What changed in this filing

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Item 9A. Controls and Procedures

2022-02-16 compared with 2021-02-12 · 161 added, 561 removed, 57 unchanged (93% of the section changed)

Item 9A Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and

procedures,”

as such term is defined in Rule 13a-15e and Rule 15d-15(e) under the Exchange Act that are designed to ensure

Evaluation of Disclosure Controls

and Procedures

We maintain “disclosure controls

and procedures,” as such term is defined in Rule 13a-15e and Rule 15d-15(e) under the Exchange Act that are designed to ensure

that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported

within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our

management, including our chief executive officer and our chief financial officer to allow for timely decisions regarding required

As of October 31, 2020, the end of the year

covered by this Report, we carried out an evaluation, under the supervision of Mr.

Patel, our Chief Executive Officer and Chief

Financial Officer, of the effectiveness of the design and the operation of our disclosure controls and procedures.

Patel concluded

that the disclosure controls and procedures were not effective as of the end of the year covered by this Report due to material

weaknesses identified below.

Management’s Annual Report on Internal Control Over

Financial Reporting

within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated

to our management, including our chief executive officer and our chief financial officer to allow for timely decisions regarding

required disclosure.

As of October 31, 2021, the end of the

year covered by this Report, we carried out an evaluation under the supervision and with the participation of members of our management,

including our Chief Executive Officer and our Interim Chief Financial Officer, of the effectiveness of the design and the operation

of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Exchange Act.

Our management has concluded, based on

their evaluation, that the disclosure controls and procedures were not effective as of the end of the year covered by this Report

due to material weaknesses identified below.

Management’s Annual Report

on Internal Control Over Financial Reporting

Our management is responsible for establishing

4 unchanged sentences

Our management assessed our internal control over financial reporting using

the criteria in Internal Control –

Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the

Treadway Commission (“COSO”).

the criteria in Internal Control – Integrated Framework (2013 Framework), issued by the Committee of Sponsoring Organizations

of the Treadway Commission (“COSO”).

A system of internal control over financial reporting is designed to provide reasonable

3 unchanged sentences

reporting may not prevent or detect misstatements.

Based on our evaluation under the framework

in COSO, our management concluded that our internal control over financial reporting was ineffective as of October 31, 2020 based

on such criteria.

Deficiencies existed in the design or operation of our internal control over financial reporting that adversely

affect our internal controls and that may be considered material weaknesses.

A material weakness is a significant deficiency, or

combination of deficiencies, in internal control over financial reporting that results in more than a remote likelihood that a

material misstatement of the annual or interim financial statements will not be prevented or detected.

As a result of the determination

that there was a lack of resources to provide segregation of duties consistent with control objectives, the lack of a formal audit

committee, and the lack of a formal review process that includes multiple levels of review over financial disclosure and reporting

processes, management has determined that material weaknesses existed as of October 31, 2020.

Based on our evaluation

under the framework in COSO, our management concluded that our internal control over financial reporting was ineffective as of October

31, 2021 based on such criteria.

Material weaknesses existed in the design or operation

of certain of our internal controls over financial reporting that adversely affect our internal controls .

A material weakness is a significant deficiency, or combination of deficiencies, in internal control over financial reporting that results

in more than a remote likelihood that a material misstatement of the annual or interim financial statements may not be prevented or detected.

Management determined that there was a lack of resources to provide segregation of duties consistent

with control objectives, the lack of sufficient and consistent real time remote communications, and the lack of a fully developed formal

review process that includes multiple levels of review over financial disclosure and reporting processes.

The weaknesses and the related risks are not

uncommon in a company of our size because of the limitations in the size and number of our staff.

To address these material weaknesses,

and subject to the receipt of additional financing or cash flows, we intend to undertake remediation measures to address the material

weaknesses described in this Report, including implementing procedures pursuant to which we can ensure segregation of duties and

hire additional resources to ensure appropriate review and oversight.

A control system, no matter how well conceived

and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met under all

potential conditions, regardless of how remote, and may not prevent or detect all errors and all fraud.

Because of the inherent

limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within

the Company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty

and that breakdowns can occur because of a simple error or mistake.

Our internal control over financial reporting is designed to

provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external

purposes in accordance with generally accepted accounting principles.

Auditor’s Report on Internal Control Over Financial

uncommon in a company of our size because of the limitations in the location, size and number of our staff.

To address these material

weaknesses, and subject to the receipt of additional financing or cash flows, we have undertaken certain remediation measures to

date to address the material weaknesses described in this Report, including implementing procedures pursuant to which we can ensure

segregation of duties and hire additional resources to ensure appropriate review and oversight, as well as more timely formal communications

processes, more diligent review and approval of all disbursements and more timely review of all banking transactions sales orders

and inventory management.

A control system, no matter how well

conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met

under all potential conditions, regardless of how remote, and may not prevent or detect all errors and all fraud.

Because of the

inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues,

if any, within the Company have been detected.

These inherent limitations include the realities that judgments in decision-making

can be faulty and that breakdowns can occur because of a simple error or mistake.

