XML 34 R24.htm IDEA: XBRL DOCUMENT
v3.21.1

STOCK-BASED COMPENSATION | 3 Months Ended
--- | ---
Feb. 28, 2021
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION |
17. | STOCK-BASED COMPENSATION
2017 Plan The Company has granted stock options and other stock-based awards under its 2017 Stock Option Plan (the “2017 Plan”). The maximum number of shares of common stock which could have been reserved for issuance under the 2017 plan was 18,993,274. The 2017 Plan was administered by the Compensation Committee of the Board. The Compensation Committee determined the persons to whom options to purchase shares of common stock, and other stock-based awards may be granted. Persons eligible to receive awards under the 2017 Plan were employees, officers, directors, and consultants of the Company. Awards were at the discretion of the Compensation Committee. On February 24, 2020 the Company terminated the 2017 Plan and adopted the 2020 Equity Incentive Plan (defined below). In connection with the adoption of the 2020 Plan, the Company cancelled outstanding option awards granted under the 2017 Plan and replaced them with new award agreements evidencing an equivalent award under the 2020 Equity Incentive Plan with no change to any of the material provisions of the 2017 Plan option. See below, 2020 Plan. 2020 Plan On October 23, 2020, the Company adopted the Byrna Technologies Inc. 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”). The aggregate number of shares of common stock available for issuance in connection with options and other awards granted under the 2020 Plan is 25,000,000. The 2020 Plan is administered by the Compensation Committee of the Board. The Compensation Committee determines the persons to whom options to purchase shares of common stock, stock appreciation rights (“SARs”), restricted stock units (“RSUs”), and restricted or unrestricted shares of common stock may be granted. Persons eligible to receive awards under the 2020 Equity Incentive Plan are employees, officers, directors, consultants, advisors and other individual service providers of the Company. Awards are at the discretion of the Compensation Committee. On February 24, 2020, following the termination of the 2017 Plan, the Company replaced outstanding options under the 2017 Plan with options under the 2020 Equity Incentive Plan. The Board also amended the definition of Disability in the 2020 Plan to provide that “Disability” shall have the meaning assigned to such term in any individual employment agreement or award agreement with a plan participant if such an agreement exists and defines the term and, if no such definition is provided in an award or employment agreement, shall have the meaning assigned to such term in the 2020 Plan. As of February 28, 2021, no new options have been issued under the 2020 Equity Incentive Plan. Restricted Stock Units At February 28, 2021, the Company has 15,735,000 of RSUs outstanding under the 2020 Equity Incentive Plan. 9,000,000 RSUs were granted to the Chief Executive Officer in August 2020 and have a “double trigger” for vesting based on stock price and time, as follows: (1) one-third of the RSUs will be triggered when the Company’s stock trades above $2.00 on a 20-day volume weighted average closing price (“VWAP”), the second one-third of the RSUs will be triggered when the Company’s stock trades above $3.00 on a 20-day VWAP, and the final one-third of the RSUs will be triggered when the stock trades above $4.00 on a 20-day VWAP and (2) the employee must remain employed by the Company for three years from the effective date for the RSUs to vest. 6,735,000 RSUs were issued to employees during the year ended November 30, 2020 and have a “double trigger” for vesting based on stock price and time, as follows: (1) one-third of the RSUs are not subject to any performance trigger, the second one-third of the RSUs will be triggered when the Company’s stock trades above $3.00 on a 20-day VWAP, and the final one-third of the RSUs will be triggered when the stock trades above $4.00 on a 20-day VWAP and (2) the employee must remain employed by the Company for three years from the effective date for the RSUs to vest. Stock-based compensation expense for the RSUs for the three months ended February 28, 2021 and February 29, 2020 was $0.6 million and $0, respectively. The following table summarizes the RSU activity during the three months ended February 28, 2021:
