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 Quarter Ended June 30, 2003
OR
[ ] 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
incorporation or organization Identification No.)
5605 N. MacArthur Boulevard, 11th Floor
Irving, Texas 75038
(Address of Principal Executive Office) (Zip Code)
(972) 819-2035
(Issuer's telephone number including area code)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares of issuer's Common Stock, $.001 par value, outstanding as
of August 8, 2003 were 4,656,408 shares.
NATURAL HEALTH TRENDS CORP.
FORM 10-QSB
For Quarter Ended June 30, 2003
INDEX
Page
Number
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of June 30, 2003 1
(unaudited)
Consolidated Statements of Operations (unaudited)
for the three and six months ended June 30, 2003 and 2002 2
Consolidated Statements of Comprehensive Income (unaudited)
for the three and six months ended June 30, 2003 and 2002 3
Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 2003 and 2002 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis or Plan of Operations 6
Item 3. Controls and Procedures 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signature 11
Certifications 12
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30,
2003
------------
ASSETS
Current Assets:
Cash $ 2,856,235
Accounts receivable 1,582,073
Inventories 2,974,300
Prepaid expenses and other current assets 237,923
------------
Total Current Assets 7,650,531
Restricted cash 955,926
Property and equipment, net 972,508
Deposits and other assets 763,584
Goodwill 207,765
Database 856,845
Website 33,250
------------
Total Assets $ 11,440,409
------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,363,990
Accrued expenses 371,017
Accrued bonus payable 1,087,147
Notes payable 334,437
Current portion of long term debt 109,416
Income tax payable 330,322
Other current liabilities 367,645
------------
Total Current Liabilities 5,963,974
------------
Long term notes payable 41,643
------------
Total Liabilities 6,005,617
Minority interest 749,978
Stockholders' Equity:
Preferred stock ($1,000 par value; authorized
1,500,000 shares) --
Common stock ($.001 par value; authorized
500,000,000 shares; issued and outstanding 4,656,408 shares) 4,656
Additional paid in capital 32,647,502
Accumulated deficit (27,961,965)
Deferred compensation (11,250)
Accumulated other comprehensive income 5,871
------------
Total Stockholders' Equity 4,684,814
------------
Total Liabilities and Stockholders' Equity $ 11,440,409
------------
See Notes to Consolidated Financial Statements.
1
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net sales $ 12,156,719 $ 9,116,192 $ 21,800,141 $ 15,270,336
Cost of sales 1,680,340 1,573,626 3,617,186 2,664,121
------------ ------------ ------------ ------------
Gross profit 10,476,379 7,542,566 18,182,955 12,606,215
Associate commissions 4,928,928 4,535,501 9,051,342 7,747,237
Selling, general and
administrative expenses 4,026,873 2,355,613 6,849,829 4,337,451
------------ ------------ ------------ ------------
Operating income 1,520,578 651,452 2,281,784 521,527
Minority interest in subsidiary 82,417 (48,541) (23,231) (60,378)
Loss on foreign exchange (64,292) (78,781) (11,492) (78,871)
Other income, net 124,682 154,169 389,196 323,531
Interest, net (11,776) (14,980) (20,176) (32,609)
------------ ------------ ------------ ------------
Net income before taxes 1,651,609 663,319 2,616,081 673,200
Income tax expense 330,322 -- 330,322 --
Net income 1,321,287 663,319 2,285,759 673,200
Preferred stock dividends 408 19,175 810 41,460
------------ ------------ ------------ ------------
Net income to common stockholders $ 1,320,879 $ 644,144 $ 2,284,949 $ 631,740
============ ============ ============ ============
Basic income per common share $ 0.28 $ 0.22 $ 0.50 $ 0.22
============ ============ ============ ============
Basic weighted common shares used 4,656,408 2,972,713 4,569,986 2,819,830
============ ============ ============ ============
Diluted income per common share $ 0.23 $ 0.17 $ 0.41 $ 0.18
============ ============ ============ ============
Diluted weighted common shares used 5,695,045 3,682,051 5,608,623 3,529,168
============ ============ ============ ============
See Notes to Consolidated Financial Statements.
2
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net income $ 1,321,287 $ 663,319 $ 2,285,759 $ 673,200
Other comprehensive income, net of tax
Foreign translation adjustment (18,967) 53,816 5,871 59,658
------------ ------------ ------------ ------------
Comprehensive income $ 1,302,320 $ 717,135 $ 2,291,630 $ 732,858
============ ============ ============ ============
See Notes to Consolidated Financial Statements.
3
NATURAL HEALTH TRENDS CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
--------------------------------------
2003 2002
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,285,759 $ 673,200
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 310,051 191,008
Stock issued for compensation 51,826 7,192
Gain on forgiveness of debt (400,000) (400,000)
Minority interest of subsidiary 23,231 196,091
CHANGES IN ASSETS AND LIABILITIES:
Accounts receivable (1,062,321) (239,846)
Inventories (53,176) (216,256)
Prepaid expenses 169,883 175,393
Deposits and other assets (431,978) 152,495
Accounts payable and accrued expenses (780,311) 2,476,668
Deferred revenue -- 116,684
Income tax payable 330,322 --
Other current liabilities 14,602 225,071
----------- -----------
Total Adjustments (1,827,871) 2,684,500
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 457,888 3,357,700
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (428,037) (367,958)
Database purchase (226,845) --
Increase in restricted cash (628,041) (88,122)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (1,282,923) (456,080)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable and long-term debt -- 260,000
Payments of notes payable and long-term debt (198,114) (77,365)
----------- -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (198,114) 182,635
----------- -----------
Effect of Exchange Rate Changes 15,438 59,658
NET (DECREASE) INCREASE IN CASH (1,007,711) 3,143,913
CASH, BEGINNING OF PERIOD 3,863,946 324,315
----------- -----------
CASH, END OF PERIOD $ 2,856,235 $ 3,468,228
=========== ===========
See Notes to Consolidated Financial Statements.
4
NATURAL HEALTH TRENDS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)
1. We are Natural Health Trends Corp. ("NHTC"), an international
direct-selling company. We operate through our subsidiaries that distribute
products to promote health, wellness and vitality. Lexxus International,
Inc., our majority-owned subsidiary and other Lexxus subsidiaries
(collectively, "Lexxus"), sell certain cosmetic products as well as
"quality of life" products. eKaire.com, Inc., our wholly-owned subsidiary
("eKaire"), distributes nutritional supplements aimed at general health and
wellness.
2. The accompanying unaudited financial statements of Natural Health Trends
Corp. and its subsidiaries (the "Company") have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with instructions to Form 10-QSB and Article 10 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation (consisting of normal
recurring accruals) of financial position and results of operations for the
interim periods have been presented. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Operating results for the
six month period ended June 30, 2003 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2003. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual report on Form 10-KSB
for the year ended December 31, 2002.
3. In January 2003, the Company issued 18,500 shares of Common Stock to a law
firm for legal services of approximately $34,000.
4. In January 2003, the Company issued 10,000 shares of Common Stock to a
consulting firm for consulting services of approximately $19,000.
5. On January 31, 2003, the Company entered into a Database Purchase Agreement
with NuEworld.com Commerce, Inc. ("NuEworld") and Lighthouse Marketing
Corporation, our wholly-owned subsidiary ("Lighthouse"), pursuant to which
Lighthouse purchased a database of associates from NuEworld in exchange for
the issuance of 360,000 shares of our Common Stock. NuEworld was in the
business of marketing and selling a variety of products and services
through its multi-level marketing distribution network.
6. In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". SFAS No. 149 amends and
clarifies under what circumstances a contract with initial investments
meets the characteristics of a derivative and when a derivative contains a
financing component. SFAS No. 149 is effective for contracts entered into
or modified after June 30, 2003. The Company does not expect that the
adoption of SFAS No. 149 will have a significant effect on the Company's
financial statement presentation or disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity".
SFAS No. 150 establishes standards for how an issuer classifies and
measures in its statement of financial position certain financial
instruments with characteristics of both liabilities and equity. SFAS No.
150 requires that an issuer classify a financial instrument that is within
its scope as a liability (or an asset in some circumstances) because that
financial instrument embodies an obligation of the issuer. SFAS No. 150 is
effective for financial instruments entered into or modified after May 31,
2003 and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. SFAS No. 150 is to be implemented by
reporting the cumulative effect of a change in accounting principle for
financial instruments created before the issuance date of SFAS No. 150 and
still existing at the beginning of the interim period of adoption.
Restatement is not permitted. The Company does not expect that the adoption
of SFAS No. 150 will have a significant effect on the Company's financial
statement presentation or disclosures.
5
Item 2. Management's Discussion and Analysis or Plan of Operations
The following discussions 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", "the Company
expects", "will continue", "is anticipated", "estimated", "projected", "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 results 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.
Overview
Natural Health Trends Corp. was incorporated on December 1, 1988, in
the state of Florida. NHTC is an international direct-selling company operating
in more than 30 markets throughout Asia, North America and Eastern Europe.
The Company markets premium quality personal care products under the
Lexxus brand and markets its nutritional supplement products under the Kaire
brand. NHTC's common stock, par value $0.001 per share (the "Common Stock"), is
listed on the OTC Bulletin Board (the "OTCBB"). In July 2003, we applied for
listing of our shares of Common Stock on The American Stock Exchange. We
anticipate that our shares of Common Stock will commence trading on The American
Stock Exchange during the third quarter of 2003. In March 2003, we effected a
1-for-100 reverse stock split with respect to our outstanding shares of Common
Stock. In addition, the trading symbol for the shares of our Common Stock
changed from "NHTC" to "NHLC".
NHTC is a holding company that operates two businesses, Lexxus and
eKaire, which distribute products that promote health, wellness and vitality
through two distinct multi-level marketing ("MLM") channels. The following
paragraphs will outline the progression of NHTC as it is organized today.
In February 1999, NHTC Holdings Inc. acquired certain assets (the
"Kaire Assets") of Kaire International, Inc., a Delaware corporation ("KII").
The assets included, but not limited to, the corporate name, all variations and
any other product name, registered and unregistered trademarks, tradenames,
servicemarks, patents, logos and copyrights of KII, and independent associate
lists.
In January 2001, NHTC entered into a joint venture with Lexxus
International and formed a new majority-owned USA subsidiary, Lexxus
International, Inc., a Delaware corporation. The original founders of Lexxus
International received an aggregate of 100,000 shares of our Common Stock and
own 49% of the total number of shares of capital stock of Lexxus International,
Inc.
In the second quarter of 2001, we incorporated Lexxus International
(SW Pacific) Pty. Ltd., an Australian corporation and our majority-owned
subsidiary, which does business in Australia ("Lexxus Australia"). In addition,
we incorporated Lexxus International (New Zealand) Limited, a New Zealand
corporation and majority-owned subsidiary of NHTC, which does business in New
Zealand ("Lexxus New Zealand").
In June 2001, we incorporated Lighthouse Marketing Corporation
("Lighthouse"), a Delaware Corporation and our wholly-owned subsidiary. As of
January 31, 2003, Lighthouse acquired certain assets from NuEworld. See Footnote
5 for more detail.
6
In June 2001, we sold all of the outstanding Common Stock in Kaire
Nutraceuticals, Inc., a Delaware corporation, to a South African firm.
In November 2001, we incorporated Lexxus International Co., Ltd., a
corporation organized under the laws of the Republic of China and our
majority-owned subsidiary ("Lexxus Taiwan") which does business in Taiwan.
In January 2002, we incorporated MyLexxus Europe AG, a corporation
organized under the laws of Switzerland and our majority-owned subsidiary
("MyLexxus Europe"). This company manages the sales of product into sixteen
eastern European countries, including Russia.
In March 2002, we incorporated Lexxus International Co., Ltd., a
corporation organized under the laws of Hong Kong and our wholly-owned
subsidiary ("Lexxus Hong Kong") which does business in Hong Kong.
In April 2002, we incorporated Personal Care International India Pvt.
Ltd., a corporation organized under the laws of India and our wholly-owned
subsidiary ("MyLexxus India") which does business in India.
In June 2002, we incorporated Lexxus International Marketing Ltd., a
corporation organized under the laws of Singapore and our majority-owned
subsidiary ("Lexxus Singapore") which does business in Singapore.
In November 2002, we incorporated Lexxus International (Philippines)
Inc., a corporation organized under the laws of the Philippines and our
majority-owned subsidiary ("Lexxus Philippines") which does business in the
Philippines.
In June 2003, we incorporated LXK Ltd. (South Korea), a corporation
organized under the laws of South Korea and our wholly-owned subsidiary ("Lexxus
Korea") which does business in South Korea.
Six Months Ended June 30, 2003 Compared To
The Six Months Ended June 30, 2002.
Revenues. Revenues were approximately $21,800,000 and $15,270,000 for
the six months ended June 30, 2003 and June 30, 2002, respectively; an increase
of $6,530,000 or 43%. The increased sales were primarily from additional sales
of Lexxus products and the expansion of Lexxus into new international markets,
including South Korea in June 2003, partially offset by a slight decrease in the
sales of eKaire products.
Cost of Sales. Cost of sales for the six months ended June 30, 2003 was
approximately $3,617,000 or 17% of net sales. Cost of sales for the six months
ended June 30, 2002 was approximately $2,664,000 or 17% of net sales. The total
cost of sales increased due to increased sales volume and increased costs
associated with the packaging of the Lexxus product line.
Gross Profit. Gross profit increased from approximately $12,606,000 in
the six months ended June 30, 2002 to approximately $18,183,000 in the six
months ended June 30, 2003, or an increase of 44%. The increase in gross profit
of approximately $5,577,000 was attributable to higher sales volumes by Lexxus.
Associate Commissions. Associate commissions were approximately
$9,051,000 or 42% of sales in the six months ended June 30, 2003 compared to
approximately $7,747,000 or 51% of sales for the six months ended June 30, 2002.
The increase of commission expense is directly related to the increase in gross
sales and the terms of the Company's compensation plans. The decrease in
commission expense as a percentage of sales is due to the normal fluctuations
that occur in the compensation plan and also due to the amount of revenues
allocated to the compensation plan.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses as a percentage of net sales increased from
approximately $4,337,000 or 28% of sales in the six months ended June 30, 2002
to approximately $6,850,000 or 31% of sales in the six months ended June 30,
2003. These costs as a percentage of net sales increased primarily due to
7
general and administrative costs, such as hiring staff, preparing office space
and initial marketing efforts through the expansion into new international
markets.
Operating income. Operating income increased from an operating income
of approximately $522,000 in the six months ended June 30, 2002 to operating
income of approximately $2,282,000 in the six months ended June 30, 2003. This
is attributable to higher sales volume, increased selling, general and
administrative costs and increased associate commissions.
Income Taxes. In the second quarter 2003, the Company has provided
income taxes in the amount of $330,000, due to the limitation of the utilization
of the Company's available net operating loss carryforwards pursuant to Section
382 of the Internal Revenue Code.
Other Income. As part of other income during the six months ended June
30, 2003 and the six months ended June 30, 2002, NHTC realized a gain of
approximately $400,000 in other income due to forgiveness of debt.
Net Income. Net income was approximately $2,286,000 in the six months
ended June 30, 2003 as compared to approximately $673,000 in the six months
ended June 30, 2002. The increase in net income of approximately $1,613,000 is
due to increased sales and efficient cost containment efforts partially offset
by an income tax expense.
Liquidity and Capital Resources.
The Company has funded the working capital and capital expenditure
requirements primarily from cash provided through operations and through limited
borrowings from individuals.
At June 30, 2003, the ratio of current assets to current liabilities
was 1.28 to 1.0 and the Company had working capital of approximately $1,687,000.