Our internal control over financial reporting

is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements

for external purposes in accordance with generally accepted accounting principles.

Auditor’s Report on Internal

Control Over Financial Reporting

This Report does not include an attestation

report of our independent registered public accounting firm regarding internal control over financial reporting.

Management’s

report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that

permit us to provide only management’s report in this Report.

Changes in Internal Control Over Financial Reporting

permit us to provide only management’s report in this Report.

Changes in Internal Control Over

Financial Reporting

There have been no changes in our internal

3 unchanged sentences

Other Information.

Directors, Executive Officers and

Corporate Governance.

Each of our directors holds office until the

next annual meeting of our stockholders or until his successor has been elected and qualified, or until his death, resignation,

Our executive officers are appointed by our Board and hold office until their death, resignation, or removal from office.

Our current executive officers and directors

and additional information concerning them are as follows:

Nirajkumar Patel

Chief Executive Officer, Chief Financial Officer, President, Treasurer, and a Director

Chief Operating Officer, Secretary, and a Director

Business Experience

The following is a brief account of the education

and business experience of our executive officers and directors during at least the past five years, indicating their principal

occupation during the period, the name and principal business of the organization by which they were employed, and certain of their

other directorships:

Patel, Chief Executive Officer, Chief Financial Officer, President, Treasurer, and a Director

Nirajkumar Patel, age 38, attended AISSMS College of Pharmacy in Pune, India and received a Bachelor of Science Degree in Pharmacy

After moving to the United States in 2005, Mr.

Patel became a United States citizen in 2008 and obtained a Master’s

Degree in Chemistry from the Florida Institute of Technology in 2009.

Patel is a prominent local businessman in Brevard County,

In 2017 and 2018, Mr.

Patel served as Vice President for the Board of the Indian Association of the Space Coast, located

in Brevard County, Florida.

Patel founded, and has served as a Board member of, the Florida Independent Liquor Stores Owners

Association since 2017.

Patel launched Just Chill Products LLC, a highly successful developer/manufacturer of high-end

CBD products, and has served as its Chief Executive Officer and Chief Science Officer since 2017.

Patel created Relax

Lab Inc., a producer/manufacturer of a CBD relaxation beverage, and currently serves as its Chief Executive Officer and Chief Science

Patel also created RLX Lab LLC, a producer/manufacturer of a non-CBD relaxation beverage, and currently serves

as its Chief Executive Officer and Chief Science Officer.

Patel also founded KC Innovations Lab Inc., a CBD white-label

manufacturing service and developer/producer of best-selling white-label CBD products including cosmetics, edibles, beverages,

topicals, and vape oils, and currently serves as its Chief Executive Officer and Chief Science Officer.

Additional companies that

are owned by Nirajkumar Patel, the Chief Executive Officer and Chief Financial Officer of the Company, and/or his wife include

Beach Food Store created in 2004, Diya Food Store created in 2010, Cloud Nine 2012 created in 2012, and JC Products of USA, LLC

created in 2013.

We believe that Mr.

Patel is qualified to serve on our Board because of his prior and current management experience,

as well as his business experience with our intended market.

Chief Operating Officer, Secretary, and a Director

Eric Mosser, age

42, attended Arizona State University and studied Business Management and then graduated from Rio Salado College with an

Associate’s Degree in Applied Science in Computer Technology in 2004.

With extensive previous corporate work history in

Information Technology, Mr.

Mosser worked from 2012 to 2014 as Director of Information Technology at Timbercon Inc., a

fiber-optic design company and ITAR manufacturing facility in Oregon.

Mosser created Lasermycig LLC, a

specialized custom laser-engraving service for electronic cigarettes and vaporizers and served as its Chief Executive Officer

Upon meeting Mr.

Nirajkumar Patel in 2015, Mr.

Mosser immediately founded Chillcorp Ltd., a full-service

corporation dedicated solely to the complete internal and external operations of Just Chill Products LLC, Relax Lab Inc., RLX

Lab LLC, and KC Innovations Lab Inc., and served as its Chief Executive Officer until 2020.

We believe that Mr.

qualified to serve on our Board because of his current management and business experience.

Committees of the Board

We currently do not have nominating, compensation,

or audit committees, or committees performing similar functions, nor do we have a written nominating, compensation, or audit committee

Currently, our entire Board is performing the functions of such committees.

In lieu of an Audit Committee, our Board is

responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results,

and effectiveness of the annual audit of our financial statements and other services provided by our independent registered public

accounting firm.

Our Board, our Chief Executive Officer, and our Chief Financial Officer review our internal accounting controls,

practices, and policies.

Audit Committee Financial Expert

Our Board has determined that we do not have

a board member that qualifies as an “audit committee financial expert”

as defined in Item 407(d)(5) of Regulation S-K

We intend to establish an Audit Committee in the future, and identify an individual to serve as an independent director and as

the audit committee financial expert.

