Company: KAVL
Filing Date: 2025-09-16
Form Type: 10-Q
Source: 0001731122-25-001266
Chunk: 45

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-09-16
Form: 10-Q
Item: Item 1
Chunk 45
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 not accrue a tax provision for income taxes during the nine months ended July 31, 2024, due to the pre-tax
loss of approximately $5.2 million for the nine months ended July 31, 2024.

Net Loss:

The net loss for the first nine months ended July
31, 2025, was approximately $6.6 million, or $0.61 basic and diluted net loss per share, compared to net loss for the nine months ended
July 31, 2024, which was approximately $5.2 million, or $1.62 basic and diluted net loss per share. The increase in the net loss for the
nine months ended July 31, 2025, as compared to the nine months ended July 31, 2024, is primarily attributable to the increase of stock
based compensation, loss on ROU asset and lower sales revenue.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity
with GAAP requires management to make certain estimates and assumptions that affect reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. These estimates are based on information available as of the date of the financial statements; therefore actual
results could differ from those estimates. There have been no material changes to our critical accounting policies and estimates during
the nine months ended July 31, 2025 from those disclosed in Item 7, Management’s Discussion and Analysis of Financial Condition
and Results of Operations, of our 2024 Annual Report for the year ended October 31, 2024.

Recent Accounting Pronouncements

Refer to Item 1, Financial Statements, Note 2, Basis
of Presentation and Significant Accounting Policies.

Emerging Growth Company

We are an “emerging growth company,” that
is exempt from certain financial disclosure and governance requirements for up to five years as defined in the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”). The JOBS Act eases restrictions on the sale of securities and increases the number
of stockholders a company must have before becoming subject to the SEC’s reporting and disclosure rules. We have not elected to
use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, that
allows us to delay the adoption of new or revised accounting standards that have different effective dates for