Kaival Brands(US:KAVL)2022-09-12 12:01Financial Position - As of July 31, 2022, the company reported working capital of approximately $11.1 million and total cash of approximately $3.4 million[162]. - The company has sufficient cash on hand to support operations for at least 12 months, relying on cash from operations and potential equity and debt offerings for liquidity needs[163]. - The company completed a firm commitment underwritten offering in September 2021, selling 4,700,000 shares and receiving net proceeds of approximately $8.3 million[164]. Revenue and Profitability - Revenues for the third quarter of fiscal year 2022 were approximately $3.8 million, an increase of 18.8% compared to approximately $3.2 million in the same period of the prior fiscal year[168]. - Gross profit for the third quarter of fiscal year 2022 was approximately $442,100, representing a gross margin of approximately 11.5%, compared to a gross loss of approximately ($84,300) for the same period in fiscal year 2021[170]. - Revenues for the first nine months of fiscal year 2022 were approximately $9.7 million, a significant decrease from $59.0 million in the same period of the prior fiscal year[174]. - Gross profit for the first nine months of fiscal year 2022 was approximately $138,800, compared to approximately $11.0 million for the first nine months of fiscal year 2021[175]. - Net loss for the third quarter of fiscal year 2022 was approximately $3.9 million, or $0.09 basic and diluted loss per share, compared to a net loss of approximately $3.4 million, or $0.15 basic and diluted loss per share, for the third quarter of fiscal year 2021[173]. - Net loss for the first nine months of fiscal year 2022 was approximately $11.7 million, or $0.34 basic and diluted loss per share, compared to a net loss of approximately $7.4 million, or $0.32 basic and diluted loss per share, for the first nine months of fiscal year 2021[178]. Operating Expenses - Total operating expenses for the third quarter of fiscal year 2022 were approximately $4.3 million, an increase from approximately $3.3 million in the third quarter of fiscal year 2021[171]. - Total operating expenses for the first nine months of fiscal year 2022 were approximately $11.8 million, down from approximately $18.1 million in the same period of fiscal year 2021[176]. Cash Flow - Cash flow used in operations for the first nine months of fiscal year 2022 was approximately $6.0 million, a slight decrease from $6.3 million used in operations for the same period in fiscal year 2021[165]. - The net cash flow provided by financing activities was approximately $1.5 million for the first nine months of fiscal year 2022, compared to cash flow used in financing activities of approximately $202,000 for the same period in fiscal year 2021[166]. Market and Regulatory Environment - The company anticipates revenues from the PMI Licensing Agreement beginning in the fiscal fourth quarter of 2022, following the launch of PMPSA's custom-branded self-contained e-vapor product, VEEBA, in Canada[157]. - The FDA's PMTA process has been set aside and remanded by the 11th Circuit, allowing the company to continue marketing and selling non-tobacco flavored BIDI® Sticks during the review process[145]. - The company has ceased all retail/direct-to-consumer sales since February 2021 to comply with the Prevent All Cigarette Trafficking Act and to prevent youth access[151]. - The company submitted a comprehensive 285,000-page PMTA application, which includes various studies, and anticipates that the FDA's scientific review process could take 1-2 years or longer[144]. Product Development and Supply Chain - The company has not launched any Kaival-branded products or white label solutions as of the date of the report, despite plans announced in July 2021[155]. - The company is wholly dependent on Bidi for the supply of BIDI® Sticks, and any supply issues impacting Bidi will indirectly affect the company's operations[153].