UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction
of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
(Address of principal executive office, including zip code)
Telephone:
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
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an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
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| Item 1.01 | Entry into a Material Definitive Agreement. |
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
| Item 3.02 | Unregistered Sales of Equity Securities. |
| Item 3.03 | Material Modification to Rights of Security Holders |
| Item 5.02 | Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. |
Overview
On May 30, 2023, Kaival Brands Innovations Group, Inc., a Delaware corporation (the “Company” or “Kaival Brands”) and Kaival Labs, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Kaival Labs”), entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and among the Company, Kaival Labs, and GoFire, Inc., a Delaware corporation (“GoFire”). Pursuant to the terms of the Purchase Agreement, the Company and Kaival Labs agreed to purchase certain intellectual property assets of GoFire consisting of various patents concerning electronic vaporizers and related technologies (the “Purchased Assets”) in exchange for equity securities of the Company and certain other consideration, as described below. GoFire is a business engaged in the development of proprietary drug delivery devices focusing on inhalation devices with applications in the consumer and pharmaceutical industries. The Company participated in this transaction with the intent to diversify its product offerings and create both near and long-term revenue opportunities.
The Purchased Assets will be housed in Kaival Labs, which develops new branded and white-label products and services in the vaporizer and inhalation technology sectors. The Purchased Assets consist of 12 existing and 46 pending patents with novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities (i.e., different methods of vaporizing) and child safety. The patents and patent applications cover territories including the United States, Australia, Canada, China, the European Patent Organisation, Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes a proprietary mobile device software application that is used in conjunction with certain patents in the portfolio. The Company has determined that the acquisition of the Purchased Assets does not constitute the acquisition of a “business” (as defined in Rule 11-01(d) of Regulation S-X) and therefore no separate financial statements or pro forma financial information is required.
The transactions contemplated by the Purchase Agreement closed on May 30, 2023 (the “Closing Date”). The Purchase Agreement contains customary representations, warranties, indemnities and covenants of the parties. The representations of the parties shall survive for twelve (12) months from the Closing Date, other than certain fundamental representations, which shall survive for eighteen (18) months from the Closing Date. A total of 200,000 APA Shares (as defined below) and 90,000 Series B Conversion Shares (as defined below) will be held in a third-party escrow account to secure GoFire’s indemnification obligations under the Purchase Agreement.
On May 31, 2023, the Company issued a press release regarding the signing of the Purchase Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Consideration Paid to GoFire Under the Purchase Agreement; Registration Rights
Pursuant to the terms of the Purchase Agreement, the Company will pay to GoFire or its designee, in addition to certain contingent cash consideration described below, consideration in the form of equity securities of the Company consisting of (i) an aggregate of 2,000,000 shares (the “APA Shares”) of common stock of the Company, par value $0.001 per share (the “Common Stock”); (ii) 900,000 shares of newly-designated Series B Convertible Preferred Stock, par value $0.001 per share, (the “Series B Preferred Stock” and the shares of Common Stock underlying the Series B Preferred, the “Series B Conversion Shares”), the rights, preferences and terms of which are set forth in a Certificate of Designation of Rights and Preferences of the Series B Preferred Stock (the “Certificate of Designation”), and (iii) a common stock purchase warrant to purchase 2,000,000 shares of Common Stock (the “Warrant” and the shares of Common Stock underlying the Warrant, the “Warrant Shares”).
Purchase to the Purchase Agreement, the Company is required to register the APA Shares and Warrant Shares with the Securities and Exchange Commission (the “SEC”) for distribution to GoFire’s stockholders and/or public resale by such stockholders. The Company is required to use commercially reasonable efforts to so register these securities within 180 days of the Closing Date. In addition, if any Series B Preferred Stock remains outstanding nineteen (19) months after the Closing Date (i.e., such shares are not redeemed by the Company as described below), 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; provided, however, that it is anticipated that the Company’s securities issued in consideration of the purchase of the Purchased Assets will be assigned by GoFire to a trust for the benefit of GoFire’s stockholders. It is anticipated that the agreement governing such trust would require the trust to hold the Company’s securities subject to such lock-up agreement.
As additional consideration for the Purchased Assets, from the Closing Date until January 1, 2027 (the “CCP Period”), any cannabis-specific (meaning cannabis, hemp or cannabinoid) royalties that are generated by Kaival Labs from or due to the Purchased Assets will be subject to a contingent cash payment (the “CCP”) as described below. Prior to the earlier of: (i) the Company achieving less than or equal to $15,000,000 in aggregate gross cannabis-specific royalties from any Kaival Labs licensing agreements, and (ii) January 1, 2027, the Company shall pay to GoFire a CCP equal to fifty percent (50%) of the aggregate gross cannabis-specific royalties generated by the Purchased Assets. After the earlier of: (i) the Company achieving greater than $15,000,000 in aggregate gross cannabis-specific royalties, and (ii) January 1, 2027, the Company shall pay to GoFire a CCP equal to ten percent (10%) of the aggregate gross cannabis-specific royalties generated by the Purchased Assets until the conclusion of the CCP Period. In addition, if aggregate gross cannabis-specific royalties of $30,000,000 are achieved by the Company prior to the conclusion of the CCP Period, the Company shall pay to GoFire a fifty percent (50%) CCP of the first $15,000,000 and a ten percent (10%) CCP of the next $15,000,000, until the conclusion of the CCP Period.
Simultaneously with the execution and delivery of this Purchase Agreement, Peter Calfee and John Woodbine, the Chief Executive Officer and Chief Innovation Officer, respectively, of GoFire, have each entered into a Non-Competition and Non-Solicitation Agreement with the Company. Pursuant to these agreements, each has agreed not to compete with the business of the Company for a period of ten (10) years from the Closing Date.
Terms of the Series B Preferred Stock
The terms of the Series B Preferred Stock are as follows:
Voting. The shares of Series B Preferred Stock carry no voting rights except: (i) with respect to the nomination of the Series B Director (as described below) and (ii) that the affirmative vote of the holders of a majority of the outstanding shares of Series B Preferred Stock (the “Majority Holders”), acting as a single class, shall be necessary for effecting any amendment, alteration or repeal of any of the provisions of the Company’s Certificate of Incorporation or this Certificate of Designation that materially and adversely affects the rights, preferences or voting power of the Series B Preferred Stock; provided, however, that the amendment of the provisions of the Company’s Certificate of Incorporation create additional classes of preferred stock shall not be deemed to materially or adversely affect the rights, preferences or voting power of the Series B Preferred Stock.
Redemption. The 900,000 shares of Series B Preferred Stock is redeemable by the Company for cash at $15 per share (the “Redemption Price”); provided, however, if the volume-weighted average price of the Common Stock for ten (10) trading-days in any thirty (30) trading-day period is equal to or greater than the prices set forth below (each, a “Redemption Price Reduction Target”), the Redemption Price shall be subject to downward adjustment to the prices per share set forth below:
| Redemption Price Reduction Target | Redemption Price |
| $3.50 per share of Common Stock | $10.00 per share of Series B Preferred Stock |
| $5.50 per share of Common Stock | $8.00 per share of Series B Preferred Stock |
| $7.50 per share of Common Stock | $6.00 per share of Series B Preferred Stock |
Priority. The Series B Preferred Stock ranks, with respect to dividend rights, rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, and redemption rights, senior to the Common Stock and each other class or series of securities now existing or hereafter authorized classified or reclassified, the terms of which do not expressly provide that such class or series ranks on a parity basis with or senior to the Series B Preferred Stock as to dividend rights, rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, and redemption rights.
Liquidation Preference. Upon a liquidation and dissolution of the Company, the holders of Series B Preferred Stock shall be entitled to a liquidation preference senior to the holders of shares of Common Stock equal to $15 per share (the “Liquidation Preference”); provided, however, that a Change of Control (as defined below) shall not be deemed a liquidation and dissolution of the Company. The term “Change of Control” means (i) a sale, lease, license or transfer of all or substantially all of the assets of the Company and its consolidated subsidiaries taken as a whole; (ii) the acquisition of more than fifty percent (50%) of the voting power of the outstanding securities of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, reorganization, exchange, merger or consolidation) unless the Company’s stockholders of record as constituted immediately prior to such acquisition will, immediately after such acquisition (by virtue of their continuing to hold such stock and/or their receipt in exchange therefor of securities issued as consideration for the Company’s outstanding stock) hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity; or (iii) any reorganization, merger, combination, exchange, or consolidation in which the Corporation is not the surviving entity, excluding any merger effected exclusively for the purpose of changing the domicile of the Company.
Dividends. The holders of the Series B Preferred Stock shall be entitled to receive, on each share of Series B Preferred Stock, an amount (such amount, the “Series B Dividend”) equal to two percent (2%) multiplied by the Liquidation Preference. The Series B Dividend shall begin to accrue on a daily basis, be cumulative from and including the Closing Date, whether or not the Company has funds legally available for such dividends or such dividends are declared, shall compound on each six (6) month anniversary of the Closing Date (a “Compounding Date”) (i.e., no dividends shall accrue on other dividends unless and until the Compounding Date has passed), and shall be payable in arrears only with respect to any then outstanding (i.e., unredeemed) shares of Series B Preferred Stock on the eighteen (18) month anniversary of the Closing Date.
Series B Director. For so long as any shares of Series B Preferred Stock remain outstanding, the Majority Holders will be entitled to designate one (1) individual to be nominated to serve as a director (the “Series B Preferred Director”) on the board of directors of Kaival Brands (the “Board”). At each annual meeting of the stockholders of the Company, or at any special meeting called for the purpose of electing directors, the Board shall nominate such designee for election. Unless the Board shall have received from the Majority Holders a written designation by March 1 of each calendar year of an individual other than the then-sitting Series B Preferred Director, the Board shall nominate the then-sitting Series B Preferred Director for re-election to the Board. The Series B Preferred Director is subject to any board of directors-related provisions that may be contained in the Company’s Certificate of Incorporation or Bylaws. The Majority Holders, voting as a single class at a meeting called for such purpose (or by written consent signed by the Majority Holders in lieu of such a meeting), have the sole right to remove the Series B Preferred Director from the Board. Any vacancy created by the removal, resignation or death of a Series B Preferred Director may solely be filled by the Majority Holders, voting as a single class, at a meeting called for such purpose (or by written consent signed by the Majority Holders in lieu of such a meeting). The Series B Preferred Director shall be entitled to receive similar compensation, benefits, reimbursement (including of reasonable travel expenses), indemnification and insurance coverage for his or her service as a director of the Company as the other non-employee directors of the Company. The initial Series B Preferred Director will be Mr. James P. Cassidy (“Mr. Cassidy”). See below for further information regarding Mr. Cassidy.
Voluntary Conversion. The Majority Holders may, on behalf of all of the then current holders of Series B Preferred Stock, elect to cause a voluntary conversion of the Series B Preferred Stock, without payment of additional consideration, into fully-paid and nonassessable shares of Common Stock. The number of shares of Common Stock to which each share of Series B Preferred Stock shall be converted upon such election shall be 8.3333 shares of Common Stock for each share of Series B Preferred Stock (the “Conversion Rate”). The Conversion Rate is subject to customary stock-based (but not price-based) adjustments upon the occurrence of stock splits and the like involving the Common Stock.
A voluntary conversion of the Series B Preferred Stock may only occur on or after the following dates and only up to the following number of shares of Series B Preferred Stock: (i) on the eighteen (18) month anniversary of the Closing Date, up to 180,000 shares of Series B Preferred Stock; (ii) on the twenty-four (24) month anniversary of the Closing Date, up to an additional 180,000 shares of Series B Preferred Stock; (iii) on the thirty-six (36) month anniversary of the Closing Date, up to an additional 180,000 shares of Series B Preferred Stock; (iv) on the forty-eight (48) month anniversary of the Closing Date, up to an additional 180,000 shares of Series B Preferred Stock; and (v) on the sixty (60) month anniversary of the Closing Date, up to an additional 180,000 shares of Series B Preferred Stock.
Automatic Conversion on Change of Control. All shares of Series B Preferred Stock shall automatically and without any further action required be converted into the Common Stock at the Conversion Rate immediately prior to the consummation of a Change of Control such that the former holders of Series B Preferred Stock will be able to participate in the Change of Control as holders of Common Stock.
Preemptive Rights. No holders of Series B Preferred Stock will, as holders of Series B Preferred Stock, have any preemptive rights to purchase or subscribe for shares of the Common Stock or any of the Company’s other securities.
Terms of the Warrant
The Warrant is exercisable for an aggregate of 2,000,000 Warrant Shares for a period of four (4) years from the Closing Date. The exercise price for the Warrant Shares is $3.00, $4.00, $5.00 and $6.00 per share, respectively, for each of four tranches of five hundred thousand (500,000) Warrant Shares. The exercise prices of the warrant are subject to customary stock-based (but not price-based) adjustments upon the occurrence of stock splits and the like involving the Common Stock. The Warrant is exercisable on a cash basis only, except that the Warrant may be exercised on a “cashless basis” if at the time of exercise there is not an effective registration statement under the Securities Act of 1933, as amended covering the public resale of the Warrant Shares.
