Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 20

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 20
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 or termination of the PMI Licensing Agreement was reduced
from 6 years to 2 years.

5. Markets. The identification
of the PMI Markets that PMI may enter has been expanded to cover certain additional territories.

    F-12

6. Net Reconciliation Payment to
KBI. As a result of the changes to the PMI License Agreement described in paragraphs 1 thought 3 above, the value of such changes was
calculated and reconciled as of the date of commencement of the PMI Licensing Agreement through June 30, 2023. On September 8, 2023, the
Company received the Net Reconciliation Payment from PMPSA of $134,981 pursuant to this provision.

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 months and six months ended April 30, 2025, the Company paid
license fees of $90,000 and $198,215, respectively, to Bidi. As of April 30, 2025, $35,000 of license fees are owed to Bidi. During the
three months 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, 2024, $131,683 of license fees are owed to Bidi.

As of April 30, 2025, amounts receivable from PMPSA
in connection with the PMI License Agreement totaled $70,000 of which $70,000 and $0 pertain to royalties and reimbursement of certain
non-recurring engineering costs, respectively. As of October 31, 2024, amounts receivable from PMPSA in connection with the PMI License
Agreement totaled $263,367 of which $263,367 and $0 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