Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 35

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 1
Chunk 35
---

to support our operations for at least twelve months. As of January 31, 2025, we had working capital of $1,998,945 and total cash of $2,427,612.
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 and our inability to sell Bidi sticks
as a result of the ITC complaint filed by RJ Reynolds.  

Cash Flows:

Net cash flows used in operations was approximately
$0.9 million for the first three months of fiscal year 2025, compared to $0.2 million cash flows provided by operations for the first
three months of fiscal year 2024. The decrease in cash flows provided by operations for the first three months of fiscal year 2025 compared
to the first three months of fiscal year 2024 was primarily due to changes in accounts receivable and inventory.

Net cash flows used
in financing activities was approximately $0.6 million for the first three months of fiscal year 2025, compared to cash flows used in
financing activities of approximately $0.2 for the first three months of fiscal year 2024. The cash used in financing activities for the
first three months