Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 647

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 5
Chunk 647
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1.8 million, and (v) approximately 12% from QuikTrip Corporation in the amount
of $1.5 million.

QuikTrip
                                            Corporation with an outstanding balance of approximately $205 accounted for 100% of the
                                            total accounts receivable from customers, as of October 31, 2024.   FAVS Business
                                            LLC with an outstanding balance of approximately $302,000, C Store Master with an outstanding
                                            balance of approximately $301,000, and QuikTrip Corporation with an outstanding balance of
                                            approximately $165,000 accounted for approximately 35%, 35%, and 19% of the total accounts
                                            receivable from customers, respectively, as of October 31, 2023.

Cash and cash equivalents

We consider all highly liquid investments with an
original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents on October 31, 2024, or
October 31, 2023. Cash as of October 31, 2024, and October 31, 2023, was $3.9 million and $0.5 million, respectively.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance
with generally accepted accounting principles in the United States, (“GAAP”). The preparation of the consolidated financial
statements in conformity with GAAP requires our management to make a number of estimates and assumptions relating to the reported amounts
of assets and liabilities, the disclosure or inclusion of contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of revenue and expenses during the period. We evaluate our significant estimates on an ongoing basis,
including, but not limited to, estimates related to allowance for doubtful accounts, and income tax provisions. We base our estimates
on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about carrying value of assets and liabilities that are not readily apparent from other sources. Actual
results could differ from those estimates.

We believe that the assumptions associated with our
revenue recognition have the greatest potential impact on our financial statements. Therefore, we consider this to be our only critical
accounting policy and we do not consider any of our estimates to be critical accounting estimates.

However, we consider Revenue Recognition the most
critical accounting policy for the Company that could create a material misevaluation of Product Revenue if not adhered to and implemented
successfully