Kaival Brands reported revenues of approximately $58.8 million in the fiscal year that ended on Oct. 31, 2021. The company’s performance was worse than 2020, primarily due to the U.S. Food and Drug Administration’s marketing denial orders, which prevented Kaival Brands from marketing the nontobacco flavored Bidi Sticks in the United States toward the end of fiscal year 2021.
In addition, the company faced increased competition, which it attributes to the lack of enforcement by federal and state authorities against subpar and low-priced vaping products that continued to enter the market illegally without FDA authorization.
Net loss for fiscal year 2021 was approximately $9 million compared to net income of approximately $3.8 million for fiscal year 2020. The decrease in net income year-over-year was largely due to the decrease in revenues and the increase in operating expenses.
“Fiscal year 2021 was a very challenging year, especially because of FDA’s marketing denial order, or MDO, for Bidi Vapor’s nontobacco flavored Bidi Stick ENDS [electronic nicotine-delivery system], which caused irreparable harm to both Bidi Vapor and Kaival Brands,” said Kaival Brands’ CEO Niraj Patel in a statement.
“However, we were pleased that the court ultimately agreed to stay the MDO and that we were able to make key strategic decisions to stay in business and continue maturation of the company in 2021, including uplisting to Nasdaq and completing our first underwritten public offering.”