Kaival Brands Innovations Group, Inc. (NASDAQ:
KAVL) ("Kaival Brands," the "Company" or "we,” “our” or
similar terms), a company focused on incubating and commercializing
innovative products into mature and dominant brands, with a current
focus on the distribution of electronic nicotine delivery systems
(ENDS), which are intended for adults 21 and over, today announced
that its licensor and commercial partner, Bidi Vapor LLC (Bidi
Vapor), will appeal the U.S. Food and Drug Administration’s (FDA)
decision to deny Bidi Vapor’s premarket tobacco product application
(PMTA) for Bidi Vapor’s “Classic” tobacco-flavored BIDI® Stick ENDS
device. Kaival Brands holds the worldwide license to distribute
products made by Bidi Vapor.
On Monday, January 22, 2024, the FDA issued a
marketing denial order (MDO) for Bidi Vapor’s “Classic” BIDI® Stick
PMTA. Importantly, this decision did not involve the ten PMTAs for
Bidi Vapor’s non-tobacco flavored devices which are still under the
FDA’s scientific review. Those ten products remain available for
sale through Kaival Brands, subject to FDA’s enforcement
discretion.
In response to the MDO, on Friday, January 26,
2024, Bidi Vapor filed a petition requesting that the U.S. Court of
Appeals for the Eleventh Circuit review the MDO, which Bidi Vapor
believes was, among other things, arbitrary and capricious, in
violation of the Administrative Procedure Act. Bidi Vapor will also
be seeking a stay of the MDO pending the outcome of the
litigation.
“Bidi Vapor disagrees with the FDA’s decision
and is taking immediate action accordingly,” said Niraj Patel, the
Founder & Chief Executive Officer of Bidi Vapor, who is also
the Chief Science Officer & Founder of Kaival Brands. “In the
meantime, it is important to note that the decision only affects
the ‘Classic’ or tobacco-flavored BIDI® Stick. The remaining ten
BIDI® Stick flavors are still under FDA scientific review and
remain in distribution in the United States through Kaival Brands,
subject to the FDA’s enforcement discretion.”
Bidi Vapor has a history of successful outcomes
when contesting adverse FDA decisions, having received a favorable
Eleventh Circuit ruling in August 2022 that set aside the
original MDOs received for its ten non-tobacco flavored products.
That ruling put the ten PMTAs back into scientific review and
allowed those flavors to remain available for sale pursuant to the
FDA’s compliance policy for deemed tobacco products. During this
evaluation period, the ten non-tobacco flavored products are still
under FDA enforcement discretion.
“While we are disappointed with the FDA’s
decision, we are in close contact with Bidi Vapor and laser focused
on selling the Bidi Vapor products that we are permitted to,” said
Barry M. Hopkins, Executive Chairman of Kaival Brands. “Like Bidi
Vapor, we are fully committed to the legal and responsible use of
our products. Moreover, we are committed to increasing Kaival
Brands’ revenues by strengthening our existing business and also
diversifying our product portfolio, as evidenced by the
intellectual property we acquired in May 2023 from GoFire, Inc. We
look forward to providing progress updates on our initiatives over
the course of 2024.”
ABOUT KAIVAL BRANDS
Based in Grant-Valkaria, Florida, Kaival Brands
is a company focused on incubating and commercializing innovative
products into mature and dominant brands, with a current focus on
the distribution of electronic nicotine delivery systems (ENDS)
also known as “e-cigarettes” for use by customers 21 years and
older. Our business plan is to seek to diversify into distributing
other nicotine and non-nicotine delivery system products (including
those related to hemp-derived cannabidiol (known as CBD) products).
