Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 15

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 15
---
2    (collectively, the “A&R
Distribution Agreement”). Pursuant to the A&R Distribution Agreement, Bidi granted us an exclusive worldwide right to distribute
Bidi’s ENDS (as more particularly set forth in the A&R Distribution Agreement) for sale and resale to both retail level customers
and non-retail level customers. Currently, the products consist solely of the “BIDI® Stick,” Bidi’s disposable,
tamper resistant ENDS product made with medical-grade components, a UL-certified battery and technology designed to deliver a consistent
vaping experience for adult smokers 21 and over. We had distributed products to wholesalers and retailers of ENDS products, having ceased
all direct-to-consumer sales in February 2021.

8

BIDI® Stick comes in a variety of flavor options
for adult cigarette smokers. We do not manufacture any of the products we resell. The BIDI® Stick is manufactured by Bidi through
its contract manufacturer in China. Pursuant to the terms of the A&R Distribution Agreement, Bidi provides us with all branding, logos,
and marketing materials to use with our commercial partners in connection with our marketing and promotion of Bidi products.

The A&R Distribution Agreement extends the previous
one-year, annual renewable term to an initial term of ten years, which automatically renews for another ten-year term if we satisfy certain
minimum purchase thresholds. The A&R Distribution Agreement also provides us with a right of first refusal in the event Bidi receives
an offer that would constitute a “change of control transaction,” as well as a right of first refusal to act as the exclusive
distributor of any and all future products of Bidi that arise out of or related to ENDS and components related to ENDS, or arise out of
or related to the tobacco-derived nicotine industry.

In connection with the
A&R Distribution Agreement, we entered into non-exclusive sub-distribution agreements, some of which were subsequently amended and
restated by the parties in order to clarify certain provisions (all such sub-distribution agreements, as amended and restated, are collectively
referred to as the “Sub-Distribution Agreements”), whereby we appointed the counterparties as non-exclusive sub-distributors.
Pursuant to the Sub-Distribution Agreements, the sub-distributors agreed to purchase for resale products in such quantities as they should
need to properly service non-retail customers within the continental United States (the “Territory”). These agreements were
terminated in the