SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement |_| Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(c)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NATURAL HEALTH TRENDS CORP.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14-a6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3),
|_| Fee computed on table below per exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
Common
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
of the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[Preliminary Copies]
NATURAL HEALTH TRENDS CORP.
2001 West Sample Road
Pompano Beach, Florida 33064
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be Held on February 11, 1998
To the Stockholders of NATURAL HEALTH TRENDS CORP.
The Special Meeting of Stockholders of Natural Health Trends Corp., a
Florida corporation (the "Company"), will be held at the ______________________,
_______________________, New York, New York, on February 11, 1998, at 2:00 P.M.,
local time, for the following purposes:
1. To approve the amendment of the Company's Amended and Restated
Articles of Incorporation to increase the number of authorized shares of the
Company's common stock, $.001 par value, from 40,000,000 to 200,000,000.
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Management is aware of no other business
which will come before the meeting.
The Board of Directors has fixed the close of business on January 21,
1998 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting or any adjournments thereof. Holders of a majority
of the outstanding shares must be present in person or by proxy in order for the
meeting to be held.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. YOU ARE
URGED TO SIGN, DATE AND OTHERWISE COMPLETE THE ENCLOSED PROXY CARD AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON IF YOU WISH TO DO
SO, EVEN IF YOU HAVE SIGNED AND RETURNED YOUR PROXY CARD.
By Order of the Board of Directors,
Neal R. Heller, President and Chief Executive Officer
Pompano Beach, Florida
January , 1998
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD
BE COMPLETED AND RETURNED PROMPTLY
<PAGE>
NATURAL HEALTH TRENDS CORP.
2001 West Sample Road
Pompano Beach, Florida 33064
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
February 11, 1998
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Natural Health Trends Corp., a Florida corporation
(the "Company"), of proxies to be voted at the Special Meeting of Stockholders
of the Company to be held on February 11, 1998 (the "Meeting"), at 2:00 P.M.,
local time, ________________________, ___________________, New York, New York,
and at any adjournments thereof.
A form of proxy is enclosed for use at the Meeting. The proxy may be
revoked by a stockholder at any time before it is voted by execution of a proxy
bearing a later date or by written notice to the Secretary before the Meeting,
and any stockholder present at the Meeting may revoke his or her proxy thereat
and vote in person if he or she desires. When such proxy is properly executed
and returned, the shares it represents will be voted at the Meeting in
accordance with any instructions noted thereon. If no direction is indicated,
all shares represented by valid proxies received pursuant to this solicitation
(and not revoked prior to exercise) will be voted (i) for the approval of the
amendment of the Amended and Restated Articles of Incorporation of the Company
increasing the number of authorized shares of common stock, $.001 par value per
share (the "Common Stock"), from 40,000,000 to 200,000,000 and (ii) in
accordance with the judgment of the persons named in the proxy as to such other
matters as may properly come before the Meeting and any adjournments thereof.
The cost for soliciting proxies on behalf of the Board of Directors
will be borne by the Company. In addition to solicitation by mail, proxies may
be solicited in person or by telephone, telefax or cable by personnel of the
Company, who will not receive any additional compensation for such solicitation.
The Company will reimburse brokers or other persons holding stock in their names
or the names of their nominees for the expenses of forwarding soliciting
material to their principals and obtaining their proxies. This Proxy Statement
and the accompanying form of proxy will be first mailed to stockholders on or
about January 28, 1998.
The close of business on January 21, 1998 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Meeting. On that date there were 28,118,624 shares of Common Stock
outstanding. Each share entitles the holder thereof to one vote and a vote of a
majority of the shares present, or represented, and entitled to vote at the
Meeting is required to approve each proposal to be acted upon at the Meeting.
The holders of a majority of the shares of Common Stock
-1-
<PAGE>
outstanding on the record date and entitled to be voted at the Meeting, present
in person or by proxy, will constitute a quorum for the transaction of business
at the Meeting and any adjournments thereof.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information as to the Common Stock
ownership of each of the Company's directors, executive officers, all executive
officers and directors as a group, and all persons known by the Company to be
the beneficial owners of more than five percent of the Company's Common Stock.
Approximate
Number of Percentage
Name and Address of Beneficial Owner(1) Shares(2) of Common Stock
- --------------------------------------- --------- ---------------
Neal R. Heller and Elizabeth S. Heller
2397 N.W. 64th Street
Boca Raton, Florida 33496 5,834,000(3) 20.1%
Martin C.Licht
Selden Lane
Greenwich, Connecticut 06831 52,000(4) *
Arthur Keiser
6324 NW 79th Way
Parkland, Florida 33067 34,000(5) *
Sir Brian Wolfson
Global Health Alternatives, Inc.
44 Welbeck Street
London, England W1N7HF 0(6) *
Robert C. Bruce
58 Kenwood Street
Portland, Maine 04102 79,152(7) *
Hiram Knott
205 East 63rd Street
New York, New York 10021 0 *
Azure Limited Partnership I
13 Eagles Nest Drive
La Conner, Washington 98257 1,662,667 5.9%
All Executive Officers and Directors as a
Group
(7 persons) 5,999,152 20.7%
(1) Unless otherwise noted, all persons named in the table have sole
voting and dispositive power with respect to all shares of Common Stock
beneficially owned by them.
(2) The table does not include shares of Common Stock issuable upon the
conversion of the Company's Debentures, as defined below, and the Company's
Series A Preferred Stock. Pursuant to the terms of such instruments, the holders
thereof generally are not entitled to convert such instruments to
-2-
<PAGE>
the extent that such conversion would increase the holders' beneficial ownership
of Common Stock to in excess of 4.9%. Notwithstanding the foregoing, upon the
maturity of the Debentures on March 31, 2000 or June 4, 2000 the date of a
mandatory conversion of the Series A Preferred Stock a change in control of the
Company may occur, based upon the number of shares of Common Stock issuable, as
described below.
(3) Mr. Heller owns 2,374,000 shares of Common Stock, and Mrs. Heller
owns 2,660,000 shares of Common Stock and each has sole voting and dispositive
power with respect to such shares. As they are husband and wife, each may be
deemed the beneficial owner of the shares owned by the other. Includes up to
800,000 shares of Common Stock issuable upon the exercise of options held by Mr.
and Mrs. Heller.
(4) Includes presently exercisable options to purchase up to 2,000
shares of Common Stock held by Mr. Licht.
(5) Includes presently exercisable options to purchase up to 14,000
shares of Common Stock held by Mr. Keiser.
(6) Does not include options to purchase up to 800,000 shares of Common
Stock which are not exercisable within 60 days.
(7) Does not include options to purchase up to 300,000 shares of Common
Stock which are not exercisable within 60 days.
* Represents less than 1% of applicable shares of Common Stock outstanding.
PROPOSAL NO. 1
AMENDMENT OF ARTICLES OF INCORPORATION
The Board of Directors has approved the amendment of the Company's
Amended and Restated Articles of Incorporation to increase the number of
authorized shares of Common Stock from 40,000,000 to 200,000,000.
The Board of Directors has approved such amendment in order for the
Company to have a sufficient number of shares of Common Stock authorized
primarily for the conversion of the Company's Debentures and the Company's
Series A Preferred Stock.
The Company, by action of the Board of Directors, also intends to
effect a reverse stock split. The magnitude of the reverse stock split has not
yet been determined by the Company. The purpose of the reverse stock split is to
increase the price of the Common Stock in excess of $1.00 in order to satisfy
the recently adopted revised listing requirements of The NASDAQ Stock Market
("NASDAQ"), which listing requirements are effective as of February 23, 1998.
There can be no assurance that the reverse stock split will have the desired
effect. The failure to maintain the listing of the Common Stock on NASDAQ could
have a material adverse effect on the price of the Common Stock.
In April 1997, the Company issued debentures (the "Debentures") in the
original principal amount of $1,300,000, which bear interest at the rate of 6%
per annum and will mature on March 31, 2000.
-3-
<PAGE>
As of January 15, 1998, $232,466 of Debentures were outstanding. The Company has
redeemed $300,000 of the Debentures and $767,534 has been converted into shares
of Common Stock. 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 net proceeds of approximately $1,015,000 from the sale of the
Debentures were used as follows: $688,000 was used primarily for advertising and
marketing the Company's health care products, $171,000 was used in connection
with a litigation settlement, $91,000 was used for leasehold improvements and
$65,000 was used for working capital. If all of the Debentures were converted
into shares of Common Stock on January 15, 1998, a total of 10,332,700 shares of
Common Stock would be issuable. The Company is obligated to have a sufficient
number of shares of Common Stock available for issuance upon the conversion of
the Debenture. In the event that the Company does not issue the shares of Common
Stock within five business days of receipt of a notice of conversion the Company
is obligated to pay the holder $100 per day for each $10,000 of the Debentures
being converted for the first 10 days and $200 per day thereafter.
In June 1997, in a private placement, the Company sold 2,200 shares of
its Series A Preferred Stock at a purchase price of $1,000 per share. Each share
of Series A Preferred Stock is convertible into shares of Common Stock at a
conversion price equal to 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 holder of each share
of Series A Preferred Stock is also entitled to a payment of 2.5% per month
commencing August 4, 1997, until the Company's registration statement covering
the resale of shares of Common Stock issuable on the conversion of the shares of
Series A Preferred became effective on January 12, 1998, 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.
The net proceeds of approximately $1,925,000 from the sale of the Series A
Preferred Stock were used as follows: $356,000 was utilized for the repayment of
the Debentures, $1,309,000 was utilized primarily for advertising and marketing
of the Company's health care products and the balance was utilized by the
Company for working capital. If all of the shares of Series A Preferred Stock
were converted into shares of Common Stock on January 15, 1998, including the
accrued interest and penalty thereon, a total oF 117,306,073 shares of Common
Stock would be issuable.
The Company is obligated to have a sufficient number of shares of
Common Stock available for issuance upon the conversion of the Series A
Preferred Stock. In the event that the Company does not have a sufficient number
of shares of Common Stock available for issuance, then the Company is obligated
to pay the holder a penalty based on the unconverted face amount of the Series A
Preferred Stock at a rate of 24% per annum payable in cash or shares of Common
Stock, at the option of the holder.
The proforma net tangible book value attributable to the Common Stock
as of September 30, 1997, was ($4,559,290) or $(.16) per share. Upon the
conversion of the Debentures and the shares of Series A Preferred Stock on
January 15, 1998, the proforma net tangible book value as of September 30, 1997,
as adjusted for the conversion of the Debentures and the Series A Preferred
Stock would be ($1,749,625) or $(.01) per share. Since the Company had a
negative net tangible book value prior to the conversion of the Debentures and
the Series A Preferred Stock, such conversion is not dilutive to existing
shareholders. However, in the event that the Company has a positive net tangible
book value prior to
-4-
<PAGE>
the conversion of the Debentures and the Series A Preferred Stock, such
conversion would have a dilutive effect.
The shares of Common Stock will also be available for issuance upon the
exercise of other outstanding options warrants and conversion rights.
The Board of Directors recommends a vote 'FOR' the ratification of the
amendment of the Company's Amended and Restated Articles of Incorporation.
PROPOSALS BY STOCKHOLDERS
Any stockholder who intends to present a proposal for action
at the Company's 1997 Annual Meeting of Stockholders in next year's proxy
statement and proxy card must forward a copy of such proposal to the Secretary
of the Company. Any such proposal must be received by the Company for inclusion
in its proxy statement and form of proxy card relating to that meeting by
December 23, 1997.
OTHER MATTERS
The Board of Directors of the Company does not know of any other
matters to be presented for action at the Meeting. If, however, any other
matters are properly brought before the Meeting, the persons named in the
accompanying proxy will vote such proxy in accordance with their own judgment on
such matters.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB AND FORM 10-QSB
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, WITHOUT EXHIBITS, WILL BE FURNISHED WITHOUT CHARGE TO ANY
PERSON FROM WHOM THE ACCOMPANYING PROXY IS SOLICITED UPON WRITTEN REQUEST TO THE
COMPANY'S PRESIDENT, NEAL R. HELLER, NATURAL HEALTH TRENDS CORP., 2001 WEST
SAMPLE ROAD, POMPANO BEACH, FLORIDA 33064.
By Order of the Board of Directors
Neal R. Heller, Chairman of the Board
Pompano Beach, Florida
January , 1998
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES AND DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. A PROMPT RESPONSE
IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
-5-
