912061--3/31/2008--NATURAL_HEALTH_TRENDS

related topics

{capital, credit, financial}

{regulation, change, law}

{financial, litigation, operation}

{product, market, service}

{stock, price, share}

{debt, indebtedness, cash}

{product, candidate, development}

{stock, price, operating}

{operation, international, foreign}

{system, service, information}

{interest, director, officer}

{product, liability, claim}

{property, intellectual, protect}

{condition, economic, financial}

{personnel, key, retain}

{control, financial, internal}

{acquisition, growth, future}

{operation, natural, condition}

{customer, product, revenue}

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. We Face Risks Related To An SEC Investigation, Securities Litigation and Other Litigation That Could Have A Material Adverse Effect On Our Relationships With Our Distributors, Business, Financial Condition And Results Of Operations. We May Face Additional Litigation In The Future That Could Also Harm Our Business. We Could Be Adversely Affected By Additional Audit Committee Investigations. 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. Claims May Arise Against Us 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. Changes to Our Distributor Compensation Plan May Not Gain Acceptance 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 62% Of Our Revenue In 2007, 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 Effect On Our Revenue. Our E-Commerce Business In Hong Kong, Which Represents A Significant Portion Of Our 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 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 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 Independent Director, Audit Committee And Compensation Committee Requirements, Our Common Stock May Be Delisted From The Nasdaq Global Market, Which May Reduce The Price Of Our Common Stock And Levels Of Liquidity Available To Our Stockholders. If Securities Analysts Do Not Publish Research Or Reports About Our Business Or If They Downgrade Our Stock, The Price Of Our Stock Could Decline. We Have Broad Discretion To Use The Proceeds Of Our Recent Private Placement Financings. Leverage And Debt Service Obligations May 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. We Are Responsible For Maintaining The Effectiveness of Registration Statements Covering The Resale Of Shares Of Common Stock Underlying Certain of Our Convertible Securities Issued In Our 2007 Private Placement Financings And Will Incur Liquidated Damage Payment Obligations And May Be Subject To Other Liabilities If They Are Not Maintained or If We Fail To Perform Certain Other Obligations In The Related Registration Rights Agreements. 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 Our Business.

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912061--3/31/2008--NATURAL_HEALTH_TRENDS_CORP