Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 463

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 3
Chunk 463
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 flows from operations. We will need significant additional funds to satisfy our outstanding payables, fund our
working capital, and fully implement our business plan. 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’s petition with the 11th Circuit Court of Appeals regarding the FDA’s January 2024 MDO relating to Classic
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. All of these factors raise substantial doubt regarding our ability to continue as a going 
concern.

Our management plans
to continue developing strategies on similar or expanded operations of our business to help our ability to determine where our business
will be viable going forward. Until such time, if ever,
we can generate substantial product revenues, management plans to finance our cash needs through public or private equity offerings or
debt financing.

40

However, there is no assurance that we 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 we face. The accompanying 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 generate sufficient revenue
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