Marijuana Retailer and Producer Kaya
Holdings' 10-Q Reports 76% Revenue Increase, Lower Operating
Costs, Fourth Kaya Shack
Dispensary Opening and Progress
on Licensing of 26 Acre Kaya Farms Marijuana Grow
Complex
Fort Lauderdale, FL -- May
16, 2018 -- InvestorsHub NewsWire -- Kaya Holdings, Inc. (OTCQB:KAYS),
filed its Quarterly report after close of market yesterday
afternoon. Developments include a 76% year-over-year increase in
revenues for Q-1, an approximately 50% reduction in selling,
general and administrative expenses, the launch of our fourth OLCC
Licensed Kaya
Shack in Central Salem Oregon and significant progress on the
licensing of our
26-acre
Kaya
Farms Marijuana Grow Complex to
feed the Kaya Shack
supply
chain.
By the
Numbers. We had revenues of $255,365
for the three months ended March 31, 2018, as compared to revenues
of $144,861 for the three months ended March 31, 2017. The increase
is largely due to the fact that in 2017 our Portland Store was
unable to process recreational sales for the first quarter due to a
delay in receiving our Portland City Licensing. As a result,
revenues from legal recreational sales were largely generated from
retail sales at one outlet during most of the 2017 period, as
compared to three outlets in the comparable period in 2018. All
four of the Company's retail locations have now received full OLCC
licensing.
Selling, general and
administrative costs decreased to $164,088 for the three months
ended March 31, 2018, as compared to $344,415 for the three months
ended March 31, 2017. This decrease reflects the fact that some of
the expenses associated with this category have decreased over time
due to investments made in the corresponding period for
2017.
We opened another
Kaya
Shack Marijuana
Superstore. Our
fourth Kaya Shack is located in North Salem, Oregon in a strip mall
directly behind Carl Jr. and Popeye's Chicken restaurants and
alongside a microbrewery sports bar, laundromat, and Hawaiian
sandwich shop. The area around the shop is primarily commercial
with residential complexes to be constructed in 2018. It has a
footprint of approximately 3100 square feet and utilizes the Kaya
Shack
Marijuana Superstore model. We believe
the
store completes
our geographic penetration of the Salem, Oregon market.
We
received Kaya ShackTM OLCC
Marijuana Recreational Retailer License #4 on February 15, 2018.
After various construction and permitting delays, on April 12, 2018
the location opened for business with both recreational and medical
sales.
Kaya Farms Medical
and Recreational Marijuana Grow and Manufacturing Complex.
On April 20, 2018 the Company was notified by the Linn County,
Oregon Planning and Building Department (the "Department") that the
site plan review for the indoor and outdoor marijuana portion grow
operation on the 26.50-acre property (which encompasses
approximately 86,000 square feet of the Company's 101,000 square
feet of the Company's submitted buildings) had been approved.
However, the conditional use permit for marijuana processing (which
encompasses approximately 15,000 square feet of the Company's
101,000 square feet of the Company's submitted buildings) had been
denied, largely due to the scale and coverage of the proposed
processing operation. Additionally, local residents have requested
a hearing to appeal the approval of the site plan based on concerns
that a portion of the approved site plan that supports the 36,000
square feet of green houses for outdoor growing is not eligible for
the Irrigation rights that the Company possesses for the
Property.
The Company reviewed its
site plan for the indoor and outdoor marijuana operation on the
26.50-acre property which encompasses approximately 86,000 square
feet of the Company's 101,000 square feet of the Company's
submitted buildings application with the Department, and is
confident that the Company's water usage plan (as already submitted
prior to the Department's approval of the site plan) is legal and
will withstand any appeal. However, the Company is planning a large
Complex to address its supply chain for both recreational and
medical products which it intends to operate well into the future,
and welcomes the opportunity to address any concerns of the
neighboring residents. Additionally, the Company intends to submit
a new application for its conditional use permit for marijuana
processing that it believes adequately addresses the concerns
addressed by the Department.
Financing
Update. During
the first quarter the Company reached an agreement with the Cayman
Venture Capital Fund, its Institutional Financing Lender
which
to date has provided KAYS with approximately $5.3 million in
capital through loans and restricted stock
purchases,
to
increase the total
amount of funding tied
to its
Current Financing Agreement to a total of $7.75 million (of which
approximately $5.8 million remains), and
extend all debt until January 1, 2020 so that available cashflow
can be utilized
for development of the Company's
business plan.
Additionally,
the Company has begun to develop access to other sources of long
term investment capital, some
details
of which are in the 10-Q.
"We
believe this Q represents the beginning of our tipping point toward
profitability", stated Kaya Holdings CEO, Craig Frank. "We always
believed that if we were to grow the company organically, as
opposed to through acquisition, we would have to establish a
significant retail base for access to end customers, control our
production to control costs and selection, and establish brands
with sufficient distinction to stand out in a crowded field. This Q
report shows that we have succeeded in establishing our retail
base, have a brand that is being embraced and have secured some of
the licenses we need to control production. As we continue to
develop and execute our business plan we will remember this period
as the time it all came together".
A copy of the Company's
Quarterly Report on Form 10-Q for the period ending March 31, 2018,
complete with pictures, complete information on the zoning and
licensing status of the status of the 26-acre parcel which it has
targeted for development of the Kaya Farms Medical and Recreational
Marijuana Grow and Manufacturing Complex, as filed with the SEC, is
available online at www.sec.gov.
To
see video of the Kaya
Farms (Architect's
Project Rendition) please go
to: https://www.dropbox.com/s/3po31ksdilcl9l9/Kaya_Farms%20Final.mp4?dl=0
To
see video of the Kaya Shack
OLCC Licensed Stores please go to: https://www.dropbox.com/s/49i5emi3wc0ha0d/Store%20Tour%20Final%20%28hi-res%29.mp4?dl=0
About Kaya
Holdings, Inc. (www.kayaholdings.com)
KAYS (OTCQB:KAYS),
through subsidiaries, produces, distributes or sells legal premium
medical and recreational cannabis products, including flower,
concentrates and oils, and cannabis-infused
foods.
In 2014, KAYS, became the first publicly
traded company to own and operate a Medical Marijuana Dispensary.
KAYS presently operates
four Kaya Shack OLCC
licensed marijuana retail stores to service the legal medical and
recreational marijuana market in Oregon (www.kayashack.com). Additionally, KAYS recently acquired a
26 acre parcel which it
has targeted for development of the Kaya Farms Medical and
Recreational Marijuana Grow and Manufacturing
Complex.
IMPORTANT DISCLOSURE: KAYS is planning
execution of its stated business objectives in accordance with
current understanding of State and Local Laws and Federal
Enforcement Policies and Priorities as it relates to Marijuana (as
outlined in the Justice Department's US Attorney General Jeff
Sessions Memo dated January 4, 2018, and subsequent commentary from
US Attorney for the District of Oregon Billy Williams), and plan to
proceed cautiously with respect to legal and compliance issues.
Potential investors and shareholders are cautioned that KAYS and
MJAI will obtain advice of counsel prior to actualizing any portion
of their business plan (including but not limited to license
applications for the cultivation, distribution or sale of marijuana
products, engaging in said activities or acquiring existing
Cannabis production/sales operations). Advice of counsel with
regard to specific activities of KAYS and MJAI, Federal, State or
Local legal action or changes in Federal Government Policy and/or
State and Local Laws may adversely affect business operations and
shareholder value.
Forward
Looking Statements
This press release includes statements that may constitute
"forward-looking" statements, usually containing the words
"believe," "estimate," "project," "expect" or similar expressions.
These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ
materially from the forward-looking statements. Factors that would
cause or contribute to such differences include, but are not
limited to, acceptance of the Company's current and future products
and services in the marketplace, the ability of the Company to
develop effective new products and receive regulatory approvals of
such products, competitive factors, dependence upon third-party
vendors, and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission. By making
these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes
after the date of this release.
For more information contact Investor Relations:
561-210-7664