Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 1162

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 8
Chunk 1162
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, 2024. The case is now proceeding on the merits, with Bidi’s opening merits brief filed on April 15, 2024.
FDA filed its response brief on June 7, 2024, and Bidi filed its reply brief on July 29, 2024. The 11th Circuit has indicated
that the oral argument will be held in April 2025. The Company cannot provide any assurance as to the timing or outcome. Unless the MDO
is ultimately remanded by the 11th Circuit, the Classic BIDI® Stick is considered an adulterated tobacco product, the continued
marketing and distribution of which is prohibited.

    F-8

Risks and Uncertainties

The FDA has indicated
that it is prioritizing enforcement of unauthorized ENDS against companies (1) that never submitted PMTAs, (2) whose PMTAs have been
refused acceptance or filing by the FDA, (3) whose PMTAs remain subject to MDOs, and (4) that are continuing to market unauthorized synthetic
nicotine products after the July 13, 2022, cutoff. Subject to FDA’s enforcement discretion, until the scientific review process
is complete on each of Bidi’s PMTA’s, the Company views the risk of FDA enforcement against Bidi as low and is no longer
marketing the Classic BIDI® Stick per the MDO. The Company anticipates FDA will move forward with a review of Bidi’s PMTA
on remand, as directed by the Court; however, the Company cannot provide any assurances as to the timing or outcome.

Merger and Share Exchange Agreement

On September 23, 2024,
we agreed with Delta Delta Corp Holdings Limited, a company incorporated in England and Wales (“Delta”) to effect a business
combination between us and Delta by entering into
a Merger and Share Exchange Agreement (the “Merger Agreement”) among us, Delta, Delta Corp Holdings Limited, a Cayman Islands
exempted company (“Pubco”), KAVL Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Pubco (“Merger
Sub”), and the shareholders of Delta. Pursuant to the Merger Agreement,   we
will effect a merger and share exchange involving the following transactions:

    (a)
    Pubco
    shall acquire all of the issued and outstanding shares of Delta from each holder of Delta shares in exchange for the issuance by
    Pubco of