Approximate date of commencement of proposed sale to the publicpublic::
As soon as practicable, after this registration statement becomes effective.

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If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X]box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE

(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2) Includes the aggregate offering price of additional shares that the underwriters have the option to purchase. See “Underwriting.”

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. The CorporationThese securities may not sell these securitiesbe sold until the registration statement filed with the Securities and Exchange Commission declares our registration statementis effective. This preliminary prospectus is not an offer to sell these securities and is not solicitingnor does it seek an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated [___________], 2013

Preliminary Prospectus - Public Offering                                 •, 2013

SECURITY DEVICES INTERNATIONAL INC.
Up to 10,000,000 COMMON SHARES

This prospectus relates to the offer and sale of up to 10,000,000 common shares, USD$0.001 par value, (“Common Shares”) of Security Devices International Inc. (“SDI” or the “Corporation”) at a price of CDN$0.40 per Common Share. The offering of Common Shares is being conducted primarily in Canada (the “Canadian Offering”) through a Canadian broker-dealer, Macquarie Private Wealth Inc. (the “Canadian Agent”), and in the United States by us directly in sales to a limited number of institutional and accredited purchasers (the “U.S. Offering” and together with the Canadian Offering the “Offering”). The Canadian Agent has been engaged by us solely to conduct sales in Canada, will limit its selling activity to residents of Canada and will not undertake any selling efforts in the United States or to U.S. Persons (as such term is defined in Rule 902(k) of Regulation S under the Securities Act of 1933, as amended). The Canadian Agent will conduct offers and sales of the Common Shares in Canada pursuant to a prospectus filed with securities commissions in Canada. While the purchase price of, and settlement amounts for, the Common Shares will be denominated in Canadian dollars, the par value of the Common Shares will remain denominated in U.S. dollars at all times. All sales of Common Shares in the Offering will be denominated in Canadian dollars. All purchasers in the U.S. Offering will be required to deposit Canadian funds with the Corporation at or before closing as consideration for Common Shares purchased by them, and the U.S. dollar value of the Common Shares purchased by each U.S. investor will depend on the prevailing exchange rate at the time of the purchase of the Common Shares. The Canadian Agent will offer in Canada up to 8,625,000 Common Shares, including the Over-Allotment Option (as defined below) on a reasonable best-efforts basis and subject to a minimum offering requirement of 7,500,000 Common Shares (the “Canadian Minimum Offering Condition”). In the event the Canadian Minimum Offering Condition is not satisfied within 90 days of the filing of a final prospectus in Canada, which may be extended by an additional 90 days if an amendment to such final prospectus has been filed in Canada, or if the Offering is otherwise terminated, all funds collected by us or the Canadian Agent will be returned to investors within 10 business days without interest or deduction of fees. Neither we nor any investor shall receive interest regardless of how long subscriber funds might be held. The Offering may terminate on the earlier of: (i) 10 business days following the date which the Canadian Minimum Offering Condition is satisfied, or (ii) within 90 days of the filing of a final prospectus in Canada, which may be extended by an additional 90 days if an amendment to such final prospectus has been filed in Canada, but in no event more than 180 days from the date of the filing of the final prospectus in Canada.

We have granted to the Canadian Agent an option to acquire up to 15% of the Common Shares placed in Canada at the public offering price pursuant to an overallotment option exercisable for a period of thirty (30) days from the closing of the Offering for market stabilization purposes (the “Over-Allotment Option”).

Our common stock is quoted on the OTCQB tier of the OTC Link (the “OTCQB”) under the symbol “SDEV”. On May 8, 2013, the closing bid price of the Corporation’s common stock was USD$0.46 per share. We have applied to list our Common Shares in Canada on the TSX Venture Exchange (“TSX-V”) under the symbol “NLA”, and we anticipate that the Common Shares in Canada will be approved for listing on the TSX-V on or promptly after the date of this prospectus and will continue to be quoted on the TSX-V as well as the OTCQB. Listing on the TSX-V will be subject to the Corporation fulfilling all of the listing requirements of the TSX-V. The Common Shares, once issued, may be resold through the OTCQB in addition to the TSX-V, regardless of whether the Common Shares were purchased in the U.S. Offering or the Canadian Offering.

(1) The offering price of the Common Shares has been determined by negotiation between ourselves and the Agent.
(2) The Canadian Agent is entitled to a cash commission equal to 9.0% of the gross proceeds of the Canadian Offering including the over-allotment. The Canadian Agent is not entitled to any commission on Common Shares sold in the U.S. Offering. In addition, the Canadian Agent will receive agent warrants to purchase up to 9.0% of the aggregate number of shares of common stock sold in the Canadian Offering.
(3) Estimated expenses of the Offering are approximately CDN$200,000.
(4) The Offerings is a minimum offering of 7,500,000 and a maximum offering of 10,000,000 Common Shares.

THE SECURITIES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE “RISK FACTORS” DESCRIBED IN THIS PROSPECTUS COMMENCING ON PAGE 10.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus •, 2013

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The Reader should rely only on the information contained in this prospectus. We have not, and the Canadian Agent has not, authorized any other person to provide you with different information. If alternative information is provided to the reader, the reader shall not rely on it. We are not, and the Canadian Agent is not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

Subject To Completion, June 1, 2021

PROSPECTUS

Shares

Common Stock

We are offering shares of our common stock. Our common stock is listed on The readerNasdaq Capital Market (“Nasdaq”) under the symbol “BYRN.” The last reported sale price on Nasdaq of our common stock on         , 2021 was $          per share. Our common stock is also traded on the Canadian Securities Exchange (the “CSE”). The last reported sale price on the CSE of our common stock on          , 2021 was          $ per share.

You should assumeconsider the risks that we have described in “Risk Factors” beginning on page 7 of this prospectus before buying our common stock.

We have granted the underwriters an option to purchase up to an additional          shares of common stock at the public offering price less the underwriting discount and commissions to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the common stock to purchasers on or before         , 2021.

RAYMOND JAMES

The date of this prospectus is              , 2021.

TABLE OF CONTENTS

We are responsible for the information appearingcontained in this prospectus. You should rely only on the information contained in this prospectus and in any related free writing prospectus prepared by or on behalf of us. Neither we, nor the underwriters, have authorized anyone to provide you with information different from, or in addition to, the information contained in this prospectus or any related free writing prospectus. This prospectus is accuratean offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus or in any applicable free writing prospectus is current only as of theits date, on the front coverregardless of this prospectus.its time of delivery or any sale of shares of our common stock. Our business, financial condition, results of operations, and prospects may have changed since that date.

Our corporate website is www.securitydii.com. The information on our website is not intended to be included or incorporated by reference into this prospectus.

Statistical information and other data relating to the non-lethal small arms ammunition technologies industry included in this prospectus are derived from industry reports published by industry analysts, industry associations and independent consulting and data compilation organizations. Other industry information and quotes contained in this prospectus were obtained from various publicly available sources.

For investors outsideInvestors Outside the United States: WeStates

Neither we nor the underwriters have not and the Canadian Agent has not done anythingtaken any action that would permit thethis offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus mustare required to inform themselves about and to observe any restrictions relating to the Offeringthis offering and the distribution of this Prospectus outsideprospectus.

Trademark Notice

Byrna®, our logo, Live Safe™, and Learn Safe™ are registered or common law trademarks of Byrna Technologies Inc. This prospectus contains references to our trademarks, both registered and common law, and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names. All other brand names, trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Industry, Market, and Other Data

This prospectus includes estimates, projections, and other information concerning our industry and market data, including data regarding the estimated size of the United States.

CURRENCY AND EXCHANGE RATES

Unless otherwise stated,market, projected growth rates, trends and perceptions and preferences of consumers. We obtained this data from industry sources, third-party studies, including market analyses and reports, and internal company data. Industry sources generally state that the information contained therein has been obtained from sources believed to be reliable. Although we are responsible for all dollar amounts and the symbol “$” or “CDN$” refers to Canada dollars and “USD$” refers to United States dollars, except in the Management Discussion and Analysis section, where all dollar amounts are in United States dollars.

The Canadian dollar exchange rates for United States dollars for each of the yearsdisclosure contained in this prospectus, and we believe the five-year period ended December 31, 2012industry and market data to be reliable as reported by the Bank of Canada, were as follows:

On May 7, 2013, the rate of exchange of the Canadian dollar, based ondate of this prospectus, this information could prove to be inaccurate. We have not independently verified data from these sources or obtained third-party verification of market share data and this information may not be reliable. In addition, these sources may use different definitions of the daily noon rate in Canada as published by the Bank of Canada, was U.S. $1.00 = Canadian $1.0052.relevant markets. Data regarding our industry is intended to provide general guidance, but is inherently imprecise.

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CAUTIONARY STATEMENTNOTE REGARDING FORWARD LOOKINGFORWARD-LOOKING STATEMENTS

The Securities

This prospectus contains “forward-looking statements” that involve substantial risks and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. Forward-looking statement may include, but are not limited to, statements with respect to our future financial or operating performance, future plans and objectives, competitive positioning, requirements for additional capital, government regulation of operations and the timing and possible outcome of litigation and regulatory matters.uncertainties. All statements other than statements of historical or current fact included or incorporated by reference in this prospectus are forward looking statements. Forward-looking statements refer to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance, and business. You can identify forward-looking statements by the fact that address activities, eventsthey do not relate strictly to historical or developments thatcurrent facts. These statements may include words such as “anticipate,” “assume,” “believe,” “can have,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “likely,” “may,” “might,” “objective,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “would,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operational performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, and growth rates, our plans and objectives for future operations, growth, or our subsidiaries expectinitiatives, or anticipate may occur in the futurestrategies are forward-looking statements. Often, but not always,All forward-looking statements can be identifiedare subject to risks and uncertainties that may cause actual results to differ materially from those that we expect and, therefore, you should not unduly rely on such statements. The risks and uncertainties that could cause those actual results to differ materially from those expressed or implied by usethese forward-looking statements include but are not limited to the following:

We make many of our forward-looking words such as “may”, “could”, “would”, “might”, “will”, “expect”, “intend”, “plan”, “budget”, “scheduled”, “estimate”, “anticipate”, “believe”, “forecast”, “future” or “continue” or the negative thereof or similar variations. Forward-looking statements based on our operating budgets and forecasts, which are based on certainupon assumptions and analyses made by us, in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Althoughmanagement. While we believe that the expectations reflected in these forward-looking statementsour assumptions are reasonable, we caution that it can give no assuranceis very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that these expectations will prove to have been correct. Readers are cautioned not to put undue reliance on such forward-looking statements, which are notcould affect our actual results.

See the “Risk Factors” section and elsewhere in this prospectus for a guaranteemore complete discussion of performancethe risks and are subject to a numberuncertainties mentioned above and for discussion of other risks and uncertainties and known and unknown risks, many of which are outside our control, whichwe face that could cause actual results to differ materially from those expressed or implied by suchthese forward-looking statements. Important factors which could cause actual results to differ materially from those expressed or implied by suchAll forward-looking statements include, amongattributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this prospectus and hereafter in our other things, general business, economic, competitive, politicalSEC filings and social uncertainties, the actual results of current operations, industry conditions, research and development activities, intellectual property and other proprietary rights, production risks, liabilities inherentpublic communications. You should evaluate all forward-looking statements made by us in the technology industry, accidents, labor disputes, delays in obtaining regulatory approvals or financingcontext of these risks and general market factors, including interest rates, currency exchange rates, equity markets, business competition, changes in government regulations. Additionaluncertainties.

We caution you that the risks and uncertainties include, but areidentified by us may not limited to, those listed underbe all of the heading “Risk Factors”.

Although we have attempted to identify important factors that could cause actual actions, events or resultsare important to differ materially from those described inyou. Furthermore, the forward lookingforward-looking statements there may be other factors that cause results to differ from those anticipated. Forward-looking statements containedincluded in this prospectus are made only as of the date hereof and we disclaim anyhereof. We undertake no obligation to publicly update or revise any forward-looking statements, whetherstatement as a result of new information, future events, results or otherwise, except as required by applicable securities laws.law.

The forward-looking statements contained in this prospectus are expressly qualified by this cautionary statement. We have no duty to update any of the forward-looking statements after the date of this prospectus or to conform such statements to actual results or to changes in our expectations, except as otherwise required by applicable legislation.

THE OFFERING

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The number of shares of our common stock that will be outstanding after this offering is based on shares of our common stock outstanding as of         , 2021, and excludes:

●      shares of our common stock issuable upon the exercise of outstanding but unexercised options, of which              are vested, to purchase shares of our common stock as of          , 2021, under the Byrna Technologies, Inc. 2020 Equity Incentive Plan (the “2020 Plan”), with a weighted average exercise price of $            per share;

●      shares of our common stock issuable upon the settlement of restricted stock units outstanding as of          , 2021 under the 2020 Plan; and

●      shares of our common stock reserved for future issuance under the 2020 Plan.

Except as otherwise indicated, all information in this prospectus assumes or reflects:

● no exercise of the underwriters’ option to purchase additional shares;

● no exercise or settlement of outstanding stock options; and

● the Reverse Stock Split.

Summary Consolidated Financial Data

The following tables provide our summary consolidated financial data and should be read in conjunction with “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus. We have derived the summary consolidated statements of income data for the fiscal years ended November 30, 2020 and 2019 from our audited consolidated financial statements appearing elsewhere in this prospectus. The summary condensed statements of income data for the three months ended February 29, 2020 and February 28, 2021, and the consolidated balance sheet data as of February 28, 2021 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future, and the results for any interim period are not necessarily indicative of the results that may be expected in any full year.

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The consolidated balance sheet data as of February 28, 2021 are presented below:

RISK FACTORS

Investing in our common stock involves a high degree of risk. These risks include, but are not limited to, those described below, each of which may be relevant to an investment decision. You should carefully consider carefully the risks and uncertainties described below, together with all of the other information contained in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes, included elsewhere in this prospectus, before deciding whether to invest in shares of our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks or other risks actually occurs,occur, our business, financial condition, results of operations, and future prospects could be materially and adversely affected.harmed. In that event, the market price of our common stock could decline, and you could lose part or all of your investment. The securities offered herebyrisks and uncertainties described below are considered speculative duenot the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” above.

Risks Related to Our Business

We have a limited operating history on which you can evaluate our business.

We have a limited operating history on which you can evaluate our business. Although our corporate entity has existed since 2005, we have only been manufacturing and selling the natureByrna HD, our largest source of revenue, since April 2019. Moreover, many members of our key senior management team are relatively new to their positions. Our Chief Financial Officer (“CFO”), Chief Supply Chain Officer, and Chief People Officer (“CPO”) began their current roles late in the third quarter in 2020, our Chief Marketing and Revenue Officer (“CMO”) began his role in the first quarter of 2021, and our Chief Governmental Affairs Officer began his role in 2020. As a result, our business may be subject to many of the Corporation'sproblems, expenses, delays, and risks inherent in the rapid growth of a relatively new business and the present stageintegration of its development. A prospective investor should consider carefully the following factors:key personnel and infrastructure.

We may not successfully commercialize anyhave a history of our products or earn a profitoperating losses and we cannot guarantee that we will ever achieve sustained profitability..

