FORT LAUDERDALE, FL / ACCESSWIRE / May 20, 2020 / 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:
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.
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About Kaya Holdings, Inc.
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,
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.
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