8-K
Kaival Brands Innovations Group, Inc. (KAVL)
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
Dateof Report (Date of earliest event reported): April 7, 2026 (March 31, 2026)
Kaival Brands Innovations Group, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-56016 | 83-3492907 |
|---|---|---|
| (State<br> or other jurisdiction of incorporation) | (Commission<br> File Number) | (I.R.S.<br> Employer Identification No.) |
1317 Edgewater Dr, #730
Orlando,Florida 32804
(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<br> Stock, par value $0.001 per share | KAVL | OTCQB<br> Market |
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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> 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 Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 31, 2026, the Board of Directors (the “Board”) of Kaival Brands Innovations Group, Inc. (the “Company”) approved employment agreements with the Company’s Chief Executive Officer and Chief Financial Officer (who also serve as directors) in the forms attached as Exhibits 10.1 and 10.2. These agreements include equity grants that are milestone-driven to support the Company’s recovery plan objectives. The approval was made pursuant to DGCL §144, with the sole disinterested director conducting an independent review and providing a fairness opinion concluding the arrangements are fair and reasonable to the Company and its stockholders, based on factors including cash preservation, equity alignment with recovery milestones, dilution controls, and market comparables. The Fairness Opinion Memorandum attached as Exhibit 99.1 was adopted.
The Board also approved an amendment to the 2020 Plan to increase the maximum aggregate shares available under the Plan to 100,000,000 shares. A copy of the amendment is attached as Exhibit 10.3.
The Eric Mosser Employment Agreement, Eric Morris Employment Agreement, and the amendments to the Amendment to 2020 Stock and Incentive Compensation Plan are being filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference. The foregoing descriptions do not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, which are filed herewith as Exhibits 10.1 through 10.3.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 10.1 | Employment<br> Agreement – Eric Mosser |
| 10.2 | Employment<br> Agreement – Eric Morris |
| 10.3 | Amendment<br> to 2020 Stock and Incentive Compensation Plan |
| 99.1 | Fairness<br> Opinion Memorandum |
| 104 | Cover<br> 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.
| KaivalBrands Innovations Group, Inc. | ||
|---|---|---|
| Dated:<br>April 7, 2026 | By: | /s/<br>Eric Mosser |
| Eric<br>Mosser | ||
| Chief<br>Executive Officer |
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is entered into as of March 31, 2026 (the “Effective Date”), by and between Kaival Brands Innovations Group, Inc., a Delaware corporation (the “Company”), and Eric Mosser (“Executive”).
RECITALSThe Company wishes to employ Executive as Chief Executive Officer, and Executive wishes to accept employment, on the terms below. The Board has approved this Agreement and the related equity grants.
AGREEMENT
| 1. | Employment and Term<br>The Company employs Executive as Chief Executive Officer for an initial three-year term beginning on the Effective Date. The<br>Agreement automatically renews for successive one-year periods unless either party gives 60 days’ written notice of non-renewal. |
|---|---|
| 2. | Position and Duties<br>Executive shall serve as Chief Executive Officer of the Company and shall have such duties and responsibilities as are customary<br>for a chief executive officer of a public company of similar size and stage of development, including oversight of the Company’s<br>recovery plan, SEC reporting obligations, disclosure controls, and strategic initiatives. Notwithstanding the foregoing, Executive may<br>engage in non-conflicting outside activities (including board service or consulting) provided that such activities do not interfere<br>with the performance of his duties to the Company and are approved in advance by the Board (which approval shall not be unreasonably withheld). |
| --- | --- |
| 3. | Compensation (a) BaseSalary. The Company shall pay Executive $15,000 per month, subject to standard withholdings and annual Board review. |
| --- | --- |
(b) InitialEquity Grants. On the Effective Date the Company shall grant under the 2020 Plan (as amended): (i) 3,000,000 restricted shares of common stock at Fair Market Value; 600,000 shares vest immediately and the remaining 2,400,000 shares vest in equal quarterly installments of 200,000 shares at the end of each fiscal quarter over the next 12 quarters, subject to continued service; and (ii) options to purchase 3,000,000 shares at 100% of Fair Market Value; 600,000 options vest immediately and the remaining 2,400,000 options vest in equal quarterly installments of 200,000 options at the end of each fiscal quarter over the next 12 quarters, subject to continued service.
(c) Annual Performance Equity Grant. Beginning on the Effective Date and each anniversary thereafter during the Term, the Board may, in its sole discretion and based on Executive’s performance against Board-established metrics (such as financial targets, operational milestones, or strategic goals), grant Executive non-qualified stock options equal to up to 3% of the Company’s then-outstanding shares of Common Stock (calculated on a fully-diluted basis immediately prior to the grant, rounded up to the nearest whole share) under the Plan. Each such grant, if awarded, shall vest 25% immediately on the grant date and 25% at the end of each of the following three fiscal quarters, subject to Executive’s continued service.
The forms of the Restricted Stock Award Agreement and both Non-Qualified Stock Option Agreements are attached as Exhibits C and D hereto and are incorporated by reference.
(d) Changein Control Acceleration. All unvested equity awards (including the Initial Equity Grants and any outstanding Annual Performance Equity Grants) shall immediately vest in full upon the consummation of a Change in Control. A “Change in Control” means the consummation of any of the following (in one transaction or a series of related transactions): (i) any merger, consolidation, reorganization, asset contribution, business combination, or similar transaction involving the Company or any of its subsidiaries (whether or not the Company is the surviving entity); (ii) the sale, lease, transfer, or other disposition of all or substantially all of the assets of the Company or its subsidiaries; (iii) any acquisition by any person or group of beneficial ownership of securities representing more than fifty percent (50%) of the voting power of the Company; or (iv) any other transaction that results in a change in control of the Company or any subsidiary, as determined by the Board in good faith.
(e) Asset-SaleContinuity Protection. Notwithstanding anything to the contrary, if a Change in Control consists solely of a sale, lease, transfer, or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company or any subsidiary and does not result in a change in control of Kaival Brands Innovations Group, Inc. itself (i.e., the current officers and directors of the Company remain in place following the transaction), and if Executive is still employed by the Company (or its successor) immediately following the closing of such transaction, then: (i) this Agreement shall automatically renew for a fresh three-year term commencing on the last day of the calendar month in which the Change in Control transaction closed; and (ii) the on the same day Company shall issue (A) 6,000,000 new non-qualified stock options at Fair Market Value (1,500,000 vest immediately and the remaining 4,500,000 vest in equal quarterly installments of 375,000 options at the end of each fiscal quarter over the ensuing twelve (12) quarters, subject to continued service) and (B) a new 3% Annual Performance Equity Grant as the initial grant for the renewed term. The Board (or the board of the successor entity) shall promptly confirm in writing that the conditions of this subsection have been satisfied.
(f) Anti-DilutionAdjustments. All equity grants shall receive standard anti-dilution adjustments under the 2020 Plan.
