ThZeal - The Zeal

	UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 2025 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _________ to _________ 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.)

21218 St. Andrews Blvd, #300

Boca Raton, FL 33433

(Address of principal executive offices)

(954)-480-1270

(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 any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D.1(b). [ ]

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

[ ] Large accelerated filer [ ] Accelerated filer

[X] Non-accelerated filer [X] Smaller reporting company

[ ] Emerging growth company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

As of May 20, 2025, the Issuer had 41,572,835 shares of its common stock outstanding.

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.

INDEX TO QUARTERLY REPORT ON FORM 10 Q

Part I – Financial Information Page

Item 1. Consolidated Financial Statements (unaudited)	Page
Consolidated Balance Sheets at March 31, 2025 and December 31, 2024	F-1
Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024	F-2
Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2025 and 2024	F-3
Consolidated Statements of Stockholder’s deficit for the three months ended March 31, 2025 and 2024	F-4
Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	F-5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3. Quantitative and Qualitative Disclosures About Market Risk	57
Item 4. Controls and Procedures	57

Part II Other Information

Item 1. Legal Proceedings	59
Item 1A. Risk Factors	60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3. Defaults Upon Senior Securities	60
Item 4. Mine Safety Disclosures	60
Item 5. Other Information	60
Item 6. Exhibits	60
Signatures	61

Cautionary Note Regarding Forward Looking Statements

Information contained in this Quarterly Report on Form 10-Q, as amended contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the ‘Exchange Act”). These forward-looking statements are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology.

The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events. Our forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements.

Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

Available Information

We file annual, quarterly and special reports and other information with the Securities and Exchange Commission (“SEC”) that can be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval System, known as EDGAR, through the SEC’s website (www.sec.gov).

Kaya Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

March 31, 2025 and December 31, 2024


ASSETS
	(Unaudited)			(Audited)
	March 31, 2025			December 31, 2024
CURRENT ASSETS:
Cash and equivalents	$	50,718		$	39,668
Inventory		188			90
Prepaid expenses		28,917			28,180
Total current assets		79,823			67,938

NON-CURRENT ASSETS:
Right-of-use asset - operating lease		21,274			52,574
Property and equipment, net of accumulated depreciation of $224,715 and $222,772 as of March 31, 2025 and December 31, 2024, respectively		44,188			46,131
Goodwill		22,772			20,955
Other Assets		29,232			28,771
Total non-current assets		117,466			148,431

Total assets	$	197,289		$	216,369


LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable and accrued expense	$	649,045		$	631,963
Accounts payable and accrued expense-related parties		978,099			869,864
Accrued interest, current		3,197,040			3,005,107
Right-of-use liability - operating lease		21,274			52,574
Taxable Payable		902,166			902,166
Convertible notes payable, net of discount of $30,315 and $0		242,500			135,000
Notes payable, current		70,920			9,312
Derivative liabilities		3,599,679			2,497,275
Total current liabilities		9,660,723			8,103,261

NON-CURRENT LIABILITIES:
Accrued expense-related parties		500,000			500,000
Accrued expense, non current		—			—
Notes payable, non current		—			61,608
Notes payable-related party		250,000			250,000
Convertible notes payable, net of discount of $343,391 and $440,590		8,584,017			8,429,632
Total non-current liabilities		9,334,017			9,241,240

Total liabilities		18,994,740			17,344,501

STOCKHOLDERS' DEFICIT:
Convertible preferred stock, Series D, par value $.0001; 10,000,000 shares authorized; 40 and 40 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		—
Common stock , par value $.0001; 1,500,000,000 shares authorized; 41,572,835 shares issued, 41,564,501 outstanding as of March 31, 2025 and 41,572,835 shares issued, 41,564,501 outstanding as of December 31, 2024		4,157			4,157
Subscriptions payable		163,630			163,630
Treasury stock, at cost, 8,334 shares as of March 31, 2025 and December 31, 2024, respectively		(18,000	)		(18,000	)
Additional paid in capital		23,384,397			23,378,849
Accumulated deficit		(40,179,889	)		(38,543,119	)
Accumulated other comprehensive income		(13,530	)		(15,571	)
Total stockholders' deficit attributable to parent company		(16,659,235	)		(15,030,054	)
Non-controlling interest		(2,138,216	)		(2,098,078	)
Total stockholders' deficit		(18,797,451	)		(17,128,132	)

Total liabilities and stockholders' deficit	$	197,289		$	216,369

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

F-1

Kaya Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations


	(Unaudited)			(Unaudited)
	For The			For The
	Three Months Ended			Three Months Ended
	March 31, 2025			March 31, 2024

Net sales	$	7,052		$	—

Cost of sales		4,970			—

Gross profit		2,082			—

Operating expenses:
Professional fees		177,750			189,425
Salaries and wages		39,903			—
General and administrative		93,967			49,405
Total operating expenses		311,620			238,830

Operating loss		(309,538	)		(238,830	)

Other income (expense):
Interest expense		(197,481	)		(180,330	)
Amortization of debt discount		(139,964	)		(5,638	)
Change in derivative liabilities expense		(1,029,325	)		(621,921	)
Other income (expense)		—			3,614

Total other loss		(1,366,770	)		(804,275	)

Net loss from continuing operations before income taxes		(1,676,308	)		(1,043,105	)

Provision for Income Taxes		—			(2,819	)

Net loss - from continued operations		(1,676,308	)		(1,045,924	)

Net Income (loss) from discontinued operations before tax		(1,123	)		(59,756	)
Provision for income taxes on discontinued operations		—			—
Net income (loss) - from discontinued operations		(1,123	)		(59,756	)

Net income loss		(1,677,431	)		(1,105,680	)

Net income (loss) attributed to non-controlling interest		(40,661	)		(20,688	)

Net income (loss) attributed to Kaya Holdings, Inc.		(1,636,770	)		(1,084,992	)

Basic net (loss) income from continuing operations per common share	$	(0.04	)	$	(0.01	)
Basic net (loss) income from discontinued operations per common share	$	(0.00	)	$	(0.00	)
Basic net (loss) income per common share	$	(0.04	)	$	(0.01	)

Weighted average number of common shares outstanding - Basic		42,672,835			185,802,835


Diluted net (loss) income from continuing operations per common share	$	(0.04	)	$	(0.01	)
Diluted net (loss) income from discontinued operations per common share	$	(0.00	)	$	(0.00	)
Diluted net (loss) income per common share	$	(0.04	)	$	(0.01	)

Weighted average number of common shares outstanding - Diluted		42,672,835			185,802,835

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

F-2

Kaya Holdings, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income(Loss)


	(Unaudited)			(Unaudited)
	For The			For The
	Three Months Ended			Three Months Ended
	March 31, 2025			March 31, 2024

Net income (loss)	$	(1,636,770	)	$	(1,084,992	)

Other comprehensive income (loss):
Foreign currency adjustments		2,564			(1,684	)

Comprehensive income (loss)		(1,634,206	)		(1,086,676	)

Comprehensive loss attributable to non-controlling interest		(40,661	)		(20,688	)

Comprehensive loss attributable to Kaya Holdings		(1,593,545	)		(1,065,988	)

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

F-3

Kaya Holdings, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Deficit

For the three months ended March 31, 2025 (Unaudited) and the year ended December 31, 2024 (Audited)


										Additional Paid-in Capital	Accumulated Deficit	Accumulated Comprehensive Loss	Noncontrolling Interest	Total Stockholders' Deficit

	Preferred Stock - Series C		Preferred Stock - Series D		Common Stock		Treasury Stock		Subscription Payable
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Amount
Balance, December 31, 2023 (Audited)	-	-	40	-	22,172,835	$ 2,217	8,334	$ (18,000)	$163,630	$ 22,531,739	$ (36,462,263)	$ (12,617)	$ (1,955,194)	$ (15,750,488)

Imputed interest	-	-	-	-	-	-	-	-	-	5,610	-	-	-	5,610

Equity transaction (Sale of subsidiary's stock)	-	-	-	-	-	-	-	-	-	6,650	-	-	-	6,650

Translation Adjustment	-	-	-	-	-	-	-	-	-	-	-	(997)	(687)	(1,684)

Net Income	-	-	-	-	-	-	-	-	-	-	(1,084,992)	-	(20,688)	(1,105,680)

Balance, March 31, 2024	-	-	40	-	22,172,835	2,217	8,334	(18,000)	163,630	22,543,999	(37,547,255)	(13,614)	(1,976,569)	(16,845,592)

Imputed interest	-	-	-	-	-	-	-	-	-	16,890	-	-	-	16,890

Common stock issued for services	-	-	-	-	3,100,000	310	-	-	-	126,790	-	-	-	127,100

Common stock issued for services - related parties	-	-	-	-	15,300,000	1,530	-	-	-	625,770	-	-	-	627,300

Common stock issued for acquiring the subsidiary	-	-	-	-	1,000,000	100	-	-	-	40,900	-	-	-	41,000

Equity transaction (Sale of subsidiary's stock)	-	-	-	-	-	-	-	-	-	24,500	-	-	-	24,500

Translation Adjustment	-	-	-	-	-	-	-	-	-	-	-	(1,957)	(501)	(2,458)

Net Income	-	-	-	-	-	-	-	-	-	-	(995,864)	-	(121,008)	(1,116,872)

Balance, December 31, 2024 (Audited)	-	-	40	-	41,572,835	4,157	8,334	(18,000)	163,630	23,378,849	(38,543,119)	(15,571)	(2,098,078)	(17,128,132)

