SAN DIEGO, March 12, 2020 /PRNewswire/
-- Youngevity® International,
Inc. (NASDAQ: YGYI), a
leading multi-channel lifestyle company operating in three
distinct business segments including a commercial coffee enterprise
and a commercial hemp enterprise, announced today that the company
is exploring the divestiture of its direct selling business unit
back to the original founders of the direct selling division and
has entered into a non-binding term sheet regarding a potential
transaction with Steve and Michelle
Wallach.
The company's board of directors has formed a special committee
consisting of all of its independent directors to review and
consider the terms of the proposed transaction. The special
committee has engaged an investment banking firm to review the
fairness of the proposed transaction to stockholders.
Some of the basic considerations outlined in the non-binding
term sheet include the proposed sale to the company of
approximately 14 million shares of Youngevity's capital stock held
by the Wallachs and termination of stock options, the forgiveness
of approximately $80,000,000 of
inter-company debt owed by the Company to the direct selling
business unit and the post-closing working capital level of the
direct selling business unit to be mutually determined. It is
expected that the terms and conditions of any transaction with the
Wallachs will be set forth in a definitive purchase agreement and
other ancillary documents to be negotiated between the parties, and
that the conditions to closing will include receipt of a fairness
opinion and stockholder approval of the transaction.
"I believe that the potential of this divestiture strengthens
the opportunity for all stakeholders and the focus that this will
bring to the various divisions will allow both the public company
and the direct selling division to thrive and better leverage their
core competencies. The sales and supply agreements that will
exist between the two entities, post divestiture, should allow for
a seamless transition that benefits both companies," said
Steve Wallach, Youngevity CEO.
He continued, "The trust and respect and the strong
relationship we have built with our President and CFO, Dave Briskie, provides us with a great deal of
optimism that this potential transaction can provide a long-term
beneficial relationship between our companies and all
stakeholders."
"We are grateful that we are a stronger company today in
part due to the incredible partnership that began with Dave Briskie and the Javalution Coffee Company
(now CLR Roasters) over the past 9 years. When we made the
decision to merge into the public company, our goal was to reach
more people around the world and heighten the awareness of Dr.
Wallach's message. Through this collaboration we believe we
have accomplished this goal and we are certain that this
relationship will continue to prosper in the event we can bring
this potential transaction to close," said Michelle Wallach, COO of Youngevity. She
continued, "Youngevity will always remain committed to innovating
the best health and wellness products that it can develop based on
the foundation of Dr. Wallach's research."
In the event the transaction is completed, it is expected that
the newly formed entity that acquires the Direct Selling Division
will retain the Youngevity tradename and the public company
will be re-branded with a new name and new stock symbol,
Steve Wallach would resign as a
Director, Chairman and CEO of the public company and become CEO and
President of the newly formed entity that acquires the Direct
Selling Division, Michelle Wallach
will resign as COO of the public company and serve as the COO of
the newly formed entity that acquires the Direct Selling Division
and Dave Briskie would become the
CEO of the public company.
Dave Briskie, Youngevity
President and CFO stated, "We believe the public markets have not
appropriately valued our securities due to the multi-division model
that we created including lower valuations on multiples of revenue
than we would like to see coming from our Direct Selling Division
on a stand alone basis. Further, we believe it will be much
more efficient from a public company expense standpoint to
eliminate the additional expense incurred as a result of the
reporting requirements associated with the Direct Sales Division's
international offices. We anticipate that focusing and
investing more heavily into our hemp enterprise (Khrysos
Industries) and our coffee enterprise (CLR Roasters) field to
finish models is the best way to maximize growth, profits, and
unlock shareholder value going forward." He continued, "If
this transaction comes to a successful close, we expect there will
be very little change, if any, experienced by our distributors, our
customers, and our employees. For all, it should still feel
like business as usual."
About Youngevity International, Inc.
Youngevity International, Inc. (NASDAQ: YGYI and YGYIP), is
a multi-channel lifestyle company operating in three 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.
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 the
potential transaction with Steve and
Michelle Wallach, the potential of the divestiture to
strengthen the opportunity for all stakeholders and focus the
various divisions to thrive and better leverage their core
competencies, the sales and supply agreements that will exist
between the two entities, post divestiture, allowing for a seamless
transition that benefits both companies, the potential transaction
providing a long-term beneficial relationship between our companies
and all stakeholders, the expected efficiencies from a public
company expense standpoint, focusing and investing more heavily
into our hemp enterprise (Khrysos Industries) and our coffee
enterprise (CLR Roasters) field to finish models to maximize
growth, profits, and unlock shareholder value going forward, and
the expected change, if any, experienced by our distributors, our
customers, and our employees. Important factors that could
cause actual results to differ materially from current expectations
include, among others, our ability to consummate the potential
transaction with Steve and Michelle
Wallach, negotiate a definitive agreement and secure all
required approvals and closing conditions, including receipt of a
fairness opinion and shareholder approval regarding the
transaction, our ability better leverage our respective core
competencies, our ability to effect a seamless transition that
benefits both companies, our ability to maintain a long-term
beneficial relationship between our companies and all stakeholders,
our ability to implement efficiencies from a public company expense
standpoint, our ability to maximize growth, profits, and unlock
shareholder value going forward by focusing and investing more
heavily into our hemp enterprise (Khrysos Industries) and our
coffee enterprise (CLR Roasters) field to finish models, our
ability to minimize the expected change experienced by our
distributors, our customers, and our employees, our ability to
drive revenue and further growth, our ability to return to
profitability, expand our liquidity, and strengthen our balance
sheet, our ability to continue to maintain compliance with the
NASDAQ requirements, our ability to expand our distribution, our
ability to add additional products (whether developed internally or
through acquisitions), and the other factors discussed in the
preliminary prospectus supplement and accompanying base prospectus
and 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.
Contacts
Youngevity International, Inc.
Dave Briskie
President and Chief Financial Officer
1 800 982 3189 X6500
Investor Relations
YGYI Investor Relations
800.504.8650
investors@ygyi.com
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SOURCE Youngevity International, Inc.