Byrna Technologies’ self-defense weapon hits the bullseye with strong sales

It is the creator of the Byrna HD, which dispenses chemical irritants from a handgun-like personal security device It also offers the 40mm Blunt Impact Projectile (BIP) line of products which use pain compliance to control a target The company gets large recurring revenue from selling ammunition, cartridges, chemical irritant payloads and training rounds What Byrna Technologies does: Byrna Technologies Inc (CSE:BYRN) (OTCMKTS:BYRN), formerly Security Devices International, is a non-lethal defense technology company which manufactures and sells less-than-lethal security devices and ammunition. The Andover, Massachusetts-based company develops the Byrna HD, a handgun-like device that dispenses chemical irritants. The small, lightweight 0.68 caliber device is equipped with a five-round magazine capable of accurately hitting a target at up to 60 feet — without causing serious injury. Its chemical payload is designed to burn an assailant’s eyes and respiratory system. Byrna’s product mix includes the 40 millimeter (mm) Blunt Impact Projectile (BIP) line of products which use pain compliance to control a target. The company has developed eight versions of the standard BIP, seven of which contain a payload and one of which is a cheaper cost, training round. A payload is an internal medium within the BIP, holding an irritant like pepper spray powder or tear gas. Founded in 2005, Byrna operates in Canada and the United States and its products are used by the military, correctional services, police agencies, private security companies and individuals looking for personal security. In addition to tapping the red-hot market for security devices, the company also draws large recurring revenue from selling ammunition, cartridges, chemical irritant payloads and training rounds. Smaller recurring revenue comes from laser sight adds, holsters and spare magazines. In April 2019, the company’s president Bryan Ganz replaced Paul Jensen at the helm as CEO. Ganz has three decades of experience in sales, manufacturing and new product design. A graduate of New York’s Columbia Law School, Ganz has built a formidable reputation after successfully building and selling half a dozen businesses. Most recently, Ganz sold Maine Industrial Tire to Sweden’s Trelleborg for $67 million, generating a return of more than seven times for investors over a three-year period. How is it doing: Byrna is sprinting to open a second manufacturing plant in Indiana as demand spikes for its self-defense weapon. The company just signed a lease for about 14,000 square feet at a facility in Ft Wayne, Indiana to enlarge its manufacturing and distribution capabilities. The company’s move to expand comes after it recently posted record revenue in its fiscal second quarter. For the period ended May 31, 2020, the company posted record revenue of $1,190,404, up from $105,769 in the same period in 2019 driven by the popularity of the Byrna HD. The company reduced its debt burden by eliminating $6.9 million of convertible debt and exchanging it for a new convertible preferred stock, raising $3.2 million during the quarter through the early warrant exercises. Byrna HD sales have soared as coronavirus pandemic fears have triggered personal safety concerns. The unsettled economic conditions have made people more concerned about increased crime rates, boosting Byrna device sales, according to the firm. Byrna has an order backlog of 12 weeks on its website after American talk show host Sean Hannity mentioned the Byrna HD on air as a personal security “solution” during times of unrest. Byrna recently acquired privately-owned South African manufacturer Roboro Industries Pty Ltd by paying Roboro shareholders around $500,000, subject to post-closing adjustments for net working capital. Roboro will now only produce Byrna components, finished goods and not do any work for unrelated third parties. The company is betting on the Roboro factory in Pretoria, South Africa giving it the production muscle to “keep pace” with the growing demand for the Byrna HD security device. According to Byrna’s manufacturing blueprint, the facility in Pretoria will work to meet local South African demand, as well as international orders, while the new US facility in Fort Wayne, Indiana will aim to fulfill growing US orders. What really boosts the product’s market appeal is that it is not a firearm under federal law and doesn’t require a federal gun license. State laws and local ordinances may, however, regulate its possession in certain localities. The firm offers the Byrna HD kit as a stand-alone product in either orange, tan, black, grey, green, hot pink, and yellow. It is deceptively easy to use, with virtually no recoil. The global non-lethal weapons market is expected to grow at a compound annual growth rate of 9.4% to reach $11.85 billion by 2023, according to market research firm Stratistics MRC. Byrna Technologies has a robust intellectual property portfolio covering a wide array of designs for non-lethal technologies. It currently has seven US patents and four international patents. It has 13 patents which are pending and nine registered designs along with a US trademark. Inflection points: Upside potential from the company’s second facility in Fort Wayne, Indiana coming on-line later this year in response to growing demand Byrna is eyeing a Nasdaq listing which will raise its profile with investors Product pipeline to leverage the company’s patented finned technology which is suitable for moderate ranges Designing a Byrna LEO personal security device for the international law enforcement market Implementing a nationwide reseller program focused on expanding Byrna's market penetration through gun shows and other direct-to-consumer events Plans to connect with influencers who resonate with the company’s target audience, energize e-commerce and social media campaigns, create print and digital content around the Byrna brand   What the boss says: "We're very pleased to see the positive market response to our product which we believe fills a market void for a truly effective, concealable non-lethal personal security device that can stop an assailant at stand-off distances of up to 60 feet,” Byrna Technologies CEO Bryan Ganz has said. “We envision the Byrna HD being the gold standard for non-lethal options,” he added. Contact Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive