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Note 14 - Stock-based Compensation | 12 Months Ended
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Nov. 30, 2024
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] |
14. | STOCK-BASED COMPENSATION
2020 Plan On October 23, 2020, the Board 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 the 2020 Plan is 2,500,000. On April 26, 2022, the Company’s Board of Directors approved and on June 17, 2022, the Company's stockholders approved the increase of the number of shares of common stock available for issuance under the 2020 Plan by 1,300,000 shares to a total of 3,800,000 shares. 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 Plan are employees, officers, directors, consultants, advisors and other individual service providers of the Company. Awards are at the discretion of the Compensation Committee. Stock-Based Compensation Expense Total stock-based compensation expense was $3.4 million and $5.4 million for the years ended November 30, 2024 and 2023, respectively. Total stock-based compensation expense was recorded in Operating expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss). Restricted Stock Units During the year ended November 30, 2024 the Company granted 600,000 of the RSU's with 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 $6.00 on a 20-day VWAP, the second one-third of the RSUs will be triggered when the Company’s stock trades above $9.00 on a 20-day VWAP, and the final one-third of the RSUs will be triggered when the stock trades above $12.00 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. During the year ended November 30, 2023, the Company did not grant "double trigger" RSUs. In addition, the Company also granted 153,232 and 102,720 time-based RSU's during the years ended November 30, 2024 and 2023, respectively. Stock-based compensation expense for the RSUs for the years ended November 30, 2024 and 2023 was $1.6 million and $3.6 million, respectively. During the year ended November 30, 2023, the Company accelerated the vesting of 200,000 RSUs held by the Company's former CTO. The acceleration of these 200,000 RSUs resulted in $0.5 million of a tax payment for which the Company withheld 89,182 shares from the former CTO in exchange. The acceleration of these RSUs was considered an equity award modification and resulted in an immaterial stock-based compensation expense. As of November 30, 2024, there was $2.4 million of unrecognized stock-based compensation cost related to unvested RSUs which is expected to be recognized over a weighted average of 1.6 years. RSU Valuation The assumptions that the Company used in a Monte Carlo simulation model to determine the grant-date fair value of RSU's granted with a double trigger for the year ended November 30, 2024, are presented in the table below. The Company did not grant RSUs for the year ended November 30, 2023 that required a Monte Carlo simulation model. (Monte Carlo simulation model)
|  | 2024 |  |  | 2023 |
Risk free rate |  |  | 4.33 | % |  |  | — |
Expected dividends |  | $ | — |  |  |  | — |
Expected volatility |  |  | 33 | % |  |  | — |
Expected life (in years) |  |  | 2.7 |  |  |  | — |
Market price of the Company’s common stock on date of grant |  | $ | 6.03 |  |  |  | — |
The following table summarizes the RSU activity during the year ended November 30, 2024:
|  | RSUs |
Outstanding, November 30, 2022 |  |  | 1,314,909 |
Granted |  |  | 200,696 |
Settled |  |  | (213,636 | )
Cancelled |  |  | — |
Forfeited |  |  | (325,743 | )
Outstanding, November 30, 2023 |  |  | 976,226 |
Granted |  |  | 753,230 |
Settled |  |  | (691,596 | )
Cancelled |  |  | — |
Forfeited |  |  | (122,630 | )
Outstanding, November 30, 2024 |  |  | 915,230 |
Of the 690,077 restricted stock units issued, 57,697 units were returned to the Company and retired in exchange for the Company paying for the payroll withholding taxes, and 21,905 units were repurchased by the Company for $0.3 million for shares withheld to pay the payroll tax liability of the vesting RSUs and treated as treasury stock. For the twelve months ended November 30, 2024, restricted stock units of 611,994, net, were issued. Stock Options During the years ended November 30, 2024 and 2023, the Company granted options to employees and directors to purchase 199,500 and 249,999 shares of common stock, respectively. The Company recorded stock-based compensation expense for options granted to its employees and directors of $1.8 million and $1.8 million during the years ended November 30, 2024 and 2023, respectively. As of November 30, 2024, there was $1.4 million of unrecognized stock-based compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 1.3 years. 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 years ended November 30, 2024 and 2023 were as follows:
|  | 2024 |  |  | 2023 |
Risk free rate |  |  | 4.10 | % |  |  | 3.63 | %
Expected dividends |  |  | 0 | % |  |  | 0 | %
Expected volatility |  |  | 76 | % |  |  | 77 | %
Expected life (in years) |  |  | 6.5 |  |  |  | 6.5 |
Market price of the Company’s common stock on date of grant |  | $ | 6.89 |  |  | $ | 8.96 |
Exercise price |  | $ | 6.89 |  |  | $ | 8.96 |
The following table summarizes option activity under the 2020 Plan during the years ended November 30, 2024 and 2023:
|  |  |  |  |  | Weighted-Average |
|  | Stock |  |  | Exercise Price Per Stock |
|  | Options |  |  | Option |
Outstanding, November 30, 2022 |  |  | 1,297,750 |  |  | $ | 6.75 |
Granted |  |  | 249,999 |  |  |  | 8.96 |
Exercised |  |  | (25,000 | ) |  |  | 1.45 |
Expired |  |  | (30,333 | ) |  |  | 7.70 |
Forfeited |  |  | (107,750 | ) |  |  | 8.09 |
Outstanding, November 30, 2023 |  |  | 1,384,666 |  |  | $ | 7.12 |
Granted |  |  | 199,500 |  |  |  | 6.89 |
Exercised |  |  | (292,827 | ) |  |  | 3.01 |
Expired |  |  | — |  |  |  | — |
Forfeited |  |  | (49,500 | ) |  |  | 7.24 |
Outstanding, November 30, 2024 |  |  | 1,241,839 |  |  | $ | 9.11 |
Exercisable, November 30, 2024 |  |  | 766,196 |  |  | $ | 9.58 |
Exercisable, November 30, 2023 |  |  | 672,256 |  |  | $ | 5.82 |
The stock options outstanding at the end of the year had weighted-average contractual life as follows:
|  | 2024 |  |  | 2023 |
|  | (in years) |  |  | (in years) |
Total outstanding options |  |  | 7.48 |  |  |  | 6.90 |
Total exercisable options |  |  | 7.04 |  |  |  | 5.29 |

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