Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 59

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 8
Chunk 59
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 three months ended January 31, 2025, and 2024, respectively. Amortization expense is included
under general and administrative expenses in the unaudited interim consolidated statement of operations.

Future amortization expense of intangible assets is
as follows:

Schedule of future amortization expense of intangible assets

Remaining period in 2025 (nine months)

$
589,796

Year ending October 31, 2026

786,398

Year ending October 31, 2027

786,398

Year ending October 31, 2028

786,398

Year ending October 31, 2029

786,398

Thereafter

6,749,921

Total

$
10,485,309

Note 5 – Loans Payable

Insurance Loans

On May 10, 2024, the Company obtained two insurance
loans. The first loan is a nine-month loan from First Insurance Bank to finance the annual D&O insurance, with the principal amount
of $381,077 and subject to an effective interest rate of 7.45%. The second loan is a nine-month loan from IPFS Corporation to
finance the annual D&O insurance, with the principal amount of $94,404 and subject to an effective interest rate of 11.15%.
As of January 31, 2025 and October 31, 2024, the outstanding balance of the Insurance loans amounted to $43,667 and $207,616, respectively.

Loan Agreements

On November 29, 2023, the Company entered into two
loan agreements which are collateralized by all assets of the Company until the loans are repaid in full. Under the terms of these agreements,
the Company received the disclosed Purchase Price and agreed to repay the disclosed Purchase Amount, which is collected by the lenders
at the disclosed weekly payment rate. The Company’s former Chief Executive Officer, Eric Mosser personally guarantees the performance
of these loans. These loans were fully paid on June 13, 2024, upon their maturity.

On August 9, 2023, the Company entered into a Securities
Purchase Agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”), pursuant to which the Company sold a
Promissory Note in the principal amount of $650,000 (the “Note”) to AJB in a private transaction for a purchase price of $585,000
(giving effect to original