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<SEC-DOCUMENT>0000950134-08-007772.txt : 20080429
<SEC-HEADER>0000950134-08-007772.hdr.sgml : 20080429
<ACCEPTANCE-DATETIME>20080429161358
ACCESSION NUMBER:		0000950134-08-007772
CONFORMED SUBMISSION TYPE:	10-K/A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20071231
FILED AS OF DATE:		20080429
DATE AS OF CHANGE:		20080429

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATURAL HEALTH TRENDS CORP
		CENTRAL INDEX KEY:			0000912061
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190]
		IRS NUMBER:				592705336
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26272
		FILM NUMBER:		08785651

	BUSINESS ADDRESS:	
		STREET 1:		2050 DIPLOMAT DRIVE
		STREET 2:		--
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
		BUSINESS PHONE:		972-241-4080

	MAIL ADDRESS:	
		STREET 1:		2050 DIPLOMAT DRIVE
		STREET 2:		--
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>d56192e10vkza.htm
<DESCRIPTION>AMENDMENT TO FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vkza</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>








<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES</B>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 0pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-K/A</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Amendment No.&nbsp;1</B></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>(Mark One)</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B>For the fiscal year ended December&nbsp;31, 2007
</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OR</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B>For the transition period from <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>.
</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission file number: 0-26272</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>NATURAL HEALTH TRENDS CORP.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 0pt">(Exact name of registrant as specified in its charter)

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Delaware<BR>
(State or other jurisdiction of <BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">59-2705336<BR>
(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">2050 Diplomat Drive <BR>
Dallas, Texas<BR>
(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">75234<BR>
(Zip code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s telephone number, including area code: (972)&nbsp;241-4080</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(b) of the Act:</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Title of each class<BR>
<B>Common Stock, $0.001 par value</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Name of each exchange on which registered<BR>
<B>The Nasdaq Stock Market LLC<BR>
(Nasdaq Capital Market)</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Securities registered pursuant to Section&nbsp;12(g) of the Act:<BR>
<B>None</B></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule&nbsp;405 of
the Securities Act.&nbsp;Yes&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is not required to file reports pursuant to Section&nbsp;13 or
Section 15(d) of the Act.&nbsp;Yes&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant: (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past 90&nbsp;days.&nbsp;Yes&nbsp;<FONT face="Wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405 of Regulation&nbsp;S-K is
not contained herein, and will not be contained, to the best of registrant&#146;s knowledge, in
definitive proxy or information statements incorporated by reference in Part&nbsp;III of this Form 10-K
or any amendment to this Form 10-K.&nbsp;<FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of &#147;large accelerated filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in
Rule&nbsp;12b-2 of the Exchange Act. (Check one):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="23%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Large accelerated filer&nbsp;<FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Accelerated filer&nbsp;<FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Non-accelerated filer&nbsp;<FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Smaller reporting company&nbsp;<FONT face="Wingdings">&#254;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align="center" valign="top">(Do not check if a smaller reporting company)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a shell company (as defined in Rule&nbsp;12b-2 of the
Act).&nbsp;Yes&nbsp;<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate market value of the voting and non-voting common equity held by non-affiliates
computed by reference to the closing price of such common equity on June&nbsp;30, 2007: $26,614,106
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At April&nbsp;21, 2008, the number of shares outstanding of the registrant&#146;s common stock was 10,347,126
shares.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>









<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">NATURAL HEALTH TRENDS CORP.
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">EXPLANATORY NOTE

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Natural Health Trends Corp. is filing this Amendment No.&nbsp;1 on Form 10-K/A to its Annual Report
on Form 10-K for the year ended December&nbsp;31, 2007 filed on March&nbsp;31, 2008 (the &#147;Form&nbsp;10-K&#148;) to
furnish the information required in Part&nbsp;III (Items 10, 11, 12, 13 and 14). This report is limited
in scope to the items identified above and should be read in conjunction with the Form 10-K. This
report does not reflect events occurring after the filing of the Form 10-K and, other than the
furnishing of the information identified above, does not modify or update the disclosure in the
Form 10-K in any way.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">TABLE OF CONTENTS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Page</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">PART III</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">Item&nbsp;10. Directors, Executive Officers and Corporate Governance</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Item&nbsp;11. Executive Compensation</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Item&nbsp;12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Item&nbsp;13. Certain Relationships and Related Transactions, and Director Independence</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Item&nbsp;14. Principal Accounting Fees and Services</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">PART IV</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Item&nbsp;15. Exhibits and Financial Statement Schedules</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Signatures</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d56192exv31w1.htm">Certification of Principal Executive Officer</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d56192exv31w2.htm">Certification of Principal Financial Officer</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain statements contained in this report constitute &#147;forward-looking statements&#148; within the
meaning of Section&nbsp;27A of the Securities Act of 1933, as amended, and Section&nbsp;21E of the Securities
Exchange Act of 1934, as amended. All statements included in this report, other than statements of
historical facts, regarding our strategy, future operations, financial position, estimated
revenues, projected costs, prospects, plans and objectives are forward-looking statements. When
used in this report, the words &#147;believe,&#148; &#147;anticipate,&#148; &#147;intend,&#148; &#147;estimate,&#148; &#147;expect,&#148; &#147;project,&#148;
&#147;could,&#148; &#147;would,&#148; &#147;may,&#148; &#147;plan,&#148; &#147;predict,&#148; &#147;pursue,&#148; &#147;continue,&#148; &#147;feel&#148; and similar expressions
are intended to identify forward-looking statements, although not all forward-looking statements
contain these identifying words.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot guarantee future results, levels of activity, performance or achievements, and you
should not place reliance on our forward-looking statements. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or
strategic investments. In addition, any forward-looking statements represent our expectation only
as of the date of this report and should not be relied on as representing our expectations as of
any subsequent date. While we may elect to update forward-looking statements at some point in the
future, we specifically disclaim any obligation to do so, even if our expectations change.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we believe that the expectations reflected in any of our forward-looking statements
are reasonable, actual results could differ materially from those projected or assumed in any of
our forward-looking statements. Our future financial condition and results of operations, as well
as any forward-looking statements, are subject to change and to inherent risks and uncertainties,
such as those disclosed in this report. Important factors that could cause our actual results,
performance and achievements, or industry results to differ materially from forward-looking
statements include the risks described under the caption &#147;Risk Factors&#148; in the Form 10-K, which
include the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may continue to experience substantial negative cash flows;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may need to seek additional debt or equity financing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we face risks related to an SEC investigation and securities and other litigation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we could be adversely affected by additional audit committee investigations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to attract and retain distributors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to recruit and retain key management, directors and consultants;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our inability to directly control the marketing of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our inability to control our distributors to the same extent as if they were our own
employees;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to protect or use our intellectual property rights;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>claims against us that could arise from the misconduct of some of our former officers
and directors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse publicity associated with our products, ingredients or network marketing
programs, or those of similar companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to maintain or expand the number of our distributors or their productivity
levels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes to our distributor compensation plan may not be accepted;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our dependence on our Hong Kong and China market for most of our revenue;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>regulatory matters pertaining to direct-selling laws, particularly in China;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we could be required to modify our compensation plan in China in a way that could
adversely affect our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>activities of our members in China could adversely affect our Hong Kong e-commerce
model;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our inability to obtain a direct-selling license in China;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our failure to properly pay business taxes or customs duties, including those of China;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks associated with operating internationally;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks associated with the amount of compensation paid to distributors, which can affect
our profitability;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we rely on our suppliers&#146; product liability insurance and product liability claims could
hurt our business;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our internal controls and accounting methods may require further modification;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we could be adversely affected if we fail to maintain an effective system of internal
controls;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks associated with our reliance on information technology systems;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks associated with the extensive regulation of our business and the implications of
changes in such regulations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>currency exchange rate fluctuations could lower our revenue and net income;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure of new products to gain distributor or market acceptance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure of our information technology system could harm our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we have a limited product line;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our reliance on outside manufacturers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the intensely competitive nature of our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>terrorist attacks, cyber attacks, acts of war or other disasters, particularly given the
scope of our international operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>disappointing quarterly revenue or operating results, which could adversely affect our
stock price;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our common stock is particularly subject to volatility because of the industry in which
we operate;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>consequences arising if an active public trading market for our common stock does not
continue;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>consequences if we fail to regain compliance with applicable Nasdaq requirements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse consequences if securities analysts publish adverse research or reports, or
otherwise fail to cover us at all;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our failure to wisely apply the proceeds derived from our May and October&nbsp;2007
financings effectively;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse cash flow consequences from leverage and debt service obligations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>substantial cash payments could be required upon an event of default under our variable
rate convertible debentures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to maintain the registration statements covering the resale of shares of common
stock for certain investors will result in liquidated damages;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>covenants and restrictions in certain investor agreements could restrict our ability to
operate our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the implications of the actual or anticipated conversion or exercise of our convertible
securities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>future sales by us or our stockholders of shares of common stock could depress the
market price of our common stock.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional factors that could cause actual results to differ materially from our
forward-looking statements are set forth in the Form 10-K, including under the heading
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations&#148; and in our
financial statements and the related notes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward-looking statements in this report speak only as of the date hereof, and forward
looking statements in documents incorporated by reference speak only as of the date of those
documents. The Company does not undertake any obligation to update or release any revisions to any
forward-looking statement or to report any events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events, except as required by law. Unless otherwise noted,
the terms &#147;we,&#148; &#147;our,&#148; &#147;us,&#148; &#147;Company,&#148; refer to Natural Health Trends Corp. and its subsidiaries.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Part III</B>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The biographical information for each director of the Company is set forth below:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Randall A. Mason. </B>Mr.&nbsp;Mason has been a director of the Company since May&nbsp;2003 and has served
as Chairman of the Board of Directors since March&nbsp;2006. Mr.&nbsp;Mason founded and has served as
President and Chief Executive Officer of Marden Rehabilitation Associates, Inc. since 1989. Marden
Rehabilitation Associates, Inc. is a private, Midwest U.S. ancillary provider of rehabilitative
therapy services and home healthcare. Mr.&nbsp;Mason is 49&nbsp;years of age. He has a bachelor degree in
chemical engineering from the University of Pittsburgh.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stefan W. Zuckut. </B>Mr.&nbsp;Zuckut has served as a director of the Company since May&nbsp;2007. Mr.