| 4. | Benefits Executive<br>shall participate in all Company benefit plans available to senior executives. |
|---|---|
| 5. | Termination (a) If<br>the Company terminates Executive without Cause or Executive terminates for Good Reason, all unvested equity shall immediately vest 100%.<br>(b) In all other terminations, Executive receives only accrued Base Salary and any already-vested equity. |
| --- | --- |
| 6. | Restrictive Covenants Executive shall comply with<br>the confidentiality, non-competition, non-solicitation, and IP assignment provisions in Exhibit A (12-month<br>post-termination). |
| --- | --- |
| 7. | Indemnification<br>The Company shall indemnify Executive to the fullest extent permitted by Delaware law and maintain D&O insurance covering Executive<br>on the same basis as other senior officers. |
| --- | --- |
| 8. | Miscellaneous This<br>Agreement is governed by Delaware law, constitutes the entire agreement, may be amended only in writing, and may be executed in counterparts.<br>Invalid provisions shall be severed. |
| --- | --- |
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/<br>Mark Thoenes |
| Mark Thoenes, Chairman | |
| Date: | March 31, 2026 |
| Executive | |
| By: | /s/ Eric Mosser |
| Eric Mosser | |
| Date: | March<br>31, 2026 |
Exhibit A – Restrictive Covenants
RESTRICTIVE COVENANTS
**1.****Confidentiality.**During the term of employment and at all times thereafter, Executive shall keep confidential and shall not use or disclose to any third party any Confidential Information of the Company or its subsidiaries, except as required in the performance of Executive’s duties or as required by law. “Confidential Information” means all non-public information relating to the Company’s business, products, technology, customers, suppliers, strategies, financial data, trade secrets, and any other proprietary information.
**2.**IntellectualProperty Assignment. All inventions, discoveries, improvements, works of authorship, and other intellectual property conceived, developed, or made by Executive during the term of employment shall be the sole and exclusive property of the Company. Executive hereby assigns all right, title, and interest in such intellectual property to the Company and agrees to execute any documents necessary to perfect the Company’s ownership.
**3.**Remedies. Executive acknowledges that any breach of this Exhibit A could cause irreparable harm to the Company for which monetary damages would be inadequate. The Company shall be entitled to injunctive relief, in addition to any other remedies available at law or in equity, without the necessity of posting a bond.
**4.**Survival. The obligations under this Exhibit A shall survive the termination of Executive’s employment for any reason.
Exhibit B – Good Reason Definition DEFINITION OF GOOD REASON
“Good Reason” means the occurrence of any of the following without Executive’s prior written consent: (i) a material diminution in Executive’s authority, duties, or responsibilities; (ii) a material reduction in Executive’s base salary; (iii) a requirement that Executive relocate more than fifty (50) miles from the Company’s principal executive offices; or (iv) any material breach by the Company of this Agreement.
To constitute Good Reason, Executive must provide written notice to the Company of the existence of the condition within ninety (90) days of its initial existence, and the Company shall have thirty (30) days to cure. If the condition is not cured within the cure period, Executive must terminate employment within thirty (30) days after the end of the cure period.
Exhibit C – Restricted Stock Award Agreement (attached).
Exhibit D – Non-Qualified Stock Option Agreements (both attached).
RSA Award Agreement (Exhibit C)
RESTRICTED STOCK AWARD AGREEMENT Under the Amended and Restated 2020 Stock and Incentive Compensation Plan
GrantDate: March 31, 2026
Grantee: Eric Mosser
Number of Shares: 3,000,000
Kaival Brands Innovations Group, Inc. (the “Company”) hereby grants to the Grantee named above a Restricted Stock Award of 3,000,000 shares of common stock under the Company’s Amended and Restated 2020 Stock and Incentive Compensation Plan (the “Plan”).
Vesting Schedule:
| · | 600,000 shares vest immediately on the Grant Date. |
|---|---|
| · | The remaining 2,400,000 shares<br>vest in equal quarterly installments of 200,000 shares at the end of each fiscal quarter over the next 12 quarters, subject to the<br>Grantee’s continued service. |
| --- | --- |
All other terms are governed by the Plan and the Employment Agreement dated March 31 , 2026 between the Company and the Grantee.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/ Eric Morris |
| Name: | Eric Morris |
| Title: | Chief Financial Officer/Director |
| Date: | March 31, 2026 |
| Grantee | |
| By: | /s/ Eric Mosser |
| Name: | Eric Mosser |
| Date: | March 31, 2026 |
Initial NQSO Award Agreement (3M Grant – Exhibit D)
NON-QUALIFIED STOCK OPTION AGREEMENT Under the Amended and Restated 2020 Stock and Incentive Compensation Plan
GrantDate: March 31, 2026
Grantee: Eric Mosser
Number of Options: 3,000,000
Exercise Price: 100% of Fair Market Value on Grant Date ( $0.0152 )
Kaival Brands Innovations Group, Inc. (the “Company”) hereby grants to the Grantee named above non-qualified stock options to purchase 3,000,000 shares of common stock under the Company’s Amended and Restated 2020 Stock and Incentive Compensation Plan (the “Plan”).
Vesting Schedule:
| · | 600,000 options vest immediately on the Grant Date. |
|---|---|
| · | The remaining 2,400,000 options<br>vest in equal quarterly installments of 200,000 options at the end of each fiscal quarter over the next 12 quarters, subject to the<br>Grantee’s continued service. |
| --- | --- |
All other terms are governed by the Plan and the Employment Agreement dated March 31 , 2026 between the Company and the Grantee.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/<br>Eric Morris |
| Name: | Eric Morris |
| Title: | Chief Financial Officer/Director |
| Date: | March 31, 2026 |
| Grantee | |
| By: | /s/ Eric Mosser |
| Name: | Eric Mosser |
| Date: | March 31, 2026 |
3% Annual Performance Equity Grant NQSO Award Agreement (Annual Template)
NON-QUALIFIED STOCK OPTION AGREEMENT Under the Amended and Restated 2020 Stock and Incentive Compensation Plan
GrantDate: March 31, 2026
Grantee: Eric Mosser
Number of Options: 586,060
Exercise Price: 100% of Fair Market Value on Grant Date ( $0.0152 )
Kaival Brands Innovations Group, Inc. (the “Company”) hereby grants to the Grantee named above non-qualified stock options under the Company’s Amended and Restated 2020 Stock and Incentive Compensation Plan (the “Plan”) pursuant to Section 3(c) of the Employment Agreement dated March 31, 2026.
Vesting Schedule:
| · | 25% of the options vest immediately on the Grant Date. |
|---|---|
| · | The remaining 75% of the options<br>vest in equal quarterly installments of 25% at the end of each of the following three fiscal quarters, subject to the Grantee’s<br>continued service. |
| --- | --- |
All other terms are governed by the Plan and the Employment Agreement dated March 31, 2026 between the Company and the Grantee.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/ Eric<br>Morris |
| Name: | Eric Morris |
| Title: | Chief Financial Officer/Director |
| Date: | March 31, 2026 |
| Grantee | |
| By: | /s/ Eric Mosser |
| Name: | Eric Mosser |
| Date: | March 31, 2026 |
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is entered into as of March 31, 2026 (the “Effective Date”), by and between Kaival Brands Innovations Group, Inc., a Delaware corporation (the “Company”), and Eric Morris (“Executive”).
RECITALS The Company wishes to employ Executive as Chief Financial Officer, and Executive wishes to accept employment, on the terms below. The Board has approved this Agreement and the related equity grants.
AGREEMENT
| 1. | Employment and Term The<br>Company employs Executive as Chief Financial Officer for an initial three-year term beginning on the Effective Date. The Agreement<br>automatically renews for successive one-year periods unless either party gives 60 days’ written notice of non-renewal. |
|---|---|
| 2. | Position and Duties Executive<br>shall serve as Chief Financial Officer of the Company and shall have such duties and responsibilities as are customary for a chief<br>executive officer of a public company of similar size and stage of development, including oversight of the Company’s recovery<br>plan, SEC reporting obligations, disclosure controls, and strategic initiatives. Notwithstanding the foregoing, Executive may engage in<br>non-conflicting outside activities (including board service or consulting) provided that such activities do not interfere with the<br>performance of his duties to the Company and are approved in advance by the Board (which approval shall not be unreasonably withheld). |
| --- | --- |
| 3. | Compensation (a) BaseSalary. The Company shall pay Executive $15,000 per month, subject to standard withholdings and annual Board review. |
| --- | --- |
(b) InitialEquity Grants. On the Effective Date the Company shall grant under the 2020 Plan (as amended): (i) 3,000,000 restricted shares of common stock at Fair Market Value; 600,000 shares vest immediately and the remaining 2,400,000 shares vest in equal quarterly installments of 200,000 shares at the end of each fiscal quarter over the next 12 quarters, subject to continued service; and (ii) options to purchase 3,000,000 shares at 100% of Fair Market Value; 600,000 options vest immediately and the remaining 2,400,000 options vest in equal quarterly installments of 200,000 options at the end of each fiscal quarter over the next 12 quarters, subject to continued service.
