Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 367

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 2
Chunk 367
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48 month, and 60 month anniversary of the original issuance
date; and only up to 180,000 number of shares of Series B Preferred Stock on each of the 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). On December 3, 2024, the Company paid Accrued dividends of $405,000 to Series B convertible preferred shareholders.

Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations.

This management’s Discussion and Analysis
of Financial Condition and Results of Operations is designed to provide a reader of the financial statements with a narrative report on
our financial condition, results of operations, and liquidity. This discussion and analysis should be read in conjunction with the audited
Financial Statements and notes thereto for the year ended October 31, 2024, included under Item 8 – Financial Statements and Supplementary
Data in this Report. The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements
of our plans, objectives, expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking
statements. Please also see the cautionary language at the beginning of this Report regarding forward-looking statements.

Overview

We
are engaged in the sale, marketing and distribution of electronic nicotine delivery system (“ENDS”) products, also known
as “e-cigarettes”, in a variety of favors. Until October of 2024, our primary source of revenue has been the Bidi Stick as
we sold our inventory on hand. However, on June 11, 2024, RAI Strategic Holdings, Inc., R.J. Reynolds Vapor Company, R.J. Reynolds Tobacco
Company, and RAI Services Company (collectively, the “RJ Reynolds Entities”) filed a patent infringement complaint with the
International Trade Commission (the “ITC”) against Bidi, us, and forty (40) other respondents (the “ITC Complaint”)
pursuant to Section 337 of the Tariff Act of 1930, as amended. Specifically, the ITC Complaint alleges that one or more components or
elements of the Bidi Stick infringe U.S. Patent No. 11,925,202, which is owned by one of the RJ Reynolds Entities. The ITC Complaint
requests the ITC grant: (a) temporary and permanent limited exclusion orders pursuant to Section 337(e)