The tobacco industry had been in steady decline for decades until e-cigarettes change the trajectory. With secondhand smoke no longer an issue, traditional smokers were freed to vape in public places, often with fruity scents being the only byproducts. Kaival's Bidi Stick flourished, with sales reaching an annual run-rate of over $100 million by the end of Q1 2021…and then everything changed. New FDA rules, cheap Chinese knockoffs, and some poor management decisions caused sales to fall by 90% in just two quarters. But the latest promotion for this stock points out some key catalysts that could get this once profitable company back in the game sooner rather than later. Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) 1-month trading range: $0.6500 - $0.9652 Typical average daily volume: 40K Float: ~ 39 million Kaival Brands Innovations Group Most of us are probably familiar with the rise and fall of electronic cigarettes (ENDS). The sleek design and sugary flavors appealed to kids, setting up a showdown with congress. Within a few years of their introduction, 2021 to be exact, legislation passed regulating ENDS products including the flavors they could market. This hit Kaival at a particularly hard time. The company's initial success with its Bidi Stick really did get them rolling hard, delivering over $37 million in sales in Q1 2021, with Circle K as their largest customer. 
Source: KAVL Corporate Presentation The following quarter sales dropped by 20% and then 90% the quarter after, where they've languished around $3 million per quarter since. Cheap chinese knockoffs hit the shelves, which Kaival claimed were illegal. But, the FDA chose not to go after them. At the same time, the company had a short-coded product shipment go out to customers in 2021 that caused massive returns and a temporary loss of Circle K as their customer. Silver linings emerged recently, with a royalty deal inked with Philip Morris to sell internationally Philip Morris branded products based on the Bidi Stick technology. But the big win came August 23, 2022 when the 11th Circuit Court ruled in favor of Bidi, suspending the FDA's marketing denial order and allowing the company to sell flavored Bidi sticks in the U.S once again. To keep black-market competitors off its back, Bidi acquired 12 patents with 46 pending, that cover the company's current product line and future possible products in the CBD/THC space. Financials 
Source: Harbinger Research Profit-wise, KAVL isn't a big success. But beneath these numbers is something interesting… On a quarterly basis, the company does generate positive cash flow from time to time. In fact, it did it in two out of the last four quarters. Granted, it wasn't much, and the bad quarters dwarfed the good ones by a mile. But it at least shows they have potential. The research above from one of the promoter's sources forecasts substantial growth based on the 6/14/2023 relaunch of the Bidi Stick to over 1,000 Circle K Locations and the 6/15/2023 distribution launch to over 900 Kwik Trip and Mapco locations. However, the company had to raise capital, mainly in 2021, to the tune of $10 million through a tender that doubled the outstanding shares. With hardly any cash on the balance sheet, it's likely they'll need some seed money to ramp up production to meet this new demand. Promoter Activity Only one promoter was pushing KAVL shares, for which they were paid $20,000 for a two-day promotion for July 13-14. Oddly enough, the promoter spent the most time discussing the ENDS industry and the Bidi Stick product. It didn't cover any recent news announcements, including the distribution agreements noted above, nor the June 14 earnings. However, they did highlight the Harbinger Research report, which was lengthy but informative. Straight to the Facts When KAVL was selling at full strength, the company's shares ran from <$10 to $44. Reacquiring its key customer, Circle K, is a huge deal. So is their ability to market in the U.S. What we can't know is how much each of the problems impacted their sales. They could rebound to their former glory or barely move the needle. In my opinion, if this company can generate sales anywhere close to what they did at the outset, or even hint at it, we could see this stock explode higher for weeks. Always at your service, Baron Von Stocks | 
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