8-K
Kaya Holdings, Inc. (KAYS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December26, 2021
| Kaya Holdings, Inc. | ||
|---|---|---|
| (Exact name of registrant as specified in its charter) | ||
| Delaware | 333-177532 | 90-0898007 |
| --- | --- | --- |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 916 Middle River Drive, Suite 316,<br><br> <br>Fort Lauderdale, FL | 33304 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number including area code: (954) 892-6911 | ||
| --- | ||
| (Former name or former address if changed since last report.) | ||
| --- |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of Company under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| None |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☒
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 used in this Current Report on Form 8-K, and unless otherwise indicated, the terms “the Company,” “KAYS,” “we,” “us” and “our” refer to Kaya Holdings, Inc. and its subsidiaries.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
|---|
***(a)***Resignation of Jordi Arimany
On December 26, 2021 our board of directors accepted the resignation of Jordi Arimany as a director of the Company effective as of September 8, 2021. Mr. Arimany’s resignation was as a result of his relocation to South Africa.
***(b)***Appointment of Mitchell Chupak
On December 26, 2021, our board of directors appointed Mitchell Chupak to fill the vacancy created by the resignation of Jordi Arimany.
The following is a brief description of Mr. Chupak’s background and business experience
Mitchell Chupak. 67, has resided in Israel since 1972, where since 1997, he has been the Director of Development for the Jaffa Institute, the largest not for profit social service agency serving southern portions of Tel-Aviv-Jaffa, Israel and its suburbs. During his over 25 years at the Jaffa Institute, Mr. Chupak has grown the organization extensively and is responsible for development of major social services, educational and community projects for which he secured millions of dollars in funding. He developed funding sources worldwide and enlisted the aid of major donors in the United States, Canada, Europe, Australia, and South America.
In 2005, Mr. Chupak created the Israel Fundraisers Forum to assist other non-profit organizations better understand methods of fundraising. The forum, with which he has been associated since its founding, promotes professionalism in fundraising and development and assists both organizations and individual fundraisers to improve methods of the profession.
We believe that Mr. Chupak’s spectrum of experience in both management and funding, will add value our board of directors.
As is the case with all of our independent directors, Mr. Chupak will be compensated with an annual grant of common stock, currently fixed at 100,000 shares annually.
| Item 8.01 | Other Information. |
|---|
On December 27, 2021, KAYS entered into an Exchange Agreement (the “Exchange Agreement”) with the current holders of its 100,000 outstanding shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”), Craig Frank, our Chairman and Chief Executive Officer and BMN Consultants, Inc. (“BMN”), to restructure their preferred holdings. Each of Mr. Frank and BMN held 50,000 shares of the Series C Preferred Stock, each share of which was convertible at the option of the holder into 28.88665 shares of our common stock (an aggregate of 2,888,665 shares) and voted on as “as converted” basis together with the holders of shares of our common stock as single class, unless required otherwise by Delaware law. As of December 27, 2021, Mr. Frank and BMN each held 8.2% (a total of 16.4%) of the voting power of the Company’s outstanding voting stock by reason of their holding the Series C Preferred Stock.
As of the date of the Exchange Agreement, the Company owed each of Tudog Consulting, LLC (“Tudog”), a limited liability company owned by Mr. Frank and BMN, approximately $588,000 in accrued but unpaid compensation (a total of $1,176,000). Pursuant to the Exchange Agreement, Tudog and BMN agreed to each waive approximately $338,000 of the compensation due them and to defer payment of the remaining $250,000 due to each of them to January 1, 2025. As a result liabilities of approximately $676,000 will be removed from the Company’s balance sheet and $500,000 will be reclassified as long-term debt on the Company’s balance sheet.
In addition, pursuant to the Exchange Agreement, Mr. Frank and BMN each exchanged their shares of the Series C Preferred Stock for the issuance to each of them or their designees, of 20 shares of a newly-designated class of Series D Convertible Preferred Stock, (the “Series D Preferred Stock”). Each share of the Series D Preferred Stock is convertible at the option of the holder at any time and from time to time, into one percent (1%) of the Company’s “Fully Diluted Capitalization” at the date of conversion. “Fully Diluted Capitalization” means the number of issued and outstanding shares of KAYS’ common stock, assuming the conversion or exercise of all of the Company's outstanding convertible or exercisable securities, including shares of convertible preferred stock and all outstanding vested or unvested options or warrants to purchase shares common stock, but excluding debt securities convertible into common stock.
The Series D Preferred Stock votes on as “asconverted” basis together with the holders of shares of our common stock as single class, unless required otherwise by Delaware law. Accordingly, holders of the Series D Preferred Stock will hold 1% of the voting power of the Company’s outstanding voting stock for each shares of the Series Preferred Stock held or a total of 40% of such voting power.
The above transactions were approved by the “independent” directors of the Company at a meeting held on December 26, 2021.
The above descriptions of the Series D Preferred Stock and the Exchange Agreement are qualified in their entirety by reference to the copies of the Certificate of Designation of the Series D Preferred Stock and the Exchange Agreement, which are filed as Exhibits 3.1 and 10.1 to this Current Report on Form 8-K.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhi****bit No | Description |
|---|---|
| 3.1 | Certificate of Designation of Series D Preferred Stock |
| 10.1 | Exchange Agreement dated December 27, 2021 |
f2skays8k122821ex3_1.htmf2skays8k122821ex10_1.htm
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: December 29, 2021 | KAYA HOLDINGS, INC. | |
|---|---|---|
| By: | /s/ Craig Frank | |
| Craig Frank,<br><br> <br>Chief Executive Officer |
Exhibit3.1
KAYAHOLDINGS, INC.
CERTIFICATEOF DESIGNATION
OF
SERIESD CONVERTIBLE PREFERRED STOCK
KAYAHOLDINGS, INC., a Delaware corporation (the “Corporation”), acting pursuant to Section 151 of the Delaware General Corporation Law, does hereby submit the following Certificate of Designation of Series and Determination of Rights, Preferences, Powers, Restrictions and Limitations of Series D Convertible Preferred Stock (the “Certificate”).
FIRST: The name of the Corporation is Kaya Holdings, Inc.
SECOND:At a duly called and held meeting of the Board of Directors of the Company, the following resolutions were adopted:
WHEREAS, the Company’s Certificate of Incorporation, as amended, authorizes Preferred Stock consisting of 10,000,000 shares, par value $0.0001 per share, issauable from time to time in one or more series; and
WHEREAS, the Board of Directors of the Company is authorized, subject to limitations prescribed by law and by the provisions of Article IVof the Company’s Certificate of Incorporation, as amended, to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions and limitations of the shares of such series; and
WHEREAS, it is the desire of the Board of Directors to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights, preferences and limitations of the shares of such new series;
NOW, THEREFORE BE IT RESOLVED, that pursuant to Article IV of the Company’s Certificate of Incorporation, as amended. there is hereby established a new series of 40 shares of Series D Convertible Preferred Stock of the Company (the “Series DPreferred Stock”) to have the designation, rights, preferences, powers, restrictions and limitations set forth in a supplement to Article IV as follows:
Dividends and Distributions. In connection with any dividends or distributions of capital or profit declared or issued by the Company, each share of issued and outstanding Series D Preferred Stock shall have rights and preferences equal to one percent (1%) of the Company’s Fully Diluted Capitalization as of the record date for any such dividend or distribution. As used in this Certificate of Designation, “Fully Diluted Capitalization” means the number of issued and outstanding shares of the Company's common stock, $.0001 par value (the “Common Stock”), assuming the conversion or exercise of all of the Company's outstanding convertible or exercisable securities, including shares of convertible preferred stock and all outstanding vested or unvested options or warrants to purchase the Common Stock, but excluding debt securities convertible into the Common Stock.
**Voting Rights.**The holders of shares of Series D Preferred Stock shall have the following voting rights:
(a) Each share of Series D Preferred Stock shall entitle the holder thereof to such number of votes per share on all matters submitted to a vote of the stockholders of the Company as equal the number of shares of the Common Stock into which the share of Series D Preferred Stock is convertible in accordance with Section 3 hereof as of the record date for such vote.
(b) Except as otherwise provided herein, in the Certificate of Incorporation, as amended, or by law, the holders of shares of Series D Preferred Stock and the holders of shares of Common Stock and other capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Company,
(c) Except as set forth herein, or as otherwise provided by law, holders of Series D Preferred Stock shall have no special voting rights and their consent shall not be required, (except to the event they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
- **Conversion Rights.**The holders of the Series D Preferred Stock shall have conversion rights as follows:
(a) **Rightto Convert.**Each share of Series D Preferred Stock shall be 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 (as hereinafter defined).
(b) Mechanicsof Conversion.
| (i) | In<br> order to convert shares of Series D Preferred Stock into shares of Common Stock, the holder<br> shall surrender the certificate or certificates for such shares of Series D Preferred Stock<br> at the office of the transfer agent (or at the principal office of the Company if the Company<br> serves as its own transfer agent), together with written notice that such holder elects to<br> convert all or any number of<br>the shares represented by such certificate or certificates, if required by the Company, Certificates surrendered for conversion shall<br>be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by<br>the registered holder or his, her or its attorney-in-fact duly authorized in writing. The date of receipt of such certificates and notice<br>by the transfer agent or the Company shall be the conversion date (“Conversion Date”), The Company shall, as soon<br>as practicable after the Conversion Date, issue and deliver at such office to such holder, or to her nominees, a certificate or certificates<br>for the number of shares of the Common Stock to which such holder shall be entitled, together with cash in lieu of any fraction of a<br>share. |
|---|---|
| (ii) | The<br> Company shall at all times during which the Series D Preferred Stock shall be outstanding,<br> reserve and keep available out of its authorized but unissued stock, for the purpose of effecting<br> the conversion of the Series D Preferred Stock, such number of its duly authorized shares<br> of the Common Stock as shall from time to time be sufficient to effect the conversion of<br> all outstanding shares of Series D Preferred Stock. |
| --- | --- |
| (iii) | The<br> Company shall pay any and all issue taxes and other similar taxes. that may be payable by<br> the Company on its issue or delivery of shares of Common Stock on conversion of any shares<br> of Series D Preferred Stock. The Company shall not be required to pay any tax which may be<br> payable in respect of any transfer involved in the issue and delivery of or any exchange,<br> conversion or recapitalization of shares of the Common Stock in a name other than that in<br> which the Series D Preferred Stock so converted was registered. No such issue or delivery<br> shall be made unless and until the Person requesting such issue has paid to the Company the<br> amount of any such tax, or has established, to the satisfaction of the Company, that such<br> tax has been paid. |
| --- | --- |
| (iv) | If<br> any shares of the Common Stock to be reserved for the purpose of conversion of shares of<br> Series D Preferred Stock require registration, listing with, or approval of, any governmental<br> authority, stock exchange or other regulatory body under any federal or state law or regulation<br> or otherwise, before such shares may be validly issued or delivered upon conversion to the<br> holder immediately prior to conversion, the Company will in good faith and as expeditiously<br> as possible endeavor to secure such registration, listing or approval. |
| --- | --- |
| (v) | All<br> shares of the Common Stock which may be issued upon conversion of the shares of Series D<br> Preferred Stock will, upon issuance by the Company, be validly issued, fully paid, non-assessable,<br> and free from all taxes, lien and charges with respect to their issuance due to any act of<br> the Company. |
| --- | --- |
| (vii) | All<br> certificates of a series of Series D Preferred Stock surrendered for conversion shall be<br> appropriately canceled on the books of the Company and the shares so converted represented<br> by such certificates shall be restored to the status of authorized but unissued shares of<br> such series of Series D Preferred Stock of the Company. |
| --- | --- |
**ReacquiredShares.**Any Shares of Series D Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock or Common Stock as the Board of Directors may determine. If reclassified as Preferred Stock, the shares may be issued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, as amended or in any other Certificate of Designation creating a series of Preferred Stock or any similar stock or as otherwise required by law,
Liquidation,Dissolution or Winding Up.
(a) Upon any liquidation, dissolution or winding up of the Company the holders of shares of Series D Preferred Stock shall be entitled to receive an aggregate distribution amount per share equal the distribution that would be payable to the holder if the Series D Preferred Stock were converted in accordance with Section 3 hereof as of the record date for such distribution.
(b) The merger or consolidation of the Company into or with another corporation or other entity or any other corporate reorganization in which the Company shall not be the continuing or surviving entity of such consolidation, merger or reorganization, the sale of all or substantially all the assets of the Company, or a transaction or series of related transactions by the Company in which in excess of fifty percent (50%) of the Company's voting power is transferred, shall be deemed to be a liquidation, dissolution or winding up of the Company.
Consolidation,Merger, etc. Notwithstanding anything to the contrary contained herein, in case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock securities, cash and/or any other property, then in any such case each share of Series D Preferred Stock shall at the same time be similarly exchanged or changed into the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, assuming that the Series D Preferred Stock was converted into the Common Stock in accordance with Section 3 hereof as of the effective date of such transaction
**NoRedemption.**The shares of Series D Preferred Stock shall not be redeemable by the Company.
**Rank.**The Series D Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, equal to the Common Stock and junior to all series of any other class of the Preferred Stock issued either before or after the issuance of the Series D Preferred Stock, unless the terms of any such series shall provide otherwise.
Amendment. At such time as any shares of Series D Preferred Stock are outstanding, the Certificate of Incorporation of the Company, as amended, shall not be further amended in any manner, whether by reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, which would materially alter or change the powers, preferences or special rights of the Series D Preferred Stock so as to affect them adversely without affirmative vote of the holders of at least a majority of the outstanding shares of Series D Preferred Stock, voting as a separate class. The Company will at all times take such action as may be necessary or appropriate in order to protect the conversion rights and other rights of the holders of the Series D Preferred Stock against impairment.
FractionalShares. Series D Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distribution and have the benefit of all other rights of holders of Series D Preferred Stock.
INWITNESS WHEREOF, the Company has caused this Certificate to be executed by its President and Chief Executive Officer this 27^th^day of December, 2021.
KAYAHOLDINGS, INC.
By: /s/ Craig Frank
Craig Frank, President and Chief Executive Officer
Exhibit 10.1
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this “Agreement”) is entered into as of December 27, 2021 by and among KAYA HOLDINGS,INC., Inc., a Delaware corporation (the “Company”), CRAIG FRANK (“Frank”) and BMNCONSULTANTS, INC. (“BMN,” and together with Frank, each, a “Holder,” and collectively, the “Holders”).
RECITALS
WHEREAS, the Holders each hold of record 50,000 shares of the Company’s Series C Convertible Preferred Stock (the “Series C Shares”); and
WHEREAS, the Company owes $588,000 in accrued but unpaid compensation to each Holder (the “Accrued Compensation”); and
WHEREAS, the Holders have each agreed with the Company to (a) waive payment of approximately $338,000 of the Accrued Compensation; (b) defer payment of the $250,000 balance of the Accrued Compensation until January 1,2025; and (c) exchange their Series C Shares for twenty (20) shares of newly designated Series D Convertible Preferred Stock of the Company (the “Series D Shares”), having the rights, powers, preferences, restrictions and limitations set forth in the Certificate of Designation attached as Exhibit A hereto (the transactions set forth in clauses (a), (b) and (c) of this Recital being referred to herein collectively as the “Share Exchange”), all on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Recitals. Each of the parties hereto acknowledges and agrees that the recitals set forth above in this Agreement are true and accurate, are contractual in nature, and are hereby incorporated into and made a part of this Agreement.
2. TheShare Exchange. Pursuant to the terms and conditions of this Agreement, the Holders each agree to (a) waive payment of approximately $338,000 of the Accrued Compensation; (b) defer payment of the $250,000 balance of the Accrued Compensation until January 1, 2025; and (c) exchange their Series C Shares for twenty (20) Series D Shares. Contemporaneously with the execution of this Agreement, each Holder shall deliver to the Company the certificates evidencing the Holder’s Series C Shares, together with an executed stock powers or such other instrument as may be required to cancel the Series C Shares. Upon receipt of the foregoing, the Company shall issue to each Holder or such Holder’s designee, a certificate in book entry form, evidencing the Holder’s Series D Shares registered in the name of such Holder or the Holder’s designee. Thereupon, the Share Exchange shall be deemed consummated and the Series C Shares shall be cancelled.
3. Representations,Warranties and Agreements.
(a) Holder Representations, Warranties and Agreements of the Holders. In order to induce the Company to enter into this Agreement, each Holder, for himself or itself, and for his or its affiliates, designs successors and assigns, hereby acknowledges, represents, warrants and agrees as follows: (i) The Holder has full power and authority to enter into this Agreement and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action; (ii) no consent, approval, filing or registration with or notice to any governmental authority is required as a condition to the validity of this Agreement or the performance of any of the obligations of the Holder hereunder; and (iii) the Series C Shares are owned by the Holder free and clear of all taxes, liens, claims, pledges, mortgages, restrictions, obligations, security interests and encumbrances of any kind, nature and description.
(b) Representations Warranties and Agreements of the Company. In order to induce the Holder to enter into this Agreement, the Company for itself, and for its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows: (i) the Company has full power and authority to enter into this Agreement and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action; (ii) no consent, approval, filing or registration with or notice to any governmental authority is required as a condition to the validity of this Agreement or the performance of any of the obligations of the Company hereunder; (iii) the Series D Shares, when issued under the terms of this Agreement, will be duly and validly issued, fully-paid and non-assessable shares of the Company’s capital stock; (v) the Company is acquiring the Series C Shares in order to return them to its authorized capital (thereby cancelling them) and will, by virtue of this Agreement, exchange them by issuing the Series D Shares to the Holders.
4. GoverningLaw; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware.
5. Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission or other electronic transmission (including email) shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile transmission or other electronic transmission (including email) shall be deemed to be their original signatures for all purposes.
6. Attorneys’Fees. In the event of action at law or in equity to interpret or enforce or interpret the terms of this Agreement, the parties agree that the party who is awarded the most
money shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of attorneys’ fees and costs at both the trial and appellate levels.
7. NoReliance. Holder acknowledges and agrees that neither the Company nor any of its officers, directors, members, managers, equity holders, representatives or agents has made any representations or warranties to Holder or any of its agents, representatives, officers, directors, or employees except as expressly set forth in this Agreement.
8. Severability. If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.
9. EntireAgreement. This Agreement supersedes all other prior oral or written agreements between each Holder and the Company with respect to the subject matter hereof
10. Amendments. This Agreement may be amended, modified, or supplemented only by written agreement of the parties. No provision of this Agreement may be waived except in writing signed by the party against whom such waiver is sought to be enforced.
11. FurtherAssurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
INWITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above.
THECOMPANY:
| KAYA<br> HOLDINGS, INC. | |
|---|---|
| By: /s/<br> Craig Frank | |
| Craig<br> Frank, Chief Executive Officer | |
| THE<br> HOLDERS: | |
| BMN<br> CONSULTANTS, INC. | |
| By: /s/<br> William David Jones | /s/<br> Craig Frank |
| William<br> David Jones, President | Craig<br> Frank, individually |