Item 7.01.
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Regulation FD Disclosure.
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In connection with the discussions with prospective lenders referenced above,
the Company intends to disclose certain updated business information that is included in the CIM Materials. The CIM Materials, other than those portions specifically incorporated by reference in Item 2.02 above, are incorporated in this Item
7.01 by reference.
The CIM Materials contain proposed debt terms, which have not been negotiated and remain subject to change.
By furnishing this Current Report on Form
8-K
and furnishing the information set forth or incorporated by reference
herein, the Company makes no admission as to the materiality of any such information that is required to be disclosed solely by reason of Regulation FD.
The information contained or incorporated by reference in this Item 7.01 is being furnished and shall not be deemed filed for purposes of
Section 18 of the Exchange Act or otherwise subject to the liabilities of such section, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in
such a filing.
Non-GAAP
Financial Information
In addition to its reported results and guidance calculated in accordance with GAAP, the CIM Materials include performance measures that the Securities and
Exchange Commission (the SEC) defines as
non-GAAP
financial measures. Management believes that such
non-GAAP
financial measures, when read in
conjunction with the Companys reported or forecasted results, in each case calculated in accordance with GAAP, can provide useful supplemental information for investors because they facilitate a period to period comparative assessment of the
Companys operating performance relative to its performance based on reported or forecasted results under GAAP, while isolating the effects of some items that vary from period to period without any correlation to core operating performance and
eliminate certain charges that management believes do not reflect the Companys operations and underlying operational performance. The Companys definition of these measures or the calculation thereof pursuant to the Companys
existing credit agreement may not be comparable to similarly titled measures of other companies because other companies may not calculate them in the same manner and should not be viewed in isolation from nor as alternatives to the most directly
comparable measure calculated in accordance with GAAP. A reconciliation of these
non-GAAP
measures to the most directly-comparable GAAP measures is set forth in the CIM Materials.
Forward-Looking Statements
This Current Report on
Form
8-K,
including the exhibit hereto, contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements
other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies
and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions
underlying any of the foregoing. Forward-looking statements may include the words may, will, estimate, intend, continue, believe, expect or anticipate
and any other similar words.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable,
actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to
inherent risks and uncertainties, such as those disclosed herein or incorporated by reference in our filings with the SEC. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially
from estimates or projections contained in our forward-looking statements include, among others, the following:
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our relationship with, and our ability to influence the actions of, our Members;
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improper action by our employees or Members in violation of applicable law;
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adverse publicity associated with our products or network marketing organization, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;
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changing consumer preferences and demands;
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the competitive nature of our business;
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regulatory matters governing our products, including potential governmental or regulatory actions concerning the safety or efficacy of our products and network marketing program, including the direct selling market in
which we operate;
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legal challenges to our network marketing program;
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the consent order entered into with the FTC, the effects thereof and any failure to comply therewith;
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risks associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, disruptions or conflicts with our third party importers, pricing and currency devaluation risks,
especially in countries such as Venezuela;
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uncertainties relating to interpretation and enforcement of legislation in China governing direct selling;
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our inability to obtain the necessary licenses to expand our direct selling business in China;
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adverse changes in the Chinese economy;
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our dependence on increased penetration of existing markets;
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contractual limitations on our ability to expand our business;
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our reliance on our information technology infrastructure and outside manufacturers;
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the sufficiency of trademarks and other intellectual property rights;
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our reliance upon, or the loss or departure of any member of, our senior management team which could negatively impact our Member relations and operating results;
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U.S. and foreign laws and regulations applicable to our international operations;
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restrictions imposed by covenants in our credit facility;
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uncertainties relating to the application of transfer pricing, duties, value added taxes, and other tax regulations, and changes thereto;
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changes in tax laws, treaties or regulations, or their interpretation;
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taxation relating to our Members;
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product liability claims;
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our incorporation under the laws of the Cayman Islands;
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whether we will purchase any of our shares in the open markets or otherwise; and
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share price volatility related to, among other things, speculative trading and certain traders shorting our common shares.
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Additional factors that could cause actual results to differ materially from our forward-looking statements
are set forth herein and in our filings with the SEC, including under the heading Risk Factors, Managements Discussion and Analysis of Financial Condition and Results of Operations and in our Consolidated Financial
Statements and the related Notes.
Forward-looking statements in this Current Report on Form
8-K,
including
the exhibit hereto, speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents. We do not undertake any obligation to update or release any
revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.