International Cannabis Company Kaya
Holdings, Inc.
(OTCQB:KAYS)
3rd Quarter 2019 10-Q
Details Lower Domestic Costs,
Results of 2019 Fall Kaya Farms™ Fall
Production Run for Hash Oil and Developments
in KAYS' Expansion into
International Cannabis Markets
Fort
Lauderdale, FL -- November 20, 2019 -- InvestorsHub NewsWire
-- Kaya
Holdings, Inc. (OTCQB:KAYS)
("KAYS"),
an international
retailer
and producer of legal medical and recreational cannabis, today
announced that it had filed its Quarterly Report on Form 10-Q for
the quarter ended September
30,
2019 (the
"Form 10-Q")
with
the Securities and Exchange Commission after the close of market
yesterday afternoon.
The
Form 10-Q contains financial results for the three and
nine
month
periods ending September
30,
2019, the 2019 Fall
Production Run Reports for Kaya Farms™ Hash Oil and
details
regarding
developments
in the transition
into international
cannabis
markets.
Financial Results for the nine
months ended September
30, 2019 versus the nine
months ended September
30, 2018. Revenues
were
off roughly 15% due to our
change
of focus to international markets ($721,000
for the nine
months
ending September
30,
2019 versus $850,000
for the same period in 2018) but our Operating Expenses decreased
to $1,359,000
from $2,860,000
and our Operating Loss decreased to $975,000
from $2,367,000
for the same periods (approximately a 53% reduction in operating
expenses and a 60% reduction in operating losses for the
nine
months
ending September
30,
2019 versus the same period in 2018). Additionally,
the
sum of our
interest
expense and debt amortization expense decreased to
approximately
$1.51
million
for
the nine
months
ended September
30,
2019 from $2.37
million for
the nine
months
ended September
30,
2018 due to lesser debt incurred over the past 12 months.
Please read our 10-Q for
Complete Financials and
Management Discussion and Analysis.
Kaya Farms 2019 Fall Hash
Oil Production Run Test
Results. The
2019 Fall
Kaya
Farms™ Hash
Oil Production Runs at
Kaya Farms yielded five
varieties of Hash-Oil posting
test results of total cannabinoid content in excess of
eighty
(80)
percent:
- Chem
91- 88.23%
- Golden
Ticket- 82.02%
- Kaya
Blend- 88.21%
- Lucky
Monkey-
88.58%
- Strawberry
Banana- 86.74%
(Note:
These concentrates were
produced under contract for Kaya Farms by a third party
while we
await licensure of our
production
facilities.)
Developments in
our Expansion into International Cannabis
Markets. As previously
disclosed in a Current Report
on Form 10-Q filed with the Securities
and Exchange Commission on November 4, 2019 and the attached
international
press
release
(the
"Form 8-K"), KAYS disclosed that
it had executed a memorandum
of understanding ("MOU") setting forth the
terms for the
acquisition
by its
newly formed subsidiary, Kaya Brands International, Inc.
("KBI"),
of a 50%
ownership interest in Greekkannabis, PC
("GKC"). GKC is an Athens,
Greece based cannabis company which has applied for and is awaiting
issuance of a medical cannabis cultivation, processing and export
license from the Greek government.
GKC
plans
to
establish its cannabis cultivation
and
processing facility on land already identified outside of
Athens, Greece. Project management
envisages 3 stages of development, each comprised of 125,000 square
feet of light-deprivation greenhouse cultivation. Each phase is
expected to produce 93,600 pounds of premium medical cannabis, for
an anticipated total project capacity of not less than 280,0000
pounds annually for distribution throughout Europe and other select
markets. Greece, as a European
Union nation, has easy access to the European market.
The MOU
sets forth an agreement in principle, pursuant to which in
consideration for KBI providing the necessary expertise related to
cannabis cultivation, processing, brand development and other
matters, KBI will have the right to acquire a 50% ownership
interest in GKC by reimbursing GKC for 50% of its license
application costs (with allowances for KBI's expenses as well).
Consummation of the transaction contemplated by the MOU is subject
to, among other customary conditions, satisfactory completion by
KBI of its due diligence review of GKC, the drafting, execution and
delivery of definitive transaction documentation and final
license approval and issuance
by the Greek government.
