Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 41

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 41
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 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, as well as higher
state and local excise taxes and the market share of deep discount brands, the tobacco industry has become increasingly price competitive.
As we seek to adapt to the price competitive environment, our competitors that are better capitalized may be able to sustain price discounts
for long periods of time by spreading the loss across their expansive portfolios, with which we are not positioned to compete.

23

“Big tobacco” has also established its
presence in the ENDS market and has begun to make investments in the alternative space. There can be no assurance that our products will
be able to compete successfully against these companies or any of our other competitors, some of which