UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 17, 2006
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NATURAL HEALTH TRENDS CORP.
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(Exact name of Company as specified in its charter)
Delaware 0-26272 59-2705336
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(State or other jurisdiction (Commission IRS Employer
of incorporation) File Number) Identification No.)
2050 Diplomat Drive Dallas, TX 75234
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(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code (972) 241-4080
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events
Natural Health Trends Corp. (the "Company") announced today that it has
not filed its Annual Report on Form 10-K with the Securities and
Exchange Commission ("SEC") by the close of business on April 17, 2006,
as required by SEC and Nasdaq rules and regulations. The Company has
been unable to complete its financial statements, and the audit of
those financial statements.
A number of items remain open before the financial statements can be
completed. One issue is obtaining further clarification that the
Company's e-commerce business in Hong Kong is not covered by, and
therefore not in violation of, Chinese laws regarding direct selling
and multi-level marketing. Many of the Company's independent consumer
members reside in the People's Republic of China ("PRC") and purchase
Company products via the Internet from the Company's Hong Kong
subsidiary. The Company has consulted with outside professionals and
believes that the Company's Hong Kong e-commerce business model is not
in violation of Chinese laws.
Another issue is determining if a previously engaged product importer
paid the correct amount of import duties with respect to the shipment
of Company products into the PRC and, if not, whether the Company could
be held responsible for the underpayment, if any, of Chinese duty. The
product importer in question is a related party, whose principal owner
is a member of the Board of Directors of the Company's wholly owned
Chinese subsidiary. The Company is working diligently to further
quantify the risk, if any, associated with whether the product importer
underpaid import duties, and if so, whether any such underpayments
could in the future become a Company obligation.The Company has
consulted with outside professionals and believes that the Company has
no liability for underpaid duties should it later be determined they
exist.
Since March 2006, the Company has engaged a new, unrelated product
importer. Based upon the advice of outside counsel and other
professionals, the Company believes that it will not be responsible for
any underpayment, if any, of import duties made by this new product
importer.
The Company has gathered significant documentation and sought the
opinions or counsel of outside professionals in its effort to meet the
requirements of completing the financial statements. The Company
anticipates successfully resolving these and certain other outstanding
issues in the very near future and filing the Form 10-K as soon as
possible.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATURAL HEALTH TRENDS CORP.
Date: April 18, 2006
By: /s/ CHRIS SHARNG
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Name: Chris Sharng
Title: Executive Vice President and
Chief Financial Officer
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