Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 42

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 42
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, professional fees totaling approximately $4.1 million, loss on ROU asset
                                            of $0.7 million, and all other general and administrative expenses of approximately $1.5
                                            million. General and administrative expenses during the six months ended April 30, 2025,
                                            consisted primarily of salaries and wages, insurance, lease expense, project expenses, banking
                                            fees, business fees and state and franchise taxes.

5

For the six months ended April 30, 2024, operating
expenses were approximately $4.7 million, consisting primarily of advertising and promotion fees of approximately $0.7 million, stock
option expense of $21 thousand, professional fees totaling approximately $1.3 million, and all other general and administrative expenses
of approximately $2.7 million. General and administrative expenses during the six months ended April 30, 2024, consisted primarily of
salaries and wages, insurance, banking fees, business fees, and other service fees.

Income Taxes:

During the six months ended April 30, 2025, we did not accrue a tax provision
for income taxes, due to the pre-tax loss of approximately $6.1 million for the six months ended April 30, 2025. Similarly, we did
not accrue a tax provision for income taxes during the six months ended April 30, 2024, due to the pre-tax loss of approximately $3.6
million for the six months ended April 30, 2024.

Net Loss:

The net loss for
the first six months ended April 30, 2025, was approximately $6.1 million, or $0.58 basic and diluted net loss per share, compared
to net loss for the six months ended April 30, 2024, which was approximately $3.6 million, or $1.32 basic and diluted net loss per
share. The increase in the net loss for the six months ended April 30, 2025, as compared to the six months ended April 30, 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