Company Overview - USSE Corp. was incorporated on September 4, 2018, in Delaware, following a merger with USSE Delaware, which was the surviving entity[18]. - The company changed its corporate name from Quick Start Holdings, Inc. to Kaival Brands Innovations Group, Inc. on July 12, 2019[28]. - The company formed a wholly-owned subsidiary, Kaival Labs, Inc., on August 31, 2020, to support its business operations[178]. Share Structure - As of the merger, USSE Delaware was authorized to issue up to 1,005,000,000 shares, including 1,000,000,000 shares of common stock, of which 66,397,574 shares were issued and outstanding[19]. - On October 19, 2018, the company issued 500,000,000 shares of restricted common stock and 400,000 shares of Convertible Series B preferred stock to GMRZ Holdings LLC for services rendered[25]. - As of October 22, 2018, all Convertible Series A preferred stock was converted into 1.25 shares of common stock, while Convertible Series B preferred stock was converted into ten shares of common stock[26]. - As of October 31, 2020, the company had 277,282,630 shares of common stock issued and outstanding, with 204,000,000 shares held by Kaival Holdings, LLC, constituting approximately 73.57% of the total[173]. Product Offerings - The primary product offerings include the "Bidi Stick" and "Bidi Pouch," with the Bidi Stick being a disposable ENDS product available in various flavors[41]. - Bidi launched a recycling program, Bidi Cares, rewarding customers with a free Bidi Stick for recycling ten used Bidi Sticks[43]. - The company markets its products through national distribution channels and focuses on ground-level marketing to prevent underage access to its products[46]. Financial Performance - For the fiscal year 2020, the company achieved revenues of approximately $64.3 million, compared to $0 in the prior fiscal year[115]. - The net income for the fiscal year 2020 was approximately $3.8 million, or $0.01 basic and diluted net income per share, compared to a net loss of approximately $68,849 for the fiscal year 2019[120]. - Gross profit for the fiscal year 2020 was approximately $10.0 million, with total cost of revenue at approximately $54.3 million[117]. - Total revenues for the year ended October 31, 2020, were $64,314,379, with a gross profit of $10,059,143[146]. - The company reported a net income of $3,845,822 for the year ended October 31, 2020, compared to a net loss of $68,849 in the previous year[146]. Cash Flow and Working Capital - The company had a positive working capital of approximately $4.4 million and total cash of approximately $7.4 million as of October 31, 2020[112]. - Cash flow provided by operations was approximately $7.6 million for the fiscal year 2020, compared to $0 for the fiscal year 2019[114]. - Cash and cash equivalents increased to $7,421,701 as of October 31, 2020, compared to $0 in the previous year[130]. - Net cash provided by operating activities for the year was $7,601,623, indicating strong operational cash flow generation[152]. Market Position and Competition - Bidi Stick's market share in the disposable ENDS market increased from 7.4% to 24.2% during the 52-week period ending on November 28, 2020, with total dollar sales growth surging to 1,845%[75]. - The distribution footprint expanded to over 30,000 retail stores, including Circle K and 7-Eleven locations, with plans to launch distribution in Europe in the third or fourth quarter of fiscal 2021[49][50]. - The company operates in a competitive environment dominated by larger "big tobacco" companies, which poses challenges for market positioning[73][74]. Regulatory Environment - The company is subject to various federal, state, and international regulations regarding the distribution of ENDS products, which could impact operations if not complied with[52][60]. - Approximately 28 states currently impose excise taxes on vapor products, with potential for future tax increases that could affect consumption and revenue[62]. Corporate Governance and Future Plans - The company is committed to enhancing corporate governance and aims to up-list to Nasdaq in the near term[68]. - The company plans to continue operations with increased marketing efforts to drive revenue growth, although future success is uncertain due to the current economic climate[107]. - The company plans to increase marketing efforts to boost revenue and net income, addressing liquidity needs for the next twelve months[207]. COVID-19 Impact - The company has not recorded any impairments related to the COVID-19 pandemic as of October 31, 2020, and operations have not been significantly impacted[180]. - The company is actively monitoring the ongoing COVID-19 situation, assessing its potential impact on financial condition and operations[180].

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ____________ Commission file number 000-56016 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2020 OR KAIVAL BRANDS INNOVATIONS GROUP, INC. (Exact name of registrant as specified in its charter) DELAWARE 83 ...

