Youngevity International (YGYI) Stock: Climbing On Asset Purchase News

Youngevity International Inc (NASDAQ: YGYI) is flying early on in the trading session this morning, and for good reason. The company announced that it has entered into an acquisition agreement, exciting investors and sending the stock on a run for the top. Today, we’ll talk about:

  • The acquisition agreement;
  • what we’re seeing from the stock; and
  • what we’ll be watching for with regard to YGYI ahead. 

YGYI Climbs On Acquisition News

As mentioned above, Youngevity International is having a great start to the trading session this morning after announcing that it has entered into an acquisition agreement. 

In a press release issued early this morning, the company said that it has entered into a binding agreement to purchase all assets of Khrysos Global. Based in tampa, the company is a manufacturer of hemp-based CBD extraction equipment. 

As a result of the acquisition, YGYI will form a wholly-owned subsidiary, Khrysos Industries. Upon inception, the company will be a global player in the field-to-finish hemp-CBD oil, isolate, and distillate market. 

Importantly, the acquisition gives YGYI ownership of INX Labs and its testing facilities. The company said that this will allow for umprecedented capabilities in regards to formulation, quality control, and testing standards with its CBD products. 

According to the release, the total cost of the acquisition will come to $16,000,000. This will be paid in a mix of 1,794,972 shares of common stock and $500,000 in cash on the day of closing. 

The company has also agreed to issue warrants to purchase up to 3 million shares of common stock at an exercise price of $10 per share. However, this part of the agreement is subject to certain conditions. 

In a statement, Dave Briskie, President and CFO at YGYI, had the following to offer:

I’m ecstatic about this purchase and what it signals for this moment in our company’s history. The purchase of the assets of Khrysos Global should be the catalyst that launches YGYI into the hemp-CBD space. We expect it will serve as a cornerstone of our comprehensive strategy as it relates to the production, cultivation, and extraction of hemp, CBD oil, as well as other CBs (cannabinoids).

The above statement was followed up by Steve Wallach, Chairman and CEO at YGYI. Here’s what he had to offer:

Our agreement to acquire Khrysos is extremely exciting on a number of levels. Beyond the fact that we believe Khrysos’ hemp-CBD extraction technology is far more efficient than most anything else on the market, we’re acquiring a turn-key business model here. Their systems are applicable to the entire industry and are immediately implementable across our own line of HempFX™ products, as well as in offtake agreements we have through our existing business relationships. We see this as providing not only immense value to our company, but also to our investors since we’ll be selling not just the extraction systems, but also generating income servicing and operating these systems via a rental model.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Youngevity, the news proved to be overwhelmingly positive. After all, the acquisition news will give the company an immediate increase in value and a strong position in the emerging global CBD market. So, it’s not surprising to see that investors are pushing the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:14), YGYI is trading at $8.01 per share after a gain of $0.74 per share or 10.18% thus far today. 

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on YGYI. In particular, we’re interested in following the story surrounding the company’s continued work to expand sales of its products as well as its footprint in the emerging CBD/cannabis market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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