Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 421

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 2
Chunk 421
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,174,456
shares of common stock from exercises of pre-funded warrants, consisting of 1,450,000 Pre-funded Warrants through cash exercise and 725,000
Pre-funded Warrants through cashless exercise. The Company received proceeds amounting to $1,450 from the cash exercise of the Pre-funded
Warrants. As of October 31, 2024, there were no Pre-Funded Warrants outstanding.

Note 9 – Related-Party Transactions  

 In March 2020, the Company commenced business
operations as a result of becoming the exclusive distributor of certain ENDS and related components (the “Products”) manufactured
by Bidi, a related party company that is also owned by Nirajkumar Patel, the former Chief Executive Officer and Director of the Company.

On June 24, 2024, the Company obtained a short-term
loan from Bidi, a related party company to finance the state and franchise tax fees. The principal amount was $218,787 and was not subject
to interest. The entire principal balance of this loan shall be due and payable in full immediately upon receipt of funds by the Company
pursuant to the June 2024 Public Offering noted above. This loan was fully paid on June 25, 2024, and as of October 31, 2024, had
an outstanding balance of zero.

Revenue and Accounts Receivable

During the fiscal year ended October 31, 2024, the
Company recognized revenue of $5,950 from one company owned by Nirajkumar Patel, the former Chief Executive Officer and former Director of
the Company, and/or his wife.

During the fiscal year ended October 31, 2023, the
Company recognized revenue of $10,828 from three companies owned by Nirajkumar Patel, the
former Chief Executive Officer and a former Director of the Company, and/or his wife.

Purchases and Accounts Payable

During the fiscal year ended October 31, 2024, 100% of the inventories of Products,
consisting solely of the BIDI® Stick, were purchased from Bidi, a related party controlled by Nirajkumar Patel, the former Chief
Executive Officer and Director of the Company, in the amount of $250,560, As of October 31, 2024, the Company had $0 in accounts payable
to Bidi from inventory purchases.

During the fiscal year ended October 31, 2023