Financial Performance - Revenues for Q2 FY2020 were approximately $22.5 million, compared to $0 in the same period of the prior fiscal year [102]. - Gross profit in Q2 FY2020 was approximately $4.2 million, compared to $0 for Q2 FY2019 [103]. - Net income for the second quarter of fiscal year 2020 was approximately $2.8 million, compared to a net loss of approximately $4,000 for the same period in fiscal year 2019 [106]. - Revenues for the first half of fiscal year 2020 were approximately $22.5 million, compared to $0 in the same period of the prior fiscal year [108]. - Gross profit in the first half of fiscal year 2020 was approximately $4.2 million, compared to $0 for the first half of fiscal year 2019 [109]. - Net income for the first half of fiscal year 2020 was approximately $2.8 million, compared to a net loss of approximately $18,000 for the same period in fiscal year 2019 [112]. Operating Expenses - Total operating expenses for Q2 FY2020 were approximately $458,000, compared to approximately $4,000 for Q2 FY2019 [104]. - Total operating expenses for the first half of fiscal year 2020 were approximately $471,000, compared to approximately $18,000 for the first half of fiscal year 2019 [110]. - Future operating expenses are expected to continue to increase while the company generates increased sales growth [110]. Tax and Cash Flow - The company accrued approximately $950,000 for income taxes during Q2 FY2020, compared to $0 for Q2 FY2019 [105]. - The company accrued approximately $950,000 for income taxes during the first half of fiscal year 2020, compared to $0 for the same period in fiscal year 2019 [111]. - Cash flow provided by operations was approximately $2.0 million for the first six months of FY2020, compared to $0 for the same period in FY2019 [101]. Liquidity and Capital - At April 30, 2020, the company had working capital of approximately $2.8 million and total cash of approximately $2.0 million [99]. - The company intends to rely on cash from operations and equity and debt offerings to satisfy liquidity needs [100]. Business Operations - The increase in gross profit was driven by the commencement of sales of the Products during Q2 FY2020 [103]. - The increase in gross profit is entirely driven by the commencement of sales of the Products during the first half of fiscal year 2020 [109]. - The company has begun hiring employees and intends to hire additional independent contractors in the future [95]. - Management is actively monitoring the impact of COVID-19 on financial condition and liquidity, but cannot estimate future effects [77]. Stock Information - Weighted-average common stock shares outstanding were 572,364,574 in both the first half of fiscal year 2020 and fiscal year 2019 [113]. Off-Balance Sheet Arrangements - The company does not have any off-balance sheet arrangements that are material to investors [115].

(Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ____________ Commission file number 000-56016 KAIVAL BRANDS INNOVATIONS GROUP, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q --------------------------------------------------------------- ...

Company Incorporation and Stock Information - The company was incorporated on September 4, 2018, in the State of Delaware[14]. - As of October 22, 2018, the company had 66,397,574 shares of common stock issued and outstanding, out of an authorized 1,000,000,000 shares[21]. - As of January 21, 2020, the company had 572,364,574 shares of common stock issued and outstanding[49]. - The closing bid price of the company's common stock on January 21, 2020, was $0.014 per share[48]. - The total number of common stock shares outstanding as of January 27, 2020, is 572,364,574[177]. - The company's common stock is quoted on the OTC Pink under the symbol "KAVL," with a limited trading market[45]. - Nirajkumar Patel and Eric Mosser collectively own 504,000,000 shares, representing 88.06% of the company's outstanding common stock[177]. Financial Performance and Position - For the year ended October 31, 2019, the company reported a net loss of $68,849, compared to a net loss of $4,376 for the period from September 4, 2018, through October 31, 2018[70]. - The net loss for the year ended October 31, 2019, was $68,849, compared to a net loss of $4,376 for the previous period, indicating a substantial increase in losses[87]. - The accumulated deficit increased to $73,225 as of October 31, 2019, from $4,376 as of October 31, 2018, showing a growing financial challenge[87]. - The company has generated no revenues since inception and has not conducted any active operations, focusing