Company: KAVL
Filing Date: 2025-08-18
Form Type: 424B5
Source: 0001731122-25-001141
Chunk: 37

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-08-18
Form: 424B5
Chunk 37
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 PMI Licensing
Agreement to be modified for a PMI Market. Pursuant to the PMI Licensing Agreement, PMPSA has absolute discretion over sales, marketing,
product branding and packaging pertaining to sales in the PMI Markets, as well as the right to select the specific PMI Markets in which
to launch commercialization and determine what product types are to be promoted in each market, subject to sales and marketing plans and
annual business plans set by PMPSA and certain expansion criteria agreed between PMPSA and KBI.

The PMI License Agreement contains customary representations,
warranties, covenants, and indemnification provisions; however, KBI’s liability under the PMI License Agreement is capped at the
greater of: (i) Ten Million Dollars ($10,000,000); or (ii) an amount equal to the total of the royalties due to KBI (but not yet paid)
plus the royalties (including the guaranteed royalty payment) paid to KBI pursuant to the PMI License Agreement during the immediately
preceding twelve (12) consecutive months, provided that such amount shall not exceed Thirty Million Dollars ($30,000,000). These royalties
may be initially offset on a limited basis by jointly agreed upon costs such as development costs incurred for entry to specific international
markets.

<div align='center'>4</div>

On August 12, 2023, we executed and entered into a
Deed of Amendment No. 1 (the “PMI License Amendment”) with PMPSA, Bidi and KBI. Pursuant to the PMI License Amendment (which
has an effective date of June 30, 2023), the following material changes have been made to the PMI License Agreement:

(i) Royalty Rate. The royalty
paid by PMPSA to KBI will no longer be based on sales price of the product being sold, but rather on the volume of liquid contained within
product being sold. The royalty will be on a sliding scale of between $0.08 to $0.16 per sale based on the volume of liquid contained
in the product, increasing to between $0.10 to $0.20 per sale upon meeting certain sales milestones. For purposes of determining aggregate
sales threshold, all sales undertaken since commencement of the PMI Licensing Agreement will be counted.

(ii) Elimination of Certain Potential Royalty Adjustments. Certain potential adjustments to the royalties receivable by KBI as provided for in the PMI License
Ag