Youngevity International Inc (fka YGYI)

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COMPANY UPDATE!!! Dear Valued Investors,

As we begin this New Year, we want to thank each and every shareholder for your continued loyal support of Youngevity International and to extend our best wishes to you for a very happy and prosperous 2015.Over the course of this past year our Company has achieved a great deal that we expect will help us set the stage for growth in fiscal 2015 and beyond. We have built a solid foundation for our Company as we work toward our objective of becoming a significant participant in the global marketplace.Our entire team is dedicated to our international expansion effort and we will work tirelessly and diligently to meet our global growth objectives. We believe success on the global platform will provide the greatest return to our shareholders.As we work to seize the opportunities ahead of us, we think it is important to look back at the significant strides we have taken over the past year.The Company has experienced record growth in 2014 for both its direct selling and coffee division. For the nine months ended September 30, 2014, our revenue increased 53.7% to $96,740,000, as compared to $62,932,000 for the same period in 2013. In the third quarter of 2014 our direct selling division grew 62.7% year over year and our coffee division was up 219%. We are proud to report nine consecutive quarters of profitable results and we look forward to announcing our fourth quarter and year-end results at the end of the first quarter.In our Direct Selling Segment:Youngevity has shown an impressive growth rate over its 18- year history and has distinguished itself as a leader in the direct selling industry. Youngevity was named among the top 100 Direct Selling Companies in the world for a second year in a row and now offers more than 1,000 high-quality nutritional and lifestyle products to over 120,000 distributors and customers.The Company continues to grow organically on the back of the 90 for Life protocol. 90 For Life is a powerful marketing message and this protocol consisting of Beyond Tangy Tangerine, EFA Plus, and Osteo FX continues to drive the sales of Youngevity’s best-selling products.The Company also continues to leverage acquisitions and its marketing muscle achieved through acquisition. The Company quickly leveraged the assets of Heritage Makers moving into the traditional scrap booking. This expanded initiative was provided a shot in the arm when the founder of Creative Memories joined Youngevity.To further leverage the growing group of women purchasing Youngevity products, the Company strategically expanded into additional categories and during the year aligned with celebrity fashion designer, Marisa Kenson, to enter the apparel and accessories market. We are proud to have added this category to our growing line of products and leverage our visionary CFO, Dave Briskie’s 18- years of experience in this significant market. To support this effort, Youngevity launched a state-of-the-art e-tailing boutique website at http://www.mkcollab.com/ designed to create an extraordinary shopping experience for our growing community of distributors and customers. We believe that Marisa Kenson’s clothing and accessories line integrates well with Youngevity’s makeup and skin care products and uniquely positions Youngevity in the direct selling industry.We believe that international markets represent the greatest future opportunity for Youngevity, as we currently have only 9 percent of our total sales revenue derived from outside the United States. The Company announced an international expansion strategy in 2014, establishing an office in Mexico and Russia, and executing a strategy focused on penetrating growing direct selling markets in Eastern Europe, Israel, Chile, and Colombia. We expect these countries to accelerate our sales growth in the near future and we are already in the process of getting regulatory approvals to set up organizational infrastructure in those countries.In order to fortify our strategic global expansion strategy, Youngevity strengthened its global expansion team with the addition of experienced industry veterans with proven track records. We are committed to increasing operations in countries and markets that we believe represent long-term growth opportunities for our direct selling business.Youngevity continues to grow both through organic growth and strategic acquisitions. Our acquisition model continues to prove to be very effective and we are proud of the success we are experiencing. During the 2014 year, we entered into three acquisitions strategically focused on expanding Youngevity’s distributor network and enhancing our product portfolio. We remain committed to growing aggressively through acquisitions as the Company has completed 12 acquisitions and/or marketing alliances since 2010 and has been strategically expanding into new and complementary product lines.The Company made a strategic investment of $750,000 to optimize our operations and improve our existing distribution facility to support our US and international growth. We have increased our warehouse storage and throughput capacity by 100% to meet higher customer and global shipment product demands. Youngevity also established a new banking relationship with Wells Fargo Bank and entered into a $2.5 million revolving line of credit agreement with Wells Fargo to support our various growth initiatives in international markets and strategic acquisitions.In our Coffee Segment:CLR Roasters was off to a fast start in 2014 as we announced a two year $2.5 million dollar contract with JBM Sales & Marketing to expand the distribution of Javalution Urban Grind Brand in the United States, Canada, and several European countries. CLR also expanded its coffee distribution for its Café La Rica Gourmet Espresso brand into five additional Sam’s Club stores in Florida, and for the first time, Café La Rica and Josie’s Java House Premium Blend and Hazelnut Cream coffees may be purchased on the Walmart website.CLR Roasters completed its plan to be a vertically integrated producer of gourmet coffees through the acquisition of a coffee plantation and processing facility located in the ideal coffee growing region of Matagalpa, Nicaragua. The plantation produces 100 percent Arabica coffee beans that are shade grown, organic, Rainforest Alliance Certified™ and Fair Trade Certified™.The coffee plantation and processing facility acquisition coupled with our existing U.S. based coffee roaster facility allows CLR Roasters to control the coffee production process from field to cup. We believe that our vertically integrated coffee operation provides us with a competitive advantage and provides a unique value proposition that does not presently exist within the direct selling industry.The processing facility has the capacity to allow us to handle over 30 million pounds of green coffee and we used this capacity to launch our green coffee sales and distribution division. During the year our coffee operation announced distribution contracts totaling $9.3 million dollars in gross revenue for the company’s recently launched Green Coffee distribution business. In anticipation of continued growth of this division we invested $500 thousand dollars in capital expenditures to expand the throughput within our processing plant.To support the growth of our vertically integrated coffee division, CLR Roasters reached terms on a new 10 year lease agreement to increase the size of the Company’s existing production and distribution facility located in Miami, FL from 38,500 to 50,000 square feet. We have invested just over $575,000 in new equipment and plant improvements at CLR Roasters to support current and future business needs.In September, 2014, the Company completed a $4.75 million private placement in which it issued five year convertible notes in the aggregate principal amount of $4.75 million and warrants exercisable at $.23 per shares to purchase 18,586,956 shares of common stock and has begun investing the net proceeds of the offering to fund the purchase of K-Cup manufacturing equipment, to fund capital improvements on its Nicaragua coffee plantation and processing plant, and to execute its option to acquire a second 450-acre coffee plantation that will double the Company’s capacity. The notes are secured by certain assets of CLR Roasters and Company’s CEO, Stephen Wallach, has also personally guaranteed the Company’s obligations under the Notes.CLR Roasters also signed a five year agreement totaling up to $10.4 million dollars in revenue with JBM Sales & Marketing, which strengthened the continued expansion of our private label business and positively impacted our business immediately. Upon the expiration of the five-year term and assuming certain conditions are met, the agreement provides for automatic renewals for successive terms of five years.We are off to a great start in 2015 as CLR Roasters recently announced that we have received commitments to purchase 15 million pounds of green coffee, all of which we intend to process in our newly acquired and expanded processing plant in Nicaragua. The estimated revenues from these commitments are over $26 million dollars, which we expect to receive between the months of January 2015 through November 2015. We are pleased with the strategic investments that we have made to grow our green coffee business and our green coffee sales continue to exceed our expectations.The Company recently entered into a Note Purchase Agreement and raised in a private placement gross proceeds of $5,050,000 with up to an additional $950,000 of funds possible. The notes are secured by certain assets of CLR Roasters and Stephen Wallach, has also personally guaranteed the Company’s obligations under the Notes.Also in January of 2015, Youngevity announced that it has partnered with Energy Professionals to launch “The Choice Energy Program” to provide Energy Professionals energy and natural gas services to Youngevity’s network of distributors and customers. Our goal is for this partnership to provide the best energy services to our customers and allow our distributors to share in the $500 billion dollar energy industry.As we enter the New Year, we are excited to announce that the Company has received additional research coverage. Solaris Select, Inc. recently initiated coverage of Youngevity International and the 25 page YGYI research report is available by clicking on the following link at http://www.solarisselect.com/reports/ygyi/YGYI-2015-01-21.pdf.As we move forward with our international expansion plans, we also intend to intensify our own public relations efforts. We will look to take every opportunity and make every effort to raise the profile of our Company with the investment community to increase our corporate visibility and unlock the true value of what we are building here at Youngevity International.We are excited about the opportunities ahead of us and believe that we are well positioned to deliver another record year in 2015.We thank you for your support and look forward to maximizing shareholder value for our loyal shareholders.Sincerely, 
Stephan Wallach
Chief Executive Officer
Youngevity International, Inc.
David Briskie
Chief Financial Officer
Youngevity International