Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 513

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 3
Chunk 513
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 Agreement. Pursuant to the Amended Service Agreement:

(a) the term of the Amended Service Agreement was
extended (unless earlier terminated pursuant to the terms of the Amended Service Agreement) from November 1, 2022 (the “Effective
Date”) until October 31, 2025, following which the term shall automatically renew for successive one (1) year period beginning November
1, 2025;

(b) QuikfillRx agreed to change its “doing business
as” name to “Kaival Marketing Services” within thirty (30) days following the Effective Date;

(c) it was provided that either party may terminate
the Amended Service Agreement without cause upon not less than ninety (90) days prior written notice to the other party;

    F-26

(d) QuikfillRx was granted a one-time, fully vested,
ten-year non-qualified option award to purchase up to 11,905 shares of Company common stock with an exercise price of $20.72 per share
(the closing price of the Company’s common stock on November 9, 2022). The option grant was memorialized pursuant to a Nonqualified
Option Agreement, dated November 9, 2022, between the Company and QuikfillRx; and

(e) the parties agreed to revise the compensation
for services as follows: (i) payment of $125,000 per month; (ii) bonus equivalent to 0.27% of the applicable gross quarterly sales and
(iii) a grant of 3,000,000 nonqualified stock options to purchase shares of Company common stock which shall vest based on achievement
of certain net revenue and profit margin targets up to $180,000,000 in total net revenues over a period of 3 years.

On February 21, 2024, the Company terminated the agreement
and all amendments with QuikFillRx. Per the termination, the Company was required to pay $80,000 by March 1, 2024, in full satisfaction
of all obligations, debts, and prior services, including but not limited to stock incentives, bonuses, third party obligations, owed by
the Company to QuickfillRx. The Company made the required payment on February 28, 2024.

International Trade Commission claims against the
Company

On June 11, 2024, RAI Strategic Holdings, Inc., R.J.
Reynolds Vapor Company, R.J. Reynolds Tobacco Company, and RAI Services Company