Annual report pursuant to Section 13 and 15(d)

Note 5 - Acquisitions

Note 5 - Acquisitions
12 Months Ended
Nov. 30, 2021
Notes to Financial Statements  
Business Combination Disclosure [Text Block]




Asset Acquisition


On May 12, 2021, the Company entered into an asset purchase agreement to purchase certain assets used in the business of designing, developing, manufacturing, licensing, and selling of products and services for the Mission Less Lethal brand from Kore Outdoor (U.S.) Inc., (“Kore”) a wholly-owned subsidiary of Kore Outdoor, Inc.


The transaction was accounted for as an asset acquisition, with a total cost of $3.7 million of which $0.2 million were acquisition-related expenses. The estimated total cost of the acquisition has been allocated as follows (in thousands):


Accounts receivable

  $ 465  

Prepaid expenses




Property and equipment




Total assets acquired

  $ 3,702  


The Company accounted for the transaction as an asset acquisition where the assets acquired were measured based on the amount of cash paid to Kore as well as transaction costs incurred as the fair value of the assets given was more readily determinable than the fair value of the assets received. The Company classified and designated identifiable assets acquired and assessed and determined the useful lives of the acquired intangible assets subject to amortization.


Business Combinations



On August 18, 2021, the Company acquired Ballistipax®, a developer of single-handed rapidly deployable bulletproof backpacks. The purchase price of $342 thousand was paid in cash. As part of the transaction, the Company has acquired two patents, finished goods and raw materials inventory. 


The estimated fair value of assets acquired on August 18, 2021 is as follows (in thousands):



  $ 117  





Net assets acquired

  $ 342  



On May 5, 2020, the Company acquired 100% of the equity interests in Roboro, its exclusive manufacturer in South Africa, in order to reduce its dependence on third parties for production. As a result of this acquisition, the Company now directly operates its sole manufacturer in South Africa.


The acquisition date fair value of the consideration was $0.6 million, including $0.5 million paid in cash. In addition, Roboro’s sellers purchased 138,889 shares of the Company’s common stock for $0.5 million at a contractual price of $3.60 per share. These shares, which were issued on May 27, 2020, were restricted and subject to a 15-month vesting schedule and are vested. The fair market value of the common stock of $0.6 million was based on the stock’s closing price of $4.00 on May 5, 2020. The difference between the fair market value and the amount paid, was treated as an additional consideration for the acquisition.


The fair value of assets acquired and liabilities assumed on May 5, 2020 is as follows (in thousands):


Property and equipment

  $ 67  



Right-of-use asset, net


Loan payable



Operating lease liability, current



Operating lease liability, noncurrent



Other net asset (liabilities)



Net assets acquired

  $ 557