Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 173

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 173
---
 at a meeting called for such purpose (or by written consent signed
by the Majority Holders in lieu of such a meeting). The Series B Preferred Director shall be entitled to receive similar compensation,
benefits, reimbursement (including of reasonable travel expenses), indemnification and insurance coverage for his or her service as a
director of our company as the other non-employee directors of on the Board. As of the date of this Report, the seat on our Board designated
for the Series B Preferred Director is vacant due to Mr. Cassidy’s resignation from the Board on January 25, 2024. As a result of
their Board appointment right, the Majority Holders could have a disproportionate impact on our governance and operations, which could
have an adverse effect on our company.  

The Series B Preferred Stock ranks senior to
our Common Stock. 

The Series B Preferred Stock ranks, with respect to
dividend rights, rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs
of our company, and redemption rights, senior to the Common Stock and each other class or series of securities now existing or hereafter
authorized classified or reclassified, the terms of which do not expressly provide that such class or series ranks on a parity basis with
or senior to the Series B Preferred Stock as to dividend rights, rights on the distribution of assets on any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of our company, and redemption rights.

29

Future offerings of debt or equity securities
may rank senior to our Common Stock. 

We have a present need for additional capital, and
we will likely continue to seek to raise new funding from time to time through the issuance of debt or equity securities. Our Board of
Directors has the ability, without further approval of our stockholders, to issue debt or equity securities in the future, in addition
to the Series B Preferred Stock, ranking senior to our Common Stock or otherwise incur additional indebtedness, it is possible that these
securities or indebtedness will be governed by an indenture or other instrument containing covenants restricting our operating flexibility
and limiting our ability to pay dividends to stockholders. Additionally, any convertible or exchangeable securities that we issue in the
future may have rights, preferences, and privileges, including with respect to dividends, more favorable than those of our Common Stock
and may result in dilution (perhaps significant) to our stockholders. Because our decision to issue debt or