Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 152

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 152
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 financial advisory and financial printing fees, must be paid even
if the Business Combination is not completed.

Further, if the Business Combination
is terminated and either company’s board of directors determines to seek another merger or business combination, there can be no
assurance that it will be able to find a partner on terms as attractive as those provided for in the Merger Agreement. In addition, while
the Merger Agreement is in effect and subject to very narrowly defined exceptions, Kaival is prohibited from soliciting, initiating or
encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets or other business combination, other
than with Delta.

The exercise of Kaival’s boards
of directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result
in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are
appropriate and in Kaival’s shareholders’ best interests.

In the period leading up to
the closing of the Business Combination, events may occur that, pursuant to the Merger Agreement, would require Kaival and/or Delta to
agree to amend the Merger Agreement, to consent to certain actions taken by Delta or Kaival, as applicable, or to waive rights that Kaival
or Delta is entitled to under the Merger Agreement. Such events could arise because of changes in the course of Kaival’s or Delta’s
business, a request by Kaival or Delta to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or
the occurrence of other events that would have a material adverse effect on Kaival’s or Delta’s business. In any of such circumstances,
it would be at Kaival’s or Delta’s discretion, acting through their respective board of directors, to grant consent or waive
those rights. The existence of the financial and personal interests of the directors of Kaival described in the preceding risk factors
may result in a conflict of interest on the part of one or more of the directors between what they may believe is best for Kaival and
its stockholders and what he or they may believe is best for themselves in determining whether or not to take the requested action.

17

The Company will incur
significant transaction and transition costs in connection with the Business Combination.

The Company has incurred and expect to incur significant,
non-recurring costs in connection with consummating the Business Combination, including legal, accounting, consulting, investment banking
and other fees, expenses and