Involvement in Certain Legal Proceedings

None of our executive officers and directors

have been involved in or a party to any of the following events or actions during the past ten years:

Any petition under the federal bankruptcy laws or any state insolvency laws filed by or against, or an appointment of a receiver, fiscal agent, or similar officer by a court for the business or property of such person, a partnership in which such person was a general partner at or within two years before the time of such filing, or any corporation or business association of which such person was an executive officer either at or within two years prior to the time of such filing;

Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

Being subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, such person from, or otherwise limiting, the following activities:

(i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director, or employee of any investment company, bank, savings and loan association, or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

(ii) engaging in any type of business practice;

or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

Being the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity;

Being found by a court of competent jurisdiction (in a civil action) or the SEC to have violated a Federal or State securities law, and the judgment has not been subsequently reversed, suspended, or vacated;

Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated;

Being the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of :(i) any Federal or State securities or commodities law or regulation;

(ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order;

or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;

Being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.

78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C.

1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Code of Ethics

We have not adopted a formal Code of Ethics.

We have a limited number of employees at this time.

We intend to adopt a formal Code of Ethics in the future.

Nomination of Directors

As of February 11, 2021, we had not effected

any material changes to the procedures by which our stockholders may recommend nominees to our Board.

We do not have any defined

policy or procedural requirements for stockholders to submit recommendations or nominations for directors.

Our Board believes that,

given the stage of our development, a specific nominating policy would be premature and of little assistance until our business

operations develop to a more advanced level.

We do not currently have any specific or minimum criteria for the election of nominees

to our Board and we do not have any specific process or procedure for evaluating such nominees.

Our Board will assess all candidates,

whether submitted by management or stockholders, and make recommendations for election or appointment.

A stockholder who wishes to communicate with

our Board may do so by directing a written request addressed to the Company with the address appearing on the first page of this

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires

the Company’s executive officers, directors, and persons who beneficially own more than ten percent of a registered class

of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership

of the Company’s common stock.

Such officers, directors, and persons are required by SEC regulation to furnish the

Company with copies of all Section 16(a) forms that they file with the SEC.

Based solely on a review of the copies of such

forms that were received by the Company, except for following, the Company is not aware of any failures to file reports or report

transactions in a timely manner during the year ended October 31, 2020:

(i) a Form 4 for Mr.

Mosser to report 4 transactions;

a Form 4 for Mr.

Mosser to report 3 transactions;

(iii) a Form 4 for Mr.

Patel to report 4 transactions;

and (iv) a Form 4 for

Patel to report 3 transactions.

Family Relationships

There are no family relationships among our

directors or executive officers.

There are no arrangements or understandings

between an executive officer or director and any other person pursuant to which he was selected as an executive officer or director.

Directors, Executive Officers

and Corporate Governance.

The information required under this

item is incorporated herein by reference to our proxy statement for our fiscal 2022 Annual Stockholders’ Meeting to be filed

with the SEC not later than 120 days after the end of fiscal year 2021.

Executive Compensation.

The table below summarizes all compensation

awarded to, earned by, or paid to our named executive officers, which is defined herein as (i) all individuals serving or having

served as our principal executive officer or officers during the year ended October 31, 2020 and (ii) our other most highly compensated

executive officer who was serving as an executive officer at the end of the year ended October 31, 2020.

principal position

Fiscal Year Ended October 31,

Incentive Plan

Nirajkumar Patel, President, CEO, CFO, Treasurer, and Director

Eric Mosser, COO, Secretary, and Director

(1) Reflects the fair value of stock awards

during the years in accordance with FASB ASC 718, Compensation –

Stock Compensation, using actual forfeitures that were immaterial.

For valuation assumptions, refer to Note 2, “

Share-based Compensation ,”

to the audited consolidated financial

statements for the year ended October 31, 2020.

Narrative Discussion of Summary Compensation Table of Named Executive

The following is a narrative discussion of

the material information that we believe is necessary to understand disclosed in the foregoing Summary Compensation Table.

following narrative disclosure is separated into sections, with a separate section for each of our named executive officers.

With respect to fiscal year 2019, we did not

pay our named executive officers any compensation.

On May 28, 2020, our Board approved an annual

base salary equal to $144,000 for our Chief Executive Officer and an annual base salary equal to $120,000 for our Chief Operating

On January 21, 2021, our Board approved an increase in annual base salaries equal to $180,000 for our Chief Executive

Officer and $144,000 for our Chief Operating Officer.

The annual base salaries will be reviewed by our Board on an annual basis

Nirajkumar Patel

During the fiscal year ended October 31, 2020,

we paid a base salary of approximately $92,000 to Nirajkumar Patel, our Chief Executive Officer and Chief Financial Officer.

May 2020, our Board approved a cash bonus award to Mr.

Patel equal to $30,000 for every $25 million in gross revenues generated

On the same date, our Board also approved an equity bonus award to Mr.

Patel of 90,000 restricted shares of our common stock

for every $50 million in accumulated gross revenues generated by us.

Based on the cash bonus award, we paid Mr.

Patel a cash bonus

of $60,000 based on our meeting the gross revenue benchmarks.