Zuckut has since November&nbsp;2005 served as Vice President, Corporate Development with Blade Network
Technologies, Inc., a computer networking company. He was a partner of Top Sight Capital, a hedge
fund, from January&nbsp;2005 to May&nbsp;2005, and served as an analyst for Bowman Capital, a hedge fund,
from July&nbsp;2003 to December&nbsp;2004. From October&nbsp;1999 to April&nbsp;2003, he served as Manager, Corporate
Development, for Agilent Technologies, Inc., which provides electronic and chemical measurement
solutions to various industries. Prior to that, he worked in various professional positions at
Atlantic Richfield Co., Mattel Inc. and McKinsey &#038; Co. Mr.&nbsp;Zuckut is 47&nbsp;years of age. He has a
Ph.D. degree from the University of Cologne, a master in business administration degree (&#147;MBA&#148;)
from the University of Chicago and a master degree in science from the Darmstadt Institute of
Technology in Germany.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Biographical information regarding the Company&#146;s executive officers is as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Chris T. Sharng. </B>Mr.&nbsp;Sharng has served as President of the Company since February&nbsp;2007. He
previously served as Executive Vice President and Chief Financial Officer of the Company from
August&nbsp;2004 to February&nbsp;2007, although Mr.&nbsp;Sharng also performed the functions of the principal
executive officer of the Company from April&nbsp;2006 to August&nbsp;2006. From March&nbsp;2006 to August&nbsp;2006,
Mr.&nbsp;Sharng also served as a member of the Company&#146;s Executive Management Committee, which was
charged with managing the Company&#146;s day-to-day operations while a search was conducted for a new
chief executive officer for the Company. From March&nbsp;2004 through July&nbsp;2004, Mr.&nbsp;Sharng was the
Chief Financial Officer of NorthPole Limited, a privately held Hong Kong-based manufacturer and
distributor of outdoor recreational equipment. From October&nbsp;2000 through February&nbsp;2004, Mr.&nbsp;Sharng
was the Senior Vice President and Chief Financial Officer of Ultrak Inc., which changed its name to
American Building Control Inc. in 2002, a Texas-based, publicly traded company listed on NASDAQ
that designed and manufactured security systems and products. From March&nbsp;1989 through July&nbsp;2000,
Mr.&nbsp;Sharng worked at Mattel, Inc., most recently as the Vice President of International Finance.
Mr.&nbsp;Sharng is 44&nbsp;years of age. Mr.&nbsp;Sharng has an MBA from Columbia University and received his
bachelor degree from National Taiwan University.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Timothy S. Davidson</B>. Mr.&nbsp;Davidson has served as the Company&#146;s Chief Financial Officer and
Senior Vice President since February&nbsp;2007. He previously served as the Company&#146;s Chief Accounting
Officer from September&nbsp;2004 to February&nbsp;2007. From February&nbsp;2000 to February&nbsp;2001, Mr.&nbsp;Davidson
was Manager of Financial Reporting for a Dallas-based telecommunications company, IP
Communications, Inc. From March&nbsp;2001 to September&nbsp;2004, Mr.&nbsp;Davidson was Corporate Controller for
another telecommunications company, Celion Networks, Inc., located in Richardson, Texas. From
December&nbsp;1994 through January&nbsp;2000, Mr.&nbsp;Davidson was employed by Arthur Andersen, LLP, most
recently as an Audit Manager. Mr.&nbsp;Davidson is 37&nbsp;years of age. Mr.&nbsp;Davidson has a master degree
in professional accounting from the University of Texas at Austin and received his bachelor degree
from Texas A&#038;M University at Commerce.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Gary C. Wallace. </B>Mr.&nbsp;Wallace has served as the Company&#146;s General Counsel, Chief Ethics and
Compliance Officer and Secretary since January&nbsp;2006. Prior to that, Mr.&nbsp;Wallace was a shareholder
in the Dallas, Texas law firm of de la Garza &#038; Wallace, PC since March&nbsp;2001. Mr.&nbsp;Wallace has
practiced business and corporate law in Dallas, Texas since 1982. Mr.&nbsp;Wallace is 51&nbsp;years of age.
Mr.&nbsp;Wallace received his law degree and bachelor degree from the University of Texas at Austin.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>John F. Cavanaugh</B>. Mr.&nbsp;Cavanaugh has been the Chief Executive Officer of MarketVision since
its founding in 2000 and its President after its acquisition by the Company in March&nbsp;2004. From
March&nbsp;2006 to August&nbsp;2006, Mr.&nbsp;Cavanaugh also served as a member of the Company&#146;s Executive
Management Committee, which was charged with managing the Company&#146;s day-to-day operations while a
search was conducted for a new chief executive officer for the Company. From 1997 until 2000, Mr.
Cavanaugh was the founder and CEO of WebWizard LLC, an internet application design company. Mr.
Cavanaugh is 47&nbsp;years of age. Mr.&nbsp;Cavanaugh studied at Gonzaga University.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Section&nbsp;16(A) Beneficial Ownership Reporting Compliance</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Securities Exchange Act of 1934 requires the Company&#146;s directors,
executive officers, and persons who own more than 10% of a registered class of the Company&#146; equity
securities, to file with the Securities and Exchange Commission (&#147;SEC&#148;) initial reports of
ownership and reports of changes in ownership of common stock and other equity securities of the
Company. Officers, directors and greater than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely on a review of the copies of such reports furnished to the Company, during the
fiscal year ended December&nbsp;31, 2007, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with, except that Mr.
Zuckut filed a Form&nbsp;3 late and Mr.&nbsp;Cavanaugh filed two Form&nbsp;4s reporting four transactions late.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Code of Ethics</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a Code of Business Conduct and a Code of Ethics for Senior Financial Officers
(collectively, the &#147;Codes&#148;) that apply to our employees, officers (including our principal
executive officer, principal financial officer and principal accounting officer or controller) and
directors. The Codes are intended to establish standards necessary to deter wrongdoing and to
promote compliance with applicable governmental laws, rules and regulations and honest and ethical
conduct. The Codes cover all areas of professional conduct, including conflicts of interest, fair
dealing, financial reporting and disclosure, protection of Company assets and confidentiality.
