MELBOURNE, Fla., Feb. 12, 2021 /PRNewswire/ -- Kaival Brands Innovations Group, Inc. (OTCQB: KAVL) ("Kaival Brands," the "Company," or "we"), is the exclusive global distributor of all products manufactured by Bidi Vapor, LLC ("Bidi Vapor"). Bidi Vapor's primary offering, the Bidi® Stick, is the fastest-growing closed system vaping product in the U.S. The tamper-resistant Bidi® Stick is also the only vape product on the market with an ecologically friendly, mass-recycling program called Bidi® Cares. Kaival Brands also recently launched the Bidi® Pouch by Bidi Vapor, a tobacco-free nicotine pouch available in six flavors.
Q1 Revenue Resumes Upward Trajectory; Management Reaffirms 2021 Revenue Guidance and Company Executes Nasdaq Application
The Company's fiscal fourth quarter saw a respite in revenue growth owed solely to Bidi Vapor's decision to do more than is required by the U.S. Food and Drug Administration's ("FDA") Premarket Tobacco Product Application (PMTA) standards with respect to packaging and labeling. While already well within federal standards, Bidi Vapor took additional action to go over and above the FDA's proposed guidelines. To that effect, Bidi Vapor halted production of all its products as it revamped the packaging and labeling of the entire product line, which, in turn, resulted in the Company being limited in the volume of products it could obtain from Bidi Vapor to distribute. Bidi Vapor incorporated suggestions from Kaival Brands' regulatory consultant, Blue Star Strategies, LLC, located in Washington D.C., and its dedicated FDA counsel, Keller and Heckman LLP, also located in Washington D.C., in revamping the packaging and labeling.
The overhaul consisted of changing the names of the product suite to non-descriptive, one-word monikers such as "arctic," "winter," and "solar." Additionally, Bidi Vapor bolstered all safety and hazard warnings on product packaging including the insertion of a leaflet into each Bidi® Stick package that educates consumers on health and battery hazards. Considerable additional efforts to further remove any remaining potential aesthetic and branding that the company considered to be possibly appealing to younger people below the federal tobacco-buying age of 21 were also taken.
This overhaul resulted in a significant loss in revenue opportunity during the fourth quarter of fiscal 2020, as neither Bidi Vapor nor the Company were willing to proceed until these significant changes were complete. Kaival Brands Chief Executive Officer, Niraj Patel, said: "It should be understood, that under no circumstance will Kaival Brands distribute, market, promote, or sell any product that would have deleterious consequences to the community and APPI guidelines – we have created a premium experience assisting current adult cigarette smokers age 21 and older to choose alternative options to traditional, combustible cigarettes. Kaival Brands will never behave in a manner that compromises health or the environment."
With the branding reposition completed, Kaival Brands has successfully restarted its sales and marketing process. Leadership is pleased to indicate the company's revenue growth profile is returning in fiscal Q1 2021 with revenues tracking close to $40 million. It is important to note the company's first quarter ended before a series of significant corporate developments. These developments (as detailed in recent releases) will result in a tremendous augmentation of the company's revenues going forward, Q2 and beyond. Furthermore, current visibility gives management confidence in Q2 2021 revenues being up 300% on a year-on-year basis.
Most importantly, on February 9, 2021, the FDA indicated all 11 Bidi-Vapor PMTA applications received acceptance letters in its PMTA process. The company believes with the recent initial acceptance letters, it will be able to formalize, in short order, additional large distribution agreements, including some comparable in size to the recent agreement with major U.S. wholesale grocery distributor, H.T. Hackney of Knoxville, Tenn. The news of the Hackney distribution agreement, the rollout of its new tobacco-free nicotine pouch, the Bidi® Pouch, and planned product introduction into the European Union (EU) scheduled for May 2021, all provide the company increased confidence in the previously issued revenue guidance range of $400-450 million. Moreover, the company has executed the application for Kaival Brands shares to list on NASDAQ and anticipates the process to be completed in March. Further details on 2021 revenue guidance, as well as a glimpse into 2022 revenues will be provided in early August of 2021.
Mr. Patel, the Company's President, Chief Executive Officer and Chief Financial Officer, owns and controls Bidi Vapor. As a result, Bidi Vapor and the Company are considered under common control and Bidi Vapor is considered a related party.
Based in Melbourne, Fla., Bidi Vapor maintains a commitment to responsible marketing, supporting age-verification standards and sustainability through its Bidi® Cares recycling program. The company's premiere device, the Bidi® Stick, is a premium product made with medical-grade components, a UL-certified battery, and technology designed to deliver a consistent vaping experience. Bidi Vapor is also adamant about strict compliance with all federal, state, and local guidelines and regulations. For more information, visit www.bidivapor.com.
Kaival Brands Innovations Group, Inc., Melbourne, Fla., is a company focused on growing and incubating innovative and profitable products into mature and dominant brands in their respective markets. Our 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.
Learn more about Kaival Brands Innovations Group, Inc., at www.kaivalbrands.com
This press release includes statements that constitute "forward-looking statements" within the meaning of federal securities laws, which are statements other than historical facts that frequently use words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "position," "should," "strategy," "target," "will," and similar words. All forward-looking statements speak only as of the date of this press release. Although we believe that the plans, intentions, and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions, or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied, or forecasted in such statements.
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SOURCE Kaival Brands
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