Company: KAVL
Filing Date: 2025-03-03
Form Type: DEF 14C
Source: 0001731122-25-000319
Chunk: 8

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-03-03
Form: DEF 14C
Chunk 8
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 shall be subject to the satisfaction or written waiver (where permissible) by Delta and Kaival of the condition) that the
Pubco Ordinary Shares to be issued in connection with those Transactions shall have been approved for listing on the Nasdaq, subject to
official notice of issuance. The Merger Agreement also requires each of Kaival and Delta to use specified efforts to consummate the Business
Combination.

By potentially increasing Kaival’s
stock price, the Reverse Split would reduce the risk that Kaival Common Stock would be below the threshold required pursuant to Nasdaq
Marketplace Rules, in order to list the Pubco Ordinary Shares for the combined company, which requirements may include a minimum price
of $4.00 per share (or $3.00 per share under specified circumstances).

The Kaival board of directors has
considered the potential harm to Kaival and its stockholders should Nasdaq fail to list the Pubco Ordinary Shares on The Nasdaq Capital
Market, including that the Merger was not consummated or that if consummated would trade on the over-the-counter market, or OTC Market.
Such results could adversely affect the liquidity of such stock, since alternatives, such as the OTC Market, are generally considered
to be less efficient markets. An investor likely would find it less convenient to sell, or to obtain accurate quotations in seeking to
buy Pubco Ordinary Shares on the OTC Market. Many investors likely would not buy or sell Pubco Ordinary Shares due to difficulty in accessing
the OTC Market, policies preventing them from trading in securities not listed on a national exchange or for other reasons.

The Kaival board of directors believes
that the proposed Reverse Split is a potentially effective means for Kaival to comply with the $4.00 minimum price requirement and to
avoid, or at least mitigate, the likely adverse consequences of Pubco Ordinary Shares not being listed on Nasdaq Capital Market by producing
the immediate effect of increasing the bid price of Kaival Common Stock to above the applicable threshold required by Nasdaq.

In light of the factors mentioned
above, the Kaival board of directors unanimously approved the proposed Reverse Split as Kaival’s best means of obtaining and maintaining
the price of the combined company’s (Pubco’s) ordinary shares to be above $4.00 per share in compliance with Nasdaq requirements.

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Criteria to be Used for Determining Whether to Implement Reverse Split

In determining whether to implement
the Reverse Split and which Reverse