FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 0-25238
NATURAL HEALTH TRENDS CORP.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its charter)
Florida 59-2705336
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2001 West Sample Road, Suite 318
Pompano Beach, FL 33064
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(Address of Principal Executive Offices)
(954) 969-9771
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(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
The number of shares outstanding of the issuer's Common Stock, $.001
par value, as of June 30, 1998 was 1,367,995 shares.
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<CAPTION>
NATURAL HEALTH TRENDS CORP.
INDEX
<S> <C>
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 1998 1
(unaudited)
Consolidated Statements of Operations (unaudited) for the
Three and Six months ended June 30, 1998 and 1997 2
Consolidated Statements of Cash Flows (unaudited) for the
Six months ended June 30, 1998 and 1997 3
Notes to the financial statements 4
Item 2. Management's discussion and analysis of financial
condition and results of operations 6
PART II - OTHER INFORMATION 8
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults Upon Senior Securities
Item 4 Submission of Matters to a Vote of Security Holders
Item 5 Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature 11
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NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEET
June 30, 1998
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash $130,931
Restricted Cash 250,000
Accounts Receivable 1,825,194
Inventories 770,713
Prepaid Expenses 559,099
---------------
TOTAL CURRENT ASSETS 3,535,937
PROPERTY, PLANT AND EQUIPMENT 3,457,371
PATENTS AND CUSTOMER LISTS 4,851,677
GOODWILL 1,183,789
DEPOSITS AND OTHER ASSETS 268,749
---------------
$13,297,523
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $1,723,800
Accrued Expenses 657,559
Revolving Credit Line 212,953
Accrued Expenses for Discontinued Operations 315,633
Current Portion of Long-Term Debt 1,967,600
Deferred Revenue 1,125,864
Accrued Consulting Contract 360,131
Other Current Liabilities 372,071
---------------
TOTAL CURRENT LIABILITIES 6,735,611
LONG-TERM DEBT 2,228,400
COMMON STOCK SUBJECT TO PUT 380,000
STOCKHOLDERS' EQUITY:
Preferred Stock, $.001 par value; 1,500,000 shares authorized;
4,747 shares issued and outstanding at June 30, 1998 4,008,444
Common Stock, $.001 par value; 50,000,000 shares authorized;
1,367,995 shares issued and outstanding at June 30, 1998 1,368
Additional Paid-in Capital 12,923,987
Retained Earnings (Accumulated Deficit) (12,600,287)
Common Stock Subject to Put (380,000)
---------------
TOTAL STOCKHOLDERS' EQUITY 3,953,512
---------------
$13,297,523
===============
See notes to consolidated financial statements
1
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<TABLE>
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
3 Months Ended June 30 6 Months Ended June 30
1998 1997 1998 1997
--------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
REVENUES $402,947 $0 $832,831 $0
COST OF SALES 111,255 0 223,354 0
---------- ---------- ---------- ----------
GROSS PROFIT 291,692 0 609,477 0
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 858,325 179,332 1,697,450 282,114
---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) (566,633) (179,332) (1,087,973) (282,114)
OTHER INCOME (EXPENSE):
Interest (net) (158,546) (139,779) (269,053) (201,728)
---------- ---------- ---------- ----------
LOSS FROM CONTINUED OPERATIONS
BEFORE INCOME TAXES (725,179) (319,111) (1,357,026) (483,842)
PROVISION FOR INCOME TAXES 0 0 0 0
---------- ---------- ---------- ----------
LOSS FROM CONTINUED OPERATIONS (725,179) (319,111) (1,357,026) (483,842)
DISCONTINUED OPERATIONS:
Loss From Discontinued Operations (131,225) (35,437) (64,443) (580,565)
Gain (Loss) on Disposal 0 0 0 32,519
---------- ---------- ---------- ----------
LOSS FROM DISCONTINUED OPERATIONS (131,225) (35,437) (64,443) (548,046)
---------- ---------- ---------- ----------
LOSS BEFORE EXTRAORDINARY GAIN (856,404) (354,548) (1,421,469) (1,031,888)
EXTRAORDINARY GAIN - FORGIVENESS OF DEBT 146,949 0 1,508,092 0
---------- ---------- ---------- ----------
NET INCOME (LOSS) $(709,455) $(354,548) $86,623 ($1,031,888)
========== ========== ========== ==========
BASIC INCOME (LOSS) PER COMMON SHARE:
Continued Operations ($0.69) ($1.00) ($1.40) ($1.53)
Discontinued Operations (0.13) (0.11) (0.07) (1.74)
Extraordinary Gain 0.14 0.00 1.55 0.00
---------- ---------- ---------- ----------
Net Income (Loss) $(0.68) $(1.11) $0.09 ($3.27)
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON SHARES USED 1,047,385 320,282 969,886 315,297
See Notes to Consolidated Financial Statements
2
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NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
6 Months Ended June 30
--------------------------------
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $86,623 ($1,031,888)
------------ -------------
Adjustments to reconcile Net Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and amortization 362,739 162,038
Non-cash imputed compensation expense 0 25,000
Interest settled by issuance of stock 8,858 0
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 288,869 (100,897)
(Increase) Decrease in Inventories 256,285 (79,821)
(Increase) in Prepaid Expenses (374,523) (272,128)
Decrease in Property and Equipment 29,745 0
(Increase) Decrease in Deposits & Other Assets 185,381 (288,683)
Increase (Decrease) in Accounts Payable (1,302,635) 100,736
Increase (Decrease) in Accrued Expenses (676,443) 10,572
Increase (Decrease) in Deferred Revenue 36,217 (5,680)
Increase (Decrease) in Other Current Liabilities 46,956 (9,955)
(Decrease) in Accrued Expenses for Discontinued Operations (40,429) 0
Increase (Decrease) in Accrued Consulting Contract 0 395,900
------------ -------------
TOTAL ADJUSTMENTS (1,178,980) (62,918)
------------ -------------
NET CASH USED IN OPERATING ACTIVITIES (1,092,357) (1,094,806)
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (46,954) (161,494)
Disposition of Discontinued Operations (19,633) 0
Loan to Global Health Alternatives, Inc. 0 (1,964,000)
------------ -------------
NET CASH USED IN INVESTING ACTIVITIES (66,587) (2,125,494)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Due from Officer 0 (4,884)
Decrease in Restricted Cash 0 8,932
Proceeds from preferred stock 3,768,500 0
Proceeds from sale of debentures 0 3,262,528
Proceeds from note payable and long-term debt 196,517 577,342
Payments of notes payable and long-term debt (279,926) (968,548)
Redemption of Preferred Stock (2,500,000) 0
------------ -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,185,091 2,875,370
------------ -------------
NET INCREASE (DECREASE) IN CASH 26,147 (344,930)
CASH, BEGINNING OF PERIOD 104,784 517,323
------------ -------------
CASH, END OF PERIOD $130,931 $172,393
============ =============
See notes to consolidated financial statements.
3
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NATURAL HEALTH TRENDS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1998
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying financial statements are unaudited, but reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation of financial position and the results of operations for the
interim periods presented. All such adjustments are of a normal and
recurring nature. The results of operations for any interim period are not
necessarily indicative of the results attainable for a full fiscal year.
2. EARNINGS (LOSS) PER SHARE
Basic per share information is computed based on the weighted average
number of shares outstanding during the period.
3. GAIN ON FORGIVENESS OF DEBT
During the six months ended June 30, 1998, the Company realized a $1.5
million gain on the work-out of various debt and payables of its subsidiary
Global Health Alternatives, Inc.
4. PREFERRED STOCK
In February 1998, the Company sold 300 shares of its convertible Series B
preferred stock for $1,000 a share realizing net proceeds of $261,500. The
preferred stock is convertible commencing on April 4, 1998 at the rate of
70% of the average closing bid price of the common stock over the three
days preceding the notice of conversion. As of June 30, 1998, 185 shares of
the Series B preferred stock had been converted into a total of 408,452
shares of common stock.
In April 1998, the Company sold 4,000 shares of its convertible Series C
preferred stock for $1,000 a share realizing net proceeds of $3,507,000.
