Kaival Brands amends PMI license; volume-based royalties, $2.7M savings, $135k payment due

Kaival Brands Innovations Group, Inc.

Royalty changes from sales price to volume-based sliding scale: $0.08–$0.10 per sale, rising to $0.10–$0.20 upon milestones.
Guaranteed royalty eliminated; quarterly payments based on actual sales; unpaid guarantee cancelled.
Expected reconciliation payment of ~$135k from PMPSA by August 31, 2023; projects ~$300k additional royalties through Q4 2023.
Cost savings of approx. $2.7M over license lifetime from simplified structure; insurance tail reduced from 6 to 2 years.
PMI Markets expanded to additional territories; product launched in 13 markets plus duty-free as of July 31, 2023.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Kaival Brands Innovations Group, Inc. amended Deed of Amendment No. 1 with Philip Morris Products S.A. valued at approximately $135,000 (effective 2023-06-30).

Action: amendment
Agreement: license
Counterparty: Philip Morris Products S.A.
Value: approximately $135,000
Effective: 2023-06-30

Exact text from the filing

On August 12, 2023, Kaival Brands Innovations Group, Inc. (the “Company”) executed and entered into a Deed of Amendment No. 1 (the “PMI License Amendment”) with Philip Morris Products S.A. (“PMPSA”), Bidi Vapor LLC (“Bidi Vapor”) and Kaival Brands International, LLC, a wholly-owned subsidiary of the Company (“KBI”).

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Kaival Brands Innovations Group, Inc. filing history →

Source: SEC EDGAR

accession 0001731122-23-001550

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