UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): May 4, 2007
Natural Health Trends Corp.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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| 0-26272
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59-2705336 |
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| (Commission File Number)
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(IRS Employer Identification No.) |
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| 2050 Diplomat Drive, Dallas, Texas
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75234 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
(972) 241-4080
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On May 4, 2007, Natural Health Trends Corp. (the “Company”) entered into a Stock and Warrant
Purchase Agreement (U.S. Purchaser) with each of the following: Bradley Baker, Craig-Hallum
Partners, George Broady, Gregory Olin, James Zavoral, John Flood, Kevin Harris, Raymond Xerri,
Robert Evans and Wenge Yang.
Also on May 4, 2007, the Company entered into a Stock and Warrant Purchase Agreement (Non-U.S.
Purchaser) with each of the following: Anthony Fierro, Cao Hui, Chief China Resources Ltd., Joanne
Yan, Qian Xin Hui, Randal Matkaluk and Zhao Yan Tao.
Under the Stock and Warrant Purchase Agreements, the Company sold: (i) 1,759,307 shares (the
“Shares”) of its Series A Convertible Preferred Stock, par value $0.001 per share (the “Preferred
Stock”), at a purchase price of $1.70 per share, and (ii) warrants (the “Warrants”) representing
the right to purchase 1,759,307 shares of its Common Stock, $0.001 per share (the “Common Stock”),
at a purchase price of $0.00001 per underlying share. The gross proceeds from the sale of the
Shares and the Warrants were approximately $3.0 million.
The Preferred Stock is initially convertible into an equivalent number of shares of Common Stock.
The Preferred Stock accrues cash dividends at the rate of 7% per annum, payable upon declaration by
the Company’s board of directors. The holders of Preferred Stock are generally entitled to vote
together with the holders of Common Stock, provided that the holders of Preferred Stock will be
entitled to separately select one candidate to be considered for nomination to the Company’s board
of directors. When voting with the holders of Common Stock, the holders of Preferred Stock will
vote as if converted at market value on the date of issuance of the Preferred Stock. The Preferred
Stock has a liquidation preference equal to the original purchase price of the Preferred Stock plus
any accrued but unpaid dividends. The Warrants are exercisable at any time during the period
beginning November 4, 2007 (six months after their issuance) and ending May 4, 2013 (six years
after their issuance). The exercise price for the Warrants varies from $3.80 to $5.00 per share,
depending on the time of exercise. In connection with the financing, the Company agreed, subject
to certain terms and conditions, to exercise its reasonable best efforts to register for resale
under the Securities Act of 1933 (“Securities Act”) the shares of Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants.
An affiliate of Chief China Resources Ltd. acted as placement agent on behalf of
the Company in connection with the conduct of the offering outside of the United States. As
partial consideration for rendering such placement agency services, the Company issued to such affiliate a warrant covering 300,000 shares of Common Stock on substantially the same terms as those
set forth in the Warrants. Mr. Ken Wang, a principal of Chief China Resources Ltd., will in accordance with the terms of the Stock and Warrant Purchase
Agreements and subject to evaluation by the Company’s Nominating Committee, be the Preferred Stockholders’ initial candidate to be considered
for nomination to the Company’s board of directors.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth under Item 1.01 above is incorporated herein by this reference.
The sale of the Preferred Stock and Warrants was made to qualified U.S. purchasers in reliance on
Regulation D under the Securities Act and to certain non-U.S. persons in transactions outside the
United States in reliance on Regulation S under the Securities Act. Neither the Preferred Stock
nor the Warrants were registered under the Securities Act and, unless so registered, may not be
offered or sold in the United States except pursuant to an exemption from the registration
requirements of the Securities Act and applicable state and foreign securities laws.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On May 4, 2007 the Company filed with the Secretary of State of the State of Delaware a Certificate
of Designations, Rights and Preferences of the Series A Convertible Preferred Stock of the Company.
For a description of the specific rights and preferences of the Preferred Stock, see the relevant
disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by this
reference.
Item 8.01 Other Events.
On May 7, 2007, the Company issued a press release announcing the completion of the offering
described in Item 1.01 above.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Description |
3.1
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Certificate of Designations, Rights and Preferences of the Series A Convertible Preferred
Stock of the Company. |
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10.1
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Form of Stock and Warrant Purchase Agreement (U.S. Purchaser) dated May 4, 2007 between the
Company and certain Purchasers. |
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10.2
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Form of Stock and Warrant Purchase Agreement (Non-U.S. Purchaser) dated May 4, 2007 between
the Company and certain Purchasers. |
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10.3
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Form of Warrant to Purchase Shares of Common Stock of the Company, dated May 4, 2007 and
issued to certain Purchasers. |
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99.1
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Press Release of the Company dated May 7, 2007. |