Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 10

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 1
Chunk 10
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the audited financial statements and notes thereto contained in the Company’s most recent audited financial statements contained
within the Company’s Annual Report on Form 10-K, filed with the SEC on February 7, 2025 (the “2024 Annual Report”).
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim period presented have been reflected herein. The results of operations for the
interim period are not necessarily indicative of the results to be expected for the full fiscal year. Notes to the consolidated financial
statements, which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal
period as reported in the 2024 Annual Report, have been omitted.

Use of Estimates

The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading
have been included. Actual results could differ from those estimates.

Cash

The Company considers all highly liquid investments
with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of January
31, 2025, and October 31, 2024.

The Federal Deposit Insurance Corporation (“FDIC”)
insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. The standard deposit
insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. The Company had uninsured cash of $2,177,615
and $3,652,300 as of January 31, 2025, and October 31, 2024, respectively.

    F-8 

Advertising and Promotion

All advertising, promotion and marketing expenses, including commissions,
are expensed when incurred.

Accounts Receivable and Reserve for Credit Loss

Accounts receivable pertain to contracts with customers
who are granted credit by the Company in the ordinary course of business and are recorded at the invoiced amount. Accounts receivable
does not bear interest. Accounts receivable presented on the consolidated balance sheet are adjusted for any write-offs and net of allowance
for credit losses. The Company’s reserve for credit losses is developed