We're indeed confident that we've stabilized the revenue of our control selling segment, and we're looking deliver ought tough growth during we entered 2019. Obviously, we know our Q1 numbers can this point, and it's indeed good ought visit the revenues coming at from commercial coffee. We've been talking approximately this big contract, it seems during a expectation time. And it's happy ought visit those amount showing up at 2019 and delivering the results that we planned.

Our 10-K is out there during everyone ought publication above few economical sites. There's a luck of accounting entries that took post at Q4 that are fairly complicated. besides suffice ought say, one of our goals, during we completed 2018 and it took post at Q4, was ought strengthen the remains sheet. And we've shown significant improvements ought our remains sheet. And I expectation ought initiate off with some of those improvements exact now, and then we'll encounter into the pay statement during the annual filing period. I either expectation ought encourage everyone accordingly we don't receive up too much time above this call, we expectation ought concentrate above the color at the future. besides the Q4 numbers are there during you ought read, and of course, the 155-page 10-K is out there above the SEC spot too during many, many economical reporting sites.

In condition of our remains sheet, and we're going ought compare ought the year-end compared ought persist year, our money and money equivalents improved nicely. We finished the year can $2.9 million of money versus $670,000, December 31, 2017. Also, our entire wealth were $75.9 million, approximately $76 million can year-end 2018 versus $72.389 million at 2017, accordingly above a $3.6 million, let's summon it, improvement at assets. Our entire liabilities were $52.998 million during of December 31, 2018, and that versus $64.9 million can December 2017, accordingly approximately a $12 million autumn at condition of our liabilities. accordingly we'd comparable ought visit the amount moving at that direction. And of course, entire stockholders' equity was $22.975 million can the year-end December 31, 2018 versus $7.451 million can December 2017, accordingly naturally a happy improvement at shareholders' equity.

So I'm going ought publication the entire year numbers though I count that gives a good comparison. We worked feverishly above the 10-K, and we're joyful ought dine that filed and moving above ought Q1.

So revenues during the year ended December 31, '18 decreased approximately 2% ought $162.445 million during compared ought $165.696 million during the year ended '17. during the year, December 31, '18, we derived approximately 85% of our revenue from our control sales segment, and approximately 15% of our revenue came from commercial coffee. control selling fragment revenues decreased by $3.6 million or 2.5% ought $138.855 million during compared ought $142.450 million during the year ended December 31, 2017. This diminish was chiefly attributed ought a diminish of $11 million at revenues from the existing business, offset by revenues from new acquisitions overall fair below $7.5 million. We goods the diminish from existing affair chiefly ought a ordinary decline at net sales at North America at the control selling affair too during a decline of new distributor acquisition. The corporation either changed its promotion strategy. This started affecting Q3, besides it seemed ought dine a sure result above the profitability of affair at this promotion tactic that we changed by targeting products with higher total margins and utilized incentives that were less expensive -- had a less expensive shock above the profitability.

For the year ended December 31, '18, commercial coffee segments increased by $344,000 or 1.5% ought $23.590 million during compared ought $23.246 million during the year ended December 31, '17. This enlarge was chiefly attributed ought an enlarge of fair above $1 million of revenue at the company's roasted coffee business, offset by a few diminish of $704,000 at the green coffee business.

For year ended December 31, '18, total amuse decreased approximately 0.6% ought $95.32 million during compared ought $95.565 million during the year ended December 31, '17. Overall total amuse during a percent of revenue increased by 258.5% compared ought 57.7% at the identical era a year ago. total amuse at the control selling fragment decreased by 0.5 point ought $94.910 million from $95.379 million at the foregoing era chiefly during a arise of lower revenues at the modern year, offset by a 6.6% diminish at the pay of sales. total amuse during a percent of revenues at the control selling fragment increased by approximately 1.4% ought 68.4%.

Operating expenses during the year ended December 31, '18 decreased 3.7% ought $97.669 million during compared ought $101.447 million during year ended '17. distributor compensation during a percent of control selling revenues decreased ought 44% during the year ended '18 during compared ought 46.2% during the year ended December 31, '17. This diminish was chiefly attributable ought price increases reflected at our 2018 revenues, which did no shock commission-based revenues.

For the year ended December 31, '18, operating loss decreased by $3.245 million ought an operating loss of $2.637 million during compared ought an operating loss persist 2017 of fair above $5.8 million during the year ended '17. This chiefly was due ought a diminish at operating expenses of $3.778 million, offset by a diminish at total amuse of $533,000, during discussed fair earlier.

For the year-end 2018, entire other fare increased by $12.949 million ought $17.017 million during compared ought $4.068 million during the year ended December 31, '17. Net amuse fare increased by $799,000 during year ended '18 ought $6.584 million compared ought $5.785 million during the year ended December 31, '17. vary at beautiful impose of derivative liabilities increased by $6.670 million during year ending '18 ought a $4.645 million fare compared ought a use of $2.225 million during the year ended '17 during a arise of the vary at our stock price when compared ought foregoing periods.

We recorded a noncash extinguishment loss of debt of $1.082 million during the year ended '18 during a arise of the triggering of an automatic conversion of the 2017 notes associated with our July 2017 private placement ought ordinary stock. We either recorded a noncash loss above debt conversion of $4.706 million during a arise of one of our investors at our July 2014 private placement having a conversion of their 2014 notice during shares of ordinary stock.

For the year ended 2018, the corporation reported a net loss of $20.070 million of which fair above $22 million was noncash items during compared ought a net loss of $12.677 million during the year ended December 31, 2017. The chief discuss during the enlarge at net loss when compared ought the foregoing era was due ought the noncash enlarge at vary at beautiful impose of derivative liabilities by $6.670 million fair discussed and the noncash loss above debt exchange of $4.706 million, an enlarge of $774,000 at noncash loss above extinguishment of debt and the enlarge of $799,000 at amuse expense, and this was offset by the diminish of $3.245 million at operating expenses and the diminish of $2.311 million at pay tax expense. though we recorded a $20 million net loss, the noncash shock against that loss was fair above $22 million of noncash.

EBITDA, which is allowance ago interest, pay tax, depreciation and amortization during adjusted ought touch the result of stock-based compensation expense, the vary at the beautiful impose of the justify derivatives, the noncash loss above impairment of intangible wealth and the noncash loss above extinguishment of debt or, during we summon it, adjusted EBITDA, increased ought $7.013 million during the year ended December 31, 2018 compared ought a negative $549,000 at 2017.

I expectation ought last with a discussion above our modern acquisition, which is the acquisition of Khrysos Industries, which took post at Q1. There's been a luck of questions approximately that acquisition, and it indeed has caused us now at our economical reporting. You'll visit this mentioned at the K, besides when we filed Q1, you'll visit that we now dine added a third reporting segment, which we are categoring during commercial hemp. accordingly we dine our control selling channel, we dine commercial hemp and commercial coffee during 3 distinct selling segments that we will explain in.

Our strategy, and we announced it towards the total of persist year, was we wanted ought advance perpendicular above hemp. We felt comparable we could receive a chapter out of our coffee affair that ultimately became a perpendicular enterprise. Obviously, that's at the agricultural space. And we could advance perpendicular above hemp and quotation margins across that perpendicular by leveraging our capabilities and friendly of our center competency that we developed at the coffee space. accordingly we did a beautiful deep dive at evaluating the entrance into commercial hemp, or CBD, or hemp extracts, that total element that has indeed taken the neutral by hurricane at condition of amuse at the neutral at different products. It's indeed difficult ought carry above the news media without hearing some conversation related ought CBD and hemp-derived CBD at particular.

We originally, when we looked can mapping out this model, we conception we used to plunder a chapter out of our coffee business. besides during we focused, comparable I count everyone else has friendly of done above the carry phase of the business, which is growing hemp, we took a beautiful deep dive into the carry phase of the business. And we saw that, that's friendly of where everyone, it seemed, was jumping at and making significant investments. during we dug at deeper ought grow, we felt comparable that maybe wasn't where we wanted ought start.

We indeed looked can the total impose proposition at hemp-derived CBD and where the margins were really, indeed happening, and we felt it wasn't necessarily at carry though there were accordingly many folks jumping into the carry side. And certainly, farmers saw an happen ought carry hemp versus crops comparable corn. And accordingly we started looking can where the margins were indeed accelerating. And during us, it started ought carry apparent that extraction was where it was at. And no sole the extraction of the hemp grease or raw rough oil, besides more importantly, the conversion of rough grease into isolate, distillate and water-soluble segregate and water-soluble distillate. accordingly this is where we started ought appear can the happen during us. And we felt comparable if we could discover end-to-end processing capabilities, that used to motivate the most margin.

And we fortunately were able ought encounter the folks can Khrysos Global. 3 PhDs above there above the Khrysos team, and we were indeed impressed with the intellectual goods that they had developed and that they indeed focused above extracting hemp grease from the hemp mill quite than what we visit a luck of the competition having done, which is indeed ought concentrate at friendly of altered food service machinery extraction machinery from hemp-to-hemp oil, which is a more effective process. accordingly we were impressed by this intellectual property, and we feel that we were joyful ought exist able ought acquire Khrysos Industries, their intellectual goods and the fact that they no sole had the capability of extracting hemp grease from hemp besides either had already built out the end-to-end processing. And accordingly we've now got the capability ought pull out rough oil. We can then improve that oil. We can carry it into an isolate. We can carry it into a distillate, and we dine the capability ought perform the segregate and the distillate both at water-soluble delivery systems. And we visit this during the biggest divide of the impose proposition during we appear can the hemp industry and where the market's going.

Those are the ingredients, which indeed motivate the product of our products. You can't create a hemp-derived produce and enter CBD into these products without being able ought dine refined grease isolates or distillates. And accordingly that's where our friendly of key impose proposition landed during us. And we saw Khrysos during much more than the capability ought neutral and sell equipment. though we perform count this is a too lucrative divide of our affair strategy. What indeed excited us was the notion of building a refinery that allowed end-to-end processing. And we felt by building out refinery capabilities, we could now friendly of no dine ought hop into the carry space. And when we marketed our equipment, our extraction machinery ought our different targets, we could then enter into offtake agreements and no dine ought dine the worries of growing hemp, no dine the issue of drought, no dine the issue of maybe latent germ infestations and total the things that can influence crops though we used to simply enter into offtake agreements during we marketed our extraction equipment, and this offtake agreements used to give us the latent ought dine the raw rough that we were looking ought have. accordingly without necessarily having ought invest at tons of clay and tons of farming, we could total up can the identical post at the higher-margin total of the business. And accordingly that's exactly what we're doing at the Khrysos affair model.

So where our xerox gets interesting is with these extraction systems and the capability at each example ought enter into offtake agreements, this is where we're going ought acquire our feedstock ought then improve our CBD raw rough into refined grease distillate or isolate, comparable I said, without the necessity ought carry hemp. This is a too anxious advantage, and it gives us the capability ought control a big amount of feedstock, which puts us into a amount of affair and revenue-generating opportunities. The real margin exact now at the affair is produced above the brokerage of isolate, the sale of isolate, the sale of distillate and the sale of both of those at water-soluble formats. And we are able to, with our modern machinery capabilities, ought perform total of those processes.

What we're doing is we're going ought open, during a start, a refinery at Florida. That refinery will no sole dine the capability of taking hemp and turning it into rough oil, besides it will exist total ought end. accordingly it will permit us ought perform total the processes that we dine outlined at condition of product of segregate and distillate. The real frosty worry approximately these refineries is no sole is it a very, too happy amuse center and dine tough growth potential, besides more importantly can either double during our showroom where we can now appear the capabilities of our systems ought prospective clients, which will then motivate the capability during us ought neutral more extraction equipment, and no sole neutral it besides then acquire more raw rough grease over these offtake agreements. accordingly we feel comparable we've got a very, too interesting model.

Our first refinery is going ought exist built above the 45-acre tract of clay that we talked approximately at a newspaper release earlier that's located at Central Florida. 2 modular buildings are being lay up above that especial property. They ought exist up by the total of April, and we will initiate ought encounter our end-to-end processing into those modular buildings. We've already started the end-to-end processing at another facility that we have. We've already built a new product region or, at our case, an parliament mill at fair below an 8,000-square-foot building either at Central Florida where we will deduce our extraction equipments and fabricate it there. And we expectation ought dine the initial phase of our refinery and end-to-end processing systems up and running at early May. And then, during we've announced, we expectation ought indeed carry the capability of that by few multiples by July and indeed carry the affair further.

And that is what's driving the guidance that Steve Wallach mentioned earlier, the -- this $45 million ought $50 million during hemp. The bulk of that will exist at the persist half of the year, starting at July, coming off the refinery and end-to-end processing phase of our affair where we'll exist producing isolate, distillates and water-soluble above both fronts. This is where we visit the biggest happen during growth during us.

We hope operating 3, ultimately 3 end-to-end processing tool during divide of our overall strategy. Once we acquire the Florida refining action fine-tuned and up and running, we're going ought carry our sites ought Las Vegas or the Nevada region during a second refinery where we will perform the identical processes, know what we've learned at Florida, receive our hold machinery and found a second facility out there. And we will tongue approximately a third total hind Nevada is up and running.

