Business Overview
PART I
Item 1. Business.
Overview
Kaya Holdings, Inc is a holding company with more than eight years of
operational experience as a vertically integrated legal cannabis enterprise.
KAYS is the first U.S. publicly traded company to operate a legal marijuana
dispensary, as well as the first to vertically integrate by adding cultivation
and manufacturing. The Company produces, distributes, and/or sells a full range
of premium cannabis products including flower, oils, vape cartridges and
cannabis infused confections, baked goods and beverages through a fully
integrated group of subsidiaries and companies supporting highly distinctive
brands.
Additionally, as noted in an 8-K filing dated July 6, 2022, KAYS is leveraging
its cannabis operational experience in Oregon and is in the process of seeking
the requisite licenses from the Oregon Department of Health to operate State
Legal Psilocybin Manufacturing and Facilitation Service Centers in Oregon. In
November 2020 Oregon became the first state in the United States to legalize and
license the supervised use of psychedelic therapeutics for treatment of a range
of physical and mental health issues. The Oregon Health Authority ("OHA") is
expected to begin issuing licenses in January 2023. The OHA also launched
Oregon's medical cannabis program in 2014, giving KAYS critical experience in
comprehending and complying with OHA mandates, and sets the stage for KAYS First
Mover Advantage in the emerging US Psychedelic Therapeutics Industry.
Cannabis Operations
The Company's cannabis business strategy seeks to achieve four fundamental
objectives:
· maintaining direct access to customers (to own the relationship with end-users);
· effecting vertical integration to control the supply chain (to control cost,
selection and quality);
· introducing strong brands in tradition and innovative categories (to control
asset development); and
· creating the capacity to expand nationally and internationally as regulations
and opportunities permit.
Kaya Holdings currently operates three majority-owned cannabis subsidiaries,
each responding to various demands and opportunities in the cannabis industry,
to aid in the execution of these objectives:
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Marijuana Holdings Americas, Inc.
Marijuana Holdings Americas, Inc. ("MJAI"), incorporated in 2014, operates the
Company's U.S. based cannabis operations including its Kaya Shack™ retail brand
and the Kaya Farms™ cultivation brand.
After an evaluation of several factors including reputation for cannabis
excellence, costs of entry, learning opportunity, and ease of regulatory
structure, the Company selected Oregon as its point-of-entry into the legal
cannabis sector where it commenced operations in Oregon in July 2014. Oregon is
universally recognized for its excellence in cannabis cultivation and is part of
the famed "Green Triangle" of expert cannabis cultivation that also includes
Northern California. Having Oregon as the Company's learning ground has allowed
the Company to combine "traditional" methods of cannabis cultivation with modern
agriculture techniques.
The Company's US cannabis operations are currently focused in Oregon, where all
of the Company's operations are licensed by the Oregon Liquor Control Commission
(the "OLCC'), which has jurisdiction over legal medical and recreational
cannabis grow, production and retail operations. The Company has two active OLCC
Marijuana Retailer Licenses, each of which allow for one brick-and-mortar
physical dispensary location as well as unlimited delivery operations tied to
the geographic location of the fixed based licensed operations. KAYS currently
operates two Kaya Shack™ retail outlets (one in South Salem and one in
Portland).
The Company has developed its own proprietary Kaya Farms™ strains of cannabis,
which it has grown and produced at the various medical and recreational grows
that the Company has operated and maintained over the past seven years in
Oregon. Additionally, the Company currently maintains a genetic library of seeds
for over 200 top strains of cannabis that it has assembled from its own grow
operations, contract growers, vendors for its retail stores and other commercial
sources which it intends to utilize to launch international grow operations in
Israel, Greece and elsewhere.
The Company owns a 26-acre farm in Lebanon, Linn County, Oregon, on which it had
previously obtained approvals to construct an OLCC Licensed Cannabis grow. Due
to a substantial increase in the value of the farm based on the large amount of
acres that it encompasses that are not relative to cannabis production, the
Company has listed the property for sale. If the property is sold the Company
intends to allocate a significant portion of the proceeds to enhance its Oregon
Cannabis Production, Processing and Retail Footprint, develop its planned Oregon
Psilocybin Business Plan and further develop its international projects.
Kaya Brands USA
Kaya Brands USA, Inc. ("KBUS") is being incorporated to manage and leverage the
intellectual property associated with the Kaya family of brands and seek out US
based projects and ventures to enhance stockholder value associated with their
development.
KBUS presently manages 18 proprietary brands formulated and developed by the
Company which includes the Kaya Shack™ retail brand, the Kaya Farms™ cultivation
brand, and the Kaya Gear™ apparel brand, as well as a host of carefully
developed cannabis and CBD products that include cannabis extracts and
concentrates, vape cartridges, chocolates, gummies and chews, topicals and
creams, beverages, foods, and cannaceuticals.
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Kaya Brands International and International Plans for Expansion
Kaya is placing current expansion emphasis on international opportunities and
brand extensions. While the US Cannabis markets initially received a strong tail
wind from the 2021 change in administration and the fact that US Cannabis
Banking and Taxation Laws and Regulations are forecast to become more industry
friendly, KAYS believes that it will still be some years until such time that
the Federal Laws allow for Interstate Cannabis Commerce and true economies of
scale to develop within the emerging U.S. Cannabis Markets. Thus, KAYS has
developed an exciting international growth program with the potential for
strategic position and growth, all the while remaining prepared for the
eventuality of a more inviting U.S. market.
Kaya Brands International, Inc. ("KBI") was incorporated in late 2019 to serve
as the Company's vehicle for expansion into worldwide cannabis markets. KBI is
seeking to leverage the other product brands for development of the Kaya Shack™
retail and Kaya Farms™ brands in Europe and elsewhere as opportunities permit.
Projects currently under development include licensing of the Kaya Farms™ brand
to develop cultivation projects in Greece, Israel and other potential locations.
This segregation of US and foreign based activities would allow for KAYS to
eventually have KBI listed on a recognized securities exchange such as the
OTCQX, NASDAQ or NYSE in the US, the Canadian Securities Exchange or "CSE" in
Canada (a Canadian Exchange that has proven to be an excellent source of new
institutional and retail investment capital and liquidity for both Canadian and
U.S.-based OTC cannabis stocks) or other such international exchange that would
allow KBI to access additional capital not currently available through US
over-the counter ("OTC") markets.
KAYS intends to maintain a majority ownership of KBI, but is also working on
plans to issue a dividend of common stock in KBI to stockholders of record at a
date to be determined by the Board of Directors of KAYS.
Additionally, KAYS intends to structure KBI's participation in projects that
would lead to these projects eventually seeking their own public company status
and corresponding issuance of securities which could potentially significantly
enhance the value of KAYS/KBI's investment and possibly lead to dividends for
KAYS/KBI's stockholders. There can be no assurance given as to whether or when
KAYS will be able to do so, or it would ultimately be successful in increasing
stockholder value.
Kaya Farms Greece
On January 11, 2021, KAYS/KBI, through a majority owned subsidiary of KBI (Kaya
Farms Greece or "KFG") and Greekkannabis ("GKC", an Athens based Cannabis
Company) executed an agreement for KBI to acquire 50% of GKC. The first 25% was
acquired in January, 2021 and the remaining 25% was acquired in July, 2021.
GKC's projects include two medical cannabis cultivation and processing projects
in Greece- one in Epidaurus, Greece and the other in Thebes, Greece.
The Epidaurus Project consists of 2 connected industrial buildings (already
constructed, approximately 50,000 square feet in total under-air space) situated
on 2.8 acres of land, with its own independent industrial electrical power
center and ample water supply to service the needs of the facility. The
Epidaurus Project will include 25,000 square feet of indoor cannabis
cultivation, a 15,000 square foot EU-GMP extraction and processing facility, and
a 10,000 square foot EU-GMP packing area. There is ample room for expansion with
room to construct an additional 15,000 square feet on site. The joint venture
has been awarded its development license to from the Greek authorities and is
awaiting project financing to complete the acquisition of the Epidaurus property
and complete the installation of EU Certified equipment to gain final licensing
of the facility.
The Epidaurus Project is smaller in scale than the Company's 15-acre project in
Thebes, Greece, allowing KAYS to fast-track cultivation and processing of its
proprietary branded cannabis products for distribution in legal EU markets while
awaiting greater legal cannabis demand to emerge prior to developing a
large-scale capacity in Thebes.
The Thebes Project has a development license from the Greek authorities and a
purchase option on 15 acres in Thebes, Greece. The farm has large-scale
cultivation capacities and the company expects to develop the site once legal
cannabis demand warrants an increase in capacity.
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Kaya Farms Israel
On March 30, 2021 the Company confirmed that its Israeli subsidiary, Kaya
Shalvah has been awarded its initial permit from the "YAKAR", the Department for
Medical Cannabis in the Israeli Ministry of Health, to develop an Israeli
cannabis cultivation and processing facility. This initial permit grants Kaya
Shalvah permission to proceed with its plans to develop commercial scale
cannabis cultivation and processing in Israel.
We have chosen to become active in the Israeli cannabis market because of this
position as global center of cannabis science, where technologies are
specifically developed to enhance cannabis cultivation processes and yields, and
innovative consumer products are emerging that have potential interest for both
the medical and recreational markets throughout the world.
Kaya Shalvah is currently focused on two separate paths of development to launch
its Israel Operations- the first being through participation in the government
sponsored Greenegev Cannabis Ecosystem in Yerucham, Israel and the second path
being through potentially acquiring an interest in currently licensed medical
cannabis production and processing facilities that are already operating in
Israel.
Psilocybin Therapeutics Business Plan
In November 2020 Oregon became the first state in the United States to legalize
and license the supervised use of psychedelic therapeutics for treatment of a
range of physical and mental health issues. The Oregon Health Authority ("OHA")
is expected to begin issuing licenses in January 2023, allowing each entity to
own and operate one (1) Psilocybin manufacturing and processing facility for the
production of Psilocybin Mushrooms and derived therapeutics ("Psilocybins"), and
up to five (5) Psilocybin Facilitation Centers where clients would go to ingest
Psilocybins and experience effects under the supervision of state licensed
Facilitators.
First Mover Advantage.
The OHA also launched Oregon's medical cannabis program in 2014, giving KAYS
critical experience in comprehending and complying with OHA mandates. The
psilocybin opportunity is a logical extension for Kaya Holdings. The purpose,
customer, regulations, and operations, as well as our familiarity with Oregon
regulators, are synergistic with our current mission, and can be leveraged
within our current operational infrastructure. We anticipate being able to
respond to market demand rapidly, upon licensing.
The Licenses to be issued in Oregon will be the first ever State Legal Licensing
of Psilocybin manufacturing and treatment centers, and KAYS is positioned to be
a first mover due to its operating history in Oregon. The Company has begun the
process of enrolling staff that qualify for the licensing into the training
programs that have been approved for state certification, and is in process of
identifying a site for Psilocybin Manufacturing and Processing and up to five
(5) sites to open and operate Psilocybin Facilitation Centers, subject to
financing and final regulatory approval.
The Science
Psilocybin, a naturally occurring compound found in "magic mushrooms", is one of
an emerging class of psychedelic medicines that contain potent psychoactive
chemicals that can serve to affect human perception, emotions, and other
cognitive functions. Psychedelic medicines have been found to have
ground-breaking potential in treating a range of physical and mental disorders
including anxiety and panic disorder, resistant depression, opiate addiction,
adult attention deficit hyperactivity disorder ("ADHD"), opioid addiction,
post-traumatic stress disorder ("PTSD"), and acute and chronic pain.
A 2020 study in the Journal of the American Medical Association Psychiatry found
that 71% of the patients with severe, previously treatment-resistant depression,
showed "clinically significant improvement" that lasted at least four weeks and
with "low potential" for addiction. Speaking on the study one of the study's
co-authors, Alan Davis, a neuroscience researcher at Ohio State University and
adjunct professor at the Johns Hopkins Center for Psychedelic and Consciousness
Research stated, "I would say at this stage the research is showing that in safe
settings, this provides relief from debilitating mental health problems for some
people."
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The Numbers
Insight Ace Analytic, an industry research firm, reports that the global
psychedelic therapeutics market was valued at US$ 3.61 billion in 2021, and
estimates the market will reach US$ 8.31 billion by 2028, with a CAGR of 13.2%
during the forecast period of 2022-2028. Other market estimates include the
research firm Research & Markets' estimate that the psychedelic drugs market
will reach US$ 10.75 billion by 2027.
As recently reported in the Wall Street Journal, Venture Capitalist Brom Rector
of Empath Ventures sees Psychedelics as … "a traditional biotech play, with a
high probability of failure but a potential upside of 10, 20, maybe 50 times."
Additionally, he sees many of the infrastructure companies for the industry as
having a lot higher probability of becoming cash flow positive.
