912061--3/28/2007--NATURAL_HEALTH_TRENDS

related topics

{regulation, change, law}

{capital, credit, financial}

{product, candidate, development}

{operation, international, foreign}

{system, service, information}

{customer, product, revenue}

{product, market, service}

{property, intellectual, protect}

{product, liability, claim}

{operation, natural, condition}

{personnel, key, retain}

{interest, director, officer}

{financial, litigation, operation}

{control, financial, internal}

Continued Adverse News About The Company Could Have A Material Adverse Effect On Our Ability To Attract And Maintain Distributors. Loss Of Key Personnel Could Adversely Affect Our Business. 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. Claims May Arise Against the Company From Unknown Oral Agreements and Misconduct of Former Officers and Directors. 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. If The Number Or Productivity Of Independent Distributors Does Not Increase, Our Revenue Could Not Increase. Because Our Hong Kong Operations Account For A Majority Of Our Business, Any Adverse Changes In Our Business Operations In Hong Kong Would Materially Harm Our Business. Our Business In Hong Kong, Which Represented 67% Of Our Revenue in 2006, May Be Harmed By The Results Of Increased Government Scrutiny of Our Current and Proposed Operations in China. We Could Be Required To Modify Our Compensation Plan In China In A Way That Could Make It Less Attractive To Members, And This Could Have A Significant Adverse Affect On Our Revenue. The Company s E-Commerce Business in Hong Kong, Which Represents A Significant Portion Of The Company s Total Revenue, Could Be Adversely Affected By The Activities Of The Members in China, If Members In China Engage In Activities That Are Deemed To Violate China s Anti-Multilevel Marketing Laws. If We Fail To Obtain a Direct Selling License in China, Our Future Business Could Be Harmed. Failure to Properly Pay Business Taxes, Including Those in China, Could Have a Material Adverse Effect. As We Continue To Expand Into 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 Do Not Have Product Liability Insurance And Product Liability Claims Could Hurt Our Business. Our Internal Controls and Accounting Methods Require Further Modification. Non-Compliance with Section 404 of the Sarbanes-Oxley Act of 2002 Could Materially Adversely Affect Us. 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 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, Acts Of War, Epidemics Or Other Communicable Diseases Or Any Other Natural Disasters May Seriously Harm Our Business.

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912061--3/28/2007--NATURAL_HEALTH_TRENDS_CORP