As filed with the Securities and Exchange Commission on September 19, 1997
Registration No. ______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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NATURAL HEALTH TRENDS CORP.
(Exact name of Registrant as specified in its charter)
Florida 8200 59-2705336
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
NATURAL HEALTH TRENDS CORP.
2001 West Sample Road
Pompano Beach, Florida 33064
(954) 969-9771
(Name, address and telephone number including area code
of principal executive offices)
NEAL R. HELLER
Natural Health Trends Corp.
2001 West Sample Road
Pompano Beach, Florida 33064
(954) 969-9771
(Name, address and telephone number including area code of agent for service)
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Copies to:
MARTIN C. LICHT, ESQ.
LANE & MITTENDORF LLP
320 Park Avenue
New York, New York 10022
(212) 508-3200
Approximate Date of Commencement of Proposed Sale to the Public: From
time to time after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
<PAGE>
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462 (b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|
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<TABLE>
CALCULATION OF REGISTRATION FEE
===============================================================================================================
Amount of
Title of Each Class of Amount to be Offering Price Aggregate Registra-
Securities to be Registered Registered Per Security Offering Price tion Fee
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<S> <C> <C> <C> <C>
Common Stock, par value (1) $.001 per
share 11,412,175 $0.25 $2,853,044 $864.56
Total Registration Fee(2)............... $864.56
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</TABLE>
(1) Includes the registration for resale of such presently indeterminate number
of shares of Common Stock issuable upon (i) conversion of, or as dividends on,
2,200 shares of the Company's Series A Convertible Preferred Stock (the "Series
A Preferred Stock") with a face amount of $2,200,000 issued in a private
placement in June 1997 and (ii) the payment of a 2.5% per-month penalty payable
in shares of Common Stock at the option of the holder of Series A Preferred
Stock pursuant to a Registration Rights Agreement, between the Company and such
holder. Estimated solely for purposes of calculating the registration fee in
connection with this Registration Statement and assumes that all of the Shares
and the accrued dividends thereon, are converted into shares of Common Stock
based on a price of .1969 per share of Common Stock (the average closing bid
price of the Common Stock for the five trading days ending on September 16,
1997) and using a discount rate of 25%. Pursuant to Rule 416, there are also
being registered such additional shares of Common Stock as may become issuable
to prevent dilution resulting from stock splits, or stock dividends.
(2) The offering price per share is estimated pursuant to Rule 457(c) solely for
the purpose of calculating the registration fee and is based upon the average of
the bid and asked prices of the Common Stock of the Company reported on the
NASDAQ SmallCap Market on September 16, 1997 (which date is within five business
days prior to the date of the filing of this Registration Statement).
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation, or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
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(Subject to Completion)
Dated September 19, 1997
NATURAL HEALTH TRENDS CORP.
11,412,175 Shares of Common Stock*
All of the shares of Common Stock, $ .001 par value (the "Common
Stock"), of Natural Health Trends Corp., a Florida corporation (the "Company"),
offered hereby (the "Shares") are being offered by certain selling security
holders (the "Selling Stockholders") as more fully described herein. Pursuant to
a registration rights agreement, the Company has agreed to bear all expenses
(other than underwriting discounts and selling commissions of any underwriters,
brokers, dealers or agents retained by the Selling Stockholders) in connection
with the registration and sale of the Shares being offered by the Selling
Stockholders. In addition, the Company has agreed to indemnify the Selling
Stockholders against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"). The Company will
receive none of the proceeds from any sale of the Shares by or for the account
of the Selling Stockholders.
See "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION."
The Shares may be sold from time to time by the Selling Stockholders.
Such sales may be made on The NASDAQ SmallCap Market ("NASDAQ"), in negotiated
transactions or otherwise at prices and at terms then prevailing; at prices
related to the then current market price; or at negotiated prices. The Shares
may be sold by any one or more of the following methods: (a) a block trade in
which the broker or dealer so engaged will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account; (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (d)
privately negotiated transactions. In addition, any Shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
Prospectus.
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act and
any commissions received by such broker-dealers, agents or underwriters and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
The Common Stock is traded on NASDAQ under the symbol "NHTC." On
September 16, 1997, the closing bid price per share, as reported by NASDAQ was
.28125.
*The shares of Common Stock offered hereby include the resale of such
presently indeterminate number of shares of Common Stock as shall be issued in
respect of all shares of Common Stock issuable upon (i) conversion of, or as
dividends on, 2,200 shares of the Series A Preferred Stock having a face amount
of $2,200,000 issued in a private placement in June 1997 and (ii) the payment of
a 2.5%-per-month penalty payable in shares of Common Stock at the option of the
holder of Series A Preferred Stock pursuant to a Registration Rights Agreement,
between the Company and such holder. The number of shares of Common Stock
indicated to
<PAGE>
be issuable in connection with such transactions and offered for resale hereby
is an estimate determined in accordance with a formula based on the market
prices of the Common Stock, as described in this Prospectus, and is subject to
adjustment and could be materially less or more than such estimated amount
depending upon factors which cannot be predicated by Company at this time. If,
however, all 2,200 shares of Series A Preferred Stock and the dividends thereon
were converted on September 16, 1997, the Company would be obligated to issue a
total of approximately 11,412,175 shares of Common Stock. This presentation is
not intended to constitute a prediction as to the future market price of the
Common Stock or as to the number of shares of Common Stock into which the shares
of Series A Preferred Stock will be converted. See "RISK FACTORS - Effect of
Conversion of the Debentures and Series A Preferred Stock."
THIS OFFERING INVOLVES SUBSTANTIAL INVESTMENT RISKS, AND SECURITIES
SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN THE LOSS OF THEIR
ENTIRE INVESTMENT. SEE "RISK FACTORS" ON PAGE 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________________, 1997.
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AVAILABLE INFORMATION
A Registration Statement on Form S-3 (the "Registration Statement"),
under the Securities Act, relating to the securities offered hereby has been
filed by the Company with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. Certain financial and other information relating to the
Company is contained in the documents indicated below under "Incorporation of
Certain Documents by Reference" which are not presented herein or delivered
herewith. For further information with respect to the Company and the securities
offered hereby, reference is made to such Registration Statement, exhibits and
schedules. Statements contained in this Prospectus as to the contents of any
contract or other document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as exhibits to the Registration Statement, each such statement being qualified
in all respects by such reference. A copy of the Registration Statement may be
inspected without charge or may be obtained from the Commission upon the payment
of certain fees prescribed by the Commission at the public reference facilities
maintained by the Commission in Washington, D.C. at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's Regional Offices in
New York at 7 World Trade Center, 13th Floor, New York, New York 10048 and in
Chicago at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information concerning
the Company may be inspected or copied at the public reference facilities at the
Commission located at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
and at the Commission's Regional Offices in New York, 7 World Trade Center, 13th
Floor, New York, New York 10048, and in Chicago, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
documents can be obtained at the public reference section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates or by
reference to the Company on the Commission's Worldwide Web page
(http://www.sec.gov).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996.
2. The Company's Current Report on Form 8-K dated January 7, 1997.
3. The Company's Current Report on Form 8-K dated January 31, 1997.
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<PAGE>
4. The Company's Current Report on Form 8-K dated February 19, 1997.
5. The Company's Quarterly Report on Form 10-QSB for the period
ended March 31, 1997.
6. The Company's current report on Form 8-K dated August 7, 1997.
7. The Company's Quarterly Report on Form 10-QSB for the period
ended June 30, 1997.
8. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on June 20,
1995, pursuant to Section 12(g) of the Exchange Act.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in and to be a part of
this Prospectus from the date of filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in the
Registration Statement containing this Prospectus or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person who receives this
Prospectus, upon the request of such person, a copy of any or all of the
foregoing documents referred to above which have been or may be incorporated
herein by reference, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into the information that this
Prospectus incorporates). Requests for such documents should be directed to:
Natural Health Trends Corp. 2001 West Sample Road, Pompano Beach, Florida 33064.
Telephone Number (954) 969-9771.
The Company
The Company develops and operates businesses to promote human wellness.
