Youngevity International, Inc. [YGYI] Filings

10-Q 1 yii20200930_10q.htm FORM 10-Q yii20200930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 001-38116

YOUNGEVITY INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		90-0890517
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2400 Boswell Road, Chula Vista, CA		91914
(Address of Principal Executive Offices)		(Zip Code)

(619) 934-3980

Registrant’s Telephone Number, Including Area Code

Not applicable

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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. Yes ☒ No ☐

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 (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 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 an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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. ☐

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

As of June 17, 2022, the issuer had 34,044,176 shares of its Common Stock, par value $0.001 per share, issued and outstanding.

Table of Contents

YOUNGEVITY INTERNATIONAL, INC.

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2020 (unaudited) & December 31, 2019	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019 (unaudited)	3
	Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2020 and 2019 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	62

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	67
Item 6.	Exhibits	67
Signatures		68

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Youngevity International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

	September 30, 2020			December 31, 2019
ASSETS	(Unaudited)
Current Assets
Cash and cash equivalents	$	1,238		$	4,463
Accounts receivable, trade		3,043			2,902
Income tax receivable		81			81
Inventory		22,036			22,706
Prepaid expenses and other current assets		5,432			3,982
Total current assets		31,830			34,134
Property and equipment, net		25,189			23,316
Operating lease right-of-use assets		6,467			8,386
Deferred tax assets		75			75
Intangible assets, net		13,726			15,566
Goodwill		6,992			6,992
Other assets		1,279			1,222
Total assets	$	85,558		$	89,691

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	9,405		$	9,069
Accrued distributor compensation		4,167			3,164
Accrued expenses		5,732			5,108
Deferred revenues		8,527			1,943
Line of credit		1,955			2,011
Other current liabilities		3,018			2,664
Operating lease liabilities, current portion		1,290			1,740
Finance lease liabilities, current portion		1,703			736
Notes payable, net of debt discounts, current portion (Note 3)		5,340			4,085
Notes payable, net of debt discounts, current portion		2,108			191
Convertible notes payable, net of debt discounts, current portion		2,927			25
Short term loans		3,923			-
Warrant derivative liability		-			1,542
Contingent acquisition debt, current portion		1,341			1,263
Total current liabilities		51,436			33,541
Operating lease liabilities, net of current portion		5,497			6,646
Finance lease liabilities, net of current portion		1,081			408
Notes payable, net of debt discounts, net of current portion (Note 3)		392			-
Notes payable, net of debt discounts, net of current portion		4,883			6,790
Convertible notes payable, net of debt discounts, net of current portion		-			2,675
Contingent acquisition debt, net of current portion		5,455			7,348
Other long-term liabilities		-			2,115
Total liabilities		68,744			59,523

Commitments and contingencies (Note 11)

Stockholders’ Equity
Preferred stock, $0.001 par value: 5,000,000 shares authorized
Series A – 8% convertible preferred stock; 161,135 shares issued and outstanding at September 30, 2020 and December 31, 2019		–			–
Series B – 5% convertible preferred stock; zero and 129,332 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		–			–
Series D – 9.75% cumulative redeemable perpetual preferred stock; 590,273 and 578,898 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively; $14,877 liquidation preference at September 30, 2020		–			–
Common stock, $0.001 par value: 50,000,000 shares authorized; 32,236,994 and 30,274,601 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		32			30
Additional paid-in capital		268,390			265,825
Accumulated deficit		(251,154	)		(235,751	)
Accumulated other comprehensive income (loss)		(454	)		64
Total stockholders’ equity		16,814			30,168
Total Liabilities and Stockholders’ Equity	$	85,558		$	89,691

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

Youngevity International, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Revenues	$	34,002		$	33,380		$	102,525		$	112,789
Cost of revenues		14,248			13,642			42,938			40,522
Gross profit		19,754			19,738			59,587			72,267
Operating expenses
Distributor compensation		13,262			13,122			40,044			42,509
Sales and marketing		3,053			4,432			9,398			11,237
General and administrative		8,101			10,663			25,336			38,795
Total operating expenses		24,416			28,217			74,778			92,541
Operating loss		(4,662	)		(8,479	)		(15,191	)		(20,274	)
Other income (expenses), net
Interest expense, net		(658	)		(1,109	)		(1,917	)		(3,678	)
Change in fair value of warrant derivative liability		101			2,457			1,542			4,344
Loss on modification of warrants		-			(876	)		-			(876	)
Total other income (expenses), net		(557	)		472			(375	)		(210	)
Loss before income taxes		(5,219	)		(8,007	)		(15,566	)		(20,484	)
Income tax benefit		(147	)		(133	)		(163	)		(61	)
Net loss		(5,072	)		(7,874	)		(15,403	)		(20,423	)
Preferred stock dividends		(362	)		(85	)		(1,104	)		(127	)
Net loss attributable to common stockholders	$	(5,434	)	$	(7,959	)	$	(16,507	)	$	(20,550	)

Net loss per share, basic	$	(0.17	)	$	(0.27	)	$	(0.52	)	$	(0.71	)
Net loss per share, diluted (Note 1)	$	(0.17	)	$	(0.27	)	$	(0.52	)	$	(0.76	)

Weighted average shares outstanding, basic		32,233,622			30,035,182			31,479,884			28,924,305
Weighted average shares outstanding, diluted		32,233,622			30,039,676			31,479,884			29,003,331

See accompanying notes to condensed consolidated financial statements.

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Youngevity International, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net loss	$	(5,072	)	$	(7,874	)	$	(15,403	)	$	(20,423	)
Foreign currency translation		(299	)		9			(518	)		49
Total other comprehensive income (loss)		(299	)		9			(518	)		49
Comprehensive loss	$	(5,371	)	$	(7,865	)	$	(15,921	)	$	(20,374	)

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

Youngevity International, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(In thousands, except shares)

	Three Months Ended September 30, 2020
	Preferred Stock
	Series A				Series B				Series D				Common Stock					Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount		Capital			Loss			Deficit			Equity
Balance at June 30, 2020		161,135	$	-		-	$	-		590,273	$	-		32,216,599		$	32	$	268,473		$	(155	)	$	(246,082	)	$	22,268
Net loss		-		-		-		-		-		-		-			-		-			-			(5,072	)		(5,072	)
Foreign currency translation adjustment		-		-		-		-		-		-		-			-		-			(299	)		-			(299	)
Issuance of common stock for vesting of restricted stock units		-		-		-		-		-		-		31,416			-		-			-			-			-
Shares surrendered for tax obligations for employee restricted stock units		-		-		-		-		-		-		(9,632	)		-		-			-			-			-
Shares surrendered for prior year vesting due to forfeitures for non-employee restricted stock units		-		-		-		-		-		-		(1,389	)		-		-			-			-			-
Fair value of common stock issued related to advance for working capital (recorded in prepaid expenses and other current assets)		-		-		-		-		-		-		-			-		(101	)		-			-			(101	)
Dividends on preferred stock		-		-		-		-		-		-		-			-		(362	)		-			-			(362	)
Equity-based compensation for services		-		-		-		-		-		-		-			-		128			-			-			128
Stock based compensation expense		-		-		-		-		-		-		-			-		252			-			-			252
Balance at September 30, 2020		161,135	$	-		-	$	-		590,273	$	-		32,236,994		$	32	$	268,390		$	(454	)	$	(251,154	)	$	16,814

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Table of Contents

	Nine Months Ended September 30, 2020
	Preferred Stock
	Series A				Series B					Series D				Common Stock					Additional Paid-in			Accumulated Other Income			Accumulated			Total Stockholders'
	Shares		Amount		Shares			Amount		Shares		Amount		Shares			Amount		Capital			(Loss)			Deficit			Equity
Balance at December 31, 2019		161,135	$	-		129,332		$	-		578,898	$	-		30,274,601		$	30	$	265,825		$	64		$	(235,751	)	$	30,168
Net loss		-		-		-			-		-		-		-			-		-			-			(15,403	)		(15,403	)
Foreign currency translation adjustment		-		-		-			-		-		-		-			-		-			(518	)		-			(518	)
Issuance of common stock for conversion of Series B preferred stock		-		-		(129,332	)		-		-		-		258,664			1		-			-			-			1
Issuance of common stock for vesting of restricted stock units		-		-		-			-		-		-		39,750			-		-			-			-			-
Shares surrendered for tax obligations for employee restricted stock units		-		-		-			-		-		-		(9,632	)		-		-			-			-			-
Shares surrendered for prior year vesting due to forfeitures for non-employee restricted stock units		-		-		-			-		-		-		(1,389	)		-		-			-			-			-
Issuance of common stock for debt financing, net of issuance costs		-		-		-			-		-		-		50,000			-		65			-			-			65
Preferred stock-Series D issued through Underwritten Registered Public Offering, net		-		-		-			-		11,375		-		-			-		233			-			-			233
Fair value of common stock issued related to Nica Hemp Project		-		-		-			-		-		-		1,500,000			1		2,489			-			-			2,490
Fair value of common stock issued related to advance for working capital (recorded in prepaid expenses and other current assets)		-		-		-			-		-		-		-			-		(324	)		-			-			(324	)
Dividends on preferred stock		-		-		-			-		-		-		-			-		(1,104	)		-			-			(1,104	)
Equity-based compensation for services		-		-		-			-		-		-		125,000			-		429			-			-			429
Stock based compensation expense		-		-		-			-		-		-		-			-		777			-			-			777
Balance at September 30, 2020		161,135	$	-		-		$	-		590,273	$	-		32,236,994		$	32	$	268,390		$	(454	)	$	(251,154	)	$	16,814

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Table of Contents

Youngevity International, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(In thousands, except shares)

	Three Months Ended September 30, 2019
	Preferred Stock
	Series A				Series B				Series D				Common Stock				Additional Paid-in		Accumulated Other Comprehensive Income			Accumulated			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		(Loss)			Deficit			Equity
Balance at June 30, 2019		161,135	$	-		129,437	$	-		-	$	-		29,316,445	$	29	$	247,935	$	(5	)	$	(196,312	)	$	51,647
Net loss		-		-		-		-		-		-		-		-		-		-			(7,874	)		(7,874	)
Foreign currency translation adjustment		-		-		-		-		-		-		-		-		-		9			-			9
Issuance of common stock from exercise of stock options and warrants		-		-		-		-		-		-		790,942		1		3,630		-			-			3,631
Issuance of common stock, related to ATM Financing		-		-		-		-		-		-		16,524		-		96		-			-			96
Issuance of common stock for services		-		-		-		-		-		-		75,600		-		478		-			-			478
Issuance of warrants for services		-		-		-		-		-		-		-		-		414		-			-			414
Issuance of common stock for inducement shares		-		-		-		-		-		-		64,250		-		478		-			-			478
Preferred stock-Series D issued through Underwritten Registered Public Offering, net		-		-		-		-		333,500		-		-		-		7,323		-			-			7,323
Vesting of Restricted Stock Units		-		-		-		-		-		-		1,389		-		-		-			-			-
Warrant issued upon vesting for services		-		-		-		-		-

Youngevity International, Inc. [YGYI] Filings
Youngevity International, Inc. [YGYIP] Filings
10-Q	[2022-06-22]
10-Q	[2022-06-22]
10-Q	[2022-06-22]
10-K	[2021-06-25]
10-Q	[2019-11-18]
10-Q	[2019-08-14]
10-Q	[2019-05-20]
10-K	[2019-04-15]
10-Q	[2018-11-14]
10-Q	[2018-08-14]
10-Q	[2018-05-14]
10-K	[2018-03-30]
S-1	[2017-12-01]
10-Q	[2017-11-14]
10-Q	[2017-08-14]
10-Q	[2017-05-12]
10-K	[2017-03-30]
10-Q	[2016-11-14]
10-Q	[2016-08-12]
10-Q	[2016-05-13]
10-K	[2016-03-30]
S-1	[2015-12-29]
10-Q	[2015-11-16]
10-Q	[2015-08-13]
10-Q	[2015-05-14]
10-K	[2015-03-30]
10-Q	[2014-11-13]
S-1	[2014-10-03]
10-Q	[2014-08-13]
10-Q	[2014-05-14]
10-K	[2014-03-27]
10-Q	[2013-11-13]
10-Q	[2013-08-14]
10-Q	[2013-05-15]

Youngevity International, Inc. [YGYI] Filings

Youngevity International, Inc. [YGYIP] Filings