2020 Plan

On October 23, 2020, the Company's Board of Directors 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 was 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

Stock-based compensation costs are recognized as expense over the employee's requisite service period, on a straight-line basis.  Total stock-based compensation expense was $4.7 million and $4.1 million for the nine months ended August 31, 2023 and 2022, respectively.  Total stock-based compensation expense was $1.7 million and $2.7 million for the three months ended August 31, 2023 and 2022. respectively. Total stock-based compensation expense was recorded in Operating expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss.

Restricted Stock Units

During the nine months ended August 31, 2023 and 2022, the Company granted 9,805 and 376,555 RSUs, respectively.  Stock-based compensation expense for the RSUs for the nine months ended August 31, 2023 and 2022 was $3.4 million and $2.4 million, respectively. The Company recorded stock-based compensation expense of $1.3 million and $1.7 million for the RSUs during the three months ended August 31, 2023 and 2022, respectively.

As of  August 31, 2023, there was $0.8 million of unrecognized stock-based compensation cost related to unvested RSUs which is expected to be recognized over a weighted average of 1.1 years. 

The following table summarizes the RSU activity during the nine months ended August 31, 2023:

              Of the 213,686 restricted stock units issued, 89,234 units were returned to the Company in exchange for the Company paying for the payroll withholding taxes.  For the nine months ended August 31, 2023, restricted stock units of 124,402, net, were issued.  

Stock Options

During the nine months ended August 31, 2023 and 2022, the Company granted options to employees and directors to purchase 249,999 and 994,750 shares of common stock, respectively.  The Company recorded stock-based compensation expense for options granted to its employees and directors of $1.3 million and $1.7 million during the nine months ended August 31, 2023 and 2022, respectively.  The Company recorded stock-based compensation expense for options granted to its employees and directors of $0.4 million and $1.7 million during the three months ended August 31, 2023 and 2022 respectively.  

As of August 31, 2023, there was $2.9 million of unrecognized stock-based compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 1.8 years.

Stock Option Valuation

The fair value of stock options at the date of grant was estimated using the Black Scholes option pricing model.  The expected volatility is based upon historical volatility of the Company's stock.  The expected term for the options is based upon observation of actual time elapsed between employees.  The assumption that the Company used to determine the grant-date fair value of stock options granted for the nine months ended August 31, 2023 were as follows:

The following table summarizes option activity under the 2020 Plan during the nine months ended August 31, 2023: