Company: KAVL
Filing Date: 2025-09-16
Form Type: 10-Q
Source: 0001731122-25-001266
Chunk: 106

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-09-16
Form: 10-Q
Item: Item 8
Chunk 106
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’s ability to continue as a going
concern is adversely affected by the uncertainty surrounding Bidi’s PMTA process with the FDA for its non-tobacco flavored Bidi®
Stick as well as the uncertainty in the Company’s ability to continue to sell the Bidi Stick given the patent infringements claim
filed by RJ Reynolds. Likewise, in April 2025 the 11th Circuit upheld FDA’s MDO for the Classic BIDI® Stick. All
of these factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

Management plans to continue developing strategies
for similar or expanded operations for the Company’s business to help the Company’s ability to determine where its business
will be viable going forward. Until such time, if ever, the Company can generate substantial product revenues, management plans to
finance its cash needs through public or private equity offerings or debt financing.

3

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 unaudited interim 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.

Liquidity and Capital Resources

We believe we will not have sufficient cash on hand
to support our operations for at least twelve months. As of July 31, 2025, we had working capital of $546,419 and total cash of $1,268,926.
As discussed above, this condition and other factors raise substantial doubt regarding our ability to continue as a going concern.

We
                                            intend to generally rely on cash from operations and equity and debt offerings to the extent
                                            necessary and available, to satisfy our liquidity needs. There are several factors that could
                                            result in the need to raise additional funds, including a decline in revenue, a lack of anticipated
                                            sales growth, and increased costs. Our efforts are directed toward generating positive cash
                                            flow and, ultimately, profitability. As our efforts during our fiscal 2024 and since have
                                            not generated positive cash flows, we will need to raise additional capital. Should capital
                                            not be available to us at reasonable terms, other actions will become necessary, including
                                            implementing cost control measures and additional efforts to generate