{"id":414906,"date":"2021-01-14T08:33:35","date_gmt":"2021-01-14T13:33:35","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=414906"},"modified":"2021-01-14T08:33:35","modified_gmt":"2021-01-14T13:33:35","slug":"youngevity-international-inc-provides-business-update-in-open-letter-to-shareholders","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/youngevity-international-inc-provides-business-update-in-open-letter-to-shareholders\/","title":{"rendered":"Youngevity International, Inc. Provides Business Update in Open Letter to Shareholders"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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\n SAN DIEGO<\/span>, Jan. 14, 2021<\/span> \/PRNewswire\/ —\u00a0Youngevity International, Inc. <\/b>(OTCMKTS: YGYI) (“YGYI” or the “Company”), a multi-channel lifestyle company operating in three distinct business segments, including a commercial coffee enterprise, a direct marketing enterprise, and a commercial hemp enterprise, today issued an open letter to shareholders.<\/p>\n

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\n \"(PRNewsfoto\/Youngevity
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Dear Shareholders,<\/p>\n

First, the management team at YGYI would like to extend well wishes for a happy, healthy, and prosperous 2021.\u00a0 We entered 2020 with a great deal of optimism and we were confident that we had the Company well positioned for a solid year.\u00a0 Although COVID-19 has negatively impacted so many of us, our Company included, meeting our financial reporting requirements became a challenge we were unable to overcome in 2020.\u00a0 On November 19, 2020<\/span>, as you know, we issued a press release announcing the delisting of YGYI’s securities from The Nasdaq Stock Market LLC (“Nasdaq”).\u00a0 \u00a0The delisting was based upon our non-compliance with the filing requirements set forth in Nasdaq Listing Rule 5250 (c)(1) for failing to file our Form 10-K for the year end December 31, 2019, and Forms 10-Q for the periods ended March 31, 2020, June 30, 2020 and September 30, 2020.\u00a0 We understand and shared in the disappointment this announcement caused our team and our shareholders.\u00a0 \u00a0Our intention, as stated in the press release, continues to be our drive to get current in our financial reporting and relisting on Nasdaq or another national securities exchange.\u00a0 <\/p>\n

As promised, we are issuing this shareholder communication letter to provide an update on our progress.\u00a0 We greatly appreciate your patience and understanding as we are working through this important process.<\/p>\n

\n Restatement & Listing Update<\/b>\n <\/p>\n

As previously announced YGYI has engaged MaloneBailey, LLP as our auditors and we have been diligently working to complete our 2019 and 2020 quarterly and annual financial statement filings.\u00a0 The challenge we faced delivering our financial statements timely was due to a revenue recognition issue related to our green coffee distribution business with a related party.\u00a0 This revenue recognition challenge was isolated to our operations in Nicaragua.\u00a0 <\/p>\n

We are proceeding as expeditiously, and thoroughly, as possible with our new auditors to complete any restatements that may be required and remain focused on becoming current on our financial reporting.\u00a0 Our goal is to complete this process as quickly as possible, filing our 2019 financial reporting on or before March 15<\/span>, 2021.We anticipate completing our 2020 quarterly and annual reports by May 15, 2021<\/span>. The Company and its auditors have set a goal and anticipate being on a current reporting cadence by July 15<\/span>, 2021.\u00a0\u00a0 \u00a0<\/p>\n

The Company’s common stock is expected to trade on the OTC Pink Market until such time that the Company may apply for relisting to a national securities exchange.\u00a0 To that end, we intend to ramp up its efforts to strengthen its internal controls and financial reporting to expedite the relisting process.<\/p>\n

\n Business Update<\/b>\n <\/p>\n

YGYI continues to operate in three distinct business segments: Direct Selling (“DSS”), Commercial Coffee (“CC”) and Commercial Hemp Segment (“CHS”).\u00a0 On March 12, 2020<\/span>, we announced plans to consider the divestiture of its Direct Selling Segment, however, at this time, we remain committed to leveraging the full capabilities of all three business segments to maximize revenue growth and profits.\u00a0 We may explore divestiture discussions after we become current with our financial reporting, have addressed any material weaknesses in its financial reporting, and fully evaluated our opportunities to move back to a national exchange.<\/p>\n

All of our segments have been employing cost-cutting measures, including staff reductions, limits on travel, reducing fixed overhead, and eliminating unnecessary expenses.\u00a0 Although staff has been reduced across the enterprise, the remaining team members are picking up the slack by doing whatever it takes to make the business run as efficiently as possible, and we are fully operational. <\/p>\n

The Direct Selling Segment<\/b>, due to COVID-19 restrictions, was forced to eliminate many marketing initiatives including annual conventions, incentive trips and quarterly road shows. \u00a0However, the business has been implementing virtual events wherever possible to keep the field engaged and active.\u00a0 DSS added exciting new products in 2020 including a host of products that have been keenly focused on current consumer interests and demands including, Beyond Tangy Tangerine 2.5 (BTT 2.5), Beyond Immune FX, Collagen Peptides Joint Support, and Ultimate Zinc and Ultimate Iodine Tinctures.\u00a0 \u00a0Additionally, the Company has drastically improved both the functionality of its Youngevity.com and hempfx.com web sites, which is making the buying process easier for our distributors and customers.\u00a0 DSS will continue to enhance and streamline its product offering wherever possible.<\/p>\n

The Commercial Coffee (“CC”) Segment <\/b>has faced a challenging year in 2020 predominantly due to COVID -19 and its impact on the cruise line industry, as well as the delays it caused in getting its new mill operations up and running for the 2021 season.\u00a0 Significant reduction in revenue from our cruise line customers, which represented approximately 16% of CC’s 2019 gross revenues, has negatively impacted the Company.\u00a0 Fortunately, CC has seen a pickup in its private label and branded business with more consumers drinking coffee at home due to the pandemic.\u00a0 This helped to partially offset some of the negative impact from the cruise line industry.\u00a0 <\/p>\n

The CC Segment, as documented in its public filings, faced revenue recognition challenges for its green coffee distribution business in 2019 due to related party transactions and the materiality of same.\u00a0 This impacted the timely financial filings of the of the Company’s financial statements.\u00a0 This challenge had a negative spillover effect into 2020.<\/p>\n

Moving into 2021 the CC segment has contracts for $35 million<\/span> of gross revenue for green coffee distribution to ship throughout the year and we are optimistic that the cruise line business will begin sailing again the summer of 2021.<\/p>\n

The Commercial Hemp Segment<\/b> has faced a number of challenges and beginning in the 3rd<\/sup> quarter of 2020 began a process to change over its management team.\u00a0 This changeover was completed by the end of 2020 and the Company believes it has strong leadership in the right positions to drive future growth.\u00a0 CHS added a new Division President that has over 30 years of experience running one of the premier manufacturing companies in supplements and hemp-based product and has senior executives in place focused on sales as well as R&D and formulation.<\/p>\n

The CHS segment obtained its cGMP certification at the end of 2020.\u00a0 The segment has shifted toward finished goods manufacturing and now manufactures a number of finished products for white label and private label including Soft Gels, Tinctures, Gummies, Creams, and Ointments featuring hemp derived ingredients.<\/p>\n

CHS, with the expertise of its new division President, is in the process of examining whether its cGMP certified facility can be leveraged to produce products that are currently manufactured by third parties for our DSS segment.<\/p>\n

\n Enhancing the Board and Senior Leadership<\/b>\n <\/p>\n

We have substantially strengthened the YGYI management team and Board, improved controls and coordination within the Company, and enhanced our governance. Since mid-2020, we have made the following updates to our leadership team:<\/p>\n