In January 2023, the Company acquired a 51% ownership interest in Byrna LATAM, a corporate joint venture formed to expand the Company’s operations and presence in South American markets, for $0.5 million. The Company accounts for the investment in the joint venture using the equity method since the Company does not have voting control of Byrna LATAM.  Additionally, the Company does not have substantive participating rights that would result in the Company having control of Byrna LATAM. 

Investments in equity method investees are those for which the Company has the ability to exercise significant influence or exercise joint control with other investors but does not control and is not the primary beneficiary. Under this method of accounting, the Company’s investment is recorded initially at cost and subsequently adjusted for its proportionate share of the net earnings or losses.  The Company's share of net income or net loss in Byrna LATAM can have a significant impact on the reported equity method investment activity and the carrying value on the investment.  In the event that net losses of Byrna LATAM reduce the equity method investment carrying amount to zero, additional net losses may be recorded if other investments, which are not accounted for under the equity method, are at-risk even if the Company has not committed to provide financial support to Byrna LATAM.  The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.  The Company recorded its share of the joint venture’s loss during the three and nine months ended August 31, 2023 of $0.3 million and $0.6 million, respectively, in the Consolidated Statements of Operations and Comprehensive Loss as other expense. The carrying value of the Company's investment in the joint venture at August 31, 2023 is $0.0 million and is recorded as investment in joint venture in the Consolidated Balance Sheet.

In January 2023, the Company loaned $1.6 million to Byrna LATAM.  The loan bears interest at a rate equal to Secured Overnight Financing Rate ("SOFR") plus 3.0%.  The interest rate on the loan was 8.3% as of  August 31, 2023.  The loan amount must be repaid within five years from the date of the loan, or January 10, 2028.  Interest income related to the loan receivable totaled $0.04 million and $0.08 million for the three and nine months ended August 31, 2023, respectively, is included in interest income in the Condensed Consolidated Statements of Operations and Comprehensive Loss.  The loan receivable is recorded as loan to joint venture in the Consolidated Balance Sheet. During the three and nine months ended August 31, 2023, the cumulative net losses of Byrna LATAM exceeded the equity method investment by $0.1 million.  The carrying basis of the loan receivable was reduced by the $0.1 million excess loss from $1.6 million to $1.5 million.