Employees have an obligation to promptly report any known or suspected violation of the Codes
without fear of retaliation. Waiver of any provision of the Codes for executive officers and
directors may only be granted by the Board of Directors or one of its committees and any such
waiver or modification of the Codes relating to such individuals will be disclosed by the Company
on its website. The Codes are available on the Company&#146;s website, www naturalhealthtrendscorp.com.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Audit Committee Matters</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors maintains an Audit Committee established in accordance with Section
3(a)(58)(A) of the Securities Exchange Act. Stefan W. Zuckut serves as Chairman of the Audit
Committee and Randall A. Mason also serves as a member of the Audit Committee. The Board of
Directors has determined that Mr.&nbsp;Zuckut meets the SEC criteria of an &#147;audit committee financial
expert&#148; and that he meets the requirements of Nasdaq Marketplace Rule&nbsp;4350 relating to
&#147;independence&#148; for audit committee members and for financial oversight responsibility.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;11. EXECUTIVE COMPENSATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information concerning the compensation for the years ended
December&nbsp;31, 2006 and 2007, for our principal executive officer, our former principal executive
officer and the two other most highly compensated executive officers during 2007 (collectively, the
&#147;named executive officers&#148;):
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Summary Compensation Table</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Stock</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Salary</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Bonus</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Awards<SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Total</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name and Principal Position</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Year</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Option Awards</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">All Other</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Chris T. Sharng, President</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">139,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">9,900</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">399,327</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,792</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10,125</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">453,917</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD NOWRAP><DIV style="margin-left:15px; text-indent:-15px">Curtis E. Broome, former Worldwide</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">112,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">7</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">497,895</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President of NHT Global</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64,295</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">161,507</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">7</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,802</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="ToP" style="background: #cceeff">

    <TD><DIV style="margin-left:0px; text-indent:-0px">John F. Cavanaugh, </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,025</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9,900</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">309,587</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President of MarketVision</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">211,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">9,496</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280,061</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stephanie S. Hayano, former</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">92,500</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">4</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">37,804</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">5</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">41,448</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">6</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">298,675</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="TOP">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Chief Executive Officer and President</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">271,716</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">6</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">321,198</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The amounts appearing in the Stock Awards column
represent the SFAS No.&nbsp;123(R) compensation expense, prior to any estimated
forfeitures, recognized during fiscal 2007 for stock awards granted and for
stock options exchanged for stock awards during fiscal 2007. See Note 9 of
Notes to Consolidated Financial Statements included in the Company&#146;s Annual
Report on Form 10-K for the year ended December&nbsp;31, 2007, and &#147;&#151;Named Executive
Officer Compensation Arrangements&#148; below.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The amounts appearing in the Option Awards column
represent the SFAS No.&nbsp;123(R) compensation expense, prior to any estimated
forfeitures, recognized during fiscal 2006. See Note 9 of Notes to
Consolidated Financial Statements included in the Company&#146;s Annual Report on
Form 10-K for the year ended December&nbsp;31, 2007, and &#147;&#151;Named Executive Officer
Compensation Arrangements&#148; below.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Represents employer matching contributions under the
Company&#146;s defined contribution plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">4</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes a $30,000 signing bonus and a $62,500
guaranteed bonus for fiscal 2006.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">5</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Ms.&nbsp;Hayano&#146;s employment with us terminated before any
of these options vested, so they were all forfeited.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">6</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes a housing allowance of $27,500 and personal
travel expenses of $13,948 during fiscal 2006, and severance payments of
$253,846, a housing allowance of $5,000 and vacation compensation of $12,870 during fiscal 2007.

</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">

<TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">7</SUP></TD>
    <TD>&nbsp;</TD>
<TD>Includes an annual housing and living allowance equal to $112,000
per annum. Year 2007 also includes $31,507 for unused vacation through
December&nbsp;31, 2007, $12,179 for tax preparation services and $5,821 for
relocation expenses.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes all outstanding equity awards held by our named executive
officers as of December&nbsp;31, 2007:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Outstanding Equity Awards at December&nbsp;31, 2007</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">Stock Awards</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Market Value of Shares</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of Shares or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">or Units of Stock That</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Units of Stock That</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Have Not Vested</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Have Not Vested (#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)<SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">

    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Chris T. Sharng</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">107,033</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">129,510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Curtis E. Broome</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John F. Cavanaugh</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">140,758</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">170,317</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stephanie S. Hayano</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Market value is computed by multiplying the closing
market price of the Company&#146;s stock as of December&nbsp;31, 2007 of $1.21 per share
by the number of shares of stock that have not vested.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>One-twelfth of the shares will vest quarterly on March
15, June&nbsp;15, September&nbsp;15, and December&nbsp;15 of each year through March&nbsp;15, 2010.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Two-twelfths of the shares will vest on June&nbsp;15, 2008,
and one-twelfth of the shares will vest quarterly on March&nbsp;15, June&nbsp;15,
September&nbsp;15, and December&nbsp;15 of each year thereafter through December&nbsp;15,
2010.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Named Executive Officer Compensation Arrangements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Chris T. Sharng</B>. We entered into an employment agreement with Mr.&nbsp;Sharng as our Executive
Vice President and Chief Financial Officer in August&nbsp;2004. The agreement provided for the payment
to Mr.&nbsp;Sharng of a base salary of $250,000 in 2006. We entered into a new employment agreement
with Mr.&nbsp;Sharng on April&nbsp;23, 2007, which provides for a base salary of $250,000 in 2007. The base
salary for Mr.&nbsp;Sharng is subject to a minimum 3% annual increase each January 1<SUP style="font-size: 85%; vertical-align: text-top">st</SUP>. Mr.
Sharng is also entitled to participate in our annual incentive plan, equity incentive plan and
other standard U.S. employee benefit programs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Curtis E. Broome. </B>We entered into an employment letter agreement with Mr.&nbsp;Broome on July&nbsp;18,
2006. The agreement provided for the payment to Mr.&nbsp;Broome of an annual base salary of $250,000
for 2006. The agreement also provided for the payment to Mr.&nbsp;Broome of a signing bonus of $50,000
and an annual housing and living allowance equal to $80,000 per annum (as Mr.&nbsp;Broome was based in
Hong Kong), and entitled Mr.&nbsp;Broome to participate in our standard benefits program available to
our United States employees. His annual housing and living allowance
was subsequently increased to $112,000, effective as of
January&nbsp;1, 2006. These compensation terms were included in a new employment agreement
that we entered into with Mr.&nbsp;Broome in April&nbsp;2007. His employment was terminated on December&nbsp;31,
2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>John F. Cavanaugh</B>. In connection with our acquisition of MarketVision Communications
Corporation (&#147;MarketVision&#148;) in March&nbsp;2004, we entered into an employment agreement with Mr.
Cavanaugh for a term of three years providing for an annual salary of $193,000. On December&nbsp;8,
2006, we, MarketVision and Mr.&nbsp;Cavanaugh entered into a new employment agreement that replaced and
superseded the previous agreement in its entirety. The new agreement has a three year term and
provides that Mr.&nbsp;Cavanaugh will continue to serve as President of MarketVision. The employment
agreement provides Mr.&nbsp;Cavanaugh with a retention bonus of $89,200 along with an annual salary of
$205,000 through December&nbsp;31, 2006. Commencing on January&nbsp;1, 2007 and on each January
1<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> thereafter during the term of the agreement, Mr.&nbsp;Cavanaugh&#146;s salary will increase by
3% if his performance is satisfactory. Mr.&nbsp;Cavanaugh is also entitled to participate in our annual
incentive plan, equity incentive plan and other standard U.S. employee benefit programs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stephanie S. Hayano</B>. Under our original agreement with Ms.&nbsp;Hayano, we agreed to pay Ms.
Hayano an annual base salary of $300,000 plus an annual bonus equal to 50% of her base salary if
certain of our annual performance goals are achieved. For fiscal 2006, the Compensation Committee
agreed to pay Ms.&nbsp;Hayano a guaranteed cash bonus equal to $62,500 and a signing bonus equal to
$30,000. In addition, we agreed to pay a temporary living allowance equal to $5,000 per month
through January&nbsp;31, 2007, or until she relocated to the Dallas metropolitan area, whichever is
sooner. Ms.&nbsp;Hayano was also granted options to purchase 150,000 shares of our common stock at an
exercise price of $2.79 per share. The options were to vest in equal annual installments over a
three year period commencing on July&nbsp;31, 2007 and expire on July&nbsp;31, 2011. Because of Ms.&nbsp;Hayano&#146;s
severance from the Company, these options never vested. Effective February&nbsp;21, 2007, Ms.&nbsp;Hayano
resigned as our President and Chief Executive Officer and as a member of our Board of Directors. In
exchange for a general release of all claims against us, we agreed to (a)&nbsp;continue to pay Ms.
Hayano&#146;s salary for a period of 12&nbsp;months, less any amounts paid, due or promised to her as
compensation from third parties during that period and pay her health insurance premiums in the
amount of $8,627, (b)&nbsp;pay her the $62,500 guaranteed cash bonus for fiscal year 2006 due to her
under the employment agreement with us, and (c)&nbsp;give her a release of claims arising from or
related to facts within the knowledge of our Board of Directors, executive management, or general
counsel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stock Option Grants. </B>On June&nbsp;24, 2004, the Company granted 34,124 stock options to Mr.
Sharng. On October&nbsp;31, 2005, the Company granted 15,000 and 12,500 stock options to Messrs.&nbsp;Sharng
and Broome, respectively, and on November&nbsp;25, 2005, the Company granted 12,500, 25,000 and 7,500
stock options to Messrs.&nbsp;Sharng, Broome and Cavanaugh, respectively. Additionally, on November&nbsp;17,
2006, the Company granted 28,000 stock options to Mr.&nbsp;Broome. Except for the grant to Mr.&nbsp;Broome
on November&nbsp;17, 2006, each of these grants was cancelled in exchange for shares of restricted stock
in June&nbsp;2007. The grant to Mr.&nbsp;Broome on November&nbsp;17, 2006, was forfeited when Mr.&nbsp;Broome&#146;s
employment terminated as of December&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2007 Restricted Stock Grants</B>. On April&nbsp;21, 2007, the Company awarded 111,900, 84,400 and
99,400 shares of restricted stock to Messrs.&nbsp;Sharng, Broome and Cavanaugh, respectively, and on
December&nbsp;31, 2007, the Company awarded 30,000 and 20,000 shares of restricted stock to Messrs.
