Kaival Brands(KAVL) - 2019 Q4 - Annual Report

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].