KAYS' Net Loss Explodes to $12.7M Amid Cannabis Exit, Crypto Pivot

TL;DR

**KAYS is a burning dumpster fire of dilution and debt, ditch it before the crypto pivot incinerates what's left.**

AI Summary

Kaya Holdings, Inc. (KAYS) reported a significant increase in net sales for the nine months ended September 30, 2025, reaching $22,557, up from $3,000 in the prior year, representing a 651.9% increase. Despite this revenue growth, the company experienced a substantial net loss of $12,774,232 for the nine months ended September 30, 2025, a sharp increase from a net loss of $3,243,797 in the same period of 2024. This expanded loss was primarily driven by a massive increase in 'Change in derivative liabilities expense,' which surged from $759,620 in 2024 to $10,985,435 in 2025. Operating expenses decreased by 60.1% to $647,946 from $1,624,893, largely due to a reduction in professional fees. The company also issued 622,868,838 common shares for notes settlement and 20,000,000 shares for compensation settlement, significantly increasing outstanding shares to 686,441,673. KAYS is transitioning its business focus, discontinuing its last retail cannabis operation (Kaya Shack Store 1) in March 2024 and forming Kaya Crypto Operations, Inc. in October 2025 to pursue a Digital Assets Treasury Company strategy.

Why It Matters

For investors, this filing reveals a company in a precarious financial state, with a net loss ballooning over 290% year-over-year, largely due to derivative liabilities. The significant dilution from issuing over 640 million new shares for debt and compensation settlements will heavily impact existing shareholders. The strategic pivot away from cannabis retail, with the closure of Kaya Shack Store 1, and into cryptocurrency via Kaya Crypto Operations, Inc., signals a high-risk, high-reward shift that could redefine KAYS' competitive landscape, moving it from a struggling cannabis operator to an unproven player in the volatile digital asset space. This transition could impact employees in the former cannabis operations and potentially create new roles in the crypto venture, while customers of Kaya Shack will need to find alternative cannabis providers.

Risk Assessment

Risk Level: high — The company's net loss surged to $12,774,232 for the nine months ended September 30, 2025, primarily due to a 'Change in derivative liabilities expense' of $10,985,435. Furthermore, KAYS' total liabilities of $2,919,815 significantly outweigh its total assets of $199,358, indicating severe financial distress and a substantial stockholders' deficit of $(2,720,457).

Analyst Insight

Investors should exercise extreme caution and consider divesting KAYS shares. The massive dilution, significant net losses driven by derivative liabilities, and the speculative pivot to cryptocurrency operations present an exceptionally high-risk profile with little clear path to profitability.

Financial Highlights

debt To Equity

N/A

revenue

$22,557

operating Margin

N/A

total Assets

$199,358

total Debt

$2,919,815

net Income

-$12,774,232

eps

N/A

gross Margin

N/A

cash Position

$26,087

revenue Growth

+651.9%

Revenue Breakdown

Key Numbers

• $22,557 — Net sales for nine months ended Sep 30, 2025 (Increased from $3,000 in the prior year, a 651.9% increase.)
• $12,774,232 — Net loss for nine months ended Sep 30, 2025 (Increased from $3,243,797 in the prior year, a 294% increase.)
• $10,985,435 — Change in derivative liabilities expense (Primary driver of increased net loss, up from $759,620 in 2024.)
• $647,946 — Total operating expenses for nine months ended Sep 30, 2025 (Decreased from $1,624,893 in the prior year, a 60.1% reduction.)
• 686,441,673 — Common shares outstanding as of Sep 30, 2025 (Significantly increased from 41,572,835 shares as of Dec 31, 2024, due to debt and compensation settlements.)
• $2,919,815 — Total liabilities as of Sep 30, 2025 (Exceeds total assets of $199,358, indicating financial distress.)
• $(2,720,457) — Total stockholders' deficit as of Sep 30, 2025 (Improved from $(17,128,132) as of Dec 31, 2024, primarily due to debt conversions to equity.)
• $25,562,025 — Value of shares issued for notes settlement (Contributed to the significant increase in common shares outstanding.)
• $430,631 — Value of shares issued for compensation settlement (Contributed to the significant increase in common shares outstanding.)
• $26,087 — Cash and equivalents as of Sep 30, 2025 (Decreased from $39,668 as of Dec 31, 2024, indicating declining liquidity.)