The forms of the Restricted Stock Award Agreement and Non-Qualified Stock Option Agreement are attached as Exhibits C and D hereto and are incorporated by reference.
(c) Changein Control Acceleration. All unvested equity awards shall immediately vest in full upon the consummation of a Change in Control. A “Change in Control” means the consummation of any of the following (in one transaction or a series of related transactions): (i) any merger, consolidation, reorganization, asset contribution, business combination, or similar transaction involving the Company or any of its subsidiaries (whether or not the Company is the surviving entity); (ii) the sale, lease, transfer, or other disposition of all or substantially all of the assets of the Company or its subsidiaries; (iii) any acquisition by any person or group of beneficial ownership of securities representing more than fifty percent (50%) of the voting power of the Company; or (iv) any other transaction that results in a change in control of the Company or any subsidiary, as determined by the Board in good faith.
(d) Asset-SaleContinuity Protection. Notwithstanding anything to the contrary, if a Change in Control consists solely of a sale, lease, transfer, or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company or any subsidiary and does not result in a change in control of Kaival Brands Innovations Group, Inc. itself (i.e., the current officers and directors of the Company remain in place following the transaction), and if Executive is still employed by the Company (or its successor) immediately following the closing of such transaction, then: (i) this Agreement shall automatically renew for a fresh three-year term commencing on the last day of the calendar month in which the Change in Control transaction closed; and (ii) and the Company shall issue 6,000,000 new non-qualified stock options at Fair Market Value (1,500,000 vest immediately and the remaining 4,500,000 vest in equal quarterly installments of 375,000 options at the end of each fiscal quarter over the ensuing twelve (12) quarters, subject to continued service). The Board (or the board of the successor entity) shall promptly confirm in writing that the conditions of this subsection have been satisfied.
(e) Anti-DilutionAdjustments. All equity grants shall receive standard anti-dilution adjustments under the 2020 Plan.
| 4. | Benefits Executive<br>shall participate in all Company benefit plans available to senior executives. |
|---|---|
| 5. | Termination (a) If<br>the Company terminates Executive without Cause or Executive terminates for Good Reason, all unvested equity shall immediately vest 100%.<br>(b) In all other terminations, Executive receives only accrued Base Salary and any already-vested equity. |
| --- | --- |
| 6. | Restrictive Covenants Executive shall comply with<br>the confidentiality, non-competition, non-solicitation, and IP assignment provisions in Exhibit A (12-month<br>post-termination). |
| --- | --- |
| 7. | Indemnification<br>The Company shall indemnify Executive to the fullest extent permitted by Delaware law and maintain D&O insurance covering Executive<br>on the same basis as other senior officers. |
| --- | --- |
| 8. | Miscellaneous This<br>Agreement is governed by Delaware law, constitutes the entire agreement, may be amended only in writing, and may be executed in counterparts.<br>Invalid provisions shall be severed. |
| --- | --- |
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/ Mark Thoenes |
| Mark Thoenes, Chairman | |
| Date: | March 31, 2026 |
| Executive | |
| By: | /s/ Eric Morris |
| Eric Morris | |
| Date: | March 31, 2026 |
Exhibit A – Restrictive Covenants
RESTRICTIVE COVENANTS
**1.****Confidentiality.**During the term of employment and at all times thereafter, Executive shall keep confidential and shall not use or disclose to any third party any Confidential Information of the Company or its subsidiaries, except as required in the performance of Executive’s duties or as required by law. “Confidential Information” means all non-public information relating to the Company’s business, products, technology, customers, suppliers, strategies, financial data, trade secrets, and any other proprietary information.
**2.**IntellectualProperty Assignment. All inventions, discoveries, improvements, works of authorship, and other intellectual property conceived, developed, or made by Executive during the term of employment shall be the sole and exclusive property of the Company. Executive hereby assigns all right, title, and interest in such intellectual property to the Company and agrees to execute any documents necessary to perfect the Company’s ownership.
**3.**Remedies. Executive acknowledges that any breach of this Exhibit A could cause irreparable harm to the Company for which monetary damages would be inadequate. The Company shall be entitled to injunctive relief, in addition to any other remedies available at law or in equity, without the necessity of posting a bond.
**4.**Survival. The obligations under this Exhibit A shall survive the termination of Executive’s employment for any reason.
Exhibit B – Good Reason Definition
DEFINITION OF GOOD REASON
“Good Reason” means the occurrence of any of the following without Executive’s prior written consent: (i) a material diminution in Executive’s authority, duties, or responsibilities; (ii) a material reduction in Executive’s base salary; (iii) a requirement that Executive relocate more than fifty (50) miles from the Company’s principal executive offices; or (iv) any material breach by the Company of this Agreement.
To constitute Good Reason, Executive must provide written notice to the Company of the existence of the condition within ninety (90) days of its initial existence, and the Company shall have thirty (30) days to cure. If the condition is not cured within the cure period, Executive must terminate employment within thirty (30) days after the end of the cure period.
Exhibit C – Restricted Stock Award Agreement (attached).
Exhibit D – Non-Qualified Stock Option Agreement (attached).
RSA Award Agreement (Exhibit C)
RESTRICTED STOCK AWARD AGREEMENT Under the Amended and Restated 2020 Stock and Incentive Compensation Plan
GrantDate: March 31, 2026
Grantee: Eric Morris
Number of Shares: 3,000,000
Kaival Brands Innovations Group, Inc. (the “Company”) hereby grants to the Grantee named above a Restricted Stock Award of 3,000,000 shares of common stock under the Company’s Amended and Restated 2020 Stock and Incentive Compensation Plan (the “Plan”).
Vesting Schedule:
| · | 600,000 shares vest immediately on the Grant Date. |
|---|---|
| · | The remaining 2,400,000 shares<br>vest in equal quarterly installments of 200,000 shares at the end of each fiscal quarter over the next 12 quarters, subject to the<br>Grantee’s continued service. |
| --- | --- |
All other terms are governed by the Plan and the Employment Agreement dated March 31, 2026 between the Company and the Grantee.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/<br>Eric Mosser |
| Name: | Eric Mosser |
| Title: | Chief Executive Officer/Director |
| Date: | March 31, 2026 |
| Grantee | |
| By: | /s/ Eric Morris |
| Name: | Eric Morris |
| Date: | March 31, 2026 |
Initial NQSO Award Agreement (3M Grant – Exhibit D)
NON-QUALIFIED STOCK OPTION AGREEMENT Under the Amended and Restated 2020 Stock and Incentive Compensation Plan
GrantDate: March 31, 2026
Grantee: Eric Morris
Number of Options: 3,000,000
Exercise Price: 100% of Fair Market Value on Grant Date ( $0.0152 )
Kaival Brands Innovations Group, Inc. (the “Company”) hereby grants to the Grantee named above non-qualified stock options to purchase 3,000,000 shares of common stock under the Company’s Amended and Restated 2020 Stock and Incentive Compensation Plan (the “Plan”).
