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Going Concern
6 Months Ended
Apr. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern

Note 3 – Going Concern

 

In February 2022, the U.S. Court of Appeals for the Eleventh Circuit granted Bidi a judicial stay of the MDO previously issued by the FDA. The ruling means that the MDO is not legally in force pending the outcome of litigation on the merits of Bidi’s challenge to the MDO. Accordingly, we anticipate being able to continue marketing and selling the Products, subject to the FDA’s enforcement discretion, while Bidi continues with its merits case challenging the legality of the MDO. The FDA has indicated that it is prioritizing enforcement against companies that have not submitted PMTAs, whose PMTAs have been refused acceptance or filing by the FDA, or whose PMTAs remain subject to MDOs. Oral arguments in the merits case were held on May 17, 2022.

 

If the U.S. Court of Appeals for the Eleventh Circuit rules in Bidi’s favor in the merits case, the Company anticipates that the FDA will be compelled to place the non-tobacco flavored ENDS back into the PMTA scientific review process. If this is the outcome of the merits case, the Company anticipates being able to continue marketing and selling the Products, subject to the FDA’s enforcement discretion, until the scientific review process is complete on each of Bidi’s PMTA for non-tobacco flavored ENDS and the FDA issues its decision on each.

 

If the U.S. Court of Appeals for the Eleventh Circuit does not rule in Bidi’s favor on the merits case, if the FDA re-issues the MDO after completing its scientific review process for each of Bidi’s PMTAs for its non-tobacco flavored ENDS, or if the FDA otherwise chooses to enforce the MDO against Bidi, the Company will be forced to cease sales of the non-tobacco flavored BIDI® Sticks in the United States market, leaving only the Tobacco (Classic) BIDI® Sticks for sale in the United States. If this is the outcome of the merits case, this combined with a negative cash flow from operations, raises substantial doubt on our ability to continue as a going concern.

 

Management plans to continue similar operations with increased marketing, which the Company believes will result in increased revenue and net income. Further, after the end of the three and six months ended April 30, 2022, the Company’s wholly owned subsidiary, KBI, entered into an international licensing agreement with PMPSA, which the Company expects will generate additional revenues. However, there is no assurance that management’s plan will be successful due to the current economic climate in the United States and globally.

 

These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that we cannot continue as a going concern.