Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 159

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 159
---
 fulfill our stated
business strategy and plans, or that financial, technological, market, or other limitations may force us to modify, alter, significantly
delay, or significantly impede the implementation of such plans. We have insufficient results of operations in our current business model
for investors to use to identify historical trends. Investors should consider our prospects considering the risk, expenses and difficulties
we will encounter as an early-stage company. Our revenue and income potential is unproven and our business model is continually evolving.
We are therefore subject to the risk that we will be unable to address these risks, and our inability to address these risks could lead
to the failure of our business.

Our business is rapidly evolving and is particularly
at risk given the FDA’s January 2024 MDO for Classic BIDI® Stick or in the event that Bidi’s pending PMTA for non-tobacco
flavored BIDI® Sticks is denied or delayed.

The ENDS industry is relatively new and is rapidly
evolving, and the FDA has been aggressive in its oversight of the ENDS industry. Changes in existing laws, regulations and policies and
the issuance of new laws, regulations, policies, as well as the FDA’s actions on ENDS-related PMTAs (including Bidi’s) and
any other entry barriers in relation to the ENDS industry may materially and adversely affect our ability to conduct business and our
results of operations.

Bidi was among the many companies that received a MDO for its non-tobacco flavored
BIDI® Sticks. On August 23, 2022, the U.S. Court of Appeals for the Eleventh Circuit set aside (i.e., vacated) the MDO
issued to the non-tobacco flavored BIDI® Sticks and remanded Bidi’s PMTA back to FDA for further review.

21

However, there is a risk that Bidi’s PMTA for non-tobacco flavored BIDI® Sticks will be
denied, which would have a significant adverse effect on our business and could lead to our bankruptcy or the failure of our business
entirely.

Separately, on or about May 13, 2022, FDA placed the
tobacco-flavored Classic BIDI® Stick into the final Phase III scientific review. In March 2023, FDA issued a deficiency letter regarding
the Classic BIDI® Stick PMTA, to which Bidi submitted a timely response in June 2023. Subsequently,