Sharng and Cavanaugh, respectively, under the Company&#146;s 2007 Equity Incentive Plan. The awards of
restricted stock vest quarterly on a pro rata basis over a three-year period. 63,301 shares of the
restricted stock awarded to Mr.&nbsp;Broome were forfeited when Mr.&nbsp;Broome&#146;s employment terminated as of
December&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2007 Exchange of Restricted Stock for Stock Options</B>. On May&nbsp;25, 2007, the Company filed a
Schedule&nbsp;TO with the Securities and Exchange Commission offering eligible option holders the
opportunity to exchange outstanding stock options with an exercise price greater than $9.00 per
share, which were originally granted under the Company&#146;s 2002 Stock Option Plan, for shares of
restricted stock that would be awarded under the 2007 Equity Incentive Plan upon the terms and
subject to the conditions set forth in
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Offer to Exchange. The number of restricted stock awards that the Company offered in
exchange for each eligible stock option was determined by an exchange ratio established for that
specific stock option. The exchange ratio was determined based on a number of factors, including
the value of outstanding eligible stock options based on the Black-Scholes option pricing model.
The aggregate value of the restricted stock awards that were offered was roughly comparable to the
aggregate Black-Scholes value of the eligible options surrendered for exchange. The offering
period expired on June&nbsp;25, 2007, and pursuant to the Offer to Exchange, the Company accepted for
cancellation stock options to purchase an aggregate of 499,124 shares of common stock in exchange
for 197,896 shares of restricted stock. Messrs.&nbsp;Sharng, Broome and Cavanaugh surrendered 61,624,
37,500 and 261,080 options, respectively, and received 30,812, 18,750 and 88,277 shares of
restricted stock, respectively, pursuant to the Offer to Exchange. All restricted stock awards
issued in exchange for eligible stock options vest quarterly on a pro rata basis over a three-year
period. 14,062 shares of restricted stock awarded to Mr.&nbsp;Broome were forfeited when Mr.&nbsp;Broome&#146;s
employment terminated as of December&nbsp;31, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Severance and Post-Termination Payment Arrangements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into employment agreements with each of our named executive officers. Under
certain of these agreements, we are required to provide compensation to these officers in the event
of the termination of the executive&#146;s employment. Details for each named executive officer are set
forth below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Chris T. Sharng. </B>Our current employment agreement with Mr.&nbsp;Sharng that was entered into on
April&nbsp;23, 2007 provides that if Mr.&nbsp;Sharng&#146;s employment with us is terminated voluntarily by him
for &#147;good reason&#148; that has not been cured by us within 30&nbsp;days of such notice, or is terminated by
us without cause, other than in connection with a change of control, then Mr.&nbsp;Sharng will be
entitled to the continuation of the payment of his salary, plus health and medical insurance
coverage, for a period of up to one year following the termination date, or until the earlier date
upon which he becomes engaged in any &#147;competitive activity&#148; or breaches the terms of his
Non-Competition Agreement with us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Mr.&nbsp;Sharng&#146;s employment with us is terminated by us without cause during the period
commencing on the date that is 30&nbsp;days prior to a change of control through and including a date
that is 18&nbsp;months following the change of control, he is entitled to the continuation of the
payment of his salary, plus health and medical insurance coverage for a period of up to two years,
plus health and medical insurance coverage for the same two year period following the termination
date. This payment is due in a lump sum 30&nbsp;days after the termination date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to be entitled to receive the severance amount in either of the above scenarios, Mr.
Sharng must execute a full general release of all claims against us and our affiliates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A &#147;change of control&#148; is defined as: (i)&nbsp;When any &#147;person&#148; as defined in Section&nbsp;3(a)(9) of
the Securities and Exchange Act of 1934, as amended, and as used in Section 13(d) and 14(d) thereof
including a &#147;group&#148; as defined in Section 13(d) of the Exchange Act, but excluding the Company or
any subsidiary or any affiliate of the Company or any employee benefit plan sponsored or maintained
by the Company or any subsidiary of the Company (including any trustee of such plan acting as
trustee), becomes the &#147;beneficial owner&#148; (as defined in Rule&nbsp;13d-3 under the Exchange Act) of
securities of the Company representing more than 50% of the combined voting power of the Company&#146;s
then outstanding securities; or (ii)&nbsp;when, during any period of 24 consecutive months, the
individuals who, at the beginning of such period constituted the Board of Directors (the &#147;Incumbent
Directors&#148;) cease for any reason other than death to constitute at least a majority thereof,
provided, however, that a director who was not a director at the beginning of such 24-month period
shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such
director was elected by, or on the recommendation of or with the approval of, at least two-thirds
of the directors who then qualified as Incumbent Directors either actually (because they were
directors at the beginning of such 24&nbsp;month period) or through the operation of this provision; or
(iii)&nbsp;the occurrence of a transaction requiring stockholder approval under applicable state law for
the acquisition of the Company by an entity other than the Company or a subsidiary or an affiliated
company of the Company through purchase of assets, or by merger, or otherwise; provided however,
that none of the foregoing shall constitute a change of control if such transaction, event or
occurrence is approved by, or consented to, by Mr.&nbsp;Sharng.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Sharng will be subject to a covenant not to compete for six months following his
termination and thereafter as long as his severance payments continue (other than severance in
connection with a change of control).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Curtis E. Broome. </B>Our employment agreement with Mr.&nbsp;Broome that was entered into on April&nbsp;23,
2007, contains the same severance, change of control, and non-competition provisions as those set
out in our agreement with Mr.&nbsp;Sharng dated April&nbsp;23, 2007. In addition to the severance benefits
to which Mr.&nbsp;Broome is entitled under the terms of his employment agreement, in connection
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">with the termination of Mr.&nbsp;Broome&#146;s employment as of December&nbsp;31, 2007, the Company paid the
estimated cost of relocating his household items back to Dallas, Texas from Hong Kong.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>John F. Cavanaugh</B>. Our employment agreement with Mr.&nbsp;Cavanaugh provides that if his
employment with us is terminated without &#147;cause&#148; or terminated voluntarily by him for &#147;good
reason,&#148; he is entitled to the continuation of the payment of his salary, plus health and medical
insurance coverage for a period of up to two years following the termination date, or until the
earlier date upon which he becomes engaged in any &#147;competitive activity&#148; or breaches the terms of
his Non-Competition Agreement with us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Mr.&nbsp;Cavanaugh&#146;s employment with us is terminated by us without cause or by him for &#147;good
reason&#148; during the period commencing on the date that is 30&nbsp;days prior to a change of control
through and including the date that is 18&nbsp;months following a change of control, he is entitled to
the continuation of the payment of his salary, plus health and medical insurance coverage for a
period of up to three years following the termination date, or until the earlier date upon which he
becomes engaged in any competitive activity or breaches the terms of his Non-Competition Agreement
with us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Stephanie S. Hayano. </B>Under our employment agreement with Ms.&nbsp;Hayano, if she had relocated
permanently to Dallas, she would have been entitled to certain severance payments. If she had
relocated and her employment with us were terminated without &#147;cause&#148; or terminated voluntarily by
her for &#147;good reason,&#148; she would have been entitled to the continuation of the payment of her
salary, plus health and medical insurance coverage for a period of up to two years following the
termination date, or until the earlier date upon which she became engaged in any &#147;competitive
activity&#148; or breached the terms of her Non-Competition Agreement with us. Ms.&nbsp;Hayano did not
relocate to Dallas, so she was not entitled to any severance payments under the terms of her
original employment agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If Ms.&nbsp;Hayano had relocated to the Dallas area, and her employment with us had been terminated
without &#147;cause&#148; or by her for &#147;good reason&#148; during the period commencing on the date that is 30
days prior to a change of control through and including the date that is 18&nbsp;months following a
change of control, she would have been entitled to the continuation of the payment of her salary,
plus health and medical insurance coverage for a period of up to three years following the
termination date, or until the earlier date upon which she became engaged in any &#147;competitive
activity&#148; or breached the terms of her Non-Competition Agreement with us. Ms.&nbsp;Hayano did not
relocate to Dallas, so she was not entitled to any change of control payments under the terms of
her original employment agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a description of the payments we made to Ms.&nbsp;Hayano upon the actual termination of her
employment, please see &#147;&#151; Employment Agreements.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Director Compensation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each non-employee member of our Board of Directors receives a cash retainer, plus the
reimbursement of their respective out-of-pocket expenses incurred in connection with the
performance of their duties as directors, and a discretionary restricted stock award. A cash
retainer was paid in 2007 to each director monthly, with each of Messrs.&nbsp;Martino, Morris, O&#146;Brien
and Zuckut receiving a monthly retainer of $3,333, Sir Brian Wolfson receiving a monthly retainer
of $4,167 and Mr.&nbsp;Mason receiving a monthly retainer of $5,333. Messrs.&nbsp;Martino and Zuckut
received an additional payment of $2,000 per month for services rendered as Chairman of the Audit
Committee. Mr.&nbsp;Morris also received an additional payment of $3,333 per month under a consulting
engagement to assist with general business matters in 2007 following his resignation as a director.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On April&nbsp;21, 2007, the Company awarded 37,500, 30,000 and 30,000 shares of restricted stock to
Messrs.&nbsp;Mason, Martino, and Wolfson, respectively. These restricted stock awards vested
immediately on the date of grant. In addition, in connection with the election of Mr.&nbsp;Zuckut to
the Board of Directors on May&nbsp;23, 2007, the Company awarded 8,750 shares of restricted stock to Mr.
