Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 178

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 178
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 as
defined in the JOBS Act, and we have taken advantage, and intend to continue to take advantage, of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”),
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved.

Investors may find our Common Stock less attractive
because we rely on these exemptions, which could contribute to a less active trading market for our Common Stock or volatility in our
share price. In addition, we may be less attractive to investors, and it may be difficult for us to raise additional capital when we need
it. Investors may be unable to compare our business with other companies in our industry if they believe that our financial accounting
is not as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, our financial
condition and results of operations may be materially and adversely affected.

We may take advantage of these reporting exemptions
until we are no longer an emerging growth company.

32

We have identified material weaknesses in our
system of internal controls over financial reporting and, if we cannot remediate these material weaknesses, we may not be able to accurately
report our financial condition, results of operations, or cash flows, which may adversely affect investor confidence in us and, as a result,
the value of our Common Stock. 

A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement
of annual or interim financial statements will not be prevented or detected on a timely basis. Section 404 of Sarbanes-Oxley also generally
requires an attestation from our independent registered public accounting firm on the effectiveness of our system of internal controls
over financial reporting. However, if we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of
the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement.

Our management has identified, and we have disclosed,
certain material weaknesses in our system of internal controls over financial reporting as of our fiscal year