Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 27

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 27
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 Leases

    Remaining period in 2025 (six months) 
    $121,476 
  
    Year ending October 31, 2026 
     253,614 
  
    Year ending October 31, 2027 
     274,946 
  
    Year ending October 31, 2028 
     175,989 
  
    Total future undiscounted lease payments 
    $826,025 
  
    Less: Interest 
     (58,573)
  
    Present value of lease liabilities 
    $767,452 

At April 30, 2025, the Company had no additional leases
which had not yet commenced.

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.

Note 7 – Stockholders’ Equity

Series B Convertible Preferred Stock

On May 30, 2023, the Company issued 900,000 shares
of the Series B Preferred Stock as consideration for the GoFire asset purchase. The Series B Preferred Stock carries no voting rights
except: (i) with respect to the ability of the holders of a majority of the then outstanding Series B Preferred Stock (the “Majority
Holders”), to nominate a director to the Company’s board of directors, and (ii) that the vote of the Majority Holders is necessary
for effecting any amendment to the Company’s Certificate of Incorporation or Certificate of Designation that affects the Series
B Preferred Stock. The Series B Preferred Stock is redeemable at the option of the Company at a redemption price of $15 per share, subject
to potential downward adjustments based on the trading price of the Common Stock. Subject to additional