Company: KAVL
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0001731122-25-000185
Chunk: 46

Company: Kaival Brands Innovations Group, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 1
Chunk 46
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acco flavored continue to face the threat
of prohibition at the local level, as many state and local authorities and attorneys general push for bans or request the FDA to deny
PMTAs for flavored ENDS. To date, at least nine states, including the District of Columbia, have banned the sale of flavored ENDS (e.g.,
California, Massachusetts, Illinois, New Jersey, New York, Rhode Island, and Utah), with several more considering similar bans (e.g.,
Maryland and Connecticut)

Our supply to our wholesalers and retailers
is dependent on the demands of their customers who are sensitive to increased sales taxes and economic conditions affecting their disposable
income. 

Consumer purchases of tobacco products are historically
affected by economic conditions, such as changes in employment, salary and wage levels, the availability of consumer credit, inflation,
interest rates, fuel prices, sales taxes, and the level of consumer confidence in prevailing and future economic conditions. Discretionary
consumer purchases, such as the BIDI® Stick, may decline during recessionary periods or at other times when disposable
income is lower, and taxes may be higher.

We may be subject to increasing international
control and regulation. 

The FCTC is the first international public health
treaty that establishes a global agenda to reduce initiation of tobacco use and regulate tobacco to encourage tobacco cessation. Over
170 governments worldwide have ratified the FCTC. The FCTC has led to increased efforts to reduce the supply and demand of tobacco products
and to encourage governments to further regulate the tobacco industry. The tobacco industry expects significant regulatory developments
to take place over the next few years, driven principally by the FCTC. Regulatory initiatives that have been proposed, introduced or enacted
include:

    ●
    the levying of substantial
    and increasing tax and duty charges;

    ●
    restrictions or bans on
    advertising, marketing and sponsorship;

    ●
    the display of larger health
    warnings, graphic health warnings and other labeling requirements;

    ●
    restrictions on packaging
    design, including the use of colors and generic packaging;

    ●
    restrictions or bans on
    the display of tobacco product packaging at the point of sale, and restrictions or bans on cigarette vending machines;

    ●
    requirements regarding
    testing, disclosure and performance standards for tar, nicotine, carbon monoxide and other smoke constituents levels;

    ●
    requirements regarding
    testing, disclosure and use of tobacco product ingredients;

    ●
    increased restrictions