Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 169

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 169
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 expose us
to liability and cause us to lose customers. 

Federal and state laws require us to safeguard our
wholesalers’, retailers’, and consumers’ financial information, including credit information. Although we have established
security procedures to protect against identity theft and the theft of our customers’ financial information, our security and testing
measures may not prevent security breaches. We cannot guarantee that a future breach will not result in material liability or otherwise
harm to our business. In the event of any such breach, we may be required to notify governmental authorities or consumers under breach
disclosure laws, indemnify consumers, or other third parties for losses resulting from the breach, and expend resources investigating
and remediating any vulnerabilities that contributed to the occurrence of the breach. We rely on third-party technology to safeguard the
security of sensitive information in our possession. Advances in computer capabilities, new discoveries in the field of cryptography and
quantum computing, inadequate facility security or other developments may result in a compromise or breach of the technology used by us
to protect customer data. Any compromise of our security, even a security breach that does not result in a material liability could harm
our reputation and, therefore, our business and financial condition. In addition, a party who can circumvent our security measures or
exploit inadequacies in our security measures, could, among other effects, misappropriate proprietary information, cause interruptions
in our operations or expose customers and other entities with which we interact to computer viruses or other disruptions. Actual or perceived
vulnerabilities may lead to claims against us. Any insurance coverage that we obtain to cover such risks may be insufficient to cover
all claims or losses. To the extent the measures we have taken prove to be insufficient or inadequate, we may become subject to litigation
or administrative sanctions, which could result in significant fines, penalties or damages and harm to our reputation.

We may fail to manage our growth. 

In our early years we had opportunities to grow significantly in a short
amount of time and we intended to continue that growth in the future. However, our future growth has been placed on hold with additional
constraints and demand for our resources, and we cannot be sure we will be able to manage an acceptable growth effectively as we did in
our early years. If we are unable to manage our growth while expanding the distribution of our products and increasing profit margins,
or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our business, financial position,