Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 157

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 157
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 a material risk that we will be unable to generate sufficient
revenues to pay our expenses, and if our existing sources of cash and cash flows are insufficient to fund our activities, we will need
to raise additional funds. Additional equity or debt financing may not be available on acceptable terms, if at all, particularly in the
current economic environment.

Until such time, if ever,
we can generate substantial product revenues, we will be required to finance our cash needs through public or private equity offerings,
debt financings and corporate collaboration and licensing arrangements. If we elect to raise additional funds by issuing equity securities,
our stockholders may experience dilution. Debt financing, if available, may involve agreements that include covenants limiting or restricting
our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt
financing or additional equity that we may raise may contain terms, such as liquidation and other preferences, that are not favorable
to us or our stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be
necessary to relinquish valuable rights to our technologies, research programs or product candidates or grant licenses on terms that may
not be favorable to us.

If we are unable to generate cash flow positive operations
or achieve profitability, and if we are unable to raise additional funds on commercially reasonable terms or at all, we may be required
to significantly reduce or cease our operations, declare bankruptcy or our business could fail, which could result in the loss to investors
of their investment in our securities.

The terms of our agreements with Bidi, including
our A&R Distribution Agreement, may not always be as favorable to us as the terms that may be obtained by arms’ length negotiation.

We currently are, and we anticipate that we will continue
to be, substantially dependent on our relationships with our affiliated entities, including Bidi. We believe that our current arrangement
with Bidi provides our business with stability and transparency. Although we believe that the terms of the A&R Distribution Agreement
are as favorable to us as what we could have obtained in an arm’s length transaction, there can be no assurance that this arrangement
or any future agreements that we enter with Bidi, or any other affiliated entity, will be as favorable to us as we may be able to negotiate
with unaffiliated parties.

20

We rely primarily on Bidi for access to our
key intellectual property rights, and any change in our relationship could adversely alter such