Company: KAVL
Filing Date: 2025-09-16
Form Type: 10-Q
Source: 0001731122-25-001266
Chunk: 14

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-09-16
Form: 10-Q
Item: Item 1
Chunk 14
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into a Business Combination Termination and Release Agreement (the “Termination Agreement”) pursuant to Section 10.1(a) of
the Merger Agreement (the “Merger Agreement’) among the Company, Delta, Delta Corp Holdings Limited, a Cayman Islands exempted
company, KAVL Merger Sub Inc. and Delta Corp Cayman Limited. 

Pursuant to the Termination
Agreement, the Company and Delta mutually terminated the Merger Agreement and all agreements between the parties that are ancillary thereto
and Delta waived any and all claims against the other party that in any way directly and/or indirectly arise out of, are based upon,
or are in connection with the Merger Agreement any agreements ancillary thereto.

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