Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 837

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 7A
Chunk 837
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 per share, (the “Series B Preferred Stock” and the
shares of Common Stock underlying the Series B Preferred, the “Series B Conversion Shares”), the rights, preferences and terms
of which are set forth in a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate
of Designation”), and (iii) a common stock purchase warrant to purchase 95,239 shares of Common Stock (the “Warrant”
and the shares of Common Stock underlying the Warrant, the “Warrant Shares”). As additional consideration for the Purchased
Assets, any cannabis-specific (meaning cannabis, hemp or cannabinoid) royalties that are generated by Kaival Labs from or due to the Purchased
Assets, from the Closing Date until January 1, 2027, will be subject to a contingent cash payment (“CCP”). Prior to the earlier
of: (i) the Company achieving less than or equal to $15,000,000 in aggregate gross cannabis-specific royalties from any Kaival Labs licensing
agreements, and (ii)

January 1, 2027, the Company shall pay GoFire a CCP equal to 50% of the aggregate gross cannabis-specific royalties generated by the
Purchased Assets. After the earlier of: (i) the Company achieving greater than $15,000,000 in aggregate gross cannabis-specific royalties,
and (ii) January 1, 2027, the Company shall pay GoFire a CCP equal to 10% of the aggregate gross cannabis-specific royalties generated
by the Purchased Assets until January 1, 2027. Pursuant to the GoFire APA, the Company is required to use commercially reasonable efforts
to register the APA Shares and Warrant Shares with the SEC for distribution to GoFire’s stockholders and/or public resale by such
stockholders within 180 days of the Closing Date. In addition, if any Series B Preferred Stock remains outstanding nineteen (19) months
after the Closing Date, the Company shall use commercially reasonable efforts to file with the SEC a subsequent registration statement
registering the distribution to GoFire’s stockholders and/or public resale Series B Conversion Shares by such stockholders. If
such subsequent registration statement is required, the Company will use its commercially reasonable efforts to obtain effectiveness
of such subsequent registration statement within nineteen (19) months of the Closing Date, and if the Company does not so register the
Series B Conversion Shares within nineteen (19) months of the Closing Date, the Company will