The preferred stock pays dividends at the rate of 10% per annum payable in
cash or shares of the Company?s common stock valued at 75% of the closing
bid price. The preferred stock has a liquidation preference of $1,000 per
share. The preferred stock is convertible commencing 41 days after issuance
at the rate of 75% of the average closing bid price of the common stock
over the five days preceding the notice of conversion. The Company has the
right to redeem the preferred stock for 240 days after the date of issuance
at the rate of 133% of the stated value. From the proceeds raised, the
Company paid $2,500,000 to retire $1,568,407 face value of Series A
preferred stock outstanding.
4
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5. DISCONTINUED OPERATIONS
In August 1998, the Company sold its three vocational schools and certain
related businesses. Revenues for the vocational school operations were
$2,316,028 for the six months ended June 30, 1998 and $ 2,459,429 for the
comparable period in 1997. The Company expects the vocational school
operation to operate at break-even between June 30, 1998 and the date of
the sale, and a profit is anticipated from the sale. Therefore, no future
losses on the discontinued vocational school segment have been reflected as
of June 30, 1998.
Following is a calculation of the estimated gain on the disposition of the
Company's vocational school operations
Proceeds from sale of schools $1,800,000
Less book value of school assets transferred:
Cash 113,086
Restricted Cash 250,000
Accounts Receivable 1,699,777
Inventories 317,520
Prepaid Expenses 119,674
Property Plant & Equipment 1,080,845
Deposits & Other Assets 267,749
----------
(3,848,651)
Add liabilities assumed by purchaser: ----------
Accounts Payable 719,101
Accrued Expenses 283,381
Revolving Credit Line 212,953
Deferred Revenue 1,125,864
Other Current Liabilities 274,718
----------
2,616,017
----------
Less Goodwill written off (323,697)
----------
Estimated gain from sale (not recognized) $243,669
==========
5
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ITEM 2: MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements and notes contained in Item 1 hereof.
Forward-Looking Statements
When used in Form 10-QSB and in future filings by the Company with the
Securities and Exchange Commission, the words "will likely result", and "the
Company expects", "will continue", "is anticipated", "estimated", "project", or
"outlook" or similar expressions are intended to identify "forward- looking
statements" within the meaning of the Private Securities Litigation Act of 1995.
The Company wishes to caution readers not to place undue reliance on such
forward-looking statements, each of which speak only as of the date made. Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. The Company has no obligation to publicly release the
result of any revisions which may be made to any forward-looking statements to
reflect anticipated or unanticipated events or circumstances occurring after the
date of such statements.
Result of Operations
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Prior to July 1997, the Company's operations consisted entirely of medical
clinics and vocational schools. Uoon the acquisition of Global Health
Alternatives, Inc. (GHA) on July 23, 1997, the Company began to market and
distribute a line of natural, over-the-counter homeopathic pharmaceutical
products. The Company subsequently discontinued its medical clinic line of
business during the third quarter of 1997, and sold the vocational schools
in August 1998.
For the six months ended June 30, 1997, the Company?s current ongoing line of
business (GHA natural products) was not in operation, not having been acquired
until July 1997. Accordingly, comparison of year-to-date Revenues, Cost of
Sales, and Selling, General & Administrative Expenses between 1998 and 1997 is
not meaningful. The discussion below includes comparisons of operations for the
quarter ended June 30, 1998 with the two immediately preceding quarters the
only previous quarters which include a full three months of GHA operations.
Revenues:
Total revenues for continued operations for the quarter ended June 30, 1998 were
$402,947, as compared to quarterly revenues of $429,884 and $598,524 for the two
preceding quarters. If the $142,555 proceeds from a truck theft settlement are
excluded from revenues in the quarter ended December 31, 1997, the quarterly
trend of revenues reflects a decrease of approximately 6% quarterly. This
decrease is attributable to a reduction in the selling price of the
Company's Natural Relief 1222 product as well as to the closure of operations in
the United Kingdom (effective December 31, 1997) and the January 1998
disposition of a kiosk retail operation.