We have incurred lossesrecorded a net loss in all reporting periods since incorporation. As of February 28, 2013, we have anour inception. Our net loss for the years ended November 30, 2020 and 2019 was $12.6 million and $4.4 million, respectively, our accumulated total deficit of $19,765,794. Forat November 30, 2020 was $50.2 million. Our net loss for the quarterquarters ended February 28, 2013 we had net losses attributable to common stockholders2021 and February 29, 2020 was $0.3 million and $2.3 million, respectively, our accumulated deficit at February 28, 2021 was $50.5 million. There can be no assurance of $469,648. For the fiscal year ended November 30, 2012, we had net losses attributable to common stockholders of $2,019,938. To date, we have experienced negative cash flow from development ofsuccess in reducing our products. We currently have not generated any revenue from operations and expect to incur substantial net losses for the foreseeable future to further develop and commercialize our products. We cannot predict the extent of these future net losses or whenbecoming profitable, and even if we may attain profitability, if at all. If we are unable to generate significant revenue from our products or attain profitability, we will not be able to sustain operations.

Because of the numerous risks and uncertainties associated with developing and commercializing our products, we are unable to predict the extent of any future losses or when we willdo become profitable, if ever. We may never become profitable and you may never receive a return on an investment in our common stock. An investor in our common stock must carefully consider the substantial challenges, risks and uncertainties inherent in a developmental stage company. The Common Shares mustthere can be considered highly speculative due to the natureno assurance of the Corporation’s business, the early stage of its deployment, its current financial position and ongoing requirements for capital. An investment in the Common Shares should only be considered by those persons who can afford a total loss of investment, and is not suited to those investors who may need to dispose of their investment in a timely fashion. We may never successfully commercialize our products, and our business may fail. Investors should consult with their own professional advisors to assess the legal, financial and other aspects of an investment in Common Shares.continued profitability.

We need substantial additional capitalexpect to grow and fund our present and planned business and business strategy.

We anticipate expending substantial funds to carry out the development, introduction and manufacture of additional products. We have no source of operating cash flow to fund all of its operational needs and will require additional financing to continue its operations. As such, our current and planned operations contemplate funding in the future through one or more public or private equity financings, by taking on debtto generate substantial revenue growth. If we do not obtain such additional financing, or from other sources. our business prospects, financial condition and results of operations could be adversely affected.

There can be no assurance that such financing will be available at all or on favorable terms or at all. If such funds are unavailable or are only available at a prohibitive cost, we may haveterms. Failure to significantly curtail its product development program or seek funds through financing alternatives thatgrow our revenues may requireresult in us to sell its rights to certain products or certain marketing territories. Failure to meet funding milestones may have a significant adverse effect on our growth and we may have to curtail our business strategy. Failureseeking to obtain such additional financing which could result in delay or indefinite postponement of the deploymentour development and sale of our products. Subsequent financing may dilute the ownership interest of our stockholders at the time of the financing and may dilute the value of their stock.

If we receive less funding than planned, we will haveare unable to revisesuccessfully implement our business modelplan for the sale of the Byrna HD, our revenue growth could be slower than we expect and reduce proposed plans. Without significant funding, we will not be able to execute on our business, operationsoperating results and mayfinancial condition could be forced to cease operations. At this time, there can be no assurance we will be able to obtain the funding we need and even if we obtain such funding that it will be on terms and conditions favorable to us and our existing shareholders. Without funding we will not be able to proceed with planned operations or meet existing obligations.adversely affected.

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We did not have a meeting of our shareholders from inception until March 15, 2013.

We did not have an annual general meeting of the shareholders since it was formed on March 1, 2005. Our Bylaws and the General Corporation Law of the State of Delaware requires it to have an annual general meeting of shareholders to elect directors. Pursuant to the laws of the State of Delaware, the failure to hold an annual meeting of stockholders does not automatically invalidate all corporate actions. However, it is unclear if all such actions would be deemed valid if challenged in a court of law. We had an annual general meeting of our shareholders on March 15, 2013.

There is substantial doubt as to our ability to continue as a going concern.

Due to our recurring losses from operations, there is substantial doubt about our ability to continue as a going concern, meaning that we may not be able to continue in operation for the foreseeable future or be able to realize assets and discharge liabilities in the ordinary course of operations. Our audited consolidated financial statements for the year ended November 30, 2012 were prepared assuming that we will continue as a going concern. However, the report of our independent registered public accounting firm included elsewhere in this prospectus contains an explanatory paragraph on our consolidated financial statements stating there is substantial doubt about our ability to continue as a going concern. Such an opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise. There is no assurance that sufficient financing will be available when needed to allow us to continue as a going concern. The perception that we may not be able to continue as a going concern may cause others to choose not to deal with us due to concerns about our ability to meet our contractual obligations.

Delaware law and our corporate charter and bylaws will contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.

Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or changes in our management. For example, our board of directors have the authority to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the powers, preferences and rights of each series without stockholder approval. The ability to issue preferred stock could discourage unsolicited acquisition proposals or make it more difficult for a third party to gain control of our company, or otherwise could adversely affect the market price of our common stock. Our bylaws require that any stockholder proposals or nominations for election to our board of directors must meet specific advance notice requirements and procedures, which make it more difficult for our stockholders to make proposals or director nominations.

Furthermore, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law. These provisions may prohibit or restrict large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us. These provisions in our certificate of incorporation and bylaws and under Delaware law could discourage potential takeover attempts and could reduce the price that investors might be willing to pay for shares of our common stock in the future and result in our market price being lower than it would without these provisions.

There can be no assurance that we can generate substantialour revenues or revenue growth or that any revenue growth that is achieved can be sustained.

Revenue growth that we have achieved or may achieve may not be indicative of future operating results. The Byrna HD is a new product and its long-term adoption by the U.S. consumer market, and by potential other markets including law enforcement, private security, and international markets, remains unknown. Among other things, production delays, including as a result of the COVID-19 pandemic, excessive costs, performance failures, new legislation or regulation, competition, or negative publicity could stall or prevent its success in the market and generation of revenue. In addition, we have increased and may increase further itsour operating expenses in order to fund higher levels of researchincreases in our manufacturing, distribution, and development, increase its sales and marketing efforts and increase itsour administrative resources in anticipation of future growth. To the extent that increases in such expenses precede or are not subsequently followed by increased revenues, the Corporation’sour business, operating results and financial condition willmay be materially adversely affected.

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We are dependent on certainmay not be able to effectively manage our growth.

As we grow our business, slower growing or reduced demand for our products, increased competition, a decrease in the growth rate of our overall market, failure to develop and successfully market new products, or the maturation of our business or market could harm our business. We expect to make significant investments in research and development and sales and marketing, expand our operations and infrastructure, design and develop or acquire new products, and enhance our existing products. If our sales do not increase at a sufficient rate to offset these increases in our operating expenses, our profitability may decline in future periods.

We have expanded our operations rapidly since our inception. The scope and complexity of our business have increased substantially over the past several years. We have only a limited history operating our business at its current scale. Key members of our management.

The lossmanagement team do not have substantial tenure working together. Consequently, if our operations continue to grow at a rapid pace, we may experience difficulties in managing this growth and building the appropriate processes and controls. Continued growth may increase the strain on our resources, and we could experience operating difficulties, including difficulties in sourcing, logistics, recruiting, maintaining internal controls, marketing, designing innovative products, and meeting consumer needs. If we do not adapt to meet these evolving challenges, the strength of our brand may erode, the servicesquality of one or more of them could adversely affect us. Our ability to maintain its competitive position is dependent upon its ability to attract and retain highly qualified managerial, specialized technical, manufacturing, sales and marketing personnel. There can be no assurance thatour products may suffer, we willmay not be able to continue to recruit and retain such personnel. Our inability to recruit and retain such personnel would adversely affect the our operations and product development.

We are dependent on key suppliers

We purchase certain key components of itsdeliver products from a limited number of key suppliers. Failure of a supplier to provide sufficient quantities on favorable terms or on a timely basis could result in possible lost sales.to our customers, and our corporate culture may be harmed.

WeProduct liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may be subject to product or warranty claims that could have a material adverse effect on our business, operating results and financial condition.develop.

We may be subject to proceedings or claims that may arise in the ordinary conductcourse of the business, which could include product and service warranty claims, which could be substantial. If our products fail to perform as warranted and we fail to quickly resolve product quality or performance issues in a timely manner, our reputation may be tarnished, potential sales may be lost, and we may be forced to pay damages. Any failure to meet customer requirements could materially affect our business, results of operations and financial condition. The occurrence of product defects and the inability to correct errors could result in the delay or loss of market acceptance of our products, material warranty expense, diversion of technological and other resources from our product development efforts, and the loss of credibility with customers, manufacturer’s representatives, distributors, value added resellers, systems integrators, original equipment manufacturersdealers and end-users, any of which could have a material adverse effect on our business, operating results and financial condition.conditions.

We currently have general liability insurance, which includes

Our products are used in activities and situations that involve risk of personal injury. Our products expose us to potential product liability, coverage. There is no assurance this insurance policy will cover all potentialwarranty liability, and personal injury claims which may haveand litigation relating to the use or misuse of our products, including allegations of defects in manufacturing, defects in design, a material adverse effect onfailure to warn of dangers inherent in the businessproduct or financial condition ofactivities associated with the Corporation. A product, recallnegligence, and strict liability. If successful, any such claims could have a material adverse effect on our business, operating results, and financial condition. Defects in our products may result in a loss of sales, recall expenses, delay in market acceptance, and damage to our reputation and increased warranty costs, which could have a material adverse effect on our business, operating results, and financial condition. In addition, our reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about our products.

We issued a product safety notice in February 2021 and, as a result, took a reserve of $195,000, which we believe to have been adequate. If the safety update fails in the future, new issues arise, or a substantial number of consumers continue to seek exchanges we could also experience damage to our reputation, business, operations (including production rate) and revenues.

We maintain general liability insurance that includes product liability coverage in amounts that we believe are reasonable, but there is no assurance that we will be able to maintain such insurance on acceptable terms, if at all, in the future and product liability claims may exceed the amount of insurance coverage.

The failure to attract and retain key personnel could have an adverse effect on our operating results.

Our success depends substantially on the efforts and abilities of our senior management and key personnel. The competition for qualified management and key personnel is intense. The loss of services of one or more of our key employees or the inability to hire, train, and retain additional key personnel could delay the development and sale of our products, disrupt our business, and interfere with our ability to execute our business plan.

In addition, our ability to maintain our competitive position is dependent to a large degree on the efforts and skills of our senior management team, including Bryan Ganz, our President, Chief Executive Officer and Chairman of the Board of Directors. The loss of the services of one or more of our key personnel could materially and adversely affect our operations.

We depend on the sale of our personal security devices.

Although we do sell certain other products (such as our 40mm product line) and we expect to introduce new products, including products acquired in connection with the acquisition of Mission Less Lethal assets in May 2021, our revenue is derived almost exclusively from the sale of the Byrna HD. The sale of such personal security devices is influenced by a variety of economic, social, and political factors, including without limitation the level of confidence of consumers in our products and in the security and reliability of online shopping and e-commerce on which we significantly rely, which may result in volatile sales. Sales of the Byrna HD, including its ammunition and accessories, represented 99% of our total revenue for the year ended November 30, 2020 and 100% of our total revenue for the quarter ended February 28, 2021. There can be no assurances of continued demand for the Byrna HD, and any change in the factors that impact demand and sales that are likely to materially and adversely affect our prospects.

Our business depends on maintaining and strengthening our brand and generating and maintaining demand for our products, and a reduction in such demand could harm our results of operations.

The Byrna name and brand image are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business. Our success depends on the value and reputation of our brand, which, in turn, depends on factors such as the quality, design, performance, functionality, and durability of our products, the image of our e-commerce platform and retail presence, our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including direct interfaces through customer service. Maintaining, promoting, and positioning our brand are important to expanding our customer base, and will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high quality customer experiences. We intend to make substantial investments in these areas in order to maintain and enhance our brand, however such investments may not be successful. Ineffective marketing, negative publicity, product diversion to unauthorized distribution channels, product or manufacturing defects, counterfeit products, unfair labor practices, failure to protect the intellectual property rights in our brand, and inability to provide satisfactory customer service experience as we rapidly expand our business, are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us. Furthermore, these factors could cause our customers to lose the personal connection they feel with the Byrna brand. We believe that maintaining and enhancing our brand image in our current markets and in new markets where we have limited brand recognition is important to expanding our customer base. If we are unable to maintain or enhance our brand in current or new markets, our growth strategy and results of operations could be harmed.

We are dependent on our relationships with key third-party suppliers for our business.

We rely on certain third-party suppliers for our business, including sole source suppliers. Sole source suppliers account for approximately 35-40% of the components in our Byrna HD and 100% of the chemical irritant projectiles we sell as well as certain accessories. Our future operating results depend upon our ability to obtain timely delivery of a sufficient amount and a reliable quality of all components on commercially reasonable terms. Failure of a supplier’s business or consolidation within the industry could further limit our ability to purchase key components at all (in the case of sole source suppliers) or in sufficient quantities and on commercially reasonable terms. Demands of competitors with larger operations and stronger bargaining power could also limit our ability to purchase key components in sufficient quantities on commercially reasonable terms. Failure of our suppliers to provide sufficient quantities of components on favorable terms, meet quality standards, or deliver components on a timely basis has occurred due to industry shortages of certain raw materials or for reasons related to the COVID-19 pandemic, and could occur in the future for similar or other reasons. Such failures could delay or stop our production, result in possible lost sales and seriously threaten our liquidity and revenues.

We are dependent on the quality of parts supplied by and quality controls of our third-party suppliers.

The Byrna HD contains over 100 parts and we rely on third-party suppliers to deliver parts and materials that comply with our specifications. While we test 100% of our finished products, we do not test 100% of the components and materials they contain. We use randomized statistical inspection for components and materials and these protocols, while we believe them to be reliable, have inherent limitations and may miss parts that do not meet specifications. If those parts pass our completed launcher testing but subsequently cause failures of the products in which they are installed, we may need to undertake product recalls or implement protocols for improved performance or safety, which could negatively impact our reputation and business. Moreover, if any such part failure resulted in a physical injury, it could also subject us to the risks of potential product liability actions and, if our stock price were impacted, security class actions.

Higher costs or unavailability of components, freight, materials and accessories, including ammunition, could adversely affect our financial results.

Delays caused by industry allocations, material shortages (such as plastic or resins), or obsolescence have occurred as a result of the COVID-19 pandemic, may continue and could occur in the future (due to the COVID-19 pandemic or other reasons). Such delays may take weeks or months to resolve and may result in increased costs as well as production and product fulfillment delays. In addition, in some cases, parts obsolescence may require a product re-design to ensure quality replacement components. These delays could cause significant delays in manufacturing and loss of sales, leading to adverse effects significantly impacting our financial condition or results of operations and could injure our reputation.

Our freight and import costs and the timely delivery of our products could be adversely impacted by a number of factors which could reduce the profitability of our operations, including: higher fuel costs; potential port closures; theft in transit; permit or customs clearance issues; increased government regulation or changes for imports of foreign products into the United States; delays created by terrorist attacks or threats, public health issues and pandemics and epidemics, national disasters or work stoppages; and other matters. Any interruption of supply for any material components of our products could significantly delay the shipment of our products and have a material adverse effect on our revenues, profitability and financial condition. International or domestic geopolitical or other events, including the imposition of new or increased tariffs and/or quotas by the U.S. government on any of these raw materials or components, could adversely impact the supply and cost of these raw materials or components, and could adversely impact the profitability of our operations. Significantly, the COVID-19 pandemic has, and may continue to, adversely impact our costs and product delivery timing and the availability and favorable pricing of materials used in our products. In addition, due to rapidly increasing demand for our products, we have faced significant challenges, including production backlogs and resulting customer complaints. All of the forgoing could negatively impact our financial results.

