Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 34

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 34
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    since
    the Merger Agreement restricts the conduct of our business prior to completion of the Business Combination, we may not have been
    able to take certain actions during the pendency of the Business Combination that would have benefitted it as an independent company,
    and the opportunity to take such actions may no longer be available.

Risks Related to Our Business and Industry  

If the claims against the Company and Bidi that
have been filed with the International Trade Commission are successful, the Company and Bidi could be prohibited from importing and selling
the Bidi Stick in to the United States.

On June 11, 2024, RAI Strategic Holdings, Inc., R.J. Reynolds Vapor Company,
R.J. Reynolds Tobacco Company, and RAI Services Company (collectively, the “RJ Reynolds Entities”) filed a patent infringement
complaint with the International Trade Commission (the “ITC”) against Bidi, us, 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. On November 1, 2024, Bidi stipulated to a consent order
prohibiting Bidi from selling for import, importing, or selling after importation the Bidi Stick.  The ITC entered the consent order
on December 6, 2024.

Our Business may permanently
suffer as a result of the ITC Complaint

As a result of the ITC Complaint,