The Company owns and operates three vocational schools as a junior college in
Oviedo, Pompano Beach and Miami, Florida (individually, the "Oviedo School," the
"Pompano Beach School" and the "Miami School" and collectively the "Schools")
that offer training and preparation for licensing in therapeutic massage and for
registration in holistic skin care. Through its wholly owned subsidiary, Health
Wellness Nationwide Corp. ("HWNC"), the Company owns two natural
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<PAGE>
health care centers, one in Boca Raton, Florida and the other in Pompano Beach,
Florida (the "Natural Health Care Centers"), both of which provide
multi-disciplinary complementary health care in the areas of alternative and
nutritional medicine.
The Schools seek to fulfill the educational needs of adults seeking
augmented career skills or whose educational needs have not been met in
traditional educational environments. These individuals are primarily high
school graduates and underemployed adults seeking specific career skills and
training. As of December 31, 1996, 650 students were enrolled in the Schools.
The Schools are licensed under Florida law and approved by the United States
Department of Education (the "USDOE") to provide financial aid to qualified
applicants. For the year ended December 31, 1996, the Schools derived
approximately 61% of their revenues from financial aid provided under Federal or
state assistance programs.
The Company plans to expand its business operations by increasing the
enrollment of the Schools, opening additional Natural Health Care Centers, as
well as acquiring, developing and marketing proprietary lines of health care
products. However, there can be no assurance that the Company will be able to
successfully expand its operations.
On July 23, 1997, the Company, Global Health Alternatives, Inc.
("Global") and the stockholders of Global (the "Global Stockholders") entered
into an Amended and Restated Agreement and Plan of Reorganization (the
"Reorganization Agreement"). Pursuant to the Reorganization Agreement, the
Company acquired all of the outstanding stock of Global from the Global
Stockholders in exchange for 5,800,000 shares of the Company's Common Stock.
Additional shares of the Company's Common Stock are issuable to the Global
Stockholders based upon the earnings of Global following the acquisition. Global
is a company which acquires, develops and markets health care products.
The Company was incorporated under the name Florida Institute of Massage
Therapy, Inc. in Florida in December 1988 and changed its name to Natural Health
Trends Corp. in June 1993. The Company's principal offices are located at 2001
West Sample Road, Pompano Beach, Florida 33064 and its telephone number is (954)
969-9771.
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RISK FACTORS
AN INVESTMENT IN THE COMPANY INVOLVES SUBSTANTIAL INVESTMENT RISKS AND
SECURITIES SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN THE
LOSS OF THEIR ENTIRE INVESTMENT. IN EVALUATING AN INVESTMENT IN THE COMPANY AND
ITS BUSINESS PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS AMONG OTHERS.
Historical Losses
For the six months ended June 30, 1997 and 1996, the Company had an
unaudited net loss of $1,031,888 (on revenues of $4,060,922) and $345,186 (on
revenues of $3,670,430), respectively. The Company had a net loss of $889,539
(on revenues of $7,218,841) for the year ended December 31, 1996. For the year
ended December 31, 1995, the Company had a net loss of $1,838,548 (on revenues
of $3,941,259). There is no assurance that the Company can generate net income,
increase revenues or successfully expand its operations in the future. The
Company is subject to all of the problems, expenses, delays and other risks
inherent in a business with a relatively short history of operations and in a
business seeking to expand its operations, including the Company's lack of
experience in connection with operating a business offering products and
services to the public and the establishment of new businesses in undeveloped
and evolving industries. Therefore, the Company cannot predict with certainty
the success or failure of its future operations.
Dependence Upon Proposed Expansion Program
The Company's expansion plans are based upon the Company's acquisition
of additional alternative health care product companies, the acquisition of
additional alternative heath care clinics and increasing student enrollment at
the Schools.
The Company through its acquisition of additional alternative health
care product companies, of which there can be no assurance, and the recent
acquisition of Global, intends to develop and market a proprietary line of
alternative health care products. The Company's growth will be dependent, in
part, upon the development of an alternative health care product line which will
be dependent upon a number of factors, including: (i) the Company's ability to
identify and acquire suitable alternative health care product companies; (ii)
achieving market acceptance of the Company's products; (iii) regulatory
constraints; (iv) the ability of the Company to market and produce the
alternative health care products on a cost-effective basis; and (v) whether
anticipated performance levels of new alternative health care products will be
achieved.
The Company owns and operates two Natural Health Care Centers and plans
to acquire others. The Company's success in increasing revenues from its Natural
Health Care Centers will depend upon a number of factors, including: (i) the
Company's ability to identify and acquire suitable alternative health care
practices, the availability of suitable markets, and the Company's
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ability to obtain good locations within those markets; (ii) whether new Natural
Health Care Centers will be opened in accordance with the Company's plans; (iii)
regulatory constraints; (iv) the ability of the Company to operate the Natural
Health Care Centers effectively; and (v) whether anticipated performance levels
at new Natural Health Care Centers will be achieved. Any significant delay in
the opening of new Natural Health Care Centers or the failure of new Natural
Health Care Centers to achieve anticipated performance levels could adversely
affect the Company. In pursuing its expansion strategy, the Company intends to
expand its presence into new geographic markets. In entering a new geographic
market, the Company will be required to comply with laws and regulations of
jurisdictions that differ from those applicable to the Company's current
operations, as well as face competitors with greater knowledge of such markets
than the Company. There can be no assurance that the Company will be able to
effectively establish a presence in any new market.
The success of the Company's plans to increase revenue from the Schools
will be dependent upon the ability of the Schools to enroll students, as well as
the ability of the Schools' students to qualify for financial aid, the ability
of the Schools to maintain its accreditation and to comply with government
regulations, the development of additional programs of study and the
transferability of credits from the Schools to four year colleges and
universities. There can be no assurance that the Company will be able to
maintain or increase the enrollment of the Schools and increase revenue.
Many of the factors required for the various new operations to succeed
will be beyond the Company's control. These include, but are not limited to, the
effectiveness of the Company's marketing efforts in the sale of the Company's
products and in attracting students for the Schools and clients for the
alternative health care practices.
The Company's growth depends to a significant degree on its ability to
carry out its proposed expansion program, including identifying and acquiring
acquisition candidates. There can be no assurance that the Company will be able
to hire, train and integrate employees, and adapt its management, information
and other operating systems, to the extent necessary to grow in a profitable
manner. In addition, the costs associated with the Company's planned expansion
may be significantly greater than anticipated and may have a materially adverse
impact upon the Company's results and prospects. In the event that the Company's
plans for expansion are not successful, there could be a materially adverse
effect on the Company's business.
Uncertainty of Market Acceptance
The Company's expansion plans are based on offering alternative health
care products and services. The Company does not believe that the market for
products and services related to alternative health care, subject to certain
limited exceptions, is either well-developed or has an established history.
Management believes that, as is typical in an undeveloped industry, demand and
market acceptance for the services and products that the Company intends to
market will be subject to a high level of uncertainty. The Company does not
intend to conduct any formal marketing or other concept feasibility studies to
predict the commercial viability of its concepts.
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<PAGE>
The Company has limited financial, personnel and other resources to undertake
marketing activities. The Company's success will be dependent on, among other
things, its ability to identify and acquire potential acquisition candidates in
connection with the Company's Natural Health Care Centers and products business;
to maintain the necessary licenses and accreditation to operate as a
degree-granting junior college; to achieve a sufficient level of enrollment in
the Schools; and to qualify for, receive and maintain any licenses necessary to
operate, and to obtain a sufficient level of acceptance of the services of the
Natural Health Care Centers. In light of the relatively undeveloped markets for
the Company's services and products and the lack of significant funds for
marketing, there can be no assurance that substantial markets will develop and,
if so, whether the Company can exploit them profitably.
Need for Additional Financing
The Company will require additional financing to pursue its expansion
plans. If the Company secures such financing, there can be no assurance that
such financing will be sufficient. If the Company's revenues are not adequate to
fund its operations, or to enable the Company to implement its present plans for
expansion, then the Company will have to seek further financing. In addition,
the Company intends to seek to acquire and open additional Natural Health Care
Centers and acquire additional alternative health care product companies, of
which there can be no assurance. As it is likely that revenues from the
Company's operations at such time will not be sufficient, the Company will be
required to raise additional capital to make such acquisitions and finance the
operations of such new businesses. Such additional financing may be in the form
of indebtedness from institutional lenders or other third parties or as equity
financing. There can be no assurance that such financing will be available and,
if so, on acceptable terms. Any such financing may result in significant
dilution to the Company's shareholders or cause the Company to become overly
leveraged.
Competition
The Schools compete with (i) regional vocational schools and national
vocational schools which offer occupational training programs in massage
therapy, holistic skin care and in related and unrelated fields, (ii) two and
four year universities and colleges, and (iii) on-the-job training offered by
private and government employers. Many current and future competitors have
greater financial, recruiting and job placement resources than the Company, have
longer operating histories and are more established than the Company, and have
more extensive facilities and more personnel than the Company has now or will
have in the foreseeable future.
The Company's Natural Health Care Centers compete and will compete with
doctors, hospitals and medical clinics offering traditional forms of health care
and other practicing therapists offering traditional forms of health care, as
well as with other providers of holistic forms of health care and health
maintenance. Many of these competitors will have established practices and
greater financial resources than the Company. In addition, the services offered
by the Company's competitors may be covered by medical insurance or other third
party reimbursement.
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The sales of vitamin, minerals and other alternative health care related
products which the Company intends to offer are highly competitive, and the
Company expects competitive pressures to continue in the future. In the vitamin
and mineral supplement line, the Company will compete on a regional basis
directly with specialty health retailers and also with mass merchandisers such
as drug stores and supermarkets. Many of the Company's competitors are larger
and have greater resources than the Company. The Company's future performance
will be subject to a number of factors beyond its control, including any future
economic downturns and any cyclical variations in the retail market for vitamin,
mineral and other alternative health care related products, as well as the
publication of positive or negative product safety and efficacy studies by the
U.S. Department of Health and Human Services and other health and medical
authorities.
Government Regulation of Alternative Health Care Products
The processing, formulation, packaging, labeling and advertising of the
Company's alternative health care products will be subject to regulation by one
or more federal agencies, including the Food and Drug Administration (the
"FDA"), the Federal Trade Commission (the "FTC"), the Consumer Product Safety
Commission and the United States Department of Agriculture and the Environmental
Protection Agency. These activities are also regulated by various agencies of
the states and localities. The FDA, in particular, regulates the advertising,
labeling and sales of vitamin and mineral supplements if the FDA believes they
are unapproved drugs or food additives rather than food supplements. Compliance
with the rules and regulations of such agencies is complex and entails continued
diligence.
The Company cannot determine what effect additional legislation,
rule-making, or other governmental regulations or administrative orders, when
and if promulgated, would have on its business in the future. They could
require, among other things, the reformulation of certain products to meet new
standards, the recall or discontinuance of certain products not capable of
reformation, additional recordkeeping, expanded documentation of the properties
of certain products, or expanded or different labeling or scientific
substantiation. Any or all of such requirements could adversely affect the
Company's operations and its financial condition.
Regulation of Natural Health Care Centers
The specialists whose services are offered at the Natural Health Care
Centers and other proposed Natural Health Care Centers, such as acupuncturists,
chiropractors, physicians, nutritionists, skin care professionals and
aestheticians, are subject to ongoing professional licensing requirements. The
failure of such persons to practice in accordance with professional licensing
requirements could have a material adverse effect on the Company.
Moreover, the Natural Health Care Centers may be subject to scrutiny by
state or federal health care enforcement officials. Although the Company
believes its Natural Health Care Centers do not violate applicable federal or
state health care regulatory requirements, there can be no assurance that health
care enforcement officials will not take a contrary view. Investigations or
prosecutions by such enforcement officials could have a material adverse effect
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on the Company, even if the operation of the Company's Natural Health Care
Centers were subsequently determined lawful.
Reliance on Alternative Health Care Practitioners
The Company's revenue is dependent, in part, on revenue generated by the
Natural Health Care Centers which are operated on a daily basis by alternative
health care practitioners. There can be no assurance that any such Natural
Health Care Center will result in a successful practice. The profitability of
the Natural Health Care Centers will be dependent on the abilities of the
alternative health care practitioners to operate the clinics effectively.
Health Care Reform
The Company anticipates that Congress and state legislatures will
continue to review and assess health care delivery and payment systems and may
in the future propose and adopt legislation effecting fundamental changes in the
health care delivery system, which may affect the Company's Natural Health Care
Centers. Also, Congress is expected to consider major reductions in the rate of
increase of Medicare and Medicaid spending as part of efforts to balance the
budget of the United States. The Company cannot predict the ultimate timing,
scope or effect of any legislation concerning health care reform, including
legislation affecting the Medicare and Medicaid programs. Any proposed federal
legislation, if adopted, could result in significant changes in the
availability, delivery, pricing and payment for health care services and
products. Various state agencies also have undertaken or are considering
significant health care reform initiatives. Although it is not possible to
predict whether any health care reform legislation will be adopted or, if
adopted, the exact manner and the extent to which the Company will be affected,
it is likely that the Company will be affected in some fashion, and there can be
no assurance that any health care reform legislation, if and when adopted, will
not have a material adverse effect on the Company.
State Laws Regarding Prohibition of Corporate Practice of Medicine
The Company's Natural Health Care Centers are wholly-owned by the
Company. Corporations such as the Company are not permitted under certain state
laws to practice medicine or exercise control over the medical judgments or
decisions of practitioners. Corporate practice of medicine laws and their
interpretations vary from state to state and are enforced by the courts and by
regulatory authorities with broad discretion. The Company believes that it
performs only non-medical services, does not represent to the public or its
clients that it offers medical services, but instead offers non-medical
alternative health care services. Expansion of the operations of the Company to
certain jurisdictions may require structural and organizational modifications of
the Company's form of relationship with alternative health care practitioners in
order to comply with corporate practice of medicine laws, which could have an
adverse effect on the Company. Although the Company believes its operations as
currently conducted are in material compliance with existing applicable laws,
there can be no assurance that the Company's structure will not be challenged as
constituting the unlicensed practice of medicine. If such a challenge were made
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successfully in any state, the Company could be subject to civil and criminal
penalties under such state's law. Such results could have a material adverse
effect upon the Company.
Lack of Third Party Reimbursable Insurance Coverage
The Company anticipates that medical insurance coverage and other third
party reimbursement will not be available for most of the services offered by
the Company's Natural Health Care Centers and to the extent that such services
are covered, coverage may be limited. The lack of medical insurance coverage or
other third party reimbursement for all of the services performed at the Natural
Health Care Centers may affect the ability to attract and retain patients.
Ability to Increase Enrollment at the Schools
In January 1997, the Company was granted a license to operate its
Schools as a degree-granting junior college. However, the success of the
Company's plans to operate the Schools as a degree-granting junior college will
be dependent upon, among other things, the ability of the Schools to enroll
students, the development of additional programs of study and the
transferability of credits from the Schools to four year colleges and
universities.
The transferability of credits from one educational institution to
another, absent an articulation agreement between the two schools, is generally
at the discretion of the receiving institution. The factors that receiving
institutions typically consider include, but are not limited to, the similarity
of accrediting commissions, the licensing status of the two institutions and the
similarity of program content, curriculum and textbooks. In addition, many
institutions enter into articulation agreements which establish specific
guidelines for the transfer of credits from one institution to another. However,
these agreements are not required by law, and the content may vary dramatically
depending on whether the institution is a public, private, academic or
vocational/technical school. Absent articulation agreements between the two
schools, consideration for the acceptance of transfer of credits is more
subjective than the transfer of credits between otherwise similar public or
private institutions. There can be no assurance that credits from the Schools'
courses will be transferable. If the ability of the Schools' students to
transfer credits to four year colleges and universities is limited, then the
Schools' ability to recruit new students may be impaired.