Imputed interest	-	-	-	-	-	-	-	-	-	5,548	-	-	-	5,548

Translation Adjustment	-	-	-	-	-	-	-	-	-	-	-	2,041	523	2,564

Net Income	-	-	-	-	-	-	-	-	-	-	(1,636,770)	-	(40,661)	(1,677,431)

Balance, March 31, 2025 (Audited)	-	-	40	-	41,572,835	4,157	8,334	(18,000)	163,630	23,384,397	(40,179,889)	(13,530)	(2,138,216)	(18,797,451)

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

F-4

Kaya Holdings, Inc. and Subsidiaries

Consolidated Statement of Cashflows


	(Unaudited)			(Unaudited)
	For The			For The
	Three Months Ended			Three Months Ended
	March 31, 2025			March 31, 2024
OPERATING ACTIVITIES:
Net income (loss)	$	(1,635,647	)	$	(1,025,236	)
Adjustment to non-controlling interest		(40,661	)		(20,688	)
Adjustments to reconcile net income / loss to net cash used in operating activities:
Depreciation		1,943			957
Imputed interest		5,548			5,610
Change in derivative liabilities		1,029,325			621,921
Amortization of debt discount		139,964			5,638
Changes in operating assets and liabilities:
Prepaid expense		(737	)		—
Inventory		(98	)		9,259
Right-of-use asset		31,300			17,280
Deposit		(461	)		5,000
Accrued interest		191,933			161,728
Accounts payable and accrued expenses		17,082			14,650
Accounts payable and accrued expenses - Related Parties		108,235			100,787
Right-of-use liabilities		(31,300	)		(18,181	)
Deferred tax liabilities		—			2,819

Net cash used in operating activities		(183,574	)		(118,456	)

Net cash (used in)/provided by Discontinued Operations		(1,123	)		(59,756	)

INVESTING ACTIVITIES:
Proceeds from sales of subsidiary's stock		—			6,650

Net cash provided by investing activities		—			6,650

FINANCING ACTIVITIES:
Proceeds from convertible notes		195,000			217,500

Net cash provided by financing activities		195,000			217,500

Effects of currency translation on cash and cash equivalents		747			(49	)

NET INCREASE (DECREASE) IN CASH		11,050			45,889

CASH BEGINNING BALANCE		39,668			29,108

CASH ENDING BALANCE	$	50,718		$	74,997

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid		—			—

NON-CASH TRANSACTIONS AFFECTING OPERATING, INVESTING AND FINANCING ACTIVITIES:

Initial derivative liability on convertible note payable		73,079			113,840

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

F-5

NOTE 1 – ORGANIZATION AND NATURE OF THE BUSINESS

Organization

Kaya Holdings, Inc. FKA (Alternative Fuels Americas, Inc.) (“KAYS”) is a holding company. The Company was incorporated in 1993 and engaged in a number of businesses until September, 2010. In October, 2010, the Company changed its name to Alternative Fuels Americas, Inc, in connection with the acquisition of a company by that name. The Company assumed its present name in March 2015, in connection with its commencement of operations in the legal cannabis market in Oregon.

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 operate the Company’s cannabis retail business in Oregon. MJAI's operations were discontinued during the six months ended June 30, 2024, and the subsidiary is now classified as a discontinued operation (see Note 4). The Company retains full ownership of MJAI but has entered into an agreement to sell the one remaining Cannabis Retail License in Oregon (the purchase price of $75,000 has been escrowed and the Company is awaiting for the License to be renewed and transferred to the buyer, subject to OLCC Licensing approval)..

34225 Kowitz Road, LLC, a wholly-owned Oregon limited liability company which held ownership of the Company’s 26 acre property in Lebanon, Oregon has been inactive since February 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 (“FDT ”) and was formed on December 13, 2022 to develop and maintain ownership of the Company’s planned Psychedelic Treatment Centers offering psilocybin treatments.

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 on February 28, 2023, 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, currently inactive). These two entities were formed to facilitate expansion of the Company’s business in Greece and Israel respectively.

FDT is the entity that was formed to hold interests in psychedelic treatment facilities, with operations initially targeted for Oregon. FDT initially held a 49% stake in FDT Oregon 1, LLC (“FDT1”, an Oregon limited liability company) and the Company has an irrevocable option to acquire the remaining 51% stake in FDT1 after the sunsetting in January 1, 2025 of Oregon’s residency requirements for majority ownership in entities that hold OHA issued psilocybin licenses. On September 5, 2024, the Company issued 1,000,000 shares of common stock to FDT Oregon 1 LLC Oregon owners who are also the Company’s related parties, and acquired the remaining 51% equity interest of FDT Oregon 1 LLC shortly after January 1, 2025, as per the agreement. As of March 31, 2025, FDT exercised the option and FDT now owns 100% of FDT1.

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.

On July 3, 2014 opened its first Kaya Shack™ MMD in Portland, Oregon. Between April of 2014 and December 31, 2023, KAYS owned and operated four (4) Kaya Shack™ retail cannabis medical and recreational dispensaries, three (3) Medical Marijuana Grow sites licensed by the OHA and two (2) Recreational Marijuana grow sites licensed by the OLCC (all in Oregon). The statuses of these operations are as follows:

The first Kaya Shack™ (Kaya Shack™ Store 1) opened in 2014 in Portland, Oregon at the same address as an Oregon Liquor and Cannabis Commission (OLCC) licensed medical and recreational marijuana retailer. On March 11, 2024, the Company notified the Oregon Liquor Control Commission (the “OLCC”) that we were temporarily closing this location. The Company is currently evaluating redeploying this remaining dispensary license to serve as a delivery hub for Portland residents, tourists and The Sacred Mushroom™ guests, among others. As of June 30, 2024, the Company had ceased all retail cannabis operations under the MJAI subsidiary. Kaya Shack™ Store 1 remained inactive following the March 2024 temporary closure notice to the OLCC, and no further cannabis retail revenue was generated in the second half of the year. Accordingly, the Company has classified MJAI’s operations as discontinued as of year-end. See Note 4 for additional details on discontinued operations.

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. On April 21, 2023 the Company concluded the sale of Store 2 for $210,000, less a 6% closing commission and minor closing expenses. After these expenses and paying $75,000 to resolve three non-performing store leases in South Oregon, the Company netted $118,900.

F-6

Kaya Shack™ Store 3 and Kaya Shack™ Store 4 were both closed due to consolidation moves by the Company in 2020 and 2021, respectively, and the Company let the licenses lapse.

In August of 2017, the Company purchased a 26-acre parcel in Lebanon, Linn County, Oregon for $510,000 on which we intended to construct a Greenhouse Grow and Production Facility (the “Property”) and filed for OLCC licensure. In August of 2022, the Company entered into an agreement (the “CVC Agreement”) with CVC International, Inc. (“CVC”), an institutional investor who holds certain 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 $769,500, 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 $302,000,000. The land is reflected on the balance sheet as assets held for sale for the year ended December 31, 2022 at a value of $516,076.

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 March 31, 2024 KBI has formed majority-owned subsidiaries in both Greece and Israel and its local operating subsidiaries have acquired interests in various licenses and entities.

On December 13, 2022, the Company formed Fifth Dimension Therapeutics ™ (“FDT”, 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.

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. We received our license for our psilocybin treatment facility from the OHA in April 2024 and began providing treatments in September 2024.

F-7

During the first half of 2024, the Company ceased operations of its retail marijuana business, MJAI, which was previously its primary revenue-generating subsidiary. MJAI's operations were discontinued during the six months ended June 30, 2024, and no revenue or operating activity has occurred since that date. The retail store was fully closed following the cessation of operations, and the Company no longer maintains involvement in or influence over MJAI’s business activities.

As a result of the closure of MJAI’s retail cannabis operations during the first half of 2024, those operations have been classified as a discontinued operation in accordance with ASC 205-20. The Company retains ownership of MJAI, and its assets and liabilities remain consolidated. Only revenues and direct expenses related to MJAI’s retail operations are included in discontinued operations. See Note 4 for further details.

On April 6, 2025, the Company was notified of the death of David M L Roberts, Managing Director of CVC International LTD, the Cayman Investment Company that has provided the bulk of the Company’s Financing. While CVC did not have any contractual obligations requiring them to make any further payments to the Company, Mr. Roberts’ wife, Kathleen Roberts agreed to advance up to $40,000.00 to the Company to complete its 2024 10-K and the subsequent Quarterly review on form 10-Q for the period ending March 31, 2025, as well as to pay some miscellaneous expenses required for the Company to complete the sale of its remaining OLCC Cannabis Retailer License in Oregon.

In April 2025, we suspended payroll to our employees at The Sacred Mushroom™ due to capital constraints and we are evaluating the operational structure of the facility with a view to restructuring operations in order to generate greater revenues as the Company seeks to gain additional financing.

NOTE 2 – LIQUIDITY AND GOING CONCERN

The Company’s consolidated financial statements as of March 31, 2025 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 incurred net loss of $1,636,770, for the three months ended March 31, 2025 and net loss of $1,084,992 for the three months ended March 31, 2024. The net loss due to the close of a retail shop in Oregon as the company focused on moving our cannabis business overseas and concentrated on the development of our Psychedelic Medicine business and the launch of The Sacred Mushroom™ facility in Portland, Oregon. At March 31, 2025, the Company has a working capital deficiency of $9,580,900 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 assure 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.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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.

F-8

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.

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.

Majority-owned subsidiaries:

Fifth Dimension Therapeutics, Inc. (a Florida Corporation)

FDT Oregon 1, LLC (an Oregon limited liability company)

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 Holding Americas, Inc. (a Florida Corporation)

MJAI Oregon 1 LLC

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 March 31, 2025, 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.

