Byrna Technologies Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

WARRANTS

WARRANTS

12 Months Ended

Nov. 30, 2019

WARRANTS

On September 16, 2019, the Company entered into a securities purchase agreement with two investors to sell a total of 818.0 units, for aggregate principal of $818,000, at a price of $1,000 per unit, consisting of (i) $1,000 10% interest secured convertible promissory note, convertible into the Company's common stock at a conversion price of $0.15 per share and (ii) four thousand warrants each exercisable for one share of common stock at an exercise price of $0.25 per share on or before January 22, 2024. The Company issued 3,272,000 warrants in connection with this transaction. The relative grant date fair value of these warrants was estimated at $363,846 using the Binomial lattice option pricing model and reflected in additional paid-in capital, with the following assumptions:

Risk free rate		1.69%
Expected dividends		0%
Expected volatility		150%
Expected life		4.35 years
Market price of the Company's common stock on date of grant	$	0.16
Exercise price	$	0.25

On July 22, 2019, the Company entered into a securities purchase agreement with several investors to sell a total of 2,282.5 units, for aggregate principal of $2,282,500, at a price of $1,000 per unit, consisting of (i) $1,000 10% interest secured convertible promissory note, convertible into the Company's common stock at a conversion price of $0.15 per share and (ii) four thousand warrants each exercisable for one share of common stock at an exercise price of $0.25 per share on or before January 22, 2024. The Company issued 9,130,000 warrants in connection with this transaction. The relative grant date fair value of these warrants was estimated at $1,038,081 using the Binomial lattice option pricing model and reflected in additional paid-in capital, with the following assumptions:

Risk free rate		1.8%
Expected dividends		0%
Expected volatility		154%
Expected life		4.5 years
Market price of the Company's common stock on date of grant	$	0.16
Exercise price	$	0.25

On April 22, 2019 and May 20, 2019, the Company entered into a securities purchase agreement with several accredited investors to sell a total of 2,080.265 units, for aggregate principal of $2,080,265, at a price of $1,000 per unit, consisting of (i) $1,000 10% interest secured convertible promissory note, convertible into the Company's common stock at a conversion price of $0.15 per share and (ii) four thousand warrants each exercisable for one share of common stock at an exercise price of $0.25 per share on or before October 22, 2023. The Company issued 8,321,058 warrants in connection with this transaction. The relative grant date fair value of these warrants was estimated at $888,444 using the Binomial lattice option pricing model and is reflected in additional paid-in capital, with the following assumptions:

Risk free rate		2.21—2.39%
Expected dividends		0%
Expected volatility		155—156%
Expected life		4.5 years
Market price of the Company's common stock on date of grant	$	0.15
Exercise price	$	0.25

On October 22, 2018, the Company entered into a securities purchase agreement with several accredited investors to sell 1,275.0 units, for aggregate principal of $1,275,000, at a price of $1,000 per unit, consisting of (i) $1,000 10% interest convertible promissory note ("the 2018 Notes"), convertible into the Company's common stock at a conversion price of $0.15 per share (See Note 15), and (ii) four thousand warrants each exercisable for one share of common stock at an exercise price of $0.25 per share on or before the five year anniversary of the issuance.

Pursuant to this private placement, the Company issued 5,100,000 warrants. The grant date fair value of these warrants was estimated at $524,089 using the Binomial lattice option pricing model and reflected in additional paid-in capital, with the following assumptions:

Risk free rate		3.05%
Expected dividends		0%
Expected volatility		159%
Expected life		5 years
Market price of the Company's common stock on date of grant	$	0.14
Exercise price	$	0.25

The following table summarizes warrant activity during the years ended November 30, 2019 and 2018:

	Number of		Weighted- Average
	Warrants		Exercise
	Granted		Price
			$
Outstanding at November 30, 2017	20,941,160		0.18
Granted	5,100,000		0.25
Expired	—		—
Outstanding at November 30, 2018	26,041,160		0.19
Granted	22,223,058		0.25
Expired	(2,476,999	)	(0.16	)
Outstanding at November 30, 2019	45,787,219		0.22

Exercisable at November 30, 2019	45,037,219		0.22
Exercisable at November 30, 2018	26,041,160		0.19

The warrants outstanding at the end of the year had a weighted-average remaining contractual life as follows:

	2019	2018
	(Years)	(Years)
Total outstanding warrants	3.55	3.88
Total exercisable warrants	3.50	3.88