Company: KAVL
Filing Date: 2025-03-03
Form Type: DEF 14C
Source: 0001731122-25-000319
Chunk: 15

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-03
Form: DEF 14C
Chunk 15
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 tax advice. Stockholders are urged to consult their own tax advisor with respect to the application of U.S. federal income tax laws to their particular situation as well as any tax considerations arising under other U.S. federal tax laws (such as the estate or gift tax laws) or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.

The Reverse Split is intended
to be treated as a recapitalization for U.S. federal income tax purposes. Assuming the Reverse Split qualifies as a recapitalization,
except as described below with respect to cash received in lieu of a fractional share, a U.S. holder will not recognize any gain or loss
for U.S. federal income tax purposes upon the Reverse Split. In the aggregate, a U.S. holder’s tax basis in the common stock received
pursuant to the Reverse Split (excluding the portion of the tax basis that is allocable to any fractional share) will equal the U.S. holder’s
tax basis in its common stock surrendered in the Reverse Split in exchange therefor, and the holding period of the U.S. holder’s
common stock received pursuant to the Reverse Split will include the holding period of the common stock surrendered in the Reverse Split
in exchange therefor.

In general, a U.S. holder
who receives a cash payment in lieu of a fractional share will recognize capital gain or loss equal to the difference between the amount
of cash received in lieu of the fractional share and the portion of the U.S. holder’s tax basis of the common stock surrendered
in the Reverse Split that is allocable to the fractional share. Such gain or loss generally will be long-term capital gain or loss if
the U.S. holder’s holding period in its common stock surrendered in the Reverse Split is more than one year as of the date of the
Reverse Split. The deductibility of net capital losses by individuals and corporations is subject to limitations. Depending on a stockholder’s
individual facts and circumstances, it is possible that cash received in lieu of a fractional share could be treated as a distribution
under Section 301 of the Code, so stockholders should consult their own tax advisors as to that possibility and the resulting tax consequences
to them in that event.

U.S. holders that have acquired
different blocks of our common stock at different times or at different prices are urged to consult their own tax advisors regarding the
allocation of their aggregated adjusted basis among, and the holding period of, our common stock.

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