Company: KAVL
Filing Date: 2025-03-03
Form Type: DEF 14C
Source: 0001731122-25-000319
Chunk: 16

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-03
Form: DEF 14C
Chunk 16
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Information returns generally
will be required to be filed with the IRS with respect to the payment of cash in lieu of a fractional share made pursuant to the Reverse
Split unless such U.S. holder is an exempt recipient and timely and properly establishes with the applicable withholding agent the exemption.
In addition, payments of cash in lieu of a fractional share made pursuant to the Reverse Split may, under certain circumstances, be subject
to backup withholding, unless a U.S. holder timely provides to the applicable withholding agent proof of an applicable exemption or a
correct taxpayer identification number, and otherwise complies with the applicable requirements of the backup withholding rules. Any amounts
withheld under the backup withholding rules are not additional tax and may be refunded or credited against the U.S. holder’s U.S.
federal income tax liability, provided that the U.S. holder timely furnishes the required information to the IRS. U.S. holders should
consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such
an exemption.

Accounting Consequences

The par value per share of
our common stock will remain unchanged at $0.00001 per share following a Reverse Split. As a result, as of the Effective Date, the stated
capital on the Company’s balance sheets attributable to common stock will be reduced proportionally based on the Reverse Split ratio,
and the additional paid-in capital will be credited with the amount by which the capital is reduced. The net income or loss per share
of common stock will be increased as a result of the fewer shares of common stock outstanding. The Reverse Split will be reflected retroactively
in our consolidated financial statements.

We present earnings per share (“EPS”)
in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings per Share,” and we
will comply with the requirements of SFAS No. 128 with respect to reverse stock splits. In pertinent part, SFAS No. 128 says as follows:
“If the number of common shares outstanding decreases as a result of a reverse stock split, the computations of basic and diluted
EPS shall be adjusted retroactively for all periods presented to reflect that change in capital structure. If changes in Common Stock
resulting from reverse stock splits occur after the close of the period but before issuance of the financial statements, the per-share
computations for those and any prior period financial statements presented shall be based on the new number of shares. If any per-share
comput