12

2020 Plan

On* October 23, 2020,the Company's Board of Directors approved and on November 19, 2020,the stockholders approved the Byrna Technologies Inc.2020 Equity Incentive Plan (the“2020* Plan”). The aggregate number of shares of Common Stock available for issuance in connection with options and other awards granted under the2020 Plan is 3,800,000 shares. The2020 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* maybe granted. Persons eligible to receive awards under the2020* Plan are employees, officers, directors, consultants, advisors and other individual service providers of the Company. Awards are at the discretion of the Compensation Committee.

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, RSUs, and incentive warrants. 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 generally the date the services were completed, resulting in financial reporting period adjustments to stock-based compensation during either the expected term or the contractual term. Stock-based compensation costs for non-employees are recognized as expense over the vesting period on a straight-line basis. Forfeitures are accounted for as they occur.

The fair value of each grant is estimated on the date of grant by using either the Black-Scholes, Binomial Lattice, 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 SEC’s Staff Accounting Bulletin, Topic14. The risk-free interest rate is determined by reference to the U.S. 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 doesnot expect to pay any cash dividends in the foreseeable future.

Stock-Based Compensation Expense

Stock-based compensation costs are recognized as expense over the employee's requisite service period, on a straight-line basis. Total stock-based compensation expense was $2.3 million and $2.6 million for thenine months ended* August 31, 2025and August 31, 2024*, respectively. Total stock-based compensation expense was $0.7 million and $0.8 million for thethree months ended* August 31, 2025and August 31, 2024*, respectively. Total stock-based compensation expense was recorded in Operating expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Restricted Stock Units

During thenine months ended* August 31, 2025*, the Company granted performance-based RSUs (“PSUs”) to certain employees. The number of PSUs that* mayultimately vest is contingent upon the achievement of specified GAAP revenue targets for the fiscal year2026* performance period (* December 1, 2025through November 30, 2026),as well as the participant’s continued employment through November 30, 2027.The actual number of shares that maybe earned ranges from 0% to 200% of the target award, depending on the level of achievement of the performance goals. Any earned PSUs will vest on November 30, 2027,subject to continued service through such date. Compensation expense is recognized for PSUs only to the extent that it is probable the performance conditions will be achieved. During thenine* months ended* August 31, 2025* the Company granted 120,830 RSUs consisting of 88,344 time-based RSUs and 32,486 PSUs. During thenine months ended* August 31, 2024*, the Company granted 600,000 PSUs with a “double trigger” for vesting based on stock price and time, as follows: (1)one-third of the RSUs would be triggered when the Company’s stock trades above $6.00 on a20-day VWAP, thesecond one-third of the RSUs would be triggered when the Company’s stock trades above $9.00 on a20-day VWAP, and the finalone-third of the RSUs would be triggered when the stock trades above $12.00 on a20-day VWAP and (2) the employee must remain employed by the Company forthree years from the effective date for the RSUs to vest. Stock-based compensation expense for the RSUs and PSUs for thenine months ended* August 31, 2025and August 31, 2024* was $1.4 million and $1.2 million, respectively. Stock-based compensation expense for the RSUs and PSUs for thethree months ended* August 31, 2025and August 31, 2024* was $0.5 million and $0.4 million, respectively.

13

The assumptions that the Company used in a Monte Carlo simulation model to determine the grant-date fair value of RSUs granted with a double trigger for thenine months ended* August 31, 2024* were as follows:

As of* August 31, 2025*, there was $3.9 million of unrecognized stock-based compensation cost related to unvested RSUs which is expected to be recognized over a weighted average of 1.1 years.

The following table summarizes the RSU activity during thenine months ended* August 31, 2025*:

Of the 106,001 RSUs that were settled during thenine months ended* August 31, 2025,3,061 units were withheld by the Company in exchange for the Company paying for the payroll withholding taxes. For thenine* months ended* August 31, 2025*, RSUs of 102,940, net, were issued in connection with the settlement of RSUs.

Stock Options

The Company recorded stock-based compensation expense for options granted to its employees and directors of $0.9 million and $1.4 million during thenine months ended* August 31, 2025and August 31, 2024*, respectively, and $0.2 million and $0.4 million for thethree months ended* August 31, 2025and2024,* respectively. As of* August 31, 2025*, there was $0.4 million of unrecognized stock-based compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 1.2 years.

Stock Option Valuation

The fair value of stock options at the date of grant was estimated using the Black Scholes option pricing model. The assumptions that the Company used to determine the grant-date fair value of stock options granted for thenine months ended* August 31, 2024* were as follows:

The following table summarizes option activity under the2020 Plan during thenine months ended* August 31, 2025*:

Of the 137,001 shares issued upon exercise of options,36,807 options were surrendered due to cashless exercise.

