Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 176

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 176
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and depress our stock price.

Based
on the number of shares outstanding as
of as of the date of this Report, Kaival Holdings and Bidi Vapor, our affiliated majority stockholder, together with our officers and
directors, beneficially own a combined total of approximately 51.6%   percent
of our outstanding Common Stock, including shares of our Common Stock subject to stock options that are currently exercisable or are exercisable
and that vest within 60 days as of the date of this prospects. If our controlling stockholders, together with these officers and directors
act together, they will be able to exert a significant degree of influence over our management and affairs and control matters requiring
stockholder approval, including the election of directors and approval of mergers, business combinations, or other significant transactions.
For example, Kaival Holdings, together with our officers and directors, could cause us to enter into transactions or agreements that we
would not otherwise consider or might not be in the best interests of our minority stockholders. Similarly, this concentration of ownership
may have the effect of delaying or preventing a change in control of our company otherwise favored by our other stockholders. This, in
turn, could have a negative effect on the market price of our Common Stock. It could also prevent our stockholders from realizing a premium
over the market price for their shares of our Common Stock. The concentration of ownership also may contribute to the low trading volume
and volatility of our Common Stock. Moreover, any such conflicts of interest may not be easy to resolve and could impair our ability to
operate our business.  

Our Common Stock may become the target of a “short squeeze.”

Beginning in 2021, the securities of several companies
have increasingly experienced significant and extreme volatility in stock price due to short sellers of shares of Common Stock and buy-and-hold
decisions of longer investors, resulting in what is sometimes described as a “short squeeze.” Short squeezes have caused extreme
volatility in those companies and in the market and have led to the price per share of those companies trading at a significantly inflated
rate that is disconnected from the underlying value of the company. Sharp rises in a company’s stock price may force traders in
a short position to buy stock to avoid even greater losses. Many investors who have purchased shares in those companies at an inflated
rate face the risk of losing a significant portion of their original investment as the price per share has declined steadily as interest
in those stocks has abated