Company: KAVL
Filing Date: 2025-09-16
Form Type: 10-Q
Source: 0001731122-25-001266
Chunk: 62

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-09-16
Form: 10-Q
Item: Item 2
Chunk 62
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. Since the initiation of the ITC Complaint, we have not imported any Bidi Sticks and
currently do not generate any revenue from the sale of Bidi Sticks. Our current primary source of revenue is through an international
licensing agreement with Philip Morris Products S.A. (“PMPSA”), a wholly owned affiliate of Philip Morris International Inc.
(“PMI”).

We have also entered into a Merger and Share Exchange
Agreement (the “Merger Agreement”) with Delta Corp Holdings Limited, a company incorporated in England and Wales (together
with its successors and assigns, “Delta”), Delta Corp Holdings Limited, a Cayman Islands exempted company (“Pubco”),
KAVL Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Pubco (“Merger Sub”) and Delta Corp Cayman Limited
(the “Sellers”).

On September 11, 2025, Kaival Brands Innovations Group,
Inc., (the “Company”) and Delta Corp Holdings Limited, a company incorporated in England and Wales (together with its successors
and assigns, “Delta”) entered into a Business Combination Termination and Release Agreement (the “Termination Agreement”)
pursuant to Section 10.1(a) of the Merger Agreement (the “Merger Agreement’) among the Company, Delta, Delta Corp Holdings
Limited, a Cayman Islands exempted company, KAVL Merger Sub Inc. and Delta Corp Cayman Limited. 

Pursuant to the Termination
Agreement, the Company and Delta mutually terminated the Merger Agreement and all agreements between the parties that are ancillary thereto
and Delta waived any and all claims against the other party that in any way directly and/or indirectly arise out of, are based upon, or
are in connection with the Merger Agreement any agreements ancillary thereto.

Material Items, Trends
and Risks Impacting Our Business

We believe that the following items and trends may
be useful in better understanding our results of operations.

On June 11, 2024, the RJ Reynolds Entities filed the ITC Complaint. The ITC
Complaint requests the ITC grant: (a) temporary and permanent limited exclusion orders pursuant to Section 337(e) of the Tariff Act of
1930, as amended, which would prohibit the importation of the Bidi Stick in the United States; and (b) issue temporary and permanent cease
and desist orders pursuant to 337(f