Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 35

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 35
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 Bidi no longer imports the Bidi Stick and
we do not expect that we will have access to the Bidi Stick in the foreseeable future. Since we have been unable to sell the Bidi Stick
our revenues have declined. We may not ever be able to increase our revenues to the levels they were at when we were able to sell Bidi
Sticks, as a result our business may not financially recover in the near term.

19

We have a present need
for additional funding, which raises questions about our ability to continue as a going concern. We may be unable to raise capital when
needed, which would force us to delay, reduce or eliminate aspects of our business or cause our business to fail.

As of October 31, 2024, we
had cash and cash equivalents of approximately $3.9 million. We believe that based on our current operating plan, our existing cash
and cash equivalents will only be sufficient to enable us to fund our operations and other obligations for a very limited period. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Moreover, we will need significant
additional funds to satisfy our outstanding payables, fund our working capital, and fully implement our business plan as we seek to grow
our revenues and ultimately achieve positive cash flow and profitability. In addition, our ability to continue as a going concern is adversely
affected by the uncertainty surrounding Bidi’s PMTA process with FDA and outcome of Bidi petition with the 11th Circuit Court of
Appeals regarding the FDA’s January 2024 MDO relating to Classic Bidi® Stick as well as our negative cash flows from
operations, significant recurring losses and present need for additional funding. All of these factors raise substantial doubt regarding
our ability to continue as a going concern.

There is therefore a material risk that we will be unable to generate sufficient
revenues to pay our expenses, and if our existing sources of cash and cash flows are insufficient to fund our activities, we will need
to raise additional funds. Additional equity or debt financing may not be available on acceptable terms, if at all, particularly in the
current economic environment.

Until such time, if ever,
we can generate substantial product revenues, we will be required to finance our cash needs through public or private equity offerings,
debt financings and corporate collaboration and licensing arrangements. If we elect to raise additional funds by issuing equity securities,
our stockholders may experience dilution. Debt financing,