Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 32

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 32
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4,
the Company had a payable to Bidi of $131,683
related to the PMI License Agreement.

Leased Office Space and Storage Space

On June 10, 2022, the Company entered into the 2022
Lease with Just Pick, owned and controlled by Nirajkumar Patel, the former Chief Executive Officer and Director of the Company. The Company
had $70,051 and $120,979 in operating lease expenses for the three and six months ended April 30, 2025, respectively, and $49,335
and $98,168 for the three and six months ended April 30, 2024, respectively.

On April 23, 2025, the Company received a letter
of demand from Just Pick, LLC. noting that the Company was in breach of the lease as base rent and operating expenses have not been
paid since January 8, 2025. On April 30, 2025, the Company responded and provided Just Pick, LLC with a termination notice. As of
April 30, 2025, the Company determined that it would no longer be using the leased office space in its business and recorded a loss
on the ROU assets of $707,626,
accordingly. As of April 30, 2025, there is ongoing negotiation between Just Pick, LLC and the Company regarding the settlement of
the remaining reported office lease liability.
In May 2025, the Company paid the total unpaid lease payments through May
2025 amounting to $78,217. 

F-19

Item 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations.

This Management’s Discussion and Analysis
of Financial Condition and Results of Operations is designed to provide a reader of the financial statements with a narrative report on
our financial condition, results of operations, and liquidity. This discussion and analysis should be read in conjunction with the unaudited
financial statements and notes thereto for the six months ended April 30, 2025, included under Item 1 – Financial Statements in
this Report and our audited financial statements and notes thereto for the year ended October 31, 2024, contained in the 2024 Annual Report.
The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives,
expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking statements. Please