Zuckut, which vest quarterly on a pro rata basis over a three-year period. On December&nbsp;31, 2007,
the Company awarded 30,000 shares of restricted stock to each of Messrs.&nbsp;Mason and Zuckut, of which
two-twelfths vest on June&nbsp;15, 2008, and one-twelfth vest quarterly thereafter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;23, 2007, the Company accepted for cancellation from Messrs.&nbsp;Mason and Martino stock
options to purchase 67,500 and 7,500 shares of common stock, respectively, in exchange for 44,184
and 3,750 shares of restricted stock, respectively, issued under the Company&#146;s 2007 Equity
Incentive Plan. These restricted stock awards issued in exchange for eligible stock options vested
immediately upon issuance. The number of restricted stock awards that the Company offered in
exchange for each eligible stock option was determined by an exchange ratio established for that
specific stock option. The exchange ratio for options that had an exercise price greater than
$10.00 per share was determined based on a number of factors, including the value of outstanding
eligible
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">stock options based on the Black-Scholes option pricing model. For these options, which were
issued under the Company&#146;s 2002 Stock Option Plan, the aggregate value of the restricted stock
awards that were offered is roughly comparable to the aggregate Black-Scholes value of the eligible
options surrendered for exchange. For options that had an exercise price of $2.00 per share or less
(which were granted in 2002 before the adoption of the 2002 Stock Option Plan), the exchange ratio
was determined by multiplying the number of shares for which the options could be exercised by the
difference between the closing price per share on the last trading day preceding the exchange and
the exercise price per share of the options, and then dividing that product by the closing price
per share on the last trading day preceding the exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the 2007 compensation earned by each non-employee member of the
Company&#146;s Board of Directors:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>2007 Director Compensation</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Fees Earned</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">or Paid</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Stock Awards</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">All Other</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">in Cash ($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($)(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Compensation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Total ($)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Anthony B. Martino (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">48,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">63,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">111,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Randall A. Mason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">149,501</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Terrence M. Morris (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">29,997</TD>
    <TD nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,664</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Colin J. O&#146;Brien (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,667</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sir Brian Wolfson (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81,611</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stefan W. Zuckut (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,965</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,159</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Martino resigned as a director in October&nbsp;2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Messrs.&nbsp;Morris and O&#146;Brien resigned as directors in February&nbsp;2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Sir Brian Wolfson passed away in May&nbsp;2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Zuckut was elected as a director in May&nbsp;2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>The amounts appearing in the Stock Awards column represent the SFAS No.&nbsp;123(R) compensation
expense, prior to any estimated forfeitures, recognized during fiscal 2007 for stock awards
granted and for stock options exchanged for stock awards during fiscal 2007. See Note 9 of
Notes to Consolidated Financial Statements included in the Company&#146;s Annual Report on Form
10-K for the year ended December&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents consulting fees paid to Mr.&nbsp;Morris for consulting services performed following his
resignation as a director.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;12.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Equity Compensation Plan Information</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding all compensation plans under which
Company equity securities are authorized for issuance as of December&nbsp;31, 2007:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">securities</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">remaining available</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">for future issuance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Securities to be</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">under equity</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">issued upon</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Weighted-average</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">compensation plans</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">exercise of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">exercise price of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">(excluding</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">outstanding</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">outstanding</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">securities</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">options, warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">options, warrants</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">reflected in left</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Plan Category</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">and rights</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">and rights</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">column)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation plans approved by
security holders </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">460,824</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">
Equity compensation
plans not approved
by security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">460,824</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Security Ownership of Management and Certain Beneficial Owners</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth, as of April&nbsp;21, 2008<B>, </B>the beneficial ownership of the
Company&#146;s common stock: (i)&nbsp;by each person known by the Company to be the beneficial owner of five
percent or more of the Company&#146;s outstanding common stock, (ii)&nbsp;by each director of the Company,
(iii)&nbsp;by the named executive officers during fiscal 2007, and (iv)&nbsp;by the Company&#146;s current
directors and executive officers of the Company as a group. Unless otherwise specified, and
subject to applicable community property laws, all persons listed below have sole voting and
investment power with respect to their shares.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Amount and Nature</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">of Beneficial</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Percent of</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Name and Address of Beneficial Owner (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Ownership (2)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Class (2)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>Officers and Directors (Current and Former):</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Chris T. Sharng</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">196,386</TD>
    <TD nowrap>(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.9</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Curtis E. Broome (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John F. Cavanaugh</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">333,408</TD>
    <TD nowrap>(4)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.2</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stephanie S. Hayano (6)<BR>
220 Morsehill Road<BR>
Millerton, NY 12546</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Randall A. Mason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">187,183</TD>
    <TD nowrap>(7)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stefan W. Zuckut</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">53,750</TD>
    <TD nowrap>(8)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current Directors and Executive Officers as a Group (6 persons)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">884,143</TD>
    <TD nowrap>(9)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.5</TD>
    <TD nowrap>%</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><I>5% of More Stockholders:</I></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Big Rich International Ltd.<BR>
4010 Gloucester Tower, The Landmark<BR>
11 Pedder Street<BR>
Central<BR>
Hong Kong</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">941,171</TD>
    <TD nowrap>(10)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.4</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Indicates beneficial ownership of less than 1%</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Unless otherwise indicated, the address of each beneficial owner is c/o Natural Health Trends
Corp., 2050 Diplomat Drive, Dallas, Texas 75234.</TD>
</TR>

</TABLE>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Any securities not outstanding that are subject to options or conversion privileges
exercisable within 60&nbsp;days of April&nbsp;21, 2008 are deemed outstanding for the purpose of
computing the percentage of outstanding securities of the class owned by any person holding
such securities, but are not deemed outstanding for the purpose of computing the percentage of
the class owned by any other person in accordance with Item&nbsp;403 of Regulation&nbsp;S-K of the
Securities Exchange Act of 1933 and Rules&nbsp;13(d)-3 of the Securities Exchange Act, and based
upon 10,347,126 shares of common stock outstanding as of April&nbsp;21, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes (i)&nbsp;1,984 shares of common stock issuable upon the exercise of warrants held by Mr.
Sharng and (ii)&nbsp;145,140 shares of restricted stock subject to vesting. Mr.&nbsp;Sharng shares
voting and investment power over 11,500 of the shares with his wife.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes (i)&nbsp;1,984 shares of common stock issuable upon the exercise of warrants held by Mr.
Cavanaugh and (ii)&nbsp;148,461 shares of restricted stock subject to vesting.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Broome is a former executive officer of the Company.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Ms.&nbsp;Hayano is a former director of the Company and the former Chief Executive Officer of the
Company.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes (i)&nbsp;5,000 shares of common stock issuable upon the exercise of options held by Mr.
Mason, (ii)&nbsp;27,399 shares owned by Marden Rehabilitation Associates, Inc., an entity
controlled by Mr.&nbsp;Mason, and (iii)&nbsp;45,000 shares of restricted stock subject to vesting.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 50,834 shares of restricted stock subject to vesting.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes (i)&nbsp;3,968 shares that may be acquired upon the exercise of outstanding warrants that
currently are exercisable by our executive officers, (ii)&nbsp;483,720 shares of restricted stock
subject to vesting that are beneficially owned by our directors and executive officers, and
(iii)&nbsp;7,500 shares of common stock issuable upon the exercise of options held by our directors
and executive officers. Does not include any shares held by Mr.&nbsp;Broome or Ms.&nbsp;Hayano because
they are no longer a director or an executive officer of the Company.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 941,171 shares of common stock issuable upon the exercise of warrants held by Big
Rich International, Ltd., a limited partnership organized under the laws of the British Virgin
Islands (&#147;Big Rich&#148;). Xiaoli Duan is the general partner of Big Rich and as such may be
deemed to be the beneficial owner of such shares.</TD>
</TR>

</TABLE>


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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Certain Relationships and Related Transactions</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;10, 2005, an independent investigator retained by the Company&#146;s Audit Committee
learned that an entity controlled by Mark D. Woodburn, former director and former President of the
Company, and Terry L. LaCore, former Chief Executive Officer of NHT Global U.S. and former director
of the Company, had received payments from an independent distributor of the Company&#146;s products
from 2001 through August&nbsp;2005. The Company believes that Messrs.&nbsp;Woodburn and LaCore received from
such distributor a total of approximately $1.4&nbsp;million and $1.1&nbsp;million, respectively. The Company
believes that the fees paid by the Company to the distributor were not in excess of the amounts due
under the Company&#146;s regular distributor compensation plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approximately $2.4&nbsp;million of the funds paid by the distributor to Messrs.&nbsp;Woodburn and LaCore
were paid at the direction of Messrs.&nbsp;Woodburn and LaCore to an entity that is partially owned by
Mr.&nbsp;Woodburn&#146;s father and Randall A. Mason, the Chairman of the Company&#146;s Board of Directors and
former Chairman of the Company&#146;s Audit Committee. The funds were subsequently paid to an entity
controlled by Messrs.&nbsp;Woodburn and LaCore at their direction. Since payments had been directed
into an entity that was partially owned by Mr.&nbsp;Mason, he could no longer be considered
&#147;independent&#148; in accordance with the Nasdaq Marketplace Rules. Therefore, effective November&nbsp;11,
2005, Mr.&nbsp;Mason resigned as Chairman and a member of the Company&#146;s Audit Committee. After
investigation by the Audit Committee, the Board of Directors of the Company concluded that Mr.
Mason was unaware that these payments were directed by Messrs.&nbsp;Woodburn and LaCore to an entity
partially owned by him until uncovered by the Audit Committee&#146;s independent investigator on
November&nbsp;10, 2005, and that Mr.&nbsp;Mason was not involved in any misconduct and received no pecuniary
benefit from the payments made by the independent distributor. Subsequently, on March&nbsp;28, 2006,
the Board of Directors appointed Mr.&nbsp;Mason as its Chairman.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;14, 2005, in light of the information learned by the Company&#146;s Audit Committee on
November&nbsp;10, 2005, the Company terminated the employment of each of Messrs.&nbsp;Woodburn and LaCore.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;23, 2006, an independent investigator retained by the Audit Committee of the Board of
Directors confirmed that affiliates of immediate family members of Mr.&nbsp;Woodburn have owned since
1998, and continued to own on March&nbsp;23, 2006, equity interests in Aloe Commodities (&#147;Aloe&#148;), the
largest manufacturer of the Company and the supplier of the <I>Skindulgence</I><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Line and <I>LaVie</I>&#153; products,
representing approximately 5% of the outstanding shares of Aloe. The Company paid Aloe and certain
of its affiliates approximately $3.6&nbsp;million and $1.8&nbsp;million during 2006 and 2007, respectively.
At December&nbsp;31, 2007, approximately $84,000 was due to Aloe and certain of its affiliates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;10, 2006, the Company entered into an escrow agreement (the &#147;Escrow Agreement&#148;)
with Messrs.&nbsp;Woodburn and LaCore, the LaCore and Woodburn Partnership, an affiliate of Messrs.
Woodburn and LaCore, and Krage and Janvey LLP, as escrow agent (the &#147;Agent&#148;). Pursuant to the
Escrow Agreement, (i)&nbsp;the Company issued and deposited with the Agent stock certificates in the
name of the Agent representing an aggregate of 1,081,066 shares of the Company&#146;s common stock (the
&#147;Escrowed Shares&#148;) and (ii)&nbsp;Messrs.&nbsp;Woodburn and LaCore deposited with the Agent $1,206,000 in cash
(the &#147;Cash Deposit&#148;). The Escrowed Shares were the shares of common stock issuable upon the
cashless exercise of stock options issued in 2001 and 2002 to Mr.&nbsp;LaCore and the LaCore and
Woodburn Partnership for 1,200,000 shares of common stock exercisable at $1.00 and $1.10 per share.
The number of Escrow Shares was based upon the closing price of the Company&#146;s common stock on
February&nbsp;9, 2006 of $10.14 and the surrender of 118,934 option shares as payment of the aggregate
exercise price of $1,206,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Escrowed Shares were issued to the Agent upon receipt from the Agent of an irrevocable
proxy to the Company to vote the Escrowed Shares on matters presented at meetings of stockholders
or written consents executed in lieu thereof. The parties also agreed that the Agent would hold
the Escrowed Shares and the Cash Deposit until it received (i)&nbsp;joint written instructions from the
Company, Messrs.&nbsp;Woodburn and LaCore, or (ii)&nbsp;a final non-appealable order from a court of
competent jurisdiction.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;31, 2006, the Company, Messrs.&nbsp;Woodburn and LaCore entered into several agreements
(collectively, the &#147;Settlement Agreements&#148;), pursuant to which they resolved certain pending
disputes among the parties relating to, among other things, payments to Messrs.&nbsp;Woodburn and LaCore
from one of the Company&#146;s distributors, as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Under the main Settlement Agreement, (i)&nbsp;Messrs.&nbsp;Woodburn and LaCore made a non-recourse
promise to repay the Company $2.5&nbsp;million (the &#147;Payment Amount&#148;) no later than October&nbsp;31, 2008,
(ii)&nbsp;the Company agreed to release the Cash Deposit to Mr.&nbsp;LaCore and the Escrowed Shares to
Messrs.&nbsp;Woodburn and LaCore (subject to the pledge described below), (iii)&nbsp;Mr.&nbsp;LaCore agreed to
provide the Company with assistance for up to 10 hours per month with respect to network marketing,
compensation plan
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">adjustments and strategic planning assistance during the one-year period ending October&nbsp;31,
2007, (iv)&nbsp;Messrs.&nbsp;Woodburn and LaCore agreed to certain restrictions on their activities, and (v)
the parties agreed to enter into the other Settlement Agreements described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Messrs.&nbsp;Woodburn and LaCore signed a Non-Recourse Promissory Note (the &#147;Note&#148;) to pay the
Payment Amount plus interest at the rate of 6% per annum, secured by a pledge of the released
Escrow Shares. At any time, Messrs.&nbsp;LaCore and Woodburn may elect to repay all or part of the Note
by delivering a number of Pledged Shares based upon the Fair Market Value (as defined in the Note)
of such shares. The Company may also elect at any time to have all or part of the Note repaid by
requiring the surrender of a number of Pledged Shares having a Fair Market Value equal to the
repayment amount. In no event shall Messrs.&nbsp;LaCore and/or Woodburn be obligated to repay an amount
due under the Note in excess of the Fair Market Value of the Pledged Shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Company and Mr.&nbsp;Woodburn entered into a Consulting Agreement, pursuant to which Mr.
Woodburn agreed for a one-year period to assist the Company as a consultant with general
administration, accounting, finance and strategic planning. Mr.&nbsp;Woodburn will be paid $17,000 per
month plus reimbursement of bona fide business expenses approved in advance in writing by the
Company. If Mr.&nbsp;Woodburn is terminated without Cause (as defined in the Consulting Agreement), he
will be entitled to continue to receive his monthly retainer fee for the remainder of the term,
unless he breaches the terms of his Restricted Activity Agreement (described below) or otherwise
engages in a Competitive Activity (as defined in the Restricted Activity Agreement). Mr.&nbsp;Woodburn
is permitted to engage in certain consulting activities for third parties that will not constitute
Cause under the Consulting Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Company and Messrs.&nbsp;LaCore and Woodburn entered into a Voting Agreement covering all
shares of Company capital stock beneficially owned by them or shares acquired by them during the
three year period ending October&nbsp;31, 2009. All of such shares shall be voted by the Company&#146;s
Board of Directors, or such third party that is reasonably acceptable to each of the Company,
Messrs.&nbsp;LaCore and Woodburn.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Each of Messrs.&nbsp;LaCore and Woodburn signed a Restricted Activity and Proprietary Rights
Assignment Agreements, pursuant to which they each agreed to keep confidential or competitively
sensitive information confidential and to disclose and assign to the Company any Work Product (as
defined in the agreements). During the one year period ending October&nbsp;31, 2007, Mr.&nbsp;LaCore agreed
not to directly or indirectly (i)&nbsp;recruit or solicit any company personnel or independent
distributors, or (ii)&nbsp;perform any services for any independent distributor of the Company (the
&#147;Covenant Not to Interfere&#148;). During the term of his Consulting Agreement with the Company and
continuing through the one year period following the receipt of his last monthly consulting fee or
severance payment, Mr.&nbsp;Woodburn has also agreed to the Covenant Not to Interfere. In addition,
except for Permitted Consulting Arrangements (as hereinafter defined), during the one year period
ending on October&nbsp;31, 2007, Mr.&nbsp;Woodburn has agreed not engage in any activity which competes with
any substantial aspect or part of the Company&#146;s business (or any affiliate thereof). &#147;Permitted
Consulting Arrangements&#148; means any consulting or similar arrangement or agreement between Woodburn
and any third party so long as Woodburn delivers to the Company not less than 10 business days
prior to the commencement of service a written notice that describes the terms and conditions of
the proposed consulting arrangement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;The Company, Messrs.&nbsp;LaCore and Woodburn entered into an Indemnification Agreement,
pursuant to which each of Messrs.&nbsp;LaCore and Woodburn agreed as to his individual conduct to
indemnify and hold harmless the Company and its affiliates for his conduct except for (i)&nbsp;Specified
Conduct (as defined), and (ii)&nbsp;conduct for which Messrs.&nbsp;LaCore or Woodburn, as the case may be, is
entitled to indemnification from the Company under the Company&#146;s certificate of incorporation,
by-laws and Delaware law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;The Company executed a limited release in favor of Messrs.&nbsp;LaCore and Woodburn with
respect to all charges, claims, causes of action and demands related to their (i)&nbsp;directing,
accepting, or permitting payments to or from certain positions in the Company&#146;s distributor &#147;tree&#148;
from January&nbsp;1, 2001 through the date of the release, (ii)&nbsp;any related party transactions relating
or pertaining to Messrs.&nbsp;LaCore or Woodburn that were previously disclosed in the Company&#146;s public
filings, and (iii)&nbsp;any disclosures made or omitted, if any, relating or pertaining to any of the
foregoing conduct (collectively, the &#147;Specified Conduct&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;Messrs.&nbsp;LaCore and Woodburn executed a general release in favor of the Company and its
affiliates, including present and former stockholders, officers, directors, shareholders,
employees, and representatives with respect to all charges, claims, causes of action and demands of
any nature, known or unknown, which Messrs.&nbsp;LaCore or Woodburn had or may have in the future,
except with respect to the Company&#146;s obligations under the Settlement Agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the execution of the Settlement Agreements, the Company, Mr.&nbsp;LaCore, Mr.
Woodburn, and the Escrow Agent terminated the Escrow Agreement.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;21, 2007, the Company entered into a temporary week-to-week agreement with Mr.&nbsp;LaCore
to administer certain distributor positions at the top of the Company&#146;s distribution network &#147;tree&#148;
and commissions accrued and payable to those positions for periods beginning on and after February
12, 2007. These are the same positions held by the distributor that indirectly made the payments
to Messrs.&nbsp;Woodburn and LaCore that were discovered by the Audit Committee&#146;s independent
investigator on November&nbsp;10, 2005 (as previously disclosed). Under the temporary agreement, Mr.
LaCore was expected to provide certain master distributor services and provide leadership and
support to the Company&#146;s other distributors, all of whom are &#147;down-lines&#148; of the positions
temporarily administered by Mr.&nbsp;LaCore. In return, the Company agreed to pay the commissions
generated by these positions under the Company&#146;s distributor compensation plan to Mr.&nbsp;LaCore, who
in turn agreed to pay some or all of the commissions to other distributors&#146; downline. The amount
of gross commissions paid to Mr.&nbsp;LaCore for temporary administration of these positions during 2007
was $741,000. The Company terminated the week-to-week agreement with Mr.&nbsp;LaCore on October&nbsp;26,
2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August&nbsp;30, 2007, the Company accepted the surrender of 642,611 shares of the Company&#146;s
common stock by Messrs.&nbsp;Woodburn and LaCore in payment of the principal and accrued interest on the
Note. As provided in the Note, the value of the surrendered shares for purposes of determining the
credit to be given against the principal and interest accrued on the Note was equal to the average
of the closing prices for the 20 consecutive trading days preceding the date the shares were
tendered for surrender.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Affirmative Determinations of Director Independence</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has adopted the requirements in Nasdaq Marketplace Rule&nbsp;4200(a)(15) as
its standard in determining the &#147;independence&#148; of members of its Board of Directors. The Board of
Directors has determined that each of the following individuals, who served as a director of the
Company during all or a portion of 2007, qualifies as an &#147;independent director&#148; under these
standards:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Anthony B. Martino<BR>
Terrence M. Morris<BR>
Colin J. O&#146;Brien<BR>
Sir Brian Wolfson<BR>
Stefan W. Zuckut
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messrs.&nbsp;Morris and O&#146;Brien resigned as directors in February&nbsp;2007, Sir Brian Wolfson passed
away in May&nbsp;2007, Mr.&nbsp;Zuckut was elected as a director in May&nbsp;2007 and Mr.&nbsp;Martino resigned as a
director in October&nbsp;2007. Messrs.&nbsp;Mason and Zuckut are the only current members of the Board of
Directors of the Company, and Messrs.&nbsp;Mason and Zuckut each serve as members of the Company&#146;s Audit
Committee and Compensation Committee. Mr.&nbsp;Zuckut is currently the Chairman and only member of the
Nominating Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As described above under &#147;&#151;Certain Relationships and Related Transactions,&#148; between 2001 and
2005 approximately $2.4&nbsp;million was paid by an independent distributor of the Company at the
direction of Mark D. Woodburn and Terry L. LaCore (both of whom are former officers and directors
of the Company) to an entity in which Mr.&nbsp;Mason is a minority shareholder. The funds were
subsequently paid to an entity controlled by Messrs.&nbsp;Woodburn and LaCore at their direction. After
an investigation by the Audit Committee, the Board of Directors of the Company concluded that Mr.
Mason was unaware that these payments were directed by Messrs.&nbsp;Woodburn and LaCore to an entity
that was partially owned by him until uncovered by the Audit Committee&#146;s independent investigator,
and that Mr.&nbsp;Mason was not involved in any misconduct and received no pecuniary benefit from the
payments made by the independent distributor. Further, the Board of Directors determined that
neither Mr.&nbsp;Mason&#146;s relationship with the entity that received funds from the independent
distributor nor any other relationship would interfere with his exercise of independent judgment in
carrying out the responsibilities of a director of the Company. Therefore, Mr.&nbsp;Mason could also be
considered an &#147;independent director&#148; under the Nasdaq Marketplace Rules, but for the fact that
within the last three years the aforementioned payments were directed to an entity that is
partially owned by him. Mr.&nbsp;Mason does qualify as an &#147;independent director&#148; under Rule&nbsp;10A-3 and as
a &#147;non-employee director&#148; under Rule&nbsp;16b-3, as such rules are promulgated under the Securities
Exchange Act of 1934, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All members of the Audit Committee and Compensation Committee must be &#147;independent,&#148; as
defined under the Nasdaq Marketplace Rules, provided that each such committee may include one
director who is not independent if such director meets specified criteria and if the Board of
Directors &#147;under exceptional and limited circumstances&#148; determines that such director&#146;s membership
on such committee is required by the best interests of the Company and its stockholders. On March
15, 2007, the Company&#146;s Board of Directors determined that exceptional and limited circumstances
existed and that it was in the best interests
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of the Company and its stockholders to appoint Mr.&nbsp;Mason to the Audit Committee and the
Compensation Committee until one or more independent directors have been elected to the Board of
Directors, and qualified and appointed to the Audit Committee and the Compensation Committee, but
in no event longer than two years from his appointment to these committees.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In making its determination, the Board of Directors took into consideration the following: Mr.
Mason was unaware that the payments in question were being made until an independent investigator
commissioned by the Audit Committee chaired by Mr.&nbsp;Mason discovered the payments on November&nbsp;10,
2006; the payments to the entity in which Mr.&nbsp;Mason owns a minority interest were immediately
stopped upon their discovery and Messrs.&nbsp;Woodburn and LaCore were terminated as officers and
directors of the Company; and Mr.&nbsp;Mason did not personally benefit from the payments in question.
The Board of Directors also considered the experience that Mr.&nbsp;Mason brings as the chief executive
officer of his own business and his knowledge of the Company and the industry. The Board of
Directors also took into account the time it may take to identify and qualify suitable candidates
for election as independent directors, as well as the immediate need of the Company to have a fully
functioning Audit Committee and Compensation Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nasdaq Marketplace Rules require that a majority of the members of the Company&#146;s Board of
Directors qualify as &#147;independent directors&#148; and that the Audit Committee and Compensation
Committee must each be wholly comprised of independent directors (unless each of such committees is
comprised of at least three members, in which case a committee can include a director that is not
independent under the &#147;exceptional and limited circumstances&#148; exception referenced above). The
Company is not currently in compliance with these requirements, but the Nasdaq Stock Market has
granted to the Company a cure period permitting it to regain compliance with the foregoing
requirements by the earlier of the Company&#146;s next annual stockholders meeting or October&nbsp;19, 2008.
The Company intends to regain compliance within this cure period.
</DIV>
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;14. PRINCIPAL ACCOUNTING FEES AND SERVICES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company changed its independent registered public accounting firm as of September&nbsp;7, 2006
from BDO Seidman, LLP to Lane Gorman Trubitt, L.L.P. (&#147;Lane Gorman&#148;). Lane Gorman served as the
Company&#146;s principal accounting firm during each of the years ended December&nbsp;31, 2006 and 2007.
