912061--3/23/2009--NATURAL_HEALTH_TRENDS

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{product, market, service}

{debt, indebtedness, cash}

{capital, credit, financial}

{product, candidate, development}

{financial, litigation, operation}

{operation, international, foreign}

{stock, price, share}

{system, service, information}

{product, liability, claim}

{condition, economic, financial}

{personnel, key, retain}

{control, financial, internal}

{stock, price, operating}

{property, intellectual, protect}

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{operation, natural, condition}

{customer, product, revenue}

Leverage And Debt Service Obligations Adversely Affect Our Cash Flows We Could Be Required To Make Substantial Cash Payments Upon An Event Of Default Under Our Variable Rate Convertible Debentures. The Agreements Governing The Variable Rate Convertible Debentures And Related Warrants Issued In Our October 2007 Financing Contain Various Covenants And Restrictions That May Limit Our Ability To Operate And Fund Our Business. If We Continue To Experience Negative Cash Flows, We May Need To Seek Additional Debt Or Equity Financing, Which May Not Be Available On Acceptable Terms Or At All. If Available, It Could Have A Dilutive Effect On The Holdings Of Existing Stockholders. Because Our Hong Kong Operations Account For A Majority Of Our Overall Business, and Most Of Our Hong Kong Business Is Derived From The Sale Of Products To Members In China, Any Material Adverse Change In Our Business Relating To Either Hong Kong Or China Would Likely Have a Material Adverse Impact On Our Overall Business. Continued Adverse News About Us Could Have A Material Adverse Effect On Our Ability To Attract And Maintain Distributors. We Could Be Adversely Affected By Additional Management Changes Or An Inability To Attract And Retain Key Management, Directors And Consultants. As A Network Marketing Company, We Rely On An Independent Sales Force And We Do Not Have Direct Control Over The Marketing Of Our Products. Since We Cannot Exert The Same Level Of Influence Or Control Over Our Independent Distributors As We Could Were They Our Own Employees, Our Distributors Could Fail To Comply With Our Distributor Policies And Procedures, Which Could Result in Claims Against Us That Could Harm Our Financial Condition And Operating Results. We May Be Unable To Protect Or Use Our Intellectual Property Rights. Adverse Publicity Associated With Our Products, Ingredients Or Network Marketing Program, Or Those Of Similar Companies, Could Harm Our Financial Condition And Operating Results. Our Failure To Maintain And Expand Our Distributor Relationships Could Adversely Affect Our Business. Changes to Our Distributor Compensation Plan May Not Gain Acceptance Failure To Properly Pay Business Taxes Or Customs Duties, Including Those In China, Could Have A Material Adverse Effect. If We Continue To Operate In Foreign Markets Our Business Becomes Increasingly Subject To Political And Economic Risks. Changes In These Markets Could Adversely Affect Our Business. An Increase In The Amount Of Compensation Paid To Distributors Would Reduce Profitability. We Face Risks Related To Litigation That Could Have A Material Adverse Effect On Financial Condition And Results Of Operations. We May Face Additional Litigation In The Future That Could Also Harm Our Business. We Do Not Have Product Liability Insurance And Product Liability Claims Could Hurt Our Business. Our Internal Controls And Accounting Methods May Require Further Modification. If We Fail To Maintain An Effective System Of Internal Controls In The Future, We May Not Be Able To Accurately Report Our Financial Results Or Prevent Fraud. As A Result, Investors May Lose Confidence In Our Financial Reporting. We Rely On And Are Subject To Risks Associated With Our Reliance Upon Information Technology Systems. Regulatory Matters Governing Our Industry Could Have A Significant Negative Effect On Our Business. Currency Exchange Rate Fluctuations Could Lower Our Revenue And Net Income. Failure Of New Products To Gain Distributor And Market Acceptance Could Harm Our Business. System Failures Could Harm Our Business. We Have A Limited Product Line. We Do Not Manufacture Our Own Products So We Must Rely On Independent Third Parties For The Manufacturing And Supply Of Our Products. The High Level Of Competition In Our Industry Could Adversely Affect Our Business. Terrorist Attacks, Cyber Attacks, Acts Of War, Epidemics Or Other Communicable Diseases Or Any Other Natural Disasters May Seriously Harm Our Business. Disappointing Quarterly Revenue Or Operating Results Could Cause The Price Of Our Common Stock To Fall. Our Common Stock Is Particularly Subject To Volatility Because Of The Industry In Which We Operate. There Is No Assurance That An Active Public Trading Market Will Continue. If We Fail To Regain Compliance With Nasdaq s Minimum $1.00 Per Share Bid Price Requirement For Continued Listing, Our Common Stock May Be Delisted From The Nasdaq Capital Market, Which May Reduce The Price Of Our Common Stock And Levels Of Liquidity Available To Our Stockholders.

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912061--3/23/2009--NATURAL_HEALTH_TRENDS_CORP