Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 19

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 1
Chunk 19
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 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 expected realization.

ASC 820, Fair Value Measurements and Disclosures
(“ASC 820”), defines fair value as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about
market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair
value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy
are described below:

    ●
    Level
    1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets
    or liabilities.

    ●
    Level
    2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly