Company: KAVL
Filing Date: 2025-02-21
Form Type: PRE 14C
Source: 0001731122-25-000278
Chunk: 11

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-21
Form: PRE 14C
Chunk 11
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 Reverse Stock Split ratio determined
by the Board, subject to our treatment of fractional shares.
For example, upon the effectiveness of the Reverse Stock Split at a ratio
of 1:20, a warrant holder that previously held a warrant to purchase 100,000 shares of common stock at an exercise price of $0.10 per
share, would hold a warrant to purchase 5,000 shares at an exercise price of $2.00 per share. Similarly, a holder of convertible preferred
stock that previously held a share of convertible preferred stock that is convertible into 100,000 shares of common stock at a conversion
price of $0.10 per share, would hold a note that is convertible into 5,000 shares at a conversion price of $2.00 per share.

Our Common Stock is currently registered under Section
12(b) of the Exchange Act and, as a result, we are subject to periodic reporting and other requirements. The proposed Reverse Split would
not affect the registration of our Common Stock under the Exchange Act.

After the Effective Date of the Reverse Split, each
stockholder would own a reduced number of shares of our Common Stock, based upon the ratio of the reverse, which will be subject to the
determination of our Board of Directors. However, a Reverse Split would affect all stockholders equally and will not affect any stockholder’s
percentage ownership of the Company, except for the immaterial result that the Reverse Split shall involve in the rounding up of any fractional
shares up to the next whole in such a manner that every stockholder shall own at least one (1) share subsequent to the Reverse Split,
as described herein. Proportionate voting rights and other rights and preferences of the holders of our Common Stock would not be affected
by the Reverse Split. There will be no payment of cash in lieu of any fractional shares. Furthermore, the number of stockholders of record
would not be affected by the Reverse Split.

Fairness of the Process

The Board of Directors did not obtain a report, opinion
or appraisal from an appraiser or financial advisor with respect to the Reverse Split and no representative or advisor was retained on
behalf of the unaffiliated stockholders to review or negotiate the transaction. The Board of Directors concluded that the additional expense
of these independent appraisal procedures was unreasonable in relation to the Company’s available cash resources and concluded that
the Board of Directors could adequately establish the fairness of the Reverse Split without the engagement of third parties.

Outstanding Shares