Related-Party Transactions

6 Months Ended

Apr. 30, 2024

Related Party Transactions [Abstract]

Related-Party Transactions

Note 8 – Related-Party Transactions

In March 2020, the Company commenced business operations as a result of becoming the exclusive distributor of certain ENDS and related components (the “Products”) manufactured by Bidi, a related party company that is also owned by Nirajkumar Patel, the Chief Executive Officer and a Director of the Company.

Revenue and Accounts Receivable 

During the six months ended April 30, 2024, the Company recognized revenue of $3,700 from one company owned by Nirajkumar Patel, the Chief Executive Officer and a Director of the Company, and/or his wife. There was no accounts receivable balance for these transactions as of April 30, 2024.

During the six months ended April 30, 2023, the Company recognized revenue of $6,713 from three companies owned by Nirajkumar Patel, the Chief Executive Officer and a Director of the Company, and/or his wife.

Concentration of Purchases and Accounts Payable 

During the six months ended April 30, 2024, 100% of the inventories of Products, consisting solely of the BIDI® Stick, were purchased from Bidi, a related party controlled by Nirajkumar Patel, the Chief Executive Officer and Director of the Company, in the amount of $273,060. As of April 30, 2024, the Company had accounts payable to Bidi of $1,275,000 from purchases of inventory, and Products valued at $598,162 were held in inventory.

During the six months ended April 30, 2023, 100% of the inventories of Products, consisting solely of the BIDI® Stick, were purchased from Bidi, a related party controlled by Nirajkumar Patel, the Chief Executive Officer and Director of the Company, in the amount of $6,355,234.

The KBI License agreement provides that KBI shall pay Bidi license fees equivalent to 50% of the adjusted earned royalty payments, after any offsets due to jointly agreed costs such development costs incurred for entry to specific international markets. As of April 30, 2024 and October 31, 2023, no additional license fees are owed to Bidi. As of April 30, 2024, the Company had a payable to Bidi of $78,691 for reimbursement of insurance expense. As of October 31, 2023, the Company had a payable to Bidi of $712,524 for certain non-recurring engineering costs related to the PMI License Agreement which were fully paid in November 2023, and $240,802 for reimbursement of insurance expense.

Leased Office Space and Storage Space

On June 10, 2022, the Company entered into a Lease Agreement with Just Pick, LLC, owned and controlled by Nirajkumar Patel, the Chief Executive Officer and Director of the Company. The Company had $49,335  and $98,168 in operating lease expenses for the three and six months ended April 30, 2024, respectively, and $47,398  and $94,347 for the three and six months ended April 30, 2023, respectively.