Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 28

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 28
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 95,239 shares of Common Stock (the “Warrant” and the shares of Common Stock underlying the Warrant, the
“Warrant Shares”). As additional consideration for the purchased assets, any cannabis-specific (meaning cannabis, hemp or
cannabinoid) royalties that are generated by Kaival Labs from or due to the purchased assets, from May 30, 2023, until January 1, 2027,
will be subject to a contingent cash payment as described in the GoFire APA and subject to the terms of the GoFire APA. 9,524 2023 APA
Shares and a Warrant for 9,524 Warrant Shares were issued to an advisor to GoFire at the closing of the GoFire APA.

Pursuant to the GoFire APA, we are required to use
commercially reasonable efforts to register the 85,715 2023 APA Shares and 85,715 Warrants and Warrant Shares with the SEC for distribution
to GoFire’s stockholders and/or public resale by such stockholders within 180 days of May 30, 2023. Such registration was declared
effective by the SEC on January 12, 2024. To our knowledge, portions of the 85,715 2023 APA Shares and 85,715 Warrants have been distributed
to the GoFire stockholders pursuant to such registration statement.

In addition, if any
Series B Preferred Stock remains outstanding nineteen (19) months after May 30, 2023, we shall use commercially reasonable efforts to
file with the SEC subsequent registration statement registering the distribution to GoFire’s stockholders and/or public resale
Series B Conversion Shares by such stockholders. If such subsequent registration statement is required, we will use our commercially
reasonable efforts to obtain effectiveness of such subsequent registration statement within nineteen (19) months of May 30, 2023, and
if we do not so register the Series B Conversion Shares within nineteen (19) months of May 30, 2023, we will issue to GoFire or its designee
an additional ten percent (10%) of all of the Series B Conversion Shares underlying the then-outstanding shares of Series B Preferred
Stock. To satisfy this obligation we will provide GoFire with an additional 10% of our shares of common stock issued to them upon
the conversion of the Series B Preferred Stock at the closing of the Business Combination.

All of the securities issued as consideration for
the GoFire purchased assets