"We have
just completed an initial due diligence trip to Athens, Greece
regarding the proposed acquisition of the interest in GKC,"
confirmed William David
Jones, KAYS
Senior Advisor for Business Development, Licensing and Financial
Operations. "Over a series of three days we met extensively with
GKC (the principals, their agents and the project technical
adviser) and conducted a site review of the property for which the
licensure has been submitted, met with a member of the Agricultural
University of Athens that was involved in drafting the Greek
Cannabis Licensing Statutes and consulted with a former Minister of
the Greek Government that gave us valuable input regarding the
project and insight into the future of Cannabis Markets in Greece.
Additionally, we met with KAYS lawyers at the Athens-based
law firm of Dalakos
Fassolis
Theofanopoulos
(https://dftlaw.gr/) who advised us on
the next steps to complete the due diligence review prior to
entering final negotiations with GKC".
"The
MOU marks the
continuation of our new strategic positioning, first launched with
our Canadian franchise program," remarked KAYS'
CEO Craig Frank. "We have elected to postpone
our domestic
development
plans
until such time as federal law permits responsible and sensible
expansion. Until such time, we will continue to
explore international opportunities and execute on those
that fit
our
coordinated international growth strategy. Greece begins a new era
for KAYS."
For
further information regarding the MOU and the
proposed transaction with GKC, please refer to the Form 8-K and
Form 10-Q filings, which may be accessed at www.sec.gov
Note: To be advised of all upcoming News Releases and
shareholder emails please go to www.kayaholdings.com and add your email to
our notification list.
About Kaya Holdings, Inc. and Kaya Brands
International, Inc.
(www.kayaholdings.com)
Kaya
Holdings, Inc. ("KAYS")
is a vertically integrated legal cannabis enterprise that produces,
distribute and/or sells premium medical and recreational cannabis
products, including flower, concentrates, oils and extracts,
cannabis-infused foods, topicals and cannaceuticals. KAYS is a
fully reporting, US-based publicly traded company, listed for
trading on the OTCQB Tier of the over-the counter market under the
symbol OTCQB:KAYS.
Brands
owned and operated by the KAYS include the Kaya Shack™ brand of
licensed medical and recreational marijuana stores (www.kayashack.com)
and the Kaya Farms™ brand of cannabis production and processing
operations. Other Kaya brands in the extract, oils, edibles,
topicals, accessory and cannaceuticals categories are fully
developed and pending launch.
Kaya
Brands International, Inc., is the subsidiary formed by KAYS to
serve as the corporate home for KAYS expansions abroad.
U.S. Cannabis
Operations
Kaya Shack™ Retail Cannabis Stores
In
2014, KAYS became the first United States publicly traded company
to own and operate a Medical Marijuana Dispensary. KAYS presently
operates three Kaya Shack™ OLCC licensed marijuana retail stores to
service the legal medical and recreational marijuana market in
Oregon.
Kaya Farms™
Eugene, Oregon Indoor Grow, Processing &
Cannaceutical
Facility: KAYS
has developed its own proprietary Kaya Farms™ strains of cannabis,
which it grows and produces (together with edibles and other
cannabis derivatives) at its 12,000 square foot indoor grow and
cannabis manufacturing facility in Eugene, Oregon, capable of
producing approximately 1,500 pounds of premium
cannabis annually, with the capacity for expansion. The Company
also plans to use the space for production of oils, concentrates,
extracts, edibles, and cannaceuticals. KAYS is currently conducting
limited operations at the facility pending approval transfer of the
production and processing licenses to KAYS by the Oregon Liquor
Control Commission (the "OLCC"),
the Oregon state regulating agency which regulates legal cannabis
production, processing and sale.
Lebanon, Oregon Farm & Greenhouse
Facility: KAYS
owns a 26-acre parcel in Lebanon, Linn County, Oregon which it
intends to construct a 85,000-square foot Kaya Farms™ greenhouse
cultivation and production facility. To date KAYS has received Linn
County Zoning approvals and upon issuance of OLCC Licensing it will
begin construction. The farm is intended for immediate development
and provides the Company with a potential additional capacity of
more than 100,000 pounds annually, to be expanded once export from
Oregon to other U.S. States and foreign countries where cannabis
use is legal is permitted. Kaya Farms™ operates in accordance with
a Grow Operations manual, as well as manuals for compliance,
employment matters and safety.