While Oregon is currently the only State that has legalized Psilocybin for
medical use with a regulatory framework in place to issue licenses for their
manufacture and sale, Denver Colorado, Santa Cruz and Oakland, California, Ann
Arbor, Michigan, Washington D.C., and Seattle, Washington have all
decriminalized small quantities. Other activity in the U.S. include:
º The Connecticut legislature has begun the process toward legalizing
Psilocybin centers for the treatment of veterans. Many veterans' groups are
advocating making psychedelic treatments available for veterans,
particularly those with PTSD.
º Texas, Utah, Maryland, and Washington State have set up task forces to
study the medical use of psilocybin and have funded research to explore the
effects of psilocybin on certain mental health conditions.
º Colorado and California have ballots initiatives pending that would
legalize psilocybin.
º The New Jersey senate is considering a bill that would legalize psilocybin
to treat certain disorders.
Internationally:
º The Canadian government has been sued by an advocate group to force the
legalization of psilocybin and other psychedelics.
º Possession of psilocybin is legal in Austria, British Virgin Islands,
Spain, and Portugal.
º Psilocybin is legal to possess, sell, transport, and cultivate in Bahamas,
Jamaica, Brazil, Nepal, Netherlands (only as a truffle), and Samoa.
Corporate Information
We are incorporated in the State of Delaware. Our corporate office is located at
915 Middle River Drive, Suite 316, Fort Lauderdale, Florida, 33304. Our
telephone number is 954-892-6911 and our corporate website is
www.kayaholdings.com. Information contained on our corporate website does not
constitute part of this Annual Report.
The Global Cannabis Industry
The global cannabis market is being driven by the increasing number of countries
passing legislation to decriminalize the use of cannabis and legalize cannabis
for medicinal use. This change in legislation is the result of an increase in
public awareness to the medicinal benefits of cannabis and greater social
acceptance of cannabis use.
According to New Frontier Data, more than 260 million adults globally consumed
cannabis at least once annually in 2018 - placing global spending on cannabis
(legal & illicit) at $344 billion USD annually.
The Insight Partners, another research group, in their 2019 Global Cannabis
Market report projects the global cannabis market to reach $153,689,900,000 in
2027, which represents a CAGR of 34% from 2019-2027.
Prohibition Partners, expects the North American market to remain the world's
largest until 2023, when they expect North American ($17.7 billion) to outpace
Europe ($16.8 billion). By 2024, with a forecasted global market of $103.9
billion, Europe is expected to outperform North America $39.1 billion to $37.9
billion.
Of the $103.9 billion global cannabis market forecasted by Prohibition Partners,
$62.7 billion is expected to be medical cannabis driven. Of this $62.7 billion,
Europe is expected to be the largest market, with $22.3 billion, followed by
North America with $20.2 billion.
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North America
North America, according to New Frontier Data, represents a total cannabis
demand (legal & illicit) valued at $86 billion USD.
The United States and Canada have been leading the global legal cannabis
movement, which in turn impacts the way governments worldwide are structuring
the regulation of legal cannabis in their own countries.
Canada
Canada legalized medical cannabis in 2001 and in October 2017 the Federal
Cannabis Act came into effect, making Canada the first G7 nation to legalize
recreational cannabis. The legal structure has given rise to large Canadian
cannabis companies that have achieved high valuations, which they have leveraged
to purchase supply chain companies and invest in overseas infrastructure
projects to produce cannabis at costs lower than those in Canada. Increasing
competition from U.S. and European countries and investor frustration has seen
some decline of valuation and some Canadian companies have been forced to shrink
operations and lessen their developing global footprint.
Canadian cannabis companies currently export to more than twenty countries. Up
until 2020, most exports of cannabis from Canada had been sent to European
Countries. Exports of oil and flowers from Canada to Europe increased from
2019-2020 by 28% in terms of weight, but have declined, with most flowers being
exported to Israel and the majority of oil being exported to Australia.
The United States
The United States has been the global leader in cannabis innovation; including
new genetics, cultivation techniques, derivative products, and delivery methods.
Cannabis remains federally illegal in the United States, with the interstate
transport and sale of cannabis prohibited. Nonetheless, support for legal
recreational cannabis remains above 60% in most reputable polls, and 48 U.S.
states have some form of legal medical or recreational cannabis (including
hemp/CBD). Only Idaho and Nebraska prohibit all forms of cannabinoids.
States with some type of legal medical cannabis includes Alabama, Arkansas,
Delaware, Florida, Georgia, Hawaii, Indiana, Iowa, Kansas, Kentucky, Louisiana,
New Hampshire, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana,
New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode
Island, South Carolina, Tennessee, Texas, Utah, Vermont, West Virginia,
Wisconsin, and Wyoming.
States permitted the sales of recreational, or "adult-use" cannabis are Alaska,
Arizona, California, Colorado, Connecticut, Illinois, Maine, Massachusetts,
Michigan, Montana, Nevada, New Jersey, New York, New Mexico, Oregon, South
Dakota, Vermont, Virginia and Washington. The District of Colombia (Washington
D.C.) also permits adult-use cannabis.
Despite the number of individual states permitting the cultivation and
distribution of cannabis (including hemp), in 2021 the U.S. Senate failed to
pass a bill that would reclassify cannabis from a Schedule I drug under
the Controlled Substances Act, which would have allowed cannabis companies
access to banking and relief from punitive IRS rules.
Europe
Some key points about the European medical cannabis market are:
§ New Frontier Data estimates the European cannabis market (legal & illicit)
generates $69 billion USD annually.
§ Prohibition Partners Europe forecasts Europe to be the largest legal
cannabis market worldwide by 2024, with a total value of $39.1 billion.
§ The Insight Partners estimates the European cannabis market will be worth
$474 million by the end of 2021. They estimate the market to grow with a
CAGR of 67.4% from 2021 to reach $3.75 billion by 2025.
§ Europe is projected to surpass North America (currently the largest
medical cannabis market) in 2024, with a market value of $39.1 billion to
North America's $37.9 billion.
§ In Europe Germany continues to be largest and fastest growing medical
cannabis market. Sales of insurance covered cannabis grew to 67% in 2019.
§ Total European market sales, including isolated cannabinoids, finished
pharmaceutical products, cannabis flower and full spectrum cannabis
products exceeded $295 million in 2019.
§ Germany has by far the largest number of medical cannabis patients as of
2021. By 2025, it is expected that countries like France and the United
Kingdom will have developed their patient access considerably, growing to
represent a significant share of the European market.
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Israel and GreeceIn June 2017, the Greek government announced it would be legalizing medical
cannabis, and less than a year later Greek leaders approved Law 4523 and Joint
Ministerial Decision No. 51483, which permitted farming and production of
medical cannabis. In 2020 the Greek Parliament passed legislation that further
relaxed cannabis export regulations, now permitting the bulk export of cannabis
flower.
Israel is currently the largest importer of medical cannabis in the world. By
June 2020 Israel had imported more than six tonnes of cannabis. The strong
medical cannabis program stems from traditionally progressive cannabis policies
and strong cultural acceptance of cannabis medicinal uses.
The Israeli cannabis sector has been slowed by regulations, which have hindered
Israeli cannabis exports and complicated domestic distribution. There is
currently no mutual recognition agreement between local Medical Cannabis GMP and
EU-GMP, denying many Israeli firms the qualifications necessary to export to
Europe.
In February 2021, Israeli cannabis company Panaxia was chosen to supply medical
cannabis to Cyprus and France as part of new government programs. IM Cannabis
exports cannabis to Germany by purchasing EU-GMP flower and selling the product
to German wholesalers.
The Kaya™ Family of Brands
KAYS produces, distributes, and/or sells a full range of premium cannabis
products including flower, oils, vape cartridges and cannabis infused
confections, baked goods and beverages through a fully integrated group of
subsidiaries and companies supporting highly distinctive brands.
Currently Operational Brands (2014-2022)
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Next Stage Traditional (2022-2023)
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Next Stage Innovative (2022-2023)
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Note: The "Next Stage Traditional" and "Next Stage Innovative" brands are all
targeted for release in late 2022 and early 2023.
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The Kaya Shack™ Brand
Kaya Holdings operates the Kaya Shack™ brand of legal medical and recreational
retail marijuana retail stores. Kaya Holdings operates two recreational
marijuana retail outlets and medical marijuana dispensaries in Oregon under the
Kaya Shack™ brand.
Dubbed by the mainstream press as the "Starbucks of Marijuana" after our first
outlet opened in July 2014, our operating concept is simple: to deliver a
consistent customer experience (quality products, fair prices and superior
customer service) to a broad and diverse base of customers. Kaya Shack™ meets
the quality needs of the "marijuana enthusiast", the comfort and atmosphere of
all including "soccer moms" and the price sensitivities of casual smokers.
The Kaya Shack™ brand communicates positive thinking and joy, with signs
adorning the walls that read "It's a Good Day to have a Good Day," "Some of our
Happiest Days Haven't Even Happened Yet," and our signature "Be Kind."
Kaya Shack™ retail outlets are open 7 days a week- Monday through Saturday from
8:00 am to 10:00 pm, and Sunday 8:00 AM to 9:00 PM. Operations follow an
operational manual that details procedures for 18 areas of operation including
safety, compliance, store opening, store closing, merchandising, handling of
cash, inventory control, product intake, store appearance and employee conduct.
In compliance with regulations, all marijuana and marijuana infused products
sold through our stores are quality tested by independent labs to assure
adherence to strict quality and OLCC regulations.
The Company is exploring opportunities to expand its operations beyond Oregon by
replicating its Kaya Shack™ brand retail outlets through franchising in other
states where medial and or recreational cannabis use is legal or expected to
become legal in the near term, as well as in Canada, Greece and Israel, as part
of KAYS International Expansion Plans. KAYS also is targeting opening corporate
owned marijuana production and processing facilities to support the envisioned
franchised outlets, and to both maintain quality control and offer customers a
consistent customer experience while reducing costs of goods to franchisees.
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Kaya Shack™ Retail Outlets
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All stores feature a check-out stand wrapped to feature the Company's
proprietary brand of pre-rolls, Kaya Buddies. The Buddies program is an exciting
and popular pre-roll offering, featuring a wide selection (20-30 strains of
pre-rolls) and featuring our special Kaya Saying in each Buddies tube. A glass
display case showcases at least 25 strains of marijuana flower, which the stores
serve to customers "deli style", weighing straight from the jar to the
customer's take-out tube. An additional display case with a varied selection of
oils, concentrates and topicals rounds out the cannabis product display.
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The stores also feature standing display cases with cannabis intended glassware
under the Company's brand Really Happy Glass, as well as a rack of proprietary
t-shirt designs marketed under the Company brand Kaya Gear. The store also has a
hospitality area that offers free water, coffee, tea and hot cocoa. As required
by law, all products containing marijuana are either behind locked glass or
behind the counter and out of customer reach.
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I. Kaya Shack™ , 1719 SE Hawthorne Blvd., Portland, Oregon.
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Our first Kaya Shack™ OLCC licensed marijuana store (located in the heart of the
trendy Hawthorne district in southeast Portland, the "Greenwich Village" of the
West Coast) opened for business July 03, 2014. The store is located next door to
a cell phone repair shop, and near to Devil's Dill restaurant and No Fun pub.
There are also a McMenamins restaurant, tattoo parlor, convenience store,
hair/nail salon and a soccer sports bar. The area around the shop is mixed use
(commercial and residential) and has a footprint of approximately 700 square
feet and is the model for the Company's small urban shops.
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II. Kaya Shack ™ Marijuana Superstore, South Salem, Oregon.
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Our second Kaya Shack™ OLCC licensed marijuana store (located in South Salem,
Oregon) opened for business on October 17, 2015. The store is located in a strip
mall alongside a Caesar's Pizza, Aaron's furniture, a convenience store, a
tanning salon, and a nail salon. The plaza also has a Subway, a sports bar and a
laundromat. The area around the shop is primarily commercial with residential
complexes under construction and has a footprint of approximately 2,100 square
feet and serves as the model for the Company's superstores featuring larger
display areas and a soon-to-be-opened Pakalolo Juice Company infused fresh fruit
smoothies stand.
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Kaya Farms™
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The Company has developed its own proprietary Kaya Farms™ strains of cannabis,
which it has grown and produced at the various medical and recreational grows
that the Company has operated and maintained over the past eight years in
Oregon. Additionally, KAYS has produced a full line of cannabis concentrates and
extracts which it has initially produced through third party manufacturers and
marketed at the Kaya Shack Stores, along with the very popular Kaya Buddies line
of strain specific cannabis cigarettes.
The Company currently maintains a genetic library of seeds for over 200 top
strains of cannabis that it has assembled from its own grow operations, contract
growers, vendors for its retail stores and other commercial sources which it
intends to utilize to launch international grow operations in Israel, Greece and
elsewhere.
As noted elsewhere in this filing, the Company owns a 26-acre farm in Lebanon,
Linn County, Oregon, on which it had previously obtained approvals to construct
an OLCC Licensed Cannabis grow. Due to a substantial increase in the value of
the farm based on the large amount of acres that it encompasses that are not
relative to cannabis production, the Company has listed the property for sale.
If the property is sold the Company intends to allocate a significant portion of
the proceeds to enhance its Oregon Cannabis Production, Processing and Retail
Footprint, develop its planned Oregon Psilocybin Business Plan and further
develop its international projects.
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Kaya Buddie™ Strain Specific Cannabis Cigarettes
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In 2016 the Company introduced a signature line of strain-specific
connoisseur-grade, pre-rolled cannabis cigarettes branded as "Kaya Buddies™".
Kaya Buddies™ cannabis cigarettes have been very well received by medical
patients and recreational users, with the Company selling over 100,000 Kaya
Buddies™ since launching the brand in January 2016. The brand, marketed under
the tagline "Buds with Benefits", features over 50 different strains of
connoisseur-grade, high quality cannabis and proprietary specialty blends. Many
cannabis retailers produce prerolls, but none that we know of offer strain
specific pre-rolls made from the buds of the flower.
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Kaya Brands International
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After over five years of conducting "touch the plant" U.S. cannabis operations
inside the strict regulatory confines of a public company, KAYS has formed Kaya
Brands International, Inc. ("Kaya International" or "KBI"), to leverage its
experience and expand into worldwide cannabis markets. KBI's current operations
and initiatives include Canada Greece, and Israel, with additional areas under
consideration for Mexico, Uruguay and Zimbabwe.
Canada
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Canadian Franchising: KAYS has endeavored to launch its franchise program and
growth strategy in Canada. To this end, the Company has retained the Toronto
based law firm of Garfinkle Biderman LLP to prepare the legal infrastructure
required to enable the Company to sell Kaya Shack™ franchises in Canada.
Garfinkle Biderman has since completed the necessary legal work and the Company
is currently in negotiations with different potential development partners to
launch franchised operations in Canada and hopes to establish up to 100
franchised locations there over the next five years.
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Greece
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Kaya Kannabis is a joint venture project cultivation-for-export cannabis-farming
and processing project of Athens based Greekkannabis PC ("GKC") and KBI. GKC is
an Athens, Greece based cannabis company with deep ties in the Greek business
community and a strong presence in the academic and agricultural communities.
The alliance is designed to combine the business acumen and extensive European
network of GKC with the broad cannabis industry and cannabis cultivation
experience of Kaya Holdings.
We have selected Greece as the center of our European market activity because of
its amenable cannabis regulations, favorable climate, affordable, capable
workforce, and the country's position as a major pharmaceutical center in
Europe. As an EU nation Greece opens up the entire European market (where legal)
to KAYS flower and oils, and as permitted, the KAYS portfolio of brands.
On January 11, 2021, KAYS/KBI, through a majority owned subsidiary of KBI (Kaya
Farms Greece or "KFG") and Greekkannabis ("GKC", an Athens based Cannabis
Company) executed an agreement for KBI to acquire 50% of GKC. The first 25% was
acquired in January, 2021 and the remaining 25% was acquired in July, 2021.
GKC's projects include two medical cannabis cultivation and processing projects
in Greece- one in Epidaurus, Greece and the other in Thebes, Greece.
Kaya Kannabis- Epidaurus, Greece Project
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Site of Epidaurus Land
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GKC plans to cultivate and manufacture KAYS proprietary cannabis brands
(CBD/THC) from the Epidaurus Project for distribution in the Greek, German and
other EU markets as permitted by local regulations.
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Interior View- KAYS' newest project with 50K square feet of already constructed
buildings is designed to
fast-track sales of KAYS proprietary branded cannabis products to the EU.
The Epidaurus Project consists of 2 connected industrial buildings (already
constructed, approximately 50,000 square feet in total under-air space) situated
on 2.8 acres of land, with its own independent industrial electrical power
center and ample water supply to service the needs of the facility. The
Epidaurus Project will include 25,000 square feet of indoor cannabis
cultivation, a 15,000 square foot EU-GMP extraction and processing facility, and
a 10,000 square foot EU-GMP packing area. There is ample room for expansion with
room to construct an additional 15,000 square feet on site. The joint venture
has been awarded its development license to from the Greek authorities and is
awaiting project financing to complete the acquisition of the Epidaurus property
and complete the installation of EU Certified equipment to gain final licensing
of the facility.
The Epidaurus project is smaller in scale than the Company's 15-acre project in
Thebes, Greece, allowing KAYS to fast-track cultivation and processing of its
proprietary branded cannabis products for distribution in legal EU markets while
awaiting greater legal cannabis demand to emerge prior to developing a
large-scale capacity in Thebes.
46
Kaya Kannabis- Thebes, Greece Project
[[Image Removed]]
Kaya Kannabis Medical Cannabis Production Facility in Thebes, Greece (Project
Design Rendering)
The Thebes Project, as currently envisaged by management consists of up to
20,000 sq. meters of light deprivation greenhouses and 60,000 square feet of
structure to be used for storage, laboratory, processing, manufacturing,
logistics, and support/administrative space. The Thebes Project has already
obtained the initial cannabis construction license approvals from Greek
government authorities and is awaiting project financing.
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generated]]
Situated on 15 acres of land which GKC has contracted to purchase, the Thebes
Project is much larger than the Epidaurus Project and allows the Company "Room
to Grow" should the legal circumstances in a country or region suddenly permit
(i.e., German legalization of recreational cannabis and the subsequent rapid
rise in demand). Thebes, with large scale production and processing capabilities
provides KAYS the operational flexibility needed to secure and maintain market
position in a rapidly evolving market arena once legal cannabis demand warrants
an increase in capacity.
47
Israel
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Kaya Shalvah Cannabis Production Facility (Project Design Rendering).
Israel has been a pioneer in cannabis R&D for several decades, and is often
referred to as the "Silicon Valley" of the Global Medical Cannabis Industry.
Israel currently has the world's largest medical marijuana program and is the
largest importer of cannabis.
There is legislation under Knesset review to permit adult-use cannabis, making
the domestic Israeli market an attractive opportunity. Upon legalization of
adult use cannabis in Israel, KAYS expects to sell flower and oils, and as
permitted, the KAYS portfolio of brands in Israel, leveraging its adult use
market experience and Kaya Shack™ retail shops (through a local franchisee) to
serve the domestic Israeli market, and has begun to target distribution
agreements with the Israeli Pharmaceutical Industry.
We have chosen to become active in the Israeli cannabis market because of this
position as global center of cannabis science, where technologies are
specifically developed to enhance cannabis cultivation processes and yields, and
innovative consumer products are emerging that have potential interest for both
the medical and recreational markets throughout the world.
On March 30, 2021 the Company confirmed that its Israeli subsidiary, Kaya
Shalvah has been awarded its initial permit from the "YAKAR", the Department for
Medical Cannabis in the Israeli Ministry of Health, to develop an Israeli
cannabis cultivation and processing facility. This initial permit grants Kaya
Shalvah permission to proceed with its plans to develop commercial scale
cannabis cultivation and processing in Israel.
Kaya Shalvah is currently focused on two separate paths of development to launch
its Israel Operations- the first being through participation in the government
sponsored Greenegev Cannabis Ecosystem in Yerucham, Israel and the second path
being through potentially acquiring an interest in currently licensed medical
cannabis production and processing facilities that are already operating in
Israel.
48
Greenegev Cannabis Ecosystem, Yerucham, Israel
Under the leadership of its Mayor, Tal Ohana, Yerucham has embarked on a program
to transform the small desert town into "Greenegev", the first cannabinoid
ecosystem in Israel. The plans call for cultivation, processing and research
companies to concentrate their respective activities in Yerucham, attracting
services that provide each resident company with core advantages by virtue of
the cooperation and support the ecosystem community is uniquely positioned to
provide. Yerucham has a Development Zone A designation from the Israeli
government, making economic growth in the area a national priority and attaching
a wide range of financial incentives to companies therein establishing
operations.
Kaya Shalvah meets all the prescribed criteria and the licensing process is
progressing, with the full support and valuable assistance of the Yerucham
mayor's office and the municipal staff. Kaya Shalvah is also benefitting from
the support and guidance of Major General (Res.) Amram Mitzna, a former Yerucham
mayor and the current chairman of the Yerucham Fund.
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Kaya Shalvah is currently awaiting for the Israeli Government to proceed with
the land tender program (which has been delayed due to COVID 19 issues). Upon
commencement with the bidding program, Kaya Shalvah will submit its land
acquisition bid for 100 Dunams (approximately 25 acres) of land to the Israel
Land Authority, which is tasked with processing the applications for the land
bids that are part of the highly sought after Greenegez Canabis Center in
Yerucham, Israel.
Pending receipt of a successful bid through this program, once Kaya Shalvah
develops the site in accordance with all Israeli regulations, and meets all
requisite standards, the final cultivation and processing licenses will be
issued.
The Company has established a Board of Directors for Kaya Shalvah that includes:
Offer Lapidot (Brig. Gen. Res.)
A career fighter pilot in the Israel Air Force (1969-1996), Offer served two
tours as a fighter squadron commander, and served as commander of the Flight
Training School, commander of the Ramon Air Force base, and Head of Planning &
Organization (at Air Force HQ). Offer holds the rank of Brigadier General. After
his military service Offer spent a number of years in senior management
positions at Israel's leading retailer, as well as CEO of a high-tech start-up,
only to miss flying and return to the skies as a pilot for El Al airlines. After
his mandatory retirement from commercial flying, he joined the El Al executive
team as the Director of Safety and Quality for El Al Airlines. Offer studied for
his B.A. degree in Economics at Bar Ilan University, and holds an M.S. in
Management from the Naval Post Graduate School in Monterey, California.
49
Ilan Horesh (Col. Res.)
Ilan was a career Israel Defense Forces officer, retiring in 1993 after 23 years
at the rank of Colonel. During his career Ilan held numerous command positions
with combat ground forces. His final assignment in the IDF was Commander of the
School of Electronics and Computerization. After his military service Ilan
embarked on a career as an executive and leader in the Israeli high tech sector,
working with such companies as Pelephone, Bezek, Paz Oil and others. Ilan has
served on the Boards of a number of Israeli companies, including Taldor Computer
Systems, Ltd., Rakah Pharmaceutical Industry, Ltd., Ampa Investments, Ltd., and
Retalix, Ltd.
Joseph Gayer, Adv.
Joseph "Yossi" Gayer is one of the founders of the international law firm
ZAG-S&W. Yossi is a prominent expert in a number of legal fields, including
commercial litigation and contracts law, representing clients both on domestic
and international matters.
Yossi also represents Israel's leading professional athletes in all fields of
sports, including advising sports clubs, organizations, and sponsors in Israel
and abroad. His litigation practice has yielded many legal precedents that have
influenced the status of professional athletes, both in Israel and abroad, with
respect to their rights vis-a-vis employers, sports authorities, and various
statutory institutes. Yossi's expertise includes insurance and property law.
Yossi lectures at the Radzyner School of Law at the Interdisciplinary Center
(IDC) Herzliya.
Gadi Katz
Gadi is the founder of Total Immersion Swimming Israel "TISI", the Israel
franchise of a multinational corporation in the sports and leisure market. Gadi
has built TISI to a current 70 branches operating across Israel, serving
thousands of clients annually. Since founding TISI in 2006, Gadi has become
expert in online marketing and has development in-house a state of the art
marketing and sales Business Intelligence system. Gadi is also an expert in
business development, specializing in small and mid-sized companies. Prior to
TISI, Gadi was the co-founder and CFO of the American-Israeli Crisis and Issue
Management (AICIM) consulting firm. AICIM specialized in high-level advisory
services to politicians (including candidates for Head of State) and business
leaders globally. Early in his career Gadi practiced law at what is today
Israel's largest Law Office Meitar & Co., where he engaged in various business
focused matters such as Venture Capital, IPOs, M&As, Joint Ventures, Spin Offs
and Corporate Restructurings. Gadi holds a B.A. in Business Administration,
Magna Cum Laude, LL.B and an MBA.
Kaya Shalvah's supportive Board of Advisors includes:
Uzi Teshuva
Uzi is a second-generation Israeli farmer, active in agriculture since his
teenage years. Since 1991 Uzi has served as the CEO of a farm distributes its
agricultural products, grown using groundbreaking and innovative agricultural
methods. Uzi became the active Chairman of TAP, an agricultural engineering and
technology company specializing in the design, construction and management of
agricultural farms in numerous countries worldwide.
50
Elon Kaplan, Ph.D.
Elon, a Ph.D. in Organizational Psychology is the Founder and CEO of Cytegic, a
cutting-edge cyber-risk quantification solution predicated on the idea that
enterprise risk is a combination of three key elements: technology, people, and
business. Cytegic was recently sold to MasterCard. Elon brings to Kaya Shalvah
the guidance of a serial entrepreneur, a scientist and a cyber-security expert.
As a business leader, he excels at building exceptional teams and driving
innovative breakthroughs. As an applied behavioral scientist, he is trained in
specific modeling and statistical methodologies. Prior to Cytegic, Elon was
Founder and CEO of Gilon Yaad, Ltd., an organizational business strategy
consultancy, where he worked with many large companies, including PayPal, El-Al,
Johnson & Johnson, Bank Leumi, Bank HaPoalim, Discount Bank, Maccabi Healthcare,
and Comverse.
Rafi Cohen
Rafi is the Israeli Chief of Operations for Day Three Labs. Rafi has managed and
overseen small and large-scale cannabis research & development projects since
2015, specializing in medicinal, cosmetic , wellness and animal health product
development. For the past five years, Rafi has been dedicated exclusively to
working within the emerging Israeli and global cannabis industry, recognizing
the commercial and medicinal potential of cannabis. Rafi has distinctive
experience in cannabis research projects, product development, clinical studies,
investments, and joint ventures. Rafi began his career as a corporate attorney
with Fischer Behar Chen Well Orion & Co., where he focused on M&A and strategic
corporate development. Later he was a founding partner at Cohen, Light, Ziv and
Associates. Rafi has a B.ed. from Herzog College of Education, an MA from
Yeshiva University in New York City and an LL.B. from the Hebrew University in
Jerusalem.
Josh Rubin
Josh is the founder and CEO of Day Three Labs (DTL). Headquartered in Denver,
Colorado and with research operations in Israel, DTL seeks to disrupt the
cannabis industry by introducing Israeli cannabis related innovations to the
North American and global markets. Josh began his career in the cannabis
industry in 2017 as a consultant analyzing trends in the cannabis market.
Recognizing the opportunity to bridge the North American and Israeli cannabis
sectors, he launched DTL. Josh was well suited to establish DTL, for in addition
to his extensive network in Israel, he speaks Hebrew and has experience living
and working in Israel. During a five year period in Israel Josh studied at the
Hebrew University and the Interdisciplinary College in Herzliya (IDC), worked in
the Knesset, and worked for the International Institute for Counter-Terrorism as
a researcher. Josh even found time to volunteer as a medic for Magan David Adom.
Josh has a Masters of Business Administration from Johns Hopkins University
(Marketing), a Masters Degree from IDC in Government and a Bachelor of Arts
Degree from Queens College (Psychology & Philosophy).
Government Regulation
We are subject to general business regulations and laws, as well as regulations
and laws directly applicable to our operations. As we continue to expand the
scope of our operations, the application of existing laws and regulations could
include matters such as pricing, advertising, consumer protection, quality of
products, and intellectual property ownership. In addition, we will also be
subject to new laws and regulations directly applicable to our activities.
51
Any existing or new legislation applicable to us could expose us to substantial
liability, including significant expenses necessary to comply with such laws and
regulations, which could hinder or prevent the growth of our business.
Federal, state and local laws and regulations governing legal recreational and
medical marijuana use are broad in scope and are subject to evolving
interpretations, which could require us to incur substantial costs associated
with compliance. In addition, violations of these laws or allegations of such
violations could disrupt our planned business and adversely affect our financial
condition and results of operations. In addition, it is possible that additional
or revised federal, state and local laws and regulations may be enacted in the
future governing the legal marijuana industry. There can be no assurance that we
will be able to comply with any such laws and regulations and its failure to do
so could significantly harm our business, financial condition and results of
operations.
Our foreign operations will also be subject to comparable government regulation
in Greece, Israel and any other various foreign jurisdictions in which KAYS
intends to operate.
Competition
The legal marijuana sector is rapidly growing and the Company faces significant
competition in the operation of retail outlets, MMDs and grow facilities. Many
of these competitors will have far greater experience, more extensive industry
contacts and greater financial resources than the Company. There can be no
assurance that we can adequately compete to succeed in our business plan.
Employees
As of the date as of this Report, our Oregon operations have a total of 12-15
part-time store employees including budtenders, trimmers, growers, and 4
full-time employees, consisting of the Senior Vice President of Cannabis
Operations, the Vice President of Marketing and Brand development, and 2 store
managers. Additionally, we engage several consultants to assist with daily
duties and business plan implementation and execution. Additional employees will
be hired and other consultants engaged in the future as our business expands.
Potential Effects of the COVID-19 Pandemic on our Business
The adverse public health developments and economic effects of the COVID-19
pandemic in the United States and overseas could adversely affect the Company's
customers and suppliers as a result of quarantines, facility closures and
logistics restrictions in connection with the outbreak. More broadly, the
COVID-19 pandemic could potentially lead to an extended economic downturn, which
would likely decrease spending, adversely affect demand for our products and
services, slow our international expansion plans, harm our business, results of
operations and financial condition. The Company cannot accurately predict the
effect the COVID-19 pandemic will have on the Company.
52
Results of Operations
Three months ended June 30, 2022 compared to three months ended June 30, 2021
Revenues
We had revenues of $195,186, for the three months ended June 30, 2022, as
compared to revenues of $239,198 for the three months ended June 30, 2021.
Cost of Goods Sold
Our cost of goods sold for the three months ended June 30, 2022 was $58,698,
compared to cost of goods sold of $86,729 for the three months ended June 30,
2021.
Salaries and Wages
Salaries and Wages increased to $102,873 for the three months ended June 30,
2022 as compared to $87,638 for the three months ended June 30, 2021. The
increase in salaries and wages was due to normal increase in labor cost.
Selling, General and Administrative Expenses
Selling, general and administrative decreased to $120,501 for the three months
ended June 30, 2022 as compared to $204,198 for the three months ended June 30,
2021.
Professional Fees
Professional fees were $182,633 for the three months ended June 30, 2022, as
compared to $158,191 for the three months ended June 30, 2021.
Gain or Loss on Impairment of Assets
Gain on impairment of assets was $0 for the three months ended June 30, 2022, as
compared to $ 13,259 for the three months ended June 30, 2021.
Interest Expense
Interest expense and debt amortization expense increased slightly to $154,570
for the three months ended June 30, 2022 from $160,961 for the three months
ended June 30, 2021.
Amortization of Debt Discount
Amortization of debt discount was $90,122 for the three months ended June 30,
2022, as compared to $70,094 for the three months ended June 30, 2021.
Derivative Liabilities Expense
Derivative liabilities expense decreased to $0 for the three months ended June
30, 2022 from $186,017 for the three months ended June 30, 2021.
