2024 Q2 - Quarterly Report

UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,D.C.20549 FORM10-Q (MarkOne) oQUARTERLYREPORTUNDERSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 ForthequarterlyperiodendedApril30,2024OR ☐TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 Forthetransitionperiodfromto Commissionfilenumber000-56016 KAIVALBRANDSINNOVATIONSGROUP,INC. (Exactnameofregistrantasspecifiedinitscharter) Delaware83-3492907 (Stateorotherjurisdictionofincorporationororganization) (I.R.S.EmployerIdentificationNo.) 4460OldDixieHighwayGrant-Valkaria,Florida32949 (Addressofprincipalexecutiveoffices,includingzipcode) (833)452-4825 (Registrant’stelephonenumber,includingareacode) N/A (Formername,formeraddress,andformerfiscalyear,ifchangedsincelastreport)SecuritiesregisteredpursuanttoSection12(b)oftheAct: Titleofeachclass TradingSymbol(s) Nameofeachexchangeonwhichregistered CommonStock,parvalue$0.001pershare KAVL TheNasdaqStockMarket,LLC Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes☒No☐ IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).Yes☒No☐ Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct. LargeAcceleratedfiler ☐ Acceleratedfiler ☐ Non-acceleratedfiler ☒ Smallerreportingcompany ☒ Emerginggrowthcompany ☒ Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct☐ Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).Yes☐No☒ AsofJune13,2024,therewere2,863,002sharesofcommonstock,$0.001parvalue,outstanding. KAIVALBRANDSINNOVATIONSGROUP,INC.FORM10-Q TABLEOFCONTENTS ItemPage CautionaryNoteConcerningForward-LookingStatementsii PARTI FinancialInformation F-1 Item1. FinancialStatements F-1 UnauditedConsolidatedBalanceSheets F-1 UnauditedConsolidatedStatementsofOperations F-2 UnauditedConsolidatedStatementsofChangesinStockholders’Equity F-3 UnauditedConsolidatedStatementsofCashFlows F-5 NotestoUnauditedConsolidatedFinancialStatements F-6 Item2 Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations 1 LiquidityandCapitalResources 7 ResultsofOperations 8 EmergingGrowthCompany 10 Item3 QuantitativeandQualitativeDisclosuresaboutMarketRisk 10 Item4 ControlsandProcedures 10 PARTII OtherInformation 11 Item1. LegalProceedings 11 Item1A. RiskFactors 11 Item2. UnregisteredSalesofEquitySecuritiesandUseofProceeds 11 Item3 DefaultsUponSeniorSecurities 11 Item4 MineSafetyDisclosures 11 Item5 OtherInformation 11 Item6 Exhibits 12 Signatures i 13 CAUTIONARYNOTECONCERNINGFORWARD-LOOKINGSTATEMENTS CertainstatementsandinformationincludedinthisQuarterlyReportonForm10-QforthequarterendedApril30,2024(this“Report”)containormaycontain“forward-lookingstatements”withinthemeaningofSection27AoftheSecuritiesActof1933,asamended(the“SecuritiesAct”),Section21oftheSecuritiesExchangeActof1934,asamended(the“ExchangeAct”),andthePrivateSecuritiesLitigationReformActof1995.Wegenerallyusethewords“may,”“should,”“believe,”“expect,”“intend,”“plan,”“anticipate,”“likely,”“estimate,”“potential,”“continue,”“will,”andsimilarexpressionstoidentifyforward-lookingstatements.Forward-lookingstatementsarenotstatementsofhistoricalfacts,butratherreflectourcurrentexpectationsconcerningfutureeventsandresults,including,withoutlimitation,statementsrelatedto: ●oursubstantialrelianceon,andeffortstodiversifyourbusinessfrom,thebusinessofouraffiliateBidiVapor,LLC(“Bidi”); ●ourabilitytoraiserequiredfundingintheformofdebtorequitybothinthenearandlongerterm; ●ourabilitytoobtainfrom,andpayfor,Bidiproductswedistribute; ●ourabilitytointegrateandultimatelyenterintolicensesfororcreateproductsrelatingtotheintellectualpropertyassetsweacquiredfromGoFire,Inc.onMay30,2023; ●theimpactoftheAugust202211thCircuitCourtofAppealsdecisionoverturningtheU.S.FoodandDrugAdministration’s(“FDA”)previousdenialofBidi’sPremarketTobaccoProductApplication(“PMTA”)foritsnon-tobaccoflavoredBIDI®Stickelectronicnicotinedeliverysystem(“ENDS”),whichwearepermittedtodistributeintheU.S.subjecttoFDAenforcementandmaintenanceofallstatelicensesandpermits,andtheoutcomeoftheFDA’spendingreviewofsuchPMTA,thedenialofwhichcouldhaveasubstantialadverseimpactonourcompany; ●theimpactoftheFDA’smarketingdenialorder(“MDO”)inJanuary202