Delta Corp Holdings Limited Advances Business Combination With Kaival Brands Innovations Group, Inc. With Confidential Submission of Draft Registration Statement With the Securities and Exchange Commission

Rhea-AI Summary

Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL) and Delta Corp Holdings have jointly announced the confidential submission of a draft registration statement on Form F-4 to the SEC. This submission is part of their previously announced Merger and Share Exchange Agreement, where Kaival and Delta will become wholly owned subsidiaries of a new publicly listed holding company, Delta Corp Holdings (Pubco).

The closing of the transaction is subject to Kaival's stockholder approval and Nasdaq's approval for listing Pubco's ordinary shares. A definitive proxy statement/prospectus will be mailed to Kaival stockholders once the Registration Statement is declared effective by the SEC. The companies urge investors and security holders to read the forthcoming documents carefully for important information about the proposed business combination.

Positive

• Potential creation of a new publicly listed holding company
• Progress towards business combination with confidential submission of draft registration statement
• Potential expansion of business scope through merger with Delta Corp Holdings

Negative

• Transaction subject to stockholder and Nasdaq approval
• Potential dilution of existing Kaival shareholders' ownership
• Uncertainty regarding SEC approval of the registration statement

Insights

Legal Expert

The confidential submission of a draft registration statement on Form F-4 by Delta Corp Holdings marks a significant step in the proposed business combination between Kaival Brands and Delta. This move indicates that the merger process is progressing as planned, although several important steps remain before completion.

Key points to consider:

• The merger would create a new publicly listed holding company, potentially diversifying Kaival's business beyond e-cigarette distribution.
• Shareholder approval and Nasdaq listing approval are still required, introducing uncertainty to the deal's completion.
• The confidential nature of the filing allows for SEC review without public scrutiny, which is common in such transactions.
• Investors should be aware that the merger could significantly alter Kaival's business structure and risk profile.

While this development is noteworthy, it's important to emphasize that the transaction is not yet finalized. Investors should closely monitor future announcements and SEC filings for more details on the merger's terms and potential impact on Kaival's valuation and operations.

Financial Analyst

This merger announcement represents a potentially transformative event for Kaival Brands, a small-cap company with a market capitalization of just $7.9 million. The proposed combination with Delta Corp Holdings, a privately held company with diverse business interests, could significantly expand Kaival's operational scope and financial resources.

Key financial considerations:

• The merger could provide Kaival access to Delta's revenue streams in logistics, fuel supply and asset management, potentially reducing reliance on e-cigarette distribution.
• The transaction structure as a share exchange suggests minimal cash outlay, which is important given Kaival's financial resources.
• Investors should watch for the release of pro forma financial statements in future filings to assess the combined entity's financial position and growth prospects.
• The merger may impact Kaival's stock liquidity and valuation, as the share structure will change post-combination.

While the merger presents opportunities for growth and diversification, it also introduces complexities and potential dilution for existing Kaival shareholders. The market's reaction to this news will be critical to monitor in the coming days and weeks.

GRANT-VALKARIA, Fla., Sept. 30, 2024 (GLOBE NEWSWIRE) -- Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL), a Delaware corporation (“Kaival” or the “Company”) and the exclusive U.S. distributor of the Bidi® Stick and certain other products manufactured by Bidi Vapor, LLC (“Bidi Vapor”), and Delta Corp Holdings Limited, a company incorporated in England and Wales (“Delta”) and a privately held holding company for global businesses engaged in Bulk & Energy logistics, fuel supply, commodities, and asset management, today jointly announced the confidential submission with the U.S. Securities and Exchange Commission (“SEC”) of a draft registration statement on Form F-4 (“Registration Statement”) by Delta Corp Holdings Limited, a newly created holding company organized under the laws of the Cayman Islands (“Holdings” or “Pubco”).

As previously announced on September 23, 2024, Kaival entered into a Merger and Share Exchange Agreement (the “Merger Agreement”) with Delta, Pubco, KAVL Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Pubco and the shareholders of Delta, whereby Kaival and Delta will become wholly owned subsidiaries of Pubco, and Pubco will become a new publicly listed holding company. The closing of the transactions contemplated by the Merger Agreement is subject to certain conditions, including, without limitation, the approval of Kaival’s stockholders and The Nasdaq Stock Market LLC’s approval of the listing of the ordinary shares of Pubco on the Nasdaq Capital Market.

No Offer or Solicitation

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of any securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such other jurisdiction. No offering of securities in connection with the proposed transaction shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information and Where to Find It

In connection with the proposed business combination, Pubco has confidentially submitted the Registration Statement with the SEC, which includes a preliminary prospectus with respect to Pubco’s securities to be issued in connection with the proposed business combination and a preliminary proxy statement to be distributed to holders of Kaival’s common stock in connection with Kaival’s solicitation of proxies for the vote by Kaival stockholders with respect to the proposed business combination and other matters described in the Registration Statement. Pubco intends to file the Registration Statement with the SEC. The Registration Statement is not yet filed and has not been declared effective by the SEC. After the Registration Statement is declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to stockholders of Kaival as of the record date to be established in the future for voting on the proposed business combination and will contain important information about the proposed business combination and related matters. INVESTORS AND SECURITY HOLDERS OF KAIVAL, PUBCO AND OTHER INTERESTED PERSONS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT HAVE BEEN OR WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. Once publicly filed with the SEC, security holders and other interested persons may obtain free copies of the Registration Statement, preliminary proxy statement/prospectus, definitive proxy statement/prospectus, and other relevant material (in each case when available) at the website maintained by the SEC at www.sec.gov or by directing a request to Kaival Brands Innovations Group, Inc., 4460 Old Dixie Highway Grant-Valkaria, Florida 32949

Participants in the Solicitation

Kaival and its directors, executive officers and certain other members of management and employees may, under SEC rules, be deemed to be participants in the solicitation of proxies from the stockholders of Kaival with respect to the proposed merger and related matters. Information about the directors and executive officers of Kaival, including their ownership of shares of Kaival common stock, is included in Kaival’s Annual Report on Form 10-K for the year ended October 31, 2023, which was filed with the SEC on February 14, 2024. Additional information regarding the persons or entities who may be deemed participants in the solicitation of proxies from Kaival stockholders, including a description of their interests in the proposed merger by security holdings or otherwise, will be included in the proxy statement/prospectus and other relevant documents to be filed with the SEC when they become available. The directors and officers of Delta do not currently hold any interests, by security holdings or otherwise, in Kaival.

CONTACT INFORMATION:

Kaival Brands Innovations Group, Inc.
Brett Maas, Managing Partner
Hayden IR
(646) 536-7331
brett@haydenir.com

Delta Corp Holdings Limited
Joseph Nelson
Chief Financial Officer
Phone: +44 0203 753 5598
Email: ir@wearedelta.com

FAQ

What is the current status of the merger between Kaival Brands (KAVL) and Delta Corp Holdings?

Kaival Brands (KAVL) and Delta Corp Holdings have confidentially submitted a draft registration statement on Form F-4 to the SEC, advancing their previously announced merger agreement.

What approvals are required for the Kaival Brands (KAVL) and Delta Corp Holdings merger to close?

The merger requires approval from Kaival's stockholders and The Nasdaq Stock Market 's approval for listing the ordinary shares of the new holding company on the Nasdaq Capital Market.

How can investors access information about the Kaival Brands (KAVL) merger with Delta Corp Holdings?

Once publicly filed, investors can obtain free copies of the registration statement, proxy statement/prospectus, and other relevant materials from the SEC's website at www.sec.gov or by contacting Kaival Brands directly.

What will be the structure of the company after the Kaival Brands (KAVL) merger with Delta Corp Holdings?

After the merger, Kaival Brands and Delta Corp Holdings will become wholly owned subsidiaries of a new publicly listed holding company, Delta Corp Holdings (Pubco), incorporated in the Cayman Islands.