In 2024, FDT increased its authorized preferred stock from 85 shares to 90 shares. The Company previously held 41 shares of FDT preferred stock and received an additional 9 preferred shares during the year, bringing its total holdings to 50 shares. Following this, the Company holds 50 preferred shares and 1,000,000 shares of common stock, representing 54.1% of the total voting rights of FDT. Thereafter, FDT issued 3,115,000 shares of common stock in connection with the execution of several convertible note agreements, receiving total proceeds of $31,150. As a result of these issuances, the Company's ownership in FDT’s common stock was diluted to 52.3%. As of March 31, 2025, the Company continues to exercise majority control over FDT.

FDT initially held a 49% stake in FDT Oregon 1, LLC (“FDT1”, an Oregon limited liability company) along with an irrevocable option to acquire the remaining 51% stake in FDT1 after the sunsetting of the Oregon OHA Licensing requirement that Oregonian individuals must own a majority of any OHA Psilocybin License on January 1, 2025. On September 5, 2024, the Company issued 1,000,000 shares of common stock to FDT Oregon 1 LLC Oregon owners who are also the Company’s related parties, and acquired the remaining 51% equity interest of FDT Oregon 1 LLC shortly after January 1, 2025, as per the agreement. As of March 31, 2025, FDT exercised the option and FDT now owns 100% of FDT1.

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.

F-9

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 March 31, 2025 and December 31, 2024 is $188 and $90, respectively. Inventory allowance and impairment were $0 and $0 as of March 31, 2025 and December 31, 2024, respectively.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation and are 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 on maintenance and repairs are charged to expenses 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 flow.

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, the 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.

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.

F-10

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.

During the year ended December 31, 2024, the Company fully transitioned out of its cannabis-related business activities. As such, the Company no longer expects to be subject to the limitations of Section 280E on a going forward basis. Nonetheless, prior tax periods remain subject to audit, and there can be no assurance that the IRS will not challenge historical deductions associated with the Company’s former cannabis operations.

Provision for Income Taxes

We recorded no provision for income taxes for the three months ended March 31, 2025, compared to a provision of $2,819 for the three months ended March 31, 2024. The 2024 provision was solely related to the operations of MJAI, our former retail cannabis subsidiary, which was discontinued during 2024 and is now reported as a discontinued operation (see Note 4).

Although the Company believes it has sufficient net operating loss carryforwards to offset this liability, the tax provision was recorded as a conservative measure due to the limitations imposed by Section 280E of the Internal Revenue Code, which disallows the deduction of most operating expenses for cannabis-related businesses. As the Company has fully exited cannabis operations, we do not expect Section 280E to impact our tax position in future periods.

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.

F-11

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 March 31, 2025
Assets	Level 1		Level 2		Level 3
Cash	$	50,718	$	—	$	—
Total Assets		50,718		—		—

Liabilities
Convertible debentures, net of discounts of $373,706		—		—		8,826,516
Derivative liabilities		—		—		3,599,679
Total liabilities		—		—		12,426,195
Total	$	50,718	$	—	$	(12,426,195	)

		Fair Value Measurements at December 31, 2024
Assets		Level 1		Level 2		Level 3
Cash	$	39,668	$	—	$	—
Total Assets		39,668		—		—

Liabilities
Convertible debentures, net of discounts of $440,590		—		—		8,564,632
Derivative liabilities		—		—		2,497,275
Total liabilities		—		—		11,061,907
Total	$	39,668	$	—	$	(11,061,907	)

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 11.

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.

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.

F-12

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.

In August 2020, the FASB issued ASU 202006, Debt-Debt with Conversion and Other Options (Subtopic 47020) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 81540): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. 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. The guidance allows for either full retrospective adoption or modified retrospective adoption. The guidance is effective for the Company in the first quarter of fiscal year 2025 and early adoption is permitted. The Company is evaluating the impact the adoption of this guidance will have on its condensed consolidated financial statements and related disclosures.

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.

F-13

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 as a 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 405-20 “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.
•		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.

F-14

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 expends 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.

F-15

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 and our OHA Licensed Psilocybin Service Center operations are conducted and operated on a “cash and carry” basis- product(s) from our inventory accounts and Psilocybin Facilitation Services are sold to the customer(s) and the customer settles the account at time of receipt of product/services via cash payment at our retail store (our OHA Licensed Service also accepts credit card payments but for services only) ; the transaction(s) are 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 products.

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.

F-16

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 March 31, 2025.

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.

Segment reporting

The Company operates as a single reportable segment focused on the development and operation of psychedelic treatment facilities. The Company does not operate separate lines of business or discrete business units. Accordingly, the Company has determined it has one reportable segment. The Company’s chief operating decision maker (“CODM”), Craig Frank, the Company’s Chief Executive Officer, reviews consolidated financial information to assess performance and allocate resources. As of March 31, 2025, all of the Company’s operations, revenues, and long-lived assets are located in the United States. The Company’s former cannabis operations have been discontinued and are presented separately as discontinued operations in accordance with ASC 205-20.

Discontinued operation

As of March 31, 2025, the Company ceased operations of its retail marijuana business, MJAI, which was previously its primary revenue-generating subsidiary. MJAI's operations were discontinued during the six months ended June 30, 2024, and no revenue or operating activity has occurred since that date. The retail store was fully closed following the cessation of operations, and the Company no longer maintains involvement in or influence over MJAI’s business activities. As a result, MJAI was reported as a discontinued operation. See Note 4.

New 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.

Recently issued accounting pronouncements not yet adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements once adopted. We are currently evaluating the provisions of this ASU.

F-17

In November 2024, the FASB issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements related to accounting for the settlement of a debt instrument as an induced conversion. The amendments in this update are effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.

Recently adopted accounting pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted this ASU retrospectively on December 31, 2024. Refer to Note 16, Segment Reporting and Information about Geographic Areas for the inclusion of the new required disclosures.

NOTE 4 – DISCONTINUED OPERATIONS

During the six months ended June 30, 2024, the Company ceased operations of its wholly owned subsidiary, MJAI, a retail marijuana dispensary based in Oregon. While the Company did not formally sell the MJAI business during the three months ended March 31, 2025, operations were effectively discontinued during the second quarter of 2024, and the dispensary has remained closed since that time. Kaya has had no further operating activity or income from MJAI following the closure.

The Company plans to pursue a potential sale of the MJAI business and remaining assets in the second quarter of 2025. As a result of the closure and strategic shift in operations, the MJAI segment is considered a discontinued operation as defined under ASC 205-20, Presentation of Financial Statements – Discontinued Operations. The Company retains ownership of MJAI, and its assets and liabilities remain consolidated in the financial statements. The results of MJAI’s operations have been presented separately from continuing operations for all periods presented in the accompanying consolidated financial statements.

The following table presents the summary of operating results from discontinued operations for the three months ended March 31, 2025, and 2024:

Marijuana Holdings Americas, Inc.

Consolidated Statements of Operations


	For The			For The
	Three Months Ended			Three Months Ended
	March 31, 2025			March 31, 2024

Net sales	$	—		$	28,009

Cost of sales		—			13,406

Gross profit		—			14,603

Operating expenses:
Salaries and wages		231			44,915
General and administrative		892			29,444
Total operating expenses		1,123			74,359

Operating loss		(1,123	)		(59,756	)

Net income (loss) from discontinued operations before income taxes		(1,123	)		(59,756	)

Provision for Income Taxes		—			—

Net income (loss) from discontinued operations		(1,123	)		(59,756	)

Although MJAI’s operations ceased during the year 2024, the Company retained control of the subsidiary as of March 31, 2025. Accordingly, MJAI was not deconsolidated, and its assets and liabilities remain included in the Company’s consolidated balance sheet as of March 31, 2025 and December 31, 2024.

F-18

Cash Flow Disclosures from Discontinued Operations

For the three months ended March 31, 2025 and 2024, the MJAI discontinued operation had net cash used in operating activities of $1,123 and $59,756, respectively. These amounts are reflected as a separate line item in the Company’s consolidated statements of cash flows. All other MJAI-related cash flows remain included in the consolidated operating, investing, and financing activities, as the Company retains ownership of MJAI’s assets and liabilities.

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31, 2025 and December 31, 2024:


	March 31,			December 31,
	2025			2024
Vehicle	$	24,000		$	24,000
Computers		30,713			30,713
Machinery and equipment		55,067			55,067
Furniture and fixtures		56,978			56,978
HVAC		25,000			25,000
Land		17,703			17,703
Leasehold improvements		59,442			59,442
Less: Accumulated depreciation		(224,715	)		(222,772	)
Property and equipment, net	$	44,188		$	46,131

Depreciation expense totaled $1,943 and $957 for the three months ended March 31, 2025 and 2024, respectively.

NOTE 6 – NON-CURRENT ASSETS

Other assets consisted of the following at March 31, 2025 and December 31, 2024:

Schedule of other assets
	March 31, 2025		December 31, 2024
Other receivable		10,816		10,355
Rent deposits		12,925		12,925
Security deposits		5,491		5,491
Total Non-current assets		29,232		28,771

During the three months ended March 31, 2025, our other receivables increased $461, related to changes of currency exchange rate.

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The accounts payable and accrued expenses consisted of the following at March 31, 2025 and December 31, 2024:


	March 31, 2025		December 31, 2024
Accounts payable		609,072		586,824
Accrued expenses		39,973		45,139
Total		649,045		631,963

NOTE 8 – 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 3.89% to 4.23%, volatility ranging from 133.95% to 157.12%, trading prices $0.04 per share and a conversion price ranging from $0.0264 to $0.08 per share. The total derivative liabilities associated with these notes were $3,599,679 at March 31, 2025 and $2,497,275 at December 31, 2024. As of March 31, 2025, the Company had one new convertible note in the amount of $195,000 due in December 31, 2026.

F-19

See Below Summary Table

Schedule of convertible debt
Convertible Debt Summary
	Debt Type	Debt Classification		Interest Rate	Due Date		Ending
	Debt Type	CT	LT	Interest Rate	Due Date		3/31/2025		12/31/2024

A	Convertible	X		15.0%	1-Jan-17	$	25,000		$ 25,000
B	Convertible		X	8.0%	31-Dec-26		82,391		82,391
C	Convertible		X	8.0%	31-Dec-26		41,195		41,195
D	Convertible		X	8.0%	31-Dec-26		262,156		262,156
O	Convertible		X	8.0%	31-Dec-26		136,902		136,902
P	Convertible		X	8.0%	31-Dec-26		66,173		66,173
Q	Convertible		X	8.0%	31-Dec-26		65,274		65,274
S	Convertible		X	8.0%	31-Dec-26		63,205		63,205
T	Convertible		X	8.0%	31-Dec-26		313,634		313,634
CC	Convertible	X		12.0%	1-Jan-24		110,000		110,000
KK	Convertible		X	8.0%	31-Dec-26		188,000		188,000
LL	Convertible		X	8.0%	31-Dec-26		749,697		749,697
MM	Convertible		X	8.0%	31-Dec-26		124,690		124,690
NN	Convertible		X	8.0%	31-Dec-26		622,588		622,588
OO	Convertible		X	8.0%	31-Dec-26		620,908		620,908
PP	Convertible		X	8.0%	31-Dec-26		611,428		611,428
QQ	Convertible		X	8.0%	31-Dec-26		180,909		180,909
RR	Convertible		X	8.0%	31-Dec-26		586,804		586,804
SS	Convertible		X	8.0%	31-Dec-26		174,374		174,374
TT	Convertible		X	8.0%	31-Dec-26		345,633		345,633
UU	Convertible		X	8.0%	31-Dec-26		171,304		171,304
VV	Convertible		X	8.0%	31-Dec-26		121,727		121,727
XX	Convertible		X	8.0%	31-Dec-26		112,734		112,734
YY	Convertible		X	8.0%	31-Dec-26		173,039		173,039
ZZ	Convertible		X	8.0%	31-Dec-26		166,603		166,603
AAA	Convertible		X	8.0%	31-Dec-26		104,641		104,641
BBB	Convertible		X	8.0%	31-Dec-26		87,066		87,066
DDD	Convertible		X	8.0%	31-Dec-26		75,262		75,262
EEE	Convertible		X	8.0%	31-Dec-26		160,619		160,619
GGG	Convertible		X	8.0%	31-Dec-26		79,992		79,992
JJJ	Convertible		X	8.0%	31-Dec-26		52,455		52,455
LLL	Convertible		X	8.0%	31-Dec-26		77,992		77,992
MMM	Convertible		X	8.0%	31-Dec-26		51,348		51,348
PPP	Convertible		X	8.0%	31-Dec-26		95,979		95,979
SSS	Convertible		X	8.0%	31-Dec-26		75,000		75,000
TTT	Convertible		X	8.0%	31-Dec-26		80,000		80,000
VVV	Convertible		X	8.0%	31-Dec-26		75,000		75,000
WWW	Convertible		X	8.0%	31-Dec-26		60,000		60,000
XXX	Convertible		X	8.0%	31-Dec-26		100,000		100,000
YYY	Convertible		X	8.0%	31-Dec-26		50,000		50,000
ZZZ	Convertible		X	8.0%	31-Dec-26		40,000		40,000
AAAA	Convertible		X	8.0%	31-Dec-26		66,000		66,000
EEEE	Convertible		X	10.0%	31-Dec-26		15,000		15,000
FFFF	Convertible		X	10.0%	31-Dec-26		60,000		60,000
GGGG	Convertible		X	10.0%	31-Dec-26		150,000		150,000
HHHH	Convertible		X	10.0%	31-Dec-26		107,500		107,500
IIII	Convertible		X	10.0%	31-Dec-26		150,000		150,000
JJJJ	Convertible		X	10.0%	31-Dec-26		150,000		150,000
kkkk	Convertible		X	10.0%	31-Dec-26		175,000		175,000
LLLL	Convertible		X	10.0%	31-Dec-26		250,000		250,000
MMMM	Convertible		X	10.0%	31-Dec-26		250,000		250,000
NNNN	Convertible		X	10.0%	31-Dec-26		250,000		250,000
OOOO	Convertible		X	10.0%	31-Dec-26		195,000

Total Convertible Debt							9,200,222		9,005,222
Less: Discount							(373,705)		(440,590)
Convertible Debt, Net of Discounts						$	8,826,517	$	8,564,632
Convertible Debt, Net of Discounts, Current						$	242,500	$	135,000
Convertible Debt, Net of Discounts, Long-term						$	8,584,017	$	8,429,632

F-20

On February 28, 2023, the Company 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 convertible notes described above, of which total principal was $370,000. On December 31, 2022, the Company and various noteholders agree to modify the maturity date to December 31,2026 of all notes that were due to mature on December 31, 2024. No other terms of the convertible notes were changed.

On January 23, 2024, the Company received $61,200 from selling 2.4 units to CVC International LTD, including $60,000 convertible debt and 120,000 FDT shares at $0.01 per share and total value was $1,200. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.08 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share 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.

On January 31, 2024, the Company signed an agreement with a third-party individual to transfer one non-convertible promissory note, including $15,000 principal and $300 accrual interest to purchase 0.6 unit, which included $15,000 convertible note and 30,000 FDT shares which is $0.01 per share and total value was $300. The convertible notes interest is stated at 10%. The Note and Interest is convertible into common shares at $0.08 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share 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.

On March 12, 2024, the Company received $150,000 from selling 6 units to CVC International LTD, including $150,000 convertible debt and 300,000 FDT shares which is $0.01 per share and total value is $3,000. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.08 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share 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.

On March 15, 2024, one of a promissory non-convertible notes was expired. The Company signed a purchase agreement with this third-party individual to purchase 4.3 units using the matured note, including $100,000 principal and $96,500 accrual interest. The 4.3 units included $107,500 convertible note and 215,000 FDT shares which is $0.01 per share and total value was $2,150. The convertible notes interest is stated at 10%. The Note and Interest is convertible into common shares at $0.08 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share. 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.

On May 1, 2024, the Company received $130,000 deposit plus $23,000 accrued interest reinvest from selling 6 units to CVC International LTD. The 6 units included $150,000 convertible debt and 300,000 FDT shares which is $0.01 per share and total value is $3,000. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.08 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share 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.

F-21

On June 4, 2024, the Company received $150,000 deposit plus $3,000 accrual interest reinvest from selling 6 units to CVC International LTD. The 6 Units included $150,000 convertible debt and 300,000 FDT shares which is $0.01 per share and total value is $3,000. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.08 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share 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.

On July 22, 2024, the Company received $125,000 deposit plus $53,000 accrual interest and principal reinvest from selling 7 units to CVC International LTD. The 7 Units included $175,000 convertible debt and 350,000 FDT shares which is $0.01 per share and total value is $3,000. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.0 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share. 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.

On September 13, 2024, the Company received $125,000 deposit plus $130,000 accrual interest and principal reinvest from selling 10 units to CVC International LTD. The 10 Units included $250,000 convertible debt and 500,000 FDT shares which is $0.01 per share and total value is $5,000. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.0 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share. 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.

On October 29, 2024, the Company received $125,000 deposit plus $130,000 accrual interest and principal reinvest from selling 10 units to CVC International Ltd. The 10 Units included $250,000 convertible debt and 500,000 FDT shares which is $0.01 per share and total value is $5,000. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.0 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share. Additionally, this note has a one-time conversion price adjustment of $0.02 per share for the first $1,000,000 principal and/or accumulated interest converted by CVC or their assigns. 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.

On December 4, 2024, the Company received $100,000 deposit plus $155,000 accrual interest and principal reinvest from selling 10 units to CVC International Ltd. The 10 Units included $250,000 convertible debt and 500,000 FDT shares which is $0.01 per share and total value is $5,000. Interest is stated at 10%. The Note and Interest is convertible into common shares at $0.0 per share. The Note is Due on December 31, 2026. This note has a price adjustment provision: if the stock price 20 days before the conversion notice proceeding is less than $0.16 per share, the conversion price should be adjusted to the less of: 50% of the average closing price or the historical price for the 20 trading days before proceeding the conversion notice, but in any event the conversion price should be not less than $0.02 per share or more than $0.08 per share. Additionally, this note has a one-time conversion price adjustment of $0.02 per share for the first $1,000,000 principal and/or accumulated interest converted by CVC or their assigns. 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.

On July 31, 2024, the Company entered into a convertible notes modification agreement with CVC to extend the due date to December 31, 2026.

