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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report:
June 24, 2022
Kaival Brands Innovations Group, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware |
000-56016 |
83-3492907 |
| (State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(I.R.S.
Employer Identification No.) |
4460 Old Dixie Highway
Grant,
Florida
32949
(Address
of principal executive office, including zip code)
Telephone:
(833)
452-4825
(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 |
|
Common Stock, par value $0.001 per share |
KAVL |
The Nasdaq Stock Market, LLC |
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:
☐ Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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
growth company ☒
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
|
ITEM 5.02. |
DEPARTURE OF DIRECTORS OR
PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN
OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS |
Management Changes
On June 24, 2022, Nirajkumar Patel notified Kaival Brands
Innovations Group, Inc. (the “Company”), that he intends to resign
as the Company’s Chief Executive Officer and Treasurer effective
immediately. Mr. Patel’s resignation is not due to any disagreement
with the Company. In connection with Mr. Patel’s resignation as the
Company’s Chief Executive Officer and Treasurer, the Board of
Directors (the “Board”) appointed Mr. Patel to serve as the
Company’s Chief Science and Regulatory Officer, a newly created
position, effective immediately. Mr. Patel will also continue to
serve as a director.
On June 24, 2022, the Board appointed Eric Mosser, the Company’s
current Chief Operating Officer, as President, effective
immediately. In connection with Mr. Mosser’s appointment as
President, the Board also appointed Mr. Mosser to serve as the
Company’s principal executive officer for purposes of its filings
with the Securities and Exchange Commission. Mr. Mosser also will
continue to serve as Chief Operating Officer, Secretary, and a
director. Mr. Mosser’s biographical information and business
experience is set forth in the Company’s Definitive Proxy Statement
on Schedule 14A, filed with the Securities and Exchange Commission
on May 4, 2022. There was no arrangement or understanding between
Mr. Mosser and any other person pursuant to which Mr. Mosser was
selected for this position. Mr. Mosser is not a party to any
transaction with any related person required to be disclosed
pursuant to Item 404(a) of Regulation S-K. In connection with Mr.
Mosser’s appointment as President, the Compensation Committee (the
“Committee”) approved certain changes to Mr. Mosser’s cash and
equity compensation as set forth below.
Officer Compensation Changes
On June 24, 2022, the Committee approved an increase in Mr.
Mosser’s base salary to $300,000 in connection with his appointment
as President. In addition, on June 24, 2022, the Committee approved
the grant of a non-qualified stock option exercisable for up to
250,000 shares of the Company’s common stock to Mr. Mosser, with
one-half of the shares vesting on the one-year anniversary of the
grant date and the remaining one-half of the shares vesting on the
second-year anniversary of the grant date. The exercise price is
$1.72 per share and the stock option has a ten-year term.
In addition, on June 24, 2022, the Committee approved the grant of
a non-qualified stock option exercisable for up to 250,000 shares
of the Company’s common stock to Mr. Patel, with one-half of the
shares vesting on the one-year anniversary of the grant date and
the remaining one-half of the shares vesting on the second-year
anniversary of the grant date. The exercise price is $1.72 per
share and the stock option has a ten-year term.
ITEM 8.01. OTHER EVENTS
On June 24, 2022, Kaival Holdings, LLC (“KH”), the Company’s
controlling stockholder, and an entity owned and controlled by Mr.
Patel and Mr. Mosser, exercised its right to convert its 3,000,000
shares of Series A Preferred Stock into 25,000,000 shares of the
Company’s common stock. The Certificate of Designation of the
Preferences, Rights, and Limitations of the Series A Preferred
Stock (the “Certificate of Designation”) provides that the Series A
Preferred Stock is convertible (i) at the option of the holder on
or after November 1, 2023 or (ii) prior to November 1, 2023, if
there is a Change of Control (as defined in the Certificate of
Designation) or the occurrence of any other event as determined and
agreed to by the Company and the holders holding a majority of the
issued and outstanding shares of Series A Preferred Stock. KH had
previously agreed to return to the Company for cancellation a
certain number of shares of Common Stock in exchange for shares of
Series A Preferred Stock convertible into shares of Common Stock
equal to the number canceled, for the purpose of temporarily
reducing the number of issued and outstanding shares of Common
Stock. The Board, after reviewing and discussing KH’s desire to
convert the Series A Preferred Stock prior to November 1, 2023,
determined that there exists a justifiable reason for allowing the
early conversion of the Series A Preferred Stock, namely the
occurrence of the entry into the international licensing agreement
with an affiliate of Philip Morris International, Inc. and approved
the early conversion.
On June 27, 2022, the Company issued a press release announcing the
management changes referenced in Item 5.02, above.
ITEM 9.01 FINANCIAL STATEMENTS EXHIBITS
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:
June 27, 2022 |
By: |
/s/ Eric Mosser |
| |
|
Eric
Mosser, President and Chief Operating Officer |
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