Youngevity International, Inc.
Q4 2016 Earnings Call Transcript

Published: 31 Mar 2017

[Operator:]

Welcome to the Youngevity Shareholder Call. During this call, we will be making forward-looking statements regarding Youngevity's current expectations and projections about future events. Generally the forward-looking statements can be identified by terminology such as may, should, expects, anticipates, intends, plans, believes, estimates and similar expressions. These statements are based on current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties, including those set forth in Youngevity's filings with the SEC many of which are difficult to predict. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. The information on this call is provided only as of the date of this call, and Youngevity undertakes no obligation to update any forward-looking statements contained on this conference call on account of new information, future events, or otherwise, except as required by law. It is my privilege to turn this call over to Youngevity’s CEO, Steve Wallach.

[Steve Wallach:]

Thank you, Alex. Good afternoon and welcome to the Youngevity International 2016 Annual review shareholders call. In addition to myself today’s speakers are, our President and CFO of Youngevity, Dave Briskie; our CMO, Loren Castronovo. On today’s call, we will cover the following topics, we will highlight 2016 financial performance, we will discuss our global expansion, we will discuss our marketing initiatives, we will talk about the uplifting process, and we will talk about an exciting new product launch and delivery system. What I would like to do right now is turn the call over to our President and CFO, Dave Briskie.

[Dave Briskie:]

