GRANT–VALKARIA, Fla., Jan. 23, 2024 (GLOBE NEWSWIRE) — Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) (“Kaival Brands,” or the “Company”), today announced that it is effecting a 1-for-21 reverse stock split (the “Reverse Stock Split”) of its issued and outstanding common stock (the “Common Stock”), effective with the opening of trading on Thursday, January 25, 2024.
Kaival Brands’ Common Stock will continue to trade on the Nasdaq Capital Market (“Nasdaq”) under the symbol “KAVL”. The new CUSIP number for the Common Stock following the Reverse Stock Split will be 483104402.
The Reverse Stock Split was approved by the Board of Directors of the Company (the “Board”) and Kaival Holdings, LLC, a Delaware limited liability company, which is the holder of approximately 68.64% of the Company’s outstanding Common Stock (the “Voting Stockholder”). Kaival Holdings LLC is co-managed by Nirajkumar Patel, the Chief Science & Regulatory Officer and director of the Company.
The material effects of the Reverse Stock Split are:
- Every twenty-one (21) shares of the issued and outstanding Common Stock has been combined into one (1) share of Common Stock.
- The number of outstanding shares of Common Stock has been proportionally reduced from 58,661,090 shares to approximately 2,793,386 shares.
- The Reverse Stock Split will not reduce the total number of Kaival Brands’ authorized shares of Common Stock.
- The ownership percentage of each Kaival Brands stockholder will remain unchanged, other than as a result of fractional shares. No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. Stockholders that would hold a fractional share of Common Stock as a result of the Reverse Stock Split will have such fractional shares of Common Stock rounded up to the nearest whole share of Common Stock.
- The number of shares of Common Stock available for issuance under the Company’s equity incentive plans and the Common Stock issuable pursuant to outstanding equity awards and common stock purchase warrants immediately prior to the Reverse Stock Split will be proportionately adjusted by the ratio of the Reverse Stock Split. The exercise prices of such outstanding options and warrants will also be adjusted in accordance with their respective terms.
To effectuate the Reverse Stock Split, Kaival Brands filed a Certificate of Amendment to its Certificate of Incorporation, as amended, which was accepted for filing by the Secretary of State of the State of Delaware on January 22, 2024.
Among other considerations, the Reverse Stock Split is intended to assist in bringing Kaival Brands into compliance with the $1.00 minimum bid price requirement for maintaining the listing of its Common Stock on the Nasdaq Capital Market, and to make the prevailing prices of the Common Stock more attractive to a broader group of institutional investors.
The combination of, and reduction in, the number of issued shares of Common Stock as a result of the Reverse Stock Split occurred automatically on Monday, January 22, 2024 with the filing of the Certificate of Amendment in Delaware, without any additional action on the part of Kaival Brands’ stockholders. Kaival Brands’ transfer agent, VStock Transfer LLC, is acting as the exchange agent for the Reverse Stock Split and will send each stockholder a transaction statement indicating the number of shares of Common Stock the stockholder holds after the Reverse Stock Split. Stockholders owning shares via a broker, bank, trust or other nominee will have their positions automatically adjusted to reflect the Reverse Stock Split, subject to such broker’s particular processes. Such stockholders will not be required to take any action in connection with the Reverse Stock Split.
Additional information regarding the Reverse Stock Split can be found in the Company’s definitive Information Statement on Schedule 14C, filed with the U.S. Securities and Exchange Commission on December 22, 2023. A Link to this document is available at https://www.sec.gov and on Kaival Brands’ website at https://kaivalbrands.com/sec-filings.
About Kaival Brands Innovations Group, Inc.
Based in Grant-Valkaria, Florida, Kaival Brands is a company focused on incubating innovative and profitable adult-focused products into mature and dominant brands, with a current focus on the distribution of electronic nicotine delivery systems (ENDS) also known as “e-cigarettes”. Our business plan is to seek to diversify into distributing other nicotine and non-nicotine delivery system products (including those related to hemp-derived cannabidiol (known as CBD) products). Kaival Brands and Philip Morris Products S.A. (via sublicense from Kaival Brands) are the exclusive global distributors of all products manufactured by Bidi Vapor.
Learn more about Kaival Brands at https://ir.kaivalbrands.com/overview/default.aspx.
Cautionary Note Regarding Forward-Looking Statements
This press release includes statements that constitute “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), which are statements other than historical facts and concern future events, particularly with respect to the Reverse Stock Split and the Company’s ability to comply with the Nasdaq Listing Standards described herein. You can identify forward-looking statements by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “position,” “should,” “strategy,” “target,” “will,” and similar words. All forward-looking statements speak only as of the date of this press release. Although we believe that the plans, intentions, and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions, or expectations will be achieved. Therefore, actual outcomes and results (including, without limitation, the anticipated benefits of the Reverse Stock Split, including the effect the Reverse Stock Split will have on the Company’s ability to regain compliance with the Nasdaq Listing Standards) could materially and adversely differ from what is expressed, implied, or forecasted in such statements. Our business may be influenced by many factors that are difficult to predict, involve uncertainties that may materially affect results, and are often beyond our control. Factors that could cause or contribute to such differences include, but are not limited to, uncertainties relating to the Company’s ability to stay compliant with other Nasdaq requirements and other factors detailed by us in our public filings with the Securities and Exchange Commission, including the disclosures under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2022, filed with the Securities and Exchange Commission on January 27, 2023 and accessible at www.sec.gov. All forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. Except as required under the federal securities laws and the Securities and Exchange Commission’s rules and regulations, we do not have any intention or obligation to update any forward-looking statements publicly, whether as a result of new information, future events, or otherwise.
Contact:
Brett Maas, Managing Partner
Hayden IR
(646) 536-7331
brett@haydenir.com
