Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 74

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 8
Chunk 74
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 Entities, in December 2024 Bidi entered into
a consent order agreeing to cease all importation and distribution of the Bidi Stick until the RJ Reynolds Entities’ patent expires
in October 2026. In November 2024, the ITC Administrative Law Judge (ALJ) denied temporary relief to the Reynolds Entities and the case
proceeded on the merits. A trial was held in April 2025. A decision from the ALJ is expected on July 21, 2025.  The ALJ’s initial
determination (ID) will be reviewed by the Commission and the Commission deadline is November 24, 2025, subject to potential extensions.
The asserted patent expires in October 2026 as would any exclusion order that the ITC enters as a result of the ITC Complaint, as well
as the Bidi consent order.

1

As a result of the ITC Complaint and other factors,
  we do not expect any significant revenue from the sale of Bidi Sticks in the foreseeable future. Our primary source of revenue
is from KBI from royalties from PMI under the PMI License Agreement.

PMI Licensing Agreement and International Distribution

On June 13, 2022, we, through our wholly owned subsidiary,
KBI, entered into the PMI License Agreement with PMPSA, a wholly owned affiliate of PMI, for the development and distribution of ENDS
products in certain markets outside of the United States, subject to market (or regulatory assessment). The PMI License Agreement grants
to PMPSA a license of certain intellectual property rights relating to Bidi’s ENDS device, known as the BIDI® Stick in the United
States, as well as potentially newly developed devices, to permit PMPSA to manufacture, promote, sell, and distribute such ENDS device
and newly developed devices, in international markets, outside of the United States.

On July 25, 2022, we announced the launch of PMPSA’s
custom-branded self-contained e-vapor product, pursuant to the licensing agreement. The product, a self-contained e-vapor device initially
called VEEBA and more recently rebranded as VEEV NOW, has been custom developed and was initially distributed in Canada. VEEV NOW was
then commercially launched by PMPSA in Europe in February 2023, with additional market launches planned this year. On August 12, 2023,
we executed and entered into a Deed