The company's performance was worse than in 2020, mainly due to a marketing denial order from the U.S. Food and Drug Administration, which prevented Kaival Brands from marketing non-tobacco flavored Bidi Sticks in the U.S. by the end of fiscal 2021.

In addition, the company faces increased competition due to a lack of enforcement by federal and state authorities against inferior and low-priced vaping products that continue to enter the market illegally without FDA authorization.

The net loss in fiscal 2021 was approximately $9 million, while the net income in fiscal 2020 was approximately $3.8 million. The year-over-year decrease in net income was primarily due to lower revenue and higher operating expenses.

“Fiscal 2021 has been a very challenging year, especially because of the FDA’s Marketing Denial Order (MDO) for Bidi Vapor’s non-tobacco-flavored Bidi Stick ENDS [Electronic Nicotine Delivery Systems], which has caused both Bidi Vapor and Kaival Brands irreparable damage," Kaival Brands CEO Niraj Patel said in a statement.

"However, we are pleased that the court finally agreed to retain MDO and that we were able to make key strategic decisions to maintain the business and continue to mature the company in 2021, including listing on the Nasdaq and completing our initial underwritten public offering."

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