Youngevity International Inc. (OTCMKTS:YGYI) has issued an open letter to its shareholders detailing the restatement of financial statements and business updates.
Youngevity working its finances to be current
The company had previously engaged Malone Bailey LL as its auditors to work on its annual and quarterly financial statements for 2019 and 2020. Youngevity faced the challenge of delivering the statements on time because of a revenue recognition issue regarding its green coffee distribution business. This revenue recognition problem was isolated to Nicaragua operations. Most importantly, the company is expediting the new auditors’ process to complete necessary restatements and focus on being current on financial reporting. Youngevity anticipates completing the filing of 2019 financial reporting before March 15, 2021, to be current by July 15, 2021.
For now, the company’s shares will continue trading on OTC pink Market until the time the company will apply for relisting on a national securities exchange. As a result, the company intends to ramp up efforts to enhance its financial reporting and internal controls to speed up the relisting.
Youngevity’s business segments impacted by COVID-19
The company is operating three different business units including, the Commercial Hemp segment (CHS), Commercial Coffee (CC), and Direct Selling (DSS). In March last year, Youngevity announced plans for the DSS divesture, but for now, the company is focusing on leveraging the full potential of the three business units to optimize profits and revenue growth. The company could consider divesture once it becomes current with its financial reporting and evaluates national exchange listing opportunities.
Most importantly, the business segments have employed cost-cutting measures such as travel limits, staff reductions, eliminating unnecessary expenses, and minimizing fixed overhead. Because of the pandemic restrictions, the company’s DSS unit was forced to do away with marketing initiatives including, quarterly roadshows, incentive trips, and annual conventions. The CC segment experienced considerable challenges in 2020 because of the pandemic and its impact on the cruise line sector and delays in getting new mill operations running ahead of the 2021 season.