Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 23

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 23
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 foreign, etc.) and a disaggregation of taxes paid and refunded. ASU 2023-09 is effective
for fiscal years beginning after December 15, 2024, and for interim periods in fiscal years beginning after December 15, 2025, although
early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its income tax disclosures.

In November 2023, the FASB issued ASU 2023-07, “Segment
Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure
requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors
to better understand an entity’s overall performance and assess potential future cash flows. The guidance is effective for fiscal
years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption
permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company is continuing
to evaluate the impact of adopting this new guidance but does not expect it to have a material impact on the Company’s financial
statements.

    F-14

Note 3 – Going Concern

The accompanying unaudited interim consolidated financial
statements of the Company are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates realization of assets
and the satisfaction of liabilities in the normal course of business within one year after the date the consolidated financial statements
are issued. In accordance with Financial Accounting Standards Board (or FASB), Accounting Standards Update (or ASU) No. 2014-15, Presentation
of Financial Statements – Going Concern (Subtopic 205-40), the Company’s management evaluates whether there are conditions
or events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within
one year after the date that the financial statements are issued.

The Company has incurred
recurring losses and negative cash flows from operations for six months ended April 30, 2025. The  
Company will need significant additional funds to satisfy its outstanding payables, fund its working
capital, and fully implement its business plan. In addition, the Company’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