International Cannabis
Company Kaya Holdings, Inc. Files
2019
Annual Report on Form
10-K
Detailing Launch of Kaya Brands International and Issuance of Greek
Cannabis License,
COVID-19 Operational Response Report
and 2019
Results of Operations
FORT
LAUDERDALE, FL -- May 21, 2020 -- InvestorsHub NewsWire
-- Kaya Holdings, Inc.
(OTCQB:KAYS),
announced that it has
released
fiscal
year 2019 results of operations
by filing its Annual Report on Form 10-K for the year ended
December 31, 2019 with the
SEC. KAYS
2019 10-K
highlights
include the
following
updates:
Launch of Kaya Brands International, Inc.
General:As
the first "touch the
plant"
U.S. cannabis company to operate inside the strict
regulatory confines of a public company and
after
six
(6) years of
operations in
Oregon,
perhaps
the most competitive cannabis market in
the
United States, KAYS has formed
Kaya Brands International,
Inc. ("KBI"),
to serve
as the vehicle from which KAYS will leverage its
operational
experience and
expand operations into
select and targeted global markets.
Greek
Cannabis License Issuance: KBI's
first EU
Project is a joint venture cultivation-for-export cannabis project
with Athens based
Greekkannabis
PC
("GKC"). GKC
was
recently
issued its Cannabis Installation License by the Greek
Government, permitting the
commencement of construction of a planned
470,000
square
foot Medical
Cannabis Cultivation and
Processing Facility on 15 acres
of land in Thebes,
Greece.
The Company estimates total farm production, once completely
constructed and operating at full capacity, to be at a minimum of
approximately 225,000 pounds of medical
cannabis
annually, which is targeted
for export to the European
Union and other select
markets.
Greenegev,
Israeli Medical Cannabis
Project: KBI
has been invited to
participate in
Greenegev,
the first cannabinoid ecosystem, which is
currently
under development
in
Yerucham,
Israel. KBI is
currently evaluating
a
potential site for
construction of
a medical
cannabis
production
facility
which
would be designed to leverage Israel's
depth of cannabis research and advanced agricultural
practices. Greenegev
is
intended
to bethe
equivalent of
a "Silicon
Valley" for
medical
cannabis
being
developed with the full support of the Israeli
Government – including grants,
licensing assistance and public/private initiatives.
Moreover,
the Israeli government has recently approved the growth and
production of medical cannabis for export. Private
sector partcipants
in Greengev
include
companies such as Perrigo, a NYSE traded
Irish pharmaceutical
company which
recently
began expanding into the
cannabis and
CBD sectors.
For more
information on our Greek and Israeli projects, please access this
link:
https://www.dropbox.com/sh/7dxarx89uxrjvkq/AABnkR1ou6uAr4Be0ehZCPn5a?dl=0
KAYS
intends
to
maintain a majority ownership of KBI, but is also
considering, in
conjunction with its advisors, various strategies by which KBI can
enhance its value to KAYS shareholders. Potential strategies
under consideration include a dividend of a portion of KBI's common
stock to KAYS shareholders or otherwise spinning off KBI as a
separately trading public company. There can be no
assurance given as to whether or when KAYS will deterimine
to
implement a specific strategy, if ever, and to successfully
implement any strategy selected..
"We have
spent the past 24 months developing the opportunities that
will we believe that
will allow KAYS to
take
advantage of potential foreign expansion opportunities, without
waiting for development of domestic regulatory cohesion,
which has inhibited growth for companies in U.S. cannabis
industry, despite
their ceployment
of
significant capital resources. commented KAYS CEO
Craig Frank. "Rather we have expended
comparatively less capital resources
to
secure
in-depth operational experience that we anticipate
can
now be
leveraged
in
environments more welcoming to an emerging cannabis industry. Both
Greece and Israel have demonstrated the
willingness to becomeglobal
centers
of cannabis excellence
and
we believe that
KAYS,
through KBI, has the opportunity
to become be a visible and
leading player in the primary and lucrative cannabis markets now
emerging. As we see the
so-called industry leaders pulling back from their massive
acquisition and "lead by size" strategies where hundreds of
millions of dollars were wasted, we believe the more considered and
paced strategy we have always embraced – gain knowledge, gain
experience, then execute – will now prevail as the more reasoned
and ultimately more successful model."
COVID-19
Operational Response
All of
our Kaya Shack™ retail cannabis
stores and Kaya Farms
production facilities
in Oregon
continue to be fully operational and the Company is working closely
with local and
state authorities to
ensure it is following or exceeding the stated guidelines related
to COVID-19. Please follow this
link to see a video of how we are operating with our Covid-19
inspired safety enhancements to protect our employees
and serve our Kaya Shack
medical and recreational marijuana customers via
in-store sales, curbside
pickup and delivery from our signature Kaya Delivery
Vehicles:
https://www.youtube.com/watch?v=-6TpVuFzxM8
2019
Results by the Numbers.
