Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 109

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 109
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 on its balance sheet for leases with terms longer than
12 months and classified as either financing or operating leases. The Company excludes short-term leases having initial terms of 12 months
or less from Topic 842 as an accounting policy election and recognizes rent expense on a straight-line basis over the lease term.

The Company does not have financing leases and only
one operating lease for office space and inventory storage space with Just Pick, LLC (“Just Pick”), a related party that was
owned and controlled by Nirajkumar Patel, the former Chief Executive Officer and Director of the Company (see Note 9). Certain of the
Company’s leases, have and may in the future, include renewal options, which have been and might be in the future, included in the
calculation of the lease liabilities and right of use assets when the Company is reasonably certain to exercise the option.

    F-19

Cash flow information related to leases was as follows:

Schedule of cash flow information related to leases

October 31, 2024
 
October 31, 2023

Other Lease Information

Cash paid for amounts included in the measurement of lease liabilities:

 Operating cash flows from operating leases
 
$
(198,392
)
 
$
(190,541
)

The following table provides the maturities of lease liabilities as of
October 31, 2024:

Schedule of maturities of lease liabilities

Operating

Leases

Year ending October 31, 2025
 
$
238,800

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
 
$
943,349

Less: Imputed interest

(77,141
)

Present value of lease liabilities
 
$
866,208

As of October 31, 2024, the Company had no additional
leases which had not yet commenced.

Note 8 – 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 acquisition of the GoFire Purchased Assets. 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