Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 490

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 3
Chunk 490
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 KBI shall
pay Bidi license fees equivalent to 50% of the adjusted earned royalty payments, after any offsets due to jointly agreed costs such development
costs incurred for entry to specific international markets. During the year ended October 31, 2024, the Company paid license fees of
approximately $220,000 to Bidi. As of October 31, 2024 and 2023, $131,683
and zero,
respectively, of license fees are owed to Bidi.

As of October 31, 2024, amounts receivable from PMPSA
in connection with the PMI license agreement pertaining to royalties totaled $263,367. As of October 31, 2023, amounts receivable from
PMPSA in connection with the PMI License Agreement totaled $1,002,196 of which $289,672 and $712,524 pertain to royalties
and reimbursement of certain non-recurring engineering costs, respectively.

Net Loss Per Share

Basic net loss per share
is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during 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.

As
of October 31, 2024, and 2023, there were 5,944,276 and 691,654, respectively, units of common stock equivalents that consists of options
and warrants units, as well as 357,120 shares issuable upon preferred stock conversions, that were excluded from the current and prior
period diluted loss per share calculation as their effect is anti-dilutive. 

Concentration of Revenues and Accounts Receivable

For the year then ended October 31, 2024, (i) 21%
or $1,236,491 of the revenue from the sale of Products, solely consisting of the BIDI® Stick, was generated from QuikTrip Corporation,
(ii) 12% or $678,562 was generated from GPM Investments