10-Q

	UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended September 30, 2023. Commission File No. 333-177532 KAYA HOLDINGS, INC. (Exact name of registrant as specified in its charter)
	Delaware	90-0898007
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

915 Middle River Drive, Suite 316

Ft. Lauderdale, Florida 33304

(Address of principal executive offices)

(954)-892-6911

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: None

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None

Securities registered under Section 12(g) of the Exchange Act:

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [X] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No

Indicate by check mark whether the registrant (1) 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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). [X] Yes [ ] No

As of November 20, 2023, the Issuer had 22,172,835 shares of its common stock outstanding.

 KAYA HOLDINGS, INC.

INDEX TO QUARTERLY REPORT ON FORM 10 Q

Part I – Financial Information Page

Item 1. Condensed Consolidated Financial Statements	Page
Condensed Consolidated Balance Sheet	3
Condensed Consolidated Statements of Operation	4
Condensed Consolidated Statements of Comprehensive Income	5
Condensed Consolidated Statements of Cash Flows	6
Statement of Stockholder’s deficit for the nine month period ended September 30, 2023 and the year ended December   31, 2022	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3. Quantitative and Qualitative Disclosures About Market Risk	52
Item 4. Controls and Procedures	52
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	54

In this Quarterly Report on Form 10-Q, the terms “ KAYS ,” “ the Company ,” “ we ,” “ us ” and “ our ” refer to Kaya Holdings, Inc. and its owned and controlled subsidiaries, unless the context indicates otherwise.

Cautionary Note Regarding Forward Looking Statements

Information contained in this Quarterly Report on Form 10-Q 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

Condensed Consolidated Balance Sheets

September 30, 2023 and December 31, 2022

ASSETS
	(Unaudited)			(Audited)
	September 30, 2023			December 31, 2022
CURRENT ASSETS:
Cash and equivalents		60,268		$	18,330
Inventory		13,256			11,990
Prepaid expenses		49,761			28,158
Total current assets		123,285			58,478
NON-CURRENT ASSETS:
Right-of-use asset - operating lease		19,361			182,604
Assets for sale		—			516,076
Property and equipment, net of accumulated depreciation of $217,735 and $358,396 as of September 30, 2023 and December 31, 2022, respectively		26,785			36,720
Investment in subsidiaries		21,114			22,188
Other Assets		40,005			27,175
Total non-current assets		107,265			784,763
Total assets	$	230,550		$	843,241
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expense	$	601,154		$	961,396
Accounts payable and accrued expense-related parties		417,777			273,190
Accrued interest		2,193,365			1,759,669
Right-of-use liability - operating lease		21,041			93,067
Taxable Payable		880,062			876,017
Convertible notes payable, net of discount of $0 and $54,707		25,000			240,293
Notes payable		109,312			9,312
Derivative liabilities		3,523,317			6,204,878
Total current liabilities		7,771,028			10,417,822
NON-CURRENT LIABILITIES:
Notes payable		355,000			—
Notes payable-related party		250,000			250,000
Convertible notes payable, net of discount of $69,499 and $333,107		7,342,653			7,179,045
Accrued expense-related parties		500,000			500,000
Right-of-use liability - operating lease		—			100,115
Total non-current liabilities		8,447,653			8,029,160
Total liabilities		16,218,681			18,446,982
STOCKHOLDERS' DEFICIT:
Convertible preferred stock, Series C, par value $.001; 10,000,000 shares authorized;  0 and 100,000 issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—			—
Convertible preferred stock, Series D, par value $.0001; 10,000,000 shares authorized; 40 and 40 issued and outstanding at September 30, 2023 and December 31, 2021, respectively		—			—
Common stock , par value $.001;  500,000,000 shares authorized; 0 shares and 22,172,835 shares issued as of September 30, 2023  and 22,172,835 shares outstanding as of December 31, 2022 , respectively		22,173			22,173
Subscriptions payable		163,630			163,630
Additional paid in capital		22,478,395			22,277,612
Accumulated deficit		(36,703,944	)		(38,071,960	)
Accumulated other comprehensive income (loss)		(14,538	)		(11,027	)
Total stockholders' deficit attributable to parent company		(14,054,284	)		(15,619,572	)
Non-controlling interest		(1,933,847	)		(1,984,169	)
Total stockholders' deficit		(15,988,131	)		(17,603,741	)
Total liabilities and stockholders' deficit	$	230,550		$	843,241

The accompanying notes are an integral part of these consolidated financial statements.      

3

Kaya Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	For The Three			For The Three			For The			For The
	Months Ended			Months Ended			Nine-months Ended			Nine-months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Net sales	$	59,011		$	172,968		$	162,372		$	556,818
Cost of sales		22,088			59,771			58,402			182,369
Gross profit		36,923			113,197			103,970			374,449
Operating expenses:
Professional fees		170,405			182,140			563,670			565,529
Salaries and wages		44,732			94,176			140,871			296,327
General and administrative		97,916			106,745			324,750			380,920
Total operating expenses		313,053			383,061			1,029,291			1,242,776
Operating loss		(276,130	)		(269,864	)		(925,321	)		(868,327	)
Other income (expense):
Interest expense		(165,774	)		(158,880	)		(484,106	)		(466,319	)
Amortization of debt discount		(68,762	)		(6,613	)		(318,315	)		(163,817	)
Gain on lease extingueshment		219,006			—			151,082			—
Gain on disposal		—			17,177			384,429			17,177
Change in derivative liabilities expense		2,302,249			(6,994,461	)		2,535,936			(3,904,639	)
Other income		90,423			—			91,923			—
Total other income (expense)		2,377,142			(7,142,777	)		2,360,949			(4,517,598	)
Net income (loss) from continuing operations before income taxes		2,101,012			(7,412,641	)		1,435,628			(5,385,925	)
Provision for Income Taxes		(5,270	)		(22,535	)		(19,109	)		(77,398	)
Net income (loss)		2,095,742			(7,435,176	)		1,416,519			(5,463,323	)
Net Income (loss) attributed to non-controlling interest		62,117			(20,279	)		48,503			(78,114	)
Net income (loss) attributed to Kaya Holdings, Inc.		2,033,625			(7,414,897	)		1,368,016			(5,385,209	)
Basic net income (loss) per common share	$	0.09		$	(0.50	)	$	0.06		$	(0.37	)
Weighted average number of common shares outstanding - Basic		22,172,835			14,722,835			22,172,835			14,722,835
Diluted net income (loss) per common share	$	0.00		$	0.00		$	0.01		$	(0.37	)
Weighted average number of common shares outstanding - Diluted		143,718,093			14,722,835			143,718,093			14,722,835

The accompanying notes are an integral part of these consolidated financial statements.

4

  Kaya Holdings, Inc. and Subsidiaries

  Condensed Consolidated Statements of Comprehensive Income    

	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	For The			For The			For The			For The
	Three-months Ended			Three-months Ended			Nine-months Ended			Nine-months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Net income (loss)		2,033,625		$	(7,414,897	)	$	1,368,016		$	(5,385,209	)
Other comprehensive expense
Foreign currency adjustments		(2,655	)		(6,162	)		(1,692	)		(17,900	)
Comprehensive income (loss)		2,030,970			(7,421,059	)		1,366,324			(5,403,109	)
Other comprehensive income (expense)
Net loss attirbuted to non-controlling interest		62,117			(20,279	)		48,503			(78,114	)
Comprehensive income (loss) attributable to Kaya Holdings		1,968,853			(7,400,780	)		1,317,821			(5,324,995	)

The accompanying notes are an integral part of these consolidated financial statements.    

5

Kaya Holdings, Inc. and Subsidiaries

Condensed Consolidated Statement of Cashflows

(Unaudited)

	For The Nine			For The Nine
	Months Ended			Months Ended
	September 30, 2023			September 30, 2022
OPERATING ACTIVITIES:
Net income (loss)	$	1,368,016		$	(5,385,209	)
Adjustments to reconcile net income / loss to net cash used in operating activities:
Adjustment to non-controlling interest		48,503			(78,114	)
Depreciation		9,935			17,836
Imputed interest		16,829			16,829
Loss (gain) on lease extingushment		(151,082	)
Change in derivative liabilities		(2,535,936	)		3,904,639
Amortization of debt discount		318,315			163,817
Loss(gain) on debt forgiveness		(91,923	)		—
Gain on disposal of fixed assets		(384,429	)		(17,177	)
Changes in operating assets and liabilities:
Prepaid expense		(33,963	)		—
Inventory		(2,145	)		22,770
Right-of-use asset		45,499			71,828
Deposit		(12,925	)		—
Other assets		—			(14,679	)
Accrued interest		433,696			449,490
Accounts payable and accrued expenses		14,617			53,272
Accounts payable and accrued expenses - Related Parties		144,587			121,995
Right-of-use liabilities		(47,322	)		(87,546	)
Deferred tax liabilities		4,045			77,398
Net cash used in operating activities		(855,683	)		(682,851	)
INVESTING ACTIVITIES:
Proceeds from sales of fixed assets		693,959			17,177
Proceeds from sales of Business License		193,900			—
Cash paid for impairment of right-of-use asset		(75,000	)		—
Net cash provided by investing activities		812,859			17,177
FINANCING ACTIVITIES:
Proceeds from convertible debt		455,000			150,000
Payments on convertible debt		(370,000	)		—
Net cash provided by financing activities		85,000			150,000
NET INCREASE (DECREASE) IN CASH		42,176			(515,674	)
Effects of currency translation on cash and cash equivalents		(238	)		(9,897	)
CASH BEGINNING BALANCE		18,330			565,979
CASH ENDING BALANCE	$	60,268		$	40,408
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid		28,582			—
NON-CASH TRANSACTIONS AFFECTING OPERATING, INVESTING    AND FINANCING ACTIVITIES:
Settlement of derivative liabilities		145,625			—
Adoption of lease standard ASC 842		—			23,738
Initial derivative liability on convertible note payable		—			110,133
Release of related party accruals and payable		38,329

The accompanying notes are an integral part of these consolidated financial statements.

6

Kaya Holdings, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Deficit

For the three and nine months ended September 30, 2023 (Unaudited) and the year ended December 31, 2022 (Audited)

	Preferred Stock - Series C				Preferred Stock - Series D				Common Stock				Subscription Payable		Additional Paid-in		Accumulated			Accumulated Comprehensive			Noncontrolling			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Amount		Capital		Deficit			Loss			Interest			Deficit
Balance, December 31, 2021 (Audited)		—	$	—		40	$	—		14,722,835	$	14,723	$	163,630	$	21,735,185	$	(34,495,346	)	$	(3,719	)	$	(1,822,378	)	$	(14,407,905	)
Imputed interest		—		—		—		—		—		—		—		11,158		—			—			—			11,158
Settlement of related party accrued compensation		—		—		—		—		—		—		—		52		—			—			—			52
Translation Adjustment		—		—		—		—		—		—		—		—		—			(5,969	)		(5,769	)		(11,738	)
Net Loss		—		—		—		—		—		—		—		—		2,029,688			—			(57,835	)		1,971,853
Balance, June 30, 2022 (Unaudited)		—		—		40		—		14,722,835		14,723		163,630		21,746,395		(32,465,658	)		(9,688	)		(1,885,982	)		(12,436,580	)
Imputed interest		—		—		—		-		-		-		-		5,671		-			-			-			5,671
Translation Adjustment		-		-		-		-		-		-		-		-		-			(3,212	)		(2,950	)		(6,162	)
Net Loss		-		-		-		-		-		-		-		-		(7,414,897	)		-			(20,279	)		(7,435,176	)
Balance, September 30, 2022 (Unaudited)		—	$	—		40	$	—		14,722,835	$	14,723	$	163,630	$	21,752,066	$	(39,880,555	)	$	(12,900	)	$	(1,909,211	)		(19,872,247	)
Balance, December 31, 2022 (Audited)		—	$	—		40	$	—		22,172,835	$	22,173	$	163,630	$	22,277,612	$	(38,071,960	)	$	(11,027	)	$	(1,984,169	)	$	(17,603,741	)
Imputed interest		—		—		—		—		—		—		—		11,158		—			—			—			11,158
Settlement of derivative liabilities to additional paid in capital		—	$	—		—		—		—		—		—		145,625		—			—			—			145,625
Translation Adjustment		—	$	—		—		—		—		—		—		—		—			(1,502	)		2,465			963
Net Income		—	$	—		—		—		—		—		—		—		(665,609	)		—			(13,614	)		(679,223	)
Balance, June 30, 2023		—	$	—		40		—		22,172,835		22,173		163,630		22,434,395		(38,737,569	)		(12,529	)		(1,995,318	)		(18,125,218	)
Imputed interest		—		—		—		—		—		—		—		5,671		—			—			—			5,671
Release of related party accruals and payable		—	$	—		—	$	—		—	$	—	$	—	$	38,329	$	—		$	—		$	—			38,329
Translation Adjustment		—	$	—		—		—		—		—		—		—		—			(2,009	)		(646	)		(2,655	)
Net Income		—	$	—		—		—		—		—		—		—		2,033,625			—			62,117			2,095,742
Balance, September 30, 2023		—	$	—		40		—		22,172,835		22,173		163,630		22,478,395		(36,703,944	)		(14,538	)		(1,933,847	)		(15,988,131	)

The accompanying notes are an integral part of these consolidated financial statements.    

7

NOTE 1 –ORGANIZATION AND NATURE OF THE BUSINESS

Organization

Kaya Holdings, Inc. FKA (Alternative Fuels Americas, Inc.) is a holding company. The Company was incorporated in 1993 and has engaged in a number of businesses. Its name was changed on May 11, 2007 to NetSpace International Holdings, Inc. (a Delaware corporation) (“NetSpace”). NetSpace acquired 100% of Alternative Fuels Americas, Inc. (a Florida corporation) in January 2010 in a stock-for-member interest transaction and issued 6,567,247 shares of common stock and 100,000 shares of Series C convertible preferred stock to existing shareholders. Certificate of Amendment to the Certificate of Incorporation was filed in October 2010 changing the Company’s name from NetSpace International Holdings, Inc. to Alternative Fuels Americas, Inc. (a Delaware corporation). Certificate of Amendment to the Certificate of Incorporation was filed in March 2015 changing the Company’s name from Alternative Fuels Americas, Inc. (a Delaware corporation) to Kaya Holdings, Inc.

The Company has four subsidiaries: Marijuana Holdings Americas, Inc., a Florida corporation (“MJAI”), which is majority-owned and was formed on March 27, 2014 to maintain ownership of the Company’s Oregon based cannabis operations, 34225 Kowitz Road, LLC, a wholly-owned Oregon limited liability company which held ownership of the Company’s 26 acre property in Lebanon, Oregon (inactive since Feb 28, 2023 when the subject property was sold), Kaya Brand International, Inc., a Florida Corporation (“KBI”) which is majority-owned and was formed on October 14, 2019 to expand the business overseas (active) and Fifth Dimension Therapeutics, Inc., a Florida corporation which is majority owned (“FTD”) and was formed on December 13, 2022 to develop and maintain ownership of the Company’s planned Psychedelic Clinics targeting Psilocybin and Ketamine Treatments.

MJAI develops and operates the Company’s legal cannabis retail operations in Oregon through controlling ownership interests in five Oregon limited liability companies: MJAI Oregon 1 LLC (active), MJAI Oregon 2 LLC (inactive), MJAI Oregon 3 LLC (inactive) , MJAI Oregon 4 LLC (inactive) and MJAI Oregon 5 LLC (inactive).

MJAI Oregon 1 LLC is the entity that holds the licenses for the Company’s retail store operations. MJAI Oregon 5 LLC is the entity that held the license application for the Company’s 26 acre farm property in Lebanon Oregon (property sold 2/28/23, inactive since that date).

KBI is the entity that holds controlling ownership interests in Kaya Farms Greece, S.A. (a Greek corporation) and Kaya Shalvah (“Kaya Farms Israel”, an Israeli corporation). These two entities were formed to facilitate expansion of the Company’s business in Greece and Israel respectively.

Fifth Dimension Therapeutics, Inc. (FTD) is the entity that was formed to hold interests in Psilocybin and Ketamine treatment facilities, with operations initially targeted for Oregon and Florida.

Nature of the Business  

In January 2014, KAYS incorporated MJAI, a wholly owned subsidiary, to focus on opportunities in the legal recreational and medical marijuana in the United States. MJAI has concentrated its efforts in Oregon, where through controlled Oregon limited liability companies, it initially secured licenses to operate a medical marijuana dispensary (an “MMD”) and following legalization of recreational cannabis use in Oregon, secured licenses to operate four retail outlets and purchased 26 acres for development as a legal cannabis cultivation and manufacturing facility. The Company has developed the Kaya Shack™ brand for its retail operations and the Kaya Farms ™ brand for its cannabis growing and processing operations.

On July 3, 2014 opened its first Kaya Shack™ MMD in Portland, Oregon.  Between April of 2014 and December 31, 2022, 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 still maintains operations in Portland, Oregon at the same address as an Oregon Liquor and Cannabis Commission (OLCC) licensed medical and recreational marijuana retailer.

9

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 (as previously disclosed in the Company’s Annual Report on form 10-K for the period ending December 31, 2021 filed on April 18, 2022 and in the Company’s Quarterly report for the period ending March 31, 2022 filed on May 16, 2022). 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. Since the time of the agreement the Company has entered into an asset purchase agreement for the sale of its receipt of approval from the Oregon Liquor Control and Cannabis Commission for the new licensee. On April 21, 2023 the Company concluded the sale of its Kaya Shack™ Store 2 Retail Cannabis Store (“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. The net book value of the assets as of December 31, 2022 was $0 and revenue for the year ended December 31, 2022 was approximately $410,880.

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.

The three (3) Medical Marijuana Grows owned and operated by the Company through Oregon Health Authority (OHA) Licensure between 2015 and 2017 were all closed by the Company due to changing market conditions as OLCC Licensure of recreational marijuana came about and medical grow sites became economically unfeasible. 

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 of the Company’s Convertible Promissory Notes (the “Notes”), one of which was secured by a $500,000 mortgage on the Property. CVC released its lien on the Property to enable the Company to sell the Property and utilize the proceeds therefrom for the benefit of the Company and its shareholders, without having to repay CVC the $500,000 Note held by CVC. Additionally, CVC agreed to advance certain sums against the sale of the Property (“Advances”), which amounted to $270,000 pending the sale of the Property. On February 28, 2023 we sold the Property for a price of $770,312, less commissions and customary closing costs. The net proceeds of the sale were used to repay the advances plus interest (including an additional $100,000 borrowed from another lender interest) and the Company realized net proceeds of approximately $302,111. The land was reflected on the balance sheet as assets held for sale for the year ended December 31, 2022 and 2021, at a value of $516,076.

On August 18, 2018, the Company purchased the assets of Eugene, Oregon based Sunstone Farms which was licensed by the OLCC for cannabis production and processing. The purchase included a 12,000 square foot building housing and indoor grow facility, as well as equipment for growing and extraction activity. The purchase price of $1.3 was paid for by the issuance of 12 million shares of KAYS restricted stock, and the seller also purchased 2.5 million restricted shares for $250,000 in cash in a private transaction with the Company, and became a Board Member of Kaya Holdings. In mid-April, 2019 the OLCC filed an administrative proceeding proposing that the facility’s licenses (the “Licenses”) be cancelled, claiming that Sunstone had not filed paperwork correctly with respect to the transaction and the historical ownership of Bruce Burwick, the seller of the facility to the Company. Neither the Issuer nor any of its agents, consultants, employees or related entities was named as a respondent to the action. On March 31, 2021 the Company entered into a settlement with Sunstone and Burwick regarding the failure to deliver to KAYS the Licenses. Bruce Burwick surrendered to KAYS all 1,006,671 shares of our common stock issued to him in connection with the transaction (after adjustments for a 15:1 reverse split this was the 800,003 shares issued for the facility purchase, the 166,667 shares which were issued for $250,000 in cash and 40,001 shares which were issued as annual compensation for Burwick serving as a director of KAYS), and the Company received clear title to the warehouse facility. Burwick received $160,000 from the net proceeds of the sale of the facility's grow license to an unrelated third party, resigned from the Company's board of directors and agreed to work as a non-exclusive consultant to the Company for the next four years for a yearly fee of $35,000.00. On October 12, 2021, KAYS completed the sale of its Eugene, Oregon Cannabis Production and Processing Facility for gross proceeds of $1,325,000.

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On September 26, 2019, the Company formed the majority owned subsidiary Kaya Brands International, Inc. (“KBI”) to serve as the Company’s vehicle for expansion into worldwide cannabis markets. Between September of 2019 and December 31, 2022 KBI has formed majority-owned subsidiaries in both Greece and Israel and its local operating subsidiaries have acquired interests in various licenses and entities as noted below:

On June 7, 2020, Kaya Shalvah (“Kaya Farms Israel” or “KFI”), a majority owned subsidiary of KBI) was incorporated by the Company’s Israel Counsel. On March 30, 2021 the Company confirmed that its Israeli subsidiary, Kaya Shalvah has been awarded its initial license and permit from the "YAKAR", the Department for Medical Cannabis in the Israeli Ministry of Health, to develop an Israeli cannabis cultivation and processing facility. This initial license and permit grants Kaya Shalvah permission to proceed with its plans to develop commercial scale cannabis cultivation and processing in Israel. The license and permit are in good order and can be assigned to a location for development and licensure pending approval from the Yakar.

On November 27, 2020, Kaya Farms Greece, S.A. (“KFG”, a majority owned subsidiary of KBI) was incorporated by the Company’s Greek Counsel. On December 31, 2020, the Company entered into a joint venture agreement with Greekkannabis, PC (“GKC”, an Athens, Greece based cannabis company) and executed a formal agreement to acquire 50% of GKC which was completed in 2021. GKC has been issued two (2) Installation Licenses for construction of two medical cannabis cultivation and processing projects in Greece- one in Epidaurus, Greece and the other in Thebes, Greece. Neither of the subject properties are currently owned or optioned by GKC or its operating subsidiaries, but the land for the potential project in Epidaurus is owned by one of the Greek Partner’s families and the Land in Thibes is currently available for purchase or option and the Company believes it could acquire either of the Properties once funding and market conditions allow. Alternatively, both licenses are in good order, and can be transferred to a new location pending Greek Government approval.

On December 13, 2022, the Company formed Fifth Dimension Therapeutics ™ (“FTD”, a Florida Corporation) to seek to provide psychedelic services to sufferers of treatment resistant mental health diseases such as depression, PTSD and other mental health disorders.

On January 3, 2023 the Oregon Health Authority (the “OHA”) began to accept license applications, allowing each entity to own and operate one (1) Psilocybin manufacturing and processing facility for the production of Psilocybin Mushrooms and derived therapeutics (“Psilocybins”), and up to five (5) Psilocybin Facilitation Centers where clients would go to ingest Psilocybins and experience effects under the supervision of State Licensed Facilitators.

The OHA also launched Oregon’s medical cannabis program in 2014, giving KAYS critical experience in comprehending and complying with OHA mandates. The psilocybin opportunity is a logical extension for Kaya Holdings. The purpose, customer, regulations, and operations, as well as our familiarity with Oregon regulators, are synergistic with our current mission, and can be leveraged within our current operational infrastructure. We anticipate being able to respond to market demand rapidly, upon licensing. The licenses to be issued in Oregon will be the first ever State Legal Licensing of Psilocybin Manufacturing and Treatment Centers, and KAYS is positioned to be a first mover due to its operating history in Oregon. The Company has begun the process of enrolling staff that qualify for the licensing into the training programs that have been approved for state certification and is in process of identifying a site for Psilocybin Manufacturing and Processing and up to five (5) sites to open and operate Psilocybin Facilitation Centers, subject to financing and final regulatory approval.

On January 25, 2023 the Company confirmed that attorney Glenn E.J. Murphy was welcomed as a founding member to the FDT Board of Directors. Glenn will assist FDT with introductions to pharmaceutical companies seeking data and access to psychedelic patients, as well as advising on the development of intellectual property, structure of potential joint ventures, funding opportunities, acquisitions, and other related endeavors. Glenn has twenty-five years of private and corporate practice, including ten years in-house with the Henkel Group and more than fifteen years in private practice, Glenn's experience has touched on most every aspect of intellectual property practice.

On March 13, 2023, Bryan Arnold (one of KAYS Vice Presidents and its longest serving Oregon Employee) completed his OHA Certified Psilocybin Education through the Changra Institute and became one of the first eighteen graduates to obtain Psilocybin Facilitator certification in the State of Oregon. Bryan’s Facilitation License application has been approved by the OHA, and he now may oversee up to five (5) Psilocybin Treatment Facilities and up to one (1) Psilocybin Production Facility. Additionally, the Company expects to enroll additional potential licensee candidates within the coming months to bolster its ranks of OHA Licensed Psilocybin Facilitators as it moves forward with plans to open its first Psilocybin Clinic, subject to completion of financing and regulatory approvals.

On November 14, 2023 the Company filed a license application with the Oregon Department of Health (the “OHA”) for the licensure of The Sacred Mushroom™, an approximately 11,000 square foot psilocybin treatment center located in Portland, Oregon which would serve as the Company’s flagship psilocybin facility.

On February 15, 2023 KAYS reached an agreement in principle with Florida-based Total Holistic Center™ ("Total Holistic") to assist FDT with the development of its ketamine treatment model as a first step in the launch of its planned Fifth Dimension Therapeutics Mind Care Clinics and Telehealth Services. The Company has not yet proceeded with any further work to open ketamine clinics as it instead elected to concentrate on opening a Psilocybin Treatment Service Center in Portland, Oregon.

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NOTE 2 –LIQUIDITY AND GOING CONCERN

The Company’s consolidated financial statements as of September 30, 2023 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company had net income of $1,368,016 for the nine months ended September 30, 2023 and net loss of $5,385,209 for the nine months ended September 30, 2022. The increase in net income is due to the changes in derivative liabilities, as well as the company’s gain on disposal. At September 30, 2023 the Company has a working capital deficiency of $7,647,743 and is totally dependent on its ability to raise capital. 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. Even though management believes that it will be able to successfully execute its business plan, which includes third-party financing and capital issuance, and meet the Company’s future liquidity needs, there can be no assurances in that regard. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this material uncertainty. Management recognizes that the Company must generate additional funds to successfully develop its operations and activities. 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 Company’s business plan,

• business transactions to ensure continuation of the Company’s development and operations,

• development of a unified brand and the pursuit of licenses to operate recreational and medical marijuana facilities under the branded name.

