Company: KAVL
Filing Date: 2025-09-16
Form Type: 10-Q
Source: 0001731122-25-001266
Chunk: 88

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-09-16
Form: 10-Q
Item: Item 8
Chunk 88
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 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 share equivalents
from conversion of dilutive stock options and warrants using the treasury method and preferred stock using the if-converted method, except
when antidilutive. In the event of a net loss, the effects of all potentially dilutive shares are excluded from the diluted net loss per
share calculation as their inclusion would be antidilutive.

Concentration of Revenues and Accounts Receivable

No revenue concentration from the sale of Products
existed for the nine months ended July 31, 2025.

For the nine months ended July 31, 2024, (i) 24% or
$1,228,535 of the revenue from the sale of Products, solely consisting of the BIDI® Stick, was generated from QuikTrip Corporation,
(ii) 19% or $990,589 of the revenue from the sale of the Products was generated from GPM Investments, LLC, and (iii) 11% or $575,183 of
the revenue from the sale of the Products was generated from FAVS Business, LLC. On May 2, 2024, QuikTrip Corporation terminated its consignment
arrangement with the Company.

No accounts receivable concentration from the sale
of Products existed as of July 31, 2025.

QuikTrip Corporation, with an outstanding balance
of approximately $205 accounted for 100% of the total accounts receivable from customers, as of October 31, 2024.

Share-Based Compensation

The Company measures the cost of services received
in exchange for an award of equity instruments (share-based payments, referred to herein as “SBP”) based on the grant-date
fair value of the award. That cost is recognized over the period during which a recipient is required to provide service in exchange for
the SBP award—the requisite service period (vesting period