Item 8.01 Other Events.
On September 29, 2021, Kaival Brands Innovations
Group, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with
Maxim Group LLC as the underwriter (the “Underwriter”), with respect to the issuance and sale in an underwritten public
offering (the “Offering”) by the Company of 4,700,000 shares (the “Shares”) of the Company’s common
stock, par value $0.001 per share (“Common Stock”), and warrants to purchase 3,525,000 shares of Common Stock (“Firm
Warrants”, and together with the Firm Shares, the “Firm Securities”). Each share of Common Stock was sold together
with 0.75 Firm Warrants at a combined public offering price of $1.70 per share. In addition, the Company granted the Underwriter
the option to purchase an additional 705,000 shares of Common Stock (the “Option Shares”) and an additional warrants
to purchase an additional 528,750 shares of Common Stock (the “Option Warrants” and together with the Option Shares,
the “Option Securities”) from the Company for the purpose of covering over-allotments in connection with the sale of
the Firm Securities (the Firm Securities and Option Securities together, the “Securities”), pursuant to the Offering.
There is no established public trading market for the Warrants and the Company does not expect a market to develop in the future.
The Firm Warrants shall initially be issued and maintained in the form of a security held in book-entry form and The Depository
Trust Company or its nominee will be the sole registered holder, subject to a holder’s right to elect to receive a Firm Warrant
in certificated form. The Offering is expected to close on or about October 4, 2021, subject to the satisfaction of customary closing
conditions.
The gross proceeds to the Company from the
offering are expected to be approximately $8.0 million, before deducting underwriting discounts and offering expenses. The Company
intends to use the proceeds from the offering to fund general corporate purposes, including working capital.
The Firm Shares, the Firm Securities and the
shares of Common Stock underlying the Firm Warrants are registered under the Securities Act of 1933, as amended (the “Securities
Act”) pursuant to a shelf registration on Form S-3 (File No. 333-258339) ) initially filed by the Company with the Securities
and Exchange Commission (the “SEC”) under the Securities Act on July 30, 2021, and declared effective by the SEC on
August 10, 2021, (the “Registration Statement”), a preliminary prospectus supplement dated September 29, 2021 (including
the accompanying base prospectus (the “Base Prospectus”) as contained in the Registration Statement) and filed with
the SEC on September 29, 2021 in connection with the Offering. A copy of the opinion of Morgan, Lewis & Bockius LLP relating
to the legality of the issuance and sale of the securities sold in this Offering is attached as Exhibit 5.1 hereto.
The Underwriting Agreement contains customary
representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the
Company and the Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination
provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for purposes of
such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations
agreed upon by the contracting parties.
Firm Warrants
Firm Warrants are immediately exercisable and
will expire on the fifth anniversary of the original issuance date. Firm Warrants have an exercise price of $1.90 per share of
Common Stock. The exercise price of the Firm Warrants is subject to adjustment in certain circumstances. If the Company fails to
timely deliver the shares underlying the Firm Warrants, the Company will be subject to certain buy-in provisions.
If there is no effective registration statement covering the issuance of the shares issuable upon the exercise of the Firm
Warrants, the warrants are exercisable on a cashless basis.
In the event of any fundamental transaction,
and generally including any merger with or into another entity, sale of all or substantially all of the Company’s assets,
tender offer or exchange offer, or reclassification of Common Stock, the holder will have the right to have the Firm Warrants and
all obligations and rights thereunder assumed by the successor or acquiring corporation.
A holder of a Firm Warrant will not have the
right to exercise any portion of the warrant if the holder (together with such holder’s affiliates, and any person acting
as a group together with such holder or any of such holder’s affiliates) would beneficially own in excess of 4.99% of the
number of shares of Common Stock outstanding immediately after giving effect to the exercise (or, at the election of the purchaser
prior to the date of issuance, 9.99%).
Vstock Transfer, LLC has agreed to be the warrant
agent for the warrants pursuant to a Warrant Agency Agreement between the Registrant and Vstock Transfer, LLC.
Forward-Looking Statements
Any statements made by the Company that are
not historical facts contained in this Current Report on Form 8-K are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and other factors that could cause the
Company’s actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking
statements. These statements often include words such as “may,” “will,” “expect,” “anticipate,”
“continue,” “estimate,” “project,” “intend,” “believe,” “plan,”
“seek,” “could,” “can,” “should” or similar expressions. These statements are based
on assumptions that the Company has made in light of the Company’s experience in the industry, as well as the Company’s
perceptions of historical trends, current conditions, expected future developments and other factors the Company believes are appropriate
in these circumstances. Forward-looking statements include, but are not limited to, those relating to the Offering and the anticipated
use of the net proceeds therefrom, and are subject to such risks as are identified in the Company’s most recent Annual Report
on Form 10-K and in any subsequent quarterly reports on Form 10-Q. These documents are available on request from the Company or
at www.sec.gov. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise, except as required by law.