solely on identifying suitable business opportunities[69]. - The company has negative working capital and a stockholder deficit, raising substantial doubt about its ability to continue as a going concern[66]. - The company had total liabilities of $44,886 as of October 31, 2019, compared to $3,000 as of October 31, 2018, reflecting a significant rise in liabilities[87]. - The total stockholders' deficit was $44,886 as of October 31, 2019, compared to $3,000 as of October 31, 2018, indicating a worsening financial position[87]. - The company has a net carryforward operating loss of $73,225, which starts to expire in 2038, and has not recognized the potential benefit of this loss in its financial statements[128]. Operational and Business Activities - The company is currently exploring business opportunities in the electronic cigarettes, vaporizers, and CBD industries[27]. - The company has not entered into any definitive agreements for business operations as of the report date[27]. - The company has not entered into any definitive agreements for business combinations but is exploring opportunities in the electronic cigarettes and CBD industries[58]. - The company has not commenced any business operations and reported cash and cash equivalents of $0 as of October 31, 2019[109][112]. Expenses and Funding - The company anticipates incurring costs of approximately $25,000 for filing Exchange Act reports over the next 12 months[34]. - The company expects to incur expenses of between $10,000 and $20,000 for legal and audit fees related to potential mergers or acquisitions[35]. - The company is entirely reliant on cash contributions from its officers and directors to cover expenses[33]. - The company is reliant on cash contributions from its officers and directors to fund ongoing operations and expenses[63]. - The Chief Executive Officer and Chief Operating Officer contributed a total of $26,157 in expenses on behalf of the Company during the year ended October 31, 2019, recorded as additional paid-in capital[133][134]. - The Chief Executive Officer contributed $6,000 in expenses to the company during the year ended October 31, 2019, recorded as additional paid-in capital[184]. - The Chief Operating Officer contributed $13,628 in expenses to the company during the year ended October 31, 2019, recorded as additional paid-in capital[185]. - The former officer contributed $7,335 in expenses to the company during the year ended October 31, 2019, recorded as additional paid-in capital[186]. Internal Controls and Governance - The company has identified material weaknesses in its disclosure controls and procedures as of October 31, 2019[141]. - As of October 31, 2019, the company concluded that its internal control over financial reporting was ineffective due to material weaknesses identified[143]. - The company plans to address these material weaknesses by implementing procedures for segregation of duties and hiring additional resources, contingent on receiving additional financing or cash flows[144]. - There were no changes in internal control over financial reporting during the fourth quarter ended October 31, 2019, that materially affected the company's internal controls[148]. - The company does not have an audit committee, and the entire board of directors is responsible for reviewing and making recommendations concerning the selection of outside auditors[156]. - The company has not established any independent director standards or committees[197]. - The company has not adopted a formal Code of Ethics due to its limited number of employees[158]. - The company does not have any retirement or similar benefit plans for its directors or executive officers[171]. Compensation and Legal Matters - The company did not pay any compensation to its directors during the fiscal year ended October 31, 2019[173]. - No executive officers or directors have been involved in any legal proceedings during the past ten years[158]. - The company has no employment agreements with any of its named executive officers[172]. - The company has no stock-based compensation plans as of October 31, 2019, and reported stock-based compensation of $0 for the years ended October 31, 2019 and 2018[123]. - There are no outstanding equity awards at the year ended October 31, 2019[169]. Audit and Financial Reporting - The company incurred audit fees of $16,000 for the year ended October 31, 2019[191]. - The effective income tax rate for the Company is 0.0%, primarily due to an increase in the valuation allowance[131]. - The company has no preferred stock issued and outstanding as of the report date[179].

