Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 364

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 2
Chunk 364
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On June 10, 2022, we entered into a Lease Agreement
(the “2022 Lease”) with Just Pick, LLC (a related party) for approximately 21,332 rentable square feet combined in the office
building and warehouse located at 4460 Old Dixie Highway, Grant-Valkaria, Florida 32949 (the “Premises”), together with all
improvements thereon. Just Pick, LLC is considered a related party as it is owned and controlled by KDMM Trust I, which is also the sole
voting member of Kaival Holdings. Kaival Holdings is the largest shareholder of Kaival. We believe our office space is sufficient to meet
our current needs. We must pay the Just Pick lease base rent equal to $17,777 per month during the first year of the lease term. Thereafter,
the monthly base rent will be increased annually with a monthly base rent of $18,666 in the second year, $19,554 in the third year, $20,443
in the fourth year, $22,221 in the fifth year, $23,999 in the sixth year, and one twelfth (1/12th) of the market annual rent
for the seventh through eleventh years, if appliable. In addition to the base rent, we must pay Just Pick one hundred percent (100%) of
operating expenses, insurance costs, and taxes for each calendar year during the lease term.

Item 3. Legal Proceedings.

From time to time, we may become party to litigation
or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal
proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition, or results
of operations. To the best of our knowledge, no adverse legal activity is anticipated or threatened.

While we are not a party to the legal or regulatory proceedings involving Bidi
described in Item 1 – Business – FDA PMTA and MDO Determinations, Related Court Actions and the Impact on Our Business, the
outcome of those or related proceedings could have a material adverse impact on our ability to operate our business given our reliance
on Bidi.

Item 4. Mine Safety Disclosures.

Not applicable.

35

PART II

Item 5. Market for Registrant’s Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

On July