Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 162

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 162
---
, leaving us even more reliant on the products we distribute
for Bidi.

We may not be successful in maintaining the
consumer brand recognition and loyalty of our products and face intense competition and may fail to compete effectively. 

We compete in a market that relies on innovation and
the ability to react to evolving consumer preferences and, thus, are subject to significant competition in the ENDS market, and larger
tobacco industry and compete against companies in such market and industry that have access to significant resources in terms of technology,
relationships with suppliers and distributors and access to cash flow and financial markets.

Consumer perceptions of the overall safety of tobacco,
nicotine, cannabis, and hemp/CBD-related products is likely to continue to shift, and our success depends, in part, on our ability to
anticipate these shifting tastes and the rapidity with which the markets in which we compete will evolve in response to these changes
on a timely and affordable basis. If we are unable to respond effectively and efficiently to changing consumer preferences, the demand
for our products may decline, which could have a material adverse effect on our business, results of operations, and financial condition.

Regulations may be enacted in the future, particularly
considering increasing restrictions on the form and content of marketing of tobacco products, that would make it more difficult to appeal
to our consumers or to leverage existing recognition of the Bidi brand, or other brands that we own or license in the future. Furthermore,
even if we can continue to distinguish our products, there can be no assurance that the sales, marketing, and distribution efforts of
our competitors will not be successful in persuading consumers of our products to switch to their products. Many of our competitors have
greater access to resources than we do, which better positions them to conduct market research in relation to branding strategies or to
launch costly marketing campaigns. Any loss of consumer brand loyalty to our products or reduction of our ability to effectively brand
our products in a recognizable way will have a material effect on our ability to continue to sell our products and maintain our market
share, which could have a material adverse effect on our business, results of operations, and financial condition.

The competitive environment and our competitive position
are also significantly influenced by economic conditions, the state of consumer confidence, competitors’ introduction of low-priced
products or innovative products, higher taxes, higher absolute prices, and larger gaps between price categories and product regulation
that diminishes the consumer’s ability to differentiate tobacco products. Due to the impact of these factors