Company: KAVL
Filing Date: 2025-02-21
Form Type: PRE 14C
Source: 0001731122-25-000278
Chunk: 9

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-21
Form: PRE 14C
Chunk 9
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ival Common Stock for business 
 and/or financial purposes.                                                                                                               |

Certain Risks and Potential Disadvantages Associated with Reverse Split

Kaival cannot assure you that the
proposed Reverse Split will increase its stock price and have the desired effect of facilitating Pubco’s compliance with Nasdaq
Listing Rules. Kaival expects that the Reverse Split will increase the market price of Kaival Common Stock in connection with Nasdaq’s
minimum price requirement for listing of Pubco Ordinary Shares at or following the Merger. However, the effect of the Reverse Split upon
the market price of Kaival Common Stock cannot be predicted with any certainty, and the history of similar Reverse Splits for companies
in like circumstances is varied, particularly since some investors may view a reverse stock split negatively. It is possible that the
per share price of Kaival Common Stock after the Reverse Split will not rise in proportion to the reduction in the number of shares of
Kaival Common Stock outstanding resulting from the Reverse Split, and the market price per post-Reverse Split share may not exceed or
remain in excess of the minimum price for the requisite listing criteria. Even if Kaival implements the Reverse Split, the market price
of Kaival Common Stock may decrease due to factors unrelated to the Reverse Split. In any case, the market price of Kaival Common Stock
may also be based on other factors which may be unrelated to the number of shares outstanding, including the combined company’s
future performance. If the Reverse Split is consummated and the trading price of the common stock declines, the percentage decline as
an absolute number and as a percentage of Kaival’s overall market capitalization may be greater than would occur in the absence
of the Reverse Split. Even if the market price per post-Reverse Split share of Kaival Common Stock remains in excess of the minimum price,
Pubco may not be listed on Nasdaq due to a failure to meet other listing requirements, including Nasdaq requirements related to the minimum
stockholders’ equity requirement, the minimum number of shares that must be in the public float, the minimum market value of the
public float and the minimum number of “round lot” holders.

The proposed Reverse Split may
decrease the liquidity of Kaival Common Stock and result in higher transaction costs. The liquidity of Kaival Common Stock may be negatively
impacted by a Reverse Split, given the reduced number of shares that would be outstanding after the Reverse Split, particularly if the
stock price does not increase as a result of the Reverse