[Cautionary Note Concerning Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Concerning%20Forward-Looking%20Statements) This section outlines the nature of forward-looking statements, their inherent risks, and the company's policy on updating such information - All statements, other than statements of historical facts, which address activities, events, or developments that are expected or anticipated to occur in the future, including future capital expenditures, commencement of business operations, and business strategy, are considered forward-looking statements[12](index=12&type=chunk) - These forward-looking statements are based on current expectations and assumptions, subject to numerous risks and uncertainties, many of which are beyond the company's control, and actual future results may differ materially[12](index=12&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements contained in the report[12](index=12&type=chunk) [PART I Financial Information](index=5&type=section&id=PART%20I%20Financial%20Information) This section presents the company's unaudited financial statements and management's discussion and analysis for the period ended July 31, 2019 [Item 1. Financial Statements](index=5&type=section&id=Item%201%20Financial%20Statement) This section presents the unaudited financial statements for Kaival Brands Innovations Group, Inc. for the period ended July 31, 2019, including balance sheets, statements of operations, cash flows, and changes in stockholders' deficit, along with explanatory notes. The statements highlight the company's lack of assets and revenue, significant accumulated deficit, and a going concern warning [Unaudited Balance Sheets](index=5&type=section&id=Unaudited%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' deficit as of specific dates | Metric | July 31, 2019 | October 31, 2018 | | :-------------------------- | :-------------- | :--------------- | | **Assets** | | | | Total Assets | **$** — | **$** — | | **Liabilities** | | | | Accrued expenses | **$** 30,650 | **$** 3,000 | | Total current liabilities | **$** 30,650 | **$** 3,000 | | Total Liabilities | **$** 30,650 | **$** 3,000 | | **Stockholders' Deficit** | | | | Common stock | **$** 572,365 | **$** 572,365 | | Additional paid in capital | **$** (553,319) | **$** (570,989) | | Accumulated deficit | **$** (49,696) | **$** (4,376) | | Total Stockholders' deficit | **$** (30,650) | **$** (3,000) | | Total Liabilities & Stockholders' Deficit | **$** — | **$** — | [Unaudited Statement of Operations](index=6&type=section&id=Unaudited%20Statement%20of%20Operations) This section details the company's financial performance, including operating expenses and net loss for the reported periods | Metric | Three Months Ended July 31, 2019 | Nine Months Ended July 31, 2019 | | :------------------------------------------ | :------------------------------- | :------------------------------ | | Operating expenses: General and administrative | **$** 27,135 | **$** 45,320 | | Total operating expenses | **$** 27,135 | **$** 45,320 | | Net loss | **$** (27,135) | **$** (45,320) | | Basic and diluted loss per share | **$** (0.00) | **$** (0.00) | | Weighted average number of common shares outstanding | 572,364,574 | 572,364,574 | [Unaudited Statement of Cash Flows](index=7&type=section&id=Unaudited%20Statement%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating activities for the nine months ended July 31, 2019 | Metric | For the Nine Months Ended July 31, 2019 | | :------------------------------------------ | :-------------------------------------- | | Net loss | **$** (45,320) | | Adjustment: Expenses contributed to capital | **$** 17,670 | | Adjustment: Changes in accrued expenses | **$** 27,650 | | Net cash used in operating activities | **$** — | | Net change in cash | **$** — | | Beginning cash balance | **$** — | | Ending cash balance | **$** — | [Unaudited Statement of Changes in Stockholders' Deficit](index=8&type=section&id=Unaudited%20Statement%20of%20Changes%20in%20Stockholders%27%20Deficit) This section details changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit | Metric | Balances, October 31, 2018 | Balances, July 31, 2019 | | :------------------------------------------ | :------------------------- | :---------------------- | | Common Shares Outstanding | 572,364,574 | 572,364,574 | | Common Stock Par Value | **$** 572,365 | **$** 572,365 | | Additional Paid-in Capital | **$** (570,989) | **$** (553,319) | | Accumulated Deficit | **$** (4,376) | **$** (49,696) | | Total Stockholders' Deficit | **$** (3,000) | **$** (30,650) | - Expenses paid on behalf of the Company and contributed to capital totaled **$7,210** (Nov-Jan), **$4,950** (Feb-Apr), and **$5,510** (May-Jul) during the nine months ended **July 31, 2019**[23](index=23&type=chunk) [Notes to Unaudited Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Financial%20Statements) These notes provide essential context to the unaudited financial statements, detailing the company's corporate history, organizational changes, going concern issues, related-party transactions, and subsequent events, all of which underscore its early-stage development and financial challenges [Note 1 – Organization, Description of Business and Basis of Presentation](index=9&type=section&id=Note%201%20%E2%80%93%20Organization%2C%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes the company's corporate history, organizational structure, and the basis for presenting its financial statements - Kaival Brands Innovations Group, Inc. (formerly Quick Start Holdings, Inc.) was incorporated on **September 4, 2018**, in the State of Delaware[26](index=26&type=chunk) - The company underwent a re-domestication merger (USSE Nevada into USSE Delaware) and a holding company reorganization in **September 2018**, leading to its current