Kaival Brands Innovations Group (KAVL) shares were soaring 195% Monday after the company said it and Delta Corp Holdings entered a merger and share exchange agreement under which both companies will become subsidiaries of a newly-formed Cayman Islands holding company, Delta Corp Holdings.
Shareholders of Kaival Brands will receive one ordinary share of the specially created holding company for each Kaival Brands share they hold at closing, Kaival Brands said. Delta shareholders will exchange their Delta shares for $270 million in the holding company shares at an implied value of $2.66 per share, Kaival Brands added.
The agreement also includes an earnout provision, granting Delta shareholders an additional $30 million in the holding company's shares if the company achieves revenues of $700 million and either $20 million earnings before interest, taxes, depreciation, and amortization or $10 million net income by the end of 2025, Kaival Brands said.
Upon completion, expected in Q4, Delta Corp Holdings shares will be listed on Nasdaq. Delta shareholders will hold 89.7% of the newly formed company, while Kaival Brands shareholders will own 10.3%, Kaival Brands said.
Price: 1.70, Change: +1.12, Percent Change: +193.61
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