ITEM 1. LEGAL PROCEEDINGS
From time to time, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company defends itself vigorously against any such claims. Although the outcome of these matters is currently not determinable, management expects that any losses that are probable or reasonably possible of being incurred as a result of these matters, which are in excess of amounts already accrued in its condensed consolidated balance sheets would not be material to the financial statements as a whole.
On March 23, 2016, we filed a lawsuit against Wakaya Perfection, LLC and several of its executives, including our former president William Andreoli, or agents in the United States District Court for the Southern District of California. The lawsuit is captioned Youngevity International Corp. v. Todd Smith, et al., No. 16-cv-0704-W-JLB (S.D. Cal. 2016).
The lawsuit alleges, inter alia, that executives and investors in Wakaya Perfection unlawfully breached their contractual agreements with Youngevity, including non-compete clauses, and intentionally interfered with our existing distributor relationships through unlawful conduct. The defendants include individuals who held positions within Youngevity, but departed to begin a competing direct networking business. Our lawsuit seeks damages and injunctive relief restraining the defendants from misappropriating proprietary Youngevity information.