Advisors and Advisor Compensation
Trust Capital Markets, a division of AGES Financial Services Ltd, acted as advisor to Kaival Brands and Winchester Capital Partners LLC acted as advisor to GoFire. As part of their compensation for services rendered (i) Trust Capital Markets will be issued 92,000 shares of Common Stock and a warrant to purchase 368,000 shares of Common Stock at an exercise price of $0.70 per share and (ii) Winchester Capital Partners LLC will receive a portion of the consideration that was issued to GoFire.
Changes to the Board of Directors
Upon the consummation of the Closing, the size of the Board was increased by one (1) member and fixed at a total of eight (8) members and Mr. Cassidy was appointed to fill the resulting vacancy on the Board. The following is certain biographical information regarding Mr. Cassidy.
James P. Cassidy, age 61, is the founder and Chief Executive Officer of Preposterous Holdings, a family run private equity firm with offices in Asheville, North Carolina he established in 2013. Mr. Cassidy has worked as a private equity investor and advisor for over 25 years with dozens of companies across several industries, with extensive experience in the tobacco, technology, hospitality, consumer packaged goods, and healthcare sectors. Since May 2021, he has served as Chairman of the Board of Two Trees Beverage Company, a North Carolina-based technology company focused on the spirits industry. Beginning in 2016, he was an early investor in, and helped guide, GoFire as a board member and consultant until the sale of that company’s intellectual property portfolio to the Company in May 2023. From 2000 to 2007, Mr. Cassidy was partner in The StrataGroup, a wealth management advisory group at Smith Barney. Mr. Cassidy started his career at UST Inc., a tobacco business holding company, where he worked in various roles from 1983 to 1993 in the government relations department as Director of Corporate Services.
Mr. Cassidy will be entitled to receive compensation for his service on the Board on par with other non-employee members of the Board. The Board believes Mr. Cassidy is qualified to serve on the Board because of his significant experience in investing in and managing companies as well as his tobacco industry experience. Mr. Cassidy meets the definition “independent” under the applicable rules of the Nasdaq Stock Market, and he has not yet been appointed to any committee of the Board. Mr. Cassidy has not been involved in any transaction with the Company that would require disclosure under Item 404(a) of Regulation S-K. Pursuant to the terms of the Certificate of Designation, Mr. Cassidy will serve on the Board until at least the 2024 annual meeting of the Company’s stockholders or his earlier resignation, death or removal.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press release, dated May 31, 2023 of the Company related to the purchase of the Purchased Assets | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements 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. | ||
| Dated: May 31, 2023 | By: | /s/ Eric Mosser |
| Eric Mosser | ||
| President and Chief Operating Officer | ||
Exhibit 99.1
Kaival Brands Acquires Extensive Vaporizer and Inhalation Patent Portfolio to Diversify Product Offerings and Create New Revenue Opportunities
Acquisition from GoFire includes 12 issued and 46 pending patents across multiple jurisdictions with technology covering e-cigarettes, cannabis/hemp and pharmaceutical applications
GRANT-VALKARIA, Fla., May 31, 2023 /Globenewswire/ -- Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) (“Kaival Brands,” the “Company” or “we,” “our” or similar terms), the exclusive distributor of all products manufactured by Bidi Vapor, LLC (“Bidi Vapor”), including the BIDI® Stick electronic nicotine delivery system (ENDS), which are intended for adults 21 and over, today announced it has acquired an extensive patent portfolio from GoFire, Inc. with the goal of diversifying its product offerings and creating near and longer term revenue opportunities.
The acquired assets will be housed in Kaival Labs, Inc., a wholly owned subsidiary of Kaival Brands which develops new branded and white-label products and services in the vaporizer and inhalation technology sectors.
In the near term, Kaival Brands expects to seek third-party licensing opportunities in the cannabis, hemp/CBD, nicotine and nutraceutical markets, as a means of monetizing its new patents. Longer term, the Company believes it can utilize the acquired patents to create innovative and market-disruptive products, including patent protected vaporizer devices and related hardware and software applications.
The GoFire patent portfolio includes 12 existing and 46 pending with novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities (i.e., different methods of vaporizing) and child safety. The patents and patent applications cover territories including the United States, Australia, Canada, China, the European Patent Organisation, Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes a proprietary mobile device software application that is used in conjunction with certain patents in the portfolio.
