Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 154

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 154
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 assets, restructure operations, or incur impairment or other charges that could result in losses.
Even if the due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner
not consistent with the parties’ preliminary risk analysis. If any of these risks materialize, this could have a material adverse
effect on the Pubco’s financial condition and results of operations and could contribute to negative market perceptions about Pubco’s
securities.

Due to potential fluctuations
in the market value of Pubco Ordinary Shares, Kaival stockholders cannot be sure of the market value of the consideration that they will
receive in the Business Combination.

The current shareholders of Delta (the “Delta
Shareholders”) and the Kaival stockholders are expected to own, immediately following consummation of the Business Combination,
approximately 90% (inclusive of shares to be distributed to advisors) and 10% of Holdings, respectively.

Prior to the Closing, there has not been and will
not be an established public trading market for Pubco Ordinary Shares. The market value of Pubco Ordinary Shares will reflect the combination
of Kaival and Delta under the terms of the Business Combination. Further, the merger consideration to be received by Kaival stockholders
will not be adjusted to reflect any changes in the number of shares of Kaival common stock outstanding, the market value of Kaival common
stock or currency exchange rates.

18

Changes in the price of our common stock may result
from a variety of factors, including, among others, changes in our business, operations or prospects, regulatory considerations, governmental
actions, legal proceedings and general business, market, industry, political or economic conditions. Many of these factors are beyond
our control. As a result, the aggregate market value of the Pubco Ordinary Shares that a Kaival stockholder is entitled to receive at
the Closing could vary significantly from the value of the equivalent shares of our common stock on the date of the Merger Agreement,
the date of this report or at other times, and Kaival stockholders will neither know nor be able to calculate the value of the merger
consideration they would receive upon the Closing. Kaival stockholders are urged to obtain current market quotations for our common stock.

Termination of the
Merger Agreement could negatively impact Kaival.

If the Business Combination is not completed for any
reason, including as a result of Kaival stockholders declining to adopt the Merger Agreement or declining to approve the proposals required
to effect