Kaya Holdings, Inc. (OTCMKTS:AFAI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry Into a Material Definitive Agreement.
The disclosure set forth below under Item 3.02.
Unregistered Sales of Equity Securities is
hereby incorporated by reference into this Item
1.01.
Item 3.02. Unregistered Sales of Equity
Securities.
On December 30, 2016, we entered into a $2.1 million financing
agreement (the Financing Agreement) with an
institutional investor (the Investor) who had
previously furnished KAYS with $1.2 million in financing, to
which the Investor purchased and agreed to purchase up to $2.1
million in convertible notes (the Notes) from
the Company as follows:
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The Investor purchased $250,000 in principal amount of Notes from the Company on December 31, 2016, contemporaneously with the execution of the Financing Agreement, which Notes are convertible into shares of the Companys common stock (Shares), at a conversion price of $0.04.(the $0.04 Notes). |
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The Investor purchased an additional $150,000 in principal amount of $0.04 Notes from the Company on January 4, 2017. |
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The Investor has the right to purchase up to an aggregate of an additional $700,000 in principal amount of Notes at any time and from time to time through March 31, 2017, which Notes will be convertible into Shares at a conversion price of $0.07 (the $0.07 Notes). |
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Provided the Investor has fulfilled its obligation to purchase all $700,000 in principal amount of $0.07 Notes from the Company on or before March 31, 2017, the Investor will have the right to purchase up to an aggregate of up to an additional $1,000,000 in principal amount of Notes at any time and from time to time through June 30, 2017, which Notes will be convertible into Shares at a conversion price of $0.10. |
The purchase price for the Notes is equal to the principal amount
thereof. The Notes have a term of two years from issuance and
bear interest at the rate of eight percent (8%) annum, which
accrues and is payable to together with interest at maturity. The
Investor may convert the principal amount of the Notes (as well
as other notes it currently holds as referenced above), together
with accrued but unpaid interest thereon, into Shares at the
applicable conversion price, at any time or from time to time
prior to maturity. The conversion price is subject to adjustment
for stock splits, stock dividends, recapitalizations and similar
transactions. The Notes also provide that at no time may they be
convertible if the number of Shares being issued upon conversion
to and then held by the Investor would result in the Investor
beneficially owning in excess of 4.99% of the Companys then
outstanding Shares, after giving effect to the proposed
conversion.
The Financing Agreement also provided that in consideration of
the Company and Investor entering into the Financing Agreement,
the currently outstanding $1,051,825 in principal amount of Notes
previously made by the Company in favor of Purchaser (the
Prior Notes) are modified and amended to (a)
extend the maturity date of the Prior Notes is hereby extended to
January 1, 2019 (the Extended Maturity Date);
and (b) reduce the, the interest rate on the Prior Notes is
hereby reduced to eight percent (8%) per annum until the Extended
Maturity Date. In addition, Investor waived the right to acquire
an additional $250,000 in principal amount of Notes to
arrangements entered into with the Company prior to the date of
Financing Agreement.
The Notes are being issued to the exemption from registration
afforded by Section 4(a)(2) of the Securities Act of 1933, as
amended and Regulation D thereunder. No commissions or placement
fees were paid in connection with the offer and sale of the
Notes. The proceeds from the offer and sale of Notes will be used
to fund the Companys 2017 growth plan, including expansion of our
chain of legal Kaya Shack Marijuana Superstores in Oregon,
increasing the capacity of our legal marijuana grow facility and
manufacturing operations and introducing new Kaya branded
cannabis products.
Copies of the Financing Agreement and the form of Note attached
hereto as Exhibit 10.1 and Exhibit
10.2, respectively, and are incorporated herein by
reference. The foregoing summaries do not purport to be complete
and are qualified in their entirety by reference to such
documents.
Item 9.01 Financial Statements and Exhibits.
| (a) | Exhibits |
| Exhibit No. | Description |
| 10.1 | Financing Agreement |
| 10.2 | Form of Note |
About Kaya Holdings, Inc. (OTCMKTS:AFAI)
Kaya Holdings, Inc., formerly Alternative Fuels Americas, Inc., is a holding company. The Company, through its subsidiary, Marijuana Holdings Americas, Inc. (MJAI), pursues medical and/or recreational licenses for the growing, processing and/or sale of marijuana in jurisdictions, where it is legal and permissible under local laws. It has developed the KayaShack brand for retail operations. It also operates Kaya Shack Medical Marijuana Dispensary (MMD) in Portland, Oregon, and Kaya Shack Marijuana Superstore in South Salem, Oregon. In addition to the recreational and medical marijuana products as offered at its Hawthorne location, the space allows for additional products, which include the Kaya Cafe Juice Bar and the Kaya Clone Room, and additional on-site concepts. The Portland facility features over 30 strains of marijuana, including its Kaya Kush. It operates the Kaya Farms West Coast Base of Operations, which houses its marijuana manage operations and manufacturing facility.