Vesting Schedule:
| · | 600,000 options vest immediately on the Grant Date. |
|---|---|
| · | The remaining 2,400,000 options<br>vest in equal quarterly installments of 200,000 options at the end of each fiscal quarter over the next 12 quarters, subject to the<br>Grantee’s continued service. |
| --- | --- |
All other terms are governed by the Plan and the Employment Agreement dated March 31, 2026 between the Company and the Grantee.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/ Eric Mosser |
| Name: | Eric Mosser |
| Title: | Chief Executive Officer/Director |
| Date: | March 31, 2026 |
| Grantee | |
| By: | /s/ Eric Morris |
| Name: | Eric Morris |
| Date: | March 31, 2026 |
EXHIBIT 10.3
Exhibit A – Plan Amendment
AMENDMENTTO THE AMENDED AND RESTATED 2020 STOCK AND INCENTIVE COMPENSATION PLAN
This Amendment (the “Amendment”) to the Amended and Restated 2020 Stock and Incentive Compensation Plan (the “Plan”) of Kaival Brands Innovations Group, Inc. (the “Company”) is effective as of March 31, 2026.
| 1. | Increase<br> in Share Reserve. The maximum aggregate number of shares of Common Stock that may be subject<br> to or delivered under awards granted pursuant to the Plan is hereby increased from 4,761,905<br> to 100,000,000 shares. |
|---|---|
| 2. | No<br> Other Changes. Except as expressly amended herein, all terms and conditions of the Plan shall<br> remain in full force and effect. |
| --- | --- |
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer as of the date first above written.
| Kaival Brands Innovations Group, Inc. | |
|---|---|
| By: | /s/ Eric Mosser |
| Name: | Eric Mosser |
| Title: | Chief Executive O cer |
| Date: | March 31, 2026 |
EXHIBIT 99.1
FAIRNESS OPINION MEMORANDUM
To: The Board of Directors Kaival Brands InnovationsGroup, Inc.
From: Mark Thoenes
Sole Disinterested Director
Re: Fairness Opinion on Proposed Compensation Arrangements for Eric Mosser (CEO) and Eric Morris (CFO)
Dear Members of the Board:
Pursuant to DGCL §144, and in my role as the director unaffiliated with the proposed transactions, I have evaluated the proposed employment arrangements for Eric Mosser (CEO) and Eric Morris (CFO), together with the related equity grants under the Company’s Amended and Restated 2020 Stock and Incentive Compensation Plan and the amendment to increase the Plan reserve to 100,000,000 shares (collectively, the “Proposed Arrangements”), as set forth in the draft Employment Agreements and Unanimous Written Consent presented to the Board.
This evaluation was conducted with a view toward ensuring impartiality and alignment with the Company’s interests, drawing on objective criteria and governance standards to assess the terms.
In forming my opinion, I considered the following key factors:
● The Company’s current cash-conservative position and post-Nasdaq delisting recovery strategy, emphasizing minimal cash commitments to preserve resources for operational needs;
● The heavily equity-oriented structure designed to align executive interests with long-term stockholder value creation, including vesting mechanisms tied to continued service over the recovery horizon;
● Retention and incentive features linked to performance and potential Change in Control events, ensuring stability through pivotal milestones;
● Market comparisons with similarly situated OTC/recovery-stage companies, confirming that the overall design is competitive yet restrained;
● The tax, accounting, and governance implications, including favorable deferral options and spread expense recognition to minimize near-term financial impact; and
● The overarching benefit to the Company in securing committed leadership for ongoing operations and long-term objectives, balanced against dilution controls and stockholder protections.
Based on this careful consideration, I conclude that the Proposed Arrangements are fair and reasonable to the Company and its stockholders from a financial point of view.
This opinion is provided solely for purposes of DGCL §144 and may be attached to the Unanimous Written Consent.
| Sincerely, |
|---|
| /s/ Mark Thoenes |
| Mark Thoenes |
| Sole DisinterestedDirector |
| Date: March 12, 2026 |