F-22

On January 23, 2025, the Company issued a secured convertible promissory note to CVC International LTD in the principal amount of $195,000, bearing interest at 10% per annum and maturing on December 31, 2026. The note is convertible into shares of the Company’s common stock at a fixed conversion price of $0.08 per share, subject to certain adjustment provisions. The note includes a price protection mechanism: if the average closing price of the Company’s common stock for the 20 trading days preceding the conversion notice is less than $0.16 per share, the conversion price is adjusted to the lesser of (i) 50% of that 20-day average or (ii) $0.08 per share, but in no event lower than $0.02 per share. The Company has also granted the holder a one-time conversion price adjustment of $0.02 per share for the first $1,000,000 in principal and/or accrued interest converted. Additionally, the note includes an acceleration clause if certain key individuals are no longer with the Company, and it ranks senior to all other existing and future indebtedness not designated as senior. The Company may prepay the note in whole or in part, subject to a minimum of six months’ interest and a 10-day advance notice, during which the holder may still elect to convert. As the conversion terms include variable pricing features and contingent adjustments, the Company accounted for the embedded derivative under ASC 815-15, "Embedded Derivatives." Accordingly, a derivative liability was initially recognized, with a corresponding discount on the convertible note. The discount is being amortized to interest expense over the term of the note. As of March 31, 2025, the full principal of $195,000 remains outstanding. No conversions or prepayments had occurred as of the reporting date.

NOTE 9 – NON-CONVERTIBLE DEBT

NON-CONVERTIBLE DEBT

Schedule of non-convertible debt
	March 31, 2025		December 31, 2024
Current non-convertible notes		70,920		9,312
Non-current non-convertible notes		-		61,608
Total non-convertible notes	$	70,920	$	70,920
Breakdown
CBD Growth Partners	$	9,312	$	9,312
CVC 46		61,608		61,608
Total non-convertible notes		70,920		70,920

(a) 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 December 31, 2024 with an outstanding balance of $9,312.

(b) 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. On October 6, 2023, the Company received another $145,000 from the same investor to increase the promissory note to $500,000 total. As of September 30, 2024, Cayman Venture Capital Fund reinvested $29,000 of accrued interest from promissory notes into convertible notes and FDT stock purchases. In connection with this reinvestment, the Fund executed three convertible promissory notes, each with a principal amount of $150,000, and received a total of 900,000 FDT shares. On July 22, 2024, $16,975 of accrued interest and $36,025 of principal were reinvested into an additional 10 units, which included $175,000 of convertible debt and 350,000 FDT shares. On September 13, 2024, $6,730 of accrued interest and $123,270 of principal were reinvested into an additional 10 units, which included $250,000 of convertible debt and 500,000 FDT shares. On October 29, 2024, $4,288 of accrued interest and $125,712 of principal were reinvested into an additional 10 units, which included $250,000 of convertible debt and 500,000 FDT shares. On December 4, 2024, $2,116 of accrued interest and $152,884 principal was reinvested into an additional 10 units, which included $250,000 convertible debt and 500,000 FDT shares. As of March 31, 2025, the outstanding balance of the note is $61,608.


Related Party
	March 31, 2025		December 31, 2024
Loan payable - Stockholder, 0%, Due December 31, 2027 (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%. The Company used the stated rate of 9% as imputed interest rate, which interest was $5,548 and $5,610 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the balance of the debt was $250,000. On December 31, 2024, the Company entered into an agreement to further extend the debt until December 31, 2027, with no additional interest for the extension period.

F-23

NOTE 10 – STOCKHOLDERS’ EQUITY

Preferred Stock

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 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.

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.

Common Stock

On August 20, 2024, the Company filed an amendment to its Certificate of Incorporation with the Delaware Secretary of State increasing the number of shares of common stock that the Company is authorized to 1,500,000,000 shares and the par value changed to $0.0001. 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.

On September 5, 2024, the Board of Directors approved the issuance of 3,100,000 shares of common stock to various individuals for services rendered to the Company. The shares were issued in accordance with Rule 144. The shares were valued at the market price of $0.041 per share on the date of issuance.

On September 5, 2024, the Board of Directors approved the issuance of 15,300,000 shares of common stock to the officers, directors and consultants. And another 1,000,000 shares of common stock issued to FDT Oregon 1 LLC owners who are also the Company’s related parties to acquire 51% equity interest of FDT Oregon 1 LLC after January 1, 2025 per the agreement. FDT Oregon 1 LLC was consolidated in the Company’s financial. The shares were issued in accordance with Rule 144. The shares were valued at the market price of $0.041 per share on the date of issuance.

As of March 31, 2025, there were 41,572,835 shares of common stock outstanding and 1,100,000 shares subscription payable.

Treasury Stock

As of March 31, 2025, the Company held 8,334 shares of its own common stock as treasury stock, which are recorded at cost using the cost method in accordance with ASC 505-30, Treasury Stock. These shares were originally issued in 2015 as part of a consulting agreement and were returned to the Company in 2016 pursuant to a settlement agreement with the service provider.

Although the shares were returned in 2016, they were not previously recorded as treasury stock. Upon review during the preparation of the 2024 financial statements, the Company determined that these shares should be properly reflected as issued but not outstanding. Accordingly, as of March 31, 2025 and December 31, 2024, 8,334 shares are reported as treasury stock, with a total recorded cost of $18,000 and have been excluded from shares outstanding in the computation of earnings per share.

F-24

NOTE 11 – 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 3.89% to 4.23%, volatility ranging from 133.95% to 157.12%, trading prices was $0.04 per share and a conversion price ranging from $0.0264 to $0.08 per share. The total derivative liabilities associated with these notes were $3,599,679 at March 31, 2025 and $2,497,275 at December 31, 2024, respectively.

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


Balance as of December 31, 2024	$	2,497,275
Change in Derivative values		1,029,325
Initial derivative		73,079
Balance as of March 31, 2025	$	3,599,679

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

The Company recorded initial derivative liabilities of $73,079 and $558,876 for the new notes issued as of March 31, 2025 and December 31, 2024, respectively.

The Company recorded a change in the value of embedded derivative liabilities loss of $1,029,325 and $621,921 for the three months ended March 31, 2025 and 2024, respectively.

NOTE 12 – DEBT DISCOUNT

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

Debt discount amounted to $373,705 and $440,590 as of March 31, 2025 and December 31, 2024, respectively.

The Company recorded the amortization of debt discount of $139,964 and $5,638 for the three months ended March 31, 2025 and 2024, respectively.

NOTE 13 – 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 and booked in related party notes payable as of March 31, 2025.

F-25

In February, 2018, the Company passed a Corporate Resolution that included a provision to enter into amended consulting agreements with two parties: Tudog International Consulting, Inc., which provides CEO services through Craig Frank, an officer and related party of the Company, and BMN Consultants, Inc., which provides business development and financial consulting services through William David Jones, a non-officer and non-related party consultant. The agreement was approved by the Board of Directors for a term of three years retroactive to January 1, 2018 and provided each consulting entity monthly compensation of $25,000 under the respective agreements. The agreements were never formalized beyond the corporate resolution and all provisions of the contemplated agreements expired at the end of the Term with the exception that the Company has maintained that level of compensation to the parties beyond the expiration of the term of the called for agreements.

Due to the Company's liquidity constraints, compensation has been paid only in part during the periods presented. As of March 31, 2024, the Company had recorded total accrued compensation of approximately $500,000, with $250,000 attributable to Tudog International Consulting, Inc. and $250,000 to BMN Consultants, Inc. By agreement of the parties, the unpaid balances are deferred and not payable until December 1, 2026, and have been classified as long-term liabilities. As of March 31, 2025, total current accrued compensation increased to $831,273, consisting of $415,637 due to Tudog International Consulting, Inc. and $415,637 due to BMN Consultants, Inc..

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. As of March 31, 2025, the Company had $138,227 due to Bruce.

In 2023, The Tudog Group, BMN Consultants, Inc, Inc and 495 Oxford Consulting, Inc (which all provide services to the Company through Craig Frank and William David Jones), forgave a total of $38,329 of payable expense. The payable forgiveness was recorded as Additional paid in capital.

On September 5, 2024, the Board of Directors approved the issuance of 1,000,000 shares of common stock to FDT Oregon 1 LLC owners who are also the Company’s related party to acquire equity interest of FDT Oregon 1 LLC.

NOTE 14 – 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.

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company has several operating leases for an office in Fort Lauderdale, Florida, the Sacred Mushroom Psilocybin Service Center in Portland, Oregon, an apartment used by Officers and Consultants for the Company in Portland, Oregon when they are working in Portland and one retail store locations in Oregon under arrangements classified as leases under ASC 842.

Effective June 1, 2019, the Company entered into an operating lease for office space in Fort Lauderdale, Florida, with an initial two-year term expiring on May 31, 2021, at a monthly base rent of $1,802. The lease was subsequently extended for one year on June 1, 2021, and again on June 1, 2022. The monthly lease payment, including sales tax and operating expenses, was $2,136. Although the lease was originally scheduled to terminate on May 30, 2023, the Company extended the lease again on October 1, 2023, on a short-term basis. The Company continued leasing the property on a month-to-month basis until it terminated the lease and vacated the premises during the first quarter of 2025. As of March 31, 2025, the Company no longer maintains a lease obligation related to this property.

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 April 30, 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. In February 2024, the landlord and the Company agreed to terminate the lease and the Company own $8,650 rent after $5,000 against the rent deposit. As of March 31, 2025, lease liabilities and right of use assets were all $0.

F-26

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 Company has escrowed $51,818 with an Oregon-licensed attorney in Oregon (“Escrow Holder”) pursuant to an escrow agreement between Tenant, Landlord and the Escrow Holder, of which $38,894 is prepaid Base Rent and Additional Rent for five months and $12,925 is the Security Deposit. The lease commencement date is April 1, 2024, $10,761 per month and $142,230 right of use assets and right of use liability were recorded. 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 $21,274 and operating lease liabilities of $21,274 as of March 31, 2025.

