Company: KAVL
Filing Date: 2025-09-16
Form Type: 10-Q
Source: 0001731122-25-001266
Chunk: 96

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-09-16
Form: 10-Q
Item: Item 8
Chunk 96
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 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 shareholders. As of July 31, 2025, the Company had zero accrued dividend payable to Series B
shareholders and no further dividends will be accrued or paid.

Pursuant to the GoFire APA, the Company is required
to use commercially reasonable efforts to register the APA Shares and Warrant Shares with the SEC for distribution to GoFire’s stockholders
and/or public resale by such stockholders within 180 days of the Closing Date. In addition, if any Series B Preferred Stock remains outstanding
nineteen (19) months after the Closing Date, the Company shall use commercially reasonable efforts to file with the SEC a 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, the Company will use its commercially reasonable efforts to obtain effectiveness
of such subsequent registration statement within nineteen (19) months of the Closing Date, and if the Company does not so register the
Series B Conversion Shares within nineteen (19) months of the Closing Date, the Company 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. All of
the securities issued as consideration for the Purchased Assets are subject to a lock-up agreement that terminates one hundred eighty
(180) days from the Closing Date. As of July 31, 2025, the Company made an accrual for the additional ten percent (10%) of all of
the Series B Conversion Shares of $39,283.

    F-17

Common Stock

During the three and nine months ended July 31, 2025,
the Company issued zero and 3,025,000 fully vested shares of common stock, respectively, to directors, officers and an employee pursuant
to grants under the Company’s Amended and Restated 2020 Stock and Incentive Compensation Plan. During the three and nine months
ended July 31, 2025, the Company recognized stock compensation cost of zero and $2,873,750, respectively.

Stock Options

Summary of stock options information is as follows:

    Schedule of stock options information