Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 13,
2018
YOUNGEVITY INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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000-54900
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90-0890517
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(State
or other jurisdiction of incorporation)
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(Commission
File No.)
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(IRS
Employer Identification No.)
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2400 Boswell Road, Chula Vista, CA 91914
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (619) 934-3980
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate
by check mark whether the registrant is an emerging growth company
as defined in in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth
company ☑
If an
emerging growth company, indicate by checkmark 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. ☐
Item 1.01. Entry into a Material Definitive
Agreement.
On
December 13, 2018, Youngevity International, Inc. (the
“Company”) closed the second tranche (the “Second
Closing”) of the private offering (the
“Offering”) of its common stock, par value $0.001 per
share (the “Common Stock”), with investors that
acquired securities in its private placement consummated in August,
September and October 2018. Pursuant to the terms of the securities
purchase agreement (“Purchase Agreement”) that the
Company had entered into with each investor, in addition to the
315,264 shares of Common Stock purchased by the investors in
August, September and October 2018 Stock at a price of $4.75
per share, the investors agreed to purchase from the Company an
additional 315,262 shares of Common Stock at a price of $4.75 per
share on or before the date that is three days from the
effectiveness of the registration statement filed by the Company
with the Securities Exchange Commission relating to the
Offering(the “Second Closing Date”). The Purchase
Agreement also provided that on the Second Closing Date the Company
will issue to the investors an aggregate of 75,000 shares of
Common Stock issued as an advisory fee, in addition to the 75,000
shares of Common Stock issued as an advisory fee in August,
September and October 2018. On December 10, 2018, the registration
statement was declared effective by the Securities and Exchange
Commission. At the Second Closing, the Company sold 315,262 shares
of Common Stock at an offering price of $4.75 per share and issued
75,000 shares of Common Stock as advisory fee.
Pursuant
to each Purchase Agreement, the Company had issued the investors
three-year warrants (the “Warrants”) to purchase an
aggregate of 630,526 shares of Common Stock at an exercise price of
$4.75, of which 315,264 shares were exercisable upon issuance and
the remaining 315,262 shares are exercisable at any time after the
Second Closing Date. The Warrants contain certain anti-dilution
provisions that apply in connection with a sale of Common Stock by
the Company at a price of below $4.75 per share, stock split, stock
dividend, stock combination, recapitalization of the
Company.
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 August 31, 2018 (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 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 Warrants, 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 Second Closing of
the Offering was $1,497,494. No commissions or other offering
expenses were paid.
The
foregoing description of the terms of the Warrant and Purchase
Agreement 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 and 10.1.,
respectively, to this Current Report on Form 8-K and are
incorporated herein by reference. The provisions of the Purchase
Agreement, 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.
In
addition, on December 13, 2018, the Company’s wholly owned
subsidiary, CLR Roasters, LLC, a Florida limited liability company
(“CLR”), entered into a Credit Agreement with Carl
Grover (the “Credit Agreement”) pursuant to which it
borrowed $5,000,000 from Mr. Grover and in exchange issued to him a
$5,000,000 credit note (“Credit Note”) secured by its
green coffee inventory under a Security Agreement, dated December
13, 2018 (the “Security Agreement”), with Mr. Grover
and CLR’s subsidiary, Siles Family Plantation Group S.A.
(“Siles”), as guarantor, and Siles executed a separate
Guaranty Agreement (“Guaranty”). In addition, Stephan
Wallach and Michelle Wallach, pledged 1,500,000 shares of the
Company’s Common Stock held by them to secure the Credit
Note under
a Security Agreement, dated December 13, 2018 (the “Wallach
Security Agreement”) with Mr. Grover. In connection with the
Credit Agreement, the Company issued to Mr. Grover a four-year
warrant to purchase 250,000 shares of its Common Stock, exercisable
at $6.82 per share (“Warrant 1”), and four-year warrant
to purchase 250,000 shares of its Common Stock, exercisable at
$7.82 per share (“Warrant 2”), pursuant to a Warrant
Purchase Agreement, dated December 13, 2018 (the ‘Warrant
Purchase Agreement”), with Mr. Grover. The Company also
entered into an Advisory Agreement (“Advisory
Agreement”) with Ascendant Alternative Strategies, LLC
(“Ascendant”) in connection with the Credit Agreement,
pursuant to which it agreed to pay to Ascendant a 3% fee on the
transaction with Mr. Grover and issued to Ascendant a four-year
warrant to purchase 50,000 shares of its Common Stock, exercisable
at the closing price of the Common Stock on December 13, 2018 (the
“Ascendant Warrant”).
The
foregoing description of the terms of Warrant 1, Warrant 2, the
Ascendant Warrant, the Credit Agreement, the Security Agreement,
Guaranty, the Wallach Security Agreement, the Warrant Purchase
Agreement and Advisory Agreement 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 4.2, 4.3, 4.4, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7,
respectively, to this Current Report on Form 8-K and are
incorporated herein by reference. The provisions of the Credit
Agreement and Security Agreement, 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 the Company’s Common
Stock, Warrants, Warrant 1, Warrant 2 and the Ascendant Warrant set
forth under Item 1.01 of this Form 8-K is incorporated by reference
in this Item 3.02. The Company issued to the investors the shares
of the Common Stock and the Warrants and issued to Mr. Grover and
Ascendant, respectively, Warrant 1, Warrant 2 and the Ascendant
Warrant, in reliance on the exemption from registration provided
for under Section 4(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.
Between December 13, 2018 and December 18, 2018, the Company issued
an aggregate of 1,242,394 shares of common stock to 35 holders of
the Company’s Series C Convertible Preferred Stock upon
conversion of 621,197 shares of Series C Convertible Preferred
Stock pursuant to the terms of the Series C Convertible Preferred
Stock and a warrant (the “Series C Warrant”) to each
holder to purchase an aggregate of 1,242,394 shares of common stock
pursuant to the terms of the Securities Purchase Agreement ( the
“Series C SPA”) that the holders had entered into with
the Company when they acquired the Series C Convertible Preferred
Stock. In addition, the Company issued Series C Preferred Warrants
to purchase an aggregate of 101, 937 shares of common stock to the
placement agents for the Series C Convertible Preferred Stock
pursuant to the terms of their placement agent agreement for the
offering which provides that the Series C Preferred Warrants are to
be issued to the placement agents to purchase such number of shares
of common stock as is equal to ten percent of the number of shares
of common stock underlying the Series C Preferred Warrants issued
to the investors introduced to the Company by them in the offering,
if and when the warrants are issued to the investors.. The Company
issued to the investors and placement agents the Series C Warrants
in reliance on the exemption from registration provided for under
Section 4(a)(2) of the Securities Act. The Company relied on
this exemption from registration for private placements based in
part on the representations made by the investors in the Series C
SPA. The Company issued the common stock upon conversion of the
Series C Preferred Stock in reliance upon Section 3(a)(9) of the
Securities Act as the issuance was made to an existing security
holder, there was no additional consideration paid for the common
stock and no commission or other remuneration was paid. The
foregoing description of the terms of the Series C Convertible
Preferred Stock, the Certificate of Designation of Powers,
Preferences and Rights of Series C Convertible Preferred Stock, the
Series C Warrant and Series C SPA 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 3.1, 4.5 and 10.8, respectively, to this Current Report on
Form 8-K and are incorporated herein by reference. The provisions
of the Series C SPA, 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 9.01 Financial Statements and
Exhibits.
(d)
Exhibits.
The
following exhibits are filed with this Current Report on Form
8-K:
Exhibit Number
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Description
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Certificate
of Designation of Powers, Preferences and Rights of Series C
Convertible Preferred Stock (Incorporated by reference to the Form
8-K filed with the Securities and Exchange Commission on August 21,
2018 (File No. 000-54900).
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Form of
Warrant (Incorporated by reference to the Form 8-K filed with the
Securities and Exchange Commission on September 7, 2018 (File No.
000-54900)
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Warrant,
dated December 13, 2018, issued to Carl Grover
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Warrant,
dated December 13, 2018, issued to Carl Grover
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Warrant,
dated December 13, 2018, issued to Ascendant Alternative
Strategies, LLC
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Form of
Warrant Agreement (Incorporated by reference to the Form 8-K filed
with the Securities and Exchange Commission on August 21, 2018
(File No. 000-54900)
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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)
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Credit
Agreement, dated December 13, 2018, by and among CLR Roasters, LLC,
Siles Family Plantation Group, S.A. and Carl Grover.
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Security
Agreement, dated December 13, 2018, by and among CLR Roasters, LLC,
Siles Family Plantation Group, S.A. and Carl Grover.
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Guaranty,
dated December 13, 2018, executed by Siles Family Plantation Group,
S.A.
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Security
Agreement, dated December 13, 2018, by and among Stephan Wallach,
Michelle Wallach and Carl Grover.
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Warrant
Purchase Agreement, dated December 13, 2018, between Youngevity
International, Inc. and Carl Grover.
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Advisory
Agreement, dated October 22, 2018 between Youngevity International,
Inc. and Ascendant Alternative Strategies, LLC (Incorporated by
reference to the Form 8-K filed with the Securities and Exchange
Commission on October 29, 2018 (File No. 000-54900)
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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 August 21, 2018
(File No. 000-54900)
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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YOUNGEVITY
INTERNATIONAL, INC.
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Date:
December 18, 2018
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By: /s/
David Briskie
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Name:
David Briskie
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Title:
President and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number
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Description
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Certificate
of Designation of Powers, Preferences and Rights of Series C
Convertible Preferred Stock (Incorporated by reference to the Form
8-K filed with the Securities and Exchange Commission on August 21,
2018 (File No. 000-54900).
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Form of
Warrant (Incorporated by reference to the Form 8-K filed with the
Securities and Exchange Commission on September 7, 2018 (File No.
000-54900)
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Warrant,
dated December 13, 2018, issued to Carl Grover
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Warrant,
dated December 13, 2018, issued to Carl Grover
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Warrant,
dated December 13, 2018, issued to Ascendant Alternative
Strategies, LLC
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Form of
Warrant Agreement (Incorporated by reference to the Form 8-K filed
with the Securities and Exchange Commission on August 21, 2018
(File No. 000-54900)
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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)
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Credit
Agreement, dated December 13, 2018, by and among CLR Roasters, LLC,
Siles Family Plantation Group, S.A. and Carl Grover.
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Security
Agreement, dated December 13, 2018, by and among CLR Roasters, LLC,
Siles Family Plantation Group, S.A. and Carl Grover.
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Guaranty,
dated December 13, 2018, executed by Siles Family Plantation Group,
S.A.
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Security
Agreement, dated December 13, 2018, by and among Stephan Wallach,
Michelle Wallach and Carl Grover.
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Warrant
Purchase Agreement, dated December 13, 2018, between Youngevity
International, Inc. and Carl Grover.
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Advisory
Agreement, dated October 22, 2018 between Youngevity International,
Inc. and Ascendant Alternative Strategies, LLC (Incorporated by
reference to the Form 8-K filed with the Securities and Exchange
Commission on October 29, 2018 (File No. 000-54900)
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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 August 21, 2018
(File No. 000-54900)
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