Cash provided by operations for the six months ended June 30, 2003 was
approximately $458,000 primarily due from increased sales, the launch of the
Company's South Korean operations which were partially offset by increased
accounts receivable and the reduction of accounts payable. Cash used in
investing activities during the period was approximately $1,283,000 due to the
purchase of an associate database, the increase of capital expenditures and the
increase of restricted cash. Cash used by financing activities during the period
was approximately $198,000. Total cash decreased by approximately $1,008,000
during the period.
CRITICAL ACCOUNTING POLICIES
A summary of significant accounting policies is included in Note 2 to
the audited consolidated financial statements included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2002. Management believes
that the application of these policies on a consistent basis enables the Company
to provide useful and reliable financial information about the Company's
operating results and financial condition.
EFFECT OF NEW ACCOUNTING STANDARDS
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities". SFAS No. 149 amends and
clarifies under what circumstances a contract with initial investments meets the
characteristics of a derivative and when a derivative contains a financing
component. SFAS No. 149 is effective for contracts entered into or modified
after June 30, 2003. The Company does not expect that the adoption of SFAS No.
149 will have a significant effect on the Company's financial statement
presentation or disclosures.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". SFAS
No. 150 establishes standards for how an issuer classifies and measures in its
statement of financial position certain financial instruments with
characteristics of both liabilities and equity. SFAS No. 150 requires that an
issuer classify a financial instrument that is within its scope as a liability
(or an asset in some circumstances) because that financial instrument embodies
an obligation of the issuer. SFAS No. 150 is effective for financial instruments
entered into or modified after May 31, 2003 and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003. SFAS No.
150 is to be implemented by reporting the cumulative effect of a change in
accounting principle for financial instruments created before the issuance date
of SFAS No. 150 and still existing at the beginning of the interim period of
adoption. Restatement is not permitted. The Company does not expect that the
adoption of SFAS No. 150 will have a significant effect on the Company's
financial statement presentation or disclosures.
8
Item 3. Controls and Procedures
We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed in our Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms and that such
information is accumulated and communicated to our management, including our
President and Chief Financial Officer, as appropriate, to allow for timely
decisions regarding required disclosure. In designing and evaluating the
disclosure controls and procedures, management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management
is required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under
the supervision and with the participation of our management, including our
President and Chief Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the quarter
covered by this report. Based on the foregoing, our President and Chief
Financial Officer concluded that our disclosure controls and procedures were
effective at the reasonable assurance level.
There has been no change in our internal controls over financial
reporting during our most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, our internal controls over financial
reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
In March 2003, NHTC issued 360,000 shares of our Common Stock to
NuEworld.com Commerce, Inc. pursuant to a database purchase agreement.
In January 2003, the Company issued 18,500 shares of Common Stock to a
law firm for legal services of approximately $34,000.
In January 2003, the Company issued 10,000 shares of Common Stock to a
consulting firm for consulting services of approximately $19,000.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On May 22, 2003, the Company held its Annual Meeting of Stockholders
where the stockholders of the Company approved the following proposals:
(a) Election of Directors. Mark D. Woodburn, Terry LaCore, Sir Brian
Wolfson and Randall A. Mason were elected to the Board of Directors of the
Company for a term of one (1) year, each receiving 3,218,419, 3,218,299,
3,215,149 and 3,218,519 votes respectively in favor of his election (69.5% of
the shares outstanding).
(b) Amendment to the 2002 Stock Option Plan. The amendment to the
Company's 2002 Stock Plan was approved by the stockholders of the Company
(3,215,333 votes for (69.46% of the shares outstanding); 4,891 shares against;
and 1,230 shares abstained).
9
(c) Ratification of the Appointment of Independent Accountants. The
ratification of the appointment of Sherb & Co., LLP as independent accountants
of the Company for fiscal year ending December 31, 2003 was approved by the
stockholders of the Company (3,221,055 votes for (69.59% of the shares
outstanding); 284 votes against; and 115 shares abstained).
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
31.1 Certification of the President and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of the President and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
None.
10
SIGNATURE
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/ Mark D. Woodburn
----------------------------
Mark D. Woodburn
President
Date: August 13, 2003
11