Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 55

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 8
Chunk 55
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 the period, without consideration
of potential common stock equivalents.

Diluted net loss per share is calculated by dividing
net loss available to common stockholders by the weighted average number of common stock outstanding plus common share equivalents
from conversion of dilutive stock options and warrants using the treasury method and preferred stock using the if-converted method, except
when antidilutive. In the event of a net loss, the effects of all potentially dilutive shares are excluded from the diluted net loss per
share calculation as their inclusion would be antidilutive.

Concentration of Revenues and Accounts Receivable

No revenue concentration  
from the sale of Products existed for the three months ended January 31, 2025.  

For the three months ended January 31, 2024, (i) 17%
or $511,192 of the revenue from the sale of Products, solely consisting of the BIDI® Stick, was generated from QuikTrip
Corporation, (ii) 16% or $474,378 of the revenue from the sale of the Products was generated from GPM Investments, LLC, and (iii) approximately
14% or $417,740 of the revenue from the sale of Products, solely consisting of the BIDI Stick, was generated from International Wholesale
Club.

 No accounts receivable concentration from the sale
of Products existed as of January 31, 2025.

QuikTrip Corporation, with an outstanding
balance of $180,294, accounted for 43% of the total accounts receivable from customers as of January 31, 2024.  

    F-13 

Share-Based Compensation

The Company measures the cost of services received
in exchange for an award of equity instruments (share-based payments, referred to herein as “SBP”) based on the grant-date
fair value of the award. That cost is recognized over the period during which a recipient is required to provide service in exchange
for the SBP award—the requisite service period (vesting period). For SBP awards subject to performance conditions, compensation
is not recognized until the performance condition is probable of occurrence. The grant-date fair value of share options is estimated
using the Black-Scholes-Merton option-pricing model.

Fair Value of Financial Instruments

The Company’s balance sheet includes certain
financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively
short period of time between the origination of these instruments and their