Company: KAVL
Filing Date: 2025-08-18
Form Type: 424B5
Source: 0001731122-25-001141
Chunk: 45

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-08-18
Form: 424B5
Chunk 45
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 with these regulations. Any lapse
in compliance by us, or Bidi, could hamper our ability to operate, which would adversely affect the results of operations.

Newly deemed tobacco products are also subject to
the other requirements of the Tobacco Control Act, such as Bidi products cannot be adulterated or misbranded. The FDA could in the future
promulgate good manufacturing practice regulations for these and our other products, which could have a material adverse impact on Bidi’s
ability to, and the cost to, manufacture our products, which would adversely affect our financial condition and results of operations.

Failure to comply with the Tobacco Control Act and
or with any FDA regulatory requirements could result in litigation, criminal convictions or significant financial penalties and could
impair our ability to market and sell our electronic and vaporizer products. At present, we are unable to predict whether the Tobacco
Control Act will impact our products to a greater degree than competitors in the industry, thus affecting our competitive position.

As part of the “Consolidated Appropriations
Act, 2021,” signed into law on December 27, 2020, Congress amended the PACT Act to apply to ENDS, which includes the BIDI® Stick.
The PACT Act regulates the sale, transfer, or shipment of cigarettes, roll-your-own tobacco, smokeless tobacco, and now ENDS, for both
business-to-business transactions as well as online sales. The PACT Act imposes substantial restrictions on sellers and shippers of ENDS
products, including, but not limited to registration with the Bureau of Alcohol, Tobacco, Firearms and Explosives (or ATF), registration
with state Tobacco Tax Administrators, and monthly reporting requirements to state and local Tobacco Tax Administrators. Delivery sellers
are subject to substantial additional restrictions, including, but not limited to, compliance with state excise tax collection requirements,
licensing requirements, shipping, and packaging requirements. Companies were required to comply with PACT Act requirements beginning on
or about March 28, 2021.

We have adopted the following compliance measures:

| ● | We have retained a team of legal, tax and accounting experts to advise on state and local tax, licensing, and regulatory matters associated with the distribution of the BIDI® Stick; |

| ● | We are appropriately licensed or registered in every state which requires it; |

| ● | We calculate and remit excise taxes where required; |

| ● | We have made a substantial investment in excise tax reporting and