Kaival Brands and Philip Morris Products S.A. (via sublicense from
Kaival Brands) are the exclusive global distributors of all
products manufactured by Bidi Vapor LLC. Based in Melbourne,
Florida, Bidi Vapor maintains a commitment to responsible,
adult-focused marketing, supporting age-verification standards and
sustainability through its BIDI® Cares recycling program. Bidi
Vapor's premier device, the BIDI® Stick, which is distributed
exclusively by Kaival Brands, is a premium product made with
high-quality components, a UL-certified battery and technology
designed to deliver a consistent vaping experience for adult
smokers 21 and over. Nirajkumar Patel, the Company’s Chief Science
and Regulatory Officer and director, owns and controls Bidi Vapor.
As a result, Bidi Vapor is considered a related party of the
Company.
Learn more about Kaival Brands at
https://ir.kaivalbrands.com/overview/default.aspx.
ABOUT KAIVAL LABS
Based in Grant-Valkaria, Florida, Kaival Labs is
a wholly-owned subsidiary of Kaival Brands focused on developing
new branded and white-label products and services in the vaporizer
and inhalation technology sectors. Kaival Labs’ current patent
portfolio consists of 12 existing and 46 pending with novel
technologies across extrusion dose control, product preservation,
tracking and tracing usage, multiple modalities and child safety.
The patents and patent applications cover territories including the
United States, Australia, Canada, China, the European Patent
Organisation, Israel, Japan, Mexico, New Zealand and South Korea.
The portfolio also includes a fully-functional proprietary mobile
device software application that is used in conjunction with
certain patents in the portfolio.
Learn more about Kaival Labs at
https://kaivallabs.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release and the statements of the
Company’s management and partners included herein and related to
the subject matter herein includes statements that constitute
“forward-looking statements” (as defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended), which are statements
other than historical facts. You can identify forward-looking
statements by 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 and adversely differ from
what is expressed, implied, or forecasted in such statements. Our
business may be influenced by many factors that are difficult to
predict, involve uncertainties that may materially affect results,
and are often beyond our control. Factors that could cause or
contribute to such differences include, but are not limited to: (i)
actions taken by Bidi Vapor in response to the FDA’s MDO on its
Classic Bidi Stick as described herein, (ii) future actions by the
FDA relating to the PMTAs for Bidi Vapor’s 10 other flavors that
could adversely impact our business and prospects, including the
outcome of FDA’s scientific review of Bidi Vapor’s pending PMTAs,
(iii) the results of international marketing and sales efforts by
Philip Morris International, the Company’s international
distribution partner, (iv) how quickly domestic and international
markets adopt our products, (v) the scope of future FDA enforcement
of regulations in the ENDS industry, (vi) the FDA’s approach to the
regulation of synthetic nicotine and its impact on our business,
(vii) potential federal and state flavor bans and other
restrictions on ENDS products, (viii) general economic uncertainty
in key global markets and a worsening of global economic conditions
or low levels of economic growth, (ix) the effects of steps that we
are taking to raise capital, reduce operating costs and diversity
our product offerings, (x) our inability to generate and sustain
profitable sales growth, including sales growth in U.S. and
international markets, (xi) circumstances or developments that may
make us unable to implement or realize anticipated benefits, or
that may increase the costs, of our current and planned business
initiatives, (xii) significant changes in our relationships with
our distributors or sub-distributors and (xiii) other factors
detailed by us in our public filings with the Securities and
Exchange Commission, including the disclosures under the heading
“Risk Factors” in our Annual Report on Form 10-K for the fiscal
year ended October 31, 2022, filed with the Securities and Exchange
Commission on January 27, 2023 and accessible at www.sec.gov.
All forward-looking statements included in this press release are
expressly qualified in their entirety by such cautionary
statements. Except as required under the federal securities laws
and the Securities and Exchange Commission’s rules and regulations,
we do not have any intention or obligation to update any
forward-looking statements publicly, whether as a result of new
information, future events, or otherwise.
All Press Inquiries and Kaival Brands Investor
Relations:Stephen Sheriff, Chief Operating Officer and
Investor Relations
OfficerIr.kaivalbrands.cominvestors@kaivalbrands.com
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