We issued the following stock-based compensation

Patel during fiscal year 2020:

Number of Shares of our Common Stock

Price Per Share

Aggregate Value

We also paid approximately $48,700 in non-equity

incentive plan compensation, which consisted of cash paid in lieu of a vested RSU issuance.

The aggregate value is based on the

value on the vesting date for the shares that would have been issued.

During the fiscal year ended October 31, 2020,

we paid a base salary of approximately $80,000 to Eric Mosser, our Chief Operating Officer.

In May 2020, our Board approved a cash

bonus award to Mr.

Mosser equal to $20,000 for every $25 million in gross revenues generated by us.

On the same date, our Board

also approved an equity bonus award to Mr.

Mosser of 75,000 restricted shares of our common stock for every $50 million in accumulated

gross revenues generated by us.

Based on the cash bonus award, we paid Mr.

Mosser a cash bonus of $40,000 based on our gross revenue

We issued the following stock-based compensation

Mosser during fiscal year 2020:

Number of Shares of our Common Stock

Price Per Share

Aggregate Value

We also paid approximately $87,800 in non-equity

incentive plan compensation, which consisted of cash paid in lieu of vested a RSU issuance.

The aggregate value is based on the

value on the vesting date for the shares that would have been issued.

Outstanding Equity Awards at Fiscal Year-End

Number of Shares or Units of Stock that Have

Market Value of Shares or Units of Stock

that Have Not Vested

Nirajkumar Patel

8,550,000 (1)

6,550,000 (2)

(1) Includes 6,000,000 RSUs that only vest in the event of a change of

control (as such term is defined in the Stock and Incentive Compensation Plan (the “Incentive Plan”)) or we achieve

in excess of $1 billion in accumulated total gross revenues during the period beginning on March 9, 2020 (the day we commended

business operations) and ending on October 31, 2023 (the end of our fiscal year 2023).

The remaining RSUs vest over a period of

three years, beginning in May 2020, with a portion vesting every three months.

(2) Includes 4,000,000 RSUs that only vest in the event of a change of

control (as such term is defined in the Incentive Plan) or we achieve in excess of $1 billion in accumulated total gross revenues

during the period beginning on March 9, 2020 (the day we commended business operations) and ending on October 31, 2023 (the end

of our fiscal year 2023).

The remaining RSUs vest over a period of three years, beginning in May 2020, with a portion vesting every

three months.

Potential Payments Upon Termination or Change-of-Control

Other than the RSUs mentioned above in “Outstanding

Equity Awards at Fiscal Year-End”, none of our named executive officers are entitled to any payments upon termination or

change-of-control.

Retirement or Similar Benefit Plans

There are no arrangements or plans in which

we provide retirement or similar benefits for our named executive officers.

Employment Agreements

We do not have

formal written employment agreements with any of our named executive officers.

Director Compensation

During fiscal year 2020, our sole directors, Mr.

Patel and Mr.

were also our named executive officers.

They did not receive any compensation in their capacities as directors.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance

Under Equity Compensation Plans

A summary of our securities authorized for

issuance under equity compensation plans as of October 31, 2020 is as follows:

The information required under this

item is incorporated herein by reference to our proxy statement for our fiscal 2022 Annual Stockholders’ Meeting to be filed

with the SEC not later than 120 days after the end of fiscal year 2021.

Security Ownership of Certain

Beneficial Owners and Management and Related Stockholder Matters.

The information required under this

item is incorporated herein by reference to our proxy statement for our fiscal 2022 Annual Stockholders’ Meeting to be filed

with the SEC not later than 120 days after the end of fiscal year 2021.

Securities Authorized for Issuance Under Equity Compensation

The following table sets forth information with respect to

compensation plans under which our equity securities are authorized for issuance as of the end of fiscal year 2022:

Plan category

Number of Securities to be Issued Upon Exercise of

Outstanding Options, Warrants and Rights

Weighted Average Exercise Price of Outstanding Options, Warrants

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted average exercise and grant price of outstanding options, warrants and rights

Number of securities remaining available for future issuance

Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

Plans Not Approved by Stockholders

On May 28, 2020, our Board adopted the Incentive

The following is a summary of the principal features of the Incentive Plan.

The summary of the Incentive Plan does not purport

to be complete and is qualified in its entirety by reference to the full text of the Incentive Plan.

The purpose of the Incentive

Plan is to enhance stockholder value by linking the compensation of our employees, officers, directors, and consultants to increases

in the price of our common stock and the achievement of other performance objectives and to encourage ownership in the Company

by key personnel whose long-term employment is considered essential to our continued progress and success.

The Incentive Plan is

also intended to assist us in recruiting new employees and to motivate, retain, and encourage such employees and directors to act

in stockholders’

interest and share in our success.

The various types of incentive awards that may be provided under the

Incentive Plan are intended to enable us to respond to changes in compensation practices, tax laws, accounting regulations, and

the size and diversity of its business.

We will not offer incentive stock options under the Incentive Plan.

All of our employees,

officers, directors, and consultants will be eligible to be granted awards under the Incentive Plan.

The Incentive Plan will be administered by

All awards made under the Incentive Plan will be subject to the recommendations and approvals of our Board.