|  |  |  | RSUs |  |  | Weighted-Average Exercise Price |
| Outstanding, November 30, 2020 |  |  |  | 15,735,000 |  |  |  |  |  |  |  | 1.55 |  |
| Granted |  |  |  | — |  |  |  |  |  |  |  | — |  |
| Expired |  |  |  | — |  |  |  |  |  |  |  | — |  |
| Exercised |  |  |  | — |  |  |  |  |  |  |  | — |  |
| Cancelled |  |  |  | — |  |  |  |  |  |  |  | — |  |
| Outstanding, February 28, 2021 |  |  |  | 15,735,000 |  |  |  |  |  |  |  | 1.55 |  |
| Exercisable, February 28, 2021 |  |  |  | — |  |  |  |  |  |  |  | — |  |
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, restricted stock units, 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 stock option 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 we use 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, Topic 14. The expected term for stock options granted to non-employees is equal to the contractual term of the options. The risk-free interest rate is determined by reference to the US Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. Stock Options During the three months ended February 28, 2021 and February 29, 2020, the Company granted options to employees and directors to purchase 120,000 and 3,917,500 shares of common stock, respectively. The options issued during the three months ended February 28, 2021 vest over three years. The Company recorded stock-based compensation expense for options granted to its employees and directors of $0.1 million and $0.6 million during the three months ended February 28, 2021 and February 29, 2020, respectively. During the three months ended February 28, 2021, 162,500 stock options were forfeited resulting in net benefit of stock-based compensation of approximately $28,000. During the three months ended February 28, 2021 and February 29, 2020, the Company granted options to purchase 0 and 110,000, shares of common stock to non-employee contractors, respectively. The Company recorded stock-based compensation expense for options granted to non-employees of approximately $18,000 and approximately $19,000 during the three months ended February 28, 2021 and February 29, 2020, respectively. Stock Option Valuation The assumptions that the Company used to determine the grant-date fair value of stock options granted to employees and non-employees for the three months ended February 28, 2021 were as follows: Employee and Director (Black-Scholes option pricing model)
Risk free rate |  |  | .39 | %
Expected dividends |  |  | 0.00 |
Expected volatility |  |  | 113 | %
Expected life |  |  | 3.5 years |
Market price of the Company’s common stock on date of grant |  | $ | 1.64 |
Exercise price |  | $ | 1.70 |
| The following table summarizes option activity under the 2017 and 2020 Plan during the three months ended February 28, 2021:
|  |  | Stock |  |  | Weighted-Average Exercise Price Per Stock Option |
|  |  | Options |  |  | CDN$ |  |  | USD$ |
Outstanding, November 30, 2020 (1) |  |  |  | 7,059,667 |  |  |  | 0.24 |  |  |  | 0.31 |
Granted |  |  |  | 120,000 |  |  |  | 2.16 |  |  |  | 1.70 |
Exercised |  |  |  | (146,667) |  |  |  | (0.19 | ) |  |  | (0.15 | )
Forfeited |  |  |  | (162,500) |  |  |  | (0.24 | ) |  |  | (0.19 | )
Outstanding, February 28, 2021 (2) |  |  |  | 6,870,500 |  |  |  | 0.21 |  |  |  | 0.27 |
Exercisable, February 28, 2021 (2) |  |  |  | 4,870,500 |  |  |  | 0.24 |  |  |  | 0.31 |
| (1) | As of November 30, 2020 all options were governed by the 2017 Plan.
| (2) | As of February 28, 2021 all options were governed by the 2020 Plan.
| Incentive Warrants
During the three months ended February 28, 2021 and February 29, 2020, the Company issued 0 and 150,000 of warrants in exchange for services to a marketing consultant to purchase common shares, respectively. The warrants were issued outside of the 2017 Plan and were not included under the 2020 Plan. Stock-based compensation expense for the three months ended February 28, 2021 and February 29, 2020 was $0 and approximately $15,000, respectively. Stock-Based Compensation Expense Total stock-based compensation expense was $0.7 million and $0.6 million for the three months ended February 28, 2021 and February 29, 2020, respectively. Total stock-based compensation expense was recorded in Operating expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration