Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 181

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 181
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 substantially
increased our legal and financial compliance costs and made some activities more time-consuming and costly. The increased costs can result
in our reporting a net loss. These rules and regulations may make it more difficult and more expensive for us to maintain sufficient directors’
and officers’ liability insurance coverage. We cannot predict or estimate the amount or timing of additional costs we may continue
to incur to respond to these requirements. The ongoing impact of these requirements could also make it more difficult for us to attract
and retain qualified people to serve on our Board, our Board committees, or as executive officers.

Item 1B. Unresolved Staff Comments.

None.

ITEM 1C. Cybersecurity

Cybersecurity Risk Management and Strategy

Our company recognizes the critical importance of
cybersecurity in our digital operations and has established a risk management program to address both internal and external cybersecurity
threats. We acknowledge the challenges posed by the evolving nature of cyber threats and the limitations in fully mitigating these risks.
We have not observed any significant impacts from known cybersecurity threats or previous incidents on our operational, strategic, or
financial aspects. Nevertheless, given the unpredictable nature of cyber threats, we cannot assure complete immunity against potential
future impacts.

The likelihood of cybersecurity incidents is influenced
by frequency risk factors. External factors include market trends in cybercrime, technological advancements in hacking methods, and geopolitical
developments. Internal factors are shaped by our policies, the effectiveness of employee training, and robustness of system updates and
maintenance procedures. External cybersecurity incidents events may include and are not limited to service disruptions due to email borne
threat activities, ransomware, or denial of service attacks against us or our suppliers, while internal events may comprise of internal
threats, subcontractors, or governance failures among other events.

Cybersecurity incident response plans are regularly
updated to include structured processes encompassing identification, containment, eradication, recovery, and post-incident review. Continuous
monitoring of systems and networks allows for the detection and response to potential cybersecurity threats. Response capabilities are
regularly reviewed to align with the evolving cyber threat landscape and processes are fully integrated into our broader risk management
system.

Criteria used to determine the materiality of an incident
includes, but is not limited to, evaluating the scope, nature, type, systems, data, operational impact, and pervasiveness of the incident.
This approach involves continuous oversight and improvement based on evolving cyber threats. Materiality also considers both quantitative
and qualitative factors in determining impact.

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