If we are unable to successfully design and develop or acquire new products, our business may be harmed.

To maintain and increase sales we must continue to introduce new products and improve or enhance our existing products or new products. The success of our new and enhanced products depends on many factors, including anticipating consumer preferences, finding innovative solutions to consumer problems or acquiring new solutions through mergers and acquisitions, differentiating our products from those of our competitors, and maintaining the strength of our brand. The design and development of our products as well as acquisitions of other businesses are costly and we typically have several products in development at the same time. Problems in the design or quality of our products, or delays in product introduction, may harm our brand, business, financial condition, and results of operations.

Our business could be harmed if we are unable to accurately forecast demand for our products or our results of operations.

To ensure adequate inventory supply, we forecast inventory needs and often place orders with our manufacturers before we receive firm orders from our retail partners or customers. If we fail to accurately forecast demand, we may experience excess inventory levels or a shortage of product.

If we underestimate the demand for our products, we or our suppliers may not be able to scale to meet our demand, and this could result in delays in the shipment of our products and our failure to satisfy demand, as well as damage to our reputation and retail partner relationships. If we overestimate the demand for our products, we could face inventory levels in excess of demand, which could result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would harm our gross margins. For example, driven by strong customer demand and a shortage of product in 2020, we experienced a product backlog. In addition, failures to accurately predict the level of demand for our products could cause a decline in sales and harm our results of operations and financial condition.

In addition, we may not be able to accurately forecast our results of operations and growth rate. Forecasts may be particularly challenging as we expand into new markets and geographies and develop and market new products for which we have no or limited historical data. Our historical sales, expense levels, and profitability may not be an appropriate basis for forecasting future results. Our lack of historical data related to new products makes it particularly difficult to make forecasts related to such products. The lead times and reliability of our suppliers has been inconsistent as a result of the COVID-19 pandemic, and may be affected by global events in the future. These effects are expected to last through the remainder of the pandemic. Pandemic related variances require a very quick pivot and adjustments to the supply chain, production and marketing. If we are unable to make these changes quickly or at all our inventory, production and sales may be materially affected.

Failure to accurately forecast our results of operations and growth rate could cause us to make poor operating decisions that we may not be able to correct in a timely manner. Consequently, actual results could be materially different than anticipated. Even if the markets in which we compete expand, we cannot assure you that our business will grow at similar rates, if at all. Forecasting has been particularly challenging during the COVID-19 pandemic.

We rely upon,on a limited number of third parties for shipping, transportation, logistics, marketing and expectsales of our products and components. A loss of any of such third-party relationships would have a material adverse effect on our operating results.

We rely on third parties to ship, transport, and provide logistics for our products and components. Our dependence on a limited number of third parties for these services leaves us particularly vulnerable due to our need to secure these parties’ services on favorable terms. Loss of, or an adverse effect on, any of these relationships or failure of any of these third parties to perform as expected could have a material and adverse effect on our operations, sales, revenue, margins, liquidity, reputation and financial and operating results.

We are dependent on our relationships with third parties for assistance in the preparation of our financial statements, which allow us to meet our financial reporting obligations.

We utilize third-party consultants to assist management in the preparation of our financial statements. Our ability to meet our future financial reporting obligations will continue to depend in part on such services provided by these third parties. Changes in such third-party relationships, personnel, or capacity may impact our ability to timely file our financial statements, which could impact our ability to maintain our listings on the Nasdaq Capital Market and CSE. Failure to maintain such listings could materially adversely affect our ability to raise capital. We have encountered challenges meeting reporting timelines in the past, and we may experience additional challenges in the future.

Any future litigation could have a material adverse impact on our results of operations, financial condition and liquidity.

From time to time, we may be subject to litigation including product liability claims, intellectual property claims, employment-related claims, commercial disputes, regulatory and enforcement action and stockholder class and derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. In addition, our reputation could be adversely affected by negative publicity surrounding such events regardless of whether or not claims against us are successful. A successful claim brought against us in excess of available insurance or not covered by insurance or indemnification agreements, or any claim that results in significant adverse publicity against us, could have a material adverse effect on our business and our reputation. Furthermore, the litigation process can put material or excessive demands on the time of management and employees, interfering with performance of regular responsibilities and stressing or delaying business operations, and the outcome of litigation is inherently uncertain. We can provide no assurances that these matters will not have a material adverse effect on our business.

If we deliver products with defects, we may be subject to product recalls or negative publicity, our credibility may be harmed, market acceptance of our products may decline, and we may be exposed to liability.

We sell complex products including products that are new to the market and without a long performance history. These products may contain certain design and manufacturing defects including defects in materials and components that we purchase from third parties. There can be no assurance we will be able to detect and fix all defects in the products we sell. Accordingly, our products may experience quality and service problems from time to time that could result in decreased sales and operating margin and harm to our reputation.

We issued a product safety notice in February 2021 and, in connection therewith, took a reserve of $195,000 which we believe to have been adequate. If the safety update fails in the future, new issues arise, or a substantial number of consumers continue to seek an updated product, we could also experience damage to our reputation, business, operations (including production rate) and revenues.

Seasonality may in the future cause our operating results to vary from quarter to quarter.

The seasonality of our sales may cause our operating results to vary in the future. Seasonal variations in our operating results may reduce our cash on hand, increase our inventory levels, and extend our accounts receivable collection periods. This in turn may cause us to increase our debt levels and interest expense to fund our working capital requirements.

Our business relationships with third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial return.

We rely upon strategic alliances with original equipment manufacturersbusiness relationships for the manufacturing and distribution of itscertain products.

Our business depends upon our ability to manufacture and sell our products to our customers. We currently do not have the capabilities to manufacture some of our products and product components on our own and are required to enter into agreements with third parties for certain of such services. Additionally, due to the introduction of the Byrna HD in the fiscal year ended November 30, 2019, we only began recently to establish a sales team for our product and utilize third-party manufacturer’s representatives and a third party e-commerce shopping platform to facilitate sales most sales of such product. We also rely upon third parties for materials and components, as well as shipping, certain marketing and sales-related services. There can be no assurance that such strategic alliancesbusiness relationships can be achieved or that the Corporationmaintained, will be able to maintain existing strategic alliancesextended or that werenewed, or will achieve ourtheir goals.

In order If we are unable to commercialize its technology, we must either acquire or develop an internal marketingenter into business relationships for distribution and sales force with technical expertise and supporting distribution capabilities or arrange for third parties to perform these services.

In order to marketif any of our products,current business relationships are terminated or fail to achieve their goals, our business, operating results and financial condition will be materially adversely affected.

To the extent that we must either acquire orinternally develop a sales force, the cost of establishing and distribution infrastructure.maintaining a sales force would be substantial and may exceed our cost effectiveness. The acquisition or development of a sales and distribution infrastructure wouldcould require substantial resources, which may divert the attention of our management and key personnel and defer our product development and deployment efforts. To the extentIn addition, in marketing our products, we would likely compete with companies that we intocurrently have extensive and well-funded marketing and sales arrangementsoperations. Despite marketing and sales efforts, we may be unable to compete successfully against these companies. We may not be able to do so on favorable terms. We could rely on third parties to market and sell our products in certain territories, rather than establishing an internal sales force. When we contract with other companies,third parties, including entering into collaborations with partners, for the sale and marketing of our products, revenues will depend onupon the efforts of others. These effortsthese third parties, which may not be successful. If we fail to develop substantial sales,establish successful marketing and distribution channels,sales capabilities or to enter intomake arrangements with third parties for thosesuch purposes, we will experience delays in product sales and incur increased costs, which may affect our business, operatingfinancial condition, results of operations and prospects will be materially adversely affected.

Our business depends on our ability to prevent or mitigate the effects of a cybersecurity attack.

Our information technology systems, including third party run e-commerce and payment service systems, may be subject to cyber-attacks, security breaches or computer hacking including a ransomware attack encrypting corporate information technology equipment, a directed attack against us or a data breach or cyber incident happening to a third-party network and affecting us. Regardless of our efforts, there may still be a breach, and the costs to eliminate, mitigate or address the aforementioned threats and vulnerabilities before or after a cyber-incident could be significant. Any such breaches or attacks could result in interruptions, delays or cessation of operations and loss of existing or potential suppliers or customers. Moreover, at this time, we do not carry cyber-insurance. In addition, breaches of our security measures and the unauthorized dissemination of sensitive personal, proprietary or confidential information about our business, our business partners, customers or other third parties could expose us to significant potential liability and reputational harm. Moreover, any material disruption or breach of our information technology systems or those of third-party partners could materially damage our customer and business partner relationships, and subject us to significant reputational, financial, condition.legal, and operational consequences.

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Risks Related to Our Industry

The markets for security products and non-lethal defense technology are in a state of technological change which could have a material adverse impact on our business, financial condition and results of operations.

The markets for security products and non-lethal defense technology, in which our products and services are characterized, byare associated with rapidly changing technology, and evolving industry standards, which could result in product obsolescence or short product life cycles.

Accordingly, our success is dependent upon itsour ability to anticipate technological and other changes in the industries it serves and to successfully identify, obtain, develop and market new products that satisfy evolving industrycustomer requirements.

There can be no assurance that we will successfully develop new products or enhance and improve itsour existing products or that any new products and enhanced and improved existing products will achieve market acceptance. Further, there can be no assurance that competitors will not market products that have perceived advantages over the our products or which render the products currently sold by us obsolete or less marketable.

We must commit significant resources to developing new products before knowing whether itsour investments will result in products the market will accept. To remain competitive, we may be required to invest significantly greater resources then currently anticipated in research and development and product enhancement efforts,efforts.

The non-lethal defense technology industry and result in increased operating expenses. There can be no assurance that we will have adequate capital to meet these demands.

Our industry issecurity products markets are highly competitive and composed of many domestic and foreign companies.our success depends upon our ability to effectively compete with numerous worldwide business.

We have experienced and expect to continue to experience, substantialface competition from numerous competitors witha number of businesses, including worldwide businesses, many of which have substantially greater financial resources, operating scale, and whom we expect to continue to improve their products and technologies. Competitors may announce and introduce new products, services or enhancements that better meet the needsa broader range of end-users or changing industry standards, or achieve greater market acceptance due to pricing, sales channels or other factors. Competitors may be able to respond more quicklyproduct offerings than we can to changes in end-user requirements and devote greater resources to the enhancement, promotion and sale of their products.

We are materially dependent on acceptance of our products bydo. In the law enforcement both domesticmarket, in particular, we face competitors who have long-term, established relationships with security professionals who subscribe to an integrated suite of their products, some of which offer features that our current products do not support, and international,who may have made substantial investments in their hardware, creating an entry barrier to introduction of our competing product. Such competition could adversely affect our ability to win new contracts and federal markets.sales and renew existing contracts. We operate in a period of intense competition in some key markets, which could affect the profitability of the contracts and sales we do win. If law enforcement agencies choose notwe cannot successfully compete in our industry and business segments, our business, financial condition and results of operations could suffer.

Expansion of sales of our product to purchase our products, our revenues will be adversely affected.

A substantial number ofschools, law enforcement and corrections agenciesother governmental or quasi-governmental entities may not purchaserequire expenditure of resources and lengthen our products. Lawsale cycle.

Generally, entities such as schools, law enforcement and corrections agencies may be influenced by claimsother governmental or perceptions that WEPs and BIPs (each as hereinafter defined), such asquasi-governmental entities consider a wide range of issues before committing to purchase non-lethal defense products, including product benefits, training costs, the cost to use our products are unsafein addition to, or in place of, other products, budget constraints and product reliability, safety and efficacy. Such considerations may be usedresult in an abusive manner. Salesa sales cycle that is longer than and different from sales process related to dealers and consumers. Adverse publicity surrounding our products or the safety of such products also could lengthen our sales cycle with these customers. In addition, if we successfully expand sales of our products to these agencies may also be delayed or limited by these claims or perceptions.

Mostcustomers, we could encounter challenges related to funding of our end-user customers are subject to budgetarylaw enforcement and political constraints, particularly in the currently challenging economic environment, that may delay or prevent sales.

Most of our end-user customers are government agencies. These agencies often do not set their own budgetsother governmental and therefore, have limited control over the amount of money they can spend. In addition, these agencies experience political pressure that may dictate the manner in which they spend money. As a result, even if an agency wants to acquire our products, it may be unable to purchase them due to budgetary or political constraints. Currently, many governmental agencies are continuing to experience severe budgetary constraints. There can be no assurance thatquasi-governmental entities generally, the economic impact of the COVID-19 pandemic on the operating budgets of agencies, states and budgeting issues will not worsenmunicipalities that fund such entities and adversely impact sales of our products. Some government agency ordersthe recent changes in public sentiment around police funding. We may also be canceled or substantially delayed due to budgetary, political or other scheduling delays which frequently occurincur substantial selling costs and expend significant effort in connection with the acquisitionevaluation of our products by such agencies and such cancellations may accelerate or be more severe than we have experienced historically as a result of the current economic environment.

We may face personal injury, wrongful death and other liability claims that harm our reputation and adversely affect our sales and financial condition.

Our products can be used in aggressive confrontations that may result in serious, permanent bodily injury or death to those involved. Our products may be associated withpotential customers before they place an order. If these injuries. A person injured in a confrontation or otherwise in connection with the use ofpotential customers do not ultimately purchase our products, may bring legal action against us to recover damages onwe will have expended significant resources and received no revenue in return.

Epidemic and pandemic diseases (including the basis of theories including personal injury, wrongful death, negligent design, defective product or inadequate warning. We are currently subject to a number of such lawsuits. We may also be subject to lawsuits involving allegations of misuse of our products. If successful, personal injury, misuse and other claimsCOVID-19 pandemic) could have a material adverse effect on our operating results andbusiness, financial condition, results of operations, cash flows, and ability to comply with regulatory requirements.

Outbreaks of epidemic, pandemic, or contagious diseases, such as COVID-19, could cause disruptions in our business and the businesses of third parties who we depend upon for materials and manufacturing, marketing and other services. These disruptions could include disruptions in our ability to receive materials, manufacture our products, distribute our products, market our products, or obtain services. These disruptions have caused, and could cause further, closures of our facilities or the facilities of our suppliers, manufacturers and dealers, as well as cancellation of events that present significant marketing opportunities such as industry conventions, and trade shows. Any disruption of the businesses of our suppliers, manufacturers or dealers would likely impact our sales and operating results. In addition, a significant outbreak of epidemic, pandemic, or contagious diseases in the human population could result in negative publicity abouta widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products. Although we carry product liability insurance, we do incur significant legal expenses within our self-insured retention in defendingAny of these lawsuits and significant litigationevents could also result in a diversion of management’s attention and resources, negative publicity and a potential award of monetary damages in excess of our insurance coverage. The outcome of any litigation is inherently uncertain and there can be no assurance that our existing or any future litigation will not have a material adverse effect on our revenues,business, financial condition, results of operations, or cash flows. Additionally, such outbreaks could disrupt our ability to timely file periodic reports required by the Securities and Exchange Commission or the stock exchanges on which our common stock is listed, which may lead to the delisting or downgrading of our common stock on such stock exchanges.

