Kaival Brands Innovations Group, Inc.

Item 1. Legal Proceedings.

From time to time we may become party to legal proceedings that we consider to be part of the ordinary course of our business. We also are subject to the regulatory and intellectual-property matters involving Bidi Vapor, LLC described below, which may affect us even though we are not the named manufacturer.

On February 12, 2025 and November 6, 2025, counsel to a stockholder of the Company delivered written demands purporting to exercise inspection rights under Section 220 of the Delaware General Corporation Law. Counsel to a second stockholder delivered a written demand dated February 24, 2025. The demands request specified books and records of the Company. The Company produced certain Board minutes in 2025 in response to the February 12 demand and is assembling additional Board-level records. As of the date of this Report, the Company is not aware of a complaint filed in the Court of Chancery of the State of Delaware arising out of these demands. The Company reserves all rights and objections with respect to the demands, including as to form, scope, purpose, and timeliness. The Company cannot predict whether a books-and-records action will be filed or the outcome of any such action.

We are not a named party to the FDA marketing-denial proceedings or to the ITC investigation involving Bidi’s products, other than as originally named and later dismissed from ITC Investigation No. 337-TA-1410. The outcome of those or related proceedings could have a material effect on royalty revenue under the PMI license, which is currently our primary source of revenue.