Kaival Brands Commends Recent FDA Regulation Efforts

Rhea-AI Summary

FDA expects to complete reviews of certain PMTAs by December 2023. Kaival Brands supports FDA's efforts to address illicit vaping products. BIDI® Stick is subject to PMTAs and has consistently been the top disposable vape product. FDA anticipates action on 100% of covered PMTAs by Dec. 31. Increased FDA enforcement and retailer commitment to compliance will help prevent youth access to illegal e-cigarettes.

FDA Scientific Reviews of Certain PMTAs Expected by December 2023

GRANT-VALKARIA, Fla., Aug. 30, 2023 (GLOBE NEWSWIRE) -- Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) ("Kaival Brands," the "Company," or "we"), the exclusive U.S. distributor of all products manufactured by Bidi Vapor, LLC ("Bidi Vapor"), which are intended for adults 21 and over, today provided an update on the efforts by the U.S. Food and Drug Administration (“FDA”) to address youth-access prevention, illegitimate, illicit products in the marketplace, and an update on recent announcements by the FDA regarding completion of certain Premarket Tobacco Product Applications (“PMTAs”) by December 2023.

Eric Mosser, Chief Executive Officer of Kaival Brands, stated, “We commend the recent enforcement efforts of the FDA to address the problem of illicit and illegal vaping products in the market right now. Most of the items you see on the shelf in your local store are illegal as per the PMTA guidelines, and we anticipate it is simply a matter of time before the market is finally cleared of those illicit vaping products, leaving only compliant and authorized products available in the market to buy, such as the Bidi Vapor product line as anticipated by the Company.”

Completed FDA Reviews of Market Dominant PMTAs Expected by December 2023

The FDA has recently provided a timeline on anticipated reviews of certain “covered” PMTAs to be completed. Covered PMTAs are limited only to applications: 1) for new tobacco products that were on the market by Aug. 8, 2016; 2) that were timely-submitted by the Sept. 9, 2020 court-established deadline; and 3) for products sold under the brand names Vuse, Juul, NJOY, Logic, SMOK, Blu, Puff Bar or Suorin, or that reach 2% of total retail dollar sales as reported in the Total E-Cig Market and Players report or the Disposable E-Cig Market and Players report, as produced by Chicago-based NielsenIQ.

BIDI^® Stick: 1) was on the market prior to August 8, 2016; 2) are subject to PMTAs that were timely submitted by the September 9, 2020 deadline, and have now entered scientific review; and 3) has consistently been the number one disposable vape product for more than twenty-four months since 2021 and has consistently reached 2% of total retail dollar sales as reported in the Total E-Cig Market and Players report or the Disposable E-Cig Market and Players report, as produced by Chicago-based NielsenIQ.

The FDA anticipates action on:

52% of covered PMTAs by March 31;
53% of covered PMTAs by June 30;
55% of covered PMTAs by Sept. 30;
100% of covered PMTAs by Dec. 31.

Capitalizing on the Tailwinds of Increased FDA Enforcement
In May 2023, the FDA launched a self-proclaimed “Inspection Blitz,” which underscores the agency’s unwavering commitment to addressing the issue facing America’s youth.¹

Both the Company and Bidi Vapor have remained steadfastly committed to compliance and youth-access prevention. That commitment, along with the renewed focus and commitment by retailers, will continue to help educate consumers and raise awareness about the importance of youth access prevention and buying legitimate, non-illicit products. As reiterated by Brian King, Ph.D., M.P.H., director of the FDA’s Center for Tobacco Products (CTP), “all players in the supply chain—including retailers—have a role in keeping illegal e-cigarettes off the shelves. ²”

^{1 https://www.fda.gov/news-events/press-announcements/fda-conducts-retailer-inspection-blitz-cracks-down-illegal-sales-popular-disposable-e-cigarettes
2 https://www.fda.gov/news-events/press-announcements/fda-inspection-blitz-leads-more-180-warning-letters-retailers-illegal-sale-youth-appealing-elf-bar}

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 (“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 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 (including, without limitation, the results of the Company’s sales and marketing efforts as described herein and the impact of such efforts on the Company’s results of operations) 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) future actions by the FDA in response to the 11th Circuit Court’s decision that could impact our business and prospects, (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 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) the duration and scope of the COVID-19 pandemic and impact on the demand for the products we distribute, (ix) general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth, (x) the effects of steps that we could take to reduce operating costs, (xi) our inability to generate and sustain profitable sales growth, including sales growth in U.S. and international markets, (xii) 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, (xiii) significant changes in our relationships with our distributors or sub-distributors and (xiv) 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.

Kaival Brands Investor Relations:
Brett Maas, Managing Partner
Hayden IR
(646) 536-7331
brett@haydenir.com