SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earlier event reported): February 19, 1999
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NATURAL HEALTH TRENDS CORP.
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(Exact Name of Registrant as Specified in Charter)
Florida 0-25238 59-2705336
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(State of Incorporation (Commission Flle No.) (IRS Identification Number)
or other Jurisdiction)
250 Park Avenue
New York, New York 10117
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(Address of Principal Executive Offices)
(212) 490-6609
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(Registrant's Telephone Number Including Area Code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective February 19, 1999, pursuant to an Asset Purchase Agreement (the
"Acquisition Agreement"), dated as of November 24, 1998 by and among, Natural
Health Trends Corp., a Florida corporation (thc "Company"), NHTC Acquisition
Corp., a newly formed, wholly-owned subsidiary of the Company (the
"Subsidiary"), and Kaire International, Inc., a privately held Delaware
corporation ("Kaire"), the Subsidary acquired (the "Acquisition"), substantially
all of the assets (the "Assets") of Kaire in exchange for the issuance (i) to
Kaire, of $2,8OO,OOO aggregate stated value of the Company's Series F Preferred
Stock, par value $.001 per share (the "Series F Preferred Stock"); (ii) to two
creditors of Kaire, $350,000 aggregate stated value of the Company's Series G
Preferred Stock, par value $.001 per share (the "Series G Preferred Stock"); and
(iii) to Kaire, five-year warrants to purchase 200,000 shares of the Company's
common stock, par value $.001 per share (the"Common Stock"). The Subsidiary
also, pursuant to the Acquisition, assumed certain indebtedness of Kaire, agreed
to indemnify certain officers of Kaire against certain liabilities accrued prior
to the closing date and agreed, subject to certain adjustments, to make certain
annual earn-out payments to Kaire for a period of five (5) years commencing with
the year ending December 31, l999, based upon the revenues and net income, if
any, of the Subsidiary. For a copy of the Acquisition Agreement and all Exhibits
thereto including the Warrant and the Articles of Amendment of Articles of
Incorporation of the Company setting forth the terms of the Seies F Preferred
Stock and Series G Preferred Stock (collectively, the "Preferred Documents"),
see the Company's Proxy Statement dated January 25, 1999.
Kaire develops and distributes, through a network of independent
associates, products that are intended to appeal to health-conscious consumers,
Current Kaire products include health care supplements and personal care
products. Kaire offers a line of approximately 50 products which it divides into
nine categories, including Antioxidant Protection, (Bodily) Defense, Digestion,
Energy and Alertness, Stress, Vital Nutrients, Weight Management, Anti-Aging and
Personal Care. Based upon the audited financial statement of Kaire, for the year
ended December 31, 1997, Kaire had net sales of approximately $35,682,000 and a
net loss of approximately $6,098,000 and based upon the unaudited financial
statements of Kaire, for the nine (9) months ended September 30, 1998, Kaire had
net sales of approximately $21,018,916 and a net loss of approximately
$3,192,264.
Attached to this Current Report on Form 8-K is the Unaudited Pro Forma
Condensed Consolidated Balance Sheet as of November 30, 1998 of the Company and
Kaire.
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
The required Financial Statements of Kaire will be filed pursuant to
an amendment to this Current Report on Form 8-K no later than sixty
(60) days from the date of this Current Report on Form 8-K.
(b) Pro Forma Financial Information
See attached
(c) Exhibits
See the Company's Proxy Statement dated January 25, 1999 for a copy
of, among other documents relating to the Acquisition, the
Acquisition Agreement, the Warrant and the Preferred Documents.
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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 hereunto duly authorized,
NATURAL HEALTH TRENDS CORP. (Registrant)
By: /s/ Joseph P. Grace
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Joseph P. Grace, Acting President
Dated: February 19, 1999
NATURAL HEALTH TRENDS CORP./KAIRE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
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<CAPTION>
Natural Health Kaire
Trends, Corp. International, Inc. Pro Forma
November 30, November 30, Adjustments
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1998 1998 DR(CR) Total
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ASSETS
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<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash $ 661,371 $ 488,091 $ (8,032) $ 1,141,430
Restricted cash -- 125,000 -- 125,000
Accounts receivable, net 23,148 272,304 -- 295,452
Inventory 414,963 914,206 (230,216) 1,098,953
Prepaid expenses and other current assets 575,395 61,115 (775) 635,735
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TOTAL CURRENT ASSETS 1,674,877 1,860,716 (239,023) 3,296,570
PROPERTY AND EQUIPMENT, net 44,265 612,185 (69,468) 586,982
PATENTS AND CUSTOMER LISTS 4,654,487 -- 4,501,059 9,155,546
GOODWILL 834,572 -- -- 834,572
DEPOSITS AND OTHER ASSETS 20,350 248,930 (24,406) 244,874
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TOTAL ASSETS $ 7,228,551 $ 2,721,831 $ 4,168,162 $14,118,544
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Cash overdraft $ -- $ 1,394,566 $ -- $ 1,394,566
Accounts payable and accrued expenses 1,774,262 4,705,932 3,276,402 3,203,792
Accrued expenses for discontinued operations 314,593 -- -- 314,593
Accrued consulting contract 360,131 -- -- 360,131
Notes payable -- 2,220,521 2,035,521 185,000
Notes payable - related parties -- 2,106,574 2,106,574 --
Current portion of long-term debt, net of discount 314,684 48,897 -- 363,581
Other current liabilities 87,916 538,916 538,916 87,916
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TOTAL CURRENT LIABILITIES 2,851,586 11,015,406 7,957,413 5,909,579
MINORITY INTEREST -- (49,194) (49,194) --
COMMON STOCK SUBJECT TO PUT 380,000 -- -- 380,000
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 1,500,000 shares
authorized, 3,354 shares issued and outstanding
(actual) and (pro forma) 2,934,572 -- (3,150,000) 6,084,572
Common stock, $.0001 par value, 50,000,000 shares
authorized, 4,873,455 shares issued and
outstanding (actual) and (pro forma) 4,873 22,312 22,312 4,873
Additional paid-in capital 15,385,032 1,365,537 683,537 16,067,032
Cumulative translation adjustment -- (435,078) (435,078) --
Retained earnings (deficit) (13,947,512) (9,197,152) (9,197,152) (13,947,512)
Common stock subject to put (380,000) -- -- (380,000)
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TOTAL STOCKHOLDERS' EQUITY 3,996,965 (8,244,381) (12,076,381) 7,828,965
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,228,551 $ 2,721,831 $ (4,168,162) $14,118,544
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