Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 158

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 158
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 rights or our access to them. 

We currently have no intellectual property rights
other than the intellectual property assets we acquired in May 2023 from GoFire and our trademarks KAIVAL BRANDS and KAIVAL LABS. We rely
on the intellectual property rights, including logos, trademarks, and trade names, of Bidi that were granted to us pursuant to the A&R
Distribution Agreement to be used in connection with the marketing, advertisement, and sale of the Bidi products. We also indirectly rely
on Bidi’s intellectual property rights related to the Bidi products, such as patents. We have from time to time considered, and
discussed with Bidi, potential alterations to this arrangement, including a potential acquisition by us of all or a portion of the intellectual
property owned by Bidi and related to Bidi products. Should we pursue such a transaction, it would be a “related party transaction,”
as defined by the listing rules of Nasdaq and, thus, subject to the review of the Audit Committee of our Board (or, if deemed appropriate,
a special Board committee comprised of disinterested directors). Further, should we undertake such a transaction, then we would become
responsible to respond if a third-party challenged Bidi’s patents, or infringed upon such rights, in which case our business could
be materially adversely affected.

We have a limited operating history, and our
historical operating and financial results may not be indicative of future performance, which, along with the relative early stage of
the ENDS industry, makes it difficult to predict our future business prospects and financial performance. 

Our current business model is relatively new, and
so business and prospects may be difficult to evaluate. Our limited operating history makes it difficult to evaluate both our operating
history and our future potential. We have yet to demonstrate a consistent ability to generate revenue, and are still subject to many of
the risks common to early-stage companies operating in the nicotine and non-nicotine delivery system products sector, including the uncertainty
as to our ability to implement our business plan, market acceptance of business plan, under-capitalization, cash shortages, limitations
with respect to personnel, financing and other resources and uncertainty of our ability to generate revenues. There is therefore a significant
risk that our activities will not result in any material revenues or profit, and the likelihood of our business viability and long-term
prospects must be considered in light of the stage of our development. There can be no assurance that we will be able to