Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 26

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 26
---
 par value $0.01 per share, of Series A Preferred
Stock (the “Series A Preferred Stock”).

In exchange for the Cancellation Shares, we issued
3,000,000 shares (the “Preferred Shares”) of our newly designated Series A Preferred Stock to Kaival Holdings. The exchange
of the Cancellation Shares and the issuance of the Preferred Shares was intended to comply with Section 3(a)(9) of the Securities Act,
in that the issuance was exempt from the registration requirements of the Act because the exchange of the Cancellation Shares for the
Preferred Shares was an exchange between us, as issuer, with an existing stockholder, and no commission or other remuneration was paid
or given directly for the exchange.

2021 Reverse Stock Split 

On July 16, 2021, we filed a Certificate of Amendment
to the Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to affect a 1-for-12 reverse
stock split (the “Reverse Stock Split”) of the shares of our Common Stock. The Reverse Stock Split was effective as of 12:01
a.m. Eastern Time on July 20, 2021. No fractional shares were issued in connection with the Reverse Stock Split. Any fractional shares
of our Common Stock that would have otherwise resulted from the Reverse Stock Split were rounded up to the nearest whole number. In connection
with the Reverse Stock Split, our Board approved appropriate and proportional adjustments to all outstanding securities or other rights
convertible or exercisable into shares of our Common Stock, including, without limitation, all preferred stock, warrants, options, and
other equity compensation rights. All historical share and per-share amounts reflected throughout our consolidated financial statements
and other financial information in this Report have been adjusted to reflect the Reverse Stock Split as if the split occurred as of the
earliest period presented. The par value per share of our Common Stock was not affected by the Reverse Stock Split. 

2022 Series A Preferred Shares Converted 

The authorized preferred stock of the Company consists
of 5,000,000 shares with a par value of $ 0.001 per share, of which 3,000,000 shares were designated as Series A Convertible Preferred
Stock (the “Series A Preferred Stock”). Each share of the Series A Preferred Stock was initially convertible into 100 shares
of Common Stock; however, as a result of the Reverse Stock Split, the conversion rate was adjusted such