Stock Subject to the Incentive Plan .

Subject to the terms of the Incentive Plan, the maximum aggregate number of shares of our common stock that may be subject to or

delivered under awards granted pursuant to the Incentive Plan is 100,000,000 shares.

Shares subject to awards that have been canceled,

expired, settled in cash, or not issued or forfeited for any reason (in whole or in part) will not reduce the aggregate number

of shares that may be subject to or delivered under awards granted under the Incentive Plan and be available for future awards

granted under the Incentive Plan.

Eligibility .

We may grant awards under

the Incentive Plan to employees, officers, directors, and consultants.

Types of Awards .

The Incentive Plan

provides for options not qualifying as “incentive”

stock options, as defined in Section 422 of the Internal Revenue

Code of 1986, as amended, stock appreciation rights, shares of restricted stock, and other stock-based awards.

Award Limitation .

Non-employee directors

may not be granted awards in excess of the 200,000 shares of our common stock in any calendar year.

Term and Amendments .

Unless terminated

by our Board, the Incentive Plan will continue to remain effective until no further awards may be granted and all awards granted

under the Incentive Plan are no longer outstanding.

Our Board may at any time, and from time to time, amend the Incentive Plan;

provided, that no amendment will be made that would impair the rights of a holder under any agreement entered into pursuant to

the Incentive Plan without the holder’s consent.

Security Ownership of Certain Beneficial

Owners and Management

The following table sets forth, as of

February 11, 2021, the number of shares of common stock owned of record and beneficially by (i) each of our current

directors, (ii) each of our named executive officers, (iii) our directors and executive officers as a group, and (iv) each

stockholder known by us to be the beneficial owner of more than 5% of our outstanding common stock.

Beneficial ownership has

been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect

Unless otherwise indicated, the persons named in the table have sole voting and investment power with respect to

the number of shares indicated as beneficial owned by them.

Name and Address

Amount and Nature of

Beneficial Ownership (Common Stock) (1)

Nirajkumar Patel (2)

Wickham Road, Suite 130

Melbourne, FL 32935

204,464,500 (2)

Eric Mosser (3)

Wickham Road, Suite 130

Melbourne, FL 32935

204,300,000 (3)

Current Executive Officers and Directors as a Group (2 Persons)

Kaival Holdings, LLC (formerly

known as Kaival Brands Innovations Group, LLC) (4)

Wickham Road, Suite 130

Melbourne, FL 32935

_________________________________________

(1) Applicable percentage of ownership

is based on 279,171,677 shares of common stock outstanding as of February 11, 2021.

Beneficial ownership is determined in accordance

with the rules of the SEC and generally includes voting or investment power with respect to securities.

Shares of common stock

that are currently exercisable within 60 days of February 11, 2021 are deemed to be beneficially owned by the person holding such

securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the

purpose of computing the percentage ownership of any person.

(2) Nirajkumar Patel serves as our Chief

Executive Officer, Chief Financial Officer, President, Treasurer and a director.

Consists of 204,000,000 shares of our common stock

held by KH, an entity over which Mr.

Patel has shared dispositive and voting authority.

(3) Eric Mosser serves as our Chief Operating

Officer, Secretary, and a director of the Company.

Consists of 204,000,000 shares of our common stock held by KH, an entity over

Mosser has shared dispositive and voting authority.

(4) Nirajkumar Patel and Eric Mosser are the

sole voting members of KH.

Preferred Stock

The following table sets forth, as of February

11, 2021, the number of shares of our Series A Preferred Stock owned of record and beneficially by (i) each of our current directors,

(ii) each of our named executive officers, (iii) our directors and executive officers as a group, and (iv) each stockholder known

by us to be the beneficial owner of more than 5% of our outstanding shares of Series A Preferred Stock.

Beneficial ownership has

been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to

Unless otherwise indicated, the persons named in the table have sole voting and investment power with respect to the number

of shares indicated as beneficial owned by them.

Name and Address

Amount and Nature of

Beneficial Ownership (Series A Preferred

Nirajkumar Patel (2)

Wickham Road, Suite 130

Melbourne, FL 32935

Eric Mosser (3)

Wickham Road, Suite 130

Melbourne, FL 32935

3,000,000 (3)

Current Executive Officers and Directors as a Group (2 Persons)

Kaival Holdings, LLC (formerly

known as Kaival Brands Innovations Group, LLC) (4)

Wickham Road, Suite 130

Melbourne, FL 32935

_________________________________________

(1) Applicable percentage of ownership

is based on 3,000,000 shares of Series A Preferred Stock outstanding as of February 11, 2021.

Beneficial ownership is determined

in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

Series A Preferred Stock that are currently exercisable within 60 days of February 11, 2021 are deemed to be beneficially owned

by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated

as outstanding for the purpose of computing the percentage ownership of any person.

(2) Nirajkumar Patel serves as our Chief

Executive Officer, Chief Financial Officer, President, Treasurer and a director.

Consists of 3,000,000 shares of our Series A Preferred

Stock held by KH, an entity over which Mr.