In particular, the COVID-19 pandemic restrictions intended to prevent and mitigate its spread, challenges related to vaccination rollout and new variants of the virus have impacted, and may continue to (and the future outbreak of other highly infectious or contagious diseases likely would), significantly and negatively impact our business, for reasons including without limitation: the shut-down of production facilities and distribution facilities as a result of government restrictions, illness and special cleaning; slow-down in production and increased costs due to COVID-19-related health and safety protocols; limited availability of plastic and other components of our products which cause price pressures as well as impair our ability to meet production demand; and shipping challenges. Since March 2020, many of our employees worked remotely for an extended period of time and some continue to do so. Additional extended periods of remote work arrangements could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. Remote work conditions, including challenges in coordinating with third parties and lack of access to certain records and documents, have caused administrative issues and contributed to our inability in some cases to timely file certain reports required by the SEC. Moreover, the COVID-19 pandemic has had and is expected to continue to have a significant negative impact on general economic conditions, which could adversely impact the sales of our products. All of the forgoing may adversely impact our financial condition or financial results.

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Recent events have demonstrated that businesses and industries throughout the world are very tightly connected to each other. Thus, events seemingly unrelated to us, or to its industry, may adversely affect its finances or operations in ways that are hard to predict or defend against. For example, credit contraction in financial markets may hurt our ability to access credit when it is needed or rapid changes in foreign exchange rates may adversely affect financial results. Finally, a reduction in credit, combined with reduced economic activity, may adversely affect businesses and industries that collectively constitute a significant portion of our customer base. As a result, these customers may need to reduce their purchases of our products, or there may be greater difficulty in receiving payment for the products that these customers purchase from us. Any of these events, or any other events caused by turmoil in world financial markets, may have a material adverse effect on our business, operating results and financial condition.

Our business is subject to a number of risks and hazards including industrial accidents,loss of parts or finished goods in inventory or shipment, labor disputes and changes in the regulatory environment.

Such occurrences could delay or halt production or sale of goods, result in damage to equipment, personal injury or death, monetary losses and possible legal liability. Although we currently maintain freight and inventory insurance and general liability insurance in amounts which it considerswe consider adequate, the nature of these risks is such that liabilities might exceed policy limits, the liabilities and hazards might not be insurable, or we may elect in the future not to insure against such liabilities due to high premium costs or other reasons, in which event we could incur significant costs that could have a materially adverse effect upon itsour financial position.

CertainTariffs, sanctions, restrictions on imports or other trade barriers between the United States and various countries, most significantly China, may impact our revenue and results of operations.

Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward internationally operating companies, and resulting tariffs, export controls, trade sanctions, sanctions blocking statutes, or other trade barriers, or changes to tax or other laws and policies, have been and may continue to be disruptive and costly to our business, and these can interfere with our expanding international sales, supply chain, production costs, customer relationships, and competitive position. For example, general trade tensions between the United States and China began escalating in 2018, with multiple rounds of U.S. tariffs on Chinese-made goods taking effect. These tariffs currently affect some of the components of our products we import from China, and we may be required to raise our prices on those products due to the tariffs or share the cost of such tariffs with our customers, which could harm our operating performance. We work closely with third parties who monitor, evaluate and keep us informed about the potential impact of the effective and proposed tariffs as well as other recent changes in foreign trade policy on our supply chain, costs, sales and profitability and seek to implement strategies to mitigate such impact, including reviewing sourcing options and working with our vendors and merchants to seek to minimize product coming from China both in existing and new product development and select suppliers in low cost regions where tariff issues are less challenging. Notwithstanding these efforts, it is possible that further tariffs may be imposed on our other imports, or that our business will be impacted by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, causing us to raise prices or make changes to our operations, any of which could materially harm our revenue or operating results. Further escalation of specific trade tensions, such as those between the United States and China, or in global trade conflict more broadly could be harmful to global economic growth, and related decreases in confidence or investment activity in the global markets would adversely affect our business performance. We do business in emerging market jurisdictions, such as South Africa, where economic, political and legal risks are heightened.

Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible sanctions and other penalties.

Our business is subject to a number of federal, state, local and foreign laws and regulations governing data privacy and security, including with respect to the collection, storage, use, transmission and protection of personal information.

In addition, a number of U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of sensitive personal information, such as social security numbers, financial information and other personal information. For example, all 50 states now have data breach laws that require timely notification to individual victims, and at times regulators, if a company has experienced the unauthorized access or acquisition of sensitive personal data. State law developments, which may impose substantial penalties for violations, could impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business. We do not currently have insurance to cover us in the event of a data breach.

The interpretation and enforcement of these laws and regulations are uncertain and subject to change, and it may require substantial costs to assess, monitor and implement compliance with any additional requirements. Failure to comply with applicable law, including international data protection laws and regulations could result in government enforcement actions (which could include substantial civil or criminal penalties), private litigation or adverse publicity and could negatively affect our operating results and business.

Failure to comply with the U.S. Foreign Corrupt Practices Act or other applicable anti-corruption legislation, and export controls and trade sanctions, could result in fines or criminal penalties if we expand our business abroad.

We, our business partners, and the industries in which we operate are subject to continuing scrutiny by regulators, other governmental authorities and private sector entities or individuals in the United States, South Africa, the European Union, China, and other jurisdictions, which may lead to enforcement actions, adverse changes to our business practices, fines and penalties, or the assertion of private litigation claims and damages that could be material. For example, the expansion of our business internationally exposes us to export controls, trade sanctions import and export clearance requirements, customs, tariffs, anti-corruption legislation, anti-boycott requirements and other obligations and restrictions imposed by the United States and other governments. The U.S. Departments of Justice, Commerce, Treasury, State, U.S. Customs and Border Protection, and other U.S. and foreign agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against companies for violations of export controls, trade sanctions, import and export clearance requirements, customs regulations, anti-corruption legislation, including the Foreign Corrupt Practices Act, anti-boycott requirements and other federal statutes, sanctions and regulations and, increasingly, similar or more restrictive foreign laws, rules and regulations, which may also apply to us. By virtue of these laws and regulations, and under laws and regulations in other jurisdictions, we may be obliged to limit our business activities, we may incur costs for becoming and staying compliant, and we may be subject to enforcement actions or penalties for noncompliance, including fines, suspension, debarment from bidding for or performing government contracts, or suspension of our export privileges, which could materially adversely affect our business, operations, products, technology, brand, growth efforts, employees, and business partners. In recent years, U.S. and foreign governments have increased their oversight and enforcement activities with respect to these laws and we expect the relevant agencies to continue to increase these activities. A violation of these laws, sanctions or regulations could result in restrictions on our exports, civil and criminal fines or penalties and could adversely impact our business, operating results, and financial condition. There can be no assurance that the risk management and compliance programs we adopt will mitigate legal and compliance risks.

If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations would be harmed.

Our reputation and our customers’ willingness to purchase our products depend in part on our suppliers’, manufacturers’, and retail partners’ compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our suppliers, manufacturers, and retail partners and cannot guarantee their compliance with ethical and lawful business practices. If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.

Risks Related to our Intellectual Property

If we are unable to protect our intellectual property, we may lose a competitive advantage or incur substantial litigation costs to protect our rights.

Our future success depends upon our proprietary technology. Our protective measures, including patent and trade secret protection and nondisclosure agreements, may prove inadequate to protect our proprietary rights. The right to stop others from misusing our trademarks, service marks, patents, designs and copyright in commerce depends to some extent on our ability to show evidence of enforcement of our rights against such misuse in commerce. Our efforts to stop improper use, if insufficient, may lead to loss of trademark and service mark rights, brand loyalty, and notoriety among our customers and prospective customers. The scope of any patent that we have or may obtain may not prevent others from developing and selling competing products. The validity and breadth of claims covered in technology patents involve complex legal and factual questions, and the resolution of such claims may be highly uncertain, and expensive. In addition, our patents may be held invalid upon challenge, or others may claim rights in or ownership of our patents.

We may be subject to intellectual property infringement claims, which could cause us to incur litigation costs and divert management attention from our business.

While we believe that our products and intellectual property do not infringe upon the proprietary rights of third parties, and undertake efforts to design around existing third-party patents or designs that we are aware of, a substantial portion of our commercial success depends upon us not infringing the intellectual property rights of others. We may become subject to claims by third parties that our technology infringes their intellectual property rights. Although all reasonable efforts are made to avoid third-party patents, there is no assurance that were a lawsuit to be brought by a third party, we would prevail. We may also become subject to these claims through indemnities that we provide to manufacturer’s representatives, distributors, dealers, retail partners, and certain service providers and consultants.

Any intellectual property infringement claims against us, with or without merit, could be costly and time-consuming to defend and divert our management’s attention from our business. If our products were found to infringe a third party’s proprietary rights, we could be required to enter into costly royalty or licensing agreements to be able to sell our products, and any allegation of infringement could cause certain reputational damage for us and the Byrna brand. Royalty and licensing agreements, if required, may not be available on terms acceptable to us or at all.

Risks Related to our Securities

Our trading market is limited, and the trading market for our common stock may not develop or be sustained.

Our common stock is listed in the United States on the Nasdaq Capital Market (since May 5, 2021, prior to which date our common stock was listed for quotation on the OTCQB marketplace operated by OTC Markets Group Inc.) and in Canada on the CSE; trading has been limited, a substantial amount of our outstanding shares of common stock were issued in private placement and subject to resale restrictions under federal securities laws, and we cannot predict the trading volume in our common stock. In the absence of an active trading market:

A limited trading market could impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. A limited trading market may also reduce the fair market value of your shares and may also impair our ability to raise capital to continue to fund operations by selling shares.

We may not maintain qualification for listing on Nasdaq, which may impair your ability to sell your shares.

Our common stock is currently listed on the Nasdaq Capital Market and in Canada on the CSE. The Nasdaq Capital Market requires listed companies to meet certain listing criteria including total number of stockholders, Board of Directors independence, minimum stock price, total value of public float, and in some cases total stockholders’ equity and market capitalization requirements. If for any reason our common stock does not maintain eligibility for listing on the Nasdaq Capital Market, we may list our common stock elsewhere, such as one of the OTC markets, which are generally considered less liquid and more volatile than a national securities exchange, and could mean that certain institutional investors could no longer hold or purchase our stock, and as a result, a purchaser of our common stock may find it more difficult to dispose of, or to obtain accurate quotations as to the price of their shares. This would materially and adversely affect the liquidity of our common stock.

The market price of our common stock may be volatile, which could result in substantial losses for purchasers.

The market price for our common stock may be volatile in response to factors including the following:

In addition, if we are unable to successfully meet investor expectations, even if by only a small margin, there could be significant impact on the market price of our common stock.

In some cases, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our business operations and reputation.

Our common stock is listed on two separate stock markets, and investors seeking to take advantage of price differences between such markets may create unexpected volatility in our stock price; in addition, investors may not be able to move stocks for trading between such markets.

Our common stock is listed on both the Nasdaq Capital Market and the CSE. Price levels for our ordinary shares could fluctuate significantly on either market, independent of our share price on the other market. Investors could seek to sell or buy our shares to take advantage of any price differences between the two markets through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility on either exchange with respect to both our share price and the volume of shares available for trading.

Exercise of options or warrants or vesting of restricted stock units may have a dilutive effect on your percentage ownership and may result in a dilution of your voting power and an increase in the number of shares of common stock eligible for future resale in the public market, which may negatively impact the trading price of our shares of common stock.

The exercise of some or all of our outstanding options and warrants, and the vesting of restricted stock units, could result in significant dilution in the percentage ownership interest of our existing stockholders and in a significant dilution of voting rights and earnings per share.

As of May 31, 2021, we had outstanding (i) warrants to purchase up to 99,055 shares of our common stock at a weighted exercise price of approximately $1.78 per share, (ii) options for the issuance of up to 642,050 shares of our common stock upon exercise at a weighted average exercise price of $3.01 under our 2020 Equity Incentive Plan, and (iii) 17,479,928 restricted stock units.

A failure of our control systems to prevent error or fraud may materially harm our company.

Proper systems of internal controls over financial accounting and disclosure are critical to the operation of a public company. Given the size of our company and the limited number of fulltime employees that we have employed, there may continue to be certain limitations on the effectiveness of our internal controls. Moreover, we do not expect that disclosure controls or internal control over financial reporting will prevent all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Failure of our control systems to prevent error or fraud could materially and adversely impact us.

Risks Related to this Offering

Investors may not be able to resell their shares at or above the public offering price.

We listed our common stock on the Nasdaq Capital Market on May 5, 2021, prior to which date our common stock was traded on the OTCQB. Our stock is also traded on the CSE. The public offering price for our common stock will be determined through negotiations between the underwriters and us, and may vary substantially from the market price of our common stock following this offering. If you purchase shares of our common stock in this offering, you may not be able to resell those shares at or above the public offering price at which you purchased such shares.

Our directors, executive officers, and significant stockholders may be able to influence us after this offering.

Upon completion of this offering, our directors, executive officers, and other holders of more than 5% of our common stock, together with their affiliates, will own, in the aggregate, 34.8% of our outstanding common stock. As a result, these stockholders, acting together, may have the ability to influence the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. In addition, these stockholders, acting together, may be able to influence the management and affairs of our company. Accordingly, this concentration of ownership might decrease the market price of our common stock by:

● delaying, deferring, or preventing a change in control of the company;

● impeding a merger, consolidation, takeover, or other business combination involving us; or

● discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the company.

Our stock price may be volatile or may decline, including due to factors beyond our control, resulting in substantial losses for investors purchasing shares in this offering.

The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

● actual or anticipated fluctuations in our results of operations;

● the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;

● failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

● ratings changes by any securities analysts who follow our company;

● sales or potential sales of shares by our stockholders, or the filing of a registration statement for these sales;

● adverse market reaction to any indebtedness we may incur or equity we may issue in the future;

● announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

● publication of adverse research reports about us, our industry, or individual companies within our industry;

● publicity related to problems in our manufacturing or the real or perceived quality of our products, as well as the failure to timely launch new products that gain market acceptance;

● changes in operating performance and stock market valuations of companies in our industry;

● price and volume fluctuations in the overall stock market, including as a result of trends in the U.S. or global economy;

● any major change in our Board of Directors or management;

● lawsuits threatened or filed against us or negative results of any lawsuits;

● security breaches or cyberattacks;

● legislation or regulation of our business;

● loss of key personnel;

● new products introduced by us or our competitors;

● developments with respect to our trademarks, patents, or proprietary rights;

● general market conditions; and

● other events or factors, including those resulting from war, incidents of terrorism, pandemics, or responses to these events, which could be unrelated to us or outside of our control.

In addition, stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies in our industry. In the past, stockholders of other public companies have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and harm our business, results of operations, financial condition, reputation, and cash flows. As a result, you may be unable to resell your shares of common stock at or above the public offering price at which you purchased your shares.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline.

The trading market for our common stock will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. We may be slow to attract research coverage and the analysts who publish information about our common stock could have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease to regularly cover us or fail to publish reports, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.

We estimate that the net proceeds from the sale of shares of our common stock in this offering will be approximately $ million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We expect to use the net proceeds from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds from this offering for acquisitions or strategic investments in complementary businesses or technologies. We do not currently have any plans for any such acquisitions or investments. We have not allocated specific amounts of net proceeds for any of these purposes. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds will be used appropriately or to influence our decisions regarding the use of proceeds. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from the intended uses described in this prospectus. The net proceeds may be used for purposes that do not result in an increase in the value of our business, which could cause our stock price to decline.

Substantial future sales, or the perception or anticipation of future sales, of shares of our common stock could cause our stock price to decline.

Our stock price could decline as a result of substantial sales of our common stock, or the perception or anticipation that such sales could occur, particularly sales by our directors, executive officers, and significant stockholders, a large number of shares of our common stock becoming available for sale, or the perception in the market that holders of a large number of shares intend to sell their shares.

