Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 495

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 3
Chunk 495
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emplates realization of assets and the
satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements are
issued. In accordance with FASB, ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40),
the Company’s management evaluates whether there are conditions or events, considered in aggregate, that raise substantial doubt
about the Company’s ability to continue as a going concern within one year after the date that the accompanying consolidated financial
statements are issued.

The
Company has incurred recurring losses and negative cash flows from operations for the years ended October 31, 2024 and 2023. The Company
will need significant additional funds to satisfy its
outstanding payables, fund its working capital, and fully implement its business plan. In addition, the Company’s ability to continue
as a going concern is adversely affected by the uncertainty surrounding Bidi’s PMTA process with FDA and outcome of Bidi’s
petition with the 11th Circuit Court of Appeals regarding the FDA’s January 2024 MDO relating to Classic Bidi®
Stick as well as the uncertainty in the Company’s ability to continue to sell the Bidi Stick given the patent infringement claim
filed by RJ Reynolds.

Our management plans
to continue   developing strategies on similar or expanded
operations of our business to help our ability to determine where our business will be viable going forward. Until
such time, if ever, we can generate substantial product revenues, management plans to finance our cash needs through public or private
equity offerings or debt financing.

However,
there is no assurance that the Company will be able to raise additional capital, generate revenues or achieve profitability due to
the factors listed above as well as the regulation and public perception of ENDS products and the various other risks faced by the
Company.

The accompanying consolidated financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the outcome of these or other risks or uncertainties.

    F-16

Note 4 –Acquisition of GoFire Assets

On May 30, 2023
(the “Closing Date”), the Company and Kaival Labs entered into an Asset Purchase Agreement (the “GoFire
APA”) with GoFire, Inc. (“GoFire”) to purchase certain intellectual property assets of GoFire consisting of
various patents concerning electronic vaporizers and related technologies