53
Change in Fair Value of Embedded Derivative Liabilities
Change in fair value of embedded derivative liabilities was an expense of
$3,638,827 for the three months ended June 30, 2022 compared to an expense of $0
or the three months ended June 30, 2021. These changes were due to change in
stock price as well as the volatility factors used in the derivative
calculations.
Other Income/(Loss)
Other income was $3,394,135 for the three months ended June 30, 2022 as compared
to a loss of $9,381,259 for the three months ended June 30, 2021. The increased
loss was due largely to a change in derivative liability expenses resulting from
a change in stock price as well as the volatility factors used in the derivative
calculations.
Net Income (Loss)
We incurred net income of $3,069,753 for the three months ended June 30, 2022,
as compared to net income of $9,096,960 for the three months ended June 30,
2021. The majority of our income during the three-month period ending June 30,
2022 was a result of the derivative liabilities associated with our Convertible
Debt and a reduction in our stock price as well as the less volatility factors
used in the derivative calculations. The non-controlling interest for the three
months ended June 30, 2022 and 2021 was a loss of $33,711 and a loss of $79,853,
respectively.
Six months ended June 30, 2022 compared to six months ended June 30, June 30,
2021
Revenues
We had revenues of $383,850 for the six months ended June 30, 2022 as compared
to revenues of $476,216 for the six months ended June 30, 2021. The slight
decrease in revenue is due to the normal fluctuation in the market and we are
evaluating the effect of the COVID 19 pandemic.
Cost of Goods Sold
Our cost of goods sold for the six months ended June 30, 2022 was $122,598
compared to cost of goods sold of $162,543 for the six months ended June 30,
2021. The decrease in cost of goods sold was due to normal fluctuation in the
wholesale cannabis market and revised pricing policies.
Salaries and Wages
Salaries and Wages decreased to $202,151 for the six months ended June 30, 2022
as compared to $174,621 for the six months ended June 30, 2021. The increase in
salaries and wages was due to an increase in staffing.
54
Selling, General and Administrative Expenses
Selling, general and administrative increased to $274,175 for the six months
ended June 30, 2022 as compared to $399,848 for the six months ended June 30,
2021. The decrease was primarily due increase in marketing and office expenses.
Professional Fees
Professional fees were $383,389 for the six months ended June 30, 2022 as
compared to $365,905 for the six months ended June 30, 2021. The increase in
professional fees was primarily related to increases in expenses for accounting,
auditing and consulting.
Interest Expense
Interest expense and debt amortization expense decreased to $307,439 for the six
months ended June 30, 2022 from $310,820 for the six months ended June 30, 2021.
The decrease was related to a decrease in debt incurred over the past 12 months
for our operations.
Amortization of Debt Discount
Amortization of debt discount was $157,204 for the six months ended June 30,
2022, as compared to $213,071 for the six months ended June 30, 2021.
Derivative Liabilities Expense
Derivative liabilities expense decreased to $0 for the six months ended June 30,
2022 from $566,080 for the six months ended June 30, 2021. The decrease was due
to change in stock price as well as the volatility factors used in the
derivative calculations.
Change in Fair Value of Embedded Derivative Liabilities
Change in fair value of embedded derivative liabilities was a gain of $3,089,822
for the six months ended June 30, 2022 compared to a loss of $5,262,894 for the
six months ended June 30, 2021. These changes were due to change in stock price
as well as the volatility factors used in the derivative calculations.
Net Income attributed to Kaya Holdings Inc.
We had net income of $ 1,971,853 for the six months ended June 30, 2022 as
compared to a net loss of $3,591,152 for the six months ended June 30, 2021.
The majority of our net income during the six months ended June 30, 2022 was a
result of the derivative liabilities associated with our Convertible Debt and a
reduction in our stock price as well as the less volatility factors used in the
derivative calculations. The non-controlling interest for the six months ended
June 30, 2022 and June 30, 2021 was a loss of $57,835 and $65,453 respectively.
55
Liquidity and Capital Resources
During the second quarter of 2022 our cash position decreased by $22,669 to
$46,605 and our negative working capital deficit was $5,272,239.
As of June 30, 2022, our working capital consisted of cash of $46,605,
inventories of $39,668 and prepaid expenses of $13,967 as compared to cash of
$565,979, inventories of $51,484 and prepaid expenses of $13,967, as of June 30,
2021.
Our current liabilities include accounts payable and accrued expenses of
$922,308, accounts payable and accrued expenses-related parties of
$158,912,_accrued interest of $1,449,064, current portion of lease liability of
$80,172, potential tax liability of $836,970, convertible notes payable- net of
discount of $25,000, notes payable of $9,312 and derivative liabilities of
$7,091722, as compared to accounts payable and accrued expenses of $918,148
accounts payable and accrued expenses-related parties of $141,990 accrued
interest of $1,152,783, current portion of lease liability of $202,722,
convertible notes payable- net of discount of $6,934,518, notes payable of
$9,312 and derivative liabilities of $4,980,563, as of June 30, 2021.
Financing Transactions
No financing transactions were entered into during the period.
Use of Proceeds
The proceeds from financing transactions that the Company may enter into will be
used to fund our growth plan, including the development, operation and expansion
of our Kaya Shack™ and Kaya Farms™ operations in Oregon, the development of our
new Kaya Shack™ branded cannabis products, the development of our planned Oregon
Psilocybin Business Plan and the groundwork required to initiate our planned
expansion through Kaya Brands International initiatives in Greece and Israel.
Plan of Operations
Management believes that further proceeds expected to be received from financing
transactions that it is seeking to enter into, combined with existing and
anticipated revenues, will alleviate the Company's financial difficulties to a
significant extent and will allow the Company to meet its anticipated working
capital needs for a period of between twelve and eighteen months from the date
of this report. However, there can be no assurance that further funding from the
contemplated financings will be achieved, or if achieved that they will be
successful to the level required to meet the Company's cash needs, or that
management's belief will be correct and that the Company will not sooner require
additional financing to meet its working capital needs prior to achieving
profitability or positive cash flow. Moreover, we may not be successful in
raising additional capital on commercially reasonable terms, if and when needed,
in which case our business, financial condition, cash flows and results of
operations may be materially and adversely affected.
56
Note Conversions
No notes were converted during the period.
Employee Stock Plan Issuances and Director and Officer Restricted Stock
issuances
No Employee Stock Plan Issuances or Director and Officer Restricted Stock
Issuances were issued during the period.
© Edgar Online, source Glimpses
KAYA HOLDINGS, INC. 