Thank you, Steve, and hello our shareholders. Welcome to the call and thank you for attending. Want to start off by saying that we continue to create an initiative of really being a trendsetter in creating our own space. We talk about being on a mission to transform an industry and I like to say even more than that we're creating a unique space through combining everything great about direct selling that higher tech, high touch influence with a growing and powerful shift and adoption by consumers of e-commerce or at home or social or online shopping all combined into one company, which we coin as an on omni-direct company. Youngevity operates in broad multiple consumer sectors or various vertical markets and we've invested heavily in the creation of a powerful cloud-based portal platform that will provide us an opportunity to onboard companies, on board products, and on board companies or products or even technologies in a quick manner and bring it to produce commerce quickly by attaching to this portal. All the speakers today on the call will talk about this shift and what we are creating and why it is unique and it’s exciting for Youngevity and its shareholders. I'm going to briefly discuss the 2016 highlights. First of all on a very top level, our 30,000 foot view revenue increased almost 4% over prior year to just under $163 million. Gross profit increased 5.6% to $98.1 million, compared to prior year. Our operating income has decreased 53.5% to $2.5 million compared to prior year, and our net loss decreased to $398,000 compared to a net loss of $1.7 million in 2015. In the last quarter of the year, we invested heavily in compliance initiatives and throughout the year, we executed initiatives to eliminate lower margin components of our coffee segment. These initiatives certainly had a drag on our top line sales, but we felt with our upcoming initiative to move to uplist that there were important initiatives for the company to partake. We believe that increasing our gross margins is in the best interest of all the stakeholders and we believe that a very big focus on compliance, particularly as we look to a potential uplisting with the NASDAQ that compliance initiatives must be very top line and we must do all we can to make sure that we protect our revenue streams, protect our shareholders, and of course protect our distributors. So, we amped that up pretty significantly, particularly in the fourth quarter. Let's get straight to the results now. For the year ended December 31, 2016, our revenue increased 3.9% to $162 million, as compared to $156,597 for the year ended 2015. During the year 2016, we derived approximately 89% of our revenue from our direct sales and approximately 11% of our revenue from our commercial coffee sales segment. The direct selling segment revenues increased by $6.5 million or 4.7% to $145.4 million, as compared to the year of 2015. This increase was primarily attributed to additional revenues of just over $9.6 million derived from the company's new acquisitions, and it was offset by a decrease of $3.1 million in revenues from other existing business channels. For the year ended December 31, 2016, commercial coffee segment revenues were basically flat as compared to the year before. Cost of revenues. Overall cost of revenues increased approximately 1.4% to $64.5 million, as compared to $63.6 million for the year ended December 31, 2015. The direct selling segment cost of revenues increased 6.4% as relative to cost related to increased sales of shipping, increases in product royalties and labor costs, and this was offset by a decrease in shipping costs. The decrease in cost of revenues in the commercial coffee segment of 10.8% is attributable to decreases in sales related to the roaster business and lower green coffee costs a result of the company's ability to procure green coffee at lower costs from its plantation and other suppliers in Nicaragua. In terms of gross profit, it increased approximately 5.6% to just over $98 million, as compared to just under $93 million for the year ended 2015. Gross profit as a percentage of revenues increased to 60.3%, compared to 59.4% in the prior year. Our operating expenses increased approximately 9.2% to just over $95.6 million, as compared to just over $87.5 million for the year ended 2015. Included in operating expenses is distributor compensation paid to our independent distributor in the direct selling segment. For the year ended December 31, 2016, distributor compensation increased 6.1% to just over $67.1 million from $63.2 million for the year ended December 31, 2015. This increase was primarily attributed to added incentive payouts and higher level achievements by our distributors. Sales and marketing expenses increased 26.8% in 2016 to just over $10.4 million from just over $8.2 in the prior year, primarily due to increases in marketing and customer service staff direct labor and benefits costs, providing our marketing costs and convention costs and distributor event costs were up significantly. Sales and marketing expenses supporting all of our international markets contributed greatly to this expense increase. General and administrative expense increased in 2016 by 12.4% to just over $18 million from just over $16 million for the year ended December 31, 2015, primarily due to increases in costs related to the international expansion, employee labor, international employee labor and benefits costs, consulting fees, amortization costs, computer and internet related costs, travel costs, and it was offset primarily by a decrease in non-cash expense of our warrant modification expenses and a benefit derived from a contingent liability revaluation. In 2016, total other expense decreased by $2.6 million to $3.1 million, as compared to $5.7 million for the year ended December 31, 2015. Total other expenses is primarily net interest expense of just over $4.4 million and the change in fair value of warrant derivative of $1.3 million. For the year ended 2016, the company reported a net loss of $398,000 as compared to a net loss of $1.7 million for last year. EBITDA improved from $7.5 million in 2015 to $7.7 million in 2016. Adjusted EBITDA, which is EBITDA (earnings before interest, income tax, depreciation and amortization) as adjusted to remove the effective stock based compensation expense and the non-cash loss on extinguishment of debt and the change in fair value of the warrant derivative or adjusted EBITDA, decreased 26% to $6.7 million for the year ended 2016, compared to $9.2 million in the same period for the prior year. We believe and our management believes that adjusted EBITDA, which is a non-GAAP term when viewed with our results under GAAP and the non-accompanying reconciliations, provides useful information about our period over period growth. Adjusted EBITDA is presented because management believes it provides additional information with respect to the performance of our fundamental business activities and is also frequently used by securities analysts. I encourage all of you to review our financial numbers posted on virtually all financial sites, which will be released later today and will also be realized on our ygyi.com site. If you have any questions, I encourage you to send us an email and we will be happy to respond to those questions. I would now like to turn the call over to CEO, Steve Wallach to discuss why this year we are bullish on the expansion of revenue within our international markets.

[Steve Wallach:]

Thanks Dave, thank you for that thorough overview as well. I would like to start with Canada, Canada continues to present a significant opportunity for growth, obviously is part of our North American overall market and it is our second largest current market in terms of sales revenue, it is our single largest market in terms of international revenue, although that’s changing as well. And so it's a huge opportunity because obviously it is connected to the United States trading partner - partner with United States, and people in Canada are easy for us to communicate with in terms of time zones and geographical locations, mainly an English speaking country, obviously as well. And so they get our message. They have grown right along with United States all along, but it continues to be a great growth opportunity for us because we’re continuing to work on ways of increasing our marketing and our marketing presence within Canada, and so we see that as a huge opportunity and we’re moving down that track. So Canada continues to be this great opportunity that we see increasing in terms of sales and revenue and activity on an ongoing basis. And so in the next year, we anticipate doing a lot more in terms of marketing activity within Canada, and we anticipate more revenue from Canada, as well. So, we have an event coming up in Toronto at the end of April for example, and we’re excited about that. I would like to jump over to Mexico for a minute. We just, speaking of events, we just had our first major corporate event March 24 and 25 in Guadalajara. I am going down to Mexico this next week, we have another event further down in Mexico, many of the people from the corporate offices and key distributors are also going down to Mexico this next week, but the event in Guadalajara, the past weekend was fantastic. It was an amazing event, the corporate staff did an amazing event, the distributors did it amazing and Dave Briskie and Sunshine Briskie went down to Guadalajara. I was down in Guadalajara, Scott and Juliet [indiscernible] in Guadalajara. And Sean Brown was down in Guadalajara. Susana Azócar, our country manager did an amazing job with the team there, and so in terms of attendance, we had well over 600 people in attendance with other parts of Mexico, participating, it was well over 1000 people that benefited from that information in the messaging and really the first, great experience and great look within or into what Youngevity and omni-direct and betterment are all about. There was a major amount of excitement and enthusiasm from that event, so it was very exciting. My father also went down and spoke to everybody and delivered the 90 for life message. He was interviewed by several television and radio and newspaper outlets and the message was received very enthusiastically. Those outlets had a reported reach of over 10 million people, so we are extremely excited about what’s going on in Mexico and Latin America and in fact today I was notified we received another product approval for - it was Ultimate Flora and so another one of our very popular products and that was for Colombia, that was slipping the tip of my tongue, sorry about that, but it was exciting. So the expansion into Latin America represents a huge opportunity. We are really just getting started. With that said, we put out a press release just recently about RicoLife being acquired by Youngevity and partnering with Youngevity several other key leaders also spoke and founders spoke at our event in Mexico, and definitely that adds more horsepower to the Latin and Latino market, but also the generation x millennial’s market if you will. This is a very young group of distributors very enthusiastic, very enthusiastic about Youngevity and our messaging, very enthusiastic about the expansion internationally, but certainly into Latin America. So with all of that said, this whole initiative is showing great promise based on what we’re seeing