byrn20220712

byrn20220712_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, 2022

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

For the transition period from _________ to _________

Commission File No. 333-132456

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

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

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

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

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

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

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

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

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

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

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

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

As of September 30, 2022, the Company had 24,016,560 issued and 22,236,602 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, 2022 (unaudited) and November 30, 2021	2

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended August 31, 2022 and 2021 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended August 31, 2022 and 2021 (unaudited)	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended August 31, 2022 and 2021 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29

Item 4.	Controls and Procedures	29

PART II – OTHER INFORMATION		30

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

SIGNATURES		32

References in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us” or “our” refer to Byrna Technologies Inc.

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,*
	*2022*			*2021*
	*Unaudited*
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	24,457		$	56,308
Restricted cash		—			92
Accounts receivable, net		2,673			1,658
Inventory, net		15,422			6,613
Prepaid expenses and other current assets		1,534			1,490
Total current assets		44,086			66,161
LONG TERM ASSETS
Intangible assets, net		3,952			3,668
Deposits for equipment		1,986			1,293
Right-of-use asset, net		2,393			1,086
Property and equipment, net		3,035			1,972
Goodwill		2,307			816
Other assets		154			318
TOTAL ASSETS	$	57,913		$	75,314

LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	6,849		$	6,996
Operating lease liabilities, current		680			463
Deferred revenue, current		921			720
Total current liabilities		8,450			8,179
LONG TERM LIABILITIES
Deferred revenue - non-current		385			405
Operating lease liabilities, non-current		1,838			632
Total liabilities		10,673			9,216

COMMITMENTS AND CONTINGENCIES (NOTE 21)

STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued		—			—
Common stock, $0.001 par value, 50,000,000 shares authorized. 24,016,612 shares issued and 22,236,602 outstanding as of August 31, 2022 and, 23,754,096 shares issued and outstanding as of November 30, 2021		23			23
Additional paid-in capital		124,107			119,589
Treasury stock (1,779,958 and 0 shares purchased as of August 31, 2022 and November 30, 2021, respectively)		(15,000	)		—
Accumulated deficit		(61,250	)		(53,498	)
Accumulated other comprehensive loss		(640	)		(16	)

Total Stockholders’ Equity		47,240			66,098

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	57,913		$	75,314

See accompanying notes to the unaudited condensed consolidated financial statements.

BYRNA TECHNOLOGIES INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Amounts in thousands except share and per share data)

(Unaudited)

	*For the Three Months Ended*						*For the Nine Months Ended*
	*August 31,*						*August 31,*
	*2022*			*2021*			*2022*			*2021*
Net revenue	$	12,422		$	8,703		$	32,018		$	30,997
Cost of goods sold		5,545			3,815			14,403			13,807
Gross profit		6,877			4,888			17,615			17,190
Operating expenses		8,283			6,692			25,045			17,382
LOSS FROM OPERATIONS		(1,406	)		(1,804	)		(7,430	)		(192	)
OTHER INCOME (EXPENSE)
Foreign currency transaction gain (loss)		28			(115	)		(67	)		78
Interest income (expense)		(3	)		13			10			(24	)
Other income - forgiveness of Paycheck Protection Program loan		—			—			—			190
Other expenses		(3	)		(9	)		(183	)		(18	)
LOSS BEFORE INCOME TAXES		(1,384	)		(1,915	)		(7,670	)		34
Income tax benefit (provision)		(150	)		74			(82	)		(109	)
NET LOSS		(1,534	)		(1,841	)		(7,752	)		(75	)

Dividends on preferred stock		—			—			—			(1,043	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(1,534	)	$	(1,841	)	$	(7,752	)	$	(1,118	)

Foreign currency translation adjustment for the period		(639	)		(55	)		(624	)		123
COMPREHENSIVE INCOME (LOSS)	$	(2,173	)	$	(1,896	)	$	(8,376	)	$	48

Net loss per share – basic and diluted	$	(0.07	)	$	(0.08	)	$	(0.34	)	$	(0.06	)
Weighted-average number of common shares outstanding - basic and diluted		21,751,879			22,047,571			22,704,565			18,269,360

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,*
	*2022*			*2021*
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(7,752	)	$	(75	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		4,061			2,527
Forgiveness of Paycheck Protection Program loan		—			(190	)
Depreciation and amortization		638			369
Operating lease costs		360			184
Changes in assets and liabilities:
Accounts receivable		(1,003	)		394
Deferred revenue		167			(4,182	)
Inventory		(8,917	)		(2,279	)
Prepaid expenses and other current assets		(85	)		643
Other assets		142			7
Accounts payable and accrued liabilities		(151	)		(557	)
Operating lease liabilities		(244	)

SEC Form 10-Q filed by Byrna Technologies Inc.