Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 167

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 167
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 four years after the
date of sale, among other things. Delivery sellers are also required to file a monthly report with the state tobacco tax administrator
and any other local or tribal entity that taxes the sale of the products. Such reports must include the name and address of the persons
delivering and receiving the shipment and the brand and quantity of the “cigarettes” that were shipped. These requirements
apply to all sales, including sales to consumers and sales between businesses.

25

In addition to the de facto FDA flavor ban that has
resulted from the denial of nearly all PMTAs for flavored ENDS, ENDS products that are non-tobacco flavored continue to face the threat
of prohibition at the local level, as many state and local authorities and attorneys general push for bans or request the FDA to deny
PMTAs for flavored ENDS. To date, at least nine states, including the District of Columbia, have banned the sale of flavored ENDS (e.g.,
California, Massachusetts, Illinois, New Jersey, New York, Rhode Island, and Utah), with several more considering similar bans (e.g.,
Maryland and Connecticut)

Our supply to our wholesalers and retailers
is dependent on the demands of their customers who are sensitive to increased sales taxes and economic conditions affecting their disposable
income. 

Consumer purchases of tobacco products are historically
affected by economic conditions, such as changes in employment, salary and wage levels, the availability of consumer credit, inflation,
interest rates, fuel prices, sales taxes, and the level of consumer confidence in prevailing and future economic conditions. Discretionary
consumer purchases, such as the BIDI® Stick, may decline during recessionary periods or at other times when disposable
income is lower, and taxes may be higher.

We may be subject to increasing international
control and regulation. 

The FCTC is the first international public health
treaty that establishes a global agenda to reduce initiation of tobacco use and regulate tobacco to encourage tobacco cessation. Over
170 governments worldwide have ratified the FCTC. The FCTC has led to increased efforts to reduce the supply and demand of tobacco products
and to encourage governments to further regulate the tobacco industry. The tobacco industry expects significant regulatory developments
to take place over the next few years, driven principally by the FCTC. Regulatory initiatives that have been proposed, introduced or enacted
include:

    ●
    the levying of substantial
    and increasing tax and duty charges;

    ●
    restrictions or bans on