Company: KAVL
Filing Date: 2025-03-17
Form Type: 10-Q
Source: 0001731122-25-000399
Chunk: 60

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-17
Form: 10-Q
Item: Item 8
Chunk 60
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 issue discount of $65,000). The Note matured on February 8, 2024 (the “Maturity Date”) and had
interest at the rate of 10% per annum. Interest was payable on a monthly basis beginning on the date one month following the date of issuance
of the Note. Pursuant to the terms of the SPA, the Company paid a commitment fee to AJB in the form of 19,048 shares of Common Stock (the
“Commitment Fee Shares”) with a relative fair value of $130,478 which was recognized as discount to the note. The debt discount
and issuance costs were amortized over the term of the note. Amortization expense amounted to zero and $38,273 for the three months ended
January 31, 2025, and 2024, respectively.

Under the SPA, the Company had the right to repurchase
half of the Commitment Fee Shares if the Note was repaid in full prior to maturity. On December 1, 2023, the Company fully paid the loan
balance in advance of the maturity date. In connection with the repayment of the Note, the Company agreed that AJB would be permitted
to retain all of the Commitment Fee Shares. The Company recognized $98,432
as loss on extinguishment of debt in the three months ended January 31, 2024. As of January 31, 2025 and October 31, 2024 the
carrying value of the Note were zero and zero, respectively.    

    F-16 

Note 6 – Leases

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 a director of the Company. 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.

Cash flow information related to leases was as follows:

Schedule of cash flow information related to leases

January 31, 2025
 
January 31, 2024

Other Lease Information

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

Operating cash flows from operating leases
 
$
(49,101
)
 
$