structure[28](index=28&type=chunk)[31](index=31&type=chunk) - On **February 20, 2019**, Kaival Holdings, LLC (KH) became the controlling stockholder, owning **504,000,000 shares**, representing approximately **88.06%** of the company's issued and outstanding common stock[36](index=36&type=chunk)[39](index=39&type=chunk) - As of **July 31, 2019**, the Company had not yet commenced any business operations[40](index=40&type=chunk) [Note 2 – Going Concern](index=10&type=section&id=Note%202%20%E2%80%93%20Going%20Concern) This note addresses the company's ability to continue operations, highlighting financial challenges and reliance on future funding - The Company's financial statements are prepared under the going concern assumption, but adverse conditions such as operating loss and working capital deficiency raise substantial doubt about its ability to continue for **one year**[42](index=42&type=chunk)[43](index=43&type=chunk) - The Company has no established source of revenue and plans to fund operating expenses through related party contributions to capital, with no assurance of success[44](index=44&type=chunk) [Note 3 – Stockholder Equity](index=12&type=section&id=Note%203%20%E2%80%93%20Stockholder%20Equity) This note details contributions made by officers and directors, impacting the company's additional paid-in capital - The Company's CEO, Mr. Nirajkumar Patel, contributed **$6,000** for expenses during the nine months ended **July 31, 2019**, recorded as additional paid-in capital[45](index=45&type=chunk) - The Company's COO, Mr. Eric Mosser, contributed **$4,335** for expenses during the nine months ended **July 31, 2019**, recorded as additional paid-in capital[46](index=46&type=chunk) - A former officer and director, Paul Moody, contributed **$7,335** for expenses during the nine months ended **July 31, 2019**, recorded as additional paid-in capital[47](index=47&type=chunk) [Note 4 – Related-Party Transactions](index=12&type=section&id=Note%204%20%E2%80%93%20Related-Party%20Transactions) This note discloses transactions and arrangements with related parties, including the use of management's home office space - The Company utilizes the home office space and equipment of its management at no cost[48](index=48&type=chunk) [Note 5 – Subsequent Events](index=12&type=section&id=Note%205%20%E2%80%93%20Subsequent%20Events) This note reports significant events that occurred after the balance sheet date, impacting the company's financial position - Subsequent to **July 31, 2019**, the Chief Executive Officer contributed an additional **$26,400** for legal fees, considered a contribution to the Company with no expectation of repayment[49](index=49&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and liquidity. It reiterates the corporate history, current lack of business operations, and ongoing search for opportunities in the e-cigarette, vaporizer, and CBD industries. The company's status as a 'blank check' and 'shell company' is highlighted, along with its reliance on related-party funding and significant going concern risks [Corporate History](index=13&type=section&id=Corporate%20History) This section traces the company's formation, corporate reorganizations, and name change up to July 2019 - The Company was incorporated on **September 4, 2018**, in the State of Delaware[52](index=52&type=chunk) - A series of corporate reorganizations, including a re-domestication merger and a holding company reorganization, occurred in **September 2018**, leading to the Company's current structure[54](index=54&type=chunk)[57](index=57&type=chunk) - On **October 22, 2018**, all Convertible Series A and Series B preferred stock were converted into common stock, and these preferred stock classes were subsequently cancelled[60](index=60&type=chunk) - Effective **July 12, 2019**, the company changed its corporate name from Quick Start Holdings, Inc. to Kaival Brands Innovations Group, Inc[62](index=62&type=chunk)[63](index=63&type=chunk) [Business Overview](index=14&type=section&id=Business%20Overview) This section describes the company's limited organizational efforts, exploration of new business opportunities, and reliance on officer funding - Since inception, the Company has been engaged in limited organizational efforts and is currently exploring business opportunities, potentially in the electronic cigarettes, vaporizers, and CBD industries[64](index=64&type=chunk) - The principal business objective for the next 12 months and beyond is to achieve long-term growth potential through a business combination or commencement of business operations, rather than immediate, short-term earnings[64](index=64&type=chunk) - The Company does not currently engage in any business activities that provide cash flow and is entirely reliant upon cash contributions from its officers and directors to pay for expenses[69](index=69&type=chunk) - Anticipated costs for filing Exchange Act reports are **approximately $15,000** or more, and potential merger or acquisition expenses are estimated between **$10,000 and $20,000** or more[70](index=70&type=chunk)[71](index=71&type=chunk) [Going Concern](index=17&type=section&id=Going%20Concern) This section discusses the company's financial viability, highlighting negative working capital and dependence on external capital - The Company has **negative working capital**, a **stockholder deficit**, and **no source of revenues**, which collectively raise substantial doubt about its ability to continue as a going concern[73](index=73&type=chunk) - The Company's ability to continue as a going concern is dependent upon its ability to develop additional sources of capital, locate and complete a merger with another company, or otherwise commence profitable business operations[73](index=73&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's financial resources, including its