Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 673

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 5
Chunk 673
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 most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions
developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about
market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair
value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy
are described below:

    ●
    Level
    1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets
    or liabilities.

    ●
    Level
    2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
    or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar
    assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability
    (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or
    other means.

    ●
    Level
    3 – Inputs that are both significant to the fair value measurement and unobservable.

    F-15

Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to management as of October 31, 2024 and 2023. The respective
carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of
these instruments. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses and
loans payable. As of October 31, 2024, and 2023, the Company did not have any financial assets or liabilities measured
and recorded at fair value on a recurring basis.

Recent Accounting Pronouncements – Not
Yet Adopted

In December 2023, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740) - Improvements
to Income Tax Disclosures (“ASU 2023-09”). ASU