Kaya Holdings' Losses Mount Amid Derivative Surge, Cannabis Exit

Ticker: KAYS · Form: 10-Q · Filed: Aug 27, 2025 · CIK: 1530746

Kaya Holdings, INC. 10-Q Filing Summary
FieldDetail
CompanyKaya Holdings, INC. (KAYS)
Form Type10-Q
Filed DateAug 27, 2025
Risk Levelhigh
Pages16
Reading Time19 min
Key Dollar Amounts$75,000, $210,000, $118,900, $510,000, $500,000 m
Sentimentbearish

Sentiment: bearish

Topics: Cannabis Industry, Psychedelic Therapeutics, Penny Stocks, High Debt, Operating Losses, Derivative Liabilities, Discontinued Operations

TL;DR

**KAYS is bleeding cash, ditching its cannabis retail, and betting big on unproven international and psychedelic ventures – steer clear.**

AI Summary

Kaya Holdings, Inc. (KAYS) reported a significant net loss of $4,182,767 for the six months ended June 30, 2025, a substantial increase from the $748,470 net loss in the prior year period. This was primarily driven by a dramatic increase in derivative liabilities expense, which surged to $3,234,914 for the six months ended June 30, 2025, compared to a $325,245 income in the same period of 2024. The company generated net sales of $17,149 for the six months ended June 30, 2025, a new revenue stream as no sales were reported in the prior year. Operating expenses decreased to $373,566 from $579,403, largely due to a reduction in professional fees from $359,772 to $145,025. KAYS has discontinued its retail cannabis operations under the MJAI subsidiary and is evaluating the sale of its remaining assets, including an agreement to sell an OLCC marijuana retail license for $75,000. The company is expanding internationally with Kaya Brand International, Inc. (KBI) in Greece and Israel, and into psychedelic treatments with Fifth Dimension Therapeutics, Inc. (FDT) in Oregon.

Why It Matters

Kaya Holdings' substantial net loss and the shift away from its core cannabis retail operations signal a critical juncture for investors. The massive increase in derivative liabilities expense to over $3.2 million indicates significant financial volatility and potential dilution risks from convertible notes, directly impacting shareholder value. While the company is pivoting to international cannabis and psychedelic treatments, these ventures are nascent and carry high execution risk, especially given the discontinuation of established operations. Employees in the former cannabis retail segment face uncertainty, and customers will see a change in KAYS's market presence, potentially impacting competitive dynamics in the Oregon cannabis market.

Risk Assessment

Risk Level: high — The company reported a net loss of $4,182,767 for the six months ended June 30, 2025, and total liabilities of $21,541,194 against total assets of $254,430, indicating severe financial distress. A significant increase in derivative liabilities expense to $3,234,914 for the six months ended June 30, 2025, highlights extreme financial volatility and potential for further shareholder dilution.

Analyst Insight

Investors should exercise extreme caution and consider divesting any holdings in KAYS. The company's substantial and growing net losses, coupled with a highly leveraged balance sheet and a pivot to speculative new ventures, present an unfavorable risk-reward profile. Wait for clear evidence of sustained profitability and a stable business model before considering any investment.

Financial Highlights

debt To Equity
N/A
revenue
$17,149
operating Margin
N/A
total Assets
$254,430
total Debt
$21,541,194
net Income
-$4,182,767
eps
N/A
gross Margin
N/A
cash Position
N/A
revenue Growth
N/A

Revenue Breakdown

SegmentRevenueGrowth
Net Sales$17,149N/A

Key Numbers

Key Players & Entities

FAQ

What were Kaya Holdings' net sales for the six months ended June 30, 2025?

Kaya Holdings, Inc. reported net sales of $17,149 for the six months ended June 30, 2025. This represents a new revenue stream, as the company had no net sales in the corresponding period of 2024.

How did Kaya Holdings' net loss change from Q2 2024 to Q2 2025?

Kaya Holdings, Inc. experienced a significant increase in net loss, reporting a net loss of $4,182,767 for the six months ended June 30, 2025, compared to a net loss of $748,470 for the six months ended June 30, 2024.

What is the primary reason for the increased net loss at Kaya Holdings?

The primary reason for the increased net loss at Kaya Holdings, Inc. is the change in derivative liabilities expense, which shifted from an income of $325,245 in the six months ended June 30, 2024, to an expense of $3,234,914 in the six months ended June 30, 2025.

What is the status of Kaya Holdings' cannabis retail operations?

Kaya Holdings, Inc. has ceased all retail cannabis operations under its MJAI subsidiary as of June 30, 2024. The company has classified MJAI's operations as discontinued and has entered into an agreement to sell its OLCC marijuana retail license for $75,000.

What new business ventures is Kaya Holdings pursuing?

Kaya Holdings, Inc. is expanding internationally through Kaya Brand International, Inc. (KBI) with operations in Greece and Israel. Additionally, it is entering the psychedelic treatment market via Fifth Dimension Therapeutics, Inc. (FDT) in Oregon, targeting psilocybin treatments.

What are Kaya Holdings' total liabilities as of June 30, 2025?

As of June 30, 2025, Kaya Holdings, Inc.'s total liabilities stood at $21,541,194. This represents an increase from $17,344,501 reported as of December 31, 2024.

How many common shares of Kaya Holdings were outstanding as of August 27, 2025?

As of August 27, 2025, Kaya Holdings, Inc. had 41,572,835 shares of its common stock outstanding. This figure is relevant for calculating per-share metrics and understanding potential dilution.

What is the significance of the $75,000 escrow for Kaya Holdings?

The $75,000 in escrow represents the purchase price for Kaya Holdings, Inc.'s OLCC marijuana retail license. The release of these funds to the company is contingent upon obtaining regulatory approvals, which had not been secured as of the reporting date.

What is the risk associated with Kaya Holdings' derivative liabilities?

The significant increase in derivative liabilities expense to $3,234,914 for the six months ended June 30, 2025, indicates high financial volatility. This can lead to unpredictable impacts on earnings and potentially result in substantial dilution for existing shareholders if these derivatives are converted into common stock.

Has Kaya Holdings, Inc. filed all required reports with the SEC?

Yes, Kaya Holdings, Inc. indicated by check mark that it has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days.

Risk Factors

Industry Context

Kaya Holdings operates in the evolving cannabis and emerging psychedelic treatment sectors. The cannabis industry faces ongoing regulatory complexities and market competition, while the psychedelic treatment space is nascent and subject to significant scientific and regulatory development. The company's strategic pivot to international markets (Greece, Israel) and new therapeutic areas (psychedelics) suggests an attempt to diversify and capitalize on growth opportunities outside its previously established, but now discontinued, retail cannabis operations.

Regulatory Implications

The company's reliance on regulatory approvals for asset sales, such as the OLCC license, presents a risk. Furthermore, the evolving regulatory landscape for both cannabis and psychedelic treatments globally requires continuous monitoring and adaptation to ensure compliance and operational viability.

What Investors Should Do

  1. Monitor derivative liability movements closely.
  2. Evaluate the success of international expansion and new ventures.
  3. Assess the company's ability to manage its growing debt.
  4. Track progress on asset sales and cash generation.

Key Dates

Glossary

Derivative Liabilities
Financial instruments whose value is derived from an underlying asset, group of assets, or benchmark. Changes in their value can lead to gains or losses. (A significant increase in the expense related to derivative liabilities ($3,234,914) was the primary driver of the company's net loss for the period.)
OLCC Marijuana Retail License
A license issued by the Oregon Liquor and Cannabis Commission that permits the holder to sell marijuana for retail purposes in Oregon. (Kaya Holdings is seeking to sell one of these licenses for $75,000, indicating a strategic shift away from its previous retail cannabis operations.)
Consolidated Financial Statements
Financial statements that present the assets, liabilities, equity, cash flows, and results of operations of a parent company and its subsidiaries as if they were a single economic entity. (These are the primary financial reports (Balance Sheets, Statements of Operations, etc.) that detail the company's financial health and performance for the period.)
Stockholder's Deficit
Occurs when a company's total liabilities exceed its total assets, resulting in negative equity. (Indicates a situation where the company owes more than it owns, highlighting a potential solvency issue.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, Kaya Holdings reported a net loss of $4,182,767, a stark increase from the $748,470 net loss in the prior year period. This deterioration was primarily driven by a $3,234,914 expense from derivative liabilities, a significant reversal from a $325,245 income in the comparable 2024 period. While operating expenses decreased due to lower professional fees, the company has discontinued its retail cannabis operations and is now focused on international expansion and new ventures, generating its first reported sales of $17,149.

Filing Stats: 4,658 words · 19 min read · ~16 pages · Grade level 16.1 · Accepted 2025-08-27 17:19:07

Key Financial Figures

Filing Documents

– Financial Information Page

Part I – Financial Information Page Item 1. Consolidated Financial Statements (unaudited) Page Consolidated Balance Sheets at June 30, 2025 and December 31, 2024 F-1 Consolidated Statements of Operations for the Three and Six months ended June 30, 2025 and 2024 F-2 Consolidated F-3 Consolidated F-4 Consolidated F-5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27 Item 3. Quantitative and Qualitative Disclosures About Market Risk 51 Item 4. Controls and Procedures 51 Part II Other Information Item 1. Legal Proceedings 54 Item 1A. Risk Factors 54 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 54 Item 3. Defaults Upon Senior Securities 54 Item 4. Mine Safety Disclosures 54 Item 5. Other Information 54 Item 6. Exhibits 54

Signatures

Signatures 55 Cautionary Note Regarding Forward Looking Statements Information contained in this Quarterly Report on Form 10-Q, as amended contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act"). These forward-looking statements are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend" or "project" or the negative of these words or other variations on these words or comparable terminology. The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. Available Information We file annual, quarterly and special reports and other information with the Securities and Exchange Commission ("SEC") that can be obtained from the SEC by telephoning 1-800-SEC-0330. The Company's filings are also available through the SEC's Electronic Data Gathering Analysis and Retrieval System, known as EDGAR, through the SEC's website (www.sec.gov). Kaya Holdings, Inc. and Subsidiaries Consolidated Balance Sheets As of June 30, 2025 and Decembe

View Full Filing

View this 10-Q filing on SEC EDGAR

View on Read The Filing