Company: KAVL
Filing Date: 2025-02-21
Form Type: PRE 14C
Source: 0001731122-25-000278
Chunk: 8

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-21
Form: PRE 14C
Chunk 8
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 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.

<div align='center'>6</div>

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.

Criteria to be Used for Determining Whether to Implement Reverse Split

In determining whether to implement
the Reverse Split and which Reverse Split ratio to implement, Kaival’s board of directors may consider, among other things, various
factors, such as:

| ● | the historical trading                                                                                                                   
 price and trading volume of Kaival Common Stock;                                                                                         |
| ● | the then-prevailing trading                                                                                                              
 price and trading volume of Kaival Common Stock and the expected impact of the Reverse Split on the trading market for Kaival Common     
 Stock in the short- and long-term;                                                                                                       |
| ● | Pubco’s ability to                                                                                                                       
 obtain or continue its listing on The Nasdaq Capital Market;                                                                             |
| ● | the conditions to closing                                                                                                                
 and covenants in the Merger Agreement;                                                                                                   |
| ● | which Reverse Split ratio                                                                                                                
 would result in the least administrative cost to Kaival;                                                                                 |
| ● | prevailing general market                                                                                                                
 and economic conditions; and                                                                                                             |
| ● | if Kaival stockholders                                                                                                                   
 approve the Reverse Split, the implementation of a Reverse Split may provide greater flexibility to use Ka