Company: KAVL
Filing Date: 2025-08-18
Form Type: 424B5
Source: 0001731122-25-001141
Chunk: 18

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-08-18
Form: 424B5
Chunk 18
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 the proposed Reverse Stock Split to regain compliance with the Nasdaq Bid Price Rule. We expect that the proposed Reverse Stock Split, if implemented, would increase the market price of our common stock. It is possible that the per share price of our common stock after the proposed Reverse Stock Split will not increase in the same proportion as the reduction in the number of outstanding shares of common stock following the proposed Reverse Stock Split However, the effect of the proposed Reverse Stock Split on the market price of our common stock cannot be predicted with any certainty, and the history of reverse stock splits for other companies of similar size to us is varied, particularly because investors may view a reverse stock split negatively. Even if we implement the proposed Reverse Stock Split, the market price of our common stock may decrease due to factors unrelated to the Reverse Stock Split, including our future performance.

Furthermore, the proposed Reverse Stock Split, if implemented, may decrease the liquidity of our common stock because fewer shares would be outstanding after the Reverse Stock Split. In addition, if the Board of Directors implements the Reverse Stock Split, more stockholders may own “odd lots” of fewer than 100 shares of common stock, which may be more difficult to sell. Brokerage commissions and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares or multiples of 100 shares of common stock. Accordingly, the proposed Reverse Stock Split may not achieve the desired results of increasing marketability of the common stock.

If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that
regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a
price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain
automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided
by the exchange or system. If we do not retain a listing on Nasdaq and if the price of our common stock is less than $5.00, our common
stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise
exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock
rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make