Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 2

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 2
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 by Pubco of ordinary shares in the capital of Pubco (the “Share Exchange”); and 

(b)
immediately following to the completion of the Share Exchange, Merger Sub shall merge with and into us (the “Merger”), with us continuing as the surviving entity in the Merger.;

Upon consummation of the transactions contemplated by the Merger Agreement, including the Share Exchange and the Merger, each of us and Delta will become wholly owned subsidiaries of Pubco. The Share Exchange, the Merger and the transactions related thereto are referred to herein as, the “Business Combination.”    
In connection with the Merger:

(i)
All of our issued and outstanding shares of Series B Preferred Stock shall convert into shares of our common stock at a conversion rate of approximately 0.4 shares of our common stock for every share of our Series B Preferred Stock and be included as outstanding shares of our common stock immediately prior to the Merger;

(ii)
Each of our outstanding stock options, if it has not been exercised prior to the Merger, shall be cancelled, retired and/or terminated and cease to represent a right to acquire, be exchanged for or convert into our common stock; 

(iii) 
Each issued and outstanding share of our common stock immediately prior to the Merger shall automatically be converted into the right to receive one Pubco Ordinary Share (the “Merger Consideration”), following which all such shares of our common stock shall cease to be outstanding and shall automatically be canceled and shall cease to exist; and

(iv)
Each of our common warrants issued and outstanding immediately prior to the Merger shall be converted into one (1) Pubco ordinary warrant, and each of our pre-funded warrants issued and outstanding immediately prior to the Merger shall be converted into one (1) Pubco pre-funded warrant. Each of the Pubco ordinary warrants shall have, and be subject to, substantially the same terms and conditions set forth in our common warrants, and each of the Pubco pre-funded warrants shall have, and be subject to, substantially the same terms and conditions set forth in our pre-funded warrants, except that they shall represent the right to acquire Pubco ordinary shares in lieu of shares of our common stock.

The Business Combination transactions value Pubco
as of the closing of the Business Combination as having an equity valuation of $301 million. KAVL expects that the holders of our Common
Stock and the holders of Delta Shares will hold approximately 10% and 90% (inclusive of shares to be