The Company has evaluated subsequent events through July 9, 2026, the date the condensed consolidated financial statements were available to be issued, in accordance with ASC Topic 855, Subsequent Events.

Asset Purchase Agreement — Hero Defense Systems

On July 7, 2026, the Company entered into an Asset Purchase Agreement (the "Hero APA") with Hero Defense Systems, LLC, a Nevada limited liability company ("Hero"), pursuant to which the Company agreed to acquire substantially all of the assets used in or related to Hero's business of designing, developing, manufacturing, marketing, and selling less-lethal defense products and related accessories, including intellectual property, customer and vendor relationships, assumed contracts, inventory, equipment, tooling, and books and records (the "Hero Acquisition"). The Company will assume only certain limited liabilities specified in the Hero APA and will not assume any other liabilities of Hero, including pre-closing product liability, warranty, or tax liabilities.

The aggregate purchase price is $1.25 million, plus contingent royalty payments described below, consisting of (i) $0.625 million in cash, subject to a $0.125 million holdback to be placed in escrow for up to eighteen months as security for indemnification obligations, and (ii) $0.625 million in shares of the Company's common stock, with the number of shares determined based on the volume-weighted average price of the Company's common stock over the 60 trading days preceding closing (subject to a cap of 104,000 shares). The shares issued as stock consideration will be unregistered, subject to customary transfer restrictions, and subject to a six-month lock-up period following closing.

As additional consideration, the Company will pay Hero a royalty equal to 3.5% of net sales of certain existing and successor products over a royalty term, subject to a guaranteed minimum aggregate royalty of $0.25 million, payable in five equal annual installments of $0.05 million, and subject to an overall cap equal to the earlier of $5.0 million in aggregate royalty payments or the fifth anniversary of closing.

The closing of the Hero Acquisition is subject to customary closing conditions and is expected to occur shortly after the Effective Date. The Company is evaluating the Hero Acquisition for purposes of ASC Topic 805, Business Combinations, and expects to provide additional disclosures, including a preliminary purchase price allocation, in a future filing. The Company does not expect the Hero Acquisition to be material to its condensed consolidated financial statements individually.

Fourth Amendment to Byrna LATAM Loan Agreement

On June 23, 2026, the Company and Byrna LATAM S.A. ("Byrna LATAM") entered into a fourth amendment (the "Fourth Amendment") to the loan agreement originally dated January 10, 2023, as previously amended. The Fourth Amendment supersedes the prior third amendment in its entirety. Pursuant to the Fourth Amendment, accrued interest of approximately $0.1 million was capitalized into the outstanding principal balance, resulting in a restated principal balance of approximately $0.7 million. The Fourth Amendment provides for repayment of the restated principal balance, together with interest at a fixed annual rate of 5% per annum, in fourteen equal monthly installments of approximately $52,751 commencing May 20, 2026 and concluding June 20, 2027.

Tariff Refund

Subsequent to May 31, 2026, the Company received an additional refund of previously paid tariffs of approximately $2.3 million in cash. Consistent with the Company's accounting policy for tariff refunds under ASC 450-30 (see Note 11, Inventory), the refund was recognized in the period received, as it did not meet the recognition criteria for a gain contingency until the funds were actually collected. The refund will be recorded as a reduction of cost of goods sold in the Company's condensed consolidated statement of operations for the three and nine months ending August 31, 2026 (the third fiscal quarter of 2026), the period in which the cash was received.

Departure of President

On June 13, 2026, Luan Pham separated from the Company as President. In accordance with the terms of Mr. Pham's new-hire restricted stock unit award agreements dated March 17, 2026, the termination of Mr. Pham's employment without Cause within twelve months of the grant date resulted in the full acceleration of all 20,810 restricted stock units comprising his new-hire retention award (10,405 time-based and 10,405 performance-based restricted stock units), with all vesting conditions, including the market-based performance condition, deemed satisfied as of the Separation Date. Settlement of these units is subject to a six-month delay required under Section 409A of the Internal Revenue Code. All other unvested equity awards held by Mr. Pham were forfeited as of the Separation Date, including 7,990 performance-based restricted stock units and approximately 5,327 unvested time-based restricted stock units granted May 2, 2025. Approximately 2,663 time-based restricted stock units granted May 2, 2025 that vested on May 2, 2026 were retained by Mr. Pham. Additionally, 20,000 restricted stock units previously assigned to Mr. Pham by a former executive were automatically revoked and reverted to such executive pursuant to the terms of the applicable assignment agreement. The Company also agreed to provide Mr. Pham with cash severance equal to one times his annual base salary of $380,000, payable over twelve months, reimbursement of COBRA premiums for up to twelve months, and a pro-rata short-term incentive payment of $145,170, in each case subject to the terms of the separation agreement.