“This is a transformative asset acquisition for Kaival Brands,” stated Eric Mosser, President and Chief Operating Officer of Kaival Brands. “As we look to the future of our company beyond our core BIDI® Stick distribution business, the purchase of this extensive patent portfolio marks the first step in diversifying our product offerings for adult consumers and potential revenue streams. We are already exploring near-term, revenue generating opportunities through royalty-based licensing agreements with third party partners in the cannabis, hemp/CBD, nicotine and nutraceutical spaces. Our longer-term plan is to incorporate this intellectual property into new, adult-focused products and expand into new segments such as cannabis/hemp, nutraceutical, and pharmaceutical markets that we can sell ourselves through existing and potential new distribution partners, once all necessary regulatory clearances have been obtained. Additionally, we believe that the portfolio provides us with certain strategic advantages due to the limited number of patents in the vaporizer space. In short, we believe this forward-looking acquisition, with the acquisition consideration structured in key respects at premiums to the current market value of our common stock, broadens and strengthens our company and our prospects considerably as we seek to drive value for our stockholders.”
Nirajkumar Patel, Chief Science and Regulatory Officer of Kaival Brands and owner of Bidi Vapor, stated “We believe these patents and patent applications represent a valuable opportunity to increase our product portfolio and diversify revenue streams. From a science perspective, these patents are innovative with novel applications, and we look forward to developing these patents into commercial or pharmaceutical products for adult consumers. From a regulatory point of view, there are only so many patents in the vaporizer space, and we believe that acquiring an extensive portfolio such as this is a wise strategic purchase for the long-term success of Kaival Brands.”
Peter Calfee, Chief Executive Officer of GoFire, Inc., stated, “We are excited to place these valuable assets into Kaival’s hands. After working hard to create this intellectual property with a goal of providing safer and healthier products to the marketplace, we engaged in a comprehensive assessment of how best to further its development into actual products and services with consumer reach. At the end of that process, we chose to invest our patent portfolio in Kaival in exchange for Kaival equity as the right fit for our technology. We have confidence in Kaival’s management team and board of directors as Kaival seeks to further develop and ultimately monetize this technology for the benefit of all Kaival stockholders, including GoFire’s stockholders. We look forward to realizing the potential market strength of this patent portfolio with Kaival.”
Transaction Overview
The consideration for the purchased patents consists primarily of Kaival Brands equity securities. In certain key aspects, the equity consideration was structured in a forward-looking manner with valuations or exercise prices struck at premiums to the current market price of Kaival Brands’ common stock.
Specifically, the equity consideration consists of: (i) 2,000,000 shares of Kaival Brands common stock; (ii) 900,000 shares of newly designated, non-voting Series B Preferred Stock valued at $15 per share and (iii) warrants to purchase 2,000,000 shares of common stock with exercise prices ranging from $3.00 to $6.00 per share for each of four 500,000 share tranches. The Company could receive up $9,000,000 in cash proceeds if such warrants are exercised in the future for cash.
The Series B Preferred shares are redeemable at $15 per share or at lower prices depending on the market value of the Company’s common stock at the time of redemption. Each preferred share is convertible into 8.3333 shares of Company common stock, or 7,500,000 common shares in total. Each preferred share has a $15 face value which, on an as converted basis, equates to a value of $1.80 for each of the 8.3333 shares of common stock receivable upon conversion, representing a premium to the market price of the Kaival’s common stock as of the Closing Date. However, the preferred shares may be only converted into common stock beginning 18 months following the closing and then only on a limited basis over the next 5 years, if the Company has not redeemed the preferred shares prior to conversion. The holders of the Series B preferred shares are also entitled to nominate one individual to serve on board of directors of Kaival Brands, with the initial board member being James P. Cassidy, a GoFire board advisor with significant investment, management and tobacco industry experience.
The share consideration is subject to a six-month lockup agreement. GoFire or its designees have been granted certain registration rights with respect to the common stock issued as part of or underlying the equity consideration.
In another forward-looking consideration structure, GoFire is also entitled to potential contingent cash consideration based on a percentage of license revenue received by Kaival Brands over the next four years from cannabis-related applications of the acquired patents.
Trust Capital Markets, a division of AGES Financial Services Ltd, acted as advisor to Kaival Brands and Winchester Capital Partners LLC acted as advisor to GoFire. Ellenoff Grossman & Schole LLP acted as legal counsel to Kaival Brands and the Gunster law firm acted as legal counsel to GoFire.
Additional details regarding this transaction will be provided in a Current Report on Form 8-K to be filed by the Company with the U.S. Securities and Exchange Commission.
ABOUT KAIVAL LABS, INC.
