Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 276

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1B
Chunk 276
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3, we issued
95,239 shares of Common Stock as consideration for the acquisition of intellectual property assets from GoFire. We also issued 4,381 shares
of Common Stock as compensation for advisory services rendered in connection with the GoFire APA. We also issued 19,048 shares of Common Stock as part of a loan transaction with AJB investments.

Series B Convertible Preferred Stock

We issued 900,000
shares of the Series B Preferred Stock as consideration for the acquisition of intellectual property assets from GoFire in May 2023.
The Series B Preferred Stock carries no voting rights except: (i) with respect to the ability of the holders of a majority of the
then outstanding Series B Preferred Stock (the “Majority Holders”), to nominate a director to our board of directors,
and (ii) that the vote of the Majority Holders is necessary for effecting any amendment to the Company’s Certificate of
Incorporation or Certificate of Designation that affects the Series B Preferred Stock. The Series B Preferred Stock is redeemable at
our option at a redemption price of $15 per share, subject to potential downward adjustments based on the trading price of the
Common Stock. Subject to additional limitations in the GoFire APA, the Series B Preferred Stock holds seniority over the Common
Stock and each other class of series of securities now existing or hereafter authorized with respect to dividend rights, the
distribution of assets upon liquidation, and dissolution and redemption rights. Upon a liquidation and winding up of our company,
the holders of Series B Preferred Stock are entitled to a liquidation preference of $15 per share (the “Liquidation
Preference”), though the redemption may be adjusted downward based on the trading price of the Common Stock at the time of
liquidation. The holders of Series B Preferred Stock are entitled to receive a dividend equal to 2% of the Liquidation Preference,
accruing from May 30, 2023 and payable on the eighteen-month anniversary of May 30, 2023. No preemptive rights are granted to the
holders of Series B Preferred Stock. The Majority Holders have the ability to cause a voluntary conversion of the Series B Preferred
Stock into Common Stock at a conversion rate of 0.3968 shares of Common Stock per share of Series B Preferred Stock which may only
occur on or after the following dates 18 month, 24 month, 36, month, 48 month, and 60 month anniversary of the original