Company: KAVL
Filing Date: 2025-08-18
Form Type: 424B5
Source: 0001731122-25-001141
Chunk: 47

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-08-18
Form: 424B5
Chunk 47
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 is compliant with applicable manufacturer
specific state requirements, such as any warning requirements (e.g., California Proposition 65).

Excise Taxes on Vapor Products

Vapor products are currently subject to excise taxes
at the state and local level. Currently, approximately 31 states, plus various localities and jurisdictions, impose a tax on vapor products.
We anticipate that state and localities will likely continue to impose new excise taxes on these products and / or increase existing excise
taxes for the purpose of funding various legislative initiatives, filling revenue shortfalls, and / or to reduce consumption. In addition,
while ENDS products are not currently subject to excise tax at the federal level, legislation to impose excise taxes at the federal level
has been introduced in the past and could potentially be adopted in the future. Any future enactment of excise tax increases at the federal,
state, or local level could potentially result in lower consumption, a shift in sales to discount brands, illicit trade channels or alternatives
as consumers seek lower priced products, any of which could result in a decline of our shipment volume, revenue, and profit. We ceased
all direct-to-consumer sales in February 2021.

International Regulations and Pertinent Information

The World Health Organization’s Framework Convention
on Tobacco Control (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 advertising, marketing, and sponsorship; |

| ● | the display of larger health warnings, graphic health warnings, and other labeling requirements; |

| ● | restrictions on packaging design, including the use of colors and generic packaging; |

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| ● | restrictions or bans on the display of tobacco product packaging at the point of sale, and restrictions or bans on cigarette vending machines; |

| ● | requirements regarding testing, disclosure, and performance standards for tar, nicotine, carbon monoxide, and other smoke constituents’ levels;