$KAVL Kaival Brands Amends Agreement with Phillip
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Posted On: 08/18/2023 9:22:57 AM
$KAVL Kaival Brands Amends Agreement with Phillip Morris International for Distribution of ENDS Products
https://www.globenewswire.com/news-release/20...ducts.html
GRANT-VALKARIA, Fla., Aug. 17, 2023 (GLOBE NEWSWIRE) -- Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) ("Kaival Brands," the "Company" or "we,” “our” or similar terms), the exclusive distributor of all products manufactured by Bidi Vapor, LLC ("Bidi Vapor"
, including the BIDI® Stick electronic nicotine delivery system (ENDS), which are intended for adults 21 and over, today announced that its wholly-owned subsidiary, Kaival Brands International, LLC (“KBI”), has amended its agreement with Philip Morris Products S.A. (“PMPSA”), a wholly owned affiliate of Philip Morris International Inc. (“PMI”) (NYSE: PM), for the development and distribution of electronic nicotine delivery system (“ENDS”) products in markets outside of the U.S.
Eric Mosser, Chief Executive Officer of Kaival Brands, stated, "With more than a year of operational history for KBI and given the recent changes to regulations in international markets, it became clear that there were a number of opportunities to improve the terms of the original licensing agreement and reduce the burden of administering it. We are extremely pleased to reach an agreement that shall enable us to achieve our objectives. The revised licensing agreement simplifies the payment structure resulting in cost savings of approximately $2.7 million for the Company over the lifetime of the license agreement. It also enables better predictability and forecasting for KBI and streamlines data reporting. Finally, we anticipate that the acceleration of royalty payments will be a net positive to our financial performance over the duration of the agreement.”
Under the terms of the amended agreement, the parties agreed to revise certain terms, which provide for, among other things, a fixed pricing structure with volume-driven increases and a recapture of non-recurring engineering costs by KBI.
Accordingly, the Company expects a reconciliation payment of approximately $135,000. Furthermore, the Company projects approximately $300,000 in additional royalties to be earned through the end of 2023.
Additional information regarding this amendment will be provided in a Current Report on Form 8-K being filed by Kaival Brands with the Securities and Exchange Commission.
https://www.globenewswire.com/news-release/20...ducts.html
GRANT-VALKARIA, Fla., Aug. 17, 2023 (GLOBE NEWSWIRE) -- Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) ("Kaival Brands," the "Company" or "we,” “our” or similar terms), the exclusive distributor of all products manufactured by Bidi Vapor, LLC ("Bidi Vapor"
, including the BIDI® Stick electronic nicotine delivery system (ENDS), which are intended for adults 21 and over, today announced that its wholly-owned subsidiary, Kaival Brands International, LLC (“KBI”), has amended its agreement with Philip Morris Products S.A. (“PMPSA”), a wholly owned affiliate of Philip Morris International Inc. (“PMI”) (NYSE: PM), for the development and distribution of electronic nicotine delivery system (“ENDS”) products in markets outside of the U.S. Eric Mosser, Chief Executive Officer of Kaival Brands, stated, "With more than a year of operational history for KBI and given the recent changes to regulations in international markets, it became clear that there were a number of opportunities to improve the terms of the original licensing agreement and reduce the burden of administering it. We are extremely pleased to reach an agreement that shall enable us to achieve our objectives. The revised licensing agreement simplifies the payment structure resulting in cost savings of approximately $2.7 million for the Company over the lifetime of the license agreement. It also enables better predictability and forecasting for KBI and streamlines data reporting. Finally, we anticipate that the acceleration of royalty payments will be a net positive to our financial performance over the duration of the agreement.”
Under the terms of the amended agreement, the parties agreed to revise certain terms, which provide for, among other things, a fixed pricing structure with volume-driven increases and a recapture of non-recurring engineering costs by KBI.
Accordingly, the Company expects a reconciliation payment of approximately $135,000. Furthermore, the Company projects approximately $300,000 in additional royalties to be earned through the end of 2023.
Additional information regarding this amendment will be provided in a Current Report on Form 8-K being filed by Kaival Brands with the Securities and Exchange Commission.
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