lack of assets, current liabilities, and funding needs - As of **July 31, 2019**, the Company had **no assets** and **current liabilities totaling $30,650**, consisting solely of accrued expenses[74](index=74&type=chunk) - The Company had **no cash flows from operating activities** for the nine months ended **July 31, 2019**, and has generated **no revenues since its inception**[75](index=75&type=chunk) - The Company is dependent upon capital investment or other financing, and continued funding from certain related parties, with no assurance that such funding will be available on reasonable terms[75](index=75&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) This section reviews the company's financial performance, noting the absence of revenue and reported net losses - The Company has not conducted any active operations or generated any revenue since its inception on **September 4, 2018**, through **July 31, 2019**[76](index=76&type=chunk) - The Company reported **net losses of $27,135** for the three months and **$45,320** for the nine months ended **July 31, 2019**, primarily attributable to general and administrative expenses[77](index=77&type=chunk) [Off-Balance Sheet Arrangements](index=17&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of off-balance sheet arrangements with material financial impact - The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on its financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources[78](index=78&type=chunk) ["Blank Check" and Shell Company](index=18&type=section&id=Blank%20Check%20and%20Shell%20Company) This section clarifies the company's status as a 'blank check' and 'shell company' under SEC regulations - The Company is considered a '**blank check**' company, defined as a **development stage company** issuing **penny stock** with **no specific business plan or purpose**, or intending to merge with an unidentified company[80](index=80&type=chunk) - The Company also qualifies as a '**shell company**' under **Rule 12b-2 of the Exchange Act**, having **no or nominal assets** (other than cash) and **no or nominal operations**[80](index=80&type=chunk) [Emerging Growth Company](index=18&type=section&id=Emerging%20Growth%20Company) This section explains the company's designation as an 'emerging growth company' and its associated regulatory exemptions - The Company is an '**emerging growth company**' under the **JOBS Act**, which provides **exemptions from certain financial disclosure and governance requirements** for up to **five years**[81](index=81&type=chunk) - The Company has elected to use the **extended transition period** for complying with new or revised accounting standards, which may result in its financial statements **not being comparable** to companies that comply with public company effective dates[81](index=81&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=18&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a 'smaller reporting company' as defined by Item 10 of Regulation S-K, Kaival Brands Innovations Group, Inc. is not required to provide quantitative and qualitative disclosures about market risk in this report - The Company is **not required to provide the information** regarding quantitative and qualitative disclosures about market risk due to its status as a '**smaller reporting company**'[82](index=82&type=chunk) [Item 4. Controls and Procedures](index=18&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were ineffective as of July 31, 2019, primarily due to a material weakness in internal control over financial reporting. No material changes in internal control over financial reporting occurred during the quarter [Evaluation of Disclosure Controls and Procedures](index=18&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports management's assessment of the company's disclosure controls and their effectiveness - Management concluded that the company's disclosure controls and procedures were **not effective as of July 31, 2019**[83](index=83&type=chunk) - The ineffectiveness was attributed to a **material weakness** in the company's internal control over financial reporting[83](index=83&type=chunk) [Changes in Internal Control over Financial Reporting](index=18&type=section&id=Chances%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms no material changes in the company's internal control over financial reporting during the quarter - During the quarter ended **July 31, 2019**, there was no change in the company's internal control over financial reporting that materially affected, or is reasonably likely to materially affect, internal control over financial reporting[85](index=85&type=chunk) [PART II Other Information](index=19&type=section&id=PART%20II%20Other%20Information) This section covers various non-financial disclosures, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=19&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material pending legal proceedings, aside from ordinary routine litigation incidental to its business - There are **no material pending legal proceedings**, as defined by **Item 103 of Regulation S-K**, to which the company is a party or of which any of its property is the subject, other than ordinary routine litigation incidental to the Company's business[87](index=87&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) As a 'smaller reporting company' as defined by Item 10 of Regulation S-K, the company is exempt from providing risk factor disclosures in this report - The Company is **not required to provide the information** regarding risk factors due to its status as a '**smaller reporting company**'[88](index=88&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=19&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period covered by this report - There were **no unregistered sales of equity securities** and use of proceeds