Kaival Brands (NASDAQ: KAVL), the exclusive global distributor of products by Bidi(R) Vapor LLC, has released its third-quarter 2021 revenues, which are lower than expected. In the report, the company observed that the U.S. Food and Drug Administration’s (“FDA”) Premarket Tobacco Application (“PMTA”) process has impacted its revenues. The company noted that it believes many retailers and distributors have been reluctant to take on new inventory because they were concerned about being left with inventory that, as a result of the PMTA, would be illegal to sell. The company also noted that other retailers may have purchased counterfeit or suboptimal products at significantly reduced prices. According to the announcement, these circumstances have resulted in a challenging third quarter. The company reported revenues of $3.4 million for the three months ended July 31, 2021, compared to $32.4 million for the three months ended July 31, 2020; KAVL also reported revenues of $59.5 million for the nine months ended July 31, 2021, compared to $54.9 million for the nine months ended July 31, 2020. The company also noted that it has lowered its internal revenue expectations for the year ending Oct. 31 , 2021. “While our third-quarter revenue results did not meet our expectations, we remain steadfast in our commitment to preventing youth use of ENDS, responsibly marketing to adult tobacco users 21 and over, working with law-abiding retailers and distributors, and complying with all federal and state laws and taxes applicable to the distribution of the BIDI(R) Stick including but not limited to the Family Smoking Prevention and Tobacco Control Act; the Food, Drug and Cosmetic Act; and the Prevent All Cigarette Trafficking Act,” said Kaival Brands founder and CEO Niraj Patel in the press release. “Since inception, we, together with Bidi Vapor, have been built upon the foundations of industry-and-regulatory exceeding compliance standards. Over the past 12 months, together we have been preparing for a post-PMTA regulatory environment and have maintained our focus on providing an industry-leading premium vape experience along with establishing industry-best youth access prevention programs and protocols. We believe that the delay in the distribution of the BIDI Pouch in the U.S. will lower revenues in the short term. However, we believe that in the longer term, the removal of all synthetic nicotine products in the U.S. market could prove to be a positive event for us.”
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About Kaival Brands Innovations Group Inc.
Based in Grant, Florida, Kaival Brands is a company focused on growing and incubating innovative and profitable products into mature and dominant brands in their respective markets. The company’s vision is to develop internally, acquire, own or exclusively distribute these innovative products and grow each into dominant market-share brands with superior quality and recognizable innovation. Kaival Brands is the exclusive global distributor of all products manufactured by Bidi Vapor. For more information about the company, visit www.KaivalBrands.com.
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