In connection with this offering, subject to certain exceptions, our executive officers and directors, and certain shareholders, have agreed to enter into lock-up agreements that restrict their ability to sell or transfer shares of our capital stock for 180 days following the offering. The representatives may, in their sole discretion, permit our shareholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

We may in the future register shares of common stock that we have issued or may issue under our equity compensation plans and shares of common stock that have been issued upon the conversion of certain convertible securities. Accordingly, these shares will be able to be freely sold in the public market upon issuance as permitted by any applicable securities laws, applicable vesting requirements, and the lock-up agreements described above to the extent such shares are held by our executive officers and directors.

Purchasers in this offering will experience immediate and substantial dilution.

The public offering price per share will be substantially higher than the pro forma net tangible book value per share of our common stock outstanding prior to this offering. As a result, investors purchasing common stock in this offering will experience immediate dilution of $      per share based on an assumed public offering price of $      per share. In addition, we have issued options and warrants to acquire common stock at prices significantly below the public offering price. To the extent outstanding options and warrants are ultimately exercised, there will be further dilution to investors in this offering. In addition, if we issue additional equity securities, you will experience additional dilution.

The ongoing requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the Nasdaq Capital Market listing standards and other applicable securities laws, rules, and regulations. Our recent required compliance with these laws, rules, and regulations since our listing on Nasdaq on May 5, 2021 increased our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and our internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures, and our internal control over financial reporting to meet this standard, significant resources and management oversight may be required. Further, we are subject to the CSE listing standards and applicable law, rules and regulations in Canada, all of which makes some activities even more difficult, time-consuming, or costly, and increase demand on our systems and resources. As a result, management’s attention may be diverted from other business concerns and our costs and expenses will increase, which could harm our business and results of operations. Although we have already hired additional employees to comply with these requirements, we will need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from sales-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal, administrative, or other proceedings against us and our business may be harmed.

As a result of disclosure of information in this prospectus and in filings required of us as a public company, our business and financial condition will become more visible, which could be advantageous to, or harm our relationships with, our competitors, suppliers, manufacturers, retail partners, and customers. These disclosures may also make it more likely that we will experience an increase in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims are resolved in our favor the time and resources necessary to resolve them could divert the resources of our management and harm our business and results of operations.

Our charter documents and Delaware law could make it more difficult for a third party to acquire us and discourage a takeover

Our Certificate of Incorporation, Amended and Restated Bylaws, and Delaware law contain certain provisions that may have the effect of deterring or discouraging, among other things, a non-negotiated tender or exchange offer for shares of common stock, a proxy contest for control of our company, the assumption of control of our company by a holder of a large block of common stock, and the removal of the management of our company. Such provisions also may have the effect of deterring or discouraging a transaction which might otherwise be beneficial to stockholders. Our certificate of incorporation also may authorize our board of directors, without stockholder approval, to issue one or more series of preferred stock, which could have voting and conversion rights that adversely affect or dilute the voting power of the holders of common stock. Delaware law also imposes conditions on certain business combination transactions with “interested stockholders.” Our certificate of incorporation authorizes our Board of Directors to fill vacancies or newly created directorships. A majority of the directors then in office may elect a successor to fill any vacancies or newly created directorships. Such provisions cold limit the price that investors might be willing to pay in the future for shares of our common stock and impede the ability of the stockholders to replace management.

The elimination of monetary liability against our directors, officers, and employees under Delaware law and the existence of indemnification rights to our directors, officers, and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers, and employees. We also expect to enter into contractual indemnification obligations under employment agreements with our executive officers. The foregoing indemnification obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup. These provisions and resultant costs may also discourage us from bringing a lawsuit against our directors and officers are orfor breaches of their fiduciary duties and may become associated with other companies insimilarly discourage the same or related industries which may give rise to conflictsfiling of interest.

Directors who have a material interest in any person who is a party to a material contract or a proposed material contract with us are required, subject to certain exceptions, to disclose that interest and generally abstain from voting on any resolution to approve the contract. In addition, the directors and the officers are required to act honestly and in good faith with a view toderivative litigation by our best interest Ourstockholders against our directors and officers even though such actions, if successful, might otherwise benefit our company and our stockholders.

Our amended and restated bylaws provide exclusive forum provisions applicable to substantially all disputes between us and our stockholders as well as claims brought under the Securities Act of 1933, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

 Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have either other full-time employmentjurisdiction, the federal district court for the District of Delaware) is the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation; (b) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee, or agent of the Corporation to the Corporation or the Corporation’s stockholders; (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, the Certificate of Incorporation, or these by-laws; or (d) any action asserting a claim governed by the internal affairs doctrine.

In addition, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint against us asserting a cause of action arising under the Securities Act of 1933, as amended. These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions or multiple jurisdictions, which could result in expensive and protracted litigation with potentially conflicting outcomes that could exhaust our insurance coverage leaving us exposed to substantial legal expenses and judgments, or otherwise harm our business, or time restrictions placed on themresults of operations, and accordingly, we will not be the only business enterprise of these directors and officers.financial condition.

A company our Chief Financial Officer is involved with is subject to a cease and desist order for failure to file required financial information

On October 11, 2012, the British Columbian Securities Commission (the “BCSC”). ordered that all trading in the securities of Pacific Copper Corp. (“Pacific Copper”) cease until it files interim financial statements and Management’s Discussion and Analysis for the interim period ended July 31, 2012, as required under applicable Canadian securities laws. As of the date of this prospectus, the cease trade order has not been revoked or rescinded. Rakesh Malhotra, our Chief Financial Officer, was at the time of the order by the BCSC and is as of the date of this prospectus the Chief Financial Officer of Pacific Copper. The financial statements have not been filed due to Pacific Copper’s lack of funds. We do not believe that this has an implication on Mr. Malhotra’s performance as our Chief Financial Officer.

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We do not expectintend to pay dividends.dividends on our common stock for the foreseeable future. If our stock price does not appreciate after you purchase our shares, you may lose some or all of your investment.

We have not paid dividends in the pastcurrently intend to retain any future earnings and we do not expect to declare or pay any dividends on our common stock in the foreseeable future. The declaration and payment in the future of any cash or stock dividends on the common stock will be at the discretion of our board of directors and will depend upon a variety of factors, including our ability to service our outstanding indebtedness, if any, and to pay dividends on securities ranking senior to the common stock, our future earnings, if any, capital requirements, financial condition and such other factors as our board of directors may consider to be relevant from time to time. Our earnings, if any, are expected to be retained for use in expanding our business.

Our common stock is subject to volatility.

There can be no assurance that the market price for our common stock will remain at its current level and a decrease in the market price could result in substantial losses for investors. The market price of our common stock may be significantly affected by one or more of the following factors:

• announcements or press releases relating to the industry or to our own business or prospects;
• regulatory, legislative or other developments affecting us or the industry generally;
• sales by holders of restricted securities pursuant to effective registration statements or exemptions from registration;
• actual or anticipated fluctuations in our quarterly financial and operating results;
• our failure to meet the expectations of the investment community and changes in investment community recommendations or estimates of our future operating results;
• strategic moves by our competitors, such as product announcements or acquisitions;
• litigation;
• general market conditions;
• other domestic and international macroeconomic factors unrelated to our performance; and
• additions or departures of key personnel.

There is a very limited trading market for our shares and no active trading market may develop or be sustained.

Prior to the closing of the Offering, there has been a limited public market for the shares on the OTCQB in the United States. Trading prices and volumes on the OTCQB are thin and erratic. The price paid for each Common Share under the Offering was determined by negotiation between us and the Canadian Agent taking into consideration a number of factors including, but not limited to, the current market price of our common stock, trading prices of our common stock over time, the illiquidity and volatility of our common stock, our current financial condition and the prospects for our future cash flows and earnings, and market and economic conditions at the time of the offering; this price may bear no relation to the price at which our Common Shares will trade in the public market subsequent to the Offering. We cannot predict at what price our Common Shares will trade and there can be no assurance that an active trading market in our Common Shares will develop or be sustained.

Our common stock trades on the OTCQB tier of the OTC Link in the United States. As a result, there are additional risks associated with our common stock and you may be unable to liquidate your investment in our common stock quickly. The trading market for our shares is not always liquid. The market price of our shares has ranged from a high of $0.99 and a low of $0.10 during the twelve-month period ended March 1, 2013. The volume of shares traded at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares.

There can be no assurance that an active market for our Common Shares will be sustained.

Securities of small and mid cap companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors include global economic developments and market perceptions of the attractiveness of certain industries. The price per Common Share is also likely to be affected by change in our financial condition or results of operations as reflected in its quarterly filings. Other factors unrelated to our performance that may have an effect on the price of our Common Shares include the following: the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow our securities; lessening in trading volume and general market interest in our securities may affect a subscriber’s ability to trade significant numbers of Common Shares, the size of our public float may limit the ability of some institutions to invest in our securities; a substantial decline in the price of our Common Shares that persists for a significant period of time could cause our securities to be delisted from an exchange, further reducing market liquidity. If an active market for our Common Shares does not continue, the liquidity of a subscriber’s investment may be limited and the price of our Common Shares may decline. If such a market does not develop, investors may lose their entire investment in our Common Shares.

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The rights of the holders of common stock may be impaired by the potential issuance of preferred stock.

Our certificate of incorporation gives our board of directors the right to create new series of preferred stock. As a result, the board of directors may, without stockholder approval, issue preferred stock with voting, dividend, conversion, liquidation or other rights which could adversely affect the voting power and equity interest of the holders of common stock. Preferred stock, which could be issued with the right to more than one vote per share, could be utilized as a method of discouraging, delaying or preventing a change of control. The possible impact on takeover attempts could adversely affect the price of our common stock. Although we have no present intention to issue any additional shares of preferred stock or to create any new series of preferred stock, we may issue such shares in the future.

Any changes in government policy may result in changes to laws affecting the sale of our products.

This may affect our ability to ship product in the future. The possibility that future governments may adopt substantially different policies, may also affect our operations. Local governments in all countries we deal with issue end user certificates to purchase or receive live ammunition from us. A change in policy may lead to a decision of these countries as to whether or not they will take possession or purchase such munitions. This may have a material adverse effect on our business, operating results, and financial condition.

Our common stock is classified as a “penny stock” under SEC Rules and Regulations, which means broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be adversely affected.

The United States Securities and Exchange Commission (the “SEC”) has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than USD$5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our shares are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of USD$5,000,000 or individuals with a net worth in excess of USD$1,000,000 or annual income exceeding USD$200,000 or USD$300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our shares. We believe that the penny stock rules may discourage investor interest in and limit the marketability of our shares.

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Due to the substantial instability in our common stock price, you may not be able to sell your shares at a profit or at all, and as a result, any investment in our shares could be totally lost.

The public market for our common stock is very limited. As with the market for many other small companies, any market price for our shares is likely to continue to be very volatile. Our common stock has very limited volume and as a “penny stock,” many brokers will not trade in our stock limiting our stocks’ liquidity. As such it may be difficult for you to sell shares of our common stock.

Future sales of our common stock by our existing stockholders may negatively impact the trading price of our common stock.

If a substantial number of our existing stockholders decide to sell shares of their common stock in the public market following the completion of this offering, the price at which our common stock trades could decline. Additionally, the public market’s perception that such sales might occur may also depress the price of our common stock. Pursuant to Canadian securities requirements, our directors, officers and insiders (the “Participants”) will enter into escrow agreements pursuant to which their common shares will be held in escrow and will be released from escrow in equal blocks of 15% of such Participant’s common shares at six-month intervals over the 36 months following the closing of the Offering, with 10% of each Participant’s holdings being released concurrent with the closing of the Offering. The Participants hold a total of 3,466,675 Common Shares. Of the 49,661,936 shares outstanding upon the completion of this public offering, 29,382,238 shares will be freely tradeable without restriction.

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to default on our debt obligations and forfeit our property interests or to reallocate funds from other planned uses. Either of these would have a significant negative effect on our business plans and operations, including our ability to acquire new property interests or fund our obligations for development of our current property interests. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

You will incur immediate and substantial dilution of the price you pay for your shares.

We are authorized to issue up to 100,000,000 shares. Our board of directors have the authority to cause an issuance of additional shares, and to determine the rights, preferences and privileges of such shares, without consent of any of the shareholders. Consequently, the shareholders may experience more dilution in their ownership of us in the future. We received shareholder approval, at an Annual General Meeting held on March 15, 2013, to increase our authorized number of Common Shares from 50,000,000 Common Shares to 100,000,000 Common Shares.

As a result of any of these factors, the market price of the Common Shares at any given point in time may not accurately reflect the our long-term value. Securities class-action litigation often has been brought against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

Our existing shareholders acquired their shares at a cost substantially less than that which you will pay for the shares you purchase in this Offering. Accordingly, any investment you make in these shares will result in the immediate and substantial dilution of the net tangible book value of those shares from the price you pay for them. As of November 30, 2012, our net negative tangible book value was (USD$925,788) or approximately (USD$0.03) per share based upon 31,472,433 common shares outstanding as of November 30, 2012. After giving effect to the sale of common shares in the aggregate maximum amount of $4,000,000 being the sale of 10,000,000 common shares at $0.40 per common share and assuming that $3,489,500 of maximum net proceeds are realized from this offering and excluding the conversion of the existing convertible debentures into common shares, there would be an immediate increase in the net tangible book value of $• per share to the existing shareholders and a dilution to new investors from the Offering price per share will be approximately ($•) per share.

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In addition, we have several convertible debentures outstanding, that are convertible into our common shares. An equity financing may cause the convertible debentures to automatically convert into our common shares, resulting in substantial dilution to your investment.

We have significant indebtedness which may restrict our business and operations, adversely affect our cash flow and restrict our future access to sufficient funding to finance desired growth.

As of February 28, 2013, our total outstanding indebtedness was approximately USD$1,070,870, which includes the balance of all outstanding convertible debt and accounts payable and accrued liabilities. All debentures will fully convert upon the Corporation becoming a reporting issuer on the TSX Venture Exchange. We dedicate a substantial portion of our cash to pay interest and principal on our debt. If we are not able to service our debt, we would need to refinance all or part of that debt, sell assets, borrow more money or sell securities, which we may not be able to do on commercially reasonable terms, or at all. An inability to service our debt will have a material adverse effect on our business, operating results, and financial condition.

Because our Common Shares are not registered under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) , we are not subject to the federal proxy rules and our directors, executive officers and 10% beneficial holders will not be subject to Section 16 of the Exchange Act. In addition, our reporting obligations under Section 15(d) of the Exchange Act may be suspended automatically if we have fewer than 300 stockholders of record on the first day of a fiscal year.

Our Common Shares are not registered under the Exchange Act and we do not intend to register our Common Shares thereunder for the foreseeable future. However, we will register our Common Shares thereunder, if after the last day of the our fiscal year, we have total assets of more than $10,000,000 and 2,000 record holders or 500 record holders who are not accredited investors, in accordance with Section 12(g) of the Exchange Act. We are currently required to file annual, quarterly, and current reports pursuant to Section 15(d) of the Exchange Act. However, we are not subject to Section 14 of the Exchange Act, which, among other things, prohibits companies that have securities registered under the Exchange Act from soliciting proxies or consents from stockholders without filing with the SEC and furnishing to them a proxy or information statement and, in the case of a proxy solicitation a form of proxy complying with the SEC’s rules. In addition, as long as our Common Shares are not registered under Section 12 of the Exchange Act, our directors, executive officers and beneficial holders of 10% or more of our outstanding Common Shares and other equity securities are not be subject to Section 16 of the Exchange Act. Section 16(a) of the Exchange Act requires these persons to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports providing information concerning their ownership of Common Shares and other equity securities. Such information will be available only through such periodic reports that we file and registration statements that we may file with the SEC. Furthermore, as long as our Common Shares are not registered under the Exchange Act, our obligation to file reports under Section 15(d) of the Exchange Act may be suspended if, on the first day of any fiscal year (other than a fiscal year in which a registration statement under the Securities Act has become effective), we have fewer than 300 stockholders of record. In this event, we may cease providing periodic reports and current or periodic information, including operational and financial information with the SEC.

DESCRIPTION OF BUSINESS

History

Security Devices International Inc. was incorporated on March 1, 2005. We began as a research and development company focused on the development of 40mm less-lethal ammunition. 40mm refers to the diameter of the bullet (sometimes also referred to as a round or a projectile) and bullets of this size are required for standard issue military riot guns. 40mm bullets are also the emerging standard among riot guns used by police forces, although many police forces are currently using 37mm riot guns.

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We began with development of a wireless electric projectile (a “WEP”), named the Lektrox. We hired Elad Engineering Ltd. (“Elad”), a ballistics-engineering firm located in Tel Aviv, Israel, to collaborate in the development of the WEP. The WEP uses mini-harpoons to fix the bullet to the target's clothing or body. The bullet contains an electrical system that releases a charge that imitates the electro-neural impulses used by the human body. The WEP sends out a control signal to the muscles, this high voltage low current pulse overrides the target's nervous system inducing a muscle spasm that causes the target to fall to the ground helpless. To reduce kinetic energy levels, the head of the WEP contains a cushioning mechanism composed of a collapsible material that enlarges the contact surface and absorbs part of the impact.

Commencing in December 2008, the Joint Non-Lethal Weapons Directorate (“JNLWD”) of the U.S. Department of Defense, an organization responsible for the development and coordination of non-lethal weapons activities within the United States, tested the WEP through its evaluation facility at Penn State University. The testing evaluated the effectiveness and safety of the electrical output compared to the Government’s standard total body effects model. Testing was completed in November 2009 and a report was prepared by Penn State University and submitted to the JNLWD in January 2010. An executive summary was released to us indicating a positive outcome. Research and development continued on the WEP until mid-2010.

In June 2010, we began development of a 40mm blunt impact projectile (the “BIP”) which used the cushioning mechanism of the WEP but did not contain the electrical mechanism of the WEP. The BIP used the pain of impact to obtain compliance from the target.

In the fall of 2010, we underwent a change in the board of directors and management. Two new directors were appointed and the board of directors appointed a Chief Operating Officer. We contracted with Level 4 Capital Corp. to assist with our restructuring, contract negotiations and operational issues.

Early in 2011, we decided to focus its attention on the BIP and to place any further development of the WEP on hold. We concluded that the cost and time required to complete development and testing of the BIP were significantly less than that required to complete development and testing of the WEP. The BIP is also less expensive to produce than the WEP, and can be sold for a lower price. We plan to use revenue received from BIP sales to complete the development and production line for the WEP.

Initially, our WEP and BIP were designed, tested and assembled in Tel Aviv, Israel. In 2011, we moved its engineering, intellectual property and production facilities from Tel Aviv, Israel to the operator of an injection molding facility outside of Boston, Massachusetts (the “BIP Manufacturer”). The Corporation’s products were moved to the US for costing and logistical reasons, such as; cost of manufacturing, language barriers, and time-zone differences. The BIP Manufacturer, Micron Products Inc., has a history of manufacturing 40mm components for the military sector, and provides molding services to the medical, aerospace, petrochemical, commercial, electronics, and defense industries, and as such was a suitable candidate to manufacture the BIP pursuant to our specifications and design.

We attended several military tradeshows through 2011 and signed a teaming agreement with Chemring Ordnance Inc. (“Chemring”), of Perry, Florida in December 2011. The agreement gives Chemring the non-exclusive right to market and sell the BIP worldwide for a five year term commencing on December 20, 2011. Chemring is responsible for its costs of marketing the BIPs and BIPs sold through this arrangement will bear the Chemring brand. The Corporation has retained the right to market the BIP directly to military, law enforcement and government agencies outside of Chemring’s sales channels. See“Material Contracts”.

Research and development for the BIP was completed in 2012.

In June 2012, we contracted CRT Less Lethal Inc. (“CRT”) to test the BIP. CRT is a Seattle based company founded in 2003 with expertise in the analysis, evaluation and human effects testing of less-lethal munitions. The testing protocol included accuracy, precision, consistency, muzzle and target energy, impact energy density and effective range of the BIP.

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Human volunteers were used during the test firing, revealing full effects to the lower body from the blunt trauma of the BIP. Extensive wound profiling from the tests were finalized in a detailed report from CRT. Based on data obtained from the three-stage evaluation, the BIP passed the CRT testing protocol for accuracy, consistency, relative safety and effectiveness. A third-party human effects evaluation is important to the Corporation to prove out the non-lethality of their BIP projectile.

In July 2012, we signed a five-year development, supply and manufacturing agreement with the BIP Manufacturer. An engineering team is available to us through the BIP Manufacturer for development of all of the core components of the BIP and any product changes that are necessary.See “Material Contracts”.

During 2012, we attended several law enforcement tradeshows and conducted live fire demonstrations with government agencies in Canada and the U.S. Live fire demonstrations allow the Corporation to demonstrate the short and long distance firing capabilities, accuracy and relative safety of the BIP.

In October 2012, we obtained an ammunition certification from Chemring which meant that the BIP satisfied the standards set by Chemring for products which it would distribute.

In November 2012, we obtained a United States Department of Transportation number (DOT#) required in order for the Corporation to ship BIP rounds.

We have begun the development of five new less-lethal ammunition rounds. These new rounds will be a modified version of the BIP, four of which will carry a payload (a marking liquid, a marking powder, pepper spray and a pungent odor) and the fifth of which is a lower cost practice round. SDI expects to complete development of these five new ammunition rounds by the second quarter of calendar 2013.

Products

Our business is the development, manufacture and sale of less-lethal ammunition. This ammunition is used by the military and police forces for crowd control.

We two products:

A. BIP

(i)Standard BIP

We completed the development of the BIP, a blunt impact projectile which uses pain to control a target. The BIP is available for sale. WE are using the BIP rounds in live fire demonstrations with military and law enforcement agencies.

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The BIP is designed to be fired from a 40mm riot gun, which is the standard riot gun used by the military. Among police forces, there are both 40mm riot guns and 37mm riot guns but the 40mm riot gun is the emerging standard.

The BIP consists of a plastic casing which contains a smokeless powder as a propellant and a collapsible nose. The collapsible nose mushrooms upon impact to absorb some of the kinetic energy of the bullet and spread the impact of the nose over a larger area of the target. A round which increases in surface area on impact will cause less injury (as a result of a decrease in the depth of the energy dispersal) and more sensory nerves on the target will be stimulated (increasing the pain reception). The body of the BIP is designed to cushion the impact by using a guide expander system that disperses the energy of the round. The BIP’s kinetic energy absorption mechanism allows the BIP to be fired from a riot gun with greater kinetic energy while meeting military standard requirements over a target range from 5 meters to 80 meters.

(ii)Payload Carrying BIPs

We are developing additional BIP rounds that are capable of carrying payloads. Each of the payload rounds is based on the standard BIP but, in addition, carries a payload which is released upon impact. The payload ammunition rounds are expected to be ready for market in the second quarter of 2013.

Each of these payload carrying BIPs has the same short and long distance capabilities as the standard BIP and each of them employs the same patented cushioning technology. The four payload carrying BIPs are as follows:

• BIP - MP (Powder Based Marking Agent)- The BIP - MP carries a powder which is released upon impact and temporarily marks the target. The temporary marking allows for evidentiary based target confirmation. This round increases the psychological effect of the bullet by making the target feel identifiable.
• BIP - ML (Semi-Permanent Liquid Marking Agent)– The BIP - ML carries a semi-permanent liquid which is released upon impact and marks the target. This semi-permanent marking allows for future apprehension of the target.
• BIP - OC (Oleoresin Capsicum – Pepper Spray Liquid)– The BIP – OC carries an irritant pepper spray liquid. Upon impact the pepper spray liquid is dispersed in a concentrated area on or around the target. The pepper spray liquid irritates the eyes and mouth of those who come in contact with it thus dispersing crowds. As part of its safety protocol, the BIP OC’s pepper spray liquid dissipates over a small geographical area to minimize the effect on bystanders.
• BIP - MO (Malodorant Liquid)– The BIP - MO contains a highly noxious payload and delivers a terrible odor. Upon impact the pungent liquid is dispersed in a concentrated area on or around the target. This scent can be used for identification purposes and it acts to disperse crowds.

(iii)BIP Practice Rounds

The BIP – PR is a practice round. The BIP – PR was created to mimic the weight, flight and ballistics of the standard BIP and it is intended to be used as a simulation round for training purposes. The cost of the BIP – PR will be approximately one-third of the standard BIP to end-users.

As a condition of selling BIPs to a military or police force, we will require that the customer become certified in the use of the BIP. We will train members of the military or police agencies who are our customers (the “Customer’s Own Trainers”). Upon completion of the training of Customer’s Own Trainers, the certification process will be completed with respect to that customer. The expectation is that the customer will use its Customer’s Own Trainers to teach the other members of its force how to properly use the BIP. Training in the use of non-lethal ammunition is important to the end-user to ensure proper distances and usage is followed. If proper distances are not followed, injury to the subject are possible.

The cost of receiving certification by the Corporation and the cost of training the members of its own force will be paid for by the customer. The BIP - PR allows a customer to receive certification of its Customer’s Own Trainers and to train its own members at a lower cost than would be the case using the standard BIP round during training.

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B. Wireless Electric Projectile

The WEP is a wireless electronic projectile which releases an electrical pulse. The electrical pulse induces a muscle spasm and causes the target to fall to the ground helpless. Although substantial development work has been undertaken on the WEP, product development is not completed. We have determined that it cannot continue to fund the development of the WEP at this time. We intend to continue development of the WEP if it receives funding for that purpose or from revenues from the sale of BIPs. None of the proceeds of the Offering have been allocated to the further development of the WEP.

The WEP uses mini-harpoons to fix the bullet to the target's clothing or body. The bullet contains an electrical system which releases a charge that imitates the electro-neural impulses used by the human body. The WEP sends out a control signal to the muscles, in the form of a high voltage low current pulse, which overrides the target's nervous system inducing a muscle spasm that causes the target to fall to the ground helpless. The WEP continues to be the only wireless product of its kind, to the knowledge of our management.

The WEP has been designed for use with standard issue riot guns and M203 grenade launchers. This will allow military and law enforcement agencies to quickly deploy the WEP without lengthy training or significant functional adjustments to vehicles or personnel equipment.

The WEP is a third generation electric solution. First generation solutions were electric batons and hand-held stun guns, which had a range of arm's length. Second generation solutions were wired electric charge solutions, such as the TASER with a range of up to 35 feet (10.6 metres). Third generation solutions are wireless electric bullets. Currently, there is no third generation wireless electric bullet on the market in a 40mm caliber, ammunition round. The WEP is intended to be used at a range up to 164 feet (50m) from the target.

The WEP was tested by the US Joint-Non-Lethal-Weapons-Directorate, a directorate made up of all branches of the United States military. A successful outcome was achieved through the product testing process of the Corporation’s WEP round. Positive results were published in a report written by the JNLWD.

Early in 2011, we decided to place any further development of the WEP on hold while it focused its resources on completing development of the BIP. We plan to use revenue received from BIP sales to complete the development and production line for the WEP.

Less-Lethal Sector

Both military and law enforcement agencies are seeking alternatives to traditional lethal ammunition. From a military standpoint, the involvement of armed forces in populated areas has created a need for less-lethal ammunition. Police forces also require non-lethal ammunition for riot control and critical incident de-escalation, motivated in part by a desire to avoid expensive litigation.

Chemical irritants (such as tear gas) have been sporadically used by military and have been adopted by police forces around the world for use in riot control.

Throughout the 1970’s and 1980’s the military and police forces began to use kinetic energy impact projectiles. These projectiles included wood, rubber and bean-bag material as ammunition. Many of these projectiles are still being used by military and police forces around the world. There has been very little technology progression within this space over the last half a century.

The rubber bullet was developed by the Ministry of Defense for the British Army in Northern Ireland at the request of army officers who wanted a weapon for use in civil disturbances with a range beyond a stone-throwing distance. In management’s opinion, rubber bullets are inaccurate and have unpredictable ricochets. In addition, management believes that they have caused numerous severe injuries and several deaths.

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The Taser is an electronic control device (ECD) sold by Taser International and used by law enforcement agencies and the military. The Taser uses electrical current to disrupt voluntary control of muscles causing neuromuscular incapacitation of subjects. It fires electrodes, which are connected to the firing gun by a wire. Their disadvantage is that they have a maximum range of 35 feet (10.6 meters) with wires attached to the firing gun/launcher, whereas the WEP is able to target 164 feet (50 meters) without any wires attached to the launching device. In Management’s opinion, this gives the user of the WEP the freedom to aim and immobilize a subject at greater distances.

According to the 2011 Homeland Security Research Corp. (HSRC) study titled “Non-Lethal Weapons: Technologies & Global Market”, it is forecasted that the global non-lethal weapons market will grow in the period 2012 to 2015 at a compounded annual growth rate (CAGR) of 8% (see the following graph). The study concludes that the growth rate will accelerate to 17% CAGR during the period 2016 to 2020 due to technology breakthroughs expected in 2014-2015.

Global NLW Market [$M] by Customer Sector - 2011-2020

The nature of a military’s role has changed significantly to the extent that the military becomes actively engaged in the policing of civilian populations. This is where the military in effect, intersects with local police forces to support and uphold national and regional law. Today, military units are involved in on-going conflicts that bring them into direct contact with civilian populations in Iraq, Afghanistan and various countries in the Middle East. Soldiers who are deployed in humanitarian roles are often subject to rules of engagement, which disallow the use of deadly force unless soldiers encounter a lethal threat. The military requires less-lethal deterrent ammunition for use in crowd and riot control, perimeter security and pilfering situations. In management’s opinion, less-lethal ammunition means a greater opportunity to preserve life.

Police and military forces require easily applied options for riot control without the consequences of lethal force. In addition to the litigation, administrative and financial resources required to defend the use of lethal force, there is a moral consideration as well. Police and military forces must balance the risk of injury or death to their own personnel against the risk of injury to civilians, including bystanders. Riot control involves difficult and challenging decision that often must be made within seconds.

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Both police and military personnel are demanding access to options that fall somewhere between physically charging into a crowd with batons and firing munitions designed to kill targets. If these personnel are equipped and trained with less-lethal munitions, they are better equipped to diffuse a riot and regain control. By providing soldiers and police with a midlevel force response, appropriate to the level of threat, the chance of an escalation can be reduced. In addition, if this less-lethal response can be employed at a standoff distance, the troops or officers can maintain a buffer zone between themselves and the crowd. The capability to target a specific individual, as opposed to spraying an entire crowd, reduces the risk of injury to innocent bystanders and political backlash.

Conflicts in Iraq and Afghanistan, events such as the August 2011 UK riots, and the June 2012 Quebec student street violence have led governments, police and defense decision-makers to seek cost effective less-lethal weapons. These decision-makers understand that social media will limit the use of lethal weapons and a new generation of less-lethal weapons is required.

Competitive Conditions

Munitions manufacturers generally fall into three categories:

We fit into the third category. We are structured to design, develop and market new less-lethal munition technologies. The Corporation has signed manufacturing and distribution agreements with large U.S. entities to enter the less-lethal 40mm marketplace. Each stage of development requires in-depth testing, evaluation and fine-tuning to ensure the product will deliver peak performance under demanding conditions.

The competitive factors in the market for less-lethal ammunitions are cost, effectiveness, and ease of use.

There are manufacturers of less-lethal ammunition, which are larger and have greater resources, and there is no assurance that the Corporation will be able to compete with these competitors for high volume projectile orders.

BIP

We, and our BIP product, compete against other manufacturers of kinetic force ammunition, which use pain to obtain compliance from a target. The Corporation's primary kinetic force ammunition competitors include Defense-Technology U.S., AMTEC Less-Lethal Systems Inc., Combined Systems, Inc. and SAGE Control Ordnance, Inc. All of them are larger and have greater resources available to compete with the Corporation. They offer a range of munitions including bean bags, rubber balls, sponge head projectiles, rubber nose projectiles and batons.

We believe that the competitive advantage of the BIP over other kinetic force ammunition is that it can be used over both short and long distances with greater safety and accuracy than competing products.

Most less-lethal kinetic force ammunition on the market has a range of 20 meters to 50 meters. Over a shorter range, that ammunition risks injury to the target from the force of its impact. Over a longer range, the ammunition’s accuracy degrades and the projectile can tumble, risking injury to bystanders, unintentional injury to the upper body and risk of injury if an un-cushioned portion of the projectile strikes the target.

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The BIP has an effective range of 5 meters to 80 meters. Management believes that the cushioning mechanism built into the BIP allows the BIP to be used in close range. Management also believes that the aerodynamic characteristics of the BIP allow it to be used with greater accuracy over longer distances.

WEP

Development of the WEP is not completed and we have any further development of this munition on hold until funds are available. We plan on using revenue received from BIP sales to complete the development and production line for the WEP.

Upon commercialization of the WEP, we will compete with other electronic control devices which use an electrical pulse to induce a muscle spasm in the target and cause the target to fall to the ground helpless. Taser International, Inc. is the primary electronic control device competitor of the Corporation for the WEP round.

We believe that the primary advantage of the WEP over electronic control devices currently on the market is longer range over which the WEP can be used. The WEP incapacitates offenders from a distance as far as 50 meters. The Taser fires two electrodes which remain connected to the launcher by conductive wire and the maximum range of the Taser is 35 feet (10.6 meters).

Milestones and Objectives

Our primary objectives for the next 12 months include the following:

Intellectual Property

Patents

We currently hold three United States patents and have applied for one other United States patent. These patents hold a twenty year term.

The following applications have been filed with the U.S. Patent Office:

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All rights to these patents have been assigned to the Corporation by the inventors.

Specialized Skill and Knowledge

The development of the BIP and WEP requires specialized engineering and ballistics expertise. The Corporation has entered into contractual arrangements with third parties to develop its product line.

Initially, our products were designed, tested and assembled by Elad in Tel Aviv, Israel. Ballistics and military experts were used building prototypes of the WEP and the BIP.

In 2011, we moved our engineering, intellectual property and production facilities from Tel Aviv, Israel to the BIP Manufacturer at its injection molding facility outside of Boston, Massachusetts. The BIP Manufacturer has a history of manufacturing 40mm components for the military sector, and provides molding services to the medical, aerospace, petrochemical, commercial, electronics, and defense industries. The BIP Manufacturer performs ongoing research and development for the BIP.See “Material Contracts”.

Government Regulations

Domestic and foreign regulations pertaining to less-lethal weapons are numerous and can be unclear and a number of countries prohibit devices similar to the BIP and/or the WEP. Accordingly, there is no assurance that we will be successfully able to sell the BIP into these jurisdictions.See “Risk Factors”.

In order to ship BIP ammunition domestically, or internationally, we need to hold specific transportation licensing. We applied for and received a Department Of Transport (DOT) number from the US Department of Transportation, Competent Authority for the United States, Pipeline and Hazardous Materials Safety Administration. Our DOT number is a domestic as well as international shipping identification number necessary to ship its products worldwide. Testing was completed through the New Mexico Tech testing facility, of Socorro, New Mexico, USA.

Research and Development

Our research and development efforts began in Israel in 2005 with the development of the WEP. Development of a working WEP prototype continued until 2010. During this time a working model of the WEP was created and tested.

In late 2010, a new management team was brought into the Corporation and the WEP’s final development was halted. We began development work on the BIP based on work previously undertaken by us.

In 2011, all WEP and BIP intellectual property and assets were moved to the BIP Manufacturer outside Boston, MA.

We completed its development of the standard BIP in 2012. We are working on four payload carrying projectiles which use the BIP technology. The payloads will include a powder based marking agent, a semi-permanent liquid marking agent, a pepper spray liquid and a pungent (malodorant) liquid. We are also working on a practice round that emulates the BIP’s weight, flight and ballistics and is intended to be used as a simulation round for training purposes.

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Employees

We have seven consultants. We do not expect to have a significant number of employees in the coming year. The consultants include; Gregory Sullivan (CEO), Rakesh Malhotra (CFO), Level 4 Capital Corp., (the company through which Dean Thrasher, COO, provides services), Boaz Dor (VP Business Development), Lumina Global Partners Inc. (the company through which Allen Ezer, Executive VP, provides services), Dawn Stafrace (Marketing), and Teresa Foster (Office Manager).See “Executive Compensation”.

USE OF PROCEEDS

Solely based on meeting the Canadian Minimum Offering Condition, requiring sale of a minimum of 7,500,000 Common Shares in Canada, the gross proceeds of the offering are estimated to be $3,000,000 and will be $3,450,000 if the Over-Allotment Option is exercised in full (excluding the payment of expenses of the Offering, which are estimated to be $200,000). The net proceeds, after deducting the Canadian Agent’s Fee (but prior to the payment of expenses of the offering, which are estimated to be $200,000) will be $2,730,000 and $3,139,500 if the Over-Allotment Option is exercised in full.

On January 30, 2013, March 14, 2013 and April 12, 2013, we borrowed $200,000 (the “January Working Capital Loan”), $100,000 (the “March Working Capital Loan”), and $200,000 (the “April Working Capital Loan”), respectively for general working capital purposes (together, the “Working Capital Loans”). The Working Capital Loans proceeds will be used for general working capital purposes and the Working Capital Loans, together with interest at 6% per annum for a minimum of 6 months interest, will be repaid on the earlier of July 30, 2013 and the closing of the Offering. A portion of the proceeds from this Offering may be used to repay the Working Capital Loans.

Solely based on meeting the Canadian Minimum Offering Condition, requiring sale of a minimum of 7,500,000 Common Shares in Canada, we intend to use the proceeds of the Offering as follows:

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We intend to utilize the funds available to it stated in this prospectus; however, there may be circumstances where, for sound business reasons, a reallocation of the funds may be necessary in order to achieve our stated business objectives.

If the Over-Allotment Option is exercised or additional funds are raised, the funds will be used for working capital to fund ongoing operations.

The general and administration expenses for the 12-month period following the completion of the Offering are as follows:

Milestones and Objectives

Our primary objectives for the next 12 months include the following:

CAPITALIZATION OF THE CORPORATION

The following table outlines our cash and capitalization as at February 28, 2013, both before and after giving effect to the Offering. This table should be read in conjunction our financial statements and the accompanying notes thereto, which appear elsewhere in this prospectus.

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DILUTION

Dilution represents the difference between the offering price and the net tangible book value per share immediately after completion of this Offering. Net tangible book value is the amount that results from subtracting total liabilities and intangible assets from total assets. Dilution arises mainly as a result of the offering price of the shares being offered. Dilution of the value of the shares you purchase is also a result of the lower book value of the shares held by our existing stockholders. As of February 28, 2013, the net negative tangible book value of our shares was (USD$816,809), or approximately (USD$0.02) per share, based upon 33,273,913 common shares outstanding. As of November 30, 2012, the net negative tangible book value of our shares was (USD$925,788), or approximately (USD$0.03) per share, based upon 31,472,433 common shares outstanding.

Upon completion of this Offering, but without taking into account any conversion of convertible debt after completion of this Offering, the net tangible book value of the shares to be outstanding, assuming the exercise of the Over-Allotment Option, will be $•, or approximately $•per share. Accordingly, the net tangible book value of the shares held by our existing shareholders will be increased by $•per share. Assuming the exercise of the Over-Allotment Option, the purchasers of shares in this Offering will incur immediate dilution (a reduction in net tangible book value per share from the offering price of ($•) per share.

Upon completion of the sale of the shares in this Offering assuming the exercise of the Over-Allotment Option, investors will own approximately •% of the total number of shares then outstanding, for which they will have made a cash investment of $•, or $0.40 per share. The following table illustrates the per share dilution to new investors, assuming the maximum number of shares being offered, and does not give any effect to the results of any operations subsequent to November 30, 2012 or the date of this prospectus:

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TRADING PRICE RANGE

Our common stock was quoted on the Over The Counter Bulletin Board (the “OTCBB”) from September 2006 to February 2011 and is currently quoted on the OTCQB tier of the OTC Link. Our common stock is currently quoted under the symbol “SDEV”. The following table lists the high and low bid information for the common stock as quoted on the OTCBB and/or OTCQB by quarter from December 1, 2009 through February 28, 2013:

The closing price per share for our common stock on May 8, 2013, as reported by the OTC Link was USD$0.46.

Holders of Common Stock

On May 1, 2013 the shareholders’ list of our common stock had approximately 171registered shareholders and 33,273,913shares outstanding.

Dividend Policy

We have never declared or paid any cash dividends on its capital stock and does not expect to pay any dividends for the foreseeable future. We intend to use future earnings, if any, in the operation and expansion of the business. Any future determination relating to the dividend policydeclare cash dividends will be made at the discretion of the boardour Board of directors, basedDirectors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, capital requirements,general business properties, restrictions imposed by applicable lawconditions, and other factors that our Board of Directors may deem relevant. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the boardonly way to realize any future gains on their investment.

USE OF PROCEEDS

We estimate that the net proceeds from the sale of directorsshares of our common stock in this offering will be approximately $       million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We expect to use the net proceeds from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds from this offering for acquisitions or strategic investments in complementary businesses or technologies. We do not currently have any plans for any such acquisitions or investments. We have not allocated specific amounts of net proceeds for any of these purposes.

Each $1.00 increase (decrease) in the assumed public offering price of $       per share would increase (decrease) the net proceeds to us by approximately $     , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of       shares in the number of shares offered by us would increase (decrease) the net proceeds to us by approximately $     , assuming that the assumed public offering price remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

DIVIDEND POLICY

We intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our Board of Directors may deem relevant.

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DILUTION

MANAGEMENT DISCUSSION

If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the offering price per share and the pro forma net tangible book value per share after this offering. Historical net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding. Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by purchasers of our common stock in this offering and the pro forma net tangible book value per share of common stock immediately after the consummation of this offering.

Our historical net tangible book value as of _______, 2021 was $       , or $     per share.

After giving effect to the sale by us of the           shares of our common stock that we are selling in this offering at the public offering price of $      per share, less underwriting discounts and commissions and estimated offering expenses payable by us and after giving effect to the use of proceeds described in this prospectus, our pro forma net tangible book value as of          , 2021 would have been approximately $       million, or approximately $         per share. This represents an immediate increase in net tangible book value of $          per share to existing stockholders and an immediate dilution in net tangible book value of $         per share to new investors of common stock in this offering. The following table illustrates this per share dilution:

If the underwriters exercise their option to purchase additional shares of our common stock in full, our as adjusted net tangible book value will be $ , or $3.90 per share, and the dilution per share of common stock to new investors will be $ per share. The discussion and tables above are based on            shares of our common stock outstanding as of          , 2021, and excludes:

●          shares of our common stock issuable upon the exercise of outstanding but unexercised options, of which        are vested, to purchase shares of our common stock as of        , 2021, under the Byrna Technologies, Inc. 2020 Equity Incentive Plan (the “2020 Plan”), with a weighted average exercise price of $         per share;

●          shares of our common stock issuable upon the settlement of restricted stock units outstanding as of          , 2021 under the 2020 Plan, with an estimated grant date fair value of $           per share; and

●          shares of our common stock reserved for future issuance under the 2020 Plan.

Except as otherwise indicated, all information in this prospectus assumes or reflects:

● no exercise of the underwriters’ option to purchase additional shares;

● no exercise or settlement of outstanding stock options; and

● the Reverse Stock Split.

SELECTED CONSOLIDATED FINANCIAL AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITIONOTHER DATA

SELECTED FINANCIAL INFORMATION

The selectedfollowing tables provide our summary consolidated financial information set forthdata and theshould be read in conjunction with “Management’s discussion and analysis of financial positioncondition and results of operations” and our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus. We have derived the summary consolidated statements of income data for the fiscal years ended November 30, 2020 and 2019 from our audited consolidated financial statements appearing elsewhere in this prospectus. The summary condensed statements of income data for the three months ended February 29, 2020 and February 28, 2021, and the consolidated balance sheet data as of February 28, 2021 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future, and the results for any interim period are not necessarily indicative of the results that may be expected in any full year.

⁽¹⁾ Adjusted EBITDA, Non-GAAP net income (loss), and Non-GAAP net income (loss) per share are non-GAAP financial measures. These non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. Please refer to “Selected Consolidated Financial and Other Data – Non-GAAP financial measures” for a description of the use of such measure and reconciliations to comparable GAAP financial measures.

The consolidated balance sheet data as of February 28, 2021 are presented below:

Non-GAAP financial measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide the following additional financial metrics that are not prepared in accordance with GAAP (non-GAAP): adjusted EBITDA, non-GAAP net income (loss), and non-GAAP net income (loss) per share (basic and diluted). Management uses these non-GAAP financial measures, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance. We believe that these non-GAAP financial measures help us to identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we exclude in the calculations of the non-GAAP financial measures.

Accordingly, we believe that these non-GAAP financial measures reflect our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

These non-GAAP financial measures do not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures, because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other non-GAAP measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Adjusted EBITDA. Adjusted EBITDA is defined as comprehensive loss (income) as reported in our consolidated statements of income excluding the impact of (i) interest expense; (ii) income tax provision; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) accretion of debt discounts; (vi) other income – forgiveness of Paycheck Protection Program loan; (vii) other financing costs; (viii) loss on extinguishment of debt; (ix) warrant inducement expense; and (x) change in fair value of derivative liabilities. Our Adjusted EBITDA measure eliminates potential differences in performance caused by variations in capital structures (affecting finance costs), tax positions, the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We also exclude certain one-time and non-cash costs.

Non-GAAP net income (loss) and non-GAAP net income (loss) per share. Non-GAAP net income (loss) is defined as comprehensive loss (income) as reported in our consolidated statements of income excluding the impact of (i) stock-based compensation expense; (ii) accretion of debt discounts; (iii) other income – forgiveness of Paycheck Protection Program loan; (iv) loss on extinguishment of debt; (v) warrant inducement expense; and (vi) change in fair value of derivative liabilities. Our non-GAAP net income (loss) measure eliminates potential differences in performance caused by certain non-cash and one-time costs. We also provide non-GAAP net income (loss) per share by dividing non-GAAP net income (loss) by the average basic or diluted shares outstanding for the period.

