Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 31

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 31
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 life is
approximately 4.07 years for common stock warrants outstanding as of April 30, 2025. As of April 30, 2025, there was no intrinsic value
of outstanding stock warrants.

    F-18

Note 8 – 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 was also owned by Nirajkumar Patel, the former Chief Executive Officer and Director of the Company.

Revenue and Accounts Receivable

During the six months ended April 30, 2025, and 2024,
  the Company recognized revenue of 0zero and $3,700, respectively, from one company owned by Nirajkumar Patel, the former Chief
Executive Officer and Director of the Company, and/or his wife. There was no accounts receivable balance for these transactions as of
April 30, 2025 and October 31, 2024.

Purchases and Accounts Payable

During the six months ended April 30, 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   $273,060.

There were no purchases of inventory from Bidi for
the six months ended April 30, 2025 and no amounts owed to Bidi for inventory purchases as of April 30, 2025.

The KBI License agreement provides that 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 three and six months ended April 30, 2025,
the Company paid license fees of approximately $90,000 and $198,215, respectively to Bidi. As of April 30, 2025, the Company had   a
payable to Bidi of $35,000 related to the PMI License Agreement.

During the three and six months ended April 30, 2024,
the Company paid license fees of $60,000 and $60,000, respectively, to Bidi. As of October 31, 202