Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 387

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 2
Chunk 387
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 consolidated financial statements.

F-6

KAIVAL BRANDS INNOVATIONS GROUP, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization and Description of Business

Kaival Brands Innovations Group, Inc. (the “Company,”
the “Registrant,” “we,” “us,” or “our”), formerly known as Quick Start Holdings, Inc.,
was incorporated on September 4, 2018, in the State of Delaware.

Description of Business

On March 9, 2020, the Company entered into an exclusive
distribution agreement (the “Distribution Agreement”) of certain electronic nicotine delivery systems (“ENDS”)
and related components (the “Products”) with Bidi Vapor, LLC, a Florida limited liability company (“Bidi”). The
Distribution Agreement was amended and restated on May 21, 2020, again on April 20, 2021, again on June 10, 2022,
and again on November 17, 2022 (collectively the “A&R Distribution Agreement”), in order to clarify some of the
provisions and memorialize the Company’s current business relationship with Bidi. Pursuant to the A&R Distribution Agreement,
Bidi granted the Company an exclusive worldwide right to distribute the Products for sale and resale to non-retail level customers. Currently,
the Products consist primarily of the “Bidi Stick.”

On August 31, 2020, the Company formed Kaival Labs,
Inc., a Delaware corporation (herein referred to as “Kaival Labs”), as a wholly owned subsidiary of the Company, for the purpose
of developing Company-branded and white-label products and services. The Company has not yet launched any Kaival-branded product, nor
has it begun to provide white label wholesale solutions for other product manufacturers. On March 11, 2022, the Company formed Kaival
Brands International, LLC, a Delaware limited liability company (herein referred to as “KBI”), as a wholly owned subsidiary
of the Company, for the purpose of entering into an international licensing agreement with Philip Morris Products S.A. (“PMPSA”),
a wholly owned affiliate of Philip Morris International Inc. (“PMI”).

On June 13, 2022, the Company’s 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