Company: KAVL
Filing Date: 2025-09-16
Form Type: 10-Q
Source: 0001731122-25-001266
Chunk: 91

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-09-16
Form: 10-Q
Item: Item 8
Chunk 91
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 Going Concern (Subtopic 205-40), the Company’s management evaluates whether there are conditions
or events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within
one year after the date that the financial statements are issued.

    F-14

The Company has incurred
recurring losses and negative cash flows from operations for the
nine months ended July 31, 2025. The Company will need significant additional funds to satisfy its outstanding payables, fund its working
capital, and fully implement its business plan. In addition, the Company’s ability to continue as a going concern is adversely
affected by the uncertainty surrounding Bidi’s PMTA process with the FDA for its non-tobacco flavored Bidi® Stick
as well as the uncertainty in the Company’s ability to continue to sell the Bidi Stick given the patent infringements claim filed
by RJ Reynolds. Likewise, in April 2025 the 11th Circuit upheld FDA’s MDO for the Classic BIDI® Stick. All of these
factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

Management plans to continue developing strategies
for similar or expanded operations for the Company’s business to help the Company’s ability to determine where its business
will be viable going forward. Until such time, if ever, the Company can generate substantial product revenues, management plans to
finance its cash needs through public or private equity offerings or debt financing.

However, there is no assurance that the Company will
be able to raise additional capital, generate revenues or achieve profitability due to the factors listed above as well as the regulation
and public perception of ENDS products and the various other risks faced by the Company. The accompanying unaudited interim consolidated
financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result from the outcome of these or other risks or uncertainties.

Note 4 – Intangible Assets

The Company’s intangible
assets include patents and technology that were acquired pursuant to the GoFire Asset Purchase Agreement (“GoFire APA”). The
cost and accumulated amortization of the intangible assets amounted to $11,795,975 and $1,703,870 as of July 31, 2025, respectively
and $11,795,975 and $1,114,064 as of October 31, 2024, respectively. Amort