14

For thethree andnine months ended* August 31, 2025and2024*, the Company recorded net income and, as such, used diluted weighted-average common shares outstanding when calculating diluted income per share for thethree andnine months ended* August 31, 2025and2024*. Stock options and RSUs that could potentially dilute basic earnings per share (“EPS”) in the future are included in the computation of diluted income per share.

The following table reconciles the weighted-average common shares outstanding used in the calculation of basic EPS to the weighted-average common shares outstanding used in the calculation of diluted EPS for thethree andnine months ended* August 31, 2025and2024*:

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

The following transactions are in the normal course of operations and are measured at the amount of consideration established and agreed to by related parties. Amounts due to related parties are unsecured, non-interest bearing and due on demand.

The Company subleases office premises at its Massachusetts headquarters to a corporation owned and controlled by the Chief Executive Officer ("CEO") of the Company beginning* July 1, 2020,withno* stated termination date. Sublease payments received were a nominal amount for thethree andnine months ended* August 31, 2025and2024*.

Fusady is owned, in equal 25% shares, byfour individual investors. Thesefour individuals also each own 25% of Bersa S.A. Bersa S.A. is a distributor of the Company’s products in Argentina. There were sales of $0.1 million during thethree andnine months ended* August 31, 2024*. Because of the divesture of the joint venture in* August 2024 (see Note8*), Fusady isno longer considered a related party.

15

Operating Leases

The Company has operating leases for real estate in the United States and South Africa and doesnot have any finance leases.

In2019, the Company entered into a real estate lease for office space in Andover, Massachusetts. In* August 2021,the lease was amended to include additional space and extend the term of the existing space byone* year. The new lease expiration date is* February**29,* 2028.

The Company leases office and warehouse space in South Africa. The Company has exercised its right to extend the lease for an additional year. The lease, which was originally set to expire in* December 2024,was extended to December 2025.*

The Company leased warehouse and manufacturing space in Fort Wayne, Indiana. The lease was to expire on* July 31, 2025.Commencing in August 2022,the Company sub-leased the former Fort Wayne facility. The amount received from the sub-lease was immaterial. In March 2024,*the Company terminated the lease and sublease.

Commencing in* July 2024,the Company entered into a new operating lease for warehouse and retail office space located in Fort Wayne, Indiana. The lease term is forfive years, commencing on July 15, 2024and expiring on July 14, 2029.As of August 31, 2025,*the total right-of-use asset amounting to $0.2 million and the corresponding lease liability of $0.2 million are reflected in the Company's financial statements.

The Company also leases office space in Las Vegas, Nevada, which expires on* January 31, 2027.*The base rent is less than $0.1 million per month.

Commencing in* August 2024,the Company entered into a new operating lease for retail office space located in Salem, New Hampshire. The lease term is forfive years, commencing on August 22, 2024and expiring on August 21, 2029.As of August 31, 2025,*the total right-of-use asset amounting to $0.1 million and the corresponding lease liability of $0.1 million are reflected in the Company's financial statements.

Commencing in* August 2024,the Company entered into a new operating lease for retail office space located in Scottsdale, Arizona. The lease term is foreight years, commencing on August 27, 2024and expiring on July 31, 2032.As of August**31,* 2025, the total right-of-use asset amounting to $0.6 million and the corresponding lease liability of $0.7 million are reflected in the Company's financial statements.

Commencing in* November 2024,the Company entered into a new operating lease for retail office space located in Franklin, Tennessee. The lease term is forfive and a half years, commencing on November 1, 2024and expiring on April 30, 2030.As of August 31, 2025,*the total right-of-use asset amounting to $0.2 million and the corresponding lease liability of $0.3 million are reflected in the Company's consolidated financial statements.

Commencing in* April**2025,* the Company entered into another operating lease for office space located in Las Vegas, Nevada. The lease term is forthree years, commencing on* April 1, 2025and expiring on April 30, 2028.As of August 31, 2025,*the total right-of-use asset amounting to $0.2 million and the corresponding lease liability of $0.2 million are reflected in the Company's consolidated financial statements.

Certain of the Company’s leases contain options to renew and extend lease terms and options to terminate leases early. Reflected in the right-of-use asset and lease liability on the Company’s balance sheets are the periods provided by renewal and extension options that the Company is reasonably certain to exercise, as well as the periods provided by termination options that the Company is reasonably certain tonot exercise.

