Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
On July 20, 2021, our Common Stock began trading on
the Nasdaq Capital Market under the trading symbol “KAVL.” On January 27, 2023, the last reported sales price of our Common
Stock was $0.82.
Holders
As of January 27, 2023, we had 56,169,090 shares of Common Stock issued
and outstanding and no shares of Series A Preferred Stock issued and outstanding. As of January 27, 2023, we had approximately 7,400 record
holders of our Common Stock.
Dividends
We have not paid any dividends to our stockholders
and do not intend to pay cash dividends on our Common Stock for the foreseeable future. Any future determination related to the
Company’s dividend policy will be made at the discretion of our Board. Also, there are no restrictions which would limit
our ability to pay dividends on common stock.
Recent Sales of Unregistered Securities; Uses of Proceeds from
Registered Securities
Common Stock Issued
The authorized Common Stock of the Company consists
of 1,000,000,000 shares with a par value of $0.001 per share. There were 56,169,090 shares of Common Stock issued and outstanding as of
October 31, 2022, as compared to 30,195,312 shares of the Common Stock issued and outstanding as of October 31, 2021.
During the fiscal year ended October 31, 2022, stockholders
of the Company exercised warrants to purchase 855,605 shares of the Company’s common stock for net proceeds of $1,625,650.
During the fiscal year
ended October 31, 2022, the Company issued 123,256 shares of Common Stock with the fair value of $172,379 to employees for services
RSUs that were settled with common shares. Of the shares issued to employees, 44,720 shares were withheld by the Company to satisfy tax
withholding obligations equal to $59,862.
During the fiscal year ended October 31, 2022, 12,963
shares of our Common Stock were issued to an individual as compensation for Consulting services rendered to us. We issued the shares in
reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the issuance of shares of our Common
Stock did not involve any public offering).
During the fiscal year ended October 31, 2022, 15,351
shares of our Common Stock were issued to QuikfillRx, LLC as compensation for marketing and promotion services rendered to us. We issued
the shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the issuance of shares
of our Common Stock did not involve any public offering).
During the fiscal year ended October 31, 2022, 11,323
shares of our Common Stock were issued to an individual as compensation for professional legal services rendered to us. We issued the
shares in reliance on the exemption from registration pursuant to Section 4(a)(2) of the Securities Act (in that the issuance of shares
of our Common Stock did not involve any public offering).
During the fiscal year ended, October 31, 2022, all
3,000,000 shares of Series A Preferred Stock were converted into shares of Common Stock by Kaival Holdings, LLC, a related party. The
conversion of 3,000,000 shares of Series A Preferred Stock, at a conversion rate of 8.33, equaled 25,000,000 shares of Common Stock. As
a result, the authorized, preferred stock of the Company consists of 5,000,000 shares with a par value of $0.001 per share, with 0 shares
of preferred stock issued or outstanding as of October 31, 2022.
In September 2021,
the Company completed a firm commitment underwritten offering, which offering was made pursuant to its Registration Statement on Form
S3 (File No. 333-258339) (the “Registration Statement”). The Securities and Exchange Commission (the “SEC”) declared
the Registration Statement effective on August 10, 2021. The Company sold 4,700,000 million shares of our Common Stock and warrants,
with an exercise price of $1.90 per share and an expiration of five years, to purchase an additional 3,525,000 shares of its Common Stock.
The Company sold each share of its Common Stock and warrants to purchase 0.75shares of its Common Stock at a combined public offering
price of $1.70. The Company also granted the underwriter the option to purchase an additional 705,000 shares of its Common Stock and
warrants to purchase an additional 528,750 shares of its Common Stock. As of October 31, 2021, the Company had received net proceeds
from the offering of approximately $8,305,772, net of offering cost. The Company had also received approximately $1,665,113 from the
exercise of 879,828 warrants.
During the year ended October 31, 2021, 674,803 shares
of Common Stock were issued to 8 non-employee vendors as compensation for professional services rendered to the Company and two officers
as additional compensation. These shares were expensed to the Company using the closing share price on the grant dates to compute an aggregate
fair market value total of $8,944,100, of which 308,333 shares and $1,597,667 compensation is related to shares issued to Inflection Partners.
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