Kaival Brands Innovations Group, Inc. (NASDAQ:
KAVL) ("Kaival Brands," the "Company" or "we,” “our” or
similar terms), the exclusive distributor of all products
manufactured by Bidi Vapor, LLC ("Bidi Vapor"), including the BIDI®
Stick electronic nicotine delivery system (ENDS), which are
intended for adults 21 and over, today announced that its
wholly-owned subsidiary, Kaival Brands International, LLC (“KBI”),
has amended its agreement with Philip Morris Products S.A.
(“PMPSA”), a wholly owned affiliate of Philip Morris International
Inc. (“PMI”) (NYSE: PM), for the development and distribution of
electronic nicotine delivery system (“ENDS”) products in markets
outside of the U.S.
Eric Mosser, Chief Executive Officer of Kaival
Brands, stated, "With more than a year of operational history for
KBI and given the recent changes to regulations in international
markets, it became clear that there were a number of opportunities
to improve the terms of the original licensing agreement and reduce
the burden of administering it. We are extremely pleased to reach
an agreement that shall enable us to achieve our objectives. The
revised licensing agreement simplifies the payment structure
resulting in cost savings of approximately $2.7 million for the
Company over the lifetime of the license agreement. It also enables
better predictability and forecasting for KBI and streamlines data
reporting. Finally, we anticipate that the acceleration of royalty
payments will be a net positive to our financial performance over
the duration of the agreement.”
Under the terms of the amended agreement, the
parties agreed to revise certain terms, which provide for, among
other things, a fixed pricing structure with volume-driven
increases and a recapture of non-recurring engineering costs by
KBI.
Accordingly, the Company expects a
reconciliation payment of approximately $135,000. Furthermore, the
Company projects approximately $300,000 in additional royalties to
be earned through the end of 2023.
Additional information regarding this amendment
will be provided in a Current Report on Form 8-K being filed by
Kaival Brands with the Securities and Exchange Commission.
ABOUT KAIVAL BRANDS
Based in Grant-Valkaria, Florida, Kaival Brands
is a company focused on incubating innovative and profitable
adult-focused products into mature and dominant brands, with a
current focus on the distribution of electronic nicotine delivery
systems (ENDS) also known as “e-cigarettes”. 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.
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 100% 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.
ABOUT BIDI VAPOR
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, 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. Bidi Vapor is also adamant about strict compliance with all
federal, state and local guidelines and regulations. At Bidi Vapor,
innovation is key to its mission, with the BIDI® Stick promoting
environmental sustainability, while providing a unique vaping
experience to adult smokers.
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.
For more information, visit
www.bidivapor.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release and any statements of the
Company’s management and partners related to the subject matter
hereof 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 the Company believes 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 (including, without limitation, the
anticipated benefits to the Company of the PMI License Amendment,
including the Company’s anticipations about potential royalties
receivable from PMPSA as described herein) could materially and
adversely differ from what is expressed, implied, or forecasted in
such statements. The Company and PMPSA’s businesses may be
influenced by many factors that are difficult to predict, involve
uncertainties that may materially affect results, and are often
beyond the control of the parties. Factors that could cause or
contribute to such differences include, but are not limited to: (i)
future actions by the FDA or its non-U.S. equivalents with respect
to the Company’s or PMPSA’s products, (ii) the outcome of FDA’s
scientific review of Bidi Vapor’s pending FDA Premarket Tobacco
Product Applications, (iii) the results of international marketing
and sales efforts by PMPSA, (iv) how quickly domestic and
international markets adopt the Company’s products, (v) the scope
of future regulatory activity in the ENDS industry, (vi) general
economic uncertainty in key global markets and a worsening of
global economic conditions or low levels of economic growth, (vii)
circumstances or developments that may make the Company or PMPSA
unable to implement or realize anticipated benefits, or that may
increase the costs, of our current and planned business
initiatives, (viii) significant changes in the Company’s
relationship with PMPSA or other distributors or sub-distributors
and (ix) other factors detailed by the Company 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.
Kaival Brands Investor Relations:Brett Maas,
Managing PartnerHayden IR(646) 536-7331brett@haydenir.com
Kaival Brands Innovations (NASDAQ:KAVL)
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Kaival Brands Innovations (NASDAQ:KAVL)
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