Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 286

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1B
Chunk 286
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, professional fees of approximately $2.9 million, salaries and wages of $1.8 million, and all other general and administrative
expenses of approximately $2.8 million.   In fiscal year ended 2023, operating expenses consisted primarily of advertising and
promotion fees of approximately $2.5 million, stock option compensation expense of approximately $3.2 million, professional fees of approximately
$2.7 million, salaries and wages of $2.0 million, and all other general and administrative expenses of approximately $2.8 million.

Income Taxes:

We have Federal net operating loss (“NOL”)
carryforwards of approximately $29.8 million and state NOL carryforwards of approximately $0.4 million. With the changes instituted by
the CARES Act, the Federal NOLs have an indefinite life and will not expire. Our federal and state tax returns for the 2022 and 2023 tax
years generally remain subject to examination by U.S. and various state authorities. A valuation allowance is recorded to reduce the deferred
tax asset if, based on the weight of the evidence, it is more likely than not that some portion or all the deferred tax assets will not
be realized. Management determined that a valuation allowance of approximately $8.7 million for the year ended on October 31, 2024, was
necessary to reduce the deferred tax asset to the amount that will more likely than not be realized.

Please refer to Note 10, Income Tax, in the Notes
to the Consolidated Financial Statements in this Report for additional information related to our income taxes.

Net Loss:

Net loss for fiscal year ended 2024 was approximately
$(6.7) million, or $(1.62) basic and diluted net loss per share, compared to a net loss of approximately $(11.1) million, or $(4.13) basic
and diluted net loss per share, for fiscal year 2023. The decrease in net loss for the fiscal year 2024, as compared to net loss in fiscal
year 2023, is attributable to the revenues and expenses factors noted above. Weighted-average Common Stock outstanding were 4,313,900
on October 31, 2024, as compared to 2,721,080 on October 31, 2023. The increase in the weighted-average shares in fiscal year 2024 was
primarily attributable to the issuance of  5,723,916 shares