Based in Grant-Valkaria, Florida, Kaival Labs is a 100% wholly-owned subsidiary of Kaival Brands focused on developing new branded and white-label products and services in the vaporizer and inhalation technology sectors. Kaival Labs’ current patent portfolio consists of 12 existing and 46 pending with novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities and child safety. The patents and patent applications cover territories including the United States, Australia, Canada, China, the European Patent Organisation, Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes a fully-functional proprietary mobile device software application that is used in conjunction with certain patents in the portfolio.
Learn more about Kaival Labs at https://kaivallabs.com.
ABOUT KAIVAL BRANDS
Based in Grant-Valkaria, Florida, Kaival Brands is a company focused on incubating innovative and profitable adult-focused products into mature and dominant brands, with a current focus on the distribution of electronic nicotine delivery systems (ENDS) also known as “e-cigarettes”. Our business plan is to seek to diversify into distributing other nicotine and non-nicotine delivery system products (including those related to hemp-derived cannabidiol (known as CBD) products. Kaival Brands and Philip Morris Products S.A. (via sublicense from Kaival Brands) are the exclusive global distributors of all products manufactured by Bidi Vapor.
Learn more about Kaival Brands at https://ir.kaivalbrands.com.
Cautionary Note Regarding Forward-Looking Statements
This press release and the statements of the Company’s management and partners included herein and related to the subject matter herein includes statements that constitute “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which are statements other than historical facts. You can identify forward-looking statements by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “position,” “prospects,” “should,” “strategy,” “target,” “will,” and similar words. All forward-looking statements speak only as of the date of this press release. Although we believe that the plans, intentions, and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions, or expectations will be achieved. Therefore, actual outcomes and results (including, without limitation, the will be able to monetize the acquired assets described herein, and the impact of such efforts on the Company’s results of operations) could materially and adversely differ from what is expressed, implied, or forecasted in such statements. Our business and our ability to expand and grow our business due to the assets we acquired from GoFire may be influenced by many factors that are difficult to predict, involve significant risks and uncertainties that may materially affect actual results, and are often beyond our control. Factors that could cause or contribute to such differences include, but are not limited to: (i) future actions by the FDA that could impact our business and prospects, (ii) the outcome of FDA’s scientific review of Bidi Vapor’s pending FDA Premarket Tobacco Product Applications, (iii) the results of international marketing and sales efforts by Philip Morris International, the Company’s international distribution partner, (iv) how quickly domestic and international markets adopt our products, (v) the scope of future FDA enforcement of regulations in the ENDS industry or other sectors we may enter, including the cannabis industry, (vi) the FDA’s approach to the regulation of synthetic nicotine and other potential products we may manufacture or sell in the future and its impact on our business, (vii) potential federal and state flavor or other bans and other restrictions on ENDS products and other potential products we may manufacture or sell in the future, (viii) whether we will be able to successfully integrate and capitalize on the patents we have acquired from GoFire, of which no assurances can be given, (ix) general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth, (x) the effects of steps that we could take to reduce operating costs, (xi) our inability to generate and sustain profitable sales growth, including sales growth in U.S. and international markets, (xii) circumstances or developments that may make us unable to implement or realize anticipated benefits, or that may increase the costs, of our current and planned business initiatives, (xiii) significant changes in our relationships with our distributors or sub-distributors and (xiv) other factors detailed by us in our public filings with the Securities and Exchange Commission, including the disclosures under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2022, filed with the Securities and Exchange Commission on January 27, 2023 and accessible at www.sec.gov. All forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. Except as required under the federal securities laws and the Securities and Exchange Commission’s rules and regulations, we do not have any intention or obligation to update any forward-looking statements publicly, whether as a result of new information, future events, or otherwise.
All Press Inquiries and Kaival Brands Investor Relations:
Stephen Sheriff, Director of Communications and Administration
Ir.kaivalbrands.com
investors@kaivalbrands.com
Cover |
May 31, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | May 31, 2023 |
| Entity File Number | 000-56016 |
| Entity Registrant Name | Kaival Brands Innovations Group, Inc. |
| Entity Central Index Key | 0001762239 |
| Entity Tax Identification Number | 83-3492907 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 4460 Old Dixie Highway |
| Entity Address, City or Town | Grant-Valkaria |
| Entity Address, State or Province | FL |
| Entity Address, Postal Zip Code | 32949 |
| City Area Code | (833) |
| Local Phone Number | 452-4825 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, par value $0.001 per share |
| Trading Symbol | KAVL |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | true |
| Elected Not To Use the Extended Transition Period | false |
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