Kaival Brands Innovations Group, Inc. 10-K

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 February 6, 2025, the last reported sales price of our Common Stock was $1.35. Holders As of February 6 , 2025, we had approximately 287 record holders of our Common Stock. Dividends We do not currently pay dividends on our shares of Common Stock and have no intention of paying dividends on shares of our Common Stock for the foreseeable future. Recent Sales of Unregistered Securities; Uses of Proceeds from Registered Securities Common Stock Our authorized Common Stock consists of 1,000,000,000 shares with a par value of $0.001 per share. There were 8,517,302 shares of Common Stock issued and outstanding as of October 31, 2024 as compared to 2,793,386 shares of the Common Stock issued and outstanding as of October 31, 2023. During the year ended October 31, 2024, the Company issued 1,400,144 shares of Common stock to Bidi Vapor LLC pursuant to a debt exchange agreement dated October 25, 2024. Pursuant to such issuance, Bidi Vapor LLC and the Company agreed that the outstanding account payable of $1,275,000 would be repaid in full and extinguished. During the year ended October 31, 2024, the Company issued 1,746,500 shares of common stock in connection with the June 2024 Public Offering. During the year ended October 31, 2024, the Company issued 2,174,456 shares of common stock from exercises of pre-funded warrants. During the year ended October 31, 2024, the Company issued 52,949 shares of common stock for rounding of shares related to the Reverse Split. During the year ended October 31, 2024, the Company issued 16,667 shares of common stock to a FINRA member broker-dealer in connection with the termination of its relationship with such broker dealer. The fair value was $62,000 based on the closing price of the common stock on the termination date and recorded as stock-based compensation. 36 During the year ended October 31, 2024, the Company issued 333,200 shares of common stock from exercises of warrants. During the year ended October 31, 2023, we issued 95,239 shares of Common Stock as consideration for the acquisition of intellectual property assets from GoFire. We also issued 4,381 shares of Common Stock as compensation for advisory services rendered in connection with the GoFire APA. We also issued 19,048 shares of Common Stock as part of a loan transaction with AJB investments. Series B Convertible Preferred Stock We issued 900,000 shares of the Series B Preferred Stock as consideration for the acquisition of intellectual property assets from GoFire in May 2023. The Series B Preferred Stock carries no voting rights except: (i) with respect to the ability of the holders of a majority of the then outstanding Series B Preferred Stock (the “Majority Holders”), to nominate a director to our board of directors, and (ii) that the vote of the Majority Holders is necessary for effecting any amendment to the Company’s Certificate of Incorporation or Certificate of Designation that affects the Series B Preferred Stock. The Series B Preferred Stock is redeemable at our option at a redemption price of $15 per share, subject to potential downward adjustments based on the trading price of the Common Stock. Subject to additional limitations in the GoFire APA, the Series B Preferred Stock holds seniority over the Common Stock and each other class of series of securities now existing or hereafter authorized with respect to dividend rights, the distribution of assets upon liquidation, and dissolution and redemption rights. Upon a liquidation and winding up of our company, the holders of Series B Preferred Stock are entitled to a liquidation preference of $15 per share (the “Liquidation Preference”), though the redemption may be adjusted downward based on the trading price of the Common Stock at the time of liquidation. The holders of Series B Preferred Stock are entitled to receive a dividend equal to 2% of the Liquidation Preference, accruing from May 30, 2023 and payable on the eighteen-month anniversary of May 30, 2023. No preemptive rights are granted to the holders of Series B Preferred Stock. The Majority Holders have the ability to cause a voluntary conversion of the Series B Preferred Stock into Common Stock at a conversion rate of 0.3968 shares of Common Stock per share of Series B Preferred Stock which may only occur on or after the following dates 18 month, 24 month, 36, month, 48 month, and 60 month anniversary of the original issuance date; and only up to 180,000 number of shares of Series B Preferred Stock on each of the these dates. All shares 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 convertible preferred shareholders .