Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 60

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 60
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1C. Cybersecurity

Cybersecurity Risk Management and Strategy

Our company recognizes the critical importance of
cybersecurity in our digital operations and has established a risk management program to address both internal and external cybersecurity
threats. We acknowledge the challenges posed by the evolving nature of cyber threats and the limitations in fully mitigating these risks.
We have not observed any significant impacts from known cybersecurity threats or previous incidents on our operational, strategic, or
financial aspects. Nevertheless, given the unpredictable nature of cyber threats, we cannot assure complete immunity against potential
future impacts.

The likelihood of cybersecurity incidents is influenced
by frequency risk factors. External factors include market trends in cybercrime, technological advancements in hacking methods, and geopolitical
developments. Internal factors are shaped by our policies, the effectiveness of employee training, and robustness of system updates and
maintenance procedures. External cybersecurity incidents events may include and are not limited to service disruptions due to email borne
threat activities, ransomware, or denial of service attacks against us or our suppliers, while internal events may comprise of internal
threats, subcontractors, or governance failures among other events.

Cybersecurity incident response plans are regularly
updated to include structured processes encompassing identification, containment, eradication, recovery, and post-incident review. Continuous
monitoring of systems and networks allows for the detection and response to potential cybersecurity threats. Response capabilities are
regularly reviewed to align with the evolving cyber threat landscape and processes are fully integrated into our broader risk management
system.

Criteria used to determine the materiality of an incident
includes, but is not limited to, evaluating the scope, nature, type, systems, data, operational impact, and pervasiveness of the incident.
This approach involves continuous oversight and improvement based on evolving cyber threats. Materiality also considers both quantitative
and qualitative factors in determining impact.

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Third-party engagement processes include risk evaluation
across various domains such as cybersecurity, data privacy, supply chain, and regulatory compliance. We are committed to transparently
disclosing material and unauthorized cybersecurity incidents involving third-party service providers, considering factors like operational
technology system damages, information breaches, and interconnected attacks exploiting vulnerabilities.

Cybersecurity Governance

Our Board of Directors plays a pivotal role in overseeing
the organization's preparedness for cyber threats. This involves a comprehensive understanding of our risk profile and ensuring appropriate
cybersecurity controls are in place.

Item 2. Properties.  

On June 10, 2022, we entered into a Lease Agreement