For thenine months ended* August 31, 2025and August 31, 2024*, the elements of lease expense were as follows (in thousands):

Future lease payments under non-cancelable operating leases as of* August 31, 2025* are as follows (in thousands):

16

For thethree months ended* August 31, 2025*, the Company recorded $0.6 million of income tax expense. For thethree months ended* August 31, 2024*, the Company recorded a nominal amount of income tax expense. For thethree months ended* August 31, 2025and August 31, 2024*, the effective tax rate was 20.6% and 0.1%, respectively. For thenine months ended* August 31, 2025*, the Company recorded $1.7 million of income tax expense. For thenine months ended* August 31, 2024*, the Company recorded $0.1 million of income tax benefit. For thenine months ended* August 31, 2025and August 31, 2024*, the effective tax rate was 18.3% and 0.2%, respectively. The Company’s tax rate differs from the statutory rate of 21.0% due to the effects of state taxes net of federal benefit, the foreign tax rate differential as a result of Byrna South Africa, effects of permanent non-deductible expenses, and other effects.

On* July 4, 2025,the One Big Beautiful Bill Act (“OBBBA”) was enacted. The OBBBA amends U.S. tax law including provisions related to domestic research and development expenses and bonus depreciation, among others. The Company is currently evaluating the impact of the OBBBA on its consolidated financial statements and has included the estimated impact of items affecting its current tax period as part of its income tax expense computed for the quarter ending August 31, 2025.*

Legal Proceedings

In the ordinary course of our business, the Company* maybe involved in various legal actions and claims, including butnot* limited to product liability, consumer, commercial, tax, and governmental matters, which* mayarise from time to time. Currently, the Company is engaged in a number of legal proceedings; however, in the opinion of management, there wasnot* at least a reasonable possibility the Company* mayhave incurred a material loss concerning loss contingencies for asserted legal and other claims. While the Company doesnot* anticipate any adverse outcomes from these proceedings, legal actions inherently carry uncertainties, and an unfavorable ruling could result in monetary damages that* mayimpact the Company’s business, financial position, results of operations, or cash flows. Although the Company maintains specific insurance coverage for certain risks, it may*still face judgments or need to settle claims in the future that could have potential material adverse effects on its business, financial condition, or results of operations.

The CEO, who is also the Chief Operating Decision Maker, evaluates the entire 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 asingle operating segment andone reportable segment.

The tables below summarize the Company’s revenue for thethree andnine months ended* August 31, 2025and2024*, respectively, by geographic region (in thousands):

17

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.

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

During thenine months ended* August 31, 2025*, in comparison to the prior year period, the U.S. dollar on average was stronger in relation to the South African rand, and upon the translation of the Company’s subsidiaries’ revenues, expenses, assets and liabilities held in South African rand. The Company recorded a translation adjustment gain of less than $0.1 million and $0.4 million related to the South African rand during thenine months ended* August 31, 2025and August 31, 2024*, respectively. The Company recorded a translation adjustment gain of approximately$0.1 million and $0.4 million related to the South African rand during thethree months ended* August 31, 2025and August 31, 2024*.

The Company’s South African subsidiary revenues, cost of goods sold, operating costs and capital expenditures are denominated in South African rand. Consequently, fluctuations in the U.S. dollar exchange rate against the South African rand increases the volatility of sales, cost of goods sold and operating costs and overall net earnings when translated into U.S. dollars. The Company isnot using any forward or option contracts to fix the foreign exchange rates. Using a 10% fluctuation in the U.S. exchange rate, the impact on the income and stockholders’ equity isnot material.

Credit risk is the risk thatone party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, marketable securities, accounts receivable, and the loan receivable from Byrna LATAM. The Company maintains cash and cash equivalents with high credit quality financial institutions located in the US and South Africa. The Company maintains cash and cash equivalents balances along with marketable securities with financial institutions in the US in excess of amounts insured by the Federal Deposit Insurance Corporation.

The Company provides credit to its customers in the normal course of its operations. It carries out, on a continuing basis, credit checks on its customers. As of* August 31, 2025,two of the Company's customers accounted for approximately 32% of total accounts receivable. As of November 30, 2024,*two of the Company's customers accounted for approximately 36% of total accounts receivable.

The Company loaned $1.6 million to Byrna LATAM in* January 2023 (see Note8*). The Company determines if an estimate for a credit loss on this loan is needed by considering the financial position of Byrna LATAM, the current economic environment, collections on our accounts receivable balances with Byrna LATAM, as well reasonable and supportable forecasts to support the payment of this loan. The Company reviews these factors quarterly to determine if any adjustments are needed.

The Company’s marketable debt securities consist of U.S. Treasury Securities, and Corporate Bonds. The Company’s investment policy limits the amounts the Company* mayinvest in anyone* type of investment and requires all investments held by the Company to be at least AA-/Aa3 rated, thereby reducing credit risk exposure.

18