to report[89](index=89&type=chunk) [Item 3. Defaults Upon Senior Securities](index=19&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were **no defaults upon senior securities** to report[90](index=90&type=chunk) [Item 4. Mine Safety Disclosures](index=19&type=section&id=Item%204%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - There were **no mine safety disclosures** to report[91](index=91&type=chunk) [Item 5. Other Information](index=19&type=section&id=Item%205%20Other%20Information) The company reported no other information requiring disclosure in this section - There was **no other information to disclose**[92](index=92&type=chunk) [Item 6. Exhibits](index=20&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report, including corporate organizational documents such as the Restated Certificate of Incorporation and Bylaws, as well as certifications by the Chief Executive Officer and Chief Financial Officer - Exhibits filed include the **Restated Certificate of Incorporation**, **Bylaws**, **Certificate of Ownership and Merger**, **Certificate of Correction**, and **certifications by the Chief Executive Officer and Chief Financial Officer**[95](index=95&type=chunk) [Signatures](index=21&type=section&id=Signatures) This section provides the official signature and title of the authorized signatory for the report - The report was duly signed on **September 10, 2019**, by Nirajkumar Patel, who serves as the **President, Chief Executive Officer, and Chief Financial Officer** of Kaival Brands Innovations Group, Inc[99](index=99&type=chunk)

Financial Position - As of April 30, 2019, the company had no assets and current liabilities totaling $9,025, which consisted of accrued expenses[72] - The company has negative working capital and a stockholder deficit, raising substantial doubt about its ability to continue as a going concern[71] - The company has no known demands or commitments that would materially affect its liquidity as of April 30, 2019[72] Financial Performance - The company reported a net loss of $4,225 for the three months and $18,185 for the six months ended April 30, 2019, attributed to general and administrative expenses[75] - The company has not generated any revenue since its inception on September 4, 2018, and is unlikely to do so without identifying suitable business opportunities[74] Future Costs and Funding - The company anticipates incurring costs of approximately $15,000 for filing Exchange Act reports over the next 12 months[68] - The company may incur expenses between $10,000 and $20,000 for legal and audit fees related to potential mergers or acquisitions[69] - The company is entirely reliant on cash contributions from its officers and directors to cover expenses, with no funding commitments currently in place[67] Business Opportunities - The company is exploring business opportunities in the electronic cigarettes, vaporizers, and CBD industries, leveraging management's prior experience[62] - The company has not entered into any definitive agreements regarding business opportunities as of the report date[62] Regulatory Status - The company is classified as an "emerging growth company," allowing it to be exempt from certain financial disclosure and governance requirements for up to five years under the JOBS Act[79] - The company has elected to use the extended transition period for complying with new or revised accounting standards, which may affect the comparability of its financial statements with public companies[79] - As a "smaller reporting company," the company is not required to provide specific market risk disclosures[80]

Financial Condition - As of January 31, 2019, the Company had no assets and current liabilities totaled $9,750, consisting of accrued expenses[69]. - The Company has negative working capital and a stockholder deficit, raising substantial doubt about its ability to continue as a going concern[68]. - The Company has no off-balance sheet arrangements that materially affect its financial condition or results of operations[73]. Revenue Generation - The Company generated no revenues since inception and has no cash flows from operating activities for the three months ended January 31, 2019[70]. - The Company has not generated any revenue since its inception on September 4, 2018, through January 31, 2019, and is unlikely to do so without identifying suitable business opportunities[71]. - For the three months ended January 31, 2019, the Company reported a net loss of $13,960, primarily due to general and administrative expenses[72]. Business Opportunities - The Company is exploring business opportunities in the electronic cigarettes, vaporizers, and CBD industries, leveraging management's prior experience[61]. - The Company has engaged in discussions regarding potential business opportunities but has not identified any viable candidates yet[64]. - The Company has not entered into any definitive agreements concerning business activities as of the date of the report[57]. Costs and Expenses - The anticipated costs for filing Exchange Act reports over the next 12 months are estimated to be between $5,000 and $10,000[67]. - If pursuing mergers or acquisitions, the Company expects to incur additional expenses of approximately between $10,000 and $20,000[67]. - The Company is reliant on cash contributions from officers and directors to cover expenses, with no funding commitments obtained for future expenses[68]. Company Classification - The Company is considered a "blank check" company with no specific business plan or purpose, qualifying as a shell company[58]. - As an Emerging Growth Company (EGC), the Company has elected to delay the adoption of new or revised accounting standards, which may affect comparability with other public companies[74]. - The Company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures[75].