Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 110

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 110
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 to the Company’s 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 the option of the Company 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 the 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 the Closing Date and payable on the eighteen-month anniversary of the Closing Date. Amounts
payable in respect of the Series B Dividend shall begin to accrue on a daily basis, be cumulative from and including the Original Issue
Date, whether or not the Corporation has funds legally available for such dividends or such dividends are declared, shall compound on
each six month anniversary of the Original Issue Date and shall be payable in arrears on the 18-month anniversary of the Original Issue
Date. 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 issuance date; and only up to 180,000 shares of Series B Preferred Stock on each of these dates. All shares of Series
B Preferred Stock will automatically convert to Common Stock upon the occurrence of a Change of Control (as defined in the GoFire APA). As of October 31, 2024, the Company had accrued a dividend
of $382,500 payable to