Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 170

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1A
Chunk 170
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results of operations and cash flows could be adversely affected. We may not be able to support, financially or otherwise, future growth,
or hire, train, motivate and manage the required personnel. Our failure to manage growth effectively could also limit our ability to achieve
our goals as they relate to streamlined sales, marketing and distribution operations and the ability to achieve certain financial metrics.

27

We are subject to fluctuations in our results
that make it difficult to track trends and develop strategies in the short term. 

In response to competitor actions and pricing pressures,
we have engaged in significant use of promotional and sales incentives. We regularly review the results of our promotional spending activities
and adjust our promotional spending programs to maintain our competitive position as well as to confirm compliance with our adult-focused
marketing policies. Accordingly, unit sales volume and sales promotion costs in any period are not necessarily indicative of sales and
costs that may be realized in subsequent periods. Additionally, promotional activity significantly increases net sales in the month in
which it is initiated, and net sales are adversely impacted in the month after a promotion. Accordingly, based upon the timing of our
marketing and promotional initiatives, we have and may continue to experience significant variability in our results, which could affect
our ability to formulate strategies that allow us to maintain our market presence across volatile periods. If our fluctuations obscure
our ability to track important trends in our key markets, it may have a material adverse effect on our business, results of operations
and financial condition.

Adverse U.S. and global economic conditions
could negatively impact our business, prospects, results of operations, financial condition or cash flows. 

Our business and operations are sensitive to global
economic conditions. These conditions include interest rates, energy costs, inflation, recession, fluctuations in debt and equity capital
markets, and the general condition of the United States and world economies, including as a result of the effect of the COVID-19 pandemic.
A material decline in the economic conditions affecting consumers, which cause a reduction in disposable income for the average consumer,
may change consumption patterns, and may result in a reduction in spending on our product offerings or a switch to cheaper products or
products obtained through illicit channels. As such, demand for our products may be particularly sensitive to economic conditions such
as inflation, recession, high energy costs, unemployment, changes in interest rates and money supply, changes in the political environment,
the ultimate effect on the economy of the COVID-19 pandemic and other factors beyond our control, any combination of which could result
in