in Q1. Revenue is tracking up 50% over last year and we see this accelerating. This is in relation to our Latin America markets. So now I’m going to jump over to Australia and New Zealand. Australia and New Zealand there is a lot of activity happening there. A lot of promise, a lot of very positive things, in fact I just came back not long ago from Australia. We had an event in November or this last year. That was a great event. We are already planning, we already have our next event planned for this upcoming November in New Zealand, but many meetings in between now and then a lot going on, definitely exciting. Now of to Asia, so you can see there is a lot of international things happening with Asia. And we put out just put out a press release about acquiring a company called BellaVita, and BellaVita their primary presence has actually been in Southeast Asia, and it’s a US company, a US-based company that – their products are amazing, their packaging is amazing, their presence throughout Southeast Asia and the opportunity that that acquisition represents is amazing. So Sean Brown, while and Lisa Brown was in Mexico launching Mexico at our events this last week, her husband Sean Brown who is an employee of Youngevity as well came in with their company Mialisia you may remember, was up in Southeast Asia with the founders of the BellaVita and the key distributors of BellaVita, launching and introducing Youngevity and launching the Youngevity message and the 90for life messaging throughout Southeast Asia. So Sean Brown did meetings in Taipei, Taiwan, Indonesia, Malaysia, Singapore, Hong Kong, he is off to China today, and so all sorts of exciting things going on there. So definitely stay tuned for really what that’s all about, but a lot of energy, a lot of excitement and so you can see that Youngevity now, what we have been talking about this international expansion for the past year, past two years and now you're seeing it happen, and so these meetings are met with a lot of enthusiasm, a lot of energy, sales, revenue activity meetings, more meetings and so it is very, very exciting. So our presence in Asia now consists a real presence of field and leadership in Singapore, the Philippines, Taiwan, Indonesia, Malaysia, Hong Kong, Japan, and we are expanding from there. Our office in the Philippines is a beautiful office, our office in Singapore is amazing, it is beautiful, and the Philippines office is just opening. The staff is now currently being trained with product approvals that are being made. We are in the process of about to begin shipping products to the Philippines. Where we're starting is with our core products or 90 for life message to products and so definitely a lot of excitement and enthusiasm to get the products there. In fact, Dave and I had a meeting with many of the US leaders that are either Filipino, or with contacts in the Philippines or excited about the Philippine launch and they are very, very enthusiastic as well. So that is no greater potential than these markets both in terms of population and in terms of the quality and acceptance through our distribution platform. We have been making significant investments in human resources, infrastructure, John Taylor from our IT department just came back from the Philippines. It was a whirlwind trip just to make sure all the IT things were connected. The communications, the phone systems, the computer systems were all linked and connected with our US headquarters and so again just all sorts of things happening and tons of excitement. So with all of that we are building a strong and capable team of executives that understand our vision and are committed to making it all happen on a very high level. One of those key executives who is on our last shareholder call would like to provide an update on her initiatives to take place in marketing. I would like to now bring on to our call, our Chief Marketing Officer, Loren Castronovo.

[Loren Castronovo:]

Thank you, Steve. I’m happy to be on the call today. Hello everyone. I’ll provide a brief update on brand and marketing activity, as well as cash position for the next several months. So, on the last call I mentioned that I was going to gather the first-class marketing team and we’ve got a great team. And it is going to continue to grow over the next year. Right now we are organizing in a way that positions us to be nimble and successful. We are working towards portfolio or vertical management. With vertical leans that will be responsible for building out the plans and financial metrics for each vertical. So in a nutshell, the structure focuses on cross functional collaboration across the company and helps guide the right investment decisions, enables agile delivery of products and services, and enables cohesive launch plans and promotions. At the end of the day, this is good for everyone, our shareholders, our field, our customers and our employees. It also helps us deliver on our commitment to help people pick their passion, as well as swap where they shop. As an example, we recently created a general company introduction presentation, and at the end of April we will begin working with leaders to create vertical specific presentations and party scripts and workshops. Vertical management will allow us to make each vertical as strong as it can be. In addition to portfolio or vertical management, we are building out the creative services team recognition and we’ve rounded out our events team. And speaking of events Steve mentioned the international events in January. In the US, we held simultaneous regionals in three cities across the country and these meetings were focused on goal setting and kicking off the year with energy and training. And the exciting thing is that we exceeded our attendance goal by over 100% and by all accounts these events were a great success. So, now the events team is focused on our August convention in Dallas. And having lived in Dallas, I can definitely say everything is bigger in Texas. And since it is our 20th year celebration, you can imagine the effort that is going into it. The exciting news is that we are already over a 30% increase in attendance versus last year and it’s only March. So, we’re going to go big and we want to see double the attendance this year. So, I invite everyone on the call to join us, where we will kick off our bold March into the next 20 years. One of the big projects we have been working on is our rebranding efforts. In February, we officially unveiled our new logo, which reflects our positioning as in omni-direct lifestyle company and signaled our transformation in growth to a full spectrum products and service marketplace. Now, omni-direct lifestyle company may sound like a mouthful, but it really boils down to the fact that we will be providing multiple points of engagement with our company. And we in the say lifestyle, it is all about representing at least six of the top selling retail categories, representing trillions of dollars in global consumer spending. The idea of a virtual Main Street of brands is really resonating with people and is one of the things that’s attracting people to us. This is a company that’s built on the pioneering spirit of Dr. Wallach. So as we move into our next 20 years, we will do so boldly to help pioneer the next generation of direct sales. And rebranding is much more than a logo change. As many of you may have been noticing, our messaging is getting clearer and our language is stronger. And simply put, we believe in betterment. It clearly is about being better and doing better. As a company, and together with our distributors and customers for our families and our communities. And so we are taking into account all the forces, reshaping our economy and we’re transforming our business model to meet today's new business reality and the way people work and live. And as a result, people are taking notice and we have more acquisitions in the pipeline than ever before. Part of our rebranding will incorporate a repackaging effort. And we are going to sound and look different. Over the next several months, we will be focusing on Phase 1, which includes our core and iconic healthy body pack products, as well as some other top sellers in the nutritional vertical. The new packaging will address feedback we have received about making the packaging better reflect the amazing product formulations, as well as being more modern and fresh. And we will be unveiling the new packaging at convention and this will be a multi-phase effort going through each of the verticals. In the upcoming months you can expect to see exciting product launches and continued focus on clarity of message and improved support for the field. Quoting a line from the recent retail of the future report, people are social by nature and will be drawn to gathering places to share ideas and be entertained. It’s about building trust. Retailers to tap into this trend will be rewarded. Well this is the essence of the direct selling experience. And these next several months will be pivotal in positioning this company for the next 20 years of success and I am truly honored to be a part of this. Dave, I am going to turn it over to you now.

[Dave Briskie:]

Thank you Loren and I appreciate the update. I am so excited about the new branding, the branding strategy, the new looks coming for our brands, the cohesiveness, you know we have done almost 20 acquisitions or in excess of 20 acquisitions over the last four years and because of all these acquisitions of different brands it is clearly time to bring that together and a cohesive look and I really believe that will be another piece that will catapult Youngevity sales revenue and excitement forward. So, I am really, really excited to see the new branding strategy unveiled in Dallas in August. You spoke of, Loren the simultaneous events that took place in January and in addition to that we did amazing top achievers club trip in the Dominican. And it is important to notice that we really amped up the investment in those trips, the investment of those events, and all of the expenses for those were really recorded on the 2016 books, yet the benefit we are going to see from those events will take place in 2017. So we continue to invest heavily in our business, continue to invest heavily in marketing, improving the marketing team, and really making progress towards driving sales. The fourth quarter last year was a bit of a challenge as we really, really spoke about stepping on compliance. And what we are doing is making sure that the company was positioned to move up into a brighter light, move up to a higher exchange as we explore and make our application with NASDAQ and make progress towards achieving that. And we are working on that as we speak. And I'm going to get down into that right now. Before I get into that though, I want to talk about these acquisitions that Steve spoke about. The RicoLife acquisition and the BellaVita acquisition, how incredible just in this week we announced two acquisitions that really now are getting pivotal, or getting targeted. We are getting more selective in this acquisition strategy. RicoLife really helps us in the Latino community, really helps us in Mexico, and BellaVita rounds out and gives us a beach headed multiple markets in Asia. Something we have been missing as a company, and now we have great people with great experience in markets that have huge potential. It was funny the other day I was talking to someone that said, well why would you go to a market like Indonesia, isn't that kind of a small market. And I was like you probably should buy a globe and do a little research. But Indonesia's population is actually the same size as the United States. So, it is unbelievable when you think about what Asia can represent for this company, and I feel like we have been investing loads and loads of dollars, tons of time, tons of human resources, tons of capital to get to the point where we have finally reached where we can actually leverage these markets, and see real hyper growth in terms of sales and revenue potential take place because we’re finally ready and while that was a long two-year run to get into position to now do things right and really execute a business plan that we’ve been working on for 24 months across the globe. So I’m very, very excited about that and I want to thank Steve for that great update on our international peace. I have got a ton of emails, text messages all types of shareholders reaching out to me and wanting to know about this uplisting that we continue to talk about. And so we have selected as those of you know the NASDAQ, we have made application already. We have already received a round of comments, we’ve got a return of those comments going out tomorrow, and we continue through the process. In my best assessment, I feel like we will accomplish this in the second quarter. So, this very next quarter coming up. And I'm excited about that and the reason why I am excited about this uplisting is because I feel like we’re ready for it. It feel like we are ready to uplist. I feel like we’ve built critical scale. I feel like, we’ve built the right team. I feel like we got the right executives on board. I feel like we have got an incredible branding strategy. I feel like our branding strategy, our messaging, what we are doing omni-direct is finally starting to resonate. I can tell you in my talks with analyst that they are getting it. They understand that we are a platform company. They understand that we built a cloud-based portal that allows us to expand really quickly. They are starving to get it. And the move up to NASDAQ is going to help us in a great way because we’re going to now be talking to an investment community and an audience of sophisticated investors and intelligent analysts that is going to understand what this means and can put the proper value on what we built. And they will understand that, you know the reverse split versus market cap is not something to worry about, but something to embrace. Market cap is everything, what is the real value of your company is what it’s all about. And I have been in talking with these analysts, they’ve helped me look at different companies in trying to formulate what is the Youngevity worth? And of course we all know that it is whenever a shareholder or an investor is willing to pay for this stock, but you also have to draw a comparison, I believe, to understand what a company may be potentially could be worth. And we have been talking about different businesses that are in our space or in some of our verticals and no one is doing what we’re doing, so we have to carve out small segments, and look at the valuations within those segments. So, one particular company is kind of interesting because they are going down, they are a little bit ahead of the road we’re heading down, and it’s a company called, trades under the stock symbol OMNT, and they are a direct seller as well, but they simply just operate in the service sector, which is one of six verticals. And they are similar in terms of their approach to what we are doing with quadruple. And they just uplisted to the NASDAQ this March, and they began trading on NASDAQ on March 20. And right now their market cap is kind of settled in with trading and their market cap as I looked yesterday was right around $190 million of market cap on annual revenue of about $18 million. So, I like to look at that and say, okay well we have got one of our six verticals and we are well represented there. And we are, I think we are well-positioned with that company, certainly our business model is much more robust and much more complicated in terms of the other verticals, and I think that’s suppose the challenge for Youngevity as we said on the OTC markets, but I look at that 180 million valuation now on the NASDAQ in one of our six segments and then I looked at another company, a company known as Chatbooks, who in February raised $11 million utilizing a valuation of $50 million and a looked at Chatbooks and I said that company essentially converts picture books from Instagram or Facebook and other social forms of media. And our snap-to-finish technology that we are about to launch in the next week or two has a part of that, but it’s so much more robust than what Chatbooks is offering on just a few areas where snap-to-finish can actually decorate your entire home and do that. And it’s the first cloud-based ability to execute a software called perfectly clear for your photos. So, it’s very, very robust, a significant investment. I’m very, very excited to see a company that I consider just having a piece of Chatbooks valued at $50 million and what that might mean for Youngevity shareholders as we roll out snap-to-finish. And then I turn to our coffee roasting division. And I want to in the same sentence over the same time frame talk a little bit about our coffee division, which is a very, very exciting wholly-owned subsidiary in Youngevity and the interesting thing is the more you start to research these medium size roasters, you start to realize that they are getting gobbled up. The big guys are getting bigger and they are buying companies that are mid-size roasters with their capabilities and I’ve watched them get gobbled up One thing that I'm excited about our Cafe La Rica brand and I’m going to talk about that on this call. It just happened and you will see press on this in the next week or two that we just signed the deal with the Major League baseball’s Miami Marlins. A professional baseball team to be the official Espresso in the official coffee of the Miami Marlins, and that tells me that our brands are starting to be recognized and have real value. So in that stadium we will be sitting alongside Pepsi and Budweiser and there is our Cafe LaRica brand right there in the middle. And I’m not certainly claiming that we have the value of our Pepsi or Budweiser, but I like that we’re getting noticed and that we are able to rub elbows with brands like that with Major League baseball and the Miami Marlins. And that the Miami Marlins are confident enough in our branding and our presence in South Florida that they are going to allow us to core brand with them right on our packaging and what that can do for the Cafe LaRica brand. If you recall in earlier calls, and in early messaging that we have put out there was a company, a Miami-based roaster in fact called Rowland Coffee, which just three years ago was purchased by a company called, what was the company, it was Smucker's. Smucker's also owns soldiers and Smucker's purchased this Rowland Coffee company, which owns the Pilon and Bustelo brands, which is an Espresso brand for $360 million. And they moved their operations outside of Florida. Pilon and Bustelo used to be the official Espresso of the Miami Marlins, but Cafe LaRica is now and we get to market our products on the shelves and Cafe LaRica now is marketing to retailers that now are putting Cafe LaRica on the shelves because as part of our deal with the Miami Marlins, every Miami Marlin wins allows the Miami Marlins fan to buy one Cafe LaRica and get one free in all of the retailers in South Florida. And this is very, very exciting for our business and it’s one small component of what our coffee roaster offered. I looked into the Rowland’s coffee when they were purchased for $360 million and they did not own 1000 acres in the Nicaraguan rainforest. They did not own 28 acre processing facility at Nicaragua. They did not have every certification that’s important to coffee in the roasting facility. They had a company owned brand in some private label approach. So, I’m very excited about the promise and prospect of what our coffee division may be able to bring in terms of shareholder value. You know just recently, as well we are in the spine beauty vertical and a company called Cody, which is a public company just purchased unique, which operates a social selling system similar to the social selling system redeployed nine months ago and are expanding. And they bought that company unique, Cody purchased unique and their healthy make-up line and their social selling platform added valuation of $1 billion put on unique, another of article, which we represent. So what’s important here is we are a platform company, we operate in six major vertical markets and we are building all of them and we’ve created an opportunity to roll off businesses into this platform. I understand that market cap is established by investment community. However, I think it is compelling given the information I just shared in the reality that we operate in several other verticals and the fact that we have created a significant international footprint, and that we have over a $160 million in sales already, and our market cap with everything combined, including the coffee division is just around $100 million. This is why my opinion is, is that we are undervalued. This is why I believe moving up to the NASDAQ will give us an opportunity to present to analysts and present to investors that maybe can more keenly be aware of the space we are in, who we are competing with, what our constituencies are valued at and hopefully come up with a fair valuation on Youngevity when we make that uplist and really bring attention to the stock symbol YGYI. With that I want to bring Steve Wallach back onto the call and let him talk about a platform company. And he's going to talk about the new project that we just have introduced, unbelievably exciting, incredible potential, and it is really what is happening here at Youngevity. Loren talked about it, the excitement, the acquisition pipeline being filled up, it is not just an acquisition pipeline, but it is others with the great technology, others with patented processes that are coming to Youngevity because they believe our model is the best way to push these opportunities and capitalize on revenue in this marketplace. So, with that, I turn the call over to Steve Wallach.

[Steve Wallach:]

Thank you, Dave. Definitely a lot of exciting information there. You brought the snap to finish before we get into this next new product and really delivery system, but you brought a snap-to-finish Chatbooks and yes snap-to-finish is so much more than Chatbooks. I am sitting here and just within arm's reach, I am seeing right here finished products from snap-to-finish that are of quality I have never seen. It is amazingly high-quality, I was blown away when I first started looking at these products that’s snap-to-finish creates and so I am extremely excited to get this out into everybody's hands and to really see the creativity of all our independent distributors and customers and their contacts and friends and families. Really takes snap-to-finish and that creativity to a whole another level. It is an exciting time and on one hand it is technology, on the other hand it is products. On the other hand it’s really tied in with our memory keeping. On the other hand it is rarely tied into the Youngevity community, and on the other hand, it’s a lot of hands I know, it is tied into omni-direct. It is amazing and this is made available or made possible, I guess. Through an alliance with Fuji. So that is another giant brand name that we are all familiar with. And they chose to partner with us in terms of being a partner supplier or a supplier partner. Through snap-to-finish because the technology is so amazing and because we represent such a great opportunity for their business to get this out to all of our distributors and customers and their contacts and so forth. So, in terms of comparing snap-to-finish to Chatbooks for example, snap-to-finish as Dave pointed out is so, so much more. And like I said, it is super exciting time, but I just wanted to touch on that and the comparables that Dave made are amazing obviously, extremely excited about all of that. This new product, really is a product, it is not an acquisition of a company or anything, but it is a product that we acquired, the technology to, the proprietary technology up and really the passion of 13 or 14 years project of the inventor Rick Anson, what this product is? It represents another level of delivery method for our nutritional supplements and for our energy drinks and really the sky is the limit in terms of drinkable nutrients, supplements, products, drinks, it really is an amazing item, but what it is, it is a reusable water bottle, but it contains a self-contained filter system as well. So not only do you save money as a consumer and user of this product, you save money by not needing to purchase bottled water, which is a $27 billion a year in the US alone business I think, from our revenue business. And on top of that, just think of the billions of bottles that wind up in landfill. So speaking of betterment, we have the ability, the opportunity to deliver this and introduce it to the world and we are already making plans to introduce it to our international markets as well, but this bottle when you see it, is so amazing because people are attracted to it because it’s so attractive at looking, it is so interesting looking, as Dave's drinking from one right now, and so - but on top of that, if you go back to our core products, over 90 for life message, we started with the liquids. My father, who popularized the understanding of absorbability of nutrients and how liquids became extremely popular from my father spreading that message around the world, introducing and educating people on the importance of solubility, in other words having liquid supplements, drinkable supplements, then we led the market in terms of powdered supplements and the benefits associated with that maintaining solubility and absorbability, and our bestselling products are beyond [indiscernible] products for example that are really trendsetting and leading the way in the nutritional supplement industry. But now with this bottle and this technology we have the ability and we're doing it to be able to take these liquid supplements and powdered supplements and actually create a soluble tablet that goes into the water bottle, into the filtering system above the water line and as you drink the water and introduce your Youngevity business to people sitting next to you because they can’t help but ask what is that. It is so visually appealing and interesting, it gives us that whole additional and next level supplement delivery system and branding really just an amazing branding opportunity and so from a branding standpoint we are able to change the look of the bottle, the branding of the bottle very, very quickly and offer many, many options in terms of things like charitable initiatives, this bottle is an amazing thing we are getting tons of enquiries about it already and we are about to introduce or put out a press release on this. So you will see much, much more information about this, but it really ties in with our overall message of betterment, and we can improve and help improve the environment and we can help improve the environments for getting this message out, and not needing to use so many plastic water bottles dispose so many plastic water bottles. Rarely leveraging our clearly leveraging our great community, our Youngevity community and having people spread that message so easily. What I have found is that our consumer contacts and certainly our distributors just inherently know that plastic water bottles, which almost everybody uses because they are convenient are creating this other problem around the world in terms of pollution and landfills and our oceans and all of that. This bottle solves that problem as it gets out there. On top of that it is an amazing branding opportunity for our distributors and for Youngevity. On top of that it is an amazing delivery system and technology of these tabulated dissolvable supplements, in other words drinkable supplements, but on top of that we can use it with our amazingly popular powders and liquids by simply removing the interchangeable filter component and using it as a shaker bottle and maintaining all those other things, those other benefits that I just talked about. So, we are extremely excited about the wide range of bottle. It will be officially introduced in the next couple of weeks. Press releases will go out, probably in the next week and so we are extremely excited about this newest product concept and technology and its proprietary Youngevity and Youngevity distributors and it represents a huge opportunity globally for us. And so we are extremely excited about that like I said. So with that I’m going to wrap up this call. Thank you for attending and we look forward to seeing and hearing you all on the next call. Thank you. Have a great day.