YOUNGEVITY INTERNATIONAL, INC. (OTCMKTS:YGYI) Files An 8-K Entry into a Material Definitive AgreementItem 3.02.Entry into a Material Definitive Agreement.
On September 7, 2018, Youngevity International, Inc. (the “Company”) closed the second round of its private offering (the “Offering”) of its common stock, par value $0.001 per share (the “Common Stock”), and entered into a Securities Purchase Agreement (the “Purchase Agreement”) with two existing accredited investors (the “Investors”) to which the Company sold 63,158 shares of its Common Stock at an offering price of $4.75 per share and the Investors agreed to purchase an aggregate of 63,157 shares of Common Stock at an offering price of $4.75 per share on or before the date (the “Second Closing Date”) that is three days from the effectiveness of the registration statement to be filed by the Company with the Securities Exchange Commission relating to the Offering (the “Registration Statement”).
to the Purchase Agreement, the Company issued the Investors Warrants to purchase an aggregate of 126,315 shares of Common Stock (at an exercise price of $4.75 per share, of which 63,158 shares are exercisable upon issuance and the remaining 63,158 shares are exercisable any time after the Second Closing Date) and agreed to issue to the Investors an aggregate of 45,000 shares of its Common Stock as an advisory fee, of which 22,500 shares have been issued and 22,500 shares are to be issued at the Second Closing.
On September 13, 2018, the Company entered into a Purchase Agreement with one additional existing accredited investor (the “Additional Investor”) in connection with the Offering to which the Company sold an aggregate of 21,053 shares of its Common Stock at an offering price of $4.75 per share and the Additional Investor agreed to purchase an aggregate of 21,052 shares of Common Stock at an offering price of $4.75 on or before the Second Closing Date. to the Purchase Agreements, the Company issued the Additional Investor Warrants to purchase an aggregate of 42,105 shares of Common Stock (at an exercise price of $4.75 per share, of which 21,052 shares are exercisable upon issuance and the remaining 21,053 shares are exercisable ant time after the Second Closing Date) and agreed to issue to the Additional Investor an aggregate of 15,000 shares of its Common Stock as an advisory fee, of which 7,500 shares have been issued and 7,500 shares are to be issued at the Second Closing.
Each Purchase Agreement provides that in the event that the average of the 15 lowest closing prices for the Company’s Common Stock during the period beginning on the execution date of such Purchase Agreement (the “Effective Date”) and ending on the date 90 days from the effective date of the Registration Statement (the “Subsequent Pricing Period”) is less than $4.75 per share, then the Company will issue to the Investors and Additional Investors additional shares of its Common Stock (the “True-up Shares”) within three days from the expiration of the Subsequent Pricing Period, according to the following formula: X= [Purchase Price Paid- (A*B)]/B, where:
X= number of True-up Shares to be issued
A= the number of purchased shares acquired by Investor
B= the True-up Price
Notwithstanding the foregoing, in no event may the aggregate number of shares issued by the Company, including shares of common stock issued, shares of common stock underlying the Warrant, the shares of common stock issued as advisory shares and True-up Shares exceed 2.9% of the Company’s issued and outstanding Common Stock as of the Effective Date for each $1,000,000 invested in the Company.
The cash proceeds received by the Company from the closing of the second round of the Offering and sale to the Additional Investor were $400,000, less $6,000 as an allowance for the Investors’ legal fees. No commissions or other offering expenses were paid.
to the terms of Registration Rights Agreements executed by each of the Investors and the Additional Investors, the Company has agreed to file a registration statement with the Securities and Exchange Commission to register the shares of Common Stock issued at the closings of the Offering and the shares of Common Stock issuable at the Second Closing, as well as the True-up Shares and shares to be issued upon exercise of the Warrant.
The foregoing description of the terms of the Warrants, the Purchase Agreements and the Registration Rights Agreements do not purport to be complete and is subject to, and are qualified in their entirety by reference to the provisions of such agreements, the forms of which are filed as Exhibits 4.1, 10.1. and 10.2, respectively, to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 7, 2018 and are incorporated herein by reference. The provisions of the Purchase Agreements, including the representations and warranties contained therein, are not for the benefit of any party other than the parties to such agreement and are not intended as a document for investors and the public to obtain factual information about the current state of affairs of the parties to that document. Rather, investors and the public should look to other disclosures contained in the Company’s filings with the Securities and Exchange Commission.
Item 3.02. Unregistered Sales of Equity Securities.
The information regarding the shares of Company and the warrants set forth under Item 3.02 of this Form 8-K is incorporated by reference in this Item 3.02. The Company issued to the shares of the Company’s common stock and the Warrants in reliance on the exemption from registration provided for under Section4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company relied on this exemption from registration for private placements based in part on the representations made by the Investors, including the representations with respect to Investor’s status as an accredited investor, as such term is defined in Rule 501(a) of the Securities Act, and Investor’s investment intent.
Item 3.02Financial Statements and Exhibits.
The following exhibits are filed with this Current Report on Form 8-K:
Form of Warrant Agreement (Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on September 7, 2018 (File No. 000-54900)
Form of Securities Purchase Agreement between Youngevity International, Inc. and Investor (Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on September 7, 2018 (File No. 000-54900)
Form of Registration Rights Agreement between Youngevity International, Inc. and Investor (Incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on September 7, 2018 (File No. 000-54900)
About YOUNGEVITY INTERNATIONAL, INC. (OTCMKTS:YGYI)
Youngevity International, Inc. is an e-commerce company. The Company operates through two segments: the direct selling segment where products are offered through a global distribution network of customers and distributors, and the commercial coffee segment where products are sold directly to businesses. The Company offers over 2,500 products to support a healthy lifestyle. All of these products, which are sold through its direct selling network, are categorized into over 11 sub-product lines. In the direct selling segment, the Company sells health and wellness, beauty product and skin care, scrap booking and story booking items, and packaged food products on a global basis, and offers a range of products through an international direct selling network. The Company is engaged in the commercial sale of coffee through its subsidiary CLR Roasters, LLC (CLR) and its subsidiary. Its brands include Cafe La Rica, Javalution Daily Grind, Javalution Royal Roast, SOZO Global and Integris.