Rent expenses for the three months ended March 31, 2025 and 2024 were $53,549 and $29,315, respectively. The big changes were due to the new lease in Oregon.


Maturity of Lease Liabilities at March 31, 2025
Maturity of Lease Liabilities at March 31, 2025		Amount
2025		21,522
2026		-
Total lease payments		21,522
Less: Imputed interest		(248)
Present value of lease liabilities	$	21,274


Maturity of Lease Liabilities at December 31, 2024
Maturity of Lease Liabilities at December 31, 2024		Amount
2024		53,805
2025		-
Total lease payments		53,805
Less: Imputed interest		(1,231)
Present value of lease liabilities	$	52,574


Operating Lease Liability		Remaining months		Weighted average
As of March 31, 2025		remaining term
	21,274		2		2

Operating Lease Liability		Remaining months		Weighted average
As of December 31, 2024		remaining term
	52,574		8		8

Legal Proceedings

From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any material litigation or legal proceedings. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

On October 17, 2024, the Company reached a settlement agreement with P3 Distributing L.L.C. in connection with a lawsuit filed in the Marion County Circuit Court, Case No. 24CV08588. Under the terms of the settlement, the Company is required to make monthly payments of $300 for a period of 18 months beginning September 30, 2024. In addition, a balloon payment of $11,779 is due at the conclusion of the payment schedule. The Plaintiff has agreed to dismiss the lawsuit without prejudice and not to file the Stipulated General Judgment with the court as long as the Company makes timely payments. In the event of a default, the Plaintiff retains the right to reinstate the lawsuit and file the Stipulated General Judgment. The total amount of the settlement is $17,179. As of March 31, 2025, the Company complies with the settlement agreement terms.

F-27

Note 16 - SEGMENT REPORT

The Company operates as a single reportable business segment, focused on the development and operation of psychedelic treatment facilities. The Company does not maintain separate lines of business or discrete operating units. Accordingly, management has concluded that the Company operates in one segment.

The Company’s chief operating decision maker (“CODM”), Craig Frank, the Chief Executive Officer, reviews consolidated operating results to assess performance and allocate resources. Financial performance is evaluated based on consolidated operating income, which includes revenue and directly attributable operating expenses. This measure is the primary metric used in internal decision-making and resource allocation.

The Company’s segment disclosures are presented in accordance with the guidance outlined in ASC 280, Segment Reporting, including ASC 280-10-50-22 through 50-30, which require entities to disclose financial information about their operating segments to provide users of financial statements with an understanding of the business activities and their performance.

As of March 31, 2025, all of the Company’s operations, revenues, and long-lived assets are located in the United States, primarily in Florida and Oregon, where the Company’s treatment facilities are based.

As disclosed in Note 4 to the consolidated financial statements, during the six months ended June 30, 2024, the Company ceased operations of its MJAI retail marijuana business, which had historically represented its primary operating segment. Following this operational shutdown, MJAI ceased to generate revenue and is no longer considered part of continuing operations. Although the Company retains ownership of MJAI as of March 31, 2025, it intends to pursue the sale of MJAI and its related assets during the second quarter of 2025. Accordingly, the MJAI segment is presented as a discontinued operation in the consolidated financial statements in accordance with ASC 205-20.

The Company has no other operating segments that meet the quantitative thresholds for separate disclosure, and a reconciliation of segment totals is not required given the single-segment structure.

The following table presents segment revenue, segment profit or loss, and significant segment expenses.


	For Three Months ended March 31, 2025			For Three Months ended March 31, 2024
Gross profit		2,082			—
Less:
Professional fees		177,750			189,425
Salaries and wages		39,903			—
General and administrative		93,967			49,405
Interest expense		197,481			180,330
Amortization of debt discount		139,964			5,638
Change in derivative liabilities expense		1,029,325			621,921
Other Segment Items^(a)		—			(3,614	)
Segment Net profit		(1,676,308	)		(1,043,105	)
Reconciliation of profit or loss		—			—
Adjustments and reconciling items		—			—
Provision for Income Taxes		—			(2,819	)
Net income (loss) from discontinued operations		(1,123	)		(59,756	)
Net income (loss) attributed to non-controlling interest		(40,661	)		(20,688	)
Consolidated net income	$	(1,636,770	)	$	(1,084,992	)

(a)

Other segment items included in Segment net income includes other income (expenses).

F-28

NOTE 17 - INCOME TAXES

We record tax positions as liabilities in accordance with ASC 740 and adjust these liabilities when our judgement changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the recognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of March 31, 2025 and December 31, 2024, we have not recorded any uncertain tax positions in our financial statements.

The effective US Federal Income Corporate Tax Rates for 2025 and 2024 are 21% and 21%, respectively

The Company has net operating loss carry forwards of approximately $19,187,039 at March 31, 2025 that do not expire. However, utilization of these losses may be limited pursuant to Section 382 of the Internal Revenue Code due to a recapitalization in 2007 and subsequent stock issuances.

The Company has a deferred tax asset as shown in the following:

Schedule of deferred tax asset
	March 31, 2025			December 31, 2024
Deferred Tax Asset		4,029,268			3,934,643
Valuation Allowance		(4,029,268	)		(3,934,643	)
Net Deferred Tax Asset	$	—		$	—

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 $0 during the three months ended March 31, 2025, compared to $2,819 during the three months ended March 31, 2024. The 2024 provision relates entirely to the operations of MJAI, our former retail cannabis business, which was discontinued during the year and is now reported as a discontinued operation (see Note 4). Although we have net operating loss carryforwards that we believe are available to offset this liability, the tax arises under Section 280E of the Internal Revenue Code, which disallows deductions for businesses trafficking in controlled substances, including cannabis. As a conservative measure, we accrued this liability in connection with MJAI’s taxable activity prior to its closure.

Note 18 - SUBSEQUENT EVENTS

Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events, which provide evidence about conditions that existed after the balance sheet date, require disclosure in the accompanying notes.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued.

On April 6, 2025, the Company was notified of the death of David M L Roberts, Managing Director of CVC International LTD, the Cayman Investment company that has historically provided the bulk of the Company’s financing. While CVC did not have any contractual obligations requiring them to make any further advances to the Company, Mr. Roberts’ Estate advanced $40,000 to the Company to complete its reporting requirements (including its Annual Report on Form 10-K for the year ended December 31, 2024 and its subsequent Quarterly report on Form 10-Q for the period ended March 31, 2025), and also to pay some expenses required for the Company to complete the sale of its remaining OLCC Cannabis Retailer License in Oregon. Mr. Roberts’ Estate also agreed to provide an additional $10,000 to the Company to renew the Company’s OHA Psilocybin Service Center License.

On April 9, 2025 the Company entered into an agreement to sell its remaining OLCC Cannabis Retail License in Oregon. The purchase price of $75,000 has been escrowed and the Company is awaiting for the License to be renewed and transferred to the buyer, subject to OLCC Licensing approval.

F-29

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 has again broken ground with the licensing and opening in August 2024 of The Sacred Mushroom Psychedelic Treatment Center in Portland, Oregon. KAYS is operating The Sacred Mushroom as part of its Fifth Dimension Therapeutics, Inc. subsidiary (“FDT”), which also intends to work cooperatively with select pharmaceutical companies to maximize the curative and therapeutic potential of psilocybin.

KAYS has approximately ten years of operational experience as a vertically integrated legal cannabis enterprise both operating legal marijuana dispensaries, as well as cultivation and manufacturing facilities. During the ten years of cannabis operations the Company has produced, distributed, and/or sold 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 supporting highly distinctive brands.

In late 2019 the Company determined that US Federal cannabis legalization was not likely to come to fruition anytime soon and began to explore overseas opportunities for cannabis operations. The Company currently has one retail cannabis license in Oregon and two medical marijuana production and processing licenses in Greece.

In addition, with respect to the pending legalization of psilocybin treatments in Oregon and their potential therapeutic value for treatment-resistant mental health disorders, we began to explore opportunities in the psychedelic treatment space in order to expand our business operations.

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, the Oregon Health Authority (the “OHA”) began accepting applications for licenses for facilitators who would be authorized to operate psilocybin treatment clinics, psilocybin manufacturing and testing operations and clinics where clients would be able to obtain psilocybin treatment services. The OHA had also launched licensing of Oregon’s legal cannabis program in 2014, giving KAYS critical experience in comprehending and complying with OHA mandates.

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 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.

In November, 2023, the Company filed a license application with the OHA for the licensure of The Sacred Mushroom an approximately 11,000 square foot psychedelic treatment center located in Portland, Oregon which the Company intends to operate as its flagship psychedelic treatment facility.

We received our license for our psilocybin treatment facility from the OHA in April 2024 and began providing treatments in September 2024. It is our understanding is that we are the first US Public Company to own and operate a US based licensed Psychedelic Treatment Facility.

In April 2025, we suspended payroll to our employees due to capital constraints and we are evaluating the operational structure of the facility with a view to restructuring operations in order to generate greater revenues.

The Science of Psilocybin and Treatment Resistant Mental Health Issues

Diagram of a brain with labels

AI-generated content may be incorrect.

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.

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”), 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.”

