Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
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Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 8
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 Opportunities

In May 2023 we acquired 19 existing and 47
pending patents with novel technologies related to vaporization and inhalation technologies from GoFire. The GoFire patent portfolio includes
novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities (i.e., different
methods of vaporizing) and child safety. The patents and patent applications cover territories including the United States, Australia,
Canada, China, the EPO (European Patent Organization), Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes
a proprietary mobile device software application that is used in   

We expect to continue seeking third-party licensing
opportunities in the cannabis, hemp/CBD, nicotine, nutraceutical and pharmaceutical markets, as a means of monetizing our patents. Longer
term, we believe we can utilize the acquired patents to create innovative and market-disruptive products for its growing base of adult
consumers, including patent protected vaporizer devices and related hardware and software applications. 

As described above, we hope to generate revenue
from this acquired intellectual property via licensing and product development activities. However, there can be no assurance that we
will be able to implement this strategy.

3

Going Concern

The accompanying unaudited interim consolidated financial
statements of the Company are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates 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 Financial Accounting Standards
Board (“FASB”), Accounting Standards Update (“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 financial statements are issued.

4

The Company has incurred
recurring losses and negative cash flows from operations for three months ended January 31, 2025. 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