Patel has shared dispositive and voting authority.

(3) Eric Mosser serves as our Chief Operating

Officer, Secretary, and a director of the Company.

Consists of 3,000,000 shares of our Series A Preferred Stock held by KH, an

entity over which Mr.

Mosser has shared dispositive and voting authority.

(4) Nirajkumar Patel and Eric Mosser are the

sole voting members of KH.

Certain Relationships and Related

Transactions.

Revenue and Accounts Receivable

During the year ended October 31, 2020, we

generated sales of $233,955 from seven companies owned by Nirajkumar Patel, our Chief Executive Officer and Chief Financial Officer,

and/or his wife.

As of October 31, 2020, the Company has accounts receivable from two related parties that are owned by Mr.

and/or his wife in the amount of $15,360.

Purchases and Accounts Payable

the year ended October 31, 2020, we purchased $53,981,351 of

products from and sold $64,976,676 of

goods to retail and non-retail customers.

As of October 31, 2020, we had accounts payable to Bidi of $1,409,461.

Bidi is owned and controlled by Nirajkumar Patel, our

Chief Executive Officer and Chief Financial Officer.

Contributed Capital

Our Chief Executive Officer and Chief Financial

Nirajkumar Patel, paid expenses on our behalf totaling $16,257 during the year ended October 31, 2020, which

is considered a contribution to us with no expectation of repayment and is recorded as additional paid-in capital.

Our Chief Operating Officer, Mr.

paid expenses on our behalf totaling $10,900 during the year ended October 31, 2020, which

is considered a contribution to us with no expectation of repayment and is recorded as additional paid-in capital.

Concentration of Purchases and Accounts

the year ended October 31, 2020, 100% of our inventory, primarily consisting of the “Bidi Stick”, were purchased from

Bidi, a related party, in the amount of $53,981,351 It also accounted for 100% of the total accounts payable as of October 31,

Common Shares Issued

During the year ended October 31, 2020, we

withheld 226,000 shares of common stock with a value of $223,762 to satisfy tax obligations due upon issuances of shares to our

On August 1, 2020, we began leasing office

space consisting of 1,595 square feet as its main corporate office in Grant, Florida for $1,000 per month.

The five-year lease

agreement is with related party, Just Pick.

Nirajkumar Patel, our Chief Executive Officer and Chief Financial Officer, is also

an officer of Just Pick.

Review, Approval, and Ratification of Transactions with Related

We follow ASC 850, Related Party Disclosures ,

for the identification of related parties and disclosure of related party transactions.

When and if we contemplate entering into

a transaction in which any executive officer, director, nominee, or any family member of the foregoing would have a direct or indirect

interest, regardless of the amount involved, the terms of such transaction are presented to our board of directors (other than

any interested director, if possible) for approval, and documented in the board minutes.

Director Independence

We are not listed on any exchange that requires directors to be

Established our own definition for determining whether our directors or nominees for directors are “independent,”

nor have we adopted any other standard of independence employed by any national securities exchange or inter-dealer quotation system, though our current directors would not be deemed to be “independent”

under any applicable definition given that they are our officers;

Established any committees of our Board.

Principal Accounting Fees and Services.

Below is the aggregate amount of fees billed

for professional services rendered by MaloneBailey, LLP, our principal accountants with respect to our fiscal year ended October

31, 2020 and October 31, 2019.

Audit and review fees

Audit-related fees

All other fees

Pre-Approval Policies and Procedures

Currently, we do not have a separately designed

Audit Committee.

Instead, our entire Board performs those functions.

Accordingly, our Board was responsible for pre-approving all

services provided by our independent registered public accounting firm.

The above fees were reviewed and approved by our Board.

Exhibits, Financial Statement Schedules.

Certain Relationships and

Related Transactions.

The information required under this

item is incorporated herein by reference to our proxy statement for our fiscal 2022 Annual Stockholders’ Meeting to be filed

with the SEC not later than 120 days after the end of fiscal year 2021.

Principal Accounting Fees

and Services.

The information required under this

item is incorporated herein by reference to our proxy statement for our fiscal 2022 Annual Stockholders’ Meeting to be filed

with the SEC not later than 120 days after the end of fiscal year 2021.

Exhibits, Financial Statement

a) Financial Statements

Our financial statements are listed

in the index under Item 8 of this document;

All financial statement schedules

are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes

(b) Exhibits required by Item 601 of Regulation

Certificate of Incorporation, which was filed as Exhibit 3.1 to our Registration Statement on Form 10-12G filed with the Securities

and Exchange Commission on March 25, 2019, and is incorporated herein by reference thereto.

which were filed as Exhibit 3.2 to our Registration Statement on Form 10-12G filed with the Securities and Exchange Commission

on February 19, 2019, and is incorporated herein by reference thereto.

of Ownership and Merger, as filed with the Secretary of State of the State of Delaware on June 20, 2019, which was filed as

Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 15, 2019, and is incorporated

herein by reference thereto.

of Correction, as filed with the Secretary of State of the State of Delaware on July 15, 2019, which was filed as Exhibit

3.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 15, 2019, and is incorporated

herein by reference thereto.

of Designation of the Preferences, Rights, and Limitations of the Series A Preferred Stock, as filed with the Secretary of

State of the State of Delaware on August 19, 2020, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed

with the Securities and Exchange Commission on August 21, 2020, and is incorporated herein by reference thereto.