The following table reconciles Adjusted EBITDA to GAAP comprehensive loss, the most directly comparable financial measure, calculated and presented in accordance with GAAP (in thousands):

The following table reconciles Non-GAAP net income (loss) and Non-GAAP net income (loss) per share – basic and diluted to GAAP comprehensive loss the most directly comparable financial measure, calculated and presented in accordance with GAAP (in thousands):

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited annualour financial statements and the related notes for SDI forto those statements included elsewhere in this prospectus. In addition to historical financial information, the fiscal years ended November 30, 2012, 2011 and 2010. Those financial statements have been prepared in accordance with U.S. generally accepted accounting principles. All dollar figures included therein and in the following management discussion and analysis ("MD&A") are expressedcontains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in U.S. dollars.

The following is a summary of selected annual financial data for the periods indicated:

The selected financial information set forth and the discussion and analysis of financial position and results of operations should be read in conjunction with the unaudited quarterly financialthese forward-looking statements and related notes for SDI for the quarters ended February 28, 2013 and February 29, 2012. Those financial statements have been prepared in accordance with U.S. generally accepted accounting principles. All dollar figures included therein and in the MD&A are expressed in U.S. dollars.

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As of November 30, 2012, we had working capital of $121,803 as compared to working capital deficit of $471,538 as of November 30, 2011. Working capital increased as a result of capital financing activitiesmany factors, including those discussed under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” and elsewhere in this prospectus. Some of the numbers included herein have been rounded for the convenience of presentation.

OVERVIEW

We are a provider of non-lethal security products for the consumer and professional security markets. Our flagship product is the Byrna HD, which fires various projectiles designed to disable an assailant or threat from a safe distance of up to 60 feet. In addition to launchers and projectiles, we also sell various accessory products and Byrna-branded apparel. Our products are sold into the U.S. consumer market through our e-commerce storefront and network of third-party distributors and dealers. Internationally, we rely primarily on distributors with local expertise to market our products. With respect to the law enforcement market, we generally sell our products directly through our Train the Trainer educational program.

We believe our non-lethal security solutions can provide consumers and professionals with an alternative to firearms, presenting options to enhance security and de-escalate dangerous situations while avoiding the potentially tragic consequences of firing a gun. In light of prevalent gun violence in U.S. society and incidents of police using deadly force, in some cases leading to significant civil unrest, we believe our solutions offer a practical solution to address these significant social challenges.

We were incorporated in 2005 as Security Devices International Inc. Our sole product at the time was our 40 mm Blunt Impact Projectile (BIP), focused on the law enforcement market, which was designed to carry more energy more safely and accurately than competing non-lethal projectiles. We believe the BIP was, and remains today, a leading product in the 40 mm non-lethal projectile category. Despite its favorable performance attributes, BIP sales did not scale as anticipated due to the regulated nature of the product and the need for us to sell directly to each law enforcement customer serially. We continue to sell the BIP today, but in low volumes.

In 2018, we recognized the opportunity to pivot to the consumer market and introduce a non-lethal personal security device that any consumer could easily obtain and operate, allowing us to grow more efficiently and address a larger potential market. We acquired the core intellectual property to develop a consumer-focused product in April 2018. In February 2019, we introduced the Byrna HD personal security device, and later that year changed our name to Byrna Technologies Inc.

Sales of the Byrna HD have grown rapidly since introduction. For fiscal 2019, the first year the Byrna HD was commercially available, we generated $924,419 in revenue, however for fiscal 2020, we generated $16.6 million in revenue. Our comprehensive loss during those periods was $4.4 million and $12.5 million, respectively. Our revenue growth has been driven by greater market awareness of our solutions.

We are focused on continuing our revenue growth and capitalizing on the year ended November 30, 2012 for $1,559,750 (common shares for $649,750significant market opportunity that we see in the consumer, law enforcement, private security and convertible debentures for $910,000).school safety markets. Our growth strategy involves introducing new launchers, projectiles and accessories, opening new sales channels, including a planned Amazon e-commerce storefront, and investing in greater marketing of our solutions. We seek to establish Byrna as a leading consumer lifestyle brand in the non-lethal security market and to leverage our loyal customer base and brand equity to introduce new products and enter new product categories.

Our current working capitalbusiness model is based on funds that we borrowed. On January 30, 2013, we borrowed $200,000 for general working capital purposesthe upfront sale of launcher devices, which then enables us to sell projectiles and on March 14, 2013, we borrowed an additional $100,000, and on April 12, 2013 we borrowed $200,000 for general working capital purposes. The Working Capital Loans proceeds will be used for general working capital purposes and the Working Capital Loans, together with interest at 6% per annum, accrued and calculated daily, plus $30,000 will be repaid on the earlier of July 30, 2013 or on demand. We are dependent on the proceeds of the Offering to maintain business operations. We currently require approximately $79,000 per month to continue operations which consists of approximately $45,000 of paymentsaccessories to our officerscustomers over the lifetime of their products. We believe our ability to sell follow-on consumable products will provide us with greater visibility into future revenues as the number of consumers who own our launchers increases. We also believe that our loyal customer base, which we refer to as Byrna Nation, is likely to recommend our products to friends and directors pursuant to consultingfamilies, and employments agreements. The balance of the monthly expenses consist of rent, travel, tradeshows and administrative costs. If wethat our existing customers are not able to obtain sufficient funds to conduct operations in the Offering we will have to seek alternative financing arrangements which may include seeking additional loans from our officers, directors and significant shareholders, selling assets or selling additional securities. If we are unable to obtain additional or alternative financing on a timely basis and are unable to generate sufficient revenues and cash flows, we will be unable to meet our capital requirements and will be unable to continue as a going concern.

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Research and Product Development costs for the year ended November 30, 2011 were substantially lower than year ended November 30, 2010 since the developmentversions of our products was nearing completion.as they are introduced. We believe these factors create a positive cycle of upfront sales followed by sales related to consumables, accessories, friends and family recommendations, and product upgrades.

iv. Liquidity

RESULTS OF OPERATIONS

Our results for the quarter ended February 28, 2021 underscore the increasing demand for our products generally and Capital Resourcesfor our Byrna HD personal security device in particular. They also illustrate, however, how our business has been and is continuing to be impacted by the COVID-19 pandemic.

Ongoing Impact of the COVID-19 Pandemic

The following table summarizescontinuing COVID-19 pandemic, restrictions intended to prevent and mitigate its spread, challenges related to vaccination rollout, and new variants of the virus have impacted, and are expected to continue to impact our cash flowsbusiness in ways and cash in hand:

As of November 30, 2011,to a degree we cannot predict. During the quarter ended February 28, 2021 we had working capital deficitto temporarily close production facilities and distribution facilities on several occasions due to outbreaks of $471,538 as comparedillness and special cleaning. Safety protocols for our workers, illnesses, and quarantines have reduced the workforce at times, slowed down optimal production and increased costs including costs of testing and personal protective equipment (PPE). Our employees in South Africa have been subject to working capital deficitgovernment imposed curfews and our employees in Massachusetts to orders limiting the number of $501,894 as of November 30, 2010. Working capital deficit decreased as a result of capital financing activities duringpeople that can occupy the yearworkplace, necessitating staggered schedules and remote work that can complicate job performance and slow our management and administrative processes in ways we have not quantified beyond the direct costs associated with PPE and safety and cleaning expenses. During the quarter ended November 30, 2011 for $1,038,328 (common shares for $160,000 and convertible debentures for $878,328).

v. Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of November 30, 2011 and November 30, 2010.

vi. Commitments

Effective January 1, 2011, we renewed a consulting agreement with oneFebruary 28, 2021, many of our directorsemployees have been working remotely for a monthly remunerationan extended period of $3,000. The agreement expired December 31, 2011.

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On November 30, 2009, we entered into a Memorandumtime. An extended period of Understanding ("MOU")remote work arrangements could strain our business continuity plans, increase operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. Remote work conditions, including challenges in coordinating with its researchthird parties and development service contractor ("the contractor"). This MOU covers various alternatives for uslack of access to settle the liability to the contractorcertain records and documents, have caused administrative issues in prior periods and could in the amountfuture cause similar or new issues. These types of $658,932events could impact our financial results as at November 30, 2009. Should we become insolvent, or is unablewell as our ability to continue operations, or is unable to pay the contractor pursuant to the MOU, then it will grant the contractor an exclusive, irrevocable, worldwide, assignable, sub licensable, perpetual license to further develop and to market our electric bullet (WEP40) and blunt impact (BIP40) technology. We will negotiate a royalty in the event of granting such rights to the contractor. We terminated their MOU with the contractormake timely filings. Additionally, during the quarter ended February 28, 20112021, the pandemic and related air freight constrictions have delayed certain deliveries of parts and materials and exacerbated the limited availability of plastic and other components of our products which cause price pressures as well as potentially impair our ability to meet production demand and shipping challenges. Continuation of these shortages and restrictions may raise costs and delay production if our supply chain management is currently negotiatingnot adequate to maintain needed production and could affect consumer sentiment about our Company as well as our financial results. Flaws in the vaccination rollout or vaccine resistant variants may extend or expand the risks to our business presented by the pandemic.

In addition to the impacts that the COVID-19 pandemic has had and may continue to have on our operations and administrative functions and those of our third-party suppliers, manufacturers and service providers, the demands the pandemic is placing on government agencies, law enforcement and potentially military organizations may impact the ability of customers and potential customers to purchase our current products or new products targeted for such sectors. Similarly, the overall economic downturn, loss of jobs, loss of savings, and loss of disposable income and liquidity on the part of consumers could adversely affect the market for our Byrna HD and other consumer directed products we may introduce. Moreover, policies instituted to reduce the transmission of COVID-19 may impact or interrupt components and products moving through our supply chain. If facilities close or produce low volume due to COVID-19, we may have difficulty sourcing supplies for existing or new products to sell in the future and may incur additional costs and lost revenue. While we have managed these risks during the quarter ended February 28, 2021 without a material adverse effect on our business, financial condition, results of operations, or cash flows, there is no assurance we will continue to be able to do so.

Three months ended February 28, 2021 as compared to three months ended February 29, 2020:

Net Revenue

Revenues were $8.9 million in the first quarter of 2021 which represents an increase of $8.7 million as compared to the prior year period revenues of $0.1 million. This increase was due to increased sales of the Byrna HD and driven by a growing market awareness of the product.

Cost of Goods Sold

Cost of goods sold was $4.2 million in the first quarter of 2021 compared to $0.2 million in the prior year period. This $4.0 million increase is primarily due to the increase in related sales volume and also to the costs associated with the contractor for future services onmanufacture and corresponding sales of the Byrna^® HD and related products.

Gross Profit

Gross profit is calculated as need basis.

We have commitments for leasing office premises in Oakville, Ontario, Canada to September 30, 2012 at a monthly rent (excluding proportionate realtytotal revenue less cost of goods sold and maintenancegross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of products, such as labor and overhead, inbound freight costs, manufacturing depreciation, purchasing and receiving costs, inspection costs and taxes)the shipping and handling costs. Gross profit was $4.7 million in the first quarter of $2,500 per month.2021, or 53% of net revenue as compared to negative gross margin of approximately $29,000, or 20% of net revenue in the prior year period. The increase in gross profit is primarily due to the increase in sales volume of Byrna HD products.

We signed a consulting agreement with our COO for a

Operating Expenses/Loss from Operations

Operating expenses were $5.2 million in the first quarter of 2021, which represents an increase of $3.6 million as compared to the prior year period operating expenses of six months commencing May 1, 2011. The officer will be paid $9,000 per month.

We issued a purchase order to an outside supplier for acquisition of injection molds for their BIP40 ammunition round for a total consideration of $123,675. We advanced $61,837 during$1.6 million. This increase was driven by the year ended November 30, 2011rapid growth in revenue and the balance is payablesales, general and administrative structure necessary to the supplier as per following terms: 20% at half completion 20% upon sample submissionmanage it including: approximately $1.6 million increase in payroll and balance 10% on sample approval

vii. Recent Accounting Pronouncements

On November 1, 2010, we adopted ASU 2010-06. ASU 2010-06 updates FASB ASC 820,Fair Value Measurements. ASU 2010-06 requires additional disclosures about fair value measurements including transfers in and out of levels 1 and 2 and a higher level of disaggregation for the different types of financial instruments. There was no material impact on our financial statementsrelated expenses related to the adoptionramp up of this guidance.infrastructure and Byrna HD production, approximately $0.4 million increase in freight, approximately $0.3 million insurance, approximately $0.2 million increase in professional fees, approximately $0.2 million increase in bank fees related to sales transaction processing, approximately $0.1 million increase in accounting and auditing fees and approximately $0.1 million increase in marketing expenses related to the Byrna HD products.

Business Combinations: In December 2010, the FASB issued ASU 2010-29, “Business Combinations (Topic 805): Disclosure

Accretion of Supplementary Pro Forma Information for Business Combinations.” The new guidance specifies that when comparative financial statements are presented, the revenueDebt Discounts and earningsInterest Expense

Accretion of the combined entity should be disclosed as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The new guidance applies prospectively to us for business combinations which occur on or after November 1, 2011. The impact of these new provisions on our consolidated financial statements will depend upon the nature, terms and size of the acquisitions we consummatedebt discounts decreased $0.5 million in the future.

Fair Value: In May 2011,first quarter of 2021 to $0 from $0.5 million in the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirementsprior year period. These decreases resulted from the exchange in U.S. GAAP and IFRSs.” The new guidance does not extendApril 2020 of then-outstanding convertible notes into shares of Series A Convertible Preferred Stock (the “Note Exchange”), resulting in the usewrite-off of fair value accounting, but provides guidance on how it should be applied where its use is already required or permitted by other standards within GAAP or International Financial Reporting Standards (“IFRSs”). The new guidance also changes the working used to describe many requirements in GAAP for measuring fair value and for disclosing information about fair value measurements and it clarifies the FASB’s intent about the application of existing fair value measurements. The new guidance applies prospectively and is effective for interim and annual periods beginning after December 15, 2011. We do not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.

Comprehensive Income: In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” The new guidance requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both cases, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income,unamortized debt discounts and a total amount for comprehensive income. If presenteddecrease in a single continuous statement, the entity is required to present the components of net income and total net income, the components of other comprehensive income and a total for other comprehensive income, along with a total of comprehensive income in that statement. If presented in the two-statement approach, the first statement which is the statement of net income, should present components of net income and total net income followed consecutively by a second statement which is the statement of other comprehensive income, that should present the components of other comprehensive income, total other comprehensive income and a total amount for comprehensive income. Regardless of the method used, the entity if required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. The new guidance is effective retrospectively for fiscal years, and interim periods within those fiscal years beginning after December 15, 2011. We do not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations.

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viii. Critical Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements, the reported amount of revenues and expenses during the reporting period and related disclosure of contingent assets and liabilities. These estimates are based on our best knowledge of current events and actions we may undertake in the future. On an ongoing basis, we evaluate our estimates and judgments. To the extent actual results differ from those estimates; our future results of operations may be affected.

Comparison of Quarter Ended February 28, 2013 to Quarter Ended February 29, 2012

i. Overview

We have no source of revenue and we continue to operate at a loss. We expect our operating losses to continue for so long as we remain in a development stage and perhaps thereafter.interest expense. As of February 28, 2013,2021, we had accumulated lossesno longer have any outstanding notes payable.