Brand and Product Development: The
Company maintains a genetics library of over 30 strains of cannabis
and has also formulated various edibles, cannabis derivatives and
marijuana cigarettes under Kaya owned brand names. Pending approval
of our production and processing license, the Company has made
advances in the development of its Kumba Extracts™, Syzygy
Extracts™, Pakalolo Juice Company™ and Kaya Yums™ brands of
extracts, oils, vape cartridges, beverages and a variety of
edibles, respectively. The brands join the Company's Kaya Buddies™
pre-rolls, Kaya Gear™ t-shirts, and Really Happy Glass™ accessories
already available at Kaya Shack™ stores. Upon successful completion
of financing and licensing, KAYS intends to begin a multi-state
rollout planned in 2020 to the extent permitted by U.S. legal
infrastructure.
International
Cannabis Operations- Kaya Brands International,
Inc.
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 a
subsidiary, Kaya
Brands International, Inc. ("KBI").
to leverage its experience and expand into worldwide cannabis
markets. KBI's current operations and initiatives
include:
Canadian Franchising: KAYS
has targeted Canada for its first international sale and operation
of Kaya Shack™ cannabis store franchises. KAYS has entered into an
area representation agreement with The Franchise Academy (a leading
Canadian Franchise Development and Sales Group)
to implement the Kaya
Shack™ Retail
Cannabis Store program in Canada (the only G7 country that has
legalized both medical and recreational cannabis production, sale
and use on a national level). The agreement targets 75-100 Kaya
Shack™ Cannabis Retail locations throughout Canada through a
multi-year structured rollout, subject to licensing and market
conditions.
The
Franchise Academy (http://www.franchiseacademy.ca)
and its founder Shawn Saraga, is a member and national sponsor of
the Canadian Franchise Association. With over 15 years of industry
experience and having successfully closed over 700 franchise
agreements and leases across Canada, the Franchise Academy has the
knowledge, expertise, network and dedication to assist select
franchisors enter the Canadian market.
Additionally,
KAYS has retained Toronto, Canada based law firm of Garfinkle
Biderman, LLP to prepare the Franchise Disclosure Documents and
related items for the sale of Kaya Shack™ cannabis store franchises
in Canada. We expect the franchise sale and placement effort
throughout Canada to progress over the next 3-24 months. KAYS plans
to ultimately expand its franchise operations to the U.S., as
regulations and laws permit.
Greece
KAYS
has entered into a Memorandum of Understanding
("MOU")
setting forth an agreement in principle for KBI to acquire a 50%
ownership interest in Greekkannabis, PC
("GKC").
GKC is a recently formed Athens, Greece based cannabis company
which has applied for and is awaiting issuance of a medical
cannabis cultivation, processing and export license from the Greek
government.
The
MOU sets forth an agreement in principle, pursuant to which in
consideration for KBI providing the necessary expertise related to
cannabis cultivation, processing, brand development and other
matters, KBI will have the right to acquire a 50% ownership
interest in GKC by reimbursing GKC for 50% of its license
application costs (with allowances for KBI's expenses as well).
Consummation of the transaction contemplated by the MOU is subject
to, among other customary conditions, satisfactory completion by
KBI of its due diligence review of GKC, the drafting, execution and
delivery of definitive transaction documentation and final license
approval and issuance by the Greek government.
GKC
plans to establish its cannabis cultivation and processing facility
on land already identified outside of Athens. Project management
envisages 3 stages of development, each comprised of 125,000 square
feet of light-deprivation greenhouse cultivation. Each phase is
expected to produce 93,600
pounds of premium medical cannabis, for an anticipated total
project capacity of not less than 280,0000 pounds annually for
distribution throughout Europe and other select markets.
In
consideration for KBI providing the necessary expertise related to
cannabis cultivation, processing, brand development and other
matters, GKC has extended an option to KBI to acquire a 50%
ownership interest in GKC by reimbursing GKC for 50% of the license
application costs (with allowances for KBI's expenses as well). The
agreement is subject to due diligence review by KBI and final
licensure by the Greek Authorities.
KAYS
and KBI are represented in Greece by the Athens based law firm
of Dalakos
Fassolis
Theofanopoulos
(https://dftlaw.gr/). The
firm has developed a long-established and well-respected commercial
legal practice and has developed a wide international network of
correspondent relationships with overseas law offices throughout
the world.
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.
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, 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
SOURCE: Kaya
Holdings, Inc.
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