Company: KAVL
Filing Date: 2025-06-10
Form Type: 10-Q
Source: 0001731122-25-000842
Chunk: 36

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-06-10
Form: 10-Q
Item: Item 1
Chunk 36
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 unable to generate meaningful sales of its licensed products, our business
and results of operations would be materially harmed.

Ability to Develop
and Monetize the GoFire Intellectual Property

We purchased certain vaporizer
and inhalation-related technology from GoFire in May 2023 with the goal of diversifying our business and lessening our dependence on BIDI
Vapor. We do not expect that the acquired assets will generate immediate revenue for us, and while we believe this to be a transformative
acquisition for us and we are already seeking to develop and monetize the acquired assets, we can give no assurances at this time that
either (i) the patent applications we acquired will eventuate in issued patents or (ii) we will be able to enter into successful monetizing
arrangements with respect to these assets.

Inflation

Consumer purchases of tobacco
products are historically affected by economic conditions, such as changes in employment, salary and wage levels, the availability of
consumer credit, inflation, interest rates, fuel prices, sales taxes, and the level of consumer confidence in prevailing and future economic
conditions. The U.S. has been experiencing an environment of material inflation in recent quarters, and this condition may impact discretionary
consumer purchases, such as the BIDI® Stick. Demand for our Products may also decline during recessionary periods or at other times
when disposable income is lower, and taxes may be higher.

Corporate History

We were incorporated on September 4, 2018, in the
State of Delaware. Effective July 12, 2019, we changed our corporate name from Quick Start Holdings, Inc. to Kaival Brands Innovations
Group, Inc. The name change was effected through a parent/subsidiary short-form merger of Kaival Brands Innovations Group, Inc., our wholly-owned
Delaware subsidiary formed solely for the purpose of the name change, with and into us. We were the surviving entity.

2

Change of Control

On February 6, 2019, we entered into a Share Purchase
Agreement (the “Share Purchase Agreement”), by and among us, GMRZ Holdings LLC, a Nevada limited liability company (“GMRZ”),
our then-controlling stockholder, and Kaival Holdings, LLC, a Delaware limited liability company (“KH”), pursuant to which,
on February 20, 2019, GMRZ sold 24,000,000 shares of our restricted common stock, representing approximately 88.06% of our then issued