Dependence on Accreditation and Student Financial Aid Programs
The Company and its Schools must comply with a variety of Federal and
state regulations in order for eligible students to qualify for government
financial aid for tuition and related expenses. These include requirements that
the Schools offer a mandated minimum tuition refund to students who leave the
Schools before completing their programs of study and that the percentage of
students enrolled without a high school or general equivalency diploma be below
specified levels. In addition, under USDOE regulations, educational institutions
with annual student loan default rates in excess of 25% (30% prior to 1994) for
three consecutive years may lose their eligibility for student loans. The
Schools' student loan default rates for 1993 and 1994
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<PAGE>
were determined to be 10% and 9.9%, respectively. The default rates for 1995 and
1996 will not be available from the USDOE until the third quarters of 1997 and
1998, respectively. Moreover, under Federal regulations, a student drop-out rate
in excess of 33% may impair an institution's ability to administer financial aid
programs and is one factor in determining whether to deny an institution's
certification to participate in Federal student aid programs. A student drop-out
rate exceeding 33%, however, is not alone sufficient to disqualify an
institution from such participation, but must be viewed in conjunction with
other factors such as loss of state licensing, loss of accreditation, poor
periodic reviews or high student loan default rates. The Schools' dropout rate
in 1996 was approximately 12%. The Schools may also be deemed ineligible to
participate in financial aid programs if the USDOE determines that 85% or more
of the Schools' operating revenue is derived from Title IV financial aid
programs (the "85-15 Rule"). According to the Company's preliminary
calculations, the Schools derived approximately 61% of their revenues for 1996
from Title IV Federal financial aid programs. The official determination of the
Company's compliance for the year ended December 31, 1996 with the 85-15 Rule
will likely be made in the second quarter of 1998. There can be no assurance
that the Schools will be able to meet the standards set by USDOE regulations or
otherwise remain eligible to participate in Federal financial aid programs.
Federal regulations require the accreditation of a school by a private
commission recognized by the USDOE. The accreditation commission, in turn, sets
additional standards relating to curricula, teacher qualifications and other
matters. When a school wishes to participate in student aid programs, the school
applies for accreditation from an accrediting body and a designation from the
USDOE that it is an approved educational institution where eligible students may
participate in government-sponsored student financial aid programs. The
Company's Schools are accredited by the Accrediting Commission of the Career
Schools and Colleges of Technology and the Schools' Therapeutic Massage Training
Program is accredited by the Commission on Massage Training
Approval/Accreditation of the American Massage Therapy Association. There can be
no assurance that the Company's Schools will be able to maintain their
accreditation.
The loss of accreditation would result in the loss of the Company's
ability to offer Federal financial aid under Title IV of the Higher Education
Act of 1965, as amended ("Title IV") (Federal Pell Grants and/or Federal Family
Educational Loan Programs), and would severely restrict the Company's ability to
attract substantial numbers of students. During the year ended December 31, 1996
the Company's Schools depended on government funding under Federal student
financial aid programs for approximately 61% of its revenues, respectively.
Numerous Federal projects, including Title IV financial aid programs, that
provide funds for student loans and grants, are currently under scrutiny by the
U.S. Congress. There can be no assurance that these Federal programs, or other
state programs, will not be reduced or eliminated. The loss of accreditation or
a reduction of Federal student financial aid programs would have a material
adverse effect on the Company.
Possible Loss of Student Financial Aid, License and Accreditation in the Event
of a Change of Control of the Company
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<PAGE>
Under current USDOE regulations, a change in control of the Schools
could result in a temporary or a permanent loss of Federal financial aid funds
to the Schools' students. In addition, under the regulations of the State Board
of Independent Postsecondary, Vocational, Technical, Trade and Business Schools
of the Florida Department of Education (the "Florida State Board") a change of
ownership resulting in a change of control may result in the termination of the
Schools' licenses. The Schools will also require the approval of the Schools'
accrediting commission upon a change of control. Pursuant to the USDOE
regulations, a determination of a change of control would involve a review of
which persons or entities have the power to direct or cause the direction of
management and policies of the Schools. Under the Florida State Board's
regulations, a change of control constitutes a change in the authority to
establish or modify school policies, standards and procedures or the authority
to make the effective decisions regarding the implementation or enforcement of
school policies, standards and procedures. In such event, the prior approval of
the Florida State Board is required. Under the rules of the Schools' accrediting
commission, a change of control occurs when a person or a corporation obtains
authority to control the actions of the institution, including a change of
control which occurs as a result of a transfer in voting interest. The Company
believes that, although there can be no assurance, as a result of the issuance
of Common Stock in connection with the acquisition of Global, there has not been
or will not be a change of control that will result in a loss of its eligibility
for Federal financial aid funds, a review of its licenses, or the requirement of
prior approval by its accrediting commission. Should the percentage ownership of
the Company's Common Stock by the Company's present shareholders, officers and
directors decrease further through the issuance of additional shares of Common
Stock, the issue of whether there was a change of control, if raised by the
USDOE, the Florida State Board or the accrediting commission, would be
determined pursuant to the standards set forth above, on the basis of the facts
then existing, including the percentage ownership of the present shareholders,
officers and directors, as compared with the holdings of others and other
factors relating to the actual control of the Company. Should there be a
determination that a change of control had occurred by the USDOE, the Florida
State Board or the Schools' accrediting commission and there was disruption or
termination of the availability of Federal financial aid to the Schools'
students or a termination or interruption of the licenses or accreditation of
the Schools, there would be a material adverse effect on the Company, its
business and its prospects.
Dependence on State Licensing of the Schools
The Company is dependent on state licensing from the Florida State Board
to operate its Schools and to recruit students. Extensive and complex
regulations govern these matters. Moreover, many other states require
post-secondary educational institutions operated with private investment capital
to post surety bonds as a precondition to licensing. Although the Company is not
required to post surety bonds with state regulatory authorities at this time,
there is no assurance that the Company will not be required to do so in the
future. Moreover, if certain financial tests recently adopted by the California
legislature and similar regulations adopted or proposed by other state
regulators are adopted in Florida, or if the Company expands into jurisdictions
in which such regulations are in effect, the Company may be unable to satisfy
the applicable requirements. The Company might be unable to operate its Schools
or otherwise be
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<PAGE>
materially and adversely affected if it is unable to comply with current or
future rules and regulations.
The present state licenses for the Company's Schools in Miami, Pompano
Beach and Oviedo expire on September 30, 1997, March 31, 1998 and November 30,
1997, respectively, and are subject to renewal at such times. The license for
the Miami School and the Oviedo School must be renewed on an annual basis. The
license for the Pompano Beach School must be renewed on a biennial basis since
it has been licensed and in good standing for more than five years. There can be
no assurance that the Florida State Board will renew the licenses of each of the
Schools. The failure of the Florida State Board to renew each of the Schools'
licenses would have a material adverse effect on the Company.
Potential Liability; Insurance
The operation of the Natural Health Care Centers and the offering of
alternative health care products exposes the Company to the possibility of
personal injury, products or other liability claims. The Company maintains a
general liability insurance policy which is subject to a $1,000,000 per
occurrence limit with a $2,000,000 aggregate limit. The Company also maintains a
professional liability insurance policy which is subject to a $1,000,000 per
occurrence limit with a $3,000,000 aggregate limit. The Company carries
$1,000,000 of malpractice insurance with respect to the Natural Health Care
Centers. The Company anticipates procuring additional insurance in connection
with the Company's proposed expansion plans. There can be no assurance, however,
that the Company's insurance will be sufficient to cover potential claims or
that an adequate level of coverage will be available in the future at reasonable
cost, if at all. A successful claim against the Company which exceeds, or is not
covered by, its insurance policies could have a material adverse effect on the
Company. In addition, the Company may be required to expend significant
resources and energy in defending against any claims.
Dependence on Key Personnel
The Company believes that its success depends to a significant extent on
the efforts and abilities of Neal R. Heller, President and a director of the
Company, and on Elizabeth S. Heller, Secretary, and a director of the Company.
Mr. and Mrs. Heller have each entered into employment agreements with the
Company that expire in December 1997. The success of the company's alternative
health care products depends primarily upon Sir Brian Wolfson of Global. The
success of the Company's Natural Health Care Centers depends upon Kaye Lenzi,
their administrator, and other alternative care practitioners. The loss or
curtailment of the services of any of such employees would have a materially
adverse effect on the Company. The ability of the Company to realize its
business strategy might be jeopardized if any of such individuals becomes
incapable of fulfilling his or her obligations to the Company and a qualified
successor is not found promptly. The Company's success also depends upon its
ability to attract and retain qualified personnel, including both instructors
and practitioners of other holistic health care services. While the Company
believes there are numerous qualified holistic health care practitioners
currently available, competition for such personnel may increase. If the Company
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<PAGE>
acquires existing Natural Health Care Centers to be operated, the Company will
be dependent on the key employees of such clinics.
Risk of Foreclosure of Mortgaged Property
The Company's property in Pompano Beach, Florida, (the "Pompano
Property") is encumbered by mortgages securing repayment of loans. In the event
that the Company defaults on its obligations under such mortgage loans, the
mortgagee could foreclose on the mortgages encumbering the Pompano Property. A
foreclosure of the mortgage loans on the Pompano Property would have a material
adverse effect on the Company.
Indemnification of Officers and Directors
The Articles of Incorporation of the Company provide that the Company
shall indemnify to the fullest extent permitted by Florida law any person whom
it may indemnify thereunder, including directors, officers, employees and agents
of the Company. Such indemnification (other than as ordered by a court) shall be
made by the Company only upon a determination that indemnification is proper in
the circumstances because the individual met the applicable standard of conduct.
Advances for such indemnification may be made pending such determination. In
addition, the Articles of Incorporation provide for the elimination, to the
extent permitted by Florida law, of personal liability of directors to the
Company and its shareholders for monetary damages for breach of fiduciary duty
as directors. The foregoing may reduce the likelihood of derivative litigation
against directors and officers of the Company and may discourage or deter
shareholders or management from suing directors or officers for breaches of
their duty of care, even though such an action, if successful, might otherwise
benefit the Company and its shareholders.
Control by Current Shareholders, Officers and Directors
The current officers and directors of the Company beneficially own an
aggregate of approximately 30.3% of the Company's Common Stock and are in a
position to influence the election of the Company's directors and otherwise
essentially control the outcome of all matters requiring shareholder approval
including election of the Company's directors.
No Dividends
The Company has not paid any cash dividends on its Common Stock to date
and does not anticipate declaring or paying any cash dividends in the
foreseeable future. In addition, future financing arrangements, if any, may
preclude or otherwise restrict the payment of dividends.
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<PAGE>
Shares Eligible for Future Sale
Of the 19,002,561 shares of Common Stock currently outstanding,
11,956,802 are "restricted securities" as that term is defined in Rule 144 under
the Securities Act and may only be sold pursuant to a registration statement
filed under the Securities Act or in compliance with Rule 144 or another
exemption from the registration requirements of the Securities Act. In general,
under Rule 144, subject to the satisfaction of certain other conditions, a
person, including an affiliate of the Company, who has beneficially owned
restricted shares of Common Stock for at least one year is entitled to sell,
within any three-month period, a number of shares that does not exceed the
greater of 1% of the total number of outstanding shares of the same class, or if
the Common Stock is quoted on NASDAQ or a stock exchange, the average weekly
trading volume during the four calendar weeks immediately preceding the sale. A
person who presently is not and who has not been an affiliate of the Company for
at least three months immediately preceding the sale and who has beneficially
owned the shares of Common Stock for at least three years is entitled to sell
such shares under Rule 144 without regard to any of the volume limitations
described above.
In addition, 3,666,666 shares of Common Stock are reserved for issuance
upon the exercise of options which have been granted or may be granted under the
Company's Stock Option Plans and an additional 6,943,344 shares of Common Stock
are issuable upon the exercise of outstanding options, warrants and conversion
rights, excluding the Debentures and the Series A Preferred Stock. To the extent
that options are exercised, dilution to the interests of the Company's
shareholders may occur. Moreover, the terms upon which the Company will be able
to obtain additional equity capital may be adversely affected, since the holders
of the outstanding options, warrants, or conversion rights can be expected to
exercise them, to the extent they are able to, at a time when the Company would,
in all likelihood, be able to obtain any needed capital on terms more favorable
to the Company than those provided in the options, warrants or conversion
rights.
Limited Prior Public Market; Potential Volatility of Stock Price
The Company's Common Stock has been traded on NASDAQ since June 21,
1995. There can be no assurance that an active public market will continue for
the Common Stock, or that the market price for the Common Stock will not decline
below its current price. Such price may be influenced by many factors,
including, but not limited to, investor perception of the Company and its
industry and general economic and market conditions. The trading price of the
Common Stock could be subject to wide fluctuations in response to announcements
of business developments by the Company or its competitors, quarterly variations
in operating results, and other events or factors. In addition, stock markets
have experienced extreme price volatility in recent years. This volatility has
had a substantial effect on the market prices of companies, at times for reasons
unrelated to their operating performance. Such broad market fluctuations may
adversely affect the price of the Common Stock.
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<PAGE>
Possible Delisting of Common Stock on NASDAQ; Possible Adverse Effect on Trading
Market
The Common Stock is quoted on the NASDAQ SmallCap Market. There are a
number of continuing requirements that must be met in order for the Common Stock
to remain eligible for quotation on NASDAQ. In order to continue to be quoted on
NASDAQ, a company must maintain $2 million in total assets, a $200,000 market
value of the public float and $1 million in total capital and surplus. NASDAQ
has recently adopted changes to such listing criteria. The Company will be
required to comply with these rules by February 1998. Under the new rules for
continued listing, the Company, generally, must have (i) net tangible assets of
$2,000,000, a market capitalization of at least $35,000,000 or net income in two
of the last three years of at least $500,000, (ii) a minimum of 500,000 shares
publicly held, (iii) a minimum of $1,000,000 market value of public float, (iv)
a minimum bid price of $1.00 per share and (v) a minimum of 300 shareholders.
Under the new rules, for initial listing the Company, generally must have (i)
net tangible assets of at least $4,000,000, a market capitalization of at least
$50,000,000 or net income in two of the last three years of $750,000, (ii) a
minimum of 1,000,000 shares publicly held, (iii) a minimum of $5,000,000 in
market value of public float, (iv) a minimum bid price of $4.00 per share, (v) a
minimum of 300 shareholders and (vi) an operating history of 14 years or a
market capitalization of $50,000,000. The failure to meet these maintenance
criteria in the future could result in the delisting of the Company's Common
Stock from NASDAQ. In such event, trading, if any, in the Common Stock may then
be conducted in the non-NASDAQ over-the-counter market. As a result, an investor
may find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Common Stock.
In addition, if the Common Stock were delisted from trading on NASDAQ
and the trading price of the Common Stock were less than $5.00 per share,
trading in the Common Stock would also be subject to the requirements of certain
rules promulgated under the Securities Exchange Act of 1934, which require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a penny stock (generally, any non-NASDAQ equity security that
has a market price of less than $5.00 per share, subject to certain exceptions).
Such rules require the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
therewith, and impose various sales practice requirements on broker-dealers who
sell penny stocks to persons other than established customers and accredited
investors (generally institutions). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. The additional burdens imposed upon broker-dealers may discourage
broker-dealers from effecting transactions in penny stocks, which could reduce
the liquidity of the shares of Common Stock and thereby have a material adverse
effect on the trading market for the securities.
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<PAGE>
Anti-Takeover Effect of Issuance of Preferred Stock
The Company's Articles of Incorporation authorize the issuance of
1,500,000 shares of "blank check" preferred stock with such designations, rights
and preferences as may be determined from time to time by the Board of
Directors. Accordingly, the Board of Directors is empowered, without shareholder
approval, to issue preferred stock with dividends, liquidation, conversion,
voting or other rights which could decrease the amount of earnings and assets
available for distribution to holders of Common Stock and adversely affect the
relative voting power or other rights of the holders of the Company's Common
Stock. In the event of issuance, the preferred stock could be used, under
certain circumstances, as a method of discouraging, delaying or preventing a
change in control of the Company.
Risks Associated with Forward-Looking Statements
This Prospectus contains certain forward-looking statements regarding
the plans and objectives of management for future operations, including plans
and objectives relating to the development of Natural Health Care Centers, the
operation of the Schools and the acquisition of companies that offer alternative
health care products. The forward-looking statements included herein are based
on current expectations that involve numerous risks and uncertainties. The
Company's plans and objectives are based on a successful execution of the
Company's expansion strategy and assumptions that Company's operations will be
profitable, that the alternative health care industry will not change materially
or adversely, and that there will be no unanticipated material adverse change in
the Company's operations or business. Assumptions relating to the foregoing
involve judgments with respect to, among other things, future economic,
competitive and market conditions and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
the control of the Company. Although the Company believes that its assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance that the
forward-looking statements included herein will prove to be accurate. In light
of the significant uncertainties inherent in the forward-looking statements
included herein, particularly in view of the Company's early stage of operations
in various new businesses, the inclusion of such information should not be
regarded as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.
Effect Of Conversion Of The Debentures and Series A Preferred Stock
The exact number of shares of Common Stock issuable upon conversion of
the Series A Preferred Stock offered hereby and the Company's outstanding
convertible debentures in the original principal amount of $1,000,000 (the
"Debentures") will vary inversely with the market price of the Common Stock. The
holders of Common Stock may be materially diluted by conversion of the
Debentures and the shares of Series A Preferred Stock depending on the future
market price of the Common Stock. The Debentures and the shares of Series A
Preferred Stock are convertible into Common Stock based upon the average of the
closing bid price on NASDAQ for the five days preceding notice of conversion at
a discount. On September 16, 1997, the five
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<PAGE>
day average of the closing bid price of the Common Stock on NASDAQ was $.2625
per share. If such price were used to determine the number of shares of Common
Stock issuable upon conversion of the Series A Preferred Stock and the
Debentures then outstanding including interest and dividends thereon, the
Company would issue a total of approximately 15,447,903 shares of Common Stock,
if all of the shares of Series A Preferred Stock and Debentures were converted
on such date. To the extent the average closing bid price is lower or higher
than $.2625 on any date on which shares of Debentures and Series A Preferred
Stock are converted, the Company would issue more or fewer shares of Common
Stock than reflected in such estimate, and such difference could be material
"DESCRIPTION OF SECURITIES - Debentures".
USE OF PROCEEDS
Since this Prospectus relates to the offering of Shares by the Selling
Stockholders, the Company will not receive any proceeds from the sale of the
Shares offered hereby. See "SELLING STOCKHOLDERS."
SELLING STOCKHOLDERS
The following table sets forth the name and the number of shares of
Common Stock beneficially owned by each Selling Stockholder as of September 16,
1997, the number of Shares to be offered by each Selling Stockholder pursuant to
this Prospectus and the number of shares to be beneficially owned by each
Selling Stockholder after the Offering if all of the Shares offered hereby by
such Selling Stockholder are sold as described herein. Except as noted below,
the Selling Stockholders have not held any position or office with, been
employed by, or otherwise had a material relationship with, the Company, other
than as stockholders of the Company subsequent to their respective acquisition
of shares of Common Stock. The Shares are being registered to permit public
secondary trading of the Shares, and the Selling Stockholders may offer the
Shares for resale from time to time. See "PLAN OF DISTRIBUTION."
Certain Shares being offered hereby by the Selling Stockholders may be
acquired, from time to time, upon (i) conversion of, or as dividends on, 2,200
shares of the Series A Preferred Stock with a face amount of $2,200,000 issued
in a private placement in June 1997 and (ii) the payment of a 2.5%-per-month
penalty payable in shares of Common Stock at the option of the holder of Series
A Preferred Stock pursuant to a Registration Rights Agreement between the
Company and such holder. Once the Commission has declared effective the
Registration Statement of which this Prospectus forms a part, the Series A
Preferred Stock is convertible into Common Stock at a conversion price equal to
75% of the average closing bid price of the Common Stock as reported on the
NASDAQ for the five consecutive trading days immediately preceding the date of
conversion. Pursuant to the terms of the Series A Preferred Stock, no holder can
convert any portion of such holder's Series A Preferred Stock if such conversion
would increase such holder's beneficial ownership of the Common Stock (other
than shares so owned through ownership of the Series A Preferred Stock) to in
excess of 4.9%.
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<PAGE>
In recognition of the fact that Selling Stockholders may wish to be
legally permitted to sell their Shares when they deem appropriate, the Company
has filed with the Commission, under the Securities Act, a Registration
Statement on Form S-3, of which this Prospectus forms a part, with respect to
the resale of the Shares from time to time on NASDAQ or in privately-negotiated
transactions and has agreed to prepare and file such amendments and supplements
to the Registration Statement as may be necessary to keep the Registration
Statement effective until the Shares are no longer required to be registered for
the sale thereof by the Selling Stockholders.
The Company has agreed to pay for all costs and expenses incident to the
issuance, offer, sale and delivery of the Shares, including, but not limited to,
all expenses and fees of preparing, filing and printing the Registration
Statement and Prospectus and related exhibits, amendments and supplements
thereto and mailing of such items. The Company will not pay selling commissions
and expenses associated with any such sales by the Selling Stockholders. The
Company has agreed to indemnify the Selling Stockholders against civil
liabilities including liabilities under the Securities Act.
Except as otherwise indicated, to the knowledge of the Company, all
persons listed below have sole voting and investment power with respect to their
securities. The information in the table concerning the Selling Stockholders who
may offer Shares hereunder from time to time is based on information provided to
the Company by such securityholders, except for the assumed conversion price of
shares of Series A Preferred Stock into Common Stock, which is based solely on
the assumptions discussed or referenced in footnote (1) to the table.
Information concerning such Selling Stockholders may change from time to time
and any changes of which the Company is advised will be set forth in a
Prospectus Supplement to the extent required. See "PLAN OF DISTRIBUTION."
<TABLE>
Number of Shares of Number of Shares Number of Shares
Name of Selling Common Stock of Common Stock Beneficially Owned
Stockholder Beneficially Owned Offered Hereby After Offering
<S> <C> <C> <C>
Sovereign Partners 4,927,986 (1) 4,927,986 (2) 0
Limited Partnership
Dominion Capital 2,593,677 (1) 2,593,677 (2) 0
Fund Ltd.
Canadian Advantage 2,593,677 (1) 2,593,677 (2) 0
Limited Partnership
FT Trading 1,296,835 (1) 1,296,835 (2) 0
--------- --------- ---
Total 11,412,175 11,412,175 0
</TABLE>
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<PAGE>
(1) Such beneficial ownership represents the aggregate of (a) the number of
shares of Common Stock beneficially owned by each such person and (b) an
estimate of the number of the shares of Common Stock issuable upon the
conversion of the shares of Series A Preferred Stock beneficially owned by such
person, assuming an average closing bid price of .2625 for the five trading days
preceding September 16, 1997, the price which would be utilized if the Series A
Preferred Stock was converted on September 16, 1997. The actual number of shares
of Common Stock offered hereby is subject to adjustment based on the market
price of the Common Stock and could be materially less or more than the
estimated amount indicated depending upon factors which cannot be predicted by
the Company at this time. This presentation is not intended to constitute a
prediction as to the future market price of Common Stock. The number of shares
of Common Stock beneficially owned prior to the offering assumes conversion of
all of the shares of Series A Preferred Stock described in this footnote (1).
See "RISK FACTORS -- Effect of Conversion the Debentures and Series A Preferred
Stock" and "DESCRIPTION OF SECURITIES."
(2) Represents the estimate of the number of shares of Common Stock issuable
upon conversion of shares of Series A Preferred Stock beneficially owned by such
person as described in Footnote (1) above.
The Selling Stockholders are offering the Shares for their own
account, and not for the account of the Company. The Company will not receive
any proceeds from the sale of the Shares by the Selling Stockholders.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling
Stockholders. Such sales may be made through ordinary brokerage transactions,
the over-the-counter market, or otherwise at prices and at terms then
prevailing, at prices related to the then current market price or at negotiated
prices. The Shares may be sold by any one or more of the following methods: (a)
a block trade in which the broker or dealer so engaged will attempt to sell the
securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker as principal
and resale by such broker or dealer for its account, (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (d)
privately negotiated transactions. In addition, any Shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
Prospectus.
The Selling Stockholders and any broker-dealers, agents or
underwriters that participate with the Selling Stockholder in the distribution
of the Shares may be deemed to be "underwriters" within the meaning of the
Securities Act and any commissions received by such broker-dealer, agent or
underwriter and any profit on the resale of the Shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
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<PAGE>
Under the Exchange Act and the regulations thereunder, any person
engaged in a distribution of the Shares offered by this Prospectus may
simultaneously engage in market making activities with respect to the Common
Stock during any applicable "Cooling off" periods prior to the commencement of
such distribution. In addition, and without limiting the foregoing, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder including, without limitation, Rules 10b-6
and 10b-7, which provisions may limit the timing of purchases and sales of
Common Stock by the Selling Stockholders.
The Company has agreed to indemnify the Selling Stockholders
against liabilities incurred by the Selling Stockholders by reason of
misstatements or omissions to state material facts in connection with the
statements made in this Prospectus and the Registration Statement of which it
forms a part. The Selling Stockholders, in turn, have agreed to indemnify the
Company against liabilities incurred by the Company by reason of misstatements
or omissions to state material facts in connection with statements made in the
Registration Statement and Prospectus based on information furnished in writing
by the Selling Stockholders. To the extent that such section of the Registration
Rights Agreement may purport to provide exculpation from possible liabilities
arising under the Federal securities laws, it is the opinion of the Commission
that such indemnification is contrary to public policy and unenforceable.
DESCRIPTION OF SECURITIES
General
The total authorized capital stock of the Company is 40,000,000
shares of Common Stock, $.001 par value per share, and 1,500,000 shares of
Preferred Stock, $.001 par value per share. The Company has 19,002,561 shares of
Common Stock issued and outstanding, which are held by approximately 1,000
shareholders, and an additional 10,610,001 shares of Common Stock issuable upon
exercise of outstanding options, warrants and conversion rights, including
shares of Common Stock issuable under the Company's Stock Option Plan, but
excluding the shares of Common Stock issuable upon the conversion of the
Debentures and Series A Preferred Stock.
Common Stock
Each share of Common Stock entitles the holder thereof to one
vote on all matters submitted to a vote of the shareholders. Since the holders
of Common Stock do not have cumulative voting rights, holders of more than 50%
of the outstanding shares can elect all of the directors of the Company then
being elected and holders of the remaining shares by themselves cannot elect any
directors. The holders of Common Stock do not have preemptive rights or rights
to convert their Common Stock into other securities. Holders of Common Stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out
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of funds legally available therefor. In the event of a liquidation, dissolution
or winding up of the Company, holders of the Common Stock have the right to a
ratable portion of the assets remaining after payment of liabilities subject to
any superior claims of any shares of Preferred Stock hereafter issued. See "-
Preferred Stock." All shares of Common Stock outstanding and to be outstanding
upon completion of the Offering are and will be fully paid and nonassessable.
Preferred Stock
The Company is authorized by its Articles of Incorporation to
issue a maximum of 1,500,000 shares of Preferred Stock, in one or more series
and containing such rights, privileges and limitations, including voting rights,
dividend rates, conversion privileges, redemption rights and terms, redemption
prices and liquidation preferences, as the Board of Directors of the Company
may, from time to time, determine. Except for the 2,200 shares of Series A
Preferred Stock, no shares of Preferred Stock have ever been issued.
The issuance of shares of Preferred Stock pursuant to the Board's
authority could decrease the amount of earnings and assets available for
distribution to holders of Common Stock, and otherwise adversely affect the
rights and powers, including voting rights, of such holders and may have the
effect of delaying, deferring or preventing a change in control of the Company.
The Company is not required by current Florida Law to seek shareholder approval
prior to any issuance of authorized but unissued stock and the Board of
Directors does not currently intend to seek shareholder approval prior to any
issuance of authorized but unissued shares of Preferred Stock or Common Stock,
unless otherwise required by law.
Series A Preferred Stock
The Company has 2,200 shares of Series A Preferred Stock
outstanding with a face amount of $2,200,000. The shares of Series A Preferred
Stock were issued to four investors in a private placement in June 1997.
For a full description of the relative rights, preferences,
privileges and restrictions, including among other things, dividend rights,
conversion rights, liquidation preferences and terms of redemption, reference is
made to the Articles of Amendment of Articles of Incorporation, filed in the
office of the Secretary of State of Florida, a copy of which is available from
the Company upon request.
Conversion
Once the Commission has declared effective the Registration
Statement, of which this Prospectus forms a part, each share of Series A
Preferred Stock will be convertible into shares of Common Stock at a conversion
price equal to 75% (the "Applicable Percentage") of the average closing bid
price of the Common Stock as reported by NASDAQ, during the five trading days
immediately preceding the date notice of conversion is given to the Company. The
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holder of each share of Series A Preferred Stock is entitled to a payment of
2.5% per month commencing August 4, 1997, until such Registration Statement
becomes effective, payable in cash or shares of Common Stock at the option of
the holder. Shares of Series A Preferred Stock are converted automatically into
shares of Common Stock on June 4, 2000.
Except in the case of the automatic conversion of the shares of
Series A Preferred Stock, the holder can convert any portion of such holder's
shares of Series A Preferred Stock if such conversion would not increase such
holder's beneficial ownership of Common Stock (other than shares of Common Stock
owned through ownership of the Series A Preferred Stock) to in excess of 4.9%.
Redemption
The Company has the right through January 31, 1998, in its
discretion, to redeem any or all of the shares of Series A Preferred Stock on a
pro rata basis from time to time upon not less than two business days prior
written notice at a price of $1,300 per share.
Ranking
The Series A Preferred Stock ranks, with respect to dividend
rights and with respect to rights of liquidation, dissolution and winding up,
senior to the Common Stock.
Dividends
Eight percent of the face amount of $1,000 per share of Series A
Preferred Stock is payable upon the conversion of the shares in Common Stock or
cash. If dividends are paid in shares of Common Stock, the number of shares of
Common Stock payable as dividends will be determined by dividing the amount of
the accrued dividends by the applicable conversion price.
Liquidation
In the event of any liquidation, dissolution or winding up of the
Company, out of the assets of the Company before any distribution or payment to
the holders of Common Stock, the holders of the Series A Preferred Stock will be
entitled to be paid $1,000 per share. In the event of any liquidation,
dissolution or winding up of the Company, the Company by resolution of the Board
of Directors will, to the extent of any legally available funds therefor,
declare a dividend payable only in cash on the Series A Preferred Stock, in an
amount equal to the accrued and unpaid dividends, calculated at the dividend
rate on the Series A Preferred Stock up to and including the date of such
liquidation, dissolution or winding up and, if accrued, an amount payable in
cash only equal to any remaining accrued and unpaid dividends, calculated at the
dividend rate, will be added to the amount to be received by the holders of the
Series A Preferred Stock upon such liquidation, dissolution or winding up.
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Voting Rights
Shares of Series A Preferred Stock have no voting rights.
Debentures
In April 1997, the Company issued debentures in the original
principal amount of $1,000,000 (the "Debentures"), which bear interest at the
rate of 6% per annum and will mature on March 31, 2000. As of September 16,
1997, $819,728 of Debentures were outstanding. The Debentures are convertible
into shares of Common Stock at a conversion price equal to the lesser of $1.4375
or 75% of the average closing bid price of the Common Stock as reported by
NASDAQ, during the five trading days immediately preceding the date notice of
conversion is given to the Company.
The Company has the right to redeem the Debentures for a
redemption price equal to 125% of the principal amount of the Debentures. The
holder of the Debentures shall not be entitled to convert any portion of the
Debentures to the extent that after such conversion, the number of shares of
Common Stock (other than shares of Common Stock owned through ownership of the
Debentures which may be deemed to be beneficially owned by the holder) would be
in excess of 4.9%.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the
securities offered hereby will be passed upon for the Company by Lane &
Mittendorf LLP, 320 Park Avenue, New York, New York 10022. Martin C. Licht, Esq.
a member of Lane & Mittendorf LLP, counsel to the Company, owns 50,000 shares of
Common Stock and options to purchase 9,000 shares of Common Stock and is a
member of the Board of Directors of the Company.
EXPERTS
The financial statements of the Company incorporated herein by
reference to the Company's Annual Report on Form 10-KSB have been audited by
Feldman Radin & Co., P.C., independent auditors. The financial statements
referred to above are included in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
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No dealer, salesperson or any other person is authorized to give any
information or to make any representations in connection with this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any security
other than the securities offered by this Prospectus, or an offer to sell or a
solicitation of an offer to buy any securities by anyone in any jurisdiction in
which such offer or solicitation is not authorized or is unlawful. The delivery
of this Prospectus shall not, under any circumstances, create any implication
that the information herein is correct as of any time subsequent to the date of
the Prospectus.
---------------------
TABLE OF CONTENTS
Page
Until , 1997 (25 days after the date of this Prospectus), all
dealers effecting transactions in the securities, whether or not participating
in the distribution, may be required to deliver a Prospectus.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses which will be paid by
the Company in connection with the shares of Common Stock being registered. With
the exception of the registration fee, all amounts shown are estimates.
