Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 65

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 8
Chunk 65
---
 deposit paid
for inventory on order.

There were no purchases of inventory from Bidi for the three months ended
January 31, 2025 and no amounts owed to Bidi for inventory purchases as of January 31, 2025.

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
ended January 31, 2025, the Company paid license fees of approximately $108,215 to Bidi. As of January 31, 2025, the Company
had   a payable to Bidi of $81,429 related
to the PMI License Agreement.

During the three months ended January 31, 2024,
the Company paid license fees of approximately $0 to Bidi.  As of October 31, 2024, the Company had a payable to Bidi of
$131,683 related
to the PMI License Agreement.  

Leased Office Space and Storage Space

On June 10, 2022, the Company entered into the 2022
Lease with Just Pick, owned and controlled by Nirajkumar Patel, the former Chief Executive Officer and Director of the Company. The Company
had $50,928 and $48,834 in operating lease expenses for the three months ended January 31, 2025 and January 31, 2024, respectively.

F-20 

Item 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations.

This Management’s Discussion and Analysis
of Financial Condition and Results of Operations is designed to provide a reader of the financial statements with a narrative report on
our financial condition, results of operations, and liquidity. This discussion and analysis should be read in conjunction with the unaudited
financial statements and notes thereto for the three months ended January 31, 2025, included under Item 1 – Financial Statements
in this Report and our audited financial statements and notes thereto for the year ended October 31, 2024, contained in the 2024 Annual
Report. The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements of our plans,
objectives, expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking statements.
Please also see the cautionary