Our financial statements

are listed in the index under Item 8 of this document;

All financial statement

schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements

or notes thereto.

(b) Exhibits required by Item 601 of

Regulation S-K.

Exhibit Number

Restated Certificate of Incorporation, which was filed as Exhibit 3.1 to our Registration Statement on Form 10-12G filed with the Securities and Exchange Commission on March 25, 2019, and is incorporated herein by reference thereto.

Bylaws, which were filed as Exhibit 3.2 to our Registration Statement on Form 10-12G filed with the Securities and Exchange Commission on February 19, 2019, and is incorporated herein by reference thereto.

Certificate of Ownership and Merger, as filed with the Secretary of State of the State of Delaware on June 20, 2019, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 15, 2019, and is incorporated herein by reference thereto.

Certificate of Correction, as filed with the Secretary of State of the State of Delaware on July 15, 2019, which was filed as Exhibit 3.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 15, 2019, and is incorporated herein by reference thereto.

Certificate of Designation of the Preferences, Rights, and Limitations of the Series A Preferred Stock, as filed with the Secretary of State of the State of Delaware on August 19, 2020, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 21, 2020, and is incorporated herein by reference thereto.

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Kaival Brands Innovations Group, Inc., effective July 20, 2021, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 20, 2021, and is incorporated herein by reference thereto.

Description of Securities.*

Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Bidi Vapor LLC, dated March 9, 2020, which

was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9,

2020, and is incorporated herein by reference thereto.

Agreement by and between Kaival Brands Innovations Group, Inc.

and QuikfillRx LLC, dated March 31, 2020, which was filed as

Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 1, 2020, and is

incorporated herein by reference thereto.

Amendment to Service Agreement by and between Kaival Brands Innovations Group, Inc.

and QuikfillRx LLC, dated June 2, 2020,

which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on

June 3, 2020, and is incorporated herein by reference thereto.

Non-Exclusive

Sub-Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Favs Business, LLC, dated April 3, 2020,

which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April

6, 2020, and is incorporated herein by reference thereto.

Non-Exclusive

Sub-Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Colonial Wholesale Distributing Inc.,

dated April 11, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange

Commission on April 13, 2020, and is incorporated herein by reference thereto.

and Restated Exclusive Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Bidi Vapor LLC, dated

May 21, 2020, which was filed as Exhibit 10.5 to our Form 10-Q filed with the Securities and Exchange Commission on May 27,

2020, and is incorporated herein by reference thereto.

Form of senior indenture, filed as Exhibit 4.4 to our Registration Statement on Form S-3 filed with the Securities and Exchange Commission on July 30, 2021, and is incorporated herein by reference thereto.

Form of Warrant, filed as Exhibit 4.1 to our Current Report on Form 8-K filed with Securities and Exchange Commission on October 4, 2021, and is incorporated herein by reference thereto.

Warrant Agency Agreement, dated as of September 29, 2021, by and between Kaival Brands Innovations Group, Inc.

and Vstock Transfer, LLC, as warrant agent, filed as Exhibit 4.2 to our Current Report on Form 8-K filed with Securities and Exchange Commission on October 4, 2021, and is incorporated herein by reference thereto.

Exclusive Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Bidi Vapor LLC, dated March 9, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2020, and is incorporated herein by reference thereto.

Service Agreement by and between Kaival Brands Innovations Group, Inc.

and QuikfillRx LLC, dated March 31, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 1, 2020, and is incorporated herein by reference thereto.

First Amendment to Service Agreement by and between Kaival Brands Innovations Group, Inc.

and QuikfillRx LLC, dated June 2, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 3, 2020, and is incorporated herein by reference thereto.

Non-Exclusive Sub-Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Favs Business, LLC, dated April 3, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 6, 2020, and is incorporated herein by reference thereto.

Non-Exclusive Sub-Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Colonial Wholesale Distributing Inc., dated April 11, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 13, 2020, and is incorporated herein by reference thereto.

Amended and Restated Exclusive Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

and Bidi Vapor LLC, dated May 21, 2020, which was filed as Exhibit 10.5 to our Form 10-Q filed with the Securities and Exchange Commission on May 27, 2020, and is incorporated herein by reference thereto.

Amended and Restated Non-Exclusive Sub-Distribution Agreement by and between Kaival Brands Innovations Group, Inc.

2 unchanged sentences

and Colonial Wholesale Distributing Inc., dated May 25, 2020, which was filed as Exhibit 10.7 to our Form 10-Q filed with the Securities and Exchange Commission on May 27, 2020, and is incorporated herein by reference thereto.

Cancellation and Exchange Agreement, by and between the Company and Kaival Holdings, LLC, dated August 19, 2020, which was

filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 21, 2020,

and is incorporated herein by reference thereto.