NOTE 3 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) under the accrual basis of accounting.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates.

Risks and Uncertainties

The Company’s operations are subject to risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business failure.  

The Company has experienced, and in the future expects to continue to experience, variability in its sales and earnings.  The factors expected to contribute to this variability include, among others, (i) the uncertainty associated with the commercialization and ultimate success of the product, (ii) competition inherent at other locations where product is expected to be sold (iii) general economic conditions and (iv) the related volatility of prices pertaining to the cost of sales. 

Fiscal Year The Company’s fiscal year-end is December 31.

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Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Kaya Holdings, Inc. and all wholly and majority-owned subsidiaries. All significant intercompany balances have been eliminated.

Wholly owned subsidiaries:

· Alternative Fuels Americas, Inc. (a Florida corporation)

· 34225 Kowitz Road, LLC (an Oregon LLC)

Majority-owned subsidiaries:

Kaya Brands International, Inc. (a Florida Corporation)

Kaya Shalvah (“Kaya Farms Israel”, an Israeli corporation) majority owned subsidiary of KBI)

Kaya Farms Greece, S.A. (a Greek Corporation) majority owned subsidiary of KBI)

· Marijuana Holdings Americas, Inc. (a Florida corporation)

o MJAI Oregon 1 LLC

o MJAI Oregon 2 LLC (inactive)

o MJAI Oregon 3 LLC (inactive)

o MJAI Oregon 4 LLC (inactive)

o MJAI Oregon 5 LLC (inactive)

Non-Controlling Interest

The company owned 55% of Marijuana Holdings Americas until September 30, 2019. Starting October 1, 2019, Kaya Holding, Inc. owns 65% of Marijuana Holdings Americas, Inc. As of September 30, 2023, Kaya owns 65% of Marijuana Holdings Americas, Inc.

The company owned 85% of Kaya Brands International, Inc. until July 31, 2020. Starting August 1, 2020, Kaya Holding, Inc. owns 65% of Kaya Brands International, Inc.

The Company owns 65% of Fifth Dimension Therapeutics, Inc.

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents.

Inventory

Inventory consists of finished goods purchased, which are valued at the lower of cost or market value, with cost being determined on the first-in, first-out method.  The Company periodically reviews historical sales activity to determine potentially obsolete items and also evaluates the impact of any anticipated changes in future demand.  Total Value of Finished goods inventory as of September 30, 2023 is $13,256 and $11,990 as of December 31, 2022. Inventory allowance and impairment were $0 and $0 as of September 30, 2023 and December 31, 2022, respectively.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  

Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 5-30 years of the respective assets. Expenditures for maintenance and repairs are charged to expense as incurred.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations.

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Long-lived assets

The Company reviews long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

Accounting for the Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets.

Assets Held for Sale

The Company classifies an asset group (‘asset’) as held for sale in the period that (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year (subject to certain events or circumstances), (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially and subsequently measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in general and administrative expenses in the period in which the held for sale criteria are met. Conversely, gains are generally not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation or amortization expense on the asset. The Company assesses the fair value of assets held for sale less any costs to sell at each reporting period until the asset is no longer classified as held for sale.

Operating Leases

We lease our retail stores under non-cancellable operating leases. Most store leases include tenant allowances from landlords, rent escalation clauses and/or contingent rent provisions. We recognize rent expense on a straight-line basis over the lease term, excluding contingent rent, and record the difference between the amount charged to expense and the rent paid as a deferred rent liability.

Deferred Rent and Tenant Allowances

Deferred rent is recognized when a lease contains fixed rent escalations. We recognize the related rent expense on a straight-line basis starting from the date of possession and record the difference between the recognized rental expense and cash rent payable as deferred rent. Deferred rent also includes tenant allowances received from landlords in accordance with negotiated lease terms. The tenant allowances are amortized as a reduction to rent expense on a straight-line basis over the term of the lease starting at the date of possession.

Earnings Per Share

In accordance with ASC 260, Earnings per Share, the Company calculates basic earnings per share by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed if the Company has net income; otherwise it would be anti-dilutive and would result from the conversion of a convertible note.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

We are subject to certain tax risks and treatments that could negatively impact our results of operations

Section 280E of the Internal Revenue Code, as amended, prohibits businesses from deducting certain expenses associated with trafficking controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act). The IRS has invoked Section 280E in tax audits against various cannabis businesses in the U.S. that are permitted under applicable state laws. Although the IRS issued a clarification allowing the deduction of certain expenses, the scope of such items is interpreted very narrowly and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E favorable to cannabis businesses.

Provision for Income Taxes

We recorded a provision for income taxes in the amount of $19,109 during the nine months ended September 30, 2023 compared to $77,398 during the nine months ended September 30, 2022. Due to the net operating income we have, we believe are available to us to offset this entire tax liability, which arises under Section 280E of the Code because we are a cannabis company, as a conservative measure, we have accrued this liability.

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Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

• Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

• Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

	Fair Value Measurements at September 30, 2023
		Level 1		Level 2		Level 3
Assets
Cash	$	60,268	$	-	$	-
Total assets		60,268		-		-
Liabilities
Convertible debentures, net of discounts of $69,499		-		-		7,367,653
Derivative liability		-		-		3,523,317
Total liabilities		-		-		10,890,970
	$	60,268	$	-	$	(10,890,970)
	Fair Value Measurements at December 31, 2022
		Level 1		Level 2		Level 3
Assets
Cash	$	18,330	$	-	$	-
Total assets		18,330		-		-
Liabilities
Convertible debentures, net of discounts of $387,814		-		-		7,419,338
Derivative liability		-		-		6,204,878
Total liabilities		-		-		13,624,216
	$	18,330	$	-	$	(13,624,216)

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The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable – related party, approximate their fair values because of the short maturity of these instruments.

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. See Note 10.

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. 

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Binomial option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

In July 2017, the FASB issued ASU 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendment also clarifies existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt-Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

Prior to this Update, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date.

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The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated.

For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update.

The amendments in Part 1 of this Update are a cost savings relative to former accounting. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period.

The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480.

The Company adopted this new standard on January 1, 2019; however, the Company needs to continue the derivative liabilities due to variable conversion price on some of the convertible instruments. As such, it did not have a material impact on the Company’s consolidated financial statements. 

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the Company records a "beneficial conversion feature" ("BCF") and related debt discount.

When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt.  These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount.  The original issue discount would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

Extinguishments of Liabilities

The Company accounts for extinguishments of liabilities in accordance with ASC 860-10 (formerly SFAS 140) “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized.

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Stock-Based Compensation - Employees

The Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  

The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.  

If the Company is a newly formed corporation or shares of the Company are thinly traded, the use of share prices established in the Company’s most recent private placement memorandum (based on sales to third parties) (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar instruments is estimated on the date of grant using a Binomial Option Model option-pricing valuation model.  The ranges of assumptions for inputs are as follows:

• Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.  Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  

• Expected volatility of the entity’s shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  

• Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.  

Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest.

The expense resulting from share-based payments is recorded in general and administrative expense in the statements of operations.

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Stock-Based Compensation – Non-Employees

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

In June 2018, the FASB issued ASU No. 2018-07, Compensation–Stock Compensation: Improvement to Nonemployee Share-Based Payment Accounting (Topic 718). The ASU supersedes ASC 505-50, Equity-Based Payment to Non-Employment and expands the scope of the Topic 718 to include stock-based payments granted to non-employees. Under the new guidance, the measurement date and performance and vesting conditions for stock-based payments to non-employees are aligned with those of employees, most notably aligning the award measurement date with the grant date of an award. The new guidance is required to be adopted using the modified retrospective transition approach. The Company adopted the new guidance effective January 1, 2019, with an immaterial impact on its financial statements and related disclosures.

The fair value of share options and similar instruments is estimated on the date of grant using a Binomial option-pricing valuation model.  The ranges of assumptions for inputs are as follows:

• Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments.  The Company uses historical data to estimate holder’s expected exercise behavior.  If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  

• Expected volatility of the entity’s shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  

• Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.  

• Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments.  

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC 606 – Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identifying the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

To confirm, all of our OLCC licensed cannabis retail sales operations are conducted and operated on a “cash and carry” basis- product(s) from our inventory accounts are sold to the customer(s) and the customer settles the account at the time of receipt of product via cash payment at our retail store; the transaction is recorded at the time of sale in our point of sale software system. Revenue is only reported after the product has been delivered to the customer and the customer has paid for the product with cash.

To date the only other revenue we have received is for ATM transactions and revenue from this activity is only reported after we receive payment via check from the ATM service provider company.

19

Cost of Sales

Cost of sales represents costs directly related to the purchase of goods and third party testing of the Company’s pr

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended September 30, 2023.

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued.

Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements.

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NOTE 4 –PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at September 30, 2023 and December 31, 2022:  

	September 30, 2023			December 31, 2022
	(Unaudited)			(Audited)
ATM Machine	$	—		$	5,600
Computer		30,713			30,713
Furniture & Fixtures		59,733			42,965
HVAC		25,000			44,430
Land		17,703			17,702
Leasehold Improvements		32,304			147,636
Machinery and Equipment		55,067			69,312
Sign		—			12,758
Vehicle		24,000			24,000
Total		244,520			395,116
Less: Accumulated Depreciation		(217,735	)		(358,396	)
Property, Plant and Equipment - net	$	26,785		$	36,720

Depreciation expense totaled $9,935 and $17,836 for the nine months ended September 30, 2023 and 2022, respectively.

NOTE 5 –ASSETS HELD FOR SALE

At December 31, 2022 assets held for sale mainly referred to property the Company owned in Lebanon, Oregon, which the Company had intended to develop as a cannabis grow and production facility. All transactions that resulted in the reclassification of assets held for sale at December 31, 2022, are already completed in 2023.

As previously reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, the Company entered into an agreement (the “CVC Agreement”) with CVC International, Inc. (“CVC”), an institutional investor who holds certain of the Company’s Convertible Promissory Notes (the “Notes”), one of which was secured by a $500,000 mortgage on the property the Company owned in Lebanon, Oregon, which the Company intended to develop as a cannabis grow and production facility (the “Property”).

Pursuant to the CVC Agreement, CVC released its $500,000 mortgage lien on the Property, to enable the Company to sell the Property and utilize the proceeds therefrom for the benefit of the Company and its shareholders, without having to repay CVC the $500,000 Note held by CVC.

Additionally, CVC agreed to advance certain sums against the sale of the Property (“Advances”), which included $150,000 advanced at the time the CVC Agreement was entered into and $120,000 which was advanced to the Company on November 10, 2022. The advances bear interest at the rate of 10% per annum and are convertible into shares of our common stock at $0.08 per share, subject to market adjustment.

On February 28, 2023 we sold the Property for a price of $769,500, less commissions and customary closing costs. The net proceeds of the sale were used to repay the advances and an additional short-term loan of $100,000 (plus interest due of $5,000). After such repayments, the Company realized a gain on disposal of assets of $177,883.

The carrying amount of assets classified as held for sale at September 30, 2023 and December 31, 2022 was $0 and $516,076, respectively.

NOTE 6 –NON-CURRENT ASSETS

Other assets consisted of the following at September 30, 2023 and December 31, 2022:

	September 30, 2023 (Unaudited)		December 31, 2022 (Audited)
Rent Deposits	$	23,941	$	11,016
Security Deposits		5,491		5,491
Other Receivable		10,573		10,668
Non-Current Assets	$	40,005	$	27,175

During the nine months ended September 30, 2023, our other receivables decreased $95, related to changes of currency exchange rate. The increase of the rent deposit was primarily due to the new lease signed on September 22, 2023.

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NOTE 7 –CONVERTIBLE DEBT

These debts have a price adjustment provision. Therefore, the Company accounted for these Notes under ASC Topic 815-15 “Embedded Derivative.”  The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to discounts on convertible debt. Discounts have been amortized to interest expense over the respective term of the related note. In determining the indicated value of the convertible note issued, the Company used the Binomial Options Pricing Model with a risk-free interest rate of ranging from 5.03% to 5.53%, volatility ranging from 149.93% to 196.65%, trading prices was $0.045 per share and a conversion price ranging from $0.04 to $0.08 per share. The total derivative liabilities associated with these notes were $3,523,317 at September 30, 2023 and $6,204,878 at December 31, 2022.

See Below Summary Table

Convertible Debt Summary
	Debt Type	Debt Classification		Interest Rate	Due Date	Ending
		CT	LT			9/30/2023	12/31/2022
A	Convertible	X		10.0%	1-Jan-17	25,000	$             25,000
B	Convertible		X	8.0%	1-Jan-25	82,391	82,391
C	Convertible		X	8.0%	1-Jan-25	41,195	41,195
D	Convertible		X	8.0%	1-Jan-25	262,156	262,156
O	Convertible		X	8.0%	1-Jan-25	136,902	136,902
P	Convertible		X	8.0%	1-Jan-25	66,173	66,173
Q	Convertible		X	8.0%	1-Jan-25	65,274	65,274
S	Convertible		X	8.0%	1-Jan-25	63,205	63,205
T	Convertible		X	8.0%	1-Jan-25	313,634	313,634
CC	Convertible		X	10.0%	1-Jan-25	100,000	100,000
KK	Convertible		X	8.0%	1-Jan-25	188,000	188,000
LL	Convertible		X	8.0%	1-Jan-25	749,697	749,697
MM	Convertible		X	8.0%	1-Jan-25	124,690	124,690
NN	Convertible		X	8.0%	1-Jan-25	622,588	622,588
OO	Convertible		X	8.0%	1-Jan-25	620,908	620,908
PP	Convertible		X	8.0%	1-Jan-25	611,428	611,428
QQ	Convertible		X	8.0%	1-Jan-25	180,909	180,909
RR	Convertible		X	8.0%	1-Jan-25	586,804	586,804
SS	Convertible		X	8.0%	1-Jan-25	174,374	174,374
TT	Convertible		X	8.0%	1-Jan-25	345,633	345,633
UU	Convertible		X	8.0%	1-Jan-25	171,304	171,304
VV	Convertible		X	8.0%	1-Jan-25	121,727	121,727
XX	Convertible		X	8.0%	1-Jan-25	112,734	112,734
YY	Convertible		X	8.0%	1-Jan-25	173,039	173,039
ZZ	Convertible		X	8.0%	1-Jan-25	166,603	166,603
AAA	Convertible		X	8.0%	1-Jan-25	104,641	104,641
BBB	Convertible		X	8.0%	1-Jan-25	87,066	87,066
DDD	Convertible		X	8.0%	1-Jan-25	75,262	75,262
EEE	Convertible		X	8.0%	1-Jan-25	160,619	160,619
GGG	Convertible		X	8.0%	1-Jan-25	79,422	79,422
JJJ	Convertible		X	8.0%	1-Jan-25	52,455	52,455
LLL	Convertible		X	8.0%	1-Jan-25	77,992	77,992
MMM	Convertible		X	8.0%	1-Jan-25	51,348	51,348
PPP	Convertible		X	8.0%	1-Jan-25	95,979	95,979
SSS	Convertible		X	8.0%	1-Jan-25	75,000	75,000
TTT	Convertible		X	8.0%	1-Jan-25	80,000	80,000
VVV	Convertible		X	8.0%	1-Jan-25	75,000	75,000
WWW	Convertible		X	8.0%	1-Jan-25	60,000	60,000
XXX	Convertible		X	8.0%	1-Jan-25	100,000	100,000
YYY	Convertible		X	8.0%	1-Jan-25	50,000	50,000
ZZZ	Convertible		X	8.0%	1-Jan-25	40,000	40,000
AAAA	Convertible		X	8.0%	1-Jan-25	66,000	66,000
BBBB	Convertible	X		12.0%	1-Mar-23	-	150,000
CCCC	Convertible	X		10.0%	1-Mar-23	-	120,000
DDDD	Convertible		X	10.0%	31-Dec-24	-	100,000
Total Convertible Debt						7,437,152	7,807,152
Less: Discount						(69,499)	(387,819)
Convertible Debt, Net of Discounts						$        7,367,653	$        7,419,333
Convertible Debt, Net of Discounts, Current						$             25,000	$           240,288
Convertible Debt, Net of Discounts, Long-term						$        7,342,653	$        7,179,045

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FOOTNOTES FOR CONVERTIBLE DEBT ACTIVITY FOR QUARTER ENDED SEPTEMBER 30, 2023

As previously reported for the quarter ended September 30, 2022, the Company entered into an agreement (the “CVC Agreement”) with CVC International, Inc. (“CVC”), an institutional investor who holds certain of the Company’s Convertible Promissory Notes (the “Notes”), one of which was secured by a $500,000 mortgage on the property the Company owned in Lebanon, Oregon, which the Company intended to develop as a cannabis grow and production facility (the “Property”).

Pursuant to the CVC Agreement, CVC released its $500,000 mortgage lien on the Property, to enable the Company to sell the Property and utilize the proceeds therefrom for the benefit of the Company and its shareholders, without having to repay CVC the $500,000 Note held by CVC.

Additionally, CVC agreed to advance certain sums against the sale of the Property (“Advances”), which included $150,000 advanced at the time the CVC Agreement was entered into and $120,000 which was advanced to the Company on November 10, 2022. The advances bear interest at the rate of 10% per annum and are convertible into shares of our common stock at $0.08 per share, subject to market adjustment.

On February 28, 2023 we sold the Property for a price of $769,500, less commissions and customary closing costs. The net proceeds of the sale were used to repay the advances and an additional short-term loan of $100,000 (plus interest due of $5,000).

NOTE 8 –NON-CONVERTIBLE DEBT

	September 30, 2023		December 31, 2022
Note 5	$	9,312		9,312
Note 6		355,000		—
Note 7		100,000		—
Total Non-Convertible notes	$	464,312		9,312

(5) On September 16, 2016, the Company received a total of $31,661 to be used for equipment in exchange for a two year note in the aggregate amount of $31,661 with interest accruing at 18% per year and a 10% loan fee. The note is in default as of June 30, 2023 with an outstanding balance of $9,312.

(6) On June 12, 2023, the Company issued a 10% promissory note in the amount of $350,000 with 10% interest rate, payable to CVC International Ltd, secured by 10% of monthly total revenues from all sources of Kaya Holdings, Inc. and any of its subsidiaries. and the noteholder also received 10 Series A preferred shares in FDT, which are convertible into a total of 10% of the common shares. The due date of the note is June 12, 2025. At the end of September 2023, the company paid $5,000, which is 10% of the total revenues from all sources of Kaya Holdings, Inc to the Holder and the Holder agreed to reinvest it as the additional of the note.

(7) On August 28, 2023 the Company received $100,000 from the issuance of working capital loan to another investor. Interest is stated at 10%. The Note is Due in March 15, 2024.

B-Related Party
Loan payable - Stockholder, 0%, Due December 31, 2025 (1)	$	250,000	$	250,000
	$	250,000	$	250,000

(1) The $250,000 non-convertible note was issued as part of a Debt Modification Agreement dated January 2, 2014. On January 1, 2019, the holder of the note extended the due date until December 31, 2021.  The interest rate of the non-convertible note is 0%. On December 31, 2021, the Company entered into an agreement to further extend the debt until December 31, 2025, with no additional interest for the extension period. The Company used the stated rate of 9% as imputed interest rate, which was $16,829 and $22,500 for the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, the balance of the debt was $250,000.  

NOTE 9 –STOCKHOLDERS’ EQUITY

The Company has 10,000,000 shares of preferred stock authorized with a par value of $0.001, of which 100,000 shares have been designated as Series C convertible preferred stock (“Series C” or “Series C preferred stock”). The Company has 10,000,000 shares of preferred stock authorized. The Board has the authority to issue the shares in one or more series and to fix the designations, preferences, powers and other rights, as it deems appropriate.

Each share of Series C has 434 votes on any matters submitted to a vote of the stockholders of the Company and is entitled to dividends equal to the dividends of 434 shares of common stock. Each share of Series C preferred stock is convertible at any time at the option of the holder into 434 shares of common stock.

On December 27, 2021 the Company entered into an Exchange Agreement with Craig Frank and BMN Consultants, Inc. for 50,000 Series C Preferred Shares of Kaya Holdings held by Mr. Frank and 50,000 Series C Preferred Shares of Kaya Holdings optioned by BMN from Mr. Frank and Ilan Sarid (pursuant to stock options extended to BMN in 2010), 100,000 total shares.

Pursuant to the terms and conditions of this Agreement, the Holders each agreed to (a) waive payment of approximately $338,000 of Accrued Compensation; (b) defer payment of the remaining balance of Accrued Compensation owed to each of them of approximately $250,000 until January 1, 2025 ; and (c) exchange the 50,000 Series C Shares ( at total of 100,000) for twenty (20) Series D Convertible Preferred Shares of Kaya Holdings Stock. Mr. Frank’s Series D shares were issued to Mr. Frank and the Series D shares issued for the option held by BMN were issued to RLH Financial Services pursuant to a private sale between BMN and RLH whereby RLH acquired the shares in exchange for a promissory note in the amount of $1,000,000.

Each Share of 40 Series D Preferred Stock is convertible, at the option of the holder thereof, at any time and from time to time, into one percent (1%) of the Company’s Fully Diluted Capitalization as of the Conversion Date. This resulted in a related party gain of $559,058.

The Company has 500,000,000 shares of common stock authorized with a par value of $0.001. Each share of common stock has one vote per share for the election of directors and all other items submitted to a vote of stockholders. The common stock does not have cumulative voting rights, preemptive, redemption or conversion rights.

There were no new issuances of common stock during the three months ended September 30, 2023.

As of September 30, 2023, there were 22,172,835 shares of common stock outstanding.

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NOTE 10 –DERIVATIVE LIABILITIES

Effective January 1, 2019, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date.

However, due to a recognition of tainting, due to variable conversion price on some of the convertible notes, all convertible notes are considered to have a derivative liability, therefore the Company accounted for these Notes under ASC Topic 815-15 “Embedded Derivative.”  The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to discounts on convertible debt. Discounts are amortized to interest expense over the respective term of the related note. In determining the indicated value of the convertible note issued, the Company used the Binomial Options Pricing Model with a risk-free interest rate of ranging 5.03% to 5.53%, volatility ranging from 149.93% to 194.43%, trading prices was $0.045 per share and a conversion price ranging from $0.04 to $0.08 per share. The total derivative liabilities associated with these notes were $3,523,317 at September 30, 2023 and $6,204,878 at December 31, 2022.

As a result of the application of ASC No. 815, the fair value of the ratchet feature related to convertible debt and warrants is summarized as follow: 

Balance as of December 31, 2022	$	6,204,878
Change in Derivative Values		(2,535,936	)
Settlement of debt-reclass to APIC		(145,625	)
Balance as of September 30, 2023	$	3,523,317

The Company recorded the debt discount to the extent of the gross proceeds raised and expended immediately the remaining fair value of the derivative liability, as it exceeded the gross proceeds of the note.  

The Company recorded settlement of debt, reclassed to APIC of $145,625 and $0 for the nine months ended September 30, 2023 and 2022, respectively. 

The Company recorded a change in the value of embedded derivative liabilities gain of $2,535,936 and a loss of $3,904,639 for the nine months ended September 30, 2023 and 2022, respectively.

NOTE 11 –DEBT DISCOUNT

The Company recorded the debt discount to the extent of the gross proceeds raised and expended immediately the remaining fair value of the derivative liability, as it exceeded the gross proceeds of the note.

Debt discount amounted to $69,499 and $387,819 as of September 30, 2023 and December 31, 2022, respectively.

The Company recorded the amortization of debt discount of $318,320 and $163,817 for the nine months ended September 30, 2023 and 2022, respectively. 

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 NOTE 12 –RELATED PARTY TRANSACTIONS

At December 31, 2014, the Company was indebted to an affiliated shareholder of the Company for $840,955, which consisted of $737,100 principal and $103,895 accrued interest, with interest accruing at 10%. On January 2, 2014, the Company entered into a Debt Modification Agreement whereby the total amount of the debt was reduced to $750,000 and no interest accrued until December 31, 2015. $500,000 of the debt is convertible into 50,000 Series C Convertible Preferred Shares of KAYS. The remaining $250,000 is not convertible.

On December 31, 2015, the Company entered into an agreement to extend the debt until December 31, 2017 with no additional interest for the extension period. On January 1, 2018 the Company entered into an agreement to further extend the debt until December 31, 2021. On December 31, 2021, the Company entered into an agreement to further extend the debt until December 31, 2025, with no additional interest for the extension period, with no additional interest for the extension period.

At December 2017, the company was indebted to Craig Frank, Chairman, CEO and Acting CFO for KAYS, in the amount of $7,737 for travel and miscellaneous expenses incurred by Mr. Frank from travel and related activities in Oregon.

In each of 2018 and 2019, the Company issued stock grants to Jordi Arimany and Carrie Schwarz for 100,000 shares of KAYS stock for their service as board members. The stock was issued from Treasury as restricted stock and carries a one-year restriction before it can be registered for resale pursuant to Rule 144.

In 2018 and 2019, the Company issued stock grants to Craig Frank for 3,000,00 shares of KAYS stock each year, pursuant to his employment agreement via board resolution. Jordi Arimany and Carrie Schwarz for 100,000 shares of KAYS stock. The stock was issued from Treasury as restricted stock and carries a one-year restriction before it can be registered for resale pursuant to Rule 144.

In August, 2018 KAYS entered into an agreement with Bruce Burwick, (who subsequently joined the Board of Directors and became an affiliate of the Company) to purchase the Eugene, Oregon based Sunstone Farms grow and manufacturing facility, which is licensed by the OLCC for both the production (growing) of medical and recreational marijuana flower and the processing of cannabis concentrates/extracts/edibles. The purchase includes a 12,000 square foot building housing an indoor grow facility, as well as equipment for growing and extraction activity. KAYS paid Bruce Burwick $1,300,000 for the real property and schedule of equipment that was and is used to operate the facility.

Bruce Burwick acquired the property for satisfaction of a promissory note due him for $1,433,000. The purchase price of $1.3 million for the OLCC licensed marijuana production and processing facility, consisting of the building and equipment was paid for by the issuance of 12 million shares of KAYS restricted stock to the seller at closing. The shares carry a lock-up-restriction that allows for their staged eligibility for resale over a 61-month period from the date of the purchase of the facility by KAYS. Additionally, the seller purchased 2.5 million restricted shares for $250,000 in cash in a private transaction with the Company. The proceeds from the sale of those shares were and are being used for acquisition related expenses, transitional operating costs and facility capital improvements with respect to the production and processing facility we purchased.

On October 14, 2019 the shareholder submitted a conversion notice and the $500,000 in convertible debt was converted into 50,000 Series C Preferred shares of KAYS stock. The stock was issued from Treasury as restricted stock and carries a minimum of one year restriction before it can be registered for resale pursuant to Rule 144.

In 2019, the Company issued a stock grant to Bruce Burwick for 100,000 shares of KAYS stock for his service as a board member. The stock was issued from Treasury as restricted stock and carries a one-year restriction before it can be registered for resale pursuant to Rule 144.

In 2019, the Company entered into amended consulting agreements with Tudog International Consulting, Inc. which provides CEO services to the Company through Craig Frank, an Officer of the Company and BMN Consultants, Inc. which provides business development and financial consulting services to the Company through William David Jones, a non-officer Consultant to the Company. Pursuant to the amended consulting agreements, each entity is entitled to monthly compensation of $25,000. Due to the liquidity of the Company, the compensations were paid partially over the periods. As of December 31, 2022, the accrued compensation was approximately $500,000.   By agreement of the parties, the accrued compensation will not be paid until January 1,, 2025 and has been recorded as a long-term liability. As of December 31, 2022, the Company also had $273,190 of accounts payable due to Tudog International Consulting, Inc. and BMN Consultants, Inc.

In 2021, the Company formed Kaya Farm Greece, which is a majority owned subsidiary of Kaya Brands International, Inc., with 70% ownership. The remaining 30% is owned by related parties of the Company. Subsequently, Kaya Farm Greece entered an acquisition agreement to acquire 50% GREEKKANNABIS S.A. (GK) The remaining 50% of GREEKKANNABIS S.A. is currently owned by Ilias Kammenos (President of GK) and Panagiotis Kininis (Vice president of GK). There is non-controlling capital of $1,909,211 representing the equity not currently owned by the Company. The financial statements have been consolidated with the Company.  

On March 31, 2021 the Company entered into a settlement with Sunstone Capital Partners, LLC, Sunstone Marketing Partners LLC and Bruce Burwick, the principal of Sunstone and a director of Kays, regarding the failure to deliver to KAYS the Oregon Cannabis Production and Processing Licenses that were part of a warehouse purchase transaction in August 2018.

In 2023, Tudog consulting, Inc, BMN Consultings, Inc and 495 Oxford Consulting, Inc which all provide services to the Company through Craug Frank and William David Jones, forgiven totally $38,329 of payable expense. The payable forgiveness are recorded as Additional paid in capital.

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On July 28, 2021 the Company announced that all terms had been satisfied. Pursuant to the terms of the settlement, Bruce Burwick surrendered to KAYS 1,006,671 shares of our common stock issued to him in connection with the transaction (800,003 shares which were issued for the facility purchase, 166,667 shares which were issued for $250,000 in cash and 40,001 shares which were issued as annual compensation for Burwick serving as a director of KAYS). The shares have been submitted to KAYS' transfer agent for cancellation. In addition, the Company received clear title to the warehouse facility, which enables the Company to sell it without restriction. As part of the settlement, Burwick received $160,000 from the net proceeds of the sale of the facility's grow license to an unrelated third party, resigned from the Company's board of directors and agreed to work as a non-exclusive consultant to the Company for the next four years for a yearly fee of $35,000.00.

On October 12, 2021, KAYS completed the sale of its Eugene, Oregon Cannabis Production and Processing Facility for gross proceeds of $1,325,000, generating a cash influx of approximately $0.09 per share for the Company (the “Eugene Warehouse Sale”). The sale was part of our recently announced settlement with Sunstone Farms, and it also resulted in the cancellation of 1,006,671 shares of KAYS stock, decreasing the Company’s issued and outstanding shares by approximately 6.5% to 14.7 million shares. Funds received from the sale were and are being used to repay certain debt and strengthen our balance sheet and for general working capital purposes, as well as provide the initial stage capital for some of the Company’s U.S. and global expansion activities, including its planned cultivation sites in Greece and Israel.

On August 30, 2021 the Company elected to dispose of two (2) of the four (4) Fiat cars that it owned that it was not using. The four cars were originally purchased in September of 2017 for prices ranging from $13,584.00 to $14,992.

After a review of market pricing the Company was able to sell one of the cars to Carvana for $14,460.00 and the funds were used for general working capital. Additionally, the second Fiat was transferred to Mr. Frank in lieu of $15,000in fees owed him. After adjusting for net book value, the Company recorded $12,453 to additional paid in capital.

On December 27, 2021 the Company entered into an Exchange Agreement with Craig Frank and BMN Consultants, Inc. for 50,000 Series C Preferred Shares of Kaya Holdings held by Mr. Frank and 50,000 Series C Preferred Shares of Kaya Holdings optioned by BMN from Mr. Frank and Ilan Sarid (pursuant to stock options that they each extended to BMN in 2010), 100,000 total shares.

Pursuant to the terms and conditions of this Agreement, the Holders each agreed to (a) waive payment of approximately $338,000 of Accrued Compensation; (b) defer payment of the remaining balance of Accrued Compensation owed to each of them of approximately $250,000 until January 1, 2025 ; and (c) exchange the 50,000 Series C Shares ( at total of 100,000) for twenty (20) Series D Convertible Preferred Shares of Kaya Holdings Stock. Each Share of 40 Series D Preferred Stock is convertible, at the option of the holder thereof, at any time and from time to time, into one percent (1%) of the Company’s Fully Diluted Capitalization as of the Conversion Date. This resulted in a related party gain, which was applied to APIC. Mr. Frank’s Series D shares were issued to Mr. Frank and the Series D shares issued for the option held by BMN were issued to RLH Financial Services pursuant to a private sale between BMN and RLH whereby RLH acquired the shares in exchange for a promissory note in the amount of $1,000,000.

On December 1, 2022, the Company priced a its one remaining vehicle with Carvana and received a offer for $14,510 In lieu of accepting the bid and partially paying Mr. Frank’s invoices which were still due from August, 2022, the Company agreed to transfer title to the car to him in settlement of $17,000.00 in fees that were due him in August (these are fees that are not being deferred and would otherwise be paid in cash, and cost the Company $2,490.00 more in fees if the car was sold).

On December 15, 2022 the Board of Directors approved the issuance of a total of 2,100,000 shares as Officer and Director Compensation as follows:1,500,000 shares of common stock to our CEO Craig Frank   300,000 shares to Carries Schwarz  300,000 shares to Mitchell Chupak, as annual award compensation, per their agreements. 

NOTE 13 –STOCK OPTION PLAN

On September 15, 2022 the Company approved the 2022 Equity Incentive Plan, which provides for equity incentives to be granted to the Company’s employees, executive officers or directors or to key advisers or consultants. Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying shares as determined pursuant to the 2022 Incentive Stock Plan, restricted stock awards, other stock based awards, or any combination of the foregoing. The 2022 Incentive Stock Plan is administered by the board of directors.

The remaining balance of the shares available in the plan is 450,000 shares.

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NOTE 14 –WARRANTS

On September 8, 2015 the Company received a total of $100,000 from an accredited investor in exchange for a two year note in the aggregate amount of $100,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 210,772 paid and non-assessable post -reverse split shares of the Common Stock at the price of $0.4744455 per post-reverse split share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $100,000, 10% promissory note due September 9, 2017 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or September 9, 2017. As of December 31, 2019, the note was paid in full. As of September 30, 2023, the warrants have expired.

On September 9, 2015 the Company received a total of $100,000 from an accredited investor in exchange for a two year note in the aggregate amount of $100,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 210,772 paid and non-assessable post-reverse split shares of the Common Stock at the price of $0.4744455 per post-reverse split share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $100,000, 10% promissory note due September 9, 2017 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or September 9, 2017. As of December 31, 2019, the note was paid in full. As of September 30, 2023, the warrants have expired.

On May 9, 2016 the Company received a total of $75,000 from an accredited investor in exchange for a two year note in the aggregate amount of $75,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 158,079 paid and non-assessable post-reverse split shares of the Common Stock at the price of $0.4744455 per post-reverse split share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $75,000, 10% promissory note due May 9, 2018 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or May 9, 2018. As of December 31, 2019, the note was paid in full.

On May 17, 2016 the Company received a total of $75,000 from an accredited investor in exchange for a two year note in the aggregate amount of $75,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 158,079 paid and non-assessable shares of the Common Stock at the price of $0.4744455 per share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $75,000, 10% promissory note due May 17, 2018 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or May 17, 2018. As of December 31, 2019, the note was paid in full.

 Warrants issued to Non-Employees

	Warrants Issued	Weighted Average Exercise Price	Weighted Average Contract Terms Years
Balance as of December 31, 2022	316,158	0.4744455	0.36
Granted	-	-	-
Exercised	-	-	-
Expired	-	-	-
Balance as of September 30, 2023	316,158	0.4744455	0.36

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NOTE 15 –COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company has one operating lease for an office in Fort Lauderdale, Florida, one retail store location in Oregon under arrangements classified as leases under ASC 842.

Effective June 1, 2019, the Company leased the office space in Fort Lauderdale, Florida under a 2-year operating lease expiring May 31, 2021 at a rate of $1,802 per month. On June 1, 2021 the lease was extended for another year and on June 1 in 2022 the lease was extended for an additional year. The current monthly payment inclusive of sales tax and operating expenses is $2,079 with right of use liabilities of $0. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The lease was terminated on May 30, 2023. On October 1, 2023, the lease was extended for another year.

Effective May 15, 2014, the Company leased a unit in Portland, Oregon under a 5-year operating lease expiring May 15, 2019. In May 2019, the lease had been extended to May 15, 2024. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The current monthly payment is $2,950 with right of use liabilities of $21,041 as of September 30, 2023.

Effective May 22, 2015, the Company leased a unit in Salem, Oregon under a 5-year operating lease expiring May 31, 2020. In May 2020, the lease had been extended to May 31, 2025. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The lease was extended for an additional 5 years. The current monthly payment is $5,140 with right of use liabilities of $124,819 as of March 31, 2023.This lease was terminated as of April 19, 2023 as part of a settlement with the Landlord on the three (3) outstanding retail store leases that the Company had outstanding in Salem, Oregon for locations that were closed, and no funds are owed for the leases.

Effective April 15, 2016, the Company leased a unit in Salem, Oregon under a 5-year operating lease expiring April 15, 2021. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The current monthly payment is $0 with right of us liabilities of $0. This lease was terminated as of April 19, 2023 as part of a settlement with the Landlord on the three (3) outstanding retail store leases that the Company had outstanding in Salem, Oregon for locations that were closed, and no funds are owed for the leases.

Effective April 15, 2016, the Company leased a unit in Salem, Oregon under a 5-year operating lease expiring April 15, 2021. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The current monthly payment is $0 with right of us liabilities of $0. This lease was terminated as of April 19, 2023 as part of a settlement with the Landlord on the three (3) outstanding retail store leases that the Company had outstanding in Salem, Oregon for locations that were closed, and no funds are owed for the leases.

On September 21, 2023, the Company executed a lease for approximately 11,000 square feet of space in Portland, OR for its Psilocybin business. The space takes up the entire seventh floor of commercial building which has floor to ceiling windows offering sweeping views of the Portland Skyline, and has an existing substantial kitchen/ café area that the Company intends to utilize for a “Microdosing Café” concept, as well as already constructed rooms that the Company intends to utilize for individual and group Psilocybin sessions. The lease is for one year with option for an additional two years, if all conditions are met. The lease does not commence until such time as the Company has received notice of OHA Psilocybin Service Center License approval for the location.

The initial term of the lease is 14 months, and as long as there is never an Event of Default by Tenant under this Lease during the first fourteen (14) months of the Lease, the term of the Lease shall be automatically extended for twenty-five (25) additional months, on the terms and conditions contained in the Lease . In the event of Default by Tenant during the initial fourteen (14) months of the Lease, the Lease term shall automatically expire on the last day of the 14th month.

Base Rent for the initial 14 month period is $10,761, and the Base Rent for Months 1, 2 and 15 shall be abated, provided Month 15 shall be abated only if initial lease term is extended per the terms noted above. Bas Rent beginning at Month 16 (if lease is extended) increase to $12,913.20

The Base Rent also includes payments in restricted stock to the Landlord as follows: Promptly upon the Commencement Date, Tenant shall issue to Landlord, or entities or individual(s) designated by Landlord, Two Million Five Hundred Thousand (2,500,000) shares of restricted stock in Tenant (the “Kaya Shares”). Tenant represents and warrants to Landlord (which representation shall be deemed renewed upon issuance of the Kaya Shares) that 250,000 shares of the Kaya Shares will be eligible for sale by Landlord every six (6) months after the original issuance. The Kaya Shares shall belong to Landlord and shall be returned to Tenant only in the event of termination of the Lease pursuant to Section 21.14, if at all.

The Company has escrowed $51,817.75 with an Oregon-licensed attorney in Oregon (“Escrow Holder”) pursuant to an escrow agreement between Tenant, Landlord and the Escrow Holder, of which $38,893.75 (the “Prepaid Rent”) is prepaid Base Rent and Additional Rent for months 1 through 5 of the Term and $12,925 is the Security Deposit (defined below). Tenant shall pay all fees charged by the Escrow Holder for holding the Prepaid Rent and Security Deposit pursuant to the escrow agreement. The Prepaid Rent and Security Deposit shall be released to Landlord promptly upon Lease Commencement. Tenant shall promptly execute any documents required by Escrow Company for such release upon Lease Commencement 

As noted above, the one (1) lease that the Company entered into on June 1, 2015 and the two (2) leases that the Company entered into effective April 15, 20 16 were terminated as part of a settlement with the landlord entered into on April 19, 2023 concurrent with a payment of $75,000 which resolved all outstanding liabilities of the Company and its subsidiaries for the leases.

The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company used an estimated incremental borrowing rate of 9.32% to estimate the present value of the right of use liability.

The Company has right-of-use assets of $19,361 and operating lease liabilities of $21,041 as of September 30, 2023. Operating lease expenses for the nine months ended September 30, 2023 and 2022 were $218,789 and $207,680, respectively. The big changes were due to the termination of the three stores lease. As the closure of 3 stores, the Company evaluated long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Hence, the Company has recorded $151,082 in impairment gain related to right-of-use assets during the nine months ended September 30, 2023.

Maturity of Lease Liabilities at September 30, 2023	Amount
2023		9,300
2024		12,400
2025		-
Later years		-
Total lease payments		21,700
Less: Imputed interest		(659	)
Present value of lease liabilities	$	21,041

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Note 16- SUBSEQUENT EVENTS

On November 14, 2023 the Company filed a license application with the Oregon Department of Health (the “OHA”) for the licensure of The Sacred Mushroom™, an approximately 11,000 square foot psilocybin treatment center located in Portland, Oregon which would serve as the Company’s flagship psilocybin facility.

On 10/1/23 CVC agreed to advance an additional $150,000 to KAYs pursuant to the previously agreed non-convertible notes, including 145,000 wire deposit received on October 06, 2023, and $5,000 payment reinvesting.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Business Overview

PART I

Item 1. Business.

Overview

Kaya Holdings, Inc is a holding company focusing on wellness and mental health through operations in psychedelic treatment clinics, medical and recreational cannabis, and CBD products.

In 2014, KAYS became the first US public company to own and operate a medical cannabis dispensary in the United States and is again seeking to break ground with the planned opening of The Sacred Mushroom™ Psilocybin Treatment Center. KAYS plans to operate The Sacred Mushroom™ as part of its Fifth Dimension Therapeutics, Inc. subsidiary (“FDT”), which also plans to work cooperatively with select pharmaceutical companies to maximize the curative potential of psilocybin.

KAYS has approximately nine years of operational experience as a vertically integrated legal cannabis enterprise and is the first U.S. publicly traded company to operate a legal marijuana dispensary, as well as the first to vertically integrate by adding cultivation and manufacturing. The Company produces, distributes, and/or sells a full range of premium cannabis products including flower, oils, vape cartridges and cannabis infused confections, baked goods and beverages through a fully integrated group of subsidiaries and companies supporting highly distinctive brands.

In November 2020 Oregon became the first state in the United States to legalize and license the supervised use of psilocybin, and in January, 2023 they began accepting licensing applications for OHA State Licensed Psilocybin Facilitators (OHA approved licensed professionals to operate the clinics) and also licensing for Manufacturing, Testing and the Facilitation clinics where clients can obtain Psilocybin Services. The OHA also launched Oregon’s medical cannabis program in 2014, giving KAYS critical experience in comprehending and complying with OHA mandates, and sets the stage for KAYS “First Mover Advantage” in the emerging US psychedelic therapeutics industry.

On November 14, 2023 the Company filed a license application with the Oregon Department of Health (the “OHA”) for the licensure of The Sacred Mushroom™, an approximately 11,000 square foot psilocybin treatment center located in Portland, Oregon which would serve as the Company’s flagship psilocybin facility.

Psilocybin Business Plan and KAYS Fifth Dimension Therapeutics, Inc. Subsidiary

On December 13, 2022 the Company formed Fifth Dimension Therapeutics ™ (“FDT”) to seek to provide psychedelic "mind care" treatments to veterans suffering from PTSD, addicts seeking to break addiction, individuals with eating disorders, and others with a wide array of treatment resistant mental health disorders.

On January 3, 2023 the Oregon Health Authority (the “OHA”) began to accept license applications, allowing each entity to own and operate one (1) Psilocybin manufacturing and processing facility for the production of Psilocybin Mushrooms and derived therapeutics (“Psilocybins”), and up to five (5) Psilocybin Facilitation Centers where clients would go to ingest Psilocybins and experience effects under the supervision of State Licensed Facilitators.

The OHA also launched Oregon’s medical cannabis program in 2014, giving KAYS critical experience in comprehending and complying with OHA mandates. The psilocybin opportunity is a logical extension for Kaya Holdings. The purpose, customer, regulations, and operations, as well as our familiarity with Oregon regulators, are synergistic with our current mission, and can be leveraged within our current operational infrastructure. We anticipate being able to respond to market demand rapidly, upon licensing. The licenses to be issued in Oregon will be the first ever State Legal Licensing of Psilocybin Manufacturing and Treatment Centers, and KAYS is positioned to be a first mover due to its operating history in Oregon. The Company has begun the process of enrolling staff that qualify for the licensing into the training programs that have been approved for state certification and is in process of identifying a site for Psilocybin Manufacturing and Processing and up to five (5) sites to open and operate Psilocybin Facilitation Centers, subject to financing and final regulatory approval.

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On January 25, 2023 the Company confirmed that attorney Glenn E.J. Murphy was welcomed as a founding member to the FDT Board of Directors. Glenn will assist FDT with introductions to pharmaceutical companies seeking data and access to psychedelic patients, as well as advising on the development of intellectual property, structure of potential joint ventures, funding opportunities, acquisitions, and other related endeavors. Glenn has twenty-five years of private and corporate practice, including ten years in-house with the Henkel Group and more than fifteen years in private practice, Glenn's experience has touched on most every aspect of intellectual property practice.

On March 13, 2023, Bryan Arnold (one of KAYS Vice Presidents and its longest serving Oregon Employee) completed his OHA Certified Psilocybin Education through the Changra Institute and became one of the first eighteen graduates to obtain Psilocybin Facilitator certification in the State of Oregon. Bryan’s Facilitation License application has been approved by the OHA, and he now may oversee up to five (5) Psilocybin Treatment Facilities and up to one (1) Psilocybin Production Facility. Additionally, the Company expects to enroll additional potential licensee candidates within the coming months to bolster its ranks of OHA Licensed Psilocybin Facilitators as it moves forward with plans to open its first Psilocybin Clinic, subject to completion of financing and regulatory approvals.

On November 14, 2023 the Company filed a license application with the Oregon Department of Health (the “OHA”) for the licensure of The Sacred Mushroom™, an approximately 11,000 square foot psilocybin treatment center located in Portland, Oregon which would serve as the Company’s flagship psilocybin facility.

The Science of Psilocybin and Treatment Resistant Mental Health Issues

Growing evidence suggests that psychedelics act on the brain’s default network, or those regions of the brain that remain active when your brain is not engaged in active tasks. The default network provides a “framework” for the brain’s activity, providing structure and making order of all that is happening in the cortex and keeping external neurological information (delivered via our senses) distinct from internally generated activity (thoughts, emotions, and memory).

Psychedelics seem to suppress the default network, relaxing the separation of our senses, memories, thoughts, and emotions, and enabling each to influence each other more easily. This ability to break down the brain’s “framework” has led to a focus on psychedelics as a groundbreaking opportunity to address a wide range of mental health disorders.

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It is estimated that approximately every 40 seconds someone in the world commits suicide due to treatment resistant Depression, Post Traumatic Stress Disorder (PTSD), severe drug and alcohol addiction and other debilitating mental health illnesses. While anti-depressants and anti-anxiety medications offer various levels of relief for a significant number of people suffering from these conditions, it is estimated that the medications do not work for in excess of 40% of those afflicted and their life is an endless struggle with no relief provided from the current treatment regimens.

Psilocybin, a naturally occurring compound found in “magic mushrooms”, is one of an emerging class of psychedelic medicines that contain potent psychoactive chemicals that can serve to affect human perception, emotions, and other cognitive functions. Psychedelic medicines have been found to have ground-breaking potential in treating a range of physical and mental disorders including anxiety and panic disorder, resistant depression, opiate addiction, adult attention deficit hyperactivity disorder (“ADHD”), opioid addiction, post-traumatic stress disorder (“PTSD”), and acute and chronic pain. 

A 2020 study in the Journal of the American Medical Association Psychiatry found that 71% of the patients with severe, previously treatment-resistant depression, showed “clinically significant improvement” that lasted at least four weeks and with “low potential” for addiction after treatment with Psilocybin. Speaking on the study one of the study’s co-authors, Alan Davis, a neuroscience researcher at Ohio State University and adjunct professor at the Johns Hopkins Center for Psychedelic and Consciousness Research stated, “I would say at this stage the research is showing that in safe settings, this provides relief from debilitating mental health problems for some people.”

Companies such as Compass Pathways, ATAI Life Sciences, and Cybin are engaged in developing synthetic versions of psilocybin and psilocin (the active ingredient in “magic mushrooms”) to offer as breakthrough therapies for treatment resistant mental health disorders. However, the costly, time consuming, and unpredictable path to FDA approval places in doubt consumer access to these synthetic psilocybin treatments anytime soon. Meanwhile, relief for million of patients (and their families) remains elusive.

KAYS, through it’s the 5^th Dimension Therapeutics subsidiary, is dedicated to the development and delivery of innovative psychedelics-based mental health therapies that can offer relief immediately.

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The Sacred Mushroom™ Psilocybin Treatment Facility

The Sacred Mushroom™ (TSM), currently under development in Portland, Oregon, is the Company’s expertly crafted Psilocybin Treatment Facility. TSM provides clients access to psilocybin treatments in a carefully controlled environment under licensure by the Oregon Health Authority (OHA).

The Sacred Mushroom™ is a green oasis 7 floors above the city. The Sacred Mushroom™ has approximately 11,000 sq ft. and will provide visitors with access to our microdosing café, private treatment rooms and group session areas, and activity zones with yoga, listening stations, journaling chairs, and art expression for distinctive, effective, and positive psilocybin treatments. The setting and space are designed to deliver the ultimate in safe, comfortable, and relaxing psychedelic treatments.

Our Treatment Model

A recently published report on psilocybin treatment prices in Oregon showed that Initial prices for one facility range from $300 for a group microdose session to $3,500 for an individual high-dose session, with another facility pricing first-time full dose treatments at $15,000 (these prices do not include the cost of the psilocybin, which can run from $300 to $500).

KAYS expects its planned model facility to offer a superior setting, broader activity and treatment options, integrated cultivation and processing, and accessible pricing, thereby enabling us to deliver a superior treatment experience at a much lower price than the competition, while still achieving profitability

View from The Sacred Mushroom™ - Mount Hood can be seen

above the Portland, Oregon skyline from our 7^th floor facility.

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$500,000 Institutional Investment in Fifth Dimension Therapeutics

On June 12, 2023 the Company received $350,000 as a first installment for a working capital loan from CVC International Ltd. an Institutional Investor that has provided substantial fundings to the Company over the past ten (10) years. The debt is not convertible and carries an interest rate of 10% annually. Additionally, on October 6, 2023 the Company received a second installment of $150,000 on the same terms, bringing the total working capital loan to $500,000.

In consideration for CVC extending the loan to the Company (as well as for the release of a $500,000 lien on property that the Company sold in Q-1, 2023 and utilized the proceeds for corporate working capital, as detailed above and in previous filings, and other substantial financial assistance provided to the Company over the past ten (10) years) , the Company transferred to CVC ten (10)  Series A Preferred shares of stock in Fifth Dimension Therapeutics, Inc. (“FDT Preferred Shares”) which are convertible into a total of 10% of the common shares of FDT (“FDT Common Shares”), taking into account the current FDT Common Shares that are outstanding and conversion of any other FDT Preferred Shares outstanding at the time of conversion. This resulted in a change of the company’s ownership of FDT from 65% to 55%. 

KAYS is moving to first establish a Psilocybin Treatment Center in Oregon, but is also keeping abreast of developments in other states such as California, Colorado, Hawaii and Washington as well as international locations such as Australia to locate Psilocybin Service Centers as regulations unfold.

Success of our business plan including the launch of “The Sacred Mushroom™” Psilocybin Facilitation Centers depends on many factors including on final Oregon Health Authority (“OHA”) licensing and receipt of final financing from our investors. 

The Numbers

Insight Ace Analytic, an industry research firm, reports that the global psychedelic therapeutics market was valued at US$ 3.61 billion in 2021, and estimates the market will reach US$ 8.31 billion by 2028, with a CAGR of 13.2% during the forecast period of 2022-2028. Other market estimates include the research firm Research & Markets’ estimate that the psychedelic drugs market will reach US$ 10.75 billion by 2027.

As recently reported in the Wall Street Journal, Venture Capitalist Brom Rector of Empath Ventures sees Psychedelics as … “a traditional biotech play, with a high probability of failure but a potential upside of 10, 20, maybe 50 times.” Additionally, he sees many of the infrastructure companies for the industry as having a lot higher probability of becoming cash flow positive.

While Oregon is currently the only State that has legalized Psilocybin for medical use with a regulatory framework in place to issue licenses for their manufacture and sale, Denver Colorado, Santa Cruz and Oakland, California, Ann Arbor, Michigan, Washington D.C., and Seattle, Washington have all decriminalized small quantities. Other activity in the U.S. include:

§ The Connecticut legislature has begun the process toward legalizing Psilocybin centers for the treatment of veterans. Many veterans’ groups are advocating making psychedelic treatments available for veterans, particularly those with PTSD.

§ Texas, Utah, Maryland, and Washington State have set up task forces to study the medical use of psilocybin and have funded research to explore the effects of psilocybin on certain mental health conditions.

§ Colorado and California have ballots initiatives pending that would legalize psilocybin.

§ The New Jersey senate is considering a bill that would legalize psilocybin to treat certain disorders.

Internationally:

§ The Canadian government has been sued by an advocate group to force the legalization of psilocybin and other psychedelics.

§ Australia’s medicines regulator, the Therapeutic Goods Administration, has down-scheduled MDMA and Psilocybin for controlled clinical used as part of psychotherapy in clinical settings.

§ Psilocybin is legal to possess, sell, transport, and cultivate in Bahamas, Jamaica, Brazil, Nepal, Netherlands (only as a truffle), and Samoa. Possession of psilocybin is legal in Austria, British Virgin Islands, Spain, and Portugal.  

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Cannabis Operations and the Kaya Shack Family of Brands

Kaya Holdings currently operates three majority-owned cannabis subsidiaries, each responding to various demands and opportunities in the cannabis industry, to aid in the execution of these objectives:

Marijuana Holdings Americas, Inc.

Marijuana Holdings Americas, Inc. (“MJAI”), incorporated in 2014, operates the Company’s U.S. based cannabis operations including its Kaya Shack™ retail brand and the Kaya Farms™ cultivation brand.

After an evaluation of several factors including reputation for cannabis excellence, costs of entry, learning opportunity, and ease of regulatory structure, the Company selected Oregon as its point-of-entry into the legal cannabis sector where it commenced operations in Oregon in July 2014. Oregon is universally recognized for its excellence in cannabis cultivation and is part of the famed “Green Triangle” of expert cannabis cultivation that also includes Northern California. Having Oregon as the Company’s learning ground has allowed the Company to combine “traditional” methods of cannabis cultivation with modern agriculture techniques.

The Company has developed its own proprietary Kaya Farms™ strains of cannabis, which it has grown and produced at the various medical and recreational grows that the Company has operated and maintained over the past seven years in Oregon. Additionally, the Company currently maintains a genetic library of seeds for over 150 top strains of cannabis that it has assembled from its own grow operations, contract growers, vendors for its retail stores and other commercial sources which it intends to utilize to launch international grow operations in Israel, Greece and elsewhere. 

The Company’s US cannabis operations are currently focused in Oregon, where the Company’s operations are licensed by the Oregon Liquor Control Commission (the “OLCC’), which has jurisdiction over legal medical and recreational cannabis grow, production and retail operations. The Company currently has one active OLCC Marijuana Retailer License in Oregon which it is utilizing to operate a Kaya Shack™ retail outlet in Portland.

Sale of Lebanon, Oregon Farm Property

In August 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. As previously reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, in August 2023 the Company elected to sell the Property and entered into an agreement (the “CVC Agreement”) with CVC International, Inc. (“CVC”), an institutional investor who holds certain of the Company’s Convertible Promissory Notes (the “Notes”), one of which was secured by a $500,000 mortgage on the Property.

Pursuant to the CVC Agreement, CVC released its $500,000 mortgage lien on the Property, to enable the Company to sell the Property and utilize the proceeds therefrom for the benefit of the Company and its shareholders, without having to repay CVC the $500,000 Note held by CVC. Additionally, CVC agreed to advance certain sums against the sale of the Property (“Advances”), which included $150,000 advanced at the time the CVC Agreement was entered into, $120,000 which was advanced to the Company by CVC on November 10, 2022 and an additional short-term loan of $100,000 which was also secured by the Property. The Advances bear interest at the rate of 10% per annum and are convertible into shares of our common stock at $0.08 per share, subject to market adjustment.

On February 28, 2023 we sold the Property for a price of $769,500, less commissions and customary closing costs. The net proceeds of the sale were used to repay the Advances (Principal of $370,000 and interest due of approximately $18,500. After such repayments, the Company realized net proceeds of approximately $302,000.   The land is reflected on the balance sheet as assets held for sale for the year ended December 31, 2022 and 2021, at a value of $516,076.

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Sale of Salem Oregon Cannabis Dispensary

In November of 2022 the Company entered into an agreement with the OLCC to resolve an Administrative Action filed by the OLCC (as previously disclosed in the Company’s Annual Report on form 10-K for the year ended December 31, 2021, the Company’s Quarterly report for the quarter ended March 31, 2022 and the Company’s Annual Report on form 10-K for the year ended December 31, 2022). 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 its Salem Retail Cannabis Store (“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. 

The Company utilized the net proceeds of approximately $420,000 from both the sale of the Property and Store 2, for general working capital including the development of its planned Oregon psilocybin business and planned Florida hybrid ketamine treatment Clinic facilities, as well as for the enhancement of its Portland Kaya Shack™ retail cannabis store to create a streamlined model designed to facilitate franchising efforts and development of its international projects.

Kaya Brands USA

Kaya Brands USA (“KBUS”) is being incorporated to manage and leverage the intellectual property associated with the Kaya family of brands and seek out US based projects and ventures to enhance stockholder value associated with their development.

KBUS presently manages several proprietary brands formulated and developed by the Company which includes the Kaya Shack™ retail brand, the Kaya Farms™ cultivation brand, and the Kaya Gear™ apparel brand, as well as a host of carefully developed cannabis and CBD products that include cannabis extracts and concentrates, vape cartridges, chocolates, gummies and chews, topicals and creams, beverages, foods, and cannaceuticals.

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Operational Brands (2014-2023)

    

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Kaya Shack™ Brand

Kaya Shack™ Retail Outlet , 1719 SE Hawthorne Blvd., Portland, Oregon.

Our Kaya Shack™ OLCC licensed marijuana store (located in the heart of the trendy Hawthorne district in southeast Portland, the “Greenwich Village” of the West Coast) opened for business July 03, 2014. The store is located next door to a cell phone repair shop, and near to Devil’s Dill restaurant and No Fun pub. There are also a McMenamins restaurant, tattoo parlor, convenience store, hair/nail salon and a soccer sports bar. The area around the shop is mixed use (commercial and residential) and has a footprint of approximately 700 square feet and is the model for the Company’s small urban shops.  

The Company is exploring opportunities to expand its operations beyond Oregon by replicating its Kaya Shack™ brand retail outlets through franchising in other states where medial and or recreational cannabis use is legal or expected to become legal in the near term, as well as in Canada, Greece and Israel, as part of KAYS International Expansion Plans. KAYS also is targeting opening corporate owned marijuana production and processing facilities to support the envisioned franchised outlets, and to both maintain quality control and offer customers a consistent customer experience while reducing costs of goods to franchisees.

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Kaya Farms™

  

The Company has developed its own proprietary Kaya Farms™ strains of cannabis, which it has grown and produced at the various medical and recreational grows that the Company has previously operated and maintained over the past eight years in Oregon. Additionally, KAYS has produced a full line of cannabis concentrates and extracts which it has initially produced through third party manufacturers and marketed at the Kaya Shack Stores, along with the very popular Kaya Buddies line of strain specific cannabis cigarettes.

The Company currently maintains a genetic library of seeds for over 150 top strains of cannabis that it has assembled from its own grow operations, contract growers, vendors for its retail stores and other commercial sources which it intends to utilize to launch international grow operations in Israel, Greece and elsewhere.

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Kaya Buddie™ Strain Specific Cannabis Cigarettes

In 2016 the Company introduced a signature line of strain-specific connoisseur-grade, pre-rolled cannabis cigarettes branded as “Kaya Buddies™”. Kaya Buddies™ cannabis cigarettes have been very well received by medical patients and recreational users, with the Company selling over 100,000 Kaya Buddies™ since launching the brand in January 2016. The brand, marketed under the tagline “Buds with Benefits”, features over 50 different strains of connoisseur-grade, high quality cannabis and proprietary specialty blends. Many cannabis retailers produce prerolls, but none that we know of offer strain specific prerolls made from the buds of the flower. 

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Kaya Brands International

In 2019 KAYS formed Kaya Brands International, Inc. (“Kaya International” or “KBI”), to leverage its experience and expand into worldwide cannabis markets. KBI’s current initiatives include Greece and Israel, with additional areas under consideration. 

Kaya Farms Greece

We have selected Greece as the center of our European market activity because of its amenable cannabis regulations, favorable climate, affordable, capable workforce, and the country’s position as a major pharmaceutical center in Europe. As an EU nation Greece opens up the entire European market (where legal) to KAYS flower and oils, and as permitted, the KAYS portfolio of brands.

On January 11, 2021, through a majority owned subsidiary of KBI, Kaya Farms Greece (or “KFG”)  and Greekkannabis (“GKC”, an Athens based cannabis company) executed an agreement for KBI to acquire 50% of GKC. The first 25% was acquired in January, 2021 and the remaining 25% was acquired in July, 2021.

GKC has a development license from the Greek authorities that was originally issued as part of a plan purchase and develop 15 acres in Thebes, Greece as a large-scale cultivation production and processing project. However, GKC has elected to hold off on acquiring the land until such time as European Cannabis Demand would warrant the investment required to develop the project.

Additionally, on November 8, 2021 KAYS/KBI through a majority owned subsidiary of KBI (Kaya Farms Greece or “KFG") executed an agreement to acquire 50% of Greekkaya, a second medical Cannabis in Epidaurus, Greece.

The Epidaurus Project consists of 2 connected industrial buildings (already constructed, approximately 50,000 square feet in total under-air space) situated on 2.8 acres of land, with its own independent industrial electrical power center and ample water supply to service the needs of the facility. The Epidaurus Project is designed to include 25,000 square feet of indoor cannabis cultivation, a 15,000 square foot EU-GMP extraction and processing facility, and a 10,000 square foot EU-GMP packing area. There is ample room for expansion with room to construct an additional 15,000 square feet on site. The joint venture has been awarded its development license to from the Greek authorities and is awaiting project financing to complete the acquisition of the Epidaurus property and complete the installation of EU Certified equipment to gain final licensing of the facility.

Neither of the subject properties are currently owned or optioned by GKC or its operating subsidiaries, but the land for the potential project in Epidaurus is owned by one of the Greek Partner’s families and the Land in Thibes is currently available for purchase or option and the Company believes it could acquire either of the Properties on good terms once funding and market conditions allow. Alternatively, both licenses are in good order, and could be transferred to a new location pending Greek government approval.

Additionally, Kaya Farms Greece is working with its Greek Partners to produce CBD and THC Cannabis products originally developed by Kaya Holdings through contract manufacturing agreements it is developing and supply these branded products to the European Union as regulations permit.

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 Kaya Kannabis- Epidaurus, Greece Project

Site of Epidaurus Land 

GKC plans to cultivate and manufacture KAYS proprietary cannabis brands (CBD/THC) from the Epidaurus Project for distribution in the Greek, German and other EU markets as permitted by local regulations.

Interior View- KAYS’ newest project with 50K square feet of already constructed buildings is designed to

fast-track sales of KAYS proprietary branded cannabis products to the EU.

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Kaya Farms Israel

We have chosen to become active in the Israeli cannabis market because of this position as global center of cannabis science, where technologies are specifically developed to enhance cannabis cultivation processes and yields, and innovative consumer products are emerging that have potential interest for both the medical and recreational markets throughout the world.

Israel has been a pioneer in cannabis R&D for several decades and is often referred to as the “Silicon Valley” of the Global Medical Cannabis Industry. Israel currently has the world’s largest medical marijuana program and is the largest importer of cannabis.

There is legislation under Knesset review to permit adult-use cannabis, making the domestic Israeli market an attractive opportunity. Upon legalization of adult use cannabis in Israel, KAYS expects to sell flower and oils, and as permitted, the KAYS portfolio of brands in Israel, leveraging its adult use market experience and Kaya Shack™ retail shops (through a local franchisee) to serve the domestic Israeli market, and has begun to target distribution agreements with the Israeli Pharmaceutical Industry.

On March 30, 2021 the Company confirmed that its Israeli subsidiary, Kaya Shalvah has been awarded its initial permit from the “YAKAR”, the Department for Medical Cannabis in the Israeli Ministry of Health, to develop an Israeli cannabis cultivation and processing facility. This initial permit grants Kaya Shalvah permission to proceed with its plans to develop commercial scale cannabis cultivation and processing in Israel. 

 Kaya Shalvah Cannabis Production Facility (Project Design Rendering).

Kaya Shalvah is currently focused on two separate paths of development to launch its Israel Operations- the first being through potentially acquiring an interest in currently licensed medical cannabis production and processing facilities that are already operating in Israel, and the second being through either filing for or acquiring an existing import/export license license for sales and distribution of Kaya’s branded products in Israel.

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The Company has established a Board of Directors for Kaya Shalvah that includes:

Offer Lapidot (Brig. Gen. Res.)

A career fighter pilot in the Israel Air Force (1969-1996), Offer served two tours as a fighter squadron commander, and served as commander of the Flight Training School, commander of the Ramon Air Force base, and Head of Planning & Organization (at Air Force HQ). Offer holds the rank of Brigadier General. After his military service Offer spent a number of years in senior management positions at Israel’s leading retailer, as well as CEO of a high-tech start-up, only to miss flying and return to the skies as a pilot for El Al airlines. After his mandatory retirement from commercial flying, he joined the El Al executive team as the Director of Safety and Quality for El Al Airlines. Offer studied for his B.A. degree in Economics at Bar Ilan University and holds an M.S. in Management from the Naval Post Graduate School in Monterey, California.

Ilan Horesh (Col. Res.)

Ilan was a career Israel Defense Forces officer, retiring in 1993 after 23 years at the rank of Colonel. During his career Ilan held numerous command positions with combat ground forces. His final assignment in the IDF was Commander of the School of Electronics and Computerization. After his military service Ilan embarked on a career as an executive and leader in the Israeli high tech sector, working with such companies as Pelephone, Bezek, Paz Oil and others. Ilan has served on the Boards of a number of Israeli companies, including Taldor Computer Systems, Ltd., Rakah Pharmaceutical Industry, Ltd., Ampa Investments, Ltd., and Retalix, Ltd.

Joseph Gayer, Adv.

Joseph “Yossi” Gayer is one of the founders of the international law firm ZAG-S&W. Yossi is a prominent expert in a number of legal fields, including commercial litigation and contracts law, representing clients both on domestic and international matters.

Yossi also represents Israel’s leading professional athletes in all fields of sports, including advising sports clubs, organizations, and sponsors in Israel and abroad. His litigation practice has yielded many legal precedents that have influenced the status of professional athletes, both in Israel and abroad, with respect to their rights vis-a-vis employers, sports authorities, and various statutory institutes. Yossi’s expertise includes insurance and property law.

Yossi lectures at the Radzyner School of Law at the Interdisciplinary Center (IDC) Herzliya. 

Potential Cannabis Projects in development for 2024 and beyond:

· International distribution of CBD and Hemp extracted products in development under Company brands, with select distribution in the United States also under consideration.

· Potential licensing of certain cannabis brands based on KAYS experience in Oregon in select U.S. and European markets with the goal of establishing royalty revenue.

· Sales of cannabis and derivative products from planned Greek facility into Germany and other legal E.U. markets.

· Expansion of Kaya Shack™ retail footprint through franchising in US and also Europe/Israel (as permitted by law).

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The Global Cannabis Industry

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. This change in legislation is the result of an increase in public awareness to the medicinal benefits of cannabis and greater social acceptance of cannabis use.

According to New Frontier Data, more than 260 million adults globally consumed cannabis at least once annually in 2018 – placing global spending on cannabis (legal & illicit) at $344 billion USD annually.

The Insight Partners, another research group, in their 2019 Global Cannabis Market report projects the global cannabis market to reach $153,689,900,000 in 2027, which represents a CAGR of 34% from 2019-2027.

Prohibition Partners, expects the North American market to remain the world’s 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.

Canada

Canada legalized medical cannabis in 2001 and in October 2017 the Federal Cannabis Act came into effect, making Canada the first G7 nation to legalize recreational cannabis. The legal structure has given rise to large Canadian cannabis companies that have achieved high valuations, which they have leveraged to purchase supply chain companies and invest in overseas infrastructure projects to produce cannabis at costs lower than those in Canada. Increasing competition from U.S. and European countries and investor frustration has seen some decline of valuation and some Canadian companies have been forced to shrink operations and lessen their developing global footprint. Canadian cannabis companies currently export to more than twenty countries. Up until 2020, most exports of cannabis from Canada had been sent to European Countries. Exports of oil and flowers from Canada to Europe increased from 2019-2020 by 28% in terms of weight, but have declined, with most flowers being exported to Israel and the majority of oil being exported to Australia.

The United States

Cannabis remains federally illegal in the United States, with the interstate transport and sale of cannabis prohibited. Nonetheless, support for legal recreational cannabis remains above 60% in most reputable polls, and 48 U.S. states have some form of legal medical or recreational cannabis (including hemp/CBD). Only Idaho and Nebraska prohibit all forms of cannabinoids. 

States with some type of legal medical cannabis includes Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Indiana, Iowa, Kansas, Kentucky, Louisiana, New Hampshire, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, West Virginia, Wisconsin, and Wyoming.  

States which permit the sales of recreational, or “adult-use” cannabis are Alaska, Arizona, California, Colorado, Connecticut, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New York, New Mexico, Oregon, South Dakota, Vermont, Virginia and Washington. The District of Colombia (Washington D.C.) also permits adult-use cannabis.

Despite the number of individual states permitting the cultivation and distribution of cannabis (including hemp), in 2021 the U.S. Senate failed to pass a bill that would reclassify cannabis from a Schedule I drug under the Controlled Substances Act, which would have allowed cannabis companies access to banking and relief from punitive IRS rules. 

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Europe

 Some key points about the European medical cannabis market are:

§ New Frontier Data estimates the European cannabis market (legal & illicit) generates $69 billion USD annually.

§ Prohibition Partners Europe forecasts Europe to be the largest legal cannabis market worldwide by 2024, with a total value of $39.1 billion.

§ The Insight Partners estimates the European cannabis market will be worth $474 million by the end of 2021. They estimate the market to grow with a CAGR of 67.4% from 2021 to reach $3.75 billion by 2025.

§ Europe is projected to surpass North America (currently the largest medical cannabis market) in 2024, with a market value of $39.1 billion to North America’s $37.9 billion.

§ Total European market sales, including isolated cannabinoids, finished pharmaceutical products, cannabis flower and full spectrum cannabis products exceeded $295 million in 2019.

§ Germany has by far the largest number of medical cannabis patients as of 2021. By 2025, it is expected that countries like France and the United Kingdom will have developed their patient access considerably, growing to represent a significant share of the European market.

Israel and Greece

In September 2017, the Greek government announced it would be legalizing medical cannabis, and less than a year later Greek leaders approved Law 4523 and Joint Ministerial Decision No. 51483, which permitted farming and production of medical cannabis. In 2020 the Greek Parliament passed legislation that further relaxed cannabis export regulations, now permitting the bulk export of cannabis flower.

Israel is currently the largest importer of medical cannabis in the world. By September 2020 Israel had imported more than Nine tonnes of cannabis. The strong medical cannabis program stems from traditionally progressive cannabis policies and strong cultural acceptance of cannabis medicinal uses.

The Israeli cannabis sector has been slowed by regulations, which have hindered Israeli cannabis exports and complicated domestic distribution. There is currently no mutual recognition agreement between local Medical Cannabis GMP and EU-GMP, denying many Israeli firms the qualifications necessary to export to Europe.

 Corporate Information

We are incorporated in the State of Delaware. Our corporate office is located at 915 Middle River Drive, Suite 316, Fort Lauderdale, Florida, 33304. Our telephone number is 954-892-6911 and our corporate website is www.kayaholdings.com. Information contained on our corporate website does not constitute part of this Annual Report.  

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Government Regulation

We are subject to general business regulations and laws, as well as regulations and laws directly applicable to our operations. As we continue to expand the scope of our operations, the application of existing laws and regulations could include matters such as pricing, advertising, consumer protection, quality of products, and intellectual property ownership. In addition, we will also be subject to new laws and regulations directly applicable to our activities.

Any existing or new legislation applicable to us could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, which could hinder or prevent the growth of our business.

Federal, state and local laws and regulations governing legal recreational and medical marijuana use are broad in scope and are subject to evolving interpretations, which could require us to incur substantial costs associated with compliance. In addition, violations of these laws or allegations of such violations could disrupt our planned business and adversely affect our financial condition and results of operations. In addition, it is possible that additional or revised federal, state and local laws and regulations may be enacted in the future governing the legal marijuana industry. There can be no assurance that we will be able to comply with any such laws and regulations and its failure to do so could significantly harm our business, financial condition and results of operations.   

Our foreign operations will also be subject to comparable government regulation in Greece, Israel and any other various foreign jurisdictions in which KAYS intends to operate.

Competition

The legal marijuana sector is rapidly growing and the Company faces significant competition in the operation of retail outlets, MMDs and grow facilities. Many of these competitors will have far greater experience, more extensive industry contacts and greater financial resources than the Company. There can be no assurance that we can adequately compete to succeed in our business plan.

Employees

As of the date as of this Report, our Oregon operations have a total of 12-15 part-time store employees including budtenders, trimmers, growers, and 4 full-time employees, consisting of the Senior Vice President of Cannabis Operations, the Vice President of Marketing and Brand development, and 2 store managers. Additionally, we engage several consultants to assist with daily duties and business plan implementation and execution. Additional employees will be hired and other consultants engaged in the future as our business expands. 

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Results of Operations

Three months ended September 30, 2023 compared to three months ended September 30, 2022

Revenues

We had revenues of $59,011, for the three months ended September 30, 2023, as compared to revenues of $172,968 for the three months ended September 30, 2022. The decrease in revenue is due to our smaller Oregon cannabis footprint as we are working to transition the bulk of our cannabis initiatives to Greece and Israel while we work to open a OHA State Licensed Psilocybin Treatment and Production Facility in Oregon.

Cost of Goods Sold

Our cost of goods sold for the three months ended September 30, 2023 was $22,088, compared to cost of goods sold of $59,771 for the three months ended September 30, 2022.

Salaries and Wages

Salaries and Wages decreased to $44,732 for the three months ended September 30, 2023 as compared to $94,176 for the three months ended September 30, 2022.

General and Administrative Expenses

General and administrative decreased to $97,916 for the three months ended September 30, 2023 as compared to $106,745 for the three months ended September 30, 2022.

Professional Fees

Professional fees were $170,405 for the three months ended September 30, 2023, as compared to $182,140 for the three months ended September 30, 2022.

Gain or Loss on Impairment of Assets

Gain on impairment of assets was $0 for the three months ended September 30, 2023, as compared to $17,177 for the three months ended September 30, 2022.

Gain or Loss on Impairment of right of use assets

Gain on impairment of right-of-use assets was $219,006 for the three months ended September 30, 2023, as compared to $0 for the three months ended September 30, 2022.

Interest Expense

Interest expense and debt amortization expense increased slightly to $165,774 for the three months ended September 30, 2023 from $158,880 for the three months ended September 30, 2022.

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Amortization of Debt Discount

Amortization of debt discount was $68,762 for the three months ended September 30, 2023, as compared to $6,613 for the three months ended September 30, 2022.

Derivative Liabilities Expense

Derivative liabilities expense was $0 for the three months ended September 30, 2023, the same as for the three months ended September 30, 2022.

Change in Fair Value of Embedded Derivative Liabilities

Change in fair value of embedded derivative liabilities was a gain of $2,302,249 for the three months ended September 30, 2023 compared to an expense of $6,994,461, for the three months ended September 30, 2022. These changes were due to changes in stock price as well as the volatility factors used in the derivative calculations. 

Other Income/(Loss)

Other income was a gain of $2,377,142 for the three months ended September 30, 2023 as compared to a loss of $7,142,777 for the three months ended September 30, 2022. The increased income was due largely to a change in derivative liability expenses resulting from a change in stock price as well as the volatility factors used in the derivative calculations.

Net Income (Loss)

We incurred net income of $2,095,742 for the three months ended September 30, 2023, as compared to net loss of $7,435,176 for the three months ended September 30, 2022. The majority of our income during the three-month period ending September 31, 2023 was a result of the derivative liabilities associated with our Convertible Debt and a reduction in our stock price as well as the less volatility factors used in the derivative calculations. The non-controlling interest for the three months ended September 30, 2023 and 2022 was a gain of $62,117 and a loss of $20,279 respectively.

Nine months ended September 30, 2023 compared to nine months ended September 30, 2022

Revenues

We had revenues of $162,372 for the nine months ended September 30, 2023 as compared to revenues of $556,818 for the nine months ended September 30, 2022. The decrease in revenue is due to our smaller Oregon cannabis footprint as we are working to transition the bulk of our cannabis initiatives to Greece and Israel while we work to open a OHA State Licensed Psilocybin Treatment and Production Facility in Oregon.

Cost of Goods Sold

Our cost of goods sold for the nine months ended September 30, 2023 was $58,402 compared to cost of goods sold of $182,369 for the nine months ended September 30, 2022. The decrease in cost of goods sold was due to lower levels of sales due to our smaller Oregon cannabis footprint as we are working to transition the bulk of our cannabis initiatives to Greece and Israel while we work to open a OHA State Licensed Psilocybin Treatment and Production Facility in Oregon.

Salaries and Wages

Salaries and Wages decreased to $140,871 for the nine months ended September 30, 2023 as compared to $296,327 for the nine months ended September 30, 2022. The decrease in salaries and wages was due to the close and sale of retail shop in Oregon.

General and Administrative Expenses

General and administrative increased to $324,750 for the nine months ended September 30, 2023 as compared to $380,920 for the nine months ended September 30, 2022. The slight decrease was primarily due decrease in marketing and office expenses.

Professional Fees

Professional fees were $563,670 for the nine months ended September 30, 2023 as compared to $565,529 for the nine months ended September 30, 2022. The increase in professional fees was primarily related to an increase in expenses for accounting, auditing and consulting.

Gain or Loss on Impairment of Assets

Gain on impairment of assets was $384,429 for the nine months ended September 30, 2023, included gain from sales of the land and sale of the Salem Retail Cannabis Store, as compared to $17,177 for the nine months ended September 30, 2022.

Gain or Loss on Impairment of right of use assets

Gain or loss on impairment of right-of-use assets was $151,082 for the nine months ended September 30, 2023, as compared to $0 for the nine months ended September 30, 2022.

Interest Expense

Interest expense and debt amortization expense increased to $484,106 for the nine months ended September 30, 2023 from $466,319 for the nine months ended September 30, 2022.   The increase was related to an increase in debt incurred over the past 12 months for our operations.

Amortization of Debt Discount

Amortization of debt discount was $318,315 for the nine months ended September 30, 2023, as compared to $163,817 for the nine months ended September 30, 2022.

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Derivative Liabilities Expense

Derivative liabilities expense was $0 for the nine months ended September 30, 2023 same as for the nine months ended September 30, 2022.

Change in Fair Value of Embedded Derivative Liabilities

Change in fair value of embedded derivative liabilities was a gain of $2,535,936 for the nine months ended September 30, 2023 compared to an expense of $3,904,639 for the nine months ended September 30, 2022. These changes were due to change in stock price as well as the volatility factors used in the derivative calculations.

Net Income attributed to Kaya Holdings Inc.

We had net income of $1,416,519 for the nine months ended September 30, 2023 as compared to net loss of $5,463,323 or the nine months ended September 30, 2022.

The majority of our net income during the nine months ended September 30, 2023 was a result of the derivative liabilities associated with our Convertible Debt and a reduction in our stock price as well as the less volatility factors used in the derivative calculations. The non-controlling interest for the nine months ended September 30, 2023 and September 30, 2022 was an income of $48,503 and a loss of $78,114 respectively.

Liquidity and Capital Resources

During the third quarter of 2023 our cash position increased by $41,938 to $60,268 and our negative working capital deficit was $7,647,744.

As of September 30, 2023, our working capital included current assets of cash of $60,268, inventories of $13,256 and prepaid expenses of $49,761 as compared to cash of $40,408, inventories of $28,714 and prepaid expenses of $13,967, as of September 30, 2022.

Our current liabilities include accounts payable and accrued expenses of $601,154, accounts payable and accrued expenses-related parties of $417,778, accrued interest of $2,193,365, current portion of lease liability of $21,041, potential tax liability of $880,062, convertible notes payable- net of discount of $25,000, notes payable of $109,312 and derivative liabilities of $3,523,317, as compared to accounts payable and accrued expenses of $971,420, accounts payable and accrued expenses-related parties of $263,933 accrued interest of $1,602,273, current portion of lease liability of $82,908, potential tax liability of $859,505, convertible notes payable- net of discount of $93,340, notes payable of $9,312 and derivative liabilities of $8,995,335 as of September 30, 2022.

Financing Transactions

On August 28, 2023 the Company received $100,000 as a working capital loan from an investor. The loan is due on March 15, 2024 and carries an interest rate of 10% annually.

On June 12, 2023 the Company received $350,000 as a working capital loan from CVC International Ltd. an Institutional Investor that has provided substantial funding to the Company over the past ten (10) years. The debt is not convertible and carries an interest rate of 10% annually.

50

Commencing with the quarterly period beginning July 1, 2023, the Company agrees to segregate and pay to the Holder ten percent (10%) of monthly total revenues from all sources (net of sales taxes) of Kaya Holdings, Inc. and or any of its subsidiaries or operations, whether currently in existence or created or acquired in the future (including but not limited to the Marijuana Holdings Americas, Inc. subsidiary, the Kaya Brand International, Inc. subsidiary and the newly formed Fifth Dimension Therapeutics, Inc subsidiary), or any other name or partnership that the Company may operate under or gain interest in that it may receive revenue from), until such time as all outstanding Principal amount and Interest due has been repaid to the Holder. At the end of September 2023, the company paid $5,000 (10% of quarterly total revenues) to the Holder as interest payment, the amount was reinvested in the company as additional principal of the note.

Financing Transactions

On June 12, 2023 the Company received $350,000 as a working capital loan from CVC International Ltd. an Institutional Investor that has provided substantial fundings to the Company over the past ten (10) years. The debt is not convertible and carries an interest rate of 10% annually. Additionally, on October 6, 2023 the Company received a second installment of $150,000 on the same terms, bringing the total working capital loan to $500,000.

Commencing with the quarterly period beginning July 1, 2023, the Company agrees to segregate and pay to the Holder ten percent (10%) of monthly total revenues from all sources (net of sales taxes) of Kaya Holdings, Inc. and or any of its subsidiaries or operations, whether currently in existence or created or acquired in the future (including but not limited to the Marijuana Holdings Americas, Inc. subsidiary, the Kaya Brand International, Inc. subsidiary and the newly formed Fifth Dimension Therapeutics, Inc subsidiary), or any other name or partnership that the Company may operate under or gain interest in that it may receive revenue from), until such time as all outstanding Principal amount and Interest due has been repaid to the Holder.

In consideration for CVC extending the loan to the Company (as well as for the release of a $500,000 lien on property that the Company sold in Q-1, 2023 and utilized the proceeds for corporate working capital, as detailed in previous filings, and other substantial financial assistance provided to the Company over the past ten (10) years) , the Company transferred to CVC ten (10)  Series A Preferred shares of stock in Fifth Dimension Therapeutics, Inc. (“FDT Preferred Shares”) which are convertible into a total of 10% of the common shares of FDT (“FDT Common Shares”), taking into account the current FDT Common Shares that are outstanding and conversion of any other FDT Preferred Shares outstanding at the time of conversion. 

Use of Proceeds

The proceeds from financing transactions that the Company may enter into will be used to fund our growth plan, including the development, operation and expansion of the Fifth Dimension Therapeutics Business Plan and the launch of its first Psilocybin facilitation Clinic. our Kaya Shack™ and Kaya Farms™ operations in Oregon, the development of our new Kaya Shack™ branded cannabis products, and the groundwork required to initiate our planned expansion through Kaya Brands International initiatives in Greece and Israel.

Plan of Operations

Management believes that further proceeds expected to be received from financing transactions that it is seeking to enter into, combined with existing and anticipated revenues, will alleviate the Company’s financial difficulties to a significant extent and will allow the Company to meet its anticipated working capital needs for a period of between twelve and eighteen months from the date of this report. However, there can be no assurance that further funding from the contemplated financings will be achieved, or if achieved that they will be successful to the level required to meet the Company’s cash needs, or that management’s belief will be correct and that the Company will not sooner require additional financing to meet its working capital needs prior to achieving profitability or positive cash flow. Moreover, 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

51

Note Conversions, Repayments

No notes were converted or repaid during the period. 

Employee Stock Plan Issuances and Director and Officer Restricted Stock issuances

 No Employee Stock Plan Issuances or Director and Officer Restricted Stock Issuances were issued during the period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable. 

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the direction of our Chairman and President, who is our principal, executive, financial and accounting officer, we evaluated our disclosure controls and procedures as of September 30, 2023. Our Chairman and President, who is our principal, executive, financial and accounting officer, concluded that our disclosure controls and procedures were not effective as of June 30, 2023.

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chairman and President, who is our principal, executive, financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chairman and President, who is our principal, executive, financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of our fourth fiscal quarter covered by this report. Based on the foregoing, our Chairman and President concluded that our disclosure controls and procedures were not effective. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Management’s Report on Internal Control Over Financial Reporting

Our management of is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our Chairman and President, who is our principal, executive, financial and accounting officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: 

52

▪ Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

▪ Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

▪ Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s Chairman and President, who is our principal, executive, financial and accounting officer, assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2023. In making this assessment, the Company’s Chairman and President, who is our principal, executive, financial and accounting officer, used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.

Based on the assessment performed, the Company’s Chairman and President, who is our principal, executive, financial and accounting officer, has concluded that the Company’s internal control over financial reporting, as of September 30, 2023. is not effective to provide reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements in accordance with generally accepted accounting principles. Further, the Company’s Chairman and President, who is our principal, executive, financial and accounting officer, has identified material weaknesses in internal control over financial reporting as of September 30, 2023.

Based on an evaluation, the Company’s Chairman and President, who is our principal, executive, financial and accounting officer, has concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of June 30, 2023. (the “Evaluation Date”), to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms; and (ii) accumulated and communicated to the Company’s Chairman and President, who is our principal, executive, financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure. Each of the following is deemed a material weakness in our internal control over financial reporting:

▪ We do not have an audit committee.  While we are not currently obligated to have an audit committee, including a member who is an “audit committee financial expert,” as defined in Item 407 of Regulation S-K, under applicable regulations or listing standards; however, it is management’s view that such a committee is an important internal control over financial reporting, the lack of which may result in ineffective oversight in the establishment and monitoring of internal controls and procedures.

▪ We did not maintain proper segregation of duties for the preparation of our financial statements.  We currently have only one officer overseeing all transactions.  This has resulted in several deficiencies, including the lack of control over preparation of financial statements and proper application of accounting policies

▪  Lack of controls over related party transactions: As  of  June 30, 2023, the  Company  did  not  establish  a  formal  written  policy  for  the  approval, identification and authorization of related party transactions.

The Company’s Chairman and President, who is our principal, executive, financial and accounting officer, believes that the material weaknesses set forth in the two items above did not have an effect on our financial results. However, the Company’s Chairman and President, who is our principal, executive, financial and accounting officer, believes that the lack of a functioning audit committee results in ineffective oversight in the establishment and monitoring of required internal controls and financial procedures, which could result in a material misstatement in our consolidated financial statements in future periods.

Changes in Internal Control over Financial Reporting

There was no change in our internal controls or in other factors that could affect these controls during the first quarter of the year ended September 30, 2023 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

53

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time-to-time KAYS be party to various legal proceedings in the ordinary course of business. Pleases see paragraphs below for status and results of legal proceedings during Q-2 2023.

Lawsuit from Law Offices of Ross Day

On September 9, 2022 the Company received notice from its Oregon Counsel that Day Law & Associates, P.C. (Attorney Ross Day is a former attorney for the Company) had filed suit in Washington County, Oregon seeking damages in the amount of $16,169.24 for unpaid legal fees, plus any costs, disbursements and attorney fees awarded.

On August 24, 2023 the Company and Day Law & Associates participated in an Arbitration in an attempt to resolve the Matter without Litigation.

On October 11, 2023 the Arbitrator ruled in favor of the Company and awarded the Company $3,000 in legal Fees and $781 in Costs. Since that time the Company has been advised that Day Law & Associates, P.C. appealed the Arbitration Award, but no new hearing has been set.

Item 1A. Risk Factors.

See “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None 

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None

Item 6. Exhibits

Exhibit No.	Description of Exhibit
31.1	Section 302 Certification

32.1 Section 906 Certification

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 20, 2023

KAYA HOLDINGS, INC.

By: /s/ Craig Frank

Craig Frank, Chairman, President, Chief Executive Officer and Acting Chief Financial Officer (Principal Executive, Financial and Accounting Officer) 

54

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANESOXLEY ACT OF 2002

I, Craig Frank, Chairman, President, Chairman, President, Chief Executive Officer and Acting Chief Financial Officer of Kaya Holdings, Inc., a Delaware corporation (the “Registrant”), certify that:

1. I have reviewed this Form 10-Q for the quarter ended September 30, 2023 of the Registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. I, as the Registrant’s sole officer, am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)       Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. I, as the Registrant’s sole officer, have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 20, 2023

KAYA HOLDINGS, INC.

By: /s/ Craig Frank

Craig Frank, Chairman, President, Chief Executive Officer and Acting Chief Financial Officer (Principal Executive, Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANESOXLEY ACT OF 2002

In connection with the Quarterly Report of Kaya Holdings, Inc., a Delaware corporation (the “Company”) on Form 10-Q for the quarter year ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Craig Frank, the Chairman, President, Chief Executive Officer and Acting Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the SarbanesOxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.  

Date: November 20, 2023

KAYA HOLDINGS, INC .

By: /s/ Craig Frank

Chairman, President, Chief Executive Officer and Acting Chief Financial Officer (Principal Executive, Financial and Accounting Officer)

XML

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 20, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	333-177532
Entity Registrant Name	KAYA HOLDINGS, INC
Entity Central Index Key	0001530746
Entity Tax Identification Number	90-0898007
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	915 Middle River Drive
Entity Address, Address Line Two	Suite 316
Entity Address, City or Town	Ft. Lauderdale
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33304
City Area Code	(954)
Local Phone Number	892-6911
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		22,172,835

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash and equivalents	$ 60,268	$ 18,330
Inventory	13,256	11,990
Prepaid expenses	49,761	28,158
Total current assets	123,285	58,478
NON-CURRENT ASSETS:
Right-of-use asset - operating lease	19,361	182,604
Assets for sale		516,076
Property and equipment, net of accumulated depreciation of $217,735 and $358,396 as of September 30, 2023 and December 31, 2022, respectively	26,785	36,720
Investment in subsidiaries	21,114	22,188
Other Assets	40,005	27,175
Total non-current assets	107,265	784,763
Total assets	230,550	843,241
CURRENT LIABILITIES:
Accounts payable and accrued expense	601,154	961,396
Accounts payable and accrued expense-related parties	417,777	273,190
Accrued interest	2,193	1,759,669
Right-of-use liability - operating lease	21,041	93,067
Taxable Payable	880,062	876,017
Convertible notes payable, net of discount of $0 and $54,707	25,000	240,293
Notes payable	109,312	9,312
Derivative liabilities	3,523,317	6,204,878
Total current liabilities	7,771,028	10,417,822
NON-CURRENT LIABILITIES:
Notes payable	355,000
Notes payable-related party	250,000	250,000
Convertible notes payable, net of discount of $69,499 and $333,107	7,342,653	7,179,045
Accrued expense-related parties	500,000	500,000
Right-of-use liability - operating lease		100,115
Total non-current liabilities	8,447,653	8,029,160
Total liabilities	16,218,681	18,446,982
STOCKHOLDERS' DEFICIT:
Common stock , par value $.001;  500,000,000 shares authorized; 0 shares and 22,172,835 shares issued as of September 30, 2023  and 22,172,835 shares outstanding as of December 31, 2022 , respectively	22,173	22,173
Subscriptions payable	163,630	163,630
Additional paid in capital	22,478,395	22,277,612
Accumulated deficit	(36,703,944)	(38,071,960)
Accumulated other comprehensive income (loss)	(14,538)	(11,027)
Total stockholders' deficit attributable to parent company	(14,054,284)	(15,619,572)
Non-controlling interest	(1,933,847)	(1,984,169)
Total stockholders' deficit	(15,988,131)	(17,603,741)
Total liabilities and stockholders' deficit	230,550	843,241
Series C Preferred Stock [Member]
STOCKHOLDERS' DEFICIT:
Convertible preferred stock, Series D, par value $.0001; 10,000,000 shares authorized; 40 and 40 issued and outstanding at September 30, 2023 and December 31, 2021, respectively
Series D Preferred Stock [Member]
STOCKHOLDERS' DEFICIT:
Convertible preferred stock, Series D, par value $.0001; 10,000,000 shares authorized; 40 and 40 issued and outstanding at September 30, 2023 and December 31, 2021, respectively

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Property and equipment, net of accumulated depreciation	$ 217,735	$ 358,396
Convertible notes payable net of discount current	0	54,707
Convertible notes payable, net of discount non current	$ 69,499	$ 333,107
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	500,000,000	500,000,000
Common Stock, Shares, Issued	22,172,835	22,172,835
Common Stock, Shares, Outstanding	22,172,835	22,172,835
Series C Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	100,000
Preferred Stock, Shares Outstanding	0	100,000
Series D Preferred Stock [Member]
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	40	40
Preferred Stock, Shares Outstanding	40	40

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net sales	$ 59,011	$ 172,968	$ 162,372	$ 556,818
Cost of sales	22,088	59,771	58,402	182,369
Gross profit	36,923	113,197	103,970	374,449
Operating expenses:
Professional fees	170,405	182,140	563,670	565,529
Salaries and wages	44,732	94,176	140,871	296,327
General and administrative	97,916	106,745	324,750	380,920
Total operating expenses	313,053	383,061	1,029,291	1,242,776
Operating loss	(276,130)	(269,864)	(925,321)	(868,327)
Interest expense	(165,774)	(158,880)	(484,106)	(466,319)
Amortization of debt discount	(68,762)	(6,613)	(318,315)	(163,817)
Gain on lease extingueshment	219,006		151,082
Gain on disposal		17,177	384,429	17,177
Change in derivative liabilities expense	2,302,249	(6,994,461)	2,535,936	(3,904,639)
Other income
Total other income (expense)	2,377,142	(7,142,777)	2,360,949	(4,517,598)
Net income (loss) from continuing operations before income taxes	2,101,012	(7,412,641)	1,435,628	(5,385,925)
Provision for Income Taxes	(5,270)	(22,535)	(19,109)	(77,398)
Net income (loss)	2,095,742	(7,435,176)	1,416,519	(5,463,323)
Net Income (loss) attributed to non-controlling interest	62,117	(20,279)	48,503	(78,114)
Net income (loss) attributed to Kaya Holdings, Inc.	$ 2,033,625	$ (7,414,897)	$ 1,368,016	$ (5,385,209)
Basic net income (loss) per common share	$ 0.09	$ (0.50)	$ 0.06	$ (0.37)
Weighted average number of common shares outstanding - Basic	22,172,835	14,722,835	22,172,835	14,722,835
Diluted net income (loss) per common share	$ 0.00	$ 0.00	$ 0.01	$ (0.37)
Weighted average number of common shares outstanding - Diluted	143,718,093	14,722,835	143,718,093	14,722,835

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net income (loss)	$ 2,033,625	$ (7,414,897)	$ 1,368,016	$ (5,385,209)
Foreign currency adjustments	(2,655)	(6,162)	(1,692)	(17,900)
Comprehensive income (loss)	2,030,970	(7,421,059)	1,366,324	(5,403,109)
Other comprehensive income (expense)
Net loss attirbuted to non-controlling interest	62,117	(20,279)	48,503	(78,114)
Comprehensive income (loss) attributable to Kaya Holdings	$ 1,968,853	$ (7,400,780)	$ 1,317,821	$ (5,324,995)

XML

Condensed Consolidated Statement of Cashflows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
OPERATING ACTIVITIES:
Net income (loss)	$ 1,368,016	$ (5,385,209)
Adjustments to reconcile net income / loss to net cash used in operating activities:
Adjustment to non-controlling interest	48,503	(78,114)
Depreciation	9,935	17,836
Imputed interest	16,829	16,829
Loss (gain) on lease extingushment	(151,082)
Change in derivative liabilities	(2,535,936)	3,904,639
Amortization of debt discount	318,315	163,817
Loss(gain) on debt forgiveness	(91,923)
Gain on disposal of fixed assets	(384,429)	(17,177)
Changes in operating assets and liabilities:
Prepaid expense	(33,963)
Inventory	(2,145)	22,770
Right-of-use asset	45,499	71,828
Deposit	(12,925)
Other assets		(14,679)
Accrued interest	433,696	449,490
Accounts payable and accrued expenses	14,617	53,272
Accounts payable and accrued expenses - Related Parties	144,587	121,995
Right-of-use liabilities	(47,322)	(87,546)
Deferred tax liabilities	4,045	77,398
Net cash used in operating activities	(855,683)	(682,851)
INVESTING ACTIVITIES:
Proceeds from sales of fixed assets	693,959	17,177
Proceeds from sales of Business License	193,900
Cash paid for impairment of right-of-use asset	(75,000)
Net cash provided by investing activities	812,859	17,177
FINANCING ACTIVITIES:
Proceeds from convertible debt	455,000	150,000
Payments on convertible debt	(370,000)
Net cash provided by financing activities	85,000	150,000
NET INCREASE (DECREASE) IN CASH	42,176	(515,674)
Effects of currency translation on cash and cash equivalents	(238)	(9,897)
CASH BEGINNING BALANCE	18,330	565,979
CASH ENDING BALANCE	60,268	40,408
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	28,582
NON-CASH TRANSACTIONS AFFECTING OPERATING, INVESTING    AND FINANCING ACTIVITIES:
Settlement of derivative liabilities	145,625
Adoption of lease standard ASC 842		23,738
Initial derivative liability on convertible note payable		$ 110,133
Release of related party accruals and payable	$ 38,329

XML

Consolidated Statements of Stockholders Deficit (Unaudited) - USD ($)	Series C Preferred Stock [Member]	Series D Preferred Stock [Member]	Common Stock [Member]	Subscription Payable [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Dec. 31, 2021			$ 14,723	$ 163,630	$ 21,735,185	$ (34,495,346)	$ (3,719)	$ (1,822,378)	$ (14,407,905)
Shares, Outstanding, Beginning Balance at Dec. 31, 2021		40	14,722,835
Imputed interest					11,158				11,158
Settlement of related party accrued compensation					52				52
Translation Adjustment							(5,969)	(5,769)	(11,738)
Net Income						2,029,688		(57,835)	1,971,853
Ending balance, value at Jun. 30, 2022			$ 14,723	163,630	21,746,395	(32,465,658)	(9,688)	(1,885,982)	(12,436,580)
Shares, Outstanding, Ending Balance at Jun. 30, 2022		40	14,722,835
Imputed interest					5,671				5,671
Translation Adjustment							(3,212)	(2,950)	(6,162)
Net Income						(7,414,897)		(20,279)	(7,435,176)
Ending balance, value at Sep. 30, 2022			$ 14,723	163,630	21,752,066	(39,880,555)	(12,900)	(1,909,211)	(19,872,247)
Shares, Outstanding, Ending Balance at Sep. 30, 2022		40	14,722,835
Beginning balance, value at Dec. 31, 2022			$ 22,173	163,630	22,277,612	(38,071,960)	(11,027)	(1,984,169)	(17,603,741)
Shares, Outstanding, Beginning Balance at Dec. 31, 2022		40	22,172,835
Imputed interest					11,158				11,158
Translation Adjustment							(1,502)	2,465	963
Net Income						(665,609)		(13,614)	(679,223)
Settlement of derivative liabilities to additional paid in capital					145,625				145,625
Ending balance, value at Jun. 30, 2023			$ 22,173	163,630	22,434,395	(38,737,569)	(12,529)	(1,995,318)	(18,125,218)
Shares, Outstanding, Ending Balance at Jun. 30, 2023		40	22,172,835
Beginning balance, value at Dec. 31, 2022			$ 22,173	163,630	22,277,612	(38,071,960)	(11,027)	(1,984,169)	(17,603,741)
Shares, Outstanding, Beginning Balance at Dec. 31, 2022		40	22,172,835
Release of related party accruals and payable									38,329
Ending balance, value at Sep. 30, 2023			$ 22,173	163,630	22,478,395	(36,703,944)	(14,538)	(1,933,847)	(15,988,131)
Beginning balance, value at Jun. 30, 2023			$ 22,173	163,630	22,434,395	(38,737,569)	(12,529)	(1,995,318)	(18,125,218)
Shares, Outstanding, Beginning Balance at Jun. 30, 2023		40	22,172,835
Imputed interest					5,671				5,671
Translation Adjustment							(2,009)	(646)	(2,655)
Net Income						2,033,625		62,117	2,095,742
Release of related party accruals and payable					38,329				38,329
Ending balance, value at Sep. 30, 2023			$ 22,173	$ 163,630	$ 22,478,395	$ (36,703,944)	$ (14,538)	$ (1,933,847)	$ (15,988,131)

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ORGANIZATION AND NATURE OF THE BUSINESS

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND NATURE OF THE BUSINESS

NOTE 1 –ORGANIZATION AND NATURE OF THE BUSINESS

Organization

Kaya Holdings, Inc. FKA (Alternative Fuels Americas, Inc.) is a holding company. The Company was incorporated in 1993 and has engaged in a number of businesses. Its name was changed on May 11, 2007 to NetSpace International Holdings, Inc. (a Delaware corporation) (“NetSpace”). NetSpace acquired 100% of Alternative Fuels Americas, Inc. (a Florida corporation) in January 2010 in a stock-for-member interest transaction and issued 6,567,247 shares of common stock and 100,000 shares of Series C convertible preferred stock to existing shareholders. Certificate of Amendment to the Certificate of Incorporation was filed in October 2010 changing the Company’s name from NetSpace International Holdings, Inc. to Alternative Fuels Americas, Inc. (a Delaware corporation). Certificate of Amendment to the Certificate of Incorporation was filed in March 2015 changing the Company’s name from Alternative Fuels Americas, Inc. (a Delaware corporation) to Kaya Holdings, Inc.

The Company has four subsidiaries: Marijuana Holdings Americas, Inc., a Florida corporation (“MJAI”), which is majority-owned and was formed on March 27, 2014 to maintain ownership of the Company’s Oregon based cannabis operations, 34225 Kowitz Road, LLC, a wholly-owned Oregon limited liability company which held ownership of the Company’s 26 acre property in Lebanon, Oregon (inactive since Feb 28, 2023 when the subject property was sold), Kaya Brand International, Inc., a Florida Corporation (“KBI”) which is majority-owned and was formed on October 14, 2019 to expand the business overseas (active) and Fifth Dimension Therapeutics, Inc., a Florida corporation which is majority owned (“FTD”) and was formed on December 13, 2022 to develop and maintain ownership of the Company’s planned Psychedelic Clinics targeting Psilocybin and Ketamine Treatments.

MJAI develops and operates the Company’s legal cannabis retail operations in Oregon through controlling ownership interests in five Oregon limited liability companies: MJAI Oregon 1 LLC (active), MJAI Oregon 2 LLC (inactive), MJAI Oregon 3 LLC (inactive) , MJAI Oregon 4 LLC (inactive) and MJAI Oregon 5 LLC (inactive).

MJAI Oregon 1 LLC is the entity that holds the licenses for the Company’s retail store operations. MJAI Oregon 5 LLC is the entity that held the license application for the Company’s 26 acre farm property in Lebanon Oregon (property sold 2/28/23, inactive since that date).

KBI is the entity that holds controlling ownership interests in Kaya Farms Greece, S.A. (a Greek corporation) and Kaya Shalvah (“Kaya Farms Israel”, an Israeli corporation). These two entities were formed to facilitate expansion of the Company’s business in Greece and Israel respectively.

Fifth Dimension Therapeutics, Inc. (FTD) is the entity that was formed to hold interests in Psilocybin and Ketamine treatment facilities, with operations initially targeted for Oregon and Florida.

Nature of the Business  

In January 2014, KAYS incorporated MJAI, a wholly owned subsidiary, to focus on opportunities in the legal recreational and medical marijuana in the United States. MJAI has concentrated its efforts in Oregon, where through controlled Oregon limited liability companies, it initially secured licenses to operate a medical marijuana dispensary (an “MMD”) and following legalization of recreational cannabis use in Oregon, secured licenses to operate four retail outlets and purchased 26 acres for development as a legal cannabis cultivation and manufacturing facility. The Company has developed the Kaya Shack™ brand for its retail operations and the Kaya Farms ™ brand for its cannabis growing and processing operations.

On July 3, 2014 opened its first Kaya Shack™ MMD in Portland, Oregon.  Between April of 2014 and December 31, 2022, 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 still maintains operations in Portland, Oregon at the same address as an Oregon Liquor and Cannabis Commission (OLCC) licensed medical and recreational marijuana retailer.

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 (as previously disclosed in the Company’s Annual Report on form 10-K for the period ending December 31, 2021 filed on April 18, 2022 and in the Company’s Quarterly report for the period ending March 31, 2022 filed on May 16, 2022). 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. Since the time of the agreement the Company has entered into an asset purchase agreement for the sale of its receipt of approval from the Oregon Liquor Control and Cannabis Commission for the new licensee. On April 21, 2023 the Company concluded the sale of its Kaya Shack™ Store 2 Retail Cannabis Store (“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. The net book value of the assets as of December 31, 2022 was $0 and revenue for the year ended December 31, 2022 was approximately $410,880.

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.

The three (3) Medical Marijuana Grows owned and operated by the Company through Oregon Health Authority (OHA) Licensure between 2015 and 2017 were all closed by the Company due to changing market conditions as OLCC Licensure of recreational marijuana came about and medical grow sites became economically unfeasible. 

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 of the Company’s Convertible Promissory Notes (the “Notes”), one of which was secured by a $500,000 mortgage on the Property. CVC released its lien on the Property to enable the Company to sell the Property and utilize the proceeds therefrom for the benefit of the Company and its shareholders, without having to repay CVC the $500,000 Note held by CVC. Additionally, CVC agreed to advance certain sums against the sale of the Property (“Advances”), which amounted to $270,000 pending the sale of the Property. On February 28, 2023 we sold the Property for a price of $770,312, less commissions and customary closing costs. The net proceeds of the sale were used to repay the advances plus interest (including an additional $100,000 borrowed from another lender interest) and the Company realized net proceeds of approximately $302,111. The land was reflected on the balance sheet as assets held for sale for the year ended December 31, 2022 and 2021, at a value of $516,076.

On August 18, 2018, the Company purchased the assets of Eugene, Oregon based Sunstone Farms which was licensed by the OLCC for cannabis production and processing. The purchase included a 12,000 square foot building housing and indoor grow facility, as well as equipment for growing and extraction activity. The purchase price of $1.3 was paid for by the issuance of 12 million shares of KAYS restricted stock, and the seller also purchased 2.5 million restricted shares for $250,000 in cash in a private transaction with the Company, and became a Board Member of Kaya Holdings. In mid-April, 2019 the OLCC filed an administrative proceeding proposing that the facility’s licenses (the “Licenses”) be cancelled, claiming that Sunstone had not filed paperwork correctly with respect to the transaction and the historical ownership of Bruce Burwick, the seller of the facility to the Company. Neither the Issuer nor any of its agents, consultants, employees or related entities was named as a respondent to the action. On March 31, 2021 the Company entered into a settlement with Sunstone and Burwick regarding the failure to deliver to KAYS the Licenses. Bruce Burwick surrendered to KAYS all 1,006,671 shares of our common stock issued to him in connection with the transaction (after adjustments for a 15:1 reverse split this was the 800,003 shares issued for the facility purchase, the 166,667 shares which were issued for $250,000 in cash and 40,001 shares which were issued as annual compensation for Burwick serving as a director of KAYS), and the Company received clear title to the warehouse facility. Burwick received $160,000 from the net proceeds of the sale of the facility's grow license to an unrelated third party, resigned from the Company's board of directors and agreed to work as a non-exclusive consultant to the Company for the next four years for a yearly fee of $35,000.00. On October 12, 2021, KAYS completed the sale of its Eugene, Oregon Cannabis Production and Processing Facility for gross proceeds of $1,325,000.

On September 26, 2019, the Company formed the majority owned subsidiary Kaya Brands International, Inc. (“KBI”) to serve as the Company’s vehicle for expansion into worldwide cannabis markets. Between September of 2019 and December 31, 2022 KBI has formed majority-owned subsidiaries in both Greece and Israel and its local operating subsidiaries have acquired interests in various licenses and entities as noted below:

On June 7, 2020, Kaya Shalvah (“Kaya Farms Israel” or “KFI”), a majority owned subsidiary of KBI) was incorporated by the Company’s Israel Counsel. On March 30, 2021 the Company confirmed that its Israeli subsidiary, Kaya Shalvah has been awarded its initial license and permit from the "YAKAR", the Department for Medical Cannabis in the Israeli Ministry of Health, to develop an Israeli cannabis cultivation and processing facility. This initial license and permit grants Kaya Shalvah permission to proceed with its plans to develop commercial scale cannabis cultivation and processing in Israel. The license and permit are in good order and can be assigned to a location for development and licensure pending approval from the Yakar.

On November 27, 2020, Kaya Farms Greece, S.A. (“KFG”, a majority owned subsidiary of KBI) was incorporated by the Company’s Greek Counsel. On December 31, 2020, the Company entered into a joint venture agreement with Greekkannabis, PC (“GKC”, an Athens, Greece based cannabis company) and executed a formal agreement to acquire 50% of GKC which was completed in 2021. GKC has been issued two (2) Installation Licenses for construction of two medical cannabis cultivation and processing projects in Greece- one in Epidaurus, Greece and the other in Thebes, Greece. Neither of the subject properties are currently owned or optioned by GKC or its operating subsidiaries, but the land for the potential project in Epidaurus is owned by one of the Greek Partner’s families and the Land in Thibes is currently available for purchase or option and the Company believes it could acquire either of the Properties once funding and market conditions allow. Alternatively, both licenses are in good order, and can be transferred to a new location pending Greek Government approval.

On December 13, 2022, the Company formed Fifth Dimension Therapeutics ™ (“FTD”, a Florida Corporation) to seek to provide psychedelic services to sufferers of treatment resistant mental health diseases such as depression, PTSD and other mental health disorders.

On January 3, 2023 the Oregon Health Authority (the “OHA”) began to accept license applications, allowing each entity to own and operate one (1) Psilocybin manufacturing and processing facility for the production of Psilocybin Mushrooms and derived therapeutics (“Psilocybins”), and up to five (5) Psilocybin Facilitation Centers where clients would go to ingest Psilocybins and experience effects under the supervision of State Licensed Facilitators.

The OHA also launched Oregon’s medical cannabis program in 2014, giving KAYS critical experience in comprehending and complying with OHA mandates. The psilocybin opportunity is a logical extension for Kaya Holdings. The purpose, customer, regulations, and operations, as well as our familiarity with Oregon regulators, are synergistic with our current mission, and can be leveraged within our current operational infrastructure. We anticipate being able to respond to market demand rapidly, upon licensing. The licenses to be issued in Oregon will be the first ever State Legal Licensing of Psilocybin Manufacturing and Treatment Centers, and KAYS is positioned to be a first mover due to its operating history in Oregon. The Company has begun the process of enrolling staff that qualify for the licensing into the training programs that have been approved for state certification and is in process of identifying a site for Psilocybin Manufacturing and Processing and up to five (5) sites to open and operate Psilocybin Facilitation Centers, subject to financing and final regulatory approval.

On January 25, 2023 the Company confirmed that attorney Glenn E.J. Murphy was welcomed as a founding member to the FDT Board of Directors. Glenn will assist FDT with introductions to pharmaceutical companies seeking data and access to psychedelic patients, as well as advising on the development of intellectual property, structure of potential joint ventures, funding opportunities, acquisitions, and other related endeavors. Glenn has twenty-five years of private and corporate practice, including ten years in-house with the Henkel Group and more than fifteen years in private practice, Glenn's experience has touched on most every aspect of intellectual property practice.

On March 13, 2023, Bryan Arnold (one of KAYS Vice Presidents and its longest serving Oregon Employee) completed his OHA Certified Psilocybin Education through the Changra Institute and became one of the first eighteen graduates to obtain Psilocybin Facilitator certification in the State of Oregon. Bryan’s Facilitation License application has been approved by the OHA, and he now may oversee up to five (5) Psilocybin Treatment Facilities and up to one (1) Psilocybin Production Facility. Additionally, the Company expects to enroll additional potential licensee candidates within the coming months to bolster its ranks of OHA Licensed Psilocybin Facilitators as it moves forward with plans to open its first Psilocybin Clinic, subject to completion of financing and regulatory approvals.

On November 14, 2023 the Company filed a license application with the Oregon Department of Health (the “OHA”) for the licensure of The Sacred Mushroom™, an approximately 11,000 square foot psilocybin treatment center located in Portland, Oregon which would serve as the Company’s flagship psilocybin facility.

On February 15, 2023 KAYS reached an agreement in principle with Florida-based Total Holistic Center™ ("Total Holistic") to assist FDT with the development of its ketamine treatment model as a first step in the launch of its planned Fifth Dimension Therapeutics Mind Care Clinics and Telehealth Services. The Company has not yet proceeded with any further work to open ketamine clinics as it instead elected to concentrate on opening a Psilocybin Treatment Service Center in Portland, Oregon.

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LIQUIDITY AND GOING CONCERN

9 Months Ended

Sep. 30, 2023

Liquidity And Going Concern

LIQUIDITY AND GOING CONCERN

NOTE 2 –LIQUIDITY AND GOING CONCERN

The Company’s consolidated financial statements as of September 30, 2023 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company had net income of $1,368,016 for the nine months ended September 30, 2023 and net loss of $5,385,209 for the nine months ended September 30, 2022. The increase in net income is due to the changes in derivative liabilities, as well as the company’s gain on disposal. At September 30, 2023 the Company has a working capital deficiency of $7,647,743 and is totally dependent on its ability to raise capital. 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. Even though management believes that it will be able to successfully execute its business plan, which includes third-party financing and capital issuance, and meet the Company’s future liquidity needs, there can be no assurances in that regard. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this material uncertainty. Management recognizes that the Company must generate additional funds to successfully develop its operations and activities. 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 Company’s business plan,

• business transactions to ensure continuation of the Company’s development and operations,

• development of a unified brand and the pursuit of licenses to operate recreational and medical marijuana facilities under the branded name.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

NOTE 3 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) under the accrual basis of accounting.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates.

Risks and Uncertainties

The Company’s operations are subject to risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business failure.  

The Company has experienced, and in the future expects to continue to experience, variability in its sales and earnings.  The factors expected to contribute to this variability include, among others, (i) the uncertainty associated with the commercialization and ultimate success of the product, (ii) competition inherent at other locations where product is expected to be sold (iii) general economic conditions and (iv) the related volatility of prices pertaining to the cost of sales. 

Fiscal Year The Company’s fiscal year-end is December 31.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Kaya Holdings, Inc. and all wholly and majority-owned subsidiaries. All significant intercompany balances have been eliminated.

Wholly owned subsidiaries:

· Alternative Fuels Americas, Inc. (a Florida corporation)

· 34225 Kowitz Road, LLC (an Oregon LLC)

Majority-owned subsidiaries:

Kaya Brands International, Inc. (a Florida Corporation)

Kaya Shalvah (“Kaya Farms Israel”, an Israeli corporation) majority owned subsidiary of KBI)

Kaya Farms Greece, S.A. (a Greek Corporation) majority owned subsidiary of KBI)

· Marijuana Holdings Americas, Inc. (a Florida corporation)

o MJAI Oregon 1 LLC

o MJAI Oregon 2 LLC (inactive)

o MJAI Oregon 3 LLC (inactive)

o MJAI Oregon 4 LLC (inactive)

o MJAI Oregon 5 LLC (inactive)

Non-Controlling Interest

The company owned 55% of Marijuana Holdings Americas until September 30, 2019. Starting October 1, 2019, Kaya Holding, Inc. owns 65% of Marijuana Holdings Americas, Inc. As of September 30, 2023, Kaya owns 65% of Marijuana Holdings Americas, Inc.

The company owned 85% of Kaya Brands International, Inc. until July 31, 2020. Starting August 1, 2020, Kaya Holding, Inc. owns 65% of Kaya Brands International, Inc.

The Company owns 65% of Fifth Dimension Therapeutics, Inc.

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents.

Inventory

Inventory consists of finished goods purchased, which are valued at the lower of cost or market value, with cost being determined on the first-in, first-out method.  The Company periodically reviews historical sales activity to determine potentially obsolete items and also evaluates the impact of any anticipated changes in future demand.  Total Value of Finished goods inventory as of September 30, 2023 is $13,256 and $11,990 as of December 31, 2022. Inventory allowance and impairment were $0 and $0 as of September 30, 2023 and December 31, 2022, respectively.

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  

Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 5-30 years of the respective assets. Expenditures for maintenance and repairs are charged to expense as incurred.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations.

Long-lived assets

The Company reviews long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

Accounting for the Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets.

Assets Held for Sale

The Company classifies an asset group (‘asset’) as held for sale in the period that (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year (subject to certain events or circumstances), (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially and subsequently measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in general and administrative expenses in the period in which the held for sale criteria are met. Conversely, gains are generally not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation or amortization expense on the asset. The Company assesses the fair value of assets held for sale less any costs to sell at each reporting period until the asset is no longer classified as held for sale.

Operating Leases

We lease our retail stores under non-cancellable operating leases. Most store leases include tenant allowances from landlords, rent escalation clauses and/or contingent rent provisions. We recognize rent expense on a straight-line basis over the lease term, excluding contingent rent, and record the difference between the amount charged to expense and the rent paid as a deferred rent liability.

Deferred Rent and Tenant Allowances

Deferred rent is recognized when a lease contains fixed rent escalations. We recognize the related rent expense on a straight-line basis starting from the date of possession and record the difference between the recognized rental expense and cash rent payable as deferred rent. Deferred rent also includes tenant allowances received from landlords in accordance with negotiated lease terms. The tenant allowances are amortized as a reduction to rent expense on a straight-line basis over the term of the lease starting at the date of possession.

Earnings Per Share

In accordance with ASC 260, Earnings per Share, the Company calculates basic earnings per share by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed if the Company has net income; otherwise it would be anti-dilutive and would result from the conversion of a convertible note.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

We are subject to certain tax risks and treatments that could negatively impact our results of operations

Section 280E of the Internal Revenue Code, as amended, prohibits businesses from deducting certain expenses associated with trafficking controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act). The IRS has invoked Section 280E in tax audits against various cannabis businesses in the U.S. that are permitted under applicable state laws. Although the IRS issued a clarification allowing the deduction of certain expenses, the scope of such items is interpreted very narrowly and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E favorable to cannabis businesses.

Provision for Income Taxes

We recorded a provision for income taxes in the amount of $19,109 during the nine months ended September 30, 2023 compared to $77,398 during the nine months ended September 30, 2022. Due to the net operating income we have, we believe are available to us to offset this entire tax liability, which arises under Section 280E of the Code because we are a cannabis company, as a conservative measure, we have accrued this liability.

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

• Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

• Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

	Fair Value Measurements at September 30, 2023
		Level 1		Level 2		Level 3
Assets
Cash	$	60,268	$	-	$	-
Total assets		60,268		-		-
Liabilities
Convertible debentures, net of discounts of $69,499		-		-		7,367,653
Derivative liability		-		-		3,523,317
Total liabilities		-		-		10,890,970
	$	60,268	$	-	$	(10,890,970)
	Fair Value Measurements at December 31, 2022
		Level 1		Level 2		Level 3
Assets
Cash	$	18,330	$	-	$	-
Total assets		18,330		-		-
Liabilities
Convertible debentures, net of discounts of $387,814		-		-		7,419,338
Derivative liability		-		-		6,204,878
Total liabilities		-		-		13,624,216
	$	18,330	$	-	$	(13,624,216)

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable – related party, approximate their fair values because of the short maturity of these instruments.

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. See Note 10.

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. 

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Binomial option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

In July 2017, the FASB issued ASU 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendment also clarifies existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt-Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

Prior to this Update, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date.

The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated.

For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update.

The amendments in Part 1 of this Update are a cost savings relative to former accounting. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period.

The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480.

The Company adopted this new standard on January 1, 2019; however, the Company needs to continue the derivative liabilities due to variable conversion price on some of the convertible instruments. As such, it did not have a material impact on the Company’s consolidated financial statements. 

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the Company records a "beneficial conversion feature" ("BCF") and related debt discount.

When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt.  These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount.  The original issue discount would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

Extinguishments of Liabilities

The Company accounts for extinguishments of liabilities in accordance with ASC 860-10 (formerly SFAS 140) “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized.

Stock-Based Compensation - Employees

The Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  

The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.  

If the Company is a newly formed corporation or shares of the Company are thinly traded, the use of share prices established in the Company’s most recent private placement memorandum (based on sales to third parties) (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar instruments is estimated on the date of grant using a Binomial Option Model option-pricing valuation model.  The ranges of assumptions for inputs are as follows:

• Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.  Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  

• Expected volatility of the entity’s shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  

• Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.  

Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest.

The expense resulting from share-based payments is recorded in general and administrative expense in the statements of operations.

Stock-Based Compensation – Non-Employees

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

In June 2018, the FASB issued ASU No. 2018-07, Compensation–Stock Compensation: Improvement to Nonemployee Share-Based Payment Accounting (Topic 718). The ASU supersedes ASC 505-50, Equity-Based Payment to Non-Employment and expands the scope of the Topic 718 to include stock-based payments granted to non-employees. Under the new guidance, the measurement date and performance and vesting conditions for stock-based payments to non-employees are aligned with those of employees, most notably aligning the award measurement date with the grant date of an award. The new guidance is required to be adopted using the modified retrospective transition approach. The Company adopted the new guidance effective January 1, 2019, with an immaterial impact on its financial statements and related disclosures.

The fair value of share options and similar instruments is estimated on the date of grant using a Binomial option-pricing valuation model.  The ranges of assumptions for inputs are as follows:

• Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments.  The Company uses historical data to estimate holder’s expected exercise behavior.  If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  

• Expected volatility of the entity’s shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  

• Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.  

• Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments.  

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC 606 – Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identifying the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

To confirm, all of our OLCC licensed cannabis retail sales operations are conducted and operated on a “cash and carry” basis- product(s) from our inventory accounts are sold to the customer(s) and the customer settles the account at the time of receipt of product via cash payment at our retail store; the transaction is recorded at the time of sale in our point of sale software system. Revenue is only reported after the product has been delivered to the customer and the customer has paid for the product with cash.

To date the only other revenue we have received is for ATM transactions and revenue from this activity is only reported after we receive payment via check from the ATM service provider company.

Cost of Sales

Cost of sales represents costs directly related to the purchase of goods and third party testing of the Company’s pr

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows.

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended September 30, 2023.

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued.

Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements.

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PROPERTY, PLANT AND EQUIPMENT

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 4 –PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at September 30, 2023 and December 31, 2022:  

	September 30, 2023			December 31, 2022
	(Unaudited)			(Audited)
ATM Machine	$	—		$	5,600
Computer		30,713			30,713
Furniture & Fixtures		59,733			42,965
HVAC		25,000			44,430
Land		17,703			17,702
Leasehold Improvements		32,304			147,636
Machinery and Equipment		55,067			69,312
Sign		—			12,758
Vehicle		24,000			24,000
Total		244,520			395,116
Less: Accumulated Depreciation		(217,735	)		(358,396	)
Property, Plant and Equipment - net	$	26,785		$	36,720

Depreciation expense totaled $9,935 and $17,836 for the nine months ended September 30, 2023 and 2022, respectively.

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ASSETS HELD FOR SALE

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

ASSETS HELD FOR SALE

NOTE 5 –ASSETS HELD FOR SALE

At December 31, 2022 assets held for sale mainly referred to property the Company owned in Lebanon, Oregon, which the Company had intended to develop as a cannabis grow and production facility. All transactions that resulted in the reclassification of assets held for sale at December 31, 2022, are already completed in 2023.

As previously reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, the Company entered into an agreement (the “CVC Agreement”) with CVC International, Inc. (“CVC”), an institutional investor who holds certain of the Company’s Convertible Promissory Notes (the “Notes”), one of which was secured by a $500,000 mortgage on the property the Company owned in Lebanon, Oregon, which the Company intended to develop as a cannabis grow and production facility (the “Property”).

Pursuant to the CVC Agreement, CVC released its $500,000 mortgage lien on the Property, to enable the Company to sell the Property and utilize the proceeds therefrom for the benefit of the Company and its shareholders, without having to repay CVC the $500,000 Note held by CVC.

Additionally, CVC agreed to advance certain sums against the sale of the Property (“Advances”), which included $150,000 advanced at the time the CVC Agreement was entered into and $120,000 which was advanced to the Company on November 10, 2022. The advances bear interest at the rate of 10% per annum and are convertible into shares of our common stock at $0.08 per share, subject to market adjustment.

On February 28, 2023 we sold the Property for a price of $769,500, less commissions and customary closing costs. The net proceeds of the sale were used to repay the advances and an additional short-term loan of $100,000 (plus interest due of $5,000). After such repayments, the Company realized a gain on disposal of assets of $177,883.

The carrying amount of assets classified as held for sale at September 30, 2023 and December 31, 2022 was $0 and $516,076, respectively.

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NON-CURRENT ASSETS

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

NON-CURRENT ASSETS

NOTE 6 –NON-CURRENT ASSETS

Other assets consisted of the following at September 30, 2023 and December 31, 2022:

	September 30, 2023 (Unaudited)		December 31, 2022 (Audited)
Rent Deposits	$	23,941	$	11,016
Security Deposits		5,491		5,491
Other Receivable		10,573		10,668
Non-Current Assets	$	40,005	$	27,175

During the nine months ended September 30, 2023, our other receivables decreased $95, related to changes of currency exchange rate. The increase of the rent deposit was primarily due to the new lease signed on September 22, 2023.

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CONVERTIBLE DEBT

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

CONVERTIBLE DEBT

NOTE 7 –CONVERTIBLE DEBT

These debts have a price adjustment provision. Therefore, the Company accounted for these Notes under ASC Topic 815-15 “Embedded Derivative.”  The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to discounts on convertible debt. Discounts have been amortized to interest expense over the respective term of the related note. In determining the indicated value of the convertible note issued, the Company used the Binomial Options Pricing Model with a risk-free interest rate of ranging from 5.03% to 5.53%, volatility ranging from 149.93% to 196.65%, trading prices was $0.045 per share and a conversion price ranging from $0.04 to $0.08 per share. The total derivative liabilities associated with these notes were $3,523,317 at September 30, 2023 and $6,204,878 at December 31, 2022.

See Below Summary Table

Convertible Debt Summary
	Debt Type	Debt Classification		Interest Rate	Due Date	Ending
		CT	LT			9/30/2023	12/31/2022
A	Convertible	X		10.0%	1-Jan-17	25,000	$             25,000
B	Convertible		X	8.0%	1-Jan-25	82,391	82,391
C	Convertible		X	8.0%	1-Jan-25	41,195	41,195
D	Convertible		X	8.0%	1-Jan-25	262,156	262,156
O	Convertible		X	8.0%	1-Jan-25	136,902	136,902
P	Convertible		X	8.0%	1-Jan-25	66,173	66,173
Q	Convertible		X	8.0%	1-Jan-25	65,274	65,274
S	Convertible		X	8.0%	1-Jan-25	63,205	63,205
T	Convertible		X	8.0%	1-Jan-25	313,634	313,634
CC	Convertible		X	10.0%	1-Jan-25	100,000	100,000
KK	Convertible		X	8.0%	1-Jan-25	188,000	188,000
LL	Convertible		X	8.0%	1-Jan-25	749,697	749,697
MM	Convertible		X	8.0%	1-Jan-25	124,690	124,690
NN	Convertible		X	8.0%	1-Jan-25	622,588	622,588
OO	Convertible		X	8.0%	1-Jan-25	620,908	620,908
PP	Convertible		X	8.0%	1-Jan-25	611,428	611,428
QQ	Convertible		X	8.0%	1-Jan-25	180,909	180,909
RR	Convertible		X	8.0%	1-Jan-25	586,804	586,804
SS	Convertible		X	8.0%	1-Jan-25	174,374	174,374
TT	Convertible		X	8.0%	1-Jan-25	345,633	345,633
UU	Convertible		X	8.0%	1-Jan-25	171,304	171,304
VV	Convertible		X	8.0%	1-Jan-25	121,727	121,727
XX	Convertible		X	8.0%	1-Jan-25	112,734	112,734
YY	Convertible		X	8.0%	1-Jan-25	173,039	173,039
ZZ	Convertible		X	8.0%	1-Jan-25	166,603	166,603
AAA	Convertible		X	8.0%	1-Jan-25	104,641	104,641
BBB	Convertible		X	8.0%	1-Jan-25	87,066	87,066
DDD	Convertible		X	8.0%	1-Jan-25	75,262	75,262
EEE	Convertible		X	8.0%	1-Jan-25	160,619	160,619
GGG	Convertible		X	8.0%	1-Jan-25	79,422	79,422
JJJ	Convertible		X	8.0%	1-Jan-25	52,455	52,455
LLL	Convertible		X	8.0%	1-Jan-25	77,992	77,992
MMM	Convertible		X	8.0%	1-Jan-25	51,348	51,348
PPP	Convertible		X	8.0%	1-Jan-25	95,979	95,979
SSS	Convertible		X	8.0%	1-Jan-25	75,000	75,000
TTT	Convertible		X	8.0%	1-Jan-25	80,000	80,000
VVV	Convertible		X	8.0%	1-Jan-25	75,000	75,000
WWW	Convertible		X	8.0%	1-Jan-25	60,000	60,000
XXX	Convertible		X	8.0%	1-Jan-25	100,000	100,000
YYY	Convertible		X	8.0%	1-Jan-25	50,000	50,000
ZZZ	Convertible		X	8.0%	1-Jan-25	40,000	40,000
AAAA	Convertible		X	8.0%	1-Jan-25	66,000	66,000
BBBB	Convertible	X		12.0%	1-Mar-23	-	150,000
CCCC	Convertible	X		10.0%	1-Mar-23	-	120,000
DDDD	Convertible		X	10.0%	31-Dec-24	-	100,000
Total Convertible Debt						7,437,152	7,807,152
Less: Discount						(69,499)	(387,819)
Convertible Debt, Net of Discounts						$        7,367,653	$        7,419,333
Convertible Debt, Net of Discounts, Current						$             25,000	$           240,288
Convertible Debt, Net of Discounts, Long-term						$        7,342,653	$        7,179,045

FOOTNOTES FOR CONVERTIBLE DEBT ACTIVITY FOR QUARTER ENDED SEPTEMBER 30, 2023

As previously reported for the quarter ended September 30, 2022, the Company entered into an agreement (the “CVC Agreement”) with CVC International, Inc. (“CVC”), an institutional investor who holds certain of the Company’s Convertible Promissory Notes (the “Notes”), one of which was secured by a $500,000 mortgage on the property the Company owned in Lebanon, Oregon, which the Company intended to develop as a cannabis grow and production facility (the “Property”).

Pursuant to the CVC Agreement, CVC released its $500,000 mortgage lien on the Property, to enable the Company to sell the Property and utilize the proceeds therefrom for the benefit of the Company and its shareholders, without having to repay CVC the $500,000 Note held by CVC.

Additionally, CVC agreed to advance certain sums against the sale of the Property (“Advances”), which included $150,000 advanced at the time the CVC Agreement was entered into and $120,000 which was advanced to the Company on November 10, 2022. The advances bear interest at the rate of 10% per annum and are convertible into shares of our common stock at $0.08 per share, subject to market adjustment.

On February 28, 2023 we sold the Property for a price of $769,500, less commissions and customary closing costs. The net proceeds of the sale were used to repay the advances and an additional short-term loan of $100,000 (plus interest due of $5,000).

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NON-CONVERTIBLE DEBT

9 Months Ended

Sep. 30, 2023

Non-convertible Debt

NON-CONVERTIBLE DEBT

NOTE 8 –NON-CONVERTIBLE DEBT

	September 30, 2023		December 31, 2022
Note 5	$	9,312		9,312
Note 6		355,000		—
Note 7		100,000		—
Total Non-Convertible notes	$	464,312		9,312

(5) On September 16, 2016, the Company received a total of $31,661 to be used for equipment in exchange for a two year note in the aggregate amount of $31,661 with interest accruing at 18% per year and a 10% loan fee. The note is in default as of June 30, 2023 with an outstanding balance of $9,312.

(6) On June 12, 2023, the Company issued a 10% promissory note in the amount of $350,000 with 10% interest rate, payable to CVC International Ltd, secured by 10% of monthly total revenues from all sources of Kaya Holdings, Inc. and any of its subsidiaries. and the noteholder also received 10 Series A preferred shares in FDT, which are convertible into a total of 10% of the common shares. The due date of the note is June 12, 2025. At the end of September 2023, the company paid $5,000, which is 10% of the total revenues from all sources of Kaya Holdings, Inc to the Holder and the Holder agreed to reinvest it as the additional of the note.

(7) On August 28, 2023 the Company received $100,000 from the issuance of working capital loan to another investor. Interest is stated at 10%. The Note is Due in March 15, 2024.

B-Related Party
Loan payable - Stockholder, 0%, Due December 31, 2025 (1)	$	250,000	$	250,000
	$	250,000	$	250,000

(1) The $250,000 non-convertible note was issued as part of a Debt Modification Agreement dated January 2, 2014. On January 1, 2019, the holder of the note extended the due date until December 31, 2021.  The interest rate of the non-convertible note is 0%. On December 31, 2021, the Company entered into an agreement to further extend the debt until December 31, 2025, with no additional interest for the extension period. The Company used the stated rate of 9% as imputed interest rate, which was $16,829 and $22,500 for the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, the balance of the debt was $250,000.  

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STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

STOCKHOLDERS’ EQUITY

NOTE 9 –STOCKHOLDERS’ EQUITY

The Company has 10,000,000 shares of preferred stock authorized with a par value of $0.001, of which 100,000 shares have been designated as Series C convertible preferred stock (“Series C” or “Series C preferred stock”). The Company has 10,000,000 shares of preferred stock authorized. The Board has the authority to issue the shares in one or more series and to fix the designations, preferences, powers and other rights, as it deems appropriate.

Each share of Series C has 434 votes on any matters submitted to a vote of the stockholders of the Company and is entitled to dividends equal to the dividends of 434 shares of common stock. Each share of Series C preferred stock is convertible at any time at the option of the holder into 434 shares of common stock.

On December 27, 2021 the Company entered into an Exchange Agreement with Craig Frank and BMN Consultants, Inc. for 50,000 Series C Preferred Shares of Kaya Holdings held by Mr. Frank and 50,000 Series C Preferred Shares of Kaya Holdings optioned by BMN from Mr. Frank and Ilan Sarid (pursuant to stock options extended to BMN in 2010), 100,000 total shares.

Pursuant to the terms and conditions of this Agreement, the Holders each agreed to (a) waive payment of approximately $338,000 of Accrued Compensation; (b) defer payment of the remaining balance of Accrued Compensation owed to each of them of approximately $250,000 until January 1, 2025 ; and (c) exchange the 50,000 Series C Shares ( at total of 100,000) for twenty (20) Series D Convertible Preferred Shares of Kaya Holdings Stock. Mr. Frank’s Series D shares were issued to Mr. Frank and the Series D shares issued for the option held by BMN were issued to RLH Financial Services pursuant to a private sale between BMN and RLH whereby RLH acquired the shares in exchange for a promissory note in the amount of $1,000,000.

Each Share of 40 Series D Preferred Stock is convertible, at the option of the holder thereof, at any time and from time to time, into one percent (1%) of the Company’s Fully Diluted Capitalization as of the Conversion Date. This resulted in a related party gain of $559,058.

The Company has 500,000,000 shares of common stock authorized with a par value of $0.001. Each share of common stock has one vote per share for the election of directors and all other items submitted to a vote of stockholders. The common stock does not have cumulative voting rights, preemptive, redemption or conversion rights.

There were no new issuances of common stock during the three months ended September 30, 2023.

As of September 30, 2023, there were 22,172,835 shares of common stock outstanding.

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DERIVATIVE LIABILITIES

9 Months Ended

Sep. 30, 2023

Derivative Liabilities

DERIVATIVE LIABILITIES

NOTE 10 –DERIVATIVE LIABILITIES

Effective January 1, 2019, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date.

However, due to a recognition of tainting, due to variable conversion price on some of the convertible notes, all convertible notes are considered to have a derivative liability, therefore the Company accounted for these Notes under ASC Topic 815-15 “Embedded Derivative.”  The derivative component of the obligation is initially valued and classified as a derivative liability with an offset to discounts on convertible debt. Discounts are amortized to interest expense over the respective term of the related note. In determining the indicated value of the convertible note issued, the Company used the Binomial Options Pricing Model with a risk-free interest rate of ranging 5.03% to 5.53%, volatility ranging from 149.93% to 194.43%, trading prices was $0.045 per share and a conversion price ranging from $0.04 to $0.08 per share. The total derivative liabilities associated with these notes were $3,523,317 at September 30, 2023 and $6,204,878 at December 31, 2022.

As a result of the application of ASC No. 815, the fair value of the ratchet feature related to convertible debt and warrants is summarized as follow: 

Balance as of December 31, 2022	$	6,204,878
Change in Derivative Values		(2,535,936	)
Settlement of debt-reclass to APIC		(145,625	)
Balance as of September 30, 2023	$	3,523,317

The Company recorded the debt discount to the extent of the gross proceeds raised and expended immediately the remaining fair value of the derivative liability, as it exceeded the gross proceeds of the note.  

The Company recorded settlement of debt, reclassed to APIC of $145,625 and $0 for the nine months ended September 30, 2023 and 2022, respectively. 

The Company recorded a change in the value of embedded derivative liabilities gain of $2,535,936 and a loss of $3,904,639 for the nine months ended September 30, 2023 and 2022, respectively.

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DEBT DISCOUNT

9 Months Ended

Sep. 30, 2023

Debt Discount

DEBT DISCOUNT

NOTE 11 –DEBT DISCOUNT

The Company recorded the debt discount to the extent of the gross proceeds raised and expended immediately the remaining fair value of the derivative liability, as it exceeded the gross proceeds of the note.

Debt discount amounted to $69,499 and $387,819 as of September 30, 2023 and December 31, 2022, respectively.

The Company recorded the amortization of debt discount of $318,320 and $163,817 for the nine months ended September 30, 2023 and 2022, respectively. 

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

 NOTE 12 –RELATED PARTY TRANSACTIONS

At December 31, 2014, the Company was indebted to an affiliated shareholder of the Company for $840,955, which consisted of $737,100 principal and $103,895 accrued interest, with interest accruing at 10%. On January 2, 2014, the Company entered into a Debt Modification Agreement whereby the total amount of the debt was reduced to $750,000 and no interest accrued until December 31, 2015. $500,000 of the debt is convertible into 50,000 Series C Convertible Preferred Shares of KAYS. The remaining $250,000 is not convertible.

On December 31, 2015, the Company entered into an agreement to extend the debt until December 31, 2017 with no additional interest for the extension period. On January 1, 2018 the Company entered into an agreement to further extend the debt until December 31, 2021. On December 31, 2021, the Company entered into an agreement to further extend the debt until December 31, 2025, with no additional interest for the extension period, with no additional interest for the extension period.

At December 2017, the company was indebted to Craig Frank, Chairman, CEO and Acting CFO for KAYS, in the amount of $7,737 for travel and miscellaneous expenses incurred by Mr. Frank from travel and related activities in Oregon.

In each of 2018 and 2019, the Company issued stock grants to Jordi Arimany and Carrie Schwarz for 100,000 shares of KAYS stock for their service as board members. The stock was issued from Treasury as restricted stock and carries a one-year restriction before it can be registered for resale pursuant to Rule 144.

In 2018 and 2019, the Company issued stock grants to Craig Frank for 3,000,00 shares of KAYS stock each year, pursuant to his employment agreement via board resolution. Jordi Arimany and Carrie Schwarz for 100,000 shares of KAYS stock. The stock was issued from Treasury as restricted stock and carries a one-year restriction before it can be registered for resale pursuant to Rule 144.

In August, 2018 KAYS entered into an agreement with Bruce Burwick, (who subsequently joined the Board of Directors and became an affiliate of the Company) to purchase the Eugene, Oregon based Sunstone Farms grow and manufacturing facility, which is licensed by the OLCC for both the production (growing) of medical and recreational marijuana flower and the processing of cannabis concentrates/extracts/edibles. The purchase includes a 12,000 square foot building housing an indoor grow facility, as well as equipment for growing and extraction activity. KAYS paid Bruce Burwick $1,300,000 for the real property and schedule of equipment that was and is used to operate the facility.

Bruce Burwick acquired the property for satisfaction of a promissory note due him for $1,433,000. The purchase price of $1.3 million for the OLCC licensed marijuana production and processing facility, consisting of the building and equipment was paid for by the issuance of 12 million shares of KAYS restricted stock to the seller at closing. The shares carry a lock-up-restriction that allows for their staged eligibility for resale over a 61-month period from the date of the purchase of the facility by KAYS. Additionally, the seller purchased 2.5 million restricted shares for $250,000 in cash in a private transaction with the Company. The proceeds from the sale of those shares were and are being used for acquisition related expenses, transitional operating costs and facility capital improvements with respect to the production and processing facility we purchased.

On October 14, 2019 the shareholder submitted a conversion notice and the $500,000 in convertible debt was converted into 50,000 Series C Preferred shares of KAYS stock. The stock was issued from Treasury as restricted stock and carries a minimum of one year restriction before it can be registered for resale pursuant to Rule 144.

In 2019, the Company issued a stock grant to Bruce Burwick for 100,000 shares of KAYS stock for his service as a board member. The stock was issued from Treasury as restricted stock and carries a one-year restriction before it can be registered for resale pursuant to Rule 144.

In 2019, the Company entered into amended consulting agreements with Tudog International Consulting, Inc. which provides CEO services to the Company through Craig Frank, an Officer of the Company and BMN Consultants, Inc. which provides business development and financial consulting services to the Company through William David Jones, a non-officer Consultant to the Company. Pursuant to the amended consulting agreements, each entity is entitled to monthly compensation of $25,000. Due to the liquidity of the Company, the compensations were paid partially over the periods. As of December 31, 2022, the accrued compensation was approximately $500,000.   By agreement of the parties, the accrued compensation will not be paid until January 1,, 2025 and has been recorded as a long-term liability. As of December 31, 2022, the Company also had $273,190 of accounts payable due to Tudog International Consulting, Inc. and BMN Consultants, Inc.

In 2021, the Company formed Kaya Farm Greece, which is a majority owned subsidiary of Kaya Brands International, Inc., with 70% ownership. The remaining 30% is owned by related parties of the Company. Subsequently, Kaya Farm Greece entered an acquisition agreement to acquire 50% GREEKKANNABIS S.A. (GK) The remaining 50% of GREEKKANNABIS S.A. is currently owned by Ilias Kammenos (President of GK) and Panagiotis Kininis (Vice president of GK). There is non-controlling capital of $1,909,211 representing the equity not currently owned by the Company. The financial statements have been consolidated with the Company.  

On March 31, 2021 the Company entered into a settlement with Sunstone Capital Partners, LLC, Sunstone Marketing Partners LLC and Bruce Burwick, the principal of Sunstone and a director of Kays, regarding the failure to deliver to KAYS the Oregon Cannabis Production and Processing Licenses that were part of a warehouse purchase transaction in August 2018.

In 2023, Tudog consulting, Inc, BMN Consultings, Inc and 495 Oxford Consulting, Inc which all provide services to the Company through Craug Frank and William David Jones, forgiven totally $38,329 of payable expense. The payable forgiveness are recorded as Additional paid in capital.

On July 28, 2021 the Company announced that all terms had been satisfied. Pursuant to the terms of the settlement, Bruce Burwick surrendered to KAYS 1,006,671 shares of our common stock issued to him in connection with the transaction (800,003 shares which were issued for the facility purchase, 166,667 shares which were issued for $250,000 in cash and 40,001 shares which were issued as annual compensation for Burwick serving as a director of KAYS). The shares have been submitted to KAYS' transfer agent for cancellation. In addition, the Company received clear title to the warehouse facility, which enables the Company to sell it without restriction. As part of the settlement, Burwick received $160,000 from the net proceeds of the sale of the facility's grow license to an unrelated third party, resigned from the Company's board of directors and agreed to work as a non-exclusive consultant to the Company for the next four years for a yearly fee of $35,000.00.

On October 12, 2021, KAYS completed the sale of its Eugene, Oregon Cannabis Production and Processing Facility for gross proceeds of $1,325,000, generating a cash influx of approximately $0.09 per share for the Company (the “Eugene Warehouse Sale”). The sale was part of our recently announced settlement with Sunstone Farms, and it also resulted in the cancellation of 1,006,671 shares of KAYS stock, decreasing the Company’s issued and outstanding shares by approximately 6.5% to 14.7 million shares. Funds received from the sale were and are being used to repay certain debt and strengthen our balance sheet and for general working capital purposes, as well as provide the initial stage capital for some of the Company’s U.S. and global expansion activities, including its planned cultivation sites in Greece and Israel.

On August 30, 2021 the Company elected to dispose of two (2) of the four (4) Fiat cars that it owned that it was not using. The four cars were originally purchased in September of 2017 for prices ranging from $13,584.00 to $14,992.

After a review of market pricing the Company was able to sell one of the cars to Carvana for $14,460.00 and the funds were used for general working capital. Additionally, the second Fiat was transferred to Mr. Frank in lieu of $15,000in fees owed him. After adjusting for net book value, the Company recorded $12,453 to additional paid in capital.

On December 27, 2021 the Company entered into an Exchange Agreement with Craig Frank and BMN Consultants, Inc. for 50,000 Series C Preferred Shares of Kaya Holdings held by Mr. Frank and 50,000 Series C Preferred Shares of Kaya Holdings optioned by BMN from Mr. Frank and Ilan Sarid (pursuant to stock options that they each extended to BMN in 2010), 100,000 total shares.

Pursuant to the terms and conditions of this Agreement, the Holders each agreed to (a) waive payment of approximately $338,000 of Accrued Compensation; (b) defer payment of the remaining balance of Accrued Compensation owed to each of them of approximately $250,000 until January 1, 2025 ; and (c) exchange the 50,000 Series C Shares ( at total of 100,000) for twenty (20) Series D Convertible Preferred Shares of Kaya Holdings Stock. Each Share of 40 Series D Preferred Stock is convertible, at the option of the holder thereof, at any time and from time to time, into one percent (1%) of the Company’s Fully Diluted Capitalization as of the Conversion Date. This resulted in a related party gain, which was applied to APIC. Mr. Frank’s Series D shares were issued to Mr. Frank and the Series D shares issued for the option held by BMN were issued to RLH Financial Services pursuant to a private sale between BMN and RLH whereby RLH acquired the shares in exchange for a promissory note in the amount of $1,000,000.

On December 1, 2022, the Company priced a its one remaining vehicle with Carvana and received a offer for $14,510 In lieu of accepting the bid and partially paying Mr. Frank’s invoices which were still due from August, 2022, the Company agreed to transfer title to the car to him in settlement of $17,000.00 in fees that were due him in August (these are fees that are not being deferred and would otherwise be paid in cash, and cost the Company $2,490.00 more in fees if the car was sold).

On December 15, 2022 the Board of Directors approved the issuance of a total of 2,100,000 shares as Officer and Director Compensation as follows:1,500,000 shares of common stock to our CEO Craig Frank   300,000 shares to Carries Schwarz  300,000 shares to Mitchell Chupak, as annual award compensation, per their agreements. 

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STOCK OPTION PLAN

9 Months Ended

Sep. 30, 2023

Stock Option Plan

STOCK OPTION PLAN

NOTE 13 –STOCK OPTION PLAN

On September 15, 2022 the Company approved the 2022 Equity Incentive Plan, which provides for equity incentives to be granted to the Company’s employees, executive officers or directors or to key advisers or consultants. Equity incentives may be in the form of stock options with an exercise price not less than the fair market value of the underlying shares as determined pursuant to the 2022 Incentive Stock Plan, restricted stock awards, other stock based awards, or any combination of the foregoing. The 2022 Incentive Stock Plan is administered by the board of directors.

The remaining balance of the shares available in the plan is 450,000 shares.

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WARRANTS

9 Months Ended

Sep. 30, 2023

Warrants

WARRANTS

NOTE 14 –WARRANTS

On September 8, 2015 the Company received a total of $100,000 from an accredited investor in exchange for a two year note in the aggregate amount of $100,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 210,772 paid and non-assessable post -reverse split shares of the Common Stock at the price of $0.4744455 per post-reverse split share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $100,000, 10% promissory note due September 9, 2017 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or September 9, 2017. As of December 31, 2019, the note was paid in full. As of September 30, 2023, the warrants have expired.

On September 9, 2015 the Company received a total of $100,000 from an accredited investor in exchange for a two year note in the aggregate amount of $100,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 210,772 paid and non-assessable post-reverse split shares of the Common Stock at the price of $0.4744455 per post-reverse split share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $100,000, 10% promissory note due September 9, 2017 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or September 9, 2017. As of December 31, 2019, the note was paid in full. As of September 30, 2023, the warrants have expired.

On May 9, 2016 the Company received a total of $75,000 from an accredited investor in exchange for a two year note in the aggregate amount of $75,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 158,079 paid and non-assessable post-reverse split shares of the Common Stock at the price of $0.4744455 per post-reverse split share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $75,000, 10% promissory note due May 9, 2018 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or May 9, 2018. As of December 31, 2019, the note was paid in full.

On May 17, 2016 the Company received a total of $75,000 from an accredited investor in exchange for a two year note in the aggregate amount of $75,000 with interest accruing at 10%. The note holder is entitled to subscribe for and purchase from the company 158,079 paid and non-assessable shares of the Common Stock at the price of $0.4744455 per share (the “Warrant Exercise Price”) for a period of five (5) years commencing from the earlier of such time as that certain $75,000, 10% promissory note due May 17, 2018 has been fully repaid or the start of the Acceleration Period as defined in “The Note” or May 17, 2018. As of December 31, 2019, the note was paid in full.

 Warrants issued to Non-Employees

	Warrants Issued	Weighted Average Exercise Price	Weighted Average Contract Terms Years
Balance as of December 31, 2022	316,158	0.4744455	0.36
Granted	-	-	-
Exercised	-	-	-
Expired	-	-	-
Balance as of September 30, 2023	316,158	0.4744455	0.36

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 15 –COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company has one operating lease for an office in Fort Lauderdale, Florida, one retail store location in Oregon under arrangements classified as leases under ASC 842.

Effective June 1, 2019, the Company leased the office space in Fort Lauderdale, Florida under a 2-year operating lease expiring May 31, 2021 at a rate of $1,802 per month. On June 1, 2021 the lease was extended for another year and on June 1 in 2022 the lease was extended for an additional year. The current monthly payment inclusive of sales tax and operating expenses is $2,079 with right of use liabilities of $0. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The lease was terminated on May 30, 2023. On October 1, 2023, the lease was extended for another year.

Effective May 15, 2014, the Company leased a unit in Portland, Oregon under a 5-year operating lease expiring May 15, 2019. In May 2019, the lease had been extended to May 15, 2024. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The current monthly payment is $2,950 with right of use liabilities of $21,041 as of September 30, 2023.

Effective May 22, 2015, the Company leased a unit in Salem, Oregon under a 5-year operating lease expiring May 31, 2020. In May 2020, the lease had been extended to May 31, 2025. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The lease was extended for an additional 5 years. The current monthly payment is $5,140 with right of use liabilities of $124,819 as of March 31, 2023.This lease was terminated as of April 19, 2023 as part of a settlement with the Landlord on the three (3) outstanding retail store leases that the Company had outstanding in Salem, Oregon for locations that were closed, and no funds are owed for the leases.

Effective April 15, 2016, the Company leased a unit in Salem, Oregon under a 5-year operating lease expiring April 15, 2021. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The current monthly payment is $0 with right of us liabilities of $0. This lease was terminated as of April 19, 2023 as part of a settlement with the Landlord on the three (3) outstanding retail store leases that the Company had outstanding in Salem, Oregon for locations that were closed, and no funds are owed for the leases.

Effective April 15, 2016, the Company leased a unit in Salem, Oregon under a 5-year operating lease expiring April 15, 2021. The total amount of rental payments due over the lease term is being charged to rent expense according to the straight-line method over the term of the lease. The current monthly payment is $0 with right of us liabilities of $0. This lease was terminated as of April 19, 2023 as part of a settlement with the Landlord on the three (3) outstanding retail store leases that the Company had outstanding in Salem, Oregon for locations that were closed, and no funds are owed for the leases.

On September 21, 2023, the Company executed a lease for approximately 11,000 square feet of space in Portland, OR for its Psilocybin business. The space takes up the entire seventh floor of commercial building which has floor to ceiling windows offering sweeping views of the Portland Skyline, and has an existing substantial kitchen/ café area that the Company intends to utilize for a “Microdosing Café” concept, as well as already constructed rooms that the Company intends to utilize for individual and group Psilocybin sessions. The lease is for one year with option for an additional two years, if all conditions are met. The lease does not commence until such time as the Company has received notice of OHA Psilocybin Service Center License approval for the location.

The initial term of the lease is 14 months, and as long as there is never an Event of Default by Tenant under this Lease during the first fourteen (14) months of the Lease, the term of the Lease shall be automatically extended for twenty-five (25) additional months, on the terms and conditions contained in the Lease . In the event of Default by Tenant during the initial fourteen (14) months of the Lease, the Lease term shall automatically expire on the last day of the 14th month.

Base Rent for the initial 14 month period is $10,761, and the Base Rent for Months 1, 2 and 15 shall be abated, provided Month 15 shall be abated only if initial lease term is extended per the terms noted above. Bas Rent beginning at Month 16 (if lease is extended) increase to $12,913.20

The Base Rent also includes payments in restricted stock to the Landlord as follows: Promptly upon the Commencement Date, Tenant shall issue to Landlord, or entities or individual(s) designated by Landlord, Two Million Five Hundred Thousand (2,500,000) shares of restricted stock in Tenant (the “Kaya Shares”). Tenant represents and warrants to Landlord (which representation shall be deemed renewed upon issuance of the Kaya Shares) that 250,000 shares of the Kaya Shares will be eligible for sale by Landlord every six (6) months after the original issuance. The Kaya Shares shall belong to Landlord and shall be returned to Tenant only in the event of termination of the Lease pursuant to Section 21.14, if at all.

The Company has escrowed $51,817.75 with an Oregon-licensed attorney in Oregon (“Escrow Holder”) pursuant to an escrow agreement between Tenant, Landlord and the Escrow Holder, of which $38,893.75 (the “Prepaid Rent”) is prepaid Base Rent and Additional Rent for months 1 through 5 of the Term and $12,925 is the Security Deposit (defined below). Tenant shall pay all fees charged by the Escrow Holder for holding the Prepaid Rent and Security Deposit pursuant to the escrow agreement. The Prepaid Rent and Security Deposit shall be released to Landlord promptly upon Lease Commencement. Tenant shall promptly execute any documents required by Escrow Company for such release upon Lease Commencement 

As noted above, the one (1) lease that the Company entered into on June 1, 2015 and the two (2) leases that the Company entered into effective April 15, 20 16 were terminated as part of a settlement with the landlord entered into on April 19, 2023 concurrent with a payment of $75,000 which resolved all outstanding liabilities of the Company and its subsidiaries for the leases.

The Company utilizes the incremental borrowing rate in determining the present value of lease payments unless the implicit rate is readily determinable. The Company used an estimated incremental borrowing rate of 9.32% to estimate the present value of the right of use liability.

The Company has right-of-use assets of $19,361 and operating lease liabilities of $21,041 as of September 30, 2023. Operating lease expenses for the nine months ended September 30, 2023 and 2022 were $218,789 and $207,680, respectively. The big changes were due to the termination of the three stores lease. As the closure of 3 stores, the Company evaluated long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Hence, the Company has recorded $151,082 in impairment gain related to right-of-use assets during the nine months ended September 30, 2023.

Maturity of Lease Liabilities at September 30, 2023	Amount
2023		9,300
2024		12,400
2025		-
Later years		-
Total lease payments		21,700
Less: Imputed interest		(659	)
Present value of lease liabilities	$	21,041

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Note 16- SUBSEQUENT EVENTS

On November 14, 2023 the Company filed a license application with the Oregon Department of Health (the “OHA”) for the licensure of The Sacred Mushroom™, an approximately 11,000 square foot psilocybin treatment center located in Portland, Oregon which would serve as the Company’s flagship psilocybin facility.

On 10/1/23 CVC agreed to advance an additional $150,000 to KAYs pursuant to the previously agreed non-convertible notes, including 145,000 wire deposit received on October 06, 2023, and $5,000 payment reinvesting.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) under the accrual basis of accounting.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable and inventory, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of share based payments and derivative liabilities, estimates of fair value of warrants issued and recorded as debt discount, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates.

Risks and Uncertainties

Risks and Uncertainties

The Company’s operations are subject to risk and uncertainties including financial, operational, regulatory and other risks including the potential risk of business failure.  

The Company has experienced, and in the future expects to continue to experience, variability in its sales and earnings.  The factors expected to contribute to this variability include, among others, (i) the uncertainty associated with the commercialization and ultimate success of the product, (ii) competition inherent at other locations where product is expected to be sold (iii) general economic conditions and (iv) the related volatility of prices pertaining to the cost of sales. 

Fiscal Year

Fiscal Year The Company’s fiscal year-end is December 31.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Kaya Holdings, Inc. and all wholly and majority-owned subsidiaries. All significant intercompany balances have been eliminated.

Wholly owned subsidiaries:

· Alternative Fuels Americas, Inc. (a Florida corporation)

· 34225 Kowitz Road, LLC (an Oregon LLC)

Majority-owned subsidiaries:

Kaya Brands International, Inc. (a Florida Corporation)

Kaya Shalvah (“Kaya Farms Israel”, an Israeli corporation) majority owned subsidiary of KBI)

Kaya Farms Greece, S.A. (a Greek Corporation) majority owned subsidiary of KBI)

· Marijuana Holdings Americas, Inc. (a Florida corporation)

o MJAI Oregon 1 LLC

o MJAI Oregon 2 LLC (inactive)

o MJAI Oregon 3 LLC (inactive)

o MJAI Oregon 4 LLC (inactive)

o MJAI Oregon 5 LLC (inactive)

Non-Controlling Interest

Non-Controlling Interest

The company owned 55% of Marijuana Holdings Americas until September 30, 2019. Starting October 1, 2019, Kaya Holding, Inc. owns 65% of Marijuana Holdings Americas, Inc. As of September 30, 2023, Kaya owns 65% of Marijuana Holdings Americas, Inc.

The company owned 85% of Kaya Brands International, Inc. until July 31, 2020. Starting August 1, 2020, Kaya Holding, Inc. owns 65% of Kaya Brands International, Inc.

The Company owns 65% of Fifth Dimension Therapeutics, Inc.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less. The Company had no cash equivalents.

Inventory

Inventory

Inventory consists of finished goods purchased, which are valued at the lower of cost or market value, with cost being determined on the first-in, first-out method.  The Company periodically reviews historical sales activity to determine potentially obsolete items and also evaluates the impact of any anticipated changes in future demand.  Total Value of Finished goods inventory as of September 30, 2023 is $13,256 and $11,990 as of December 31, 2022. Inventory allowance and impairment were $0 and $0 as of September 30, 2023 and December 31, 2022, respectively.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  

Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 5-30 years of the respective assets. Expenditures for maintenance and repairs are charged to expense as incurred.

Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statements of operations.

Long-lived assets

Long-lived assets

The Company reviews long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows.

Accounting for the Impairment of Long-Lived Assets

Accounting for the Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets.

Assets Held for Sale

Assets Held for Sale

The Company classifies an asset group (‘asset’) as held for sale in the period that (i) it has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year (subject to certain events or circumstances), (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially and subsequently measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in general and administrative expenses in the period in which the held for sale criteria are met. Conversely, gains are generally not recognized on the sale of a long-lived asset until the date of sale. Upon designation as an asset held for sale, the Company stops recording depreciation or amortization expense on the asset. The Company assesses the fair value of assets held for sale less any costs to sell at each reporting period until the asset is no longer classified as held for sale.

Operating Leases

Operating Leases

We lease our retail stores under non-cancellable operating leases. Most store leases include tenant allowances from landlords, rent escalation clauses and/or contingent rent provisions. We recognize rent expense on a straight-line basis over the lease term, excluding contingent rent, and record the difference between the amount charged to expense and the rent paid as a deferred rent liability.

Deferred Rent and Tenant Allowances

Deferred Rent and Tenant Allowances

Deferred rent is recognized when a lease contains fixed rent escalations. We recognize the related rent expense on a straight-line basis starting from the date of possession and record the difference between the recognized rental expense and cash rent payable as deferred rent. Deferred rent also includes tenant allowances received from landlords in accordance with negotiated lease terms. The tenant allowances are amortized as a reduction to rent expense on a straight-line basis over the term of the lease starting at the date of possession.

Earnings Per Share

Earnings Per Share

In accordance with ASC 260, Earnings per Share, the Company calculates basic earnings per share by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed if the Company has net income; otherwise it would be anti-dilutive and would result from the conversion of a convertible note.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes.  Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.

ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

We are subject to certain tax risks and treatments that could negatively impact our results of operations

Section 280E of the Internal Revenue Code, as amended, prohibits businesses from deducting certain expenses associated with trafficking controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act). The IRS has invoked Section 280E in tax audits against various cannabis businesses in the U.S. that are permitted under applicable state laws. Although the IRS issued a clarification allowing the deduction of certain expenses, the scope of such items is interpreted very narrowly and the bulk of operating costs and general administrative costs are not permitted to be deducted. While there are currently several pending cases before various administrative and federal courts challenging these restrictions, there is no guarantee that these courts will issue an interpretation of Section 280E favorable to cannabis businesses.

Provision for Income Taxes

Provision for Income Taxes

We recorded a provision for income taxes in the amount of $19,109 during the nine months ended September 30, 2023 compared to $77,398 during the nine months ended September 30, 2022. Due to the net operating income we have, we believe are available to us to offset this entire tax liability, which arises under Section 280E of the Code because we are a cannabis company, as a conservative measure, we have accrued this liability.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.

The following are the hierarchical levels of inputs to measure fair value:

• Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities.

• Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

	Fair Value Measurements at September 30, 2023
		Level 1		Level 2		Level 3
Assets
Cash	$	60,268	$	-	$	-
Total assets		60,268		-		-
Liabilities
Convertible debentures, net of discounts of $69,499		-		-		7,367,653
Derivative liability		-		-		3,523,317
Total liabilities		-		-		10,890,970
	$	60,268	$	-	$	(10,890,970)
	Fair Value Measurements at December 31, 2022
		Level 1		Level 2		Level 3
Assets
Cash	$	18,330	$	-	$	-
Total assets		18,330		-		-
Liabilities
Convertible debentures, net of discounts of $387,814		-		-		7,419,338
Derivative liability		-		-		6,204,878
Total liabilities		-		-		13,624,216
	$	18,330	$	-	$	(13,624,216)

The carrying amounts of the Company’s financial assets and liabilities, such as cash, prepaid expenses, other current assets, accounts payable & accrued expenses, certain notes payable and notes payable – related party, approximate their fair values because of the short maturity of these instruments.

The Company accounts for its derivative liabilities, at fair value, on a recurring basis under level 3. See Note 10.

Embedded Conversion Features

Embedded Conversion Features

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature. 

Derivative Financial Instruments

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based simple derivative financial instruments, the Company uses the Binomial option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

In July 2017, the FASB issued ASU 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendment also clarifies existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt-Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

Prior to this Update, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date.

The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated.

For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update.

The amendments in Part 1 of this Update are a cost savings relative to former accounting. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period.

The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480.

The Company adopted this new standard on January 1, 2019; however, the Company needs to continue the derivative liabilities due to variable conversion price on some of the convertible instruments. As such, it did not have a material impact on the Company’s consolidated financial statements. 

Beneficial Conversion Feature

Beneficial Conversion Feature

For conventional convertible debt where the rate of conversion is below market value, the Company records a "beneficial conversion feature" ("BCF") and related debt discount.

When the Company records a BCF, the relative fair value of the BCF is recorded as a debt discount against the face amount of the respective debt instrument (offset to additional paid in capital) and amortized to interest expense over the life of the debt.

Debt Issue Costs and Debt Discount

Debt Issue Costs and Debt Discount

The Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt.  These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed.

Original Issue Discount

Original Issue Discount

For certain convertible debt issued, the Company may provide the debt holder with an original issue discount.  The original issue discount would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense over the life of the debt.

Extinguishments of Liabilities

Extinguishments of Liabilities

The Company accounts for extinguishments of liabilities in accordance with ASC 860-10 (formerly SFAS 140) “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. When the conditions are met for extinguishment accounting, the liabilities are derecognized and the gain or loss on the sale is recognized.

Stock-Based Compensation - Employees

Stock-Based Compensation - Employees

The Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification. Pursuant to paragraph 718-10-30-6 of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  

The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.  

If the Company is a newly formed corporation or shares of the Company are thinly traded, the use of share prices established in the Company’s most recent private placement memorandum (based on sales to third parties) (“PPM”), or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar instruments is estimated on the date of grant using a Binomial Option Model option-pricing valuation model.  The ranges of assumptions for inputs are as follows:

• Expected term of share options and similar instruments: The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding. Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees’ expected exercise and post-vesting employment termination behavior into the fair value (or calculated value) of the instruments.  Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term. The Company uses the simplified method to calculate expected term of share options and similar instruments as the company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  

• Expected volatility of the entity’s shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  

• Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.  

Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest.

The expense resulting from share-based payments is recorded in general and administrative expense in the statements of operations.

Stock-Based Compensation – Non-Employees

Stock-Based Compensation – Non-Employees

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

In June 2018, the FASB issued ASU No. 2018-07, Compensation–Stock Compensation: Improvement to Nonemployee Share-Based Payment Accounting (Topic 718). The ASU supersedes ASC 505-50, Equity-Based Payment to Non-Employment and expands the scope of the Topic 718 to include stock-based payments granted to non-employees. Under the new guidance, the measurement date and performance and vesting conditions for stock-based payments to non-employees are aligned with those of employees, most notably aligning the award measurement date with the grant date of an award. The new guidance is required to be adopted using the modified retrospective transition approach. The Company adopted the new guidance effective January 1, 2019, with an immaterial impact on its financial statements and related disclosures.

The fair value of share options and similar instruments is estimated on the date of grant using a Binomial option-pricing valuation model.  The ranges of assumptions for inputs are as follows:

• Expected term of share options and similar instruments: Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments.  The Company uses historical data to estimate holder’s expected exercise behavior.  If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.  

• Expected volatility of the entity’s shares and the method used to estimate it.  Pursuant to ASC Paragraph 718-10-50-2(f)(2)(ii) a thinly-traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.  The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.  If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.  

• Expected annual rate of quarterly dividends.  An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted-average expected dividends.  The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.  

• Risk-free rate(s). An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments.  

Revenue Recognition

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC 606 – Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identifying the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

To confirm, all of our OLCC licensed cannabis retail sales operations are conducted and operated on a “cash and carry” basis- product(s) from our inventory accounts are sold to the customer(s) and the customer settles the account at the time of receipt of product via cash payment at our retail store; the transaction is recorded at the time of sale in our point of sale software system. Revenue is only reported after the product has been delivered to the customer and the customer has paid for the product with cash.

To date the only other revenue we have received is for ATM transactions and revenue from this activity is only reported after we receive payment via check from the ATM service provider company.

Cost of Sales

Cost of Sales

Cost of sales represents costs directly related to the purchase of goods and third party testing of the Company’s pr

Related Parties

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements.

The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

Contingencies

Contingencies

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, consolidated financial position, and consolidated results of operations or consolidated cash flows.

Uncertain Tax Positions

Uncertain Tax Positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the provisions of Section 740-10-25 for the reporting period ended September 30, 2023.

Subsequent Events

Subsequent Events

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements are issued.

Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the effect of recently issued standards that are not yet effective will not have a material effect on its consolidated financial position or results of operations upon adoption.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40)” (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. The ASU’s amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the impact ASU 2020-06 will have on its financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis

	Fair Value Measurements at September 30, 2023
		Level 1		Level 2		Level 3
Assets
Cash	$	60,268	$	-	$	-
Total assets		60,268		-		-
Liabilities
Convertible debentures, net of discounts of $69,499		-		-		7,367,653
Derivative liability		-		-		3,523,317
Total liabilities		-		-		10,890,970
	$	60,268	$	-	$	(10,890,970)
	Fair Value Measurements at December 31, 2022
		Level 1		Level 2		Level 3
Assets
Cash	$	18,330	$	-	$	-
Total assets		18,330		-		-
Liabilities
Convertible debentures, net of discounts of $387,814		-		-		7,419,338
Derivative liability		-		-		6,204,878
Total liabilities		-		-		13,624,216
	$	18,330	$	-	$	(13,624,216)

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PROPERTY, PLANT AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property Plant And Equipment

	September 30, 2023			December 31, 2022
	(Unaudited)			(Audited)
ATM Machine	$	—		$	5,600
Computer		30,713			30,713
Furniture & Fixtures		59,733			42,965
HVAC		25,000			44,430
Land		17,703			17,702
Leasehold Improvements		32,304			147,636
Machinery and Equipment		55,067			69,312
Sign		—			12,758
Vehicle		24,000			24,000
Total		244,520			395,116
Less: Accumulated Depreciation		(217,735	)		(358,396	)
Property, Plant and Equipment - net	$	26,785		$	36,720

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NON-CURRENT ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of other assets noncurrent

	September 30, 2023 (Unaudited)		December 31, 2022 (Audited)
Rent Deposits	$	23,941	$	11,016
Security Deposits		5,491		5,491
Other Receivable		10,573		10,668
Non-Current Assets	$	40,005	$	27,175

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CONVERTIBLE DEBT (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Convertible Debt

Convertible Debt Summary
	Debt Type	Debt Classification		Interest Rate	Due Date	Ending
		CT	LT			9/30/2023	12/31/2022
A	Convertible	X		10.0%	1-Jan-17	25,000	$             25,000
B	Convertible		X	8.0%	1-Jan-25	82,391	82,391
C	Convertible		X	8.0%	1-Jan-25	41,195	41,195
D	Convertible		X	8.0%	1-Jan-25	262,156	262,156
O	Convertible		X	8.0%	1-Jan-25	136,902	136,902
P	Convertible		X	8.0%	1-Jan-25	66,173	66,173
Q	Convertible		X	8.0%	1-Jan-25	65,274	65,274
S	Convertible		X	8.0%	1-Jan-25	63,205	63,205
T	Convertible		X	8.0%	1-Jan-25	313,634	313,634
CC	Convertible		X	10.0%	1-Jan-25	100,000	100,000
KK	Convertible		X	8.0%	1-Jan-25	188,000	188,000
LL	Convertible		X	8.0%	1-Jan-25	749,697	749,697
MM	Convertible		X	8.0%	1-Jan-25	124,690	124,690
NN	Convertible		X	8.0%	1-Jan-25	622,588	622,588
OO	Convertible		X	8.0%	1-Jan-25	620,908	620,908
PP	Convertible		X	8.0%	1-Jan-25	611,428	611,428
QQ	Convertible		X	8.0%	1-Jan-25	180,909	180,909
RR	Convertible		X	8.0%	1-Jan-25	586,804	586,804
SS	Convertible		X	8.0%	1-Jan-25	174,374	174,374
TT	Convertible		X	8.0%	1-Jan-25	345,633	345,633
UU	Convertible		X	8.0%	1-Jan-25	171,304	171,304
VV	Convertible		X	8.0%	1-Jan-25	121,727	121,727
XX	Convertible		X	8.0%	1-Jan-25	112,734	112,734
YY	Convertible		X	8.0%	1-Jan-25	173,039	173,039
ZZ	Convertible		X	8.0%	1-Jan-25	166,603	166,603
AAA	Convertible		X	8.0%	1-Jan-25	104,641	104,641
BBB	Convertible		X	8.0%	1-Jan-25	87,066	87,066
DDD	Convertible		X	8.0%	1-Jan-25	75,262	75,262
EEE	Convertible		X	8.0%	1-Jan-25	160,619	160,619
GGG	Convertible		X	8.0%	1-Jan-25	79,422	79,422
JJJ	Convertible		X	8.0%	1-Jan-25	52,455	52,455
LLL	Convertible		X	8.0%	1-Jan-25	77,992	77,992
MMM	Convertible		X	8.0%	1-Jan-25	51,348	51,348
PPP	Convertible		X	8.0%	1-Jan-25	95,979	95,979
SSS	Convertible		X	8.0%	1-Jan-25	75,000	75,000
TTT	Convertible		X	8.0%	1-Jan-25	80,000	80,000
VVV	Convertible		X	8.0%	1-Jan-25	75,000	75,000
WWW	Convertible		X	8.0%	1-Jan-25	60,000	60,000
XXX	Convertible		X	8.0%	1-Jan-25	100,000	100,000
YYY	Convertible		X	8.0%	1-Jan-25	50,000	50,000
ZZZ	Convertible		X	8.0%	1-Jan-25	40,000	40,000
AAAA	Convertible		X	8.0%	1-Jan-25	66,000	66,000
BBBB	Convertible	X		12.0%	1-Mar-23	-	150,000
CCCC	Convertible	X		10.0%	1-Mar-23	-	120,000
DDDD	Convertible		X	10.0%	31-Dec-24	-	100,000
Total Convertible Debt						7,437,152	7,807,152
Less: Discount						(69,499)	(387,819)
Convertible Debt, Net of Discounts						$        7,367,653	$        7,419,333
Convertible Debt, Net of Discounts, Current						$             25,000	$           240,288
Convertible Debt, Net of Discounts, Long-term						$        7,342,653	$        7,179,045

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NON-CONVERTIBLE DEBT (Tables)

9 Months Ended

Sep. 30, 2023

Non-convertible Debt

Schedule of Nonconvertible Debt

	September 30, 2023		December 31, 2022
Note 5	$	9,312		9,312
Note 6		355,000		—
Note 7		100,000		—
Total Non-Convertible notes	$	464,312		9,312

Schedule Of Related Party Transactions

B-Related Party
Loan payable - Stockholder, 0%, Due December 31, 2025 (1)	$	250,000	$	250,000
	$	250,000	$	250,000

(1) The $250,000 non-convertible note was issued as part of a Debt Modification Agreement dated January 2, 2014. On January 1, 2019, the holder of the note extended the due date until December 31, 2021.  The interest rate of the non-convertible note is 0%. On December 31, 2021, the Company entered into an agreement to further extend the debt until December 31, 2025, with no additional interest for the extension period. The Company used the stated rate of 9% as imputed interest rate, which was $16,829 and $22,500 for the nine months ended September 30, 2023 and the year ended December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, the balance of the debt was $250,000.  

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DERIVATIVE LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Liabilities

Schedule Of Derivative Liabilities At Fair Value

Balance as of December 31, 2022	$	6,204,878
Change in Derivative Values		(2,535,936	)
Settlement of debt-reclass to APIC		(145,625	)
Balance as of September 30, 2023	$	3,523,317

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WARRANTS (Tables)

9 Months Ended

Sep. 30, 2023

Warrants

Schedule Of Warrants

	Warrants Issued	Weighted Average Exercise Price	Weighted Average Contract Terms Years
Balance as of December 31, 2022	316,158	0.4744455	0.36
Granted	-	-	-
Exercised	-	-	-
Expired	-	-	-
Balance as of September 30, 2023	316,158	0.4744455	0.36

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Future Minimum Rental Payments For Operating Leases

Maturity of Lease Liabilities at September 30, 2023	Amount
2023		9,300
2024		12,400
2025		-
Later years		-
Total lease payments		21,700
Less: Imputed interest		(659	)
Present value of lease liabilities	$	21,041

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LIQUIDITY AND GOING CONCERN (Details Narrative)	9 Months Ended
	Sep. 30, 2023 USD ($)
Liquidity And Going Concern
[custom:NetIncome]	$ 1,368,016
[custom:NetLoss]	5,385,209
[custom:WorkingCapitalDeficiency-0]	$ 7,647,743

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Schedule of Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Cash	$ 60,268	$ 18,330
Net Assets	60,268	18,330
Derivative Assets (Liabilities), at Fair Value, Net	60,268	18,330
Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Cash
Net Assets
Derivative Assets (Liabilities), at Fair Value, Net
Fair Value, Inputs, Level 3 [Member]
Defined Benefit Plan Disclosure [Line Items]
Net Assets
[custom:ConvertibleDebentures-0]	7,367,653	7,419,338
Derivative Liability	3,523,317	6,204,878
[custom:LiabilitiesNet-0]	10,890,970	13,624,216
Derivative Assets (Liabilities), at Fair Value, Net	$ (10,890,970)	$ (13,624,216)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (Details Narrative) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Total Value of Finished goods inventory	$ 13,256	$ 11,990
Inventory allowance and impairment	$ 0	$ 0

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PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
ATM Machine		$ 5,600
Computer	30,713	30,713
Furniture & Fixtures	59,733	42,965
HVAC	25,000	44,430
Land	17,703	17,702
Leasehold Improvements	32,304	147,636
Machinery and Equipment	55,067	69,312
Sign		12,758
Vehicle	24,000	24,000
Total	244,520	395,116
Less: Accumulated Depreciation	(217,735)	(358,396)
Property, Plant and Equipment - net	$ 26,785	$ 36,720

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NON-CURRENT ASSETS (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Rent Deposits	$ 23,941	$ 11,016
Security Deposits	5,491	5,491
Other Receivable	10,573	10,668
Non-Current Assets	$ 40,005	$ 27,175

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Schedule of Convertible Debt (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
[custom:TotalConvertibleDebt-0]	$ 7,437,152	$ 7,807,152
[custom:ConvertibleNotesPayableLongTermNetOfDiscounts-0]	(69,499)	(387,819)
[custom:ConvertibleNotesPayableNetOfDiscount-0]	7,367,653	7,419,333
[custom:ConvertibleDebtNetOfDiscountsCurrent-0]	25,000	240,288
Convertible Debt	$ 7,342,653	7,179,045
Convertible Debt A [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	1000.00%
Convertible Debt, Current	$ 25,000	25,000
Convertible Debt B [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 82,391	82,391
Convertible Debt C [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 41,195	41,195
Convertible Debt D [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 262,156	262,156
Convertible Debt O [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 136,902	136,902
Convertible Debt P [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 66,173	66,173
Convertible Debt Q [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 65,274	65,274
Convertible Debt S [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 63,205	63,205
Convertible Debt T [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 313,634	313,634
Convertible Debt C C [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	1000.00%
Convertible Debt, Current	$ 100,000	100,000
Convertible Debt K K [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 188,000	188,000
Convertible Debt L L [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 749,697	749,697
Convertible Debt M M [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 124,690	124,690
Convertible Debt N N [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 622,588	622,588
Convertible Debt O O [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 620,908	620,908
Convertible Debt P P [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 611,428	611,428
Convertible Debt Q Q [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 180,909	180,909
Convertible Debt R R [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 586,804	586,804
Convertible Debt S S [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 174,374	174,374
Convertible Debt T T [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 345,633	345,633
Convertible Debt U U [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 171,304	171,304
Convertible Debt V V [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 121,727	121,727
Convertible Debt X X [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 112,734	112,734
Convertible Debt Y Y [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 173,039	173,039
Convertible Debt Z Z [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 166,603	166,603
Convertible Debt A A A [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 104,641	104,641
Convertible Debt B B B [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 87,066	87,066
Convertible Debt D D D [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 75,262	75,262
Convertible Debt E E E [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 160,619	160,619
Convertible Debt G G G [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 79,422	79,422
Convertible Debt J J J [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 52,455	52,455
Convertible Debt L L L [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 77,992	77,992
Convertible Debt M M M [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 51,348	51,348
Convertible Debt P P P [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 95,979	95,979
Convertible Debt S S S [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 75,000	75,000
Convertible Debt T T T [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 80,000	80,000
Convertible Debt V V V [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 75,000	75,000
Convertible Debt W W W [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	800.00%
Convertible Debt, Current	$ 60,000	60,000
Convertible Debt X X X [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	8.00%
Convertible Debt, Current	$ 100,000	100,000
Convertible Debt Y Y Y [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	8.00%
Convertible Debt, Current	$ 50,000	50,000
Convertible Debt Z Z Z [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	8.00%
Convertible Debt, Current	$ 40,000	40,000
Convertible Debt A A A A [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	8.00%
Convertible Debt, Current	$ 66,000	66,000
Convertible Debt B B B B [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	12.00%
Convertible Debt, Current		150,000
Convertible Debt C C C C [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	10.00%
Convertible Debt, Current		120,000
Convertible Debt D D D D [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period	10.00%
Convertible Debt, Current		$ 100,000

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NON-CONVERTIBLE DEBT (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Non-convertible Debt
Note 5	$ 9,312	$ 9,312
Note 6	355,000
Note 7	100,000
Total Non-Convertible notes	$ 464,312	$ 9,312

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NON-CONVERTIBLE DEBT (Details 1) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]
Loan payable	$ 250,000	$ 250,000
B Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Loan payable	$ 250,000	$ 250,000

XML

STOCKHOLDERS’ EQUITY (Details Narrative)	Sep. 30, 2023 shares
Equity [Abstract]
Common stock outstanding	22,172,835

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DERIVATIVE LIABILITIES (Details)	9 Months Ended
	Sep. 30, 2023 USD ($)
Derivative Liabilities
Balance as of December 31, 2022	$ 6,204,878
Change in Derivative Values	(2,535,936)
Settlement of debt-reclass to APIC	(145,625)
Balance as of September 30, 2023	$ 3,523,317

XML

DERIVATIVE LIABILITIES (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Derivative Liabilities
Settlement of debt	$ 145,625	$ 0
Embedded derivative liabilities gain	$ 2,535,936	$ 3,904,639

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DEBT DISCOUNT (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Debt Discount
Debt Discount	$ 69,499		$ 387,819
Amortization of debt discount	$ 318,320	$ 163,817

XML

WARRANTS (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Weighted Average Contract Terms Years		0.36
Weighted Average Contract Terms Years		0.36
Warrants [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Beginning Balance	316,158
Weighted Average Exercise Price	$ 0.4744455
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Granted
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Exercised
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Expirations
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance	316,158	316,158
Weighted Average Exercise Price	$ 0.4744455	$ 0.4744455

XML

COMMITMENTS AND CONTINGENCIES (Details)	Sep. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 9,300
2024	12,400
2025
Later years
Total lease payments	21,700
Less: Imputed interest	(659)
Present value of lease liabilities	$ 21,041