SAN DIEGO, March 22, 2021 /PRNewswire/ — Youngevity International, Inc. (OTCMKTS: YGYI), 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 a follow up regarding its open letter to shareholders released on January 19, 2021.
We are continuing to work diligently with our accounting team and independent auditors to complete all the filings we need to become current with our financial reporting and SEC filing requirements. Our primary focus is also to relist on the Nasdaq or another national securities exchange as soon as practical.
We have faced many challenges over the last twelve months, including ever-changing general and travel restrictions related to COVID-19, as well as related internal challenges which have impacted in part our business and caused time-line adjustments for the completion of our 2019 and 2020 audits of our financial statements. We are progressing forward as quickly as possible. With that in mind, we are providing the following progress report.
As previously announced, YGYI has engaged MaloneBailey, LLP as our independent registered public accounting firm responsible for auditing our financial statements and we have been meticulously working to complete our quarterly and year end 2019 restated financial statements and our quarterly financial statements for 2020. The challenge we faced delivering our financial statements in a timely manner was due to a revenue recognition issue related to our green coffee distribution business with a related party. This revenue recognition challenge was isolated to our operations in Nicaragua.
With the benefit of 60 days of comprehensive audit work since the time of our last update our auditors are nearly complete with their analysis. As a result, we feel compelled to adjust our timeline forward approximately 45 days from what we outlined in our last update to shareholders. We now fully expect that we can complete our 2019 financial reporting on or before May 1, 2021 and anticipate completing our 2020 quarterly and annual reports by July 1, 2021. We also anticipate being on a current reporting cadence by September 1, 2021.
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. To that end, we intend to ramp up our efforts to strengthen internal controls and financial reporting to expedite the relisting process.
We continue to operate in three distinct business segments Direct Selling (“DSS”), Commercial Coffee (“CC”) and Commercial Hemp Segment (“CHS”).
We also continue to employ cost cutting measures, including additional staff reductions, limits on travel and the overall reduction of fixed overhead expenses with a keen focus on running as efficiently as possible.
The Direct Selling Segment has been negatively impacted by the elimination of marketing initiatives including annual conventions, incentive trips and quarterly road shows due to COVID-19 restrictions. Despite these challenges, we expect that top line revenue for this segment will come in at approximately $127 million for 2019 and $121 Million for 2020. The revenue growth challenges have been impacted by supply chain constraints, however we believe we have taken appropriate steps to remedy this situation. The segment is continuing to drive marketing and sales activity through Virtual Events and will be holding a “Rise and Shine” Virtual Event on April 22nd and 23rd.
The Commercial Coffee (“CC”) Segment continues to experience a drag on its roasted business due to the impact COVID -19 has had on the cruise line industry, however, industry analysts report that cruise line bookings for the beginning of 2021 are on the rise with bookings expected to outweigh supply. The Commercial Coffee Segment eagerly anticipates its cruise line accounts to begin coming on-line in Q4 of this year and is hopeful to see these accounts growing quarter by quarter throughout 2022 with hopes of reaching pre covid levels by the end of 2022. We believe there is no question that there is pent up demand for consumers to be back cruising again.
The CC Segment has begun installation of state-of-the-art production equipment to run its Nicaragua based new mill operation. Twenty container loads of equipment have now safely arrived in Nicaragua and the installation phase is under way.
As previously reported, the CC Segment faced revenue recognition challenges for its green coffee distribution business in 2019 due to related party transactions. This impacted the timely financial filings of the of the Company’s financial statements. This challenge had a negative spillover effect into 2020. Revenues for this segment are estimated to come in at approximately $19.5 million in 2019 and $16.6 million for 2020.
We are also pleased to report that the Commercial Coffee Segment has renewed its contract with Major League Baseball’s Miami Marlins for the 2021 season, and that Café La Rica will remain the “Official Cafecito” of the Miami Marlins. We expect a robust baseball season in South Florida this summer.
The Commercial Hemp Segment (CHS) following a complete overhaul of its management team and leveraging its cGMP certification is beginning to see stronger bookings for its core hemp based raw materials and finished products. Current CHS capabilities include Soft Gels, Tinctures, Gummies, Creams, Ointments and Spa products with future expansion plans to include powder and capsule manufacturing as well as fully automating many existing processes. CHS has also begun expansion beyond the hemp space into the global nutraceutical market with hemp fortified and non-fortified consumer wellness products including multivitamins, antioxidant, protein powders, fiber, weight management and more.
Increasing awareness of the therapeutic benefits of hemp continues to influence consumer demand. Mainstream retailers are now focusing on selling hemp-based products which we expect will further fuel consumer demand.
The sales funnel has been building in 2021 and so far in this current month of March this segment has already received purchase orders approaching $500,000. March will certainly be the strongest booking month in terms of finished products for this segment. CHS has expanded its customer base in the US and is currently experiencing strong demand from overseas clients including Germany, Brazil, and Ecuador.
CHS continues to focus on research and development and has recently embarked on the identification and extraction of newly discovered compounds from the hemp plant which are believed to have health benefits. Additionally, CHS is currently investigating the patentability of a newly developed dosage form for hemp and nutraceuticals.
We are diligently moving forward with completing our 2019 and 2020 audits of our financial statements and would like to thank you for your continued support of YGYI. We continue our pledge to do all that we can within our control to put the Company back on track with transparency and timely current filings of its financial information.
About Youngevity International, Inc.
Youngevity International, Inc. (OTCMKTS: YGYI), is a multi-channel lifestyle company operating in 3 distinct business segments including a commercial coffee enterprise, a commercial hemp enterprise, and a multi-vertical omni direct selling enterprise. The Company features a multi country selling network and has assembled a virtual Main Street of products and services under one corporate entity, YGYI offers products from the six top selling retail categories: health/nutrition, home/family, food/beverage (including coffee), spa/beauty, apparel/jewelry, as well as innovative services. For investor information, please visit YGYI.com. Be sure to like us on Facebook and follow us on Twitter.
Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements, and include statements regarding relisting on the Nasdaq or another national securities exchange as soon as practical, completing our 2019 financial reporting on or before May 1, 2021, completing our 2020 quarterly and annual reports by July 1, 2021, being on a current reporting cadence by September 1, 2021, top line revenue for the Direct Selling Segment coming in at approximately $127 million for 2019 and $121 Million for 2020, Commercial Coffee Segment cruise line accounts to begin coming on-line in Q4 of this year, growing quarter by quarter throughout 2022 and reaching pre covid levels by the end of 2022, revenues for the Commercial Coffee Segment coming in at approximately $19.5 million in 2019 and $16.6 million for 2020, plans for the Commercial Hemp Segment to include powder and capsule manufacturing as well as fully automating many existing processes and investigating the patentability of a newly developed dosage form for hemp and nutraceuticals. Important factors that could cause actual results to differ materially from current expectations include, among others, our ability to become current in our financial reporting as planned, our ability to report top line revenue for the Direct Selling Segment at approximately $127 million for 2019 and $121 Million for 2020, our ability to bring cruise line accounts to begin coming on-line in Q4 of this year, grow quarter by quarter throughout 2022 and reach pre covid levels by the end of 2022, our ability to report revenues for the Commercial Coffee Segment at approximately $19.5 million in 2019 and $16.6 million for 2020, our ability to develop powder and capsule manufacturing at our Commercial Hemp Segment, fully automate many existing processes and patent a newly developed dosage form for hemp and nutraceuticals, our ability to improve our profitability, expand our liquidity, and strengthen our balance sheet, the acceptance of the omni-direct approach by our customers, our ability to expand our distribution, our ability to continue our financial performance and the other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2018 and our subsequent filings with the SEC, including subsequent periodic reports on Forms 10-Q and 8-K. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.
Youngevity International, Inc.
President and Chief Investment Officer
1 800 982 3189 X6500
YGYI Investor Relations
View original content to download multimedia:http://www.prnewswire.com/news-releases/youngevity-international-inc-provides-financial-reporting-and-business-update-301252577.html
SOURCE Youngevity International, Inc.