Registration fee...................................... $ 865
Printing expenses..................................... $ 2,500
Legal fees and expenses (other than Blue Sky)......... $ 18,000
Accounting fees and expenses.......................... $ 2,000
Miscellaneous expenses................................ $ 2,000
Total ........................................ $ 25,365
Item 15. Indemnification of Officers and Directors.
Section 607.0850 of the Florida Business Corporation Act (the "FBCA")
permits, in general, a Florida corporation to indemnify any person who was or is
a party to an action or proceeding by reason of the fact that he or she was a
director or officer of the corporation, or served another entity in any capacity
at the request of the corporation, against liability incurred in connection with
such proceeding including the estimated expenses of litigating the proceeding to
conclusion and the expenses, actually and reasonably incurred in connection with
the defense or settlement of such proceeding, including any appeal thereof, if
such person acted in good faith, for a purpose he or she reasonably believed to
be in, or not opposed to, the best interests of the corporation and, in criminal
actions or proceedings, in addition had no reasonable cause to believe that his
or her conduct was unlawful. Section 607.0850(6) of the FBCA permits the
corporation to pay in advance of a final disposition of such action or
proceeding the expenses incurred in defending such action or proceeding upon
receipt of an undertaking by or on behalf of the director or officer to repay
such amount as, and to the extent, required by statute. Section 607.0850 of the
FBCA provides that the indemnification and advancement of expense provisions
contained in the FBCA shall not be deemed exclusive of any rights to which a
director or officer seeking indemnification or advancement of expenses may be
entitled.
The Company's Certificate of Incorporation provides, in general, that
the Company shall indemnify, to the fullest extent permitted by Section 607.0850
of the FBCA, any and all persons whom it shall have power to indemnify under
said section from and against any and all of the expenses, liabilities or other
matters referred to in, or covered by, said section. The Certificate of
Incorporation also provides that the indemnification provided for therein shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any By-Law,
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<PAGE>
agreement, vote of stockholders or disinterested directors or otherwise, both as
to actions taken in his or her official capacity and as to acts in another
capacity while holding such office.
In accordance with that provision of the Certificate of Incorporation,
the Company shall indemnify any officer or director (including officers and
directors serving another corporation, partnership, joint venture, trust, or
other enterprise in any capacity at the Company's request) made, or threatened
to be made, a party to an action or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that he or she was
serving in any of those capacities against judgments, fines, amounts paid in
settlement and reasonable expenses (including attorney's fees) incurred as a
result of such action or proceeding. Indemnification would not be available if a
judgment or other final adjudication adverse to such director or officer
establishes that (i) his or her acts were committed in bad faith or were the
result of active and deliberate dishonesty or (ii) he or she personally gained
in fact a financial profit or other advantage to which he or she was not legally
entitled.
The Registration Rights Agreement contains, among other things,
provisions whereby the Selling Stockholders agree to indemnify the Company, each
officer and director of the Company who has signed the Registration Statement,
and each person who controls the Company within the meaning of Section 15 of the
Securities Act, against any losses, liabilities, claims or damages arising out
of alleged untrue statements or alleged omissions of material facts with respect
to information furnished to the Company by the Selling Stockholders for use in
the Registration Statement or Prospectus. See Item 17, "UNDERTAKINGS."
Item 16. Exhibit Index.
Number Description of Exhibit
4.1 Amended and Restated Certificate of Incorporation of the Company**
5.1 Opinion of Counsel of Lane & Mittendorf LLP
23.1 Consent of Feldman Radin & Co., P.C.
23.2 Consent of Lane & Mittendorf LLP (included in Exhibit 5.1)
** Previously field with the Company's Form 10-QSB for the three months
ended June 30, 1997 (and incorporated herein by reference).
Item 17. Undertakings.
1. The undersigned, Company, hereby undertakes:
(a) To file, during any period in which the Company offers or
sells securities, a post-effective amendment(s) to this
registration statement:
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(1) To include any prospectus required by Section 10(a)
(3) of the Securities Act;
(2) To reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
registration statement; and
(3) To include any additional or changed material
information with respect to the plan of
distribution not previously disclosed in the
registration statement or any material change to
such information in the registration statement;
Provided, however, that paragraphs (1)(a)(1) and 1(a)(2)
do not apply if the information required or to be included
in a post-effective amendment by these paragraphs is
contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are
incorporated by reference in this Registration Statement.
(b) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering; and
(c) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
2. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission (the "Commission") such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
3. That, for purposes of determining any liability under the Act, each
filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act (and where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the County of Broward, State of Florida, on September 12, 1997.
NATURAL HEALTH TRENDS CORP.
By: /s/ Neal R. Heller
----------------------------
Neal R. Heller, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints NEAL R. HELLER and/or ELIZABETH S. HELLER his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or either of them or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Sir Brian Wolfson Chairman and Director September 18, 1997
Sir Brian Wolfson
/s/ Neal R. Heller President, Chief Executive September 12, 1997
Neal R. Heller Officer and Director
(Principal Executive Officer)
/s/ Elizabeth S. Heller Secretary September 15, 1997
Elizabeth S. Heller and Director
/s/ Martin C. Licht Director September 18, 1997
Martin C. Licht
/s/ Arthur Keiser Director September 12, 1997
Arthur Keiser
Hiram Knott Director September __, 1997
Exhibit 5.1
LANE & MITTENDORF LLP
320 Park Avenue
New York, New York 10022
(212) 508-3200
Facsimile: (212) 508-3230
September 18, 1997
Natural Health Trends Corp.
2001 West Sample Road
Pompano Beach, FL 33064
Attn: Neal R. Heller
Re: Registration Statement on Form S-3
Gentlemen:
We refer to the offering (the "Offering") of the shares of common
stock, $.001 par value (the "Common Stock"), of Natural Health Trends Corp., a
Florida corporation (the "Company") issuable upon the conversion of 2,200 shares
of the Company's Series A Convertible Preferred Stock with a face amount of
$2,200,000 (the "Series A Preferred Stock"), being registered for resale on
behalf of the Selling Stockholders as described in the Registration Statement on
Form S-3 to be filed with the Securities and Exchange Commission as subsequently
amended from time to time (collectively, the "Registration Statement").
In furnishing our opinion, we have examined copies of the
Registration Statement and the Exhibits thereto. We have conferred with officers
of the Company and have examined the originals or certified, conformed or
photostatic copies of such records of the Company, certificates of officers of
the Company, certificates of public officials, and such other documents as we
have deemed relevant and necessary under the circumstances as the basis of the
opinion expressed herein. In all such examinations, we have assumed the
authenticity of all documents submitted to us as originals or duplicate
originals, the conformity to original documents of all document copies, the
authenticity of the respective originals of such latter documents, and the
correctness and completeness of such certificates. Finally, we have obtained
from officers of the Company such assurances as we have considered necessary for
the purposes of this opinion.
Based upon and subject to the foregoing and such other matters of
fact and questions of law as we have deemed relevant in the circumstances, and
in reliance thereon, it is our opinion that the shares of Common Stock, to be
sold for the account of the Selling Stockholders, issuable upon conversion of
the Series A Preferred Stock in accordance with its terms will, upon execution
and delivery of proper certificates therefor, be duly authorized, validly issued
and outstanding, fully paid and nonassessable.
<PAGE>
We hereby consent to the use of our name in the Registration
Statement and to the inclusion of this opinion in the Exhibits to the
Registration Statement.
It should be noted that Martin C. Licht, a partner of this firm,
serves in a business capacity on the Board of Directors of the Company. No
knowledge that he may have as a result of his business association with the
Company is to be imputed to this firm.
We are admitted to the practice of law only in the State of New
York. The opinions set forth herein are based upon the laws of the State of New
York, the corporate law of the State of Florida and the Federal laws of the
United States.
This opinion is limited to the matters set forth herein, and may
not be relied upon in any matter by any other person or used for any other
purpose other than in connection with the corporate authority for the issuance
of the shares of Common Stock pursuant to and as contemplated by the
Registration Statement.
Very truly yours,
LANE & MITTENDORF LLP
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Registration Statement on Form S-3 of our
report dated March 7, 1997, relating to the consolidated financial statements of
Natural Health Trends Corp. and the reference to our firm under the caption
"Experts" in this Registration Statement.
FELDMAN RADIN & CO., P.C.
Certified Public Accountants
New York, New York
September 18, 1997