It is estimated that approximately 46.5 million American adults (18%) battle an anxiety disorder such as Post Traumatic Stress Disorder (PTSD) and Panic Disorders, 24.5 million American adults (9.5%) suffer from depressive illness (with someone committing suicide every 40 seconds), 17.3 million American adults (6.7%) have been diagnosed with Alcohol Use Disorder, 18.3 million American adults (7.1%) are considered drug dependent, and 11.4 million American women (8.5%) and 3 million American men (2.5%) struggle with an eating disorder. All of these difficult to treat mental health disorders have been shown by research to be aided by psychedelic treatment.

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. As a “Delivery of Treatment” provider, it is expected that The Sacred Mushroom™ and similar facilities will be the safe environment needed for these emerging pharma-based psychedelic treatments. As these companies endure the costly, time consuming, and unpredictable path to FDA approval, we believe that The Scared Mushroom will establish its position as a leader in the delivery of psychedelic care, offering more immediate relief for people with pressing mental health conditions.

KAYS believes that its facility offers a superior setting, broader activity and treatment options with pricing at or near the lower range, thereby enabling us to deliver a superior treatment experience at a much lower price than the competition, while still achieving profitability.

The Sacred Mushroom™ Psychedelic Treatment Facility

A logo for a company

AI-generated content may be incorrect.

It has been shown that Set and Setting are the keys to the successful psilocybin journeys. (Set as in mindset, Setting as in the place). With this in mind, the curators at The Sacred Mushroom™ (“TSM”) carefully considered every detail to enable an extraordinary setting. TSM provides guests access to psilocybin treatments in a spacious, comfortable, carefully controlled environment under licensure by the OHA (OHA).

Situated in downtown Portland in Old Chinatown, The Sacred Mushroom™ is less than 30 minutes from Portland International Airport (PDX) and conveniently accessible by public transportation. The Sacred Mushroom™ is seven floors above the city of Portland, with panoramic views of the city skyline and Mount Hood. The Sacred Mushroom™ encompasses approximately 11,000 sq ft. and provides guests with access to private treatment rooms, group session areas, and activity zones with movement, 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.

With peaceful gardens, engaging sensory areas, and comfortable seating everywhere, every inch of our 11,000 square feet has been designed with your psilocybin journey in mind.

A bridge over a city

AI-generated content may be incorrect.

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

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

Entrance and Reception

A warm and welcoming entrance with plants everywhere

and engaging images projected onto the wall.

Psilocybin Administration/Integration Area

A large inviting room with video conferencing and comforting amenities.

The East Room Group Areas

A Serenity Fountain greets our guests as they enter the East Room Group Area.

Sitting areas with carefully selected and spaced plants allow for

both privacy and flow through connectivity.

A large kitchen area allows for a comfortable café setting.

Stunning views of Downtown Portland and Mount Hood from the café Area.

The West Room Activity & Garden Areas

Our West Wing is centered around an indoor garden that “brings the outdoors in”

affording our guests the ultimate in psilocybin journey experiences.

Garden areas complete with grass mat seating merge with sitting areas

and high-resolution wall projections.

As with the East area, stunning views of Downtown Portland abound in this area of the facility.

Areas dedicated to yoga and body movement, as well as spaces for art expression

and journaling allow guests to pursue different activities.

Private Treatment Rooms

Comfort focused rooms with adjustable beds, seating, and a wide range of amenities

The United States Psilocybin and Psychedelic Medicine Industry

Oregon and Colorado are currently the only two states that have legalized Psilocybin for use within a regulatory framework.

Oregon is the most mature market but Colorado is moving closely behind it and is in process of licensing facilitators and As of the date of this filing Colorado has completed their licensing framework for Psilocybin Access and is in process of processing applications and licensing Colorado Psilocybin Facilitators in a framework similar to the Oregon Model. The Sacred Mushroom is working with a Portland, Oregon training program that is approved by the Colorado Psilocybin Licensing Program, and is utilizing The Sacred Mushroom’s Psilocybin Service Center as a practicum site for the completion of facilitator training prior to licensing.

There are four steps to the psilocybin therapeutic model in Colorado: assessment, preparation, administration and integration. First, an interested participant will go through a screening process to determine if they are a good fit for psychedelic therapy and the type of facilitator they would work best with. The participant then meets with their facilitator to learn about the administration process, set goals for their session and develop a safety plan.

Then, the facilitator will administer psilocybin at a licensed service center, overseeing the session and supporting the participant throughout. An administration session can last five hours or longer. The participant will meet with their facilitator again after their session to “integrate insights and learnings from the psilocybin experience into daily life” and make plans for future support needed.

Participants will primarily take psilocybin at a healing center, but the law will also permit clinical facilitators to offer psilocybin services at their existing practice, a retreat model where participants may stay overnight and reflect on their experiences for several days, and at-home administration with additional safety measures in place.

In addition to Oregon and Colorado, California and Washington State are moving towards the same type of license usage framework, and other states have approved decriminalization, currently allow medical research or have legislation in different stages of progress as denoted in the table below:

Current psychedelic legal status by state
State	Legal status
Alabama	No state legislation
Alaska	Active legislation in progress
Arizona	Inactive/failed legislation attempts
Arkansas	No state legislation
California	Local reforms to support decriminalization
Colorado	Legalized
Connecticut	Medical research/trials ongoing
Delaware	No state legislation
Florida	Inactive/failed legislation attempts
Georgia	Inactive/failed legislation attempts
Hawaii	Medical research/trials ongoing
Idaho	No state legislation
Illinois	Active legislation in progress
Indiana	Active legislation in progress
Iowa	Inactive/failed legislation attempts
Kansas	No state legislation
Kentucky	Medical research/trials ongoing
Louisiana	No state legislation
Maine	Active legislation in progress
Maryland	Medical research/trials ongoing
Massachusetts	Local reforms to support decriminalization
Michigan	Active legislation in progress
Minnesota	Medical research/trials ongoing
Mississippi	No state legislation
Missouri	No state legislation
Montana	Inactive/failed legislation attempts
Nebraska	No state legislation
Nevada	Medical research/trials ongoing
New Hampshire	Inactive/failed legislation attempts
New Jersey	Reduced penalty
New Mexico	Judicial exceptions
New York	Active legislation in progress
North Carolina	Active legislation in progress
North Dakota	No state legislation
Ohio	Inactive/failed legislation attempts
Oklahoma	No state legislation
Oregon	Legalized
Pennsylvania	Inactive/failed legislation attempts
Rhode Island	Inactive/failed legislation attempts
South Carolina	No state legislation
South Dakota	No state legislation
Tennessee	No state legislation
Texas	Medical research/trials ongoing
Utah	Medical research/trials ongoing
Vermont	Active legislation in progress
Virginia	Inactive/failed legislation attempts
Washington	Medical research/trials ongoing
West Virginia	Inactive/failed legislation attempts
Wisconsin	No state legislation
Wyoming	No state legislation

Source: Psychedelic legalization & Decriminalization Tracker from Psychedelic Alpha, which collaborated with UC Berkley Center for the Science of Psychedelics and Calyx Law to provide this data

(https://psychedelicalpha.com/data/psychedelic-laws)

Cannabis Operations

Kaya™ Family of Brands

During the last 10 years of cannabis operations the Company has produced, distributed, and/or sold 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.

The Company currently maintains an extensive genetic library of seeds for top strains of cannabis that it has assembled from its own grow operations and other commercial sources which it intends to utilize to launch international grow operations in Greece and elsewhere.

Kaya Farms™ Cannabis

Kaya Buddie™ Strain Specific Cannabis Cigarettes

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 initiative includes Greece, with additional areas under consideration.

Kaya Farms 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.

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’s projects include two medical cannabis cultivation and processing projects in Greece- one in Epidaurus, Greece and the other in Thebes, Greece.

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.

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 warrants the investment required to develop the project.

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 will 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 is awaiting project financing and final license approval from Greek government authorities.

Neither of the two subject Greece 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 our Greek partner’s families and the land in Thebes is currently available for purchase or option. 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.

Kaya Kannabis- Epidaurus, Greece Project

Site of Epidaurus Land and Overview of Building Complex

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.

Epidaurus Project with 50K square feet of already constructed buildings.

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.

While the State of Oregon has created a regulatory framework through the Oregon Health Authority (OHA) that allows for the administration of psilocybin to clients in OHA Licensed Psilocybin Treatment Facilities, the use and possession of Psilocybin is currently illegal under Federal Law.

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 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 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.

The legal psychedelic medicine sector is rapidly growing, and while the industry is at a much earlier stage than cannabis, the Company will also face significant competition in the operation of retail outlets 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

Results of Operations

Three months ended March 31, 2025 compared to three months ended March 31, 2024

Revenues

We generated revenues from continuing operations of $7,052 for the three months ended March 31, 2025, compared to $0 for the three months ended March 31, 2024. These revenues were primarily related to the early-stage development of our Psychedelic Medicine business, including The Sacred Mushroom™ facility in Portland, Oregon.

Revenues from discontinued operations, which reflect our former cannabis retail business under Marijuana Holdings Americas, Inc., a Florida corporation (“MJAI”), totaled $0 for the three months ended March 31, 2025, compared to $28,009 for the three months ended March 31, 2024. The significant decrease in discontinued revenues was due to the closure of our last remaining retail dispensary in Oregon during the first half of 2024, in line with our strategic shift away from the U.S. cannabis retail market. As a result, MJAI was classified as a discontinued operation for the three months ended March 31, 2025.

Cost of Sales

Cost of sales from continuing operations was $4,970 for the three months ended March 31, 2025, compared to $0 for the three months ended March 31, 2024, reflecting the cost of our Psychedelic Medicine business in the early-stage.

Cost of sales from discontinued operations, related to our former retail cannabis business under MJAI, was $0 for the three months ended March 31, 2025, compared to $13,406 for the three months ended March 31, 2024. The decrease corresponds with the closure of MJAI’s dispensary operations during the first half of 2024 and the resulting wind-down of cannabis-related retail activity.

Operating Expenses

General and administrative expenses from continuing operations were $93,967 for the three months ended March 31, 2025, compared to $49,405 for the three months ended March 31, 2024. Salaries and wages from continuing operations totaled $39,903 for the three months ended March 31, 2025, compared to $0 for the three months ended March 31, 2024. General and administrative expenses from discontinued operations were $892 for the three months ended March 31, 2025, compared to $29,444 for the three months ended March 31, 2024. Salaries and wages from discontinued operations totaled $231 for the three months ended March 31, 2025, compared to $44,915 for the three months ended March 31, 2024. The changes primarily reflect the wind-down of MJAI’s cannabis retail operations and the pre-opening expenses associated with the launch of The Sacred Mushroom™ facility.

Professional fees from continuing operations were $177,750, for the three months ended March 31, 2025, compared to $189,425 for the three months ended March 31, 2024. Professional fees from discontinued operations totaled $0 and $0 for the three months ended March 31, 2025 and 2024, respectively. The overall decrease in professional fees was primarily driven by stock-based compensation issued during 2024.

After giving effect to all of the foregoing, operating expenses from continuing operations were $311,620 for the three months ended March 31, 2025, compared to $238,830 for the three months ended March 31, 2024. Operating expenses from discontinued operations totaled $1,123 and $74,359 for the three months ended March 31, 2025 and 2024, respectively. Correspondingly, the Company recorded an operating loss from continuing operations of $ 309,538 and 238,830 for the three months ended March 31, 2025 and 2024, respectively. Operating loss from discontinued operations was $1,123 and $59,756 for the three months ended March 31, 2025, and 2024, respectively.

Interest expense

Interest expense from continuing operations was $197,481 for the three months ended March 31, 2025, as compared to $180,330 for the three months ended March 31, 2024, reflecting a slight increase of additional debt incurred in 2025. Interest expense from discontinued operations was $0 and $0 for the three months ended March 31, 2025 and 2024, respectively.

Net Income (Loss)

After giving effect to an operating loss of $ 309,538, interest expense of $197,481, amortization of debt discount of $139,964, and change in derivative liabilities expense of $1,029,325 arising from the increase of our stock prices which decreased the volatility factors used in the derivative calculations. Net loss from discontinued operations for the same period was $1,123, which includes the results of MJAI’s cannabis retail business prior to its closure in Q2 2024.We had net loss from non-controlling interest of $40,661 for the three months ended March 31, 2025. Additionally, the Company has accrued a tax liability of $902,166 related to potential taxes due under the IRS Code 280E.

This compares to a net loss from non-controlling interest of $20,688 for the three months ended March 31, 2024, after giving effect to an operating loss of $238,830, interest expense of $180,330, amortization of debt discount of $5,638, and derivative liabilities expense of $621,921, offset by the gain from other income of $3,614. Net loss from discontinued operations was $59,756, and from non-controlling interest net loss was $20,688, during three months ended March 31, 2024. The net loss attributable to the Company for the three months ended March 31, 2025 was $1,636,770 and net income attributable to the Company for the three months ended March 31, 2024 was $1,084,992.

Liquidity and Capital Resources

During the first three months of 2025 our cash position increased by $11,050 to $50,718, and our negative working capital deficit was $9,580,900.

As of March 31, 2025, our working capital consisted of cash of $50,718, inventories of $188 and prepaid expenses of $28,917 as compared to cash of $39,668, inventories of $90 and prepaid expenses of $28,180 as of December 31, 2024.

Our current liabilities include accounts payable and accrued expenses of $649,045, accounts payable and accrued expenses-related parties of $978,099, current portion of accrued interest of $3,197,040, current portion of lease liability of $21,274, tax liability of $902,166, convertible notes payable- net of discount of $242,500, notes payable of $70,920 and derivative liabilities of $3,599,679 as of March 31, 2025.

As compared to current liabilities include accounts payable and accrued expenses of $631,963, accounts payable and accrued expenses-related parties of $869,864, current portion of accrued interest of $3,005,107, current portion of lease liability of $52,574, tax liability of $902,166, convertible notes payable- net of discount of $135,000, notes payable of $9,312 and derivative liabilities of $2,497,275 as of December 31, 2024.

The following table sets forth the major sources and uses of cash for the three months ended March 31, 2025 and 2024:

	Three Months Ending March 31, 2025			Three Months Ending March 31, 2024
Net cash used in operating activities	$	(183,574	)	$	(118,456	)
Net cash provided by investing activities		—			6,650
Net cash provided by financing activities		195,000			217,500
Effects of currency translation on cash and cash equivalents		747			(49	)
Net cash used in operating activities from discontinued operations		(1,123	)		(59,756	)
Net increase in cash	$	11,050		$	45,889

Cash Used in Operating Activities

During the three months ended March 31, 2025, from continuing operations, we had cash of $183,574 used in operating activities, as compared to cash used in operations of $118,456 in 2024. From discontinued operations, we had cash of 1,123 and $59,756 used in operating activities during the three months ended March 31, 2025 and 2024, respectively.

Cash Provided by Investing Activities

During the three months ended March 31, 2025, we had no cash activities under investing activities, as compared to $6,650 cash provided by investing activities in 2023. Cashflow in 2025 decreased due to retail business closed in Oregon.

Cash Provided by Financing Activities

During the three months ended March 31, 2025, $195,000 of notes payable was issued, as compared to $217,500 of notes payable was issued in 2024.

Additional Capital

At March 31, 2025, we had cash of $50,718 and a working capital deficiency of $9,580,900 as compared to cash of $39,668 and a working capital deficiency of $8,035,323 at December 31, 2024.

Management believes that it will require additional capital, in addition to anticipated revenues from operations to fund expansion of the Company’s operations and ultimately achieve profitability. The Company intends to seek such additional capital from further private offerings of equity and/or debt securities. However, we may not be successful in raising additional capital on commercially reasonable terms, if and when needed, in which case our business, financial condition, cash flows and results of operations may be materially and adversely affected.

Critical Accounting Estimates

The following are deemed to be the most significant accounting estimates affecting us and our results of operations:

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) identify 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. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured.

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 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 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.

Fair value of financial instruments

The Company follows the provisions of ASC 820. This Topic defines fair value, establishes a measurement framework and expands disclosures about fair value measurements. We apply these provisions to estimate the fair value of our financial instruments including cash, accounts payable and accrued expenses, and notes payable.

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. Our 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.

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 of $0 for the three months ended March 31, 2025, compared to $2,819 for the three months ended March 31, 2024. Although we have net operating losses that we believe are available to offset this tax liability, it arises under Section 280E of the Internal Revenue Code due to our cannabis-related operations. As a conservative measure, we have accrued this liability in connection with our discontinued business.

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

Recently adopted accounting pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We adopted this ASU retrospectively on December 31, 2024. Refer to Note 16 in the consolidated financial statements, Segment Reporting and Information about Geographic Areas for the inclusion of the new required disclosures.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Financing Transactions

On January 23, 2025, the Company entered into a convertible promissory note with the Institutional Investor for $195,000 in capital and the funds were drawn down by the Company during Q-1 2025. The $195,000 was utilized for general working capital.

The note and accrued interest is convertible at any time prior to maturity (December 31, 2026) at the option of the Institutional Investor into shares of the Company’s common stock, at a conversion price of $0.08 per share.

In addition to customary adjustments, for stock splits, stock dividends and other recapitalization events, the conversion price and number of shares issuable upon conversion of the note is subject to adjustment if the market price of the Company’s common stock 20 days before notice of conversion is given is less than $0.16 per share, in which case, the conversion price would be adjusted to the lesser of 50% of the average closing price or the historical price for the 20 trading days before receipt of the conversion notice, but in no event, less than $0.02 per share or more than $0.08 per share.

In the event that the Maker completes an issuance or sale of common stock of the Company at a price lower than the Conversion Price any time before this Note is repaid or converted into common stock of the Company (whether via an acquisition transaction, debt conversion, a bona fide public offering, or a sale of restricted stock or any other form of exemption available to the Company) then the Exercise Price of the option shall be adjusted to that price for the remaining term of the Note.

Additionally, in the event that the Maker completes an issuance or sale of Preferred Shares, Debt, etc. (the "Other Debt Or Securities") or securities of one of its subsidiaries, then the Payee shall have the right to convert the Note into the Other Debt Or Securities, or securities of one of its subsidiaries on the same terms as those offered to any other investor using any Balance Due owed to Payee at that time.

Use of Proceeds

The proceeds from financing transactions that the Company has and may enter into will be used for general working capital to fund our growth plan.

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 and results of operations may be materially and adversely affected.

Note Conversions

No notes were converted 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 March 31, 2025. 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 March 31, 2025.

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:

▪

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, 2024.. 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 March 31, 2025 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 March 31, 2025.

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 March 31, 2025 (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 March 31, 2025, 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 March 31, 2025 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

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, but during Q-1 2025 there were no new legal proceedings involving the Company.

Item 1A. Risk Factors.

See “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.

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

Please see Note 8 to the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Report with respect to unregistered sales of securities during the three months ended March 31, 2025.

The securities described therein were issued in private transactions pursuant to the exemption from registration afforded by Section 4(a)(20 of the Securities Act of 1933, as amended.

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: May 21, 2025

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)