Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 730

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 7
Chunk 730
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to support our operations for at least twelve months. As of October 31, 2024, we had working capital of approximately $3.0 million and
total cash of approximately $3.9 million. 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   sales.
We may also be required to take more strategic actions such as exploring strategic options for the sale of our company, the creation
of joint ventures or strategic alliances under which we will pursue business opportunities, or other alternatives. We believe we have,
or have access to, the financial resources to weather the impacts of the FDA’s PMTA process and Bidi’s receipt of MDOs from
the FDA in 2021 and 2024, which are subject to additional FDA action and ongoing court proceedings, respectively. However, we will require
further financing for the next twelve months, given our operating results.

Cash Flows:

Net cash flows used in operations was approximately
$0.7 million for fiscal year ended 2024, compared to cash flow used in operations of approximately $3.0 million for fiscal year ended
2023. The decrease in cash flows used in operations for the fiscal year ended 2024 compared to the fiscal year ended 2023 was primarily
due to changes in Other receivable – related party, Accounts receivable, Income tax receivable, and Accounts
payable – related party (such related party being our affiliate, Bidi, as described further below under Results of Operations).

Net cash flows used in investing activities was zero
for the fiscal year ended 2024, compared to approximately $0.3 million cash flow used in investing activities for the fiscal year ended
2023. The cash used in investing activities for the fiscal year ended 2023 consisted