6
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Cost of Sales:
Cost of Sales for the quarter ended June 30, 1998 were $111,255 (27.6% of
revenues), as compared to $112,099 (26.1% of revenues) and $249,961 (41.8% of
revenues) for the two preceding quarters. The increase in Cost of Sales as
a percentage of revenues that occurred in the most recent quarter is
attributable to the price reduction in Natural Relief 122, which is partially
offset by a favorable change in product mix. Cost of Sales in the quarter ended
December 31, 1997 were significantly higher due to higher royalty costs
and year end inventory write-downs.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses for the quarter ended June 30, 1998
were $858,325, as compared to $839,125 and $1,826,870 for the two preceding
quarters. The higher cost structure in place during the quarter ended December
31, 1997 included operations in the United Kingdom and a retail operation that
were discontinued in December 1997 and January 1998, respectively, as well as
significantly higher advertising costs (by approximately $525,000 per quarterly)
and minimum royalty charges of $139,661 that were eliminated effective December
31, 1997.
Interest Expense:
Interest Expense for the six months ended June 30, 1998 was $269,053 as compared
to $201,728 for the comparable period in 1997. The increase is due to the
interest payable on GHA's notes ($124,192), partially offset by a reduction in
the parent company's interest expense, resulting from the conversion of
convertible debentures in the fourth quarter of 1997 and January 1998.
Discontinued Operations:
In October 1997, the Company closed its medical clinic located in Boca Raton,
Florida. In February 1998, the Company sold its remaining medical clinic in
Pompano Beach, Florida. All anticipated losses on these discontinued operations
were reflected in the fiscal year ended December 31, 1997. In August 1998, the
Company sold its three vocational schools and certain related businesses.
Revenues for the vocational school operations were $ 2,316,028 for the six
months ended June 30, 1998 and $ 2,459,429 for the comparable period in 1997.
The Company expects the vocational school segment to operate at break-even
between June 30, 1998 and the date of the sale, and a profit is anticipated from
the sale. Therefore, no future losses on the discontinued vocational school
segment have been reflected as of June 30, 1998.
Gain on Forgiveness of Debt:
During the six months ended June 30, 1998, the Company realized a gain of
$1,508,092 from the work-out of various debt and payables of GHA.
Net Income (Loss):
For the six months ended June 30, 1998, the net profit was $86,623, as compared
to a net loss of $1,031,888 for the six months ended June 30, 1997. The increase
in profit is attributable to the Extraordinary Gain on Forgiveness of Debt,
partially offset by GHA's Operating Loss for 1998.
7
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Liquidity and Capital Resources
The Company has funded its working capital and capital expenditure requirements
from cash provided through borrowing from institutions and individuals, and from
the sale of the Company's securities in private placements. The Company's
primary source of cash receipts has been from the payments for tuition, fees and
books from its soon-to-be-discontinued vocational school operations. The Company
also realizes cash receipts from the sale of GHA's products.
In February 1998, the Company issued $300,000 face amount of Series B
convertible preferred stock, net of expenses of $113,658.
In April 1998, the Company issued $4,000,000 face amount of Series C convertible
preferred stock, net of expenses of $492,500. The preferred stock pays a
dividend of 12% per annum and is convertible into common stock at 75% of the
market value of the common stock, commencing 41 days after issuance. From the
proceeds raised, the Company paid $2,500,000 to retire $1,568,407 face value of
Series A preferred stock outstanding.
At June 30, 1998 the ratio of current assets to current liabilities was .52 to
1.0. There was a working capital deficit of $3,199,674.
Cash used in operations for the six months ended June 30, 1998 was $1,092,357,
attributable primarily to the net reduction in accounts payable and accrued
expenses of $1,302,635 and $676,443, respectively. Capital expenditures used
$46,954 of cash.
In August 1998, the Company sold its three vocational schools and certain
related businesses for $1,800,000. The proceeds will be used to provide working
capital to redeem preferred stock and to redeem a portion of the Company's
outstanding debt. The Company anticipates that further additional financing
will be required to finance the Company's continued operations during the next
twelve months, principally to fund the continued development and growth of GHA's
product sales. Management is currently seeking at least $3.0 million in
additional capital to continue GHA's business plan of marketing development and
support. There can be no assurance that the Company will be able to secure
such additional debt or equity financing. Failure to obtain additional
financing of at least $2.5 million within the next six months will require
reductions in operating expenses, and may have a material impact on the ability
of the Company to increase GHA's sales and to continue operations. If the
Company obtains additional financing of at least $2.5 million for the next six
months, of which there can be no assurance, the Company believes that its net
cash flow may be sufficient to finance the Company's operations for the period
of at least 12 months thereafter.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
The Company has not become subject to any material legal proceedings in the six
months ended June 30, 1998.
Item 2. Changes in Securities and Use of Proceeds
In February 1998, the Company sold 300 shares of its convertible Series B
preferred stock for $1,000 a share realizing net proceeds of $261,500. The
preferred stock is convertible commencing on April 4, 1998 at the rate of
70% of the average closing bid price of the common stock over the three
days preceding the notice of conversion. As of June 30, 1998, 185 shares of
the Series B preferred stock had been converted into a total of 408,452
shares of common stock.
In April 1998, the Company sold 4,000 shares of its convertible Series C
preferred stock for $1,000 a share realizing net proceeds of $3,507,000.
The preferred stock pays dividends at the rate of 10% per annum payable in
cash or shares of the Company?s common stock valued at 75% of the closing
bid price. The preferred stock has a liquidation preference of $1,000 per
share. The preferred stock is convertible commencing 41 days after issuance
at the rate of 75% of the average closing bid price of the common stock
over the five days preceding the notice of conversion. The Company has the
right to redeem the preferred stock for 240 days after the date of issuance
at the rate of 133% of the stated value. From the proceeds raised, the
Company paid $2,500,000 to retire $1,568,407 face value of Series A
preferred stock outstanding.
8
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Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
At a special meeting of the stockholders on March 23, 1998, the stockholders of
the Company voted to increase the number of authorized shares of Common Stock
from 1,000,000 to 5,000,000 shares. Of the 416,743 shares of Common Stock voted,
397,335 voted in favor, 17,855 voted against and 1,553 abstained. On April 6,
1998, the Company effected a one for 40 reverse stock split. (The number of
common shares referred to above reflect a one for forty reverse stock split.)
On July 24, 1998, the Company held an annual meeting of its stockholders. The
stockholders voted to approve and ratify the following:
The election of Sir Brian Wolfson, Neal R. Heller, Elizabeth S. Heller, Martin
C. Licht and Dirk D. Goldwasser to the Board of Directors.
The retention of Feldman Sherb Ehrlich & Co., P.C. as the Company's independent
auditors for the year ended December 31, 1998. The shares of Common Stock were
voted as follows: 1,154,400 voted for ratification; 5,736 voted against
ratification; and 310 abstained.
The Company's 1998 Stock Option Plan. The shares of Common Stock were voted as
follows: 650,541 voted for approval; 16,856 voted against approval; and 858
abstained.
The sale of the Company's three vocational schools and certain related
businesses to Florida College of Natural Health, Inc. a Florida corporation
controlled by Neal R. Heller and Elizabeth S. Heller, both of whom are officers,
directors and principal stockholders of the Company, for a purchase price of
$1,800,000. The shares of Common Stock were voted as follows: 658,666 voted for
ratification; 9,327 voted against ratification; and 262 abstained.
An increase in the number of authorized shares of Common Stock from 5,000,000 to
50,000,000 shares. The shares of Common Stock were voted as follows: 649,407
voted for approval; 20,470 voted against approval; and 835 abstained.
The conversion of 4,000 shares of Series C Preferred Stock issued in the
Company's April 1998 private placement into shares of Common Stock pursuant
to the terms of such preferred stock, to the extent that the number of
shares of Common Stock issued exceeds 20 percent of the total number of
Common shares then outstanding. The shares of Common Stock were voted as
follows: 651,099 voted for approval; 14,470 voted against approval; and
2,686 abstained.
The conversion of $595,000 of the Company's 12.5% promissory notes and the
interest thereon into the number of shares of Common Stock equal to the
principal and accrued interest thereon divided by 85% of the closing bid
price of the Common Stock for five consecutive trading days ending on May
15, 1998. The shares of Common Stock were voted as follows: 1,154,400 voted
for approval; 5,736 voted against approval; and 310 abstained.
Item 5. Other Information
As of August 4, 1998, the Company sold three vocational schools pursuant to
the agreement dated April 29, 1998 by and among Natural Health Trends Corp.,
Neal R. Heller and Elizabeth S. Heller and Florida College of Natural Health,
Inc. for a purchase prive of $1,800,000 together with the assumption of certain
Liabilites. See Note 5 to Financial Statements.
Item 6. Exhibits and Other Reports on Form R-K
The company filed a current report on form 8-K on April 21, 1998.
9
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<TABLE>
<CAPTION>
NATURAL HEALTH TRENDS CORP. EXHIBIT INDEX
<S> <C>
Number Description of Exhibit
2.1 Assets Purchase Agreement dated April 29, 1998 by and among Natural Health Trends
Corp., Neal R. Heller & Elizabeth S. Heller and Florida College of Natural Health, Inc.#
3.1 Amended and Restated Certificate of Incorporation of the Company.*
3.2 Amended and Restated By-Laws of the Company.*
4.1 Specimen Certificate of the Company's Common Stock.*
4.2 Form of Class A Warrant.*
4.3 Form of Class B Warrant.*
4.4 Form of Warrant Agreement between the Company and Continental Stock Transfer &
Trust Company.*
4.5 Form of Underwriter's Warrants.*
4.6 1994 Stock Option Plan.*
4.7 Form of Debenture.**
4.8 Registration Rights Agreement dated July 23, 1997 by and among the Company, Global
and the Global Stockholders.+
4.9 Agreement as to Transfers dated July 23, 1997 by and between Capital Development, S.A.
and the Company.+
4.10 Articles of Amendment of Articles of Incorporation of the Company.***
4.11 Florida Statutes Sections 607.1301, 607.1302, 607.1320 Regarding Appraisal Rights. #
10.1 Form of Employment Agreement between the Company and Neal R. Heller.*
10.2 Form of Employment Agreement between the Company and Elizabeth S. Heller.*
10.3 Lease, dated April 29, 1993, between Florida Institute of Massage Therapy, Inc., as tenant,
and MICC Venture, as landlord, as amended.*
10.4 Agreement among Natural Health Trends Corp. Health Wellness Nationwide Corp.,
Samantha Haimes and Leonard Haimes.++
10.13 Agreement among Natural Health Trends Corp. Health Wellness Nationwide Corp.,
Samantha Haimes and Leonard Haimes.
10.14 Employment Agreement between Health Wellness Nationwide Corp. And Kaye Lenzi.
10
<PAGE>
Number Description of Exhibit
10.15 Mortgage note in the amount of $2,250,000, dated October 30, 1997 between NHTC Real
Estate, Inc. as maker and BANC One Mortgage Capital Market, LLC as payee.
27.1 Financial Data Schedule.
* Previously filed with the Company's Registration Statement No. 33-991184.
** Previously filed with the Company's Form 10-QSB for the quarter ended March 31, 1997.
*** Previously filed with the Company's Form 10-QSB dated June 30, 1997.
+ Previously filed with the Company's Form 8-K dated August 7, 1997.
++ Previously filed with the Company's Form 10-KSB for the year ended December 31, 1996.
+++ Previously filed with the Company's Registration Statement No. 333-35935.
# Previously filed with the Company's Proxy Statement on Schedule 14A, dated May
14, 1998 .
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11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NATURAL HEALTH TRENDS CORP.
By: /s/ Roger Guerin
Roger Guerin
Chief Financial Officer
Date: August 19, 1998
12
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000912061
<NAME> Natural Health Trends Corp.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 380,931
<SECURITIES> 0
<RECEIVABLES> 1,825,194
<ALLOWANCES> 0
<INVENTORY> 770,713
<CURRENT-ASSETS> 3,535,937
<PP&E> 4,082,018
<DEPRECIATION> 624,647
<TOTAL-ASSETS> 13,297,523
<CURRENT-LIABILITIES> 6,735,611
<BONDS> 2,228,400
380,000
4,008,444
<COMMON> 1,368
<OTHER-SE> (56,300)
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<SALES> 832,831
<TOTAL-REVENUES> 832,831
<CGS> 223,354
<TOTAL-COSTS> 223,354
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 269,053
<INCOME-PRETAX> (1,357,026)
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<INCOME-CONTINUING> (1,357,026)
<DISCONTINUED> (64,443)
<EXTRAORDINARY> 1,508,092
<CHANGES> 0
<NET-INCOME> 86,623
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
