GRANT, Fla., Sept. 15, 2020 (GLOBE NEWSWIRE) — via NetworkWire – Kaival Brands Innovations Group, Inc. (OTCQB: KAVL) (“Kaival Brands,” the “Company” or “we”), a company focused on growing and incubating innovative and profitable products into mature, dominant brands, announces an increasing demand for the Bidi™ Stick is driving sales to new heights. Financial results for the Company’s 2020 third quarter, ended July 31, show revenues increased approximately 44% compared to the second quarter of 2020, with total revenues for the first nine months of the year reaching nearly $54.9 million.
“We had an extremely busy and fruitful third fiscal quarter. We experienced a rising demand for our exclusively distributed premium product, the Bidi™ Stick. Our sales growth is occurring mostly organically through smaller distribution channels and wholesalers,” said Niraj Patel, president and CEO of Kaival Brands. “Now in the fourth fiscal quarter, we are more closely focused on expanding our distribution into large national retailers and convenience chains.”
Fiscal 2020 Third Quarter Highlights*:
- Revenues for the third quarter of fiscal 2020 were approximately $32.4 million, compared to $0 in the same period of the prior fiscal year.
- Gross profit* for the third quarter of fiscal 2020 was approximately $4.4 million, compared to $0 for the third quarter of fiscal 2019.
- Total cost of revenue – related party was approximately $28 million for the third quarter of fiscal 2020, compared to $0 in the same period of the prior fiscal year.
- Total operating expenses were approximately $1.5 million in the third quarter of fiscal 2020, compared to approximately $27,000 in the same period of the prior fiscal year.
- Net income was approximately $2.6 million, or $0.00 basic and diluted earnings per share, in the third quarter of fiscal 2020, compared to net loss of approximately $27,000, or $0.00 basic and diluted loss per share, for the prior year period.
- Cash balance at July 31, 2020, was approximately $2.7 million, compared to $0 at Oct. 31, 2019.
- National distribution channels are being established for future growth and the Company’s products are currently in thousands of retail and convenience store locations.
- Revenues for the first nine months of fiscal year 2020 were approximately $54.9 million, compared to $0 in the same period of the prior fiscal year.
Bidi™ Sticks can now be found nationally in over 850 retail stores, such as Fas Mart and SprintMart, and in over 2,200 current Circle K convenience stores, with distribution expected to expand into thousands of additional retailers and convenience chains, Patel said.
Bidi™ Stick is a completely self-contained disposable product that is tamper-proof and recyclable. The innovative product is made from high-quality components and equipped with a long-lasting battery and class A nicotine. Its product engineering also includes a sensitivity control system, along with a proven mechanism designed to help identify and eliminate counterfeit products.
Available in 11 flavors, the Bidi™ Stick offers a premium vaping experience for adult consumers only. From its packaging design to its marketing strategies, Bidi Vapor makes sure that everything is compliant with government regulations. Bidi™ Sticks can also be purchased online for in-person delivery from any goPuff.com facility that has the ability to sell Bidi™ Sticks legally with proper age-verification gates within that state or municipality.
“Kaival Brands is also focusing on the future for all stockholders with the recent cancellation of 300 million shares of common stock, resulting in the Company currently having 277,282,630 total issued and outstanding shares of common stock and 3 million shares of Series A preferred stock. Kaival Brands also recently secured the services of InvestorBrandNetwork to assist the Company in brand awareness. We believe brand awareness is the first step in creating a more active daily trading base for our common stock. We also intend to explore other options in connection with our goal of expanding and growing our business and brand, such as public offerings of our equity, mergers and acquisitions, as well as possibly qualifying for an up-listing to Nasdaq,” Patel concluded.
*Use of Non-GAAP Financial Measures
To provide investors with additional information regarding financial results, this press release includes references to gross profit. Gross profit is determined by deducting the cost of revenue from operating revenue. Cost of revenue includes direct and indirect labor, materials, services, fixed costs and variable overhead. Gross profit should not be considered an alternative to operating income or net income, which are determined in accordance with GAAP. We believe that gross profit, although a non-GAAP financial measure, is useful and meaningful to investors as a basis for making investment decisions. It provides investors with information that demonstrates our cost structure and provides funds for our total costs and expenses. We use gross profit in measuring the performance of our business. Other companies may calculate gross profit in a different manner.
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The Bidi™ Stick is manufactured by Bidi Vapor, LLC, and the Company acts as the sole exclusive worldwide distributor. Mr. Patel, the Company’s president, chief executive officer and chief financial officer, owns and controls Bidi Vapor, LLC; thus, Bidi Vapor, LLC and the Company are considered under common control, and Bidi Vapor, LLC is considered a related party.
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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 forecast 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, the duration and scope of the coronavirus (“COVID-19”) pandemic and impact on the demand for the products we distribute; the actions governments, businesses and individuals take in response to the pandemic, including mandatory business closures and restrictions on onsite commercial interactions; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies and economic activity; the pace of recovery when the COVID-19 pandemic subsides; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps that we could take to reduce operating costs; our inability to generate and sustain profitable sales growth; 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; whether we will be able to engage in future public offerings or consummate any transactions on the timeline we expect, if at all; whether we will be able to uplist to a securities exchange in the future, if at all; and those factors detailed by us in our public filings with the Securities and Exchange Commission. 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 rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
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