Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 12

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 12
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    Upon consummation of the transactions contemplated by the Merger Agreement, including the Share Exchange and the Merger, each of us and Delta will become wholly owned subsidiaries of Pubco. 

Note 2 – Basis of Presentation and Significant
Accounting Policies

Principles of Consolidation

The consolidated financial statements include the
financial statements of the Company’s wholly-owned subsidiaries, Kaival Labs and Kaival Brands International. Intercompany transactions
are eliminated.

Basis of Presentation

The accompanying unaudited interim consolidated financial
statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America
(“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with
the audited financial statements and notes thereto contained in the Company’s most recent audited financial statements contained
within the Company’s Annual Report on Form 10-K, filed with the SEC on February 7, 2025 (the “2024 Annual Report”).
In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim period presented have been reflected herein. The results of operations for the
interim period are not necessarily indicative of the results to be expected for the full fiscal year. Notes to the consolidated financial
statements, which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal
period as reported in the 2024 Annual Report, have been omitted.

Use of Estimates

The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading
have been included. Actual results could differ from those estimates.

    F-8

Cash

The Company considers all highly liquid investments
with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of April 30,
2025, and October 31, 2024.

The Federal Deposit Insurance Corporation (“FDIC”)
insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. The standard deposit
insurance coverage limit is $250,000 per depositor, per FDIC