Key Players & Entities

• Kaya Holdings, Inc. (company) — registrant of the 10-Q filing
• KAYS (company) — ticker symbol for Kaya Holdings, Inc.
• Marijuana Holdings Americas, Inc. (company) — majority-owned subsidiary, cannabis retail operations discontinued
• Kaya Brand International, Inc. (company) — majority-owned subsidiary, active in overseas expansion
• Fifth Dimension Therapeutics, Inc. (company) — majority-owned subsidiary, developing Psychedelic Treatment Projects
• Kaya Crypto Operations, Inc. (company) — wholly-owned subsidiary, formed October 20, 2025, for Digital Assets Treasury Company strategy
• SEC (regulator) — Securities and Exchange Commission
• OLCC (regulator) — Oregon Liquor and Cannabis Commission
• OHA (regulator) — Oregon Health Authority
• Kaya Shack Store 1 (company) — last remaining retail cannabis operation, closed March 2024

FAQ

Risk Factors

• Significant Increase in Net Loss Driven by Derivative Liabilities [high — financial]: The company reported a net loss of $12,774,232 for the nine months ended September 30, 2025, a substantial increase from $3,243,797 in the prior year. This was primarily driven by a surge in 'Change in derivative liabilities expense' from $759,620 to $10,985,435.
• Negative Working Capital and Declining Cash [high — financial]: As of September 30, 2025, total liabilities of $2,919,815 significantly exceed total assets of $199,358, resulting in a substantial stockholders' deficit of $(2,720,457). Cash and equivalents decreased to $26,087 from $39,668.
• Massive Dilution of Common Stock [high — financial]: The company issued 622,868,838 common shares for notes settlement and 20,000,000 shares for compensation settlement, increasing outstanding shares to 686,441,673 from 41,572,835 at the end of 2024. This represents a dilution of over 1500%.
• Business Model Transition and Uncertainty [medium — operational]: KAYS is discontinuing its cannabis retail operations and forming Kaya Crypto Operations, Inc. to pursue a Digital Assets Treasury Company strategy. This pivot introduces significant execution risk and uncertainty regarding future revenue streams and profitability.
• High Derivative Liabilities [medium — financial]: Derivative liabilities stood at $503,792 as of September 30, 2025, down from $2,497,275 at the end of 2024. However, the 'Change in derivative liabilities expense' was a major contributor to the net loss.
• Reduction in Operating Expenses [low — financial]: Total operating expenses decreased by 60.1% to $647,946 for the nine months ended September 30, 2025, from $1,624,893 in the prior year, largely due to reduced professional fees. While positive, this reduction may not offset the significant increase in other expenses.

Industry Context

The cannabis industry, particularly retail operations, has faced significant regulatory hurdles and market consolidation. KAYS' exit from this sector, with its last store closing in March 2024, reflects a broader trend of operational challenges and strategic re-evaluation within the industry. The company's pivot to digital assets places it in a nascent and highly volatile market.

Regulatory Implications

The company's past operations in the cannabis industry may still carry residual regulatory scrutiny. The transition to digital assets exposes KAYS to evolving regulations in the cryptocurrency space, which are subject to rapid change and vary significantly by jurisdiction.

What Investors Should Do

1. Monitor the execution of the Digital Assets Treasury Company strategy.
2. Analyze the impact of ongoing derivative liabilities.
3. Evaluate the long-term impact of share dilution.

Key Dates

• 2024-03-01: Kaya Shack Store 1 Closure — Marked the end of the company's last remaining retail cannabis operation, signaling a strategic shift away from the cannabis industry.
• 2025-10-01: Formation of Kaya Crypto Operations, Inc. — Indicates the company's formal pivot towards a Digital Assets Treasury Company strategy, moving away from its historical cannabis business.

Glossary

Derivative Liabilities

Financial obligations that derive their value from an underlying asset, index, or rate. Changes in the value of the underlying can cause significant fluctuations in the liability. (A substantial increase in the expense related to derivative liabilities was the primary driver of the company's increased net loss.)

Stockholders' Deficit

The amount by which total liabilities exceed total assets, resulting in a negative net worth for the company's shareholders. (KAYS has a significant stockholders' deficit of $(2,720,457) as of September 30, 2025, indicating financial distress.)

Common Shares Outstanding

The total number of shares of common stock that have been issued and are held by investors. (The number of outstanding shares increased dramatically due to debt and compensation settlements, leading to significant dilution for existing shareholders.)

Digital Assets Treasury Company

A company that manages a treasury of digital assets (like cryptocurrencies) as part of its business strategy, potentially for investment, operational, or collateral purposes. (This is the new business strategy KAYS is pursuing through its subsidiary, Kaya Crypto Operations, Inc.)

Year-Over-Year Comparison

Kaya Holdings, Inc. has seen a dramatic increase in net sales, up 651.9% to $22,557 for the nine months ended September 30, 2025, compared to the prior year. However, this top-line growth is overshadowed by a substantial increase in net loss, which widened by 294% to $12,774,232, primarily due to a massive surge in derivative liabilities expense. Operating expenses saw a significant reduction of 60.1%, but the overall financial picture remains bearish due to the escalating losses and a dramatic increase in outstanding shares.

Key Financial Figures

• $210,000 — mpany concluded the sale of Store 2 for $210,000, less a 6% closing commission and minor
• $75,000 — penses. After these expenses and paying $75,000 to resolve three non-performing store l
• $118,900 — ses in South Oregon, the Company netted $118,900. Kaya Shack Store 3 and Kaya Shack St
• $510,000 — cel in Lebanon, Linn County, Oregon for $510,000 on which we intended to construct a Gre
• $500,000 m — "Notes"), one of which was secured by a $500,000 mortgage on the Property. CVC released it
• $500,000 — olders, without having to repay CVC the $500,000 Note held by CVC. Additionally, CVC agr
• $270,000 — roperty ("Advances"), which amounted to $270,000 pending the sale of the Property. On Fe
• $769,500 — 023 we sold the Property for a price of $769,500, less commissions and customary closing
• $100,000 b — plus interest (including an additional $100,000 borrowed from another lender interest) an
• $302,000,000 — realized net proceeds of approximately $302,000,000. The land is reflected on the balance s
• $516,076 — r ended December 31, 2022 at a value of $516,076. The land was sold in 2023. In the fo
• $1,417,200 — ompany paid 12,000,000 shares valued at $1,417,200 for the purchase of the property and th
• $250,000 — icted shares of the Company's stock for $250,000 in cash in a private transaction with t
• $140,000.00 — 48 months for a total four year fee of $140,000.00. F-8 Pursuant to the

Filing Documents

• kays_10q.htm (10-Q) — 1390KB
• ex31_1.htm (EX-31.1) — 15KB
• ex32_1.htm (EX-32.1) — 5KB
• image_001.jpg (GRAPHIC) — 4KB
• 0001903596-25-000552.txt ( ) — 7391KB
• kays-20250930.xsd (EX-101.SCH) — 59KB
• kays-20250930_cal.xml (EX-101.CAL) — 71KB
• kays-20250930_def.xml (EX-101.DEF) — 187KB
• kays-20250930_lab.xml (EX-101.LAB) — 444KB
• kays-20250930_pre.xml (EX-101.PRE) — 359KB
• kays_10q_htm.xml (XML) — 1260KB

Signatures

Signatures 51 Cautionary Note Regarding Forward Looking 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 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).

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Kaya Holdings, Inc. and Subsidiaries Consolidated Balance Sheets As of September 30, 2025 and December 31, 2024 ASSETS (Unaudited) (Audited) September 30, 2025 December 31, 2024 CURRENT ASSETS: Cash and equivalents $ 26,087 $ 39,668 Inventory 348 90 Prepaid expenses 85,255 28,180 Total current assets 111,690 67,938 NON-CURRENT ASSETS: Right-of-use asset - operating lease — 52,574 Property and equipment, net of accumulated depreciation of $ 203,600 and $ 197,772 as of September 30, 2025 and December 31, 2024, respectively 22,600 46,131 Goodwill 26,395 20,955 Other Assets 38,673 28,771 Total non-current assets 87,668 148,431 Total assets $ 199,358 $ 216,369 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expense $ 683,427 $ 631,963 Accounts payable and accrued expense-related parties — 869,864 Accrued interest, current 250,376 3,005,107 Right-of-use liability - operating lease — 52,574 Taxable Payable 902,166 902,166 Convertible notes payable, net of discount of $ 0 , and $ 0 135,000 135,000 Notes payable, current 59,312 9,312 Derivative liabilities 503,792 2,497,275 Total current liabilities 2,534,073 8,103,261 NON-CURRENT LIABILITIES: Accrued expense-related parties — 500,000 Notes payable, non current — 61,608 Notes payable-related party — 250,000 Convertible notes payable, net of discount of $ 0 and $ 440,590 385,742 8,429,632 Total non-current liabilities 385,742 9,241,240 Total liabilities 2,919,815 17,344,501 STOCKHOLDERS' DEFICIT: Convertible preferred stock, Series D, par value $ .0001 ; 10,000,000 shares authorized; 40 and 40 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively — — Common stock , par value $ .0001 ; 1,500,000,000 shares authorized; 686,441,673 shares issued, 686,433,339 outstanding as of September 30, 202 and 41,572

Business

Business In January 2014, KAYS incorporated MJAI, a wholly owned subsidiary, to focus on opportunities in the legal recreational and medical marijuana industry in the United States. Between April of 2014 and December 31, 2023, KAYS owned and operated four (4) Kaya Shack retail cannabis medical and recreational dispensaries, three (3) Medical Marijuana Grow sites licensed by the OHA and two (2) Recreational Marijuana grow sites licensed by the OLCC (all in Oregon). The statuses of these operations are as follows: The first Kaya Shack (Kaya Shack Store 1) opened in 2014 in Portland, Oregon and operated until March of 2024, and no further cannabis retail revenue has been generated since that time as it was the Company's last remaining retail cannabis operation. F-7 Kaya Shack Store 2 was closed in December, 2022 as part of a sale and surrender agreement that the Company entered into with the OLCC to resolve an Administrative Action filed by the OLCC .Per the terms of the agreement the Company agreed to either enter into a purchase and sale agreement for its retail license in South Salem by February 1, 2023 (the renewal date) or surrender the license. On April 21, 2023 the Company concluded the sale of Store 2 for $210,000, less a 6% closing commission and minor closing expenses. After these expenses and paying $75,000 to resolve three non-performing store leases in South Oregon, the Company netted $118,900. Kaya Shack Store 3 and Kaya Shack Store 4 were both closed due to consolidation moves by the Company in 2020 and 2021, respectively, and the Company let the licenses lapse. In August of 2017, the Company purchased a 26-acre parcel in Lebanon, Linn County, Oregon for $510,000 on which we intended to construct a Greenhouse Grow and Production Facility (the "Property") and filed for OLCC licensure. In August of 2022, the Company entered into an agreement (the "CVC Agreement") with CVC International, Inc. ("CVC"), an institutional investor who holds certain o

View Full Filing

View this 10-Q filing on SEC EDGAR