Share Cancellation and Exchange Agreement, by and between the Company and Kaival Holdings, LLC, dated August 19, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 21, 2020, and is incorporated herein by reference thereto.

2020 Stock and Incentive Compensation Plan, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 3, 2020, and is incorporated herein by reference thereto.

7 unchanged sentences

and Eric Mosser, which was filed as Exhibit 10.6 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 3, 2020, and is incorporated herein by reference thereto.

Lease Agreement by and between Kaival Brands Innovations Group, Inc., and Just Pick, LLC, dated July 15, 2020,

which was filed as Exhibit 10.14 to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on September

14, 2020, and is incorporated herein by reference thereto.

Patent Contribution Agreement, by and between Kaival Brands Innovations Group, Inc., and Next Generation Labs, LLC dated September 28, 2020, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 28, 2020, and is incorporated herein by reference thereto.

Lease Agreement by and between Kaival Brands Innovations Group, Inc., and Just Pick, LLC, dated July 15, 2020, which was filed as Exhibit 10.14 to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on September 14, 2020, and is incorporated herein by reference thereto.

Second Amended and Restated Exclusive Distribution Agreement, by and between Kaival Brands Innovations Group, Inc.

and Bidi Vapor, LLC, dated April 2021, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 21, 2021, and is incorporated herein by reference thereto.

Consulting Agreement, by and between Kaival Brands Innovations Group, Inc.

and Russell Quick, dated March 16, 2021, which was filed as Exhibit 10.18 to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on June 21, 2021, and is incorporated herein by reference thereto.

Second Amendment to Service Agreement, by and between Kaival Brands Innovations Group, Inc.

and QuikfillRx LLC, effective as of March 16, 2021, which was filed as Exhibit 10.19 to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on June 21, 2021, and is incorporated herein by reference thereto.

Independent Director Agreement, dated June 30, 2021, by and between the Company and George Chuang, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2021, and is incorporated herein by reference thereto.

Consulting Agreement, dated June 14, 2021, by and between the Company and Mark Thoenes, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 1, 2021, and is incorporated herein by reference thereto.

Amended and Restated Independent Director Agreement, dated March 29, 2021, by and between the Company and Roger Brooks, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2021, and is incorporated herein by reference thereto.

Amended and Restated Independent Direct Agreement, dated March 29, 2021, by and between the Company and Paul Reuter, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2021, and is incorporated herein by reference thereto.

Amendment to Amended and Restated Independent Director Agreement, dated July 19, 2021, by and between the Company and Roger Brooks, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed with Securities and Exchange Commission on July 23, 2021, and is incorporated herein by reference thereto.

Amendment to Amended and Restated Independent Director Agreement, dated July 19, 2021, by and between the Company and Paul Reuter, which was filed as Exhibit 10.4 to our Current Report on Form 8-K filed with Securities and Exchange Commission on July 23, 2021, and is incorporated herein by reference thereto.

Subsidiaries*

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*

Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*

Chief Executive Officer pursuant to 18 U.S.C.

Section 1350 of Chapter 63 of Title 18 of the United States Code*

Instance Document*

Taxonomy Extension Schema Document*

Taxonomy Extension Calculation Linkbase Document*

Taxonomy Extension Definition Linkbase Document*

Taxonomy Extension Label Linkbase Document*

Taxonomy Presentation Linkbase Document*

Chief Financial Officer pursuant to 18 U.S.C.

Section 1350 of Chapter 63 of Title 18 of the United States Code*

XBRL Instance Document*

XBRL Taxonomy Extension Schema Document*

XBRL Taxonomy Extension Calculation Linkbase Document*

XBRL Taxonomy Extension Definition Linkbase Document*

XBRL Taxonomy Extension Label Linkbase Document*

XBRL Taxonomy Presentation Linkbase Document*

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

*Filed herewith.

(1) Schedules and Exhibits omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Company agrees

to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request;

provided, however,

that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended,

for any Schedule or Exhibit so furnished.

Form 10-K Summary.

Pursuant to the requirements of Section

or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the

undersigned, thereunto duly authorized.

Kaival Brands Innovations Group, Inc.

1 unchanged sentence

Nirajkumar Patel

Chief Executive Officer, Chief Financial Officer,

President, Treasurer, and a Director

President and Chief Executive Officer

(Principal Executive Officer)

February 15, 2022

In accordance with the Exchange Act, this report

has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Pursuant to the requirements of the

Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in

the capacities and on the dates indicated.

/s/ Nirajkumar Patel

Nirajkumar Patel

Chief Executive Officer, Chief Financial Officer,

President, Treasurer, and a Director

President and Chief Executive Officer and Director

(Principal Executive Officer)

February 15, 2022

By :/s/ Eric Mosser

/s/ Mark Thoenes

Interim Chief Financial Officer

February 15, 2022

/s/ Eric Mosser

Chief Operating Officer, Secretary, and a Director

February 15, 2022

/s/ Roger Brooks

February 15, 2022

/s/ George Chuang

George Chuang

February 15, 2022

/s/ Paul Reuter

February 15, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures