OTC Markets Newsletter October 2013

Blue Sky Laws — What They Are. Why Companies Should Care.

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Blue Sky Laws, individual U.S. state laws regulating the offer and sales of securities, were created in order to protect investors from fraud. Without Blue Sky compliance, companies limit the deep pool of U.S. investors that can buy and sell their stock. Tim Ryan, Managing Director of OTC Markets Group, explains what Blue Sky Laws are and reviews best practices so that companies can understand why being compliant is critical to their investor relations programs. To learn more about Blue Sky Laws, companies can contact Corporate Services at 212.896.4420 or issuers@otcmarkets.com.

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Get to Know Your Community: Interview with Steve Wallach, President of Youngevity International Inc.

This month, we speak with Steve Wallach, CEO of Youngevity International Inc. (OTCQX: YGYI), a U.S. based nutritional products and coffee company. He discusses major milestones that the company has achieved this year, including becoming SEC reporting as well as joining OTCQX, and positioning the company for expansion in international markets.

OTC Markets Group: Tell us about Youngevity International Inc.

Steve Wallach: Youngevity International is a fast growing global direct marketer of nutritional and lifestyle products and a vertically-integrated producer of gourmet coffees for the commercial, retail and direct sales channels. The company has a unique business model and operates in two high growth business segments (direct selling and commercial coffee).

Through our direct selling division, we market a wide range of quality supplements, skin care and other wholesome consumer products that promote a healthy lifestyle. The company distributes its products through its large database of distributors and end user consumers as well as via the wholesale and retail channels.

CLR Roasters represents the traditional marketing side of the company and it is a wholly-owned subsidiary of Youngevity International. CLR Roasters is a mid-sized coffee roaster that produces coffees under its own boutique brands as well as manufactures a variety of private labels throughout various tiers of distribution.

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OTCM: You upgraded to OTCQX in June this year. Why did you make that change?

SW: We made a concerted effort and significant investment in becoming a fully reporting public company in 2013. We felt this achievement and the effort and investment to make it happen would be best valued by trading on OTCQX, the Best Marketplace. We are proud to be trading on the OTCQX U.S., which enables us to provide our investors with timely news and information to help them better analyze, value and trade our securities.

OTCM: You went through a major rebranding this year changing your company name to Youngevity. Tell us more about that.

SW: The new corporate name is part of a larger rebranding effort intended to more clearly represent Youngevity International’s focus on its commitment to operate as a multi-dimensional consumer products company. Our direct selling division of the company was established in 1997, and for 17 years now we have been delivering products that promote a healthy lifestyle for our customers. We have been marketing many of these consumer products under the brand Youngevity® with the tag line “Live Younger, Longer.” Tying the name of our company to our product branding strategy streamlines our message and allows us to effectively market the name Youngevity to all the interested parties, that being our shareholders, distributors and customers. Also, our celebrity brand ambassadors truly exemplify what it means to live younger, longer and have always been passionate about inspiring and helping others to live healthier, more active lifestyles.

OTCM: What other highlights and milestones did Youngevity achieve this year?

SW: In the 3rd quarter of 2012 we announced our profitability improvement initiative with expected results of the initiative to be reflected in 2013. Through the first two quarters of this year we delivered $1.7 million dollars of net income and $3.9 million dollars of EBITDA. We expect those results to continue for the balance of the year and into the foreseeable future. We are optimistic about the scalability of our business model and the prospects of our continued growth both organically and through acquisition that will come from our growing financial strength. We are bullish about the recently completed acquisitions of Heritage Makers and GoFoods Global and we anticipate additional acquisitions to be completed prior to the end of the year.

Another milestone reached this year is YGYI becoming a fully reporting company. We cleared SEC comments at the end of May and shortly after that we moved up to the OTCQX. Our coffee roasting operations, CLR Roasters, recently earned its Safe Quality Food (SQF) Level 2 Certification, which opens up significant growth prospects and market opportunities for that business segment. CLR Roasters also just signed a direct supply contract, which will provide improved profitability for the next several years. We strongly feel we are well positioned for growth going into 2014.

OTCM: What is your growth strategy going forward?

SW: Our most significant growth opportunity will come from our launch into markets outside of the United States. Youngevity has been readying and positioning itself for global expansion. In the direct selling space those companies with significant sales volume typically derive 70% to 75% of their sales volume outside of the U.S. Youngevity ships its products to over 60 countries, but this only accounts for 8% of our revenue. The demand for our products in other markets is apparent and we are poised to make an impact internationally.

In 2014, we will accelerate our expansion into various international markets and we expect this will be a major growth driver for the next several years. Another part of our growth strategy will be our investment in technology. We are making significant investments in mobile applications, the direct to consumer shopping experience, data base mining, and social media marketing to maximize sales to our growing data base of consumers. Finally, we will continue to grow through acquisitions with a strategic view of exploring vertical integration opportunities that will maximize the margins on some of our core products.

OTCM: What else do you want investors to know about Youngevity?

SW: Youngevity International is committed to growing aggressively through direct selling, traditional marketing, mergers and acquisitions, and organic growth. The company's direct sales model and international rollout strategy is ideally suited to fully leverage the significant upside potential in high growth emerging markets. Youngevity International is solid financially and we have strong growth prospects. Based on our current share prices we feel that we are both a value and a growth story. We are confident that by continuing to execute our business plan that ultimately more investors will take notice of our performance and all that we are accomplishing here at Youngevity. We have budgeted additional funds for 2014 to attend more investment conferences around the country where we can tell our exciting growth story to the investment community.

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Monthly Trade Summary — October 2013

Marketplace Designations # Securities* Monthly Dollar Volume Monthly Dollar Volume
per Security
Aggregate Market Capitalization
(in Millions)*
OTCQX® 373 $2,534,591,380 $6,795,151 $1,518,242
OTCQB® 3,216 $6,839,727,223 $2,126,781 $337,088
OTC Pink® Current Information 2,959 $8,063,170,565 $2,724,965 $12,480,340
OTC Pink Limited Information 417 $68,015,043 $163,106 $9,936
OTC Pink No Information 3,059 $1,049,014,922 $342,927 $68,511
Totals 10,024 $18,554,519,135 $1,851,009 $14,414,118
* Selected data as of October 31, 2013.

Events & Sponsorships

OTC Markets Group has attended or will attend the following events to educate investors, broker-dealers, and OTCQX, OTCQB and OTC Pink companies about our marketplaces.

OTCQX Issuer Forum and Cocktail Reception (December 12, 2013)

Webinar on U.S. Marketplace Options for TSX and CNSX Listed Companies (December 3, 2013)

LD Micro Conference (December 3-5, 2013)

STANY's 23rd Annual International Reception (November 20, 2013)

The PIPEs Conference 2013 (November 4, 2013)

STA Annual Conference (October 22-25, 2013)

Angel Capital Association’s 2013 Leadership Workshop (October 17-18, 2013)

NASAA Annual Conference (October 6-8, 2013)

IR Magazine Think Tank - Canada 2013 (October 3, 2013)

STA 80th Annual Market Structure Conference (October 2-5, 2013)

 

Contact us if you are interested in meeting us at one of these events.

 

 

 

OTC Markets Featured in Q&A with The Pick

PPR’s The Pick is a quarterly magazine covering issues for investors in the Australian resource sector through company profiles, commodity reports and analysis on current issues in the capital markets. Their most recent issue features a Q&A with OTCM Executive Director Andy Kyzyk on the options for Australian companies to access U.S. investors through the OTCQX marketplace. See the Q&A.

PPR is a full service Public Relations agency with offices across Australia and in the United States.

News

Delisting and Deregistration Revisited: Considerations for U.S. Listed Foreign Private Issuers after the JOBS Act - Bloomberg Law (November 2013)

OTC Markets Group Congratulates American Eagle Energy on NYSE MKT Listing - press release (November 19, 2013)

OTC Markets Makes Changes To System After Outage - The Wall Street Journal (November 13, 2013)

OTC Markets Group Announces Third Quarter 2013 Financial Results - press release (November 12, 2013)

OTC Markets Group Issues Statement on OTC Link® ATS Trading on November 7, 2013 - press release (November 7, 2013)

1,500 ADRs Now Trading on OTCQX®, OTCQB® and OTC Pink® Marketplaces - press release (October 23, 2013)

DTC Lifts Veil on Chills - Growth Capitalist (October 21, 2013)

Banks Increasingly Move to Public Markets - BankDirector.com (October 9, 2013)

OTC Markets Group in Canada. Join us.

December 3Webinar on U.S. Marketplace Options for TSX and CNSX Listed Companies — Learn about options available to Canadian companies that would like to trade their securities in the U.S. and how they can improve their visibility with U.S. investors in order to grow global liquidity. Register here.

 

December 12OTCQX Senior Executive Forum and Cocktail Reception in Toronto — Join us to hear about how companies use OTCQX to improve the information and trading experience for their U.S. investors. OTCM CEO Cromwell Coulson to present, as well as key OTCQX companies. Click here to RSVP.

Product Updates

Now File Press Releases as a Form 8-K/6-K

OTC Markets Group recently added a new feature to the OTC Disclosure & News Service to help SEC reporting companies more seamlessly comply with SEC disclosure requirements. Companies may now file press releases with the SEC as a Form 8-K/6-K through PR Newswire’s EDGAR filings service — Vintage Filings.

Expand News Distribution to International Media

International news distribution is now available for companies that wish to distribute press releases to international news media and financial sites.  Subscribers to OTC Disclosure & News Service may distribute English-language press releases through PR Newswire’s expansive international news distribution network in the U.K., Singapore and Canada, at exclusive discounted rates.

Read more about the partnership between OTC Disclosure & News Service and PR Newswire, here.

Featured Videos Posted by Companies on www.otcmarkets.com

OTCQX: WGIJF

 

OTCQX: CSVI

 

OTCQX: SRBCF

 

To learn more about OTC Disclosure & News Service and our other Corporate Services, contact us at 212.896.4420 or issuers@otcmarkets.com or visit www.otciq.com.

Market Data Updates

•   Investis now offers Real-Time and Delayed Level 1+ (OTCQX, OTCQB, OTC Pink, OTC Bonds) Quotes through its APIs and corporate IR website platform.

•   The OTCM BNY Mellon ADR Index rose 11.12% in the third quarter and is up 12.75% year-to-date. See highlights from third quarter here.

•   OTCM has updated the fee schedule for market data fees and licenses. View the updated schedule here.

•   The OTC Markets Multicast Data Feed (version 3.0) has been updated to include three new binary channels — OTC Link Trade Channel, Reference Data Channel, Reference Data with Cusip Channel — and additional data fields. The OTC Markets Multicast Data Feed specifications may be found here.

For more information, contact our Market Data Services at 212.220.2166 or marketdata@otcmarkets.com.

Regulation & Compliance

SEC Proposes for Comment New Regulation Crowdfunding

 

 

The SEC has proposed for comment new Regulation Crowdfunding to implement the requirements of Title III of the JOBS Act. The proposed rule can be found here.

Comment Period for Reg D, Form D and Rule 156 Re-opened

 

 

The SEC has re-opened the comment period for Amendments to Regulation D, Form D and Rule 156. Comments received can be found here. A White Paper released by the Division of Economic and Risk Analysis on capital raising in the U.S. through unregistered offerings using the Regulation D exemption can be found here.

FINRA Extends Rule 6433 Tier Size Pilot Period

 

 

FINRA has extended the Rule 6433 tier size pilot period for an additional year.  The pilot period under Rule 6433 will continue until November 14, 2014. Additional information can be found here.

OTCQX - New Additions

5 new companies joined OTCQX in October:

A complete list of OTCQX companies is available on www.otcqx.com.

Our Marketplaces

OTCQX
The Best Marketplace with Qualified Companies

OTCQB
The Venture Stage Marketplace with U.S. Reporting Companies

OTC Pink
The Open Marketplace with Variable Reporting Companies

For questions, please contact OTC Markets Group.
www.otcmarkets.com • 212-896-4420 • info@otcmarkets.com

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© 2013 OTC Markets Group Inc.