Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 514

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 3
Chunk 514
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 (collectively, the “RJ Reynolds Entities”)
filed a patent infringement complaint with the International Trade Commission (the “ITC”) against Bidi, the Company, and forty
(40) other respondents (the “ITC Complaint”) pursuant to Section 337 of the Tariff Act of 1930, as amended. Specifically,
the ITC Complaint alleges that one or more components or elements of the Bidi Stick infringe U.S. Patent No. 11,925,202, which is owned
by one of the RJ Reynolds Entities. 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) of the Tariff Act of 1930, as amended, which would prohibit
the sale and distribution of the Bidi Stick in the United States. On July 17, 2024, the Company was dismissed from the ITC proceeding
and is no longer a defendant in the ITC proceeding. No damages are recoverable in the proceedings before the ITC. If Bidi is prohibited
from importing the Bidi Stick, then the Company’s business, operations, financial results, and reputation would be significantly
adversely impacted.

Note 12 – Subsequent Events 

On January 2, 2025, the Company issued 3,025,000 fully
vested shares of common stock to directors, officers and an employee pursuant to grants under the Company’s Amended and Restated
2020 Stock and Incentive Compensation Plan.

On December 3, 2024, the Company paid accrued dividends
of $405,000 to Series B Preferred shareholders.

On various dates from November 2024 through January 2025, the Company received
reimbursements of non-recurring engineering costs from PMPSA totaling $932,937 which have been fully remitted to Bidi.

F-27

Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.

None.

Item 9A. Controls and Procedures.  

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,”
as such term is defined in Rule 13a-15e and Rule 15d-