10-K: Kaya Holdings Faces Financial Headwinds Despite Psychedelic Venture; Suspends Payroll, Eyes Restructuring

Kaya Holdings, a holding company in the wellness sector, reports a net loss for 2024 and suspends payroll due to capital constraints, despite progress in its psychedelic treatment center operations.

Summary

• Kaya Holdings, Inc. (KAYS) is a holding company focusing on wellness and mental health through psychedelic treatment clinics, medical and recreational cannabis, and CBD products.
• The company's legal medical and recreational marijuana business has not generated sufficient revenue to achieve profitability.
• KAYS has reduced its US retail operations and expanded into establishing a psilocybin therapy and treatment center in Portland, Oregon.
• The psilocybin treatment center has generated limited revenues to date.
• In April 2025, KAYS suspended payroll to its employees due to capital constraints and is evaluating the operational structure of the facility with a view to restructuring operations in order to generate greater revenues.
• KAYS generated revenues from continuing operations of $7,134 for the year ended December 31, 2024, compared to $0 for the year ended December 31, 2023.
• Revenues from discontinued operations totaled $28,009 in 2024, compared to $196,294 in 2023.
• General and administrative expenses from continuing operations were $605,388 for the year ended December 31, 2024, compared to $269,772 in 2023.
• Professional fees from continuing operations were $1,384,954 for the year ended December 31, 2024, compared to $752,973 in 2023.
• Interest expense from continuing operations was $738,290 for the year ended December 31, 2024, as compared to $665,427 for the year ended December 31, 2023.
• The net loss attributable to the Company for 2024 was $2,080,856 and net income attributable to the Company for 2023 was $1,609,697.
• During 2024, the company's cash position increased by $10,560 to $10,778 and its negative working capital deficit was $8,035,323.
• The company will require additional financing to become commercially viable.
• The company's internal controls were not effective as of December 31, 2024.

Sentiment

Score: 3

Explanation: The document presents a mixed picture, with some progress in the psychedelic treatment business but significant financial challenges and operational concerns. The suspension of payroll and the need for additional capital raise concerns.

Positives

• Kaya Holdings has expanded into the psychedelic treatment space with The Sacred Mushroom facility.
• The company has experience in navigating Oregon's regulatory landscape for both cannabis and psilocybin.
• The company has an extensive genetic library of cannabis seeds.
• The company has a plan of operations and acknowledges that its plan of operations may not result in generating positive working capital in the near future.

Negatives

• Kaya Holdings has a history of losses and a significant working capital deficit.
• The company suspended payroll in April 2025 due to capital constraints.
• The company's internal controls were not effective as of December 31, 2024.
• The company's former retail cannabis business was discontinued due to insufficient profit.
• The company is dependent on its ability to raise capital.

Risks

• The company has a relatively short operating history in its current business.
• The company will require additional financing to become commercially viable.
• The company relies on certain key individuals, and the loss of one of these key individuals could have an adverse effect on the Company.
• Marijuana and Psilocybin remains illegal in the United States under federal law.
• The marketing and market acceptance of marijuana and psilocybin may not be as rapid as KAYS expects.
• The company's business activities are part of emerging industries.
• The company's business could be affected by changes in governmental regulation.
• The company will likely face significant competition.
• The company has borrowed and may be required to borrow funds in the future.
• Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity.
• The company's internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
• The costs of being a public company could result in us being unable to continue as a going concern.
• The market for the KAYS Shares is extremely limited and sporadic.
• KAYSs common stock is a penny stock.
• The market for penny stocks has experienced numerous frauds and abuses that could adversely impact KAYSs common stock.
• FINRA sales practice requirements may also limit a stockholders ability to buy and sell our common stock.
• The price of our common stock may become volatile, which could lead to losses by investors and costly securities litigation.
• If securities analysts do not initiate coverage or continue to cover our common stock or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our common stock.
• The board of directors of KAYS has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to common stockholders and with the ability to adversely affect common stockholder voting power and rights upon liquidation.
• The ability of our principal stockholders, including our CEO, to control our business may limit or eliminate minority stockholders ability to influence corporate affairs.
• We do not expect to pay cash dividends in the foreseeable future.
• The conversion of the 40 shares of KAYS outstanding Series D Preferred stock by the CEO and an unrelated third-party stockholder would result in the issuance of an additional 27,715,222 shares of KAYS common stock, (without taking into effect the conversion into shares of KAYS common stock of any or all outstanding convertible debt described in this prospectus).
• Future sales of shares of KAYS common stock pursuant to Rule 144 under the Securities Act could adversely affect the market price of KAYSs common stock.
• Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.
• You may experience dilution of your ownership interests because of the future issuance of additional shares of common stock.
• We have agreed to indemnify our officers and directors and a Key Consultant against lawsuits to the fullest extent of the law.

Future Outlook

Management believes that it will require additional capital, in addition to anticipated revenues from operations to fund expansion of the Companys operations and ultimately achieve profitability. The Company intends to seek such additional capital from further private offerings of equity and/or debt securities. However, 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.

Management Comments

• Management believes that it will require additional capital, in addition to anticipated revenues from operations to fund expansion of the Companys operations and ultimately achieve profitability.
• Management plans include the sale of additional equity and debt securities, alliances and/or partnerships with entities interested in and having the resources to support the further development of the Companys business plan, business transactions to assure continuation of the Companys development and operations, and development of a unified brand and the pursuit of licenses to operate recreational and medical marijuana facilities under the branded name.

Industry Context

The document provides insight into the challenges and opportunities within the emerging legal cannabis and psychedelic medicine industries, highlighting the regulatory complexities, competition, and capital-intensive nature of these sectors.

Comparison to Industry Standards

• The document mentions companies like Compass Pathways, ATAI Life Sciences, and Cybin, which are developing synthetic versions of psilocybin.
• KAYS believes that its facility offers a superior setting, broader activity and treatment options with pricing at or near the lower range, thereby enabling us to deliver a superior treatment experience at a much lower price than the competition, while still achieving profitability.
• 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.
• According to Statista, cannabis is expected to reach a legal market of 74 billion USD by 2029, for a CAGR of 3.01%.
• Prohibition Partners, expects the North American market to remain the worlds 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.

Legal Proceedings

• On October 17, 2024, the Company reached a settlement agreement with P3 Distributing L.L.C. in connection with a lawsuit filed in the Marion County Circuit Court, Case No. 24CV08588.

Related Party Transactions

• On September 5, 2024, the Board of Directors approved the issuance of 1,000,000 shares of common stock to FDT Oregon 1 LLC owners who are also the Companys related parties to acquire 51 % equity interest of FDT Oregon 1 LLC after January 1, 2025 per the agreement.

Stakeholder Impact

• Shareholders may experience dilution due to potential future equity offerings.
• Employees are impacted by the suspension of payroll.
• Customers of The Sacred Mushroom may be affected by potential restructuring of operations.

Next Steps

• The company is evaluating the operational structure of The Sacred Mushroom facility with a view to restructuring operations in order to generate greater revenues.
• The company intends to seek additional capital from further private offerings of equity and/or debt securities.
• The Company plans to pursue a potential sale of the MJAI business and remaining assets in the first quarter of 2025.

Key Dates

Keywords

Kaya Holdings, psilocybin, cannabis, psychedelic treatment, financial results, The Sacred Mushroom, MJAI, convertible debt, internal controls, Oregon, KAYS, FDT, revenue, loss, liquidity