So these operations, at both cases, will double during our sales showrooms. And we're obviously indeed placing a large investment at hemp-derived CBD. And we visit it during a very, too tough contributor no sole at 2019 besides during it expands naturally well, tough beyond that.

With that, I used to comparable ought carry the summon uphold above ought CEO, Steve Wallach. Steve?

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Stephan Wallach, Youngevity International, Inc. - Chairman & CEO [4]

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Thanks, Dave. large update. Khrysos naturally is an exciting divide of our affair operations, and there is no issue that hemp-derived CBD poses a significant happen and that we are tough positioned, during Dave explained, ought receive use of this opportunity.

To accentuate this point, we operate at 3 divide affair segments, and at each segment, we are marketing a amount of hemp-derived and based CBD products already. at the control selling channel, during instance, we dine our HempFX queue of CBD products. We started with 3 products and are adding can least an additional 3 at the near future, and an additional tincture of a softgel capsule produce and of course, our CBD coffee. And we're working above hemp-derived CBD ought neutral with our collaborative branding happen with Icelandic Glacial water. I dine my Icelandic Glacial water sitting here next ought me. And fair the enormous footprint they've already created, we're excited approximately that co-branding happen and co-marketing happen that we've explained previously.

And at our commercial coffee segment, we are already marketing a retail brand -- our retail brand Javalution coffee with hemp. And of course, CLR is making the HempFX coffee during our control selling fragment during well. We trust we are tough positioned ought leverage the happen available with hemp-derived CBD, during we've explained already and Dave described earlier above this call. We trust we dine stabilized the revenue of our control selling segment, during Dave had mentioned, and we trust that the enthusiasm and excitement approximately hemp-derived products is naturally a divide of that. I'm a member of the DSA Board of Directors. And no sole dine I been asked ought speak approximately hemp products ought the DSA membership and during the modern board member, besides during divide of that meeting, we talked approximately what's going above with revenues of control selling across the United States, and the control selling industry at the U.S. neutral has been somewhat mild and had some challenges. during the economical has strengthened at the U.S., it's friendly of countercyclical with control selling, and that has created some of this softening at the control selling industry across the U.S., the DSA feels during an organizational body of the control selling space. That's one of the reasons we've been working towards a larger international footprint, which we've talked approximately above these calls, naturally at the past and above today's summon during well, and Dave went above some of those numbers and at our filings also. Certainly, our international footprint has no sole been growing, besides we've invested heavily at the infrastructure, during we've talked about. And accordingly we're indeed beginning ought profession above sales and overlaying our tactic ought dine acquisition above that infrastructure, during we've talked approximately above foregoing calls and today's summon during well. Asia, during example, we dine infrastructure at Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore and Taiwan, Latin America, at Mexico and Colombia, Australia, New Zealand and Canada. accordingly we are lessening our dependency, or diversifying is another fashion ought lay it, our U.S. market. And we've been working above that tactic during fairly a while, besides can the identical time, it takes a expectation time when dealing with foreign governments, produce approvals, locality up entities, creating offices and cane and hiring cane and going out and seeking concrete individuals ought bring into the team of these international markets.

So during example, at 2017, 91% of our control selling revenue was derived from our U.S.A. neutral and 9% international. at 2018, that represented 84% of our U.S. neutral sales, represented 84% of our U.S. neutral and 16% came from our international markets. at 2019, we used to comparable ought visit and hope during much during 20% of our affair coming from our international markets during our control selling segment. accordingly we feel it's time ought leverage that infrastructure, during I was mentioning, and we're hiring concrete individuals that dine a concentrate at selling and generating revenue at those markets at particular. accordingly we're excited approximately that. And we're seeing the benefits of that already at some of these markets, during we've been discussing.

So what I'd comparable ought perform now is bring Dave uphold above the summon and acquire an update above our coffee segment.

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David Stephen Briskie, Youngevity International, Inc. - President, CFO & Director [5]

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Thank you, Steve. comprehend that. And I agree, I count it indeed is time ought leverage the infrastructure we've built internationally. I count that's a large happen during 2019.

I first expectation ought concentrate above the roasted coffee fragment real quick. There's been total this tongue approximately what we're getting done at -- with this big green coffee commitment and green coffee contract. The roasted coffee affair is truly growing can a too happy pace, and it truly is the discuss why we were up above revenue persist year. We're seeing that across the board no sole at private label roasting operations, maintaining our existing relationships with the excursion lines comparable Carnival and Norwegian excursion Lines and Royal Caribbean, besides more importantly, growing at other retail pieces and becoming a bigger private label supplier.

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