Revenues-
We had
revenues of $1,014,266 for the year ended December 31, 2019, as
compared to revenues of $1,136,599 for the year ended December 31,
2018, a decrease of 10% due to the closing of a
non-performing
store as we looked to
reduce expenses and consolidate operations as we transition to
international operations.
Operating
Expenses- Total operating
expenses were $2,264,883 for the year ended December 31, 2019,
as compared to
$2,870,627 for the year ended December 31, 2018 as we were able to
reduce our salaries and
professional Fees
significantly.
Debt
Restructuring- At December 31, 2019 we had approximately $7.2
million in convertible debt due between January
1, 2020 and 2022 which we had
accumulated over the past six years to finance the development of
our cannabis operations and our
public
company overhead. We are pleased to confirm that
as of
January 1, 2020 we have refinanced
approximately $6.8 million
of this
debt so that no interest and principal payments are due until
January 1, 2024 and we are in the process of negotiating with the
remaining debt holders to further reduce those obligations as well
so that we may concentrate on utilizing funds raised through future
securities offering to pay down some accumulated professional fees
and operational expenses and target the balance for expansion and
building the Company as we move forward.
A copy of
the Company's Annual Report on Form 10-K for the year ended
December 31, 2019, complete with
pictures, store information and product testing as filed with the
SEC, is available online at www.sec.gov
or
at
www.otcmarkets.com.
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.
(www.kayaholdings.com)
Kaya
Holdings, Inc. ("KAYS")
is a touch-the-plant vertically integrated legal cannabis company
operating a number of majority-owned subsidiaries that retail,
cultivate, produce and distribute premium medical and recreational
cannabis products, including flower, concentrates, oils and
extracts,
cannabis-infused foods and beverages, 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.
KAYS
Cannabis operations are conducted under three main majority-owned
subsidiaries as further detailed below:
Marijuana
Holdings Americas, Inc. owns 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 that operate in the United States.
Kaya
Brands USA, Inc. owns a wide range of proprietary brands of
cannabis extracts, oils, pre-rolls, topicals, food and
beverages, cannaceuticals
and
related accessories.
Kaya
Brands International, Inc., was founded to serve as the vehicle for
the Company's non-U.S. operations including retail franchising in
Canada and cultivation activities in Greece and Israel.
Marijuana
Holdings Americas, Inc.- 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
two
Kaya
Shack™ OLCC licensed marijuana retail stores to service the legal
medical and recreational marijuana market in
Oregon,
and is in
the process of relocating a third retail cannabis license to serve
as a delivery hub for the Eugene and
Southern
Oregon Cannabis
Market.
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 an 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.
Kaya
Brands USA, Inc.- Brand and Product Development
The
Company maintains a genetics library of over 30 strains of cannabis
and owns a number of proprietary brands in traditional and
innovative cannabis categories including Kaya Buddies™ pre-rolls,
Really Happy Glass™ cannabis accessories, and Kaya Gear™,
company-related and cannabis-centric fashion. These brands are
currently available at Kaya Shack™ stores.
The
Company has made advances in the development of its
Kumba
Extracts™, Syzygy
Extracts™, Pakalolo Juice Company™ Soothe Topicals™, Tony Giggles
Pleasure Foods™ (frozen infused Italian entrees), Uptown Shaman™
(cannaceuticals),
and Kaya Yums™
(chocolates, gummies, power bars) brands. Pending approval of our
production and processing license, KAYS intends to begin a
multi-state rollout planned in 2020 to the extent permitted by U.S.
legal infrastructure. These brands are intended for all Kaya Shack™
stores, both corporate-owned and franchised.
Kaya
Brands International, Inc.- Foreign Cannabis
Operations
After
over six
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.
Kaya
Kannabis-
Kaya Farms™ 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 a total of 425,000
square feet of light deprivation
greenhouses situated on fifteen acres of land, and
supported
by an additional 50,000 sq. feet building for workspace, storage
and administrative offices. The Company estimates total
farm
production, once completely constructed and operating at full
capacity, to be at a minimum of approximately 225,000 pounds of
premium grade cannabis annually.
Licensing
Status: On April 22, 2020
KAYS/KBI received confirmation from their Greek Counsel that the
Greek Government had awarded the crucial Installation License for
the project.
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.
Kaya
Farms™ Israel
KAYS,
through KBI is seeking to establish a state of-the-art cannabis
cultivation facility on approximately 50 acres of prime
agricultural land.
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.