Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 86

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 2
Chunk 86
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 to the pre-tax loss of approximately ($2.1) million for the first quarter of fiscal year 2024.

Net Loss:

As a result of the items noted above, the net loss
for the first quarter of fiscal year 2025 was approximately $4.0 million, or $0.43 basic and diluted net loss per share, compared to a
net loss of approximately $2.2 million, or $0.76 basic and diluted net loss per share, for the first quarter of fiscal year 2024.
The increase in the net loss for the first quarter of fiscal year 2025, as compared to the first quarter of fiscal year 2024, is
primarily attributable to the decrease in revenues and increase in operating expenses as noted above.

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 three months ended January 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.

6

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 public and private companies
until those standards apply to private companies.

Item 3. Quantitative and Qualitative Disclosures