Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 179

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 179
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 ended October 31, 2024.
Specifically, our management has found that our internal control system over financial reporting was ineffective as of October 31, 2024,
based on a determination that there was a lack of sufficient resources to provide adequate segregation of duties consistent with control
objectives, the lack of sufficient and consistent real time remote communications, and the lack of a fully developed formal review process
that includes multiple levels of review over financial disclosure and reporting processes.

To address these material weaknesses, and subject
to the receipt of additional financing or cash flows, we have undertaken, and intend to continue to undertake, remediation measures to
address such material weaknesses, including implementing prevent and detect internal control procedures pursuant to which we can ensure
segregation of duties and hire additional resources to ensure appropriate review and oversight.

Our compliance with Section 404 of Sarbanes-Oxley
will require that we incur substantial accounting expenses and spend significant management efforts. We may not be able to complete our
evaluation, testing, and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or
more material weaknesses in our internal control over financial reporting, we will be unable to assert that our system of internal control
over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in
our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely
inhibit our ability to accurately report our financial condition, results of operations, or cash flows. This may expose us, including
individual executives, to potential liability which could significantly affect our business.

We cannot assure you that we will, in the future,
identify areas requiring improvement in our system of internal controls over financial reporting. We cannot assure you that the measures
we will take to remediate any areas in need of improvement will be successful or that we will implement and maintain adequate controls
over our financial process and reporting in the future as we continue to grow. If we are unable to establish appropriate internal financial
reporting controls and procedures, if we are unable to conclude that our system of internal controls over financial reporting is effective,
or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our system
of internal controls over financial reporting once that firm begins its audits of our systems of internal controls over financial reporting,
it could cause us to fail to meet our reporting obligations, result in the restatement of our financial statements, harm our