Fees billed in connection with services rendered for the years ended December&nbsp;31, 2006 and 2007 are
as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">352,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">379,108</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit-related fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All other fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">352,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">379,108</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2006 and 2007, audit fees include fees for professional services rendered for the audit,
filing of Registration Statements on Form S-8 and Form S-3, and quarterly reviews of the Company&#146;s
financial statements for the applicable fiscal year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Pre-Approval Policy for Audit and Non-Audit Services</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consistent with the Audit Committee&#146;s responsibility for engaging our independent auditors,
all audit and permitted non-audit services require pre-approval by the Audit Committee. All audit
and permitted non-audit services performed by Lane Gorman during 2006 and 2007 were pre-approved.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Part IV</B>
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The exhibits listed on the accompanying Exhibit&nbsp;Index are filed as a part of, and are
incorporated by reference into, this Report.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this Amendment No.&nbsp;1 to Annual Report on Form 10-K/A to be signed on
its behalf by the undersigned, thereunto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">NATURAL HEALTH TRENDS CORP.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date: April 29, 2008&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Chris T. Sharng
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chris T. Sharng&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">President
(Principal Executive Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, this report statement has
been signed by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="CENTER" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Chris T. Sharng
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" valign="top">April&nbsp;29, 2008</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chris T. Sharng
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Executive Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Timothy S. Davidson
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and Chief Financial Officer&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">April&nbsp;29, 2008</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Timothy S. Davidson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Financial and Accounting Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top" ALIGN="LEFT"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Randall A. Mason
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board and Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">April&nbsp;29, 2008</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD ALIGN="CENTER" valign="top"><DIV style="margin-left:0px; text-indent:-0px">*
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">April&nbsp;29, 2008</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Stefan W. Zuckut</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">* By: /s/ Chris T. Sharng
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">April&nbsp;29, 2008</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Chris T. Sharng, Attorney-in-Fact</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">EXHIBIT INDEX<BR>
(Pursuant to Item&nbsp;601 of Regulation&nbsp;S-K)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Exhibit Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Incorporation of Natural Health Trends Corp. (incorporated by reference to Exhibit&nbsp;3.01 to
Current Report on Form&nbsp;8-K filed on July&nbsp;12, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Designations, Rights and Preferences of the Series&nbsp;A Convertible Preferred Stock of the Company
(incorporated by reference to Exhibit&nbsp;3.1 to Current Report on Form&nbsp;8-K filed on May&nbsp;9, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By-Laws of Natural Health Trends Corp. (incorporated by reference to Exhibit&nbsp;3.02 to Current Report on Form&nbsp;8-K
filed on July&nbsp;12, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Specimen Certificate for shares of common stock, $.001 par value per share, of Natural Health Trends Corp.
(incorporated by reference to Exhibit&nbsp;4.01 to Annual Report on Form&nbsp;10-K filed on May&nbsp;8, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Common Stock Purchase Warrant issued in October&nbsp;2004 Private Placement (incorporated by reference to
Exhibit&nbsp;4.1 to Quarterly Report on Form&nbsp;10-Q filed on November&nbsp;12, 2004).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Stock and Warrant Purchase Agreement (U.S. Purchaser) dated May&nbsp;4, 2007 between the Company and certain
Purchasers (incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on May&nbsp;9, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Stock and Warrant Purchase Agreement (Non-U.S. Purchaser) dated May&nbsp;4, 2007 between the Company and
certain Purchasers (incorporated by reference to Exhibit&nbsp;10.2 to Current Report on Form&nbsp;8-K filed on May&nbsp;9,
2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Warrant to Purchase Shares of Common Stock of the Company, dated May&nbsp;4, 2007 and issued to certain
Purchasers (incorporated by reference to Exhibit&nbsp;10.3 to Current Report on Form&nbsp;8-K filed on May&nbsp;9, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Securities Purchase Agreement dated October&nbsp;19, 2007 between the Company and certain Purchasers (incorporated by
reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on October&nbsp;22, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Registration Rights Agreement signed by the Company and the Purchasers named in the Securities Purchase
Agreement dated October&nbsp;19, 2007 between the Company and the Purchasers named therein (incorporated by reference
to Exhibit&nbsp;10.2 to Current Report on Form&nbsp;8-K filed on October&nbsp;22, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Variable Rate Convertible Debenture issued to the Purchasers named in the Securities Purchase Agreement
dated October&nbsp;19, 2007 between the Company and the Purchasers named therein (incorporated by reference to
Exhibit&nbsp;10.3 to Current Report on Form&nbsp;8-K filed on October&nbsp;22, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Seven Year and One Year Warrants to Purchase Shares of Common Stock of the Company issued by the Company
to the Purchasers named in the Securities Purchase Agreement dated October&nbsp;19, 2007 between the Company and the
Purchasers named therein (incorporated by reference to Exhibit&nbsp;10.4 to Current Report on Form&nbsp;8-K filed on
October&nbsp;22, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement agreement dated as of October&nbsp;31, 2006, by and among Terry LaCore, Mark D. Woodburn and Natural
Health Trends Corp. (incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on November
1, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Indemnification agreement effective as of October&nbsp;31, 2006 by and among Natural Health Trends Corp., Terry
LaCore and Mark D. Woodburn (incorporated by reference to Exhibit&nbsp;10.3 to Current Report on Form&nbsp;8-K filed on
November&nbsp;1, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Voting agreement, dated as of October&nbsp;31, 2006, by and among Natural Health Trends Corp., Terry L. LaCore and
Mark D. Woodburn (incorporated by reference to Exhibit&nbsp;10.4 to Current Report on Form&nbsp;8-K filed on November&nbsp;1,
2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stockholders Agreement, dated as of March&nbsp;31, 2004, by and among the Company, John Cavanaugh, Terry LaCore and
Jason Landry (incorporated by reference to Exhibit&nbsp;10.2 to Current Report on Form&nbsp;8-K filed on April&nbsp;15, 2004).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease by and between CLP Properties Texas, LLP and Natural Health Trends Corp. dated as of June&nbsp;18, 2005
(incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on June&nbsp;24, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement dated December&nbsp;21, 2005 between Natural Health Trends Corp. and KGC Networks Pte Ltd. (incorporated by
reference to Exhibit&nbsp;10.2 to Current Report on Form&nbsp;8-K filed on December&nbsp;28, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2002 Stock Plan, as amended (incorporated by reference to Appendix&nbsp;C to Definitive Proxy Statement filed on
April&nbsp;27, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Notice of Grant of Stock Option Agreement under the Company&#146;s 2002 Stock Option Plan (incorporated by
reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on December&nbsp;1, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2007 Annual Incentive Plan (incorporated by reference to Appendix&nbsp;A to Definitive Proxy Statement filed on
October&nbsp;20, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.18
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2007 Equity Incentive Plan (incorporated by reference to Appendix&nbsp;B to Definitive Proxy Statement filed on
October&nbsp;20, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.19
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Notice of Restricted Stock Grant and Restricted Stock Agreement under the Company&#146;s 2007 Equity
Incentive</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Exhibit Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Plan (incorporated by reference to Exhibit&nbsp;10.5 to Quarterly Report on Form&nbsp;10-Q filed on May&nbsp;11,
2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.20
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement (including form of Non-Competition and Proprietary Rights Assignment Agreement) for Chris
Sharng, dated April&nbsp;23, 2007 (incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on
April&nbsp;26, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement (including form of Non-Competition and Proprietary Rights Assignment Agreement) for Timothy
S. Davidson dated April&nbsp;23, 2007 (incorporated by reference to Exhibit&nbsp;10.2 to Current Report on Form&nbsp;8-K filed
on April&nbsp;26, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.22
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement (including form of Non-Competition and Proprietary Rights Assignment Agreement) for Gary C.
Wallace dated April&nbsp;23, 2007 (incorporated by reference to Exhibit&nbsp;10.3 to Current Report on Form&nbsp;8-K filed on
April&nbsp;26, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment letter agreement dated as of December&nbsp;8, 2006 between Natural Health Trends Corp. and John Cavanaugh
(incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on December&nbsp;13, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Non-competition and proprietary rights assignment agreement dated as of December&nbsp;8, 2006 between Natural Health
Trends Corp. and John Cavanaugh (incorporated by reference to Exhibit&nbsp;10.2to Current Report on Form&nbsp;8-K filed on
December&nbsp;13, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.25
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Indemnification Agreement dated December&nbsp;13, 2005, between Natural Health Trends Corp. and each of its
directors (incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on December&nbsp;13, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement (including form of Non-Competition and Proprietary Rights Assignment Agreement) for Curtis
Broome dated April&nbsp;23, 2007 (incorporated by reference to Exhibit&nbsp;10.4 to Current Report on Form&nbsp;8-K filed on
April&nbsp;26, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment letter agreement dated as of July&nbsp;31, 2006 between Natural Health Trends Corp. and Stephanie Hayano
(incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on August&nbsp;3, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Non-competition and proprietary rights assignment agreement dated as of July&nbsp;31, 2006 between Natural Health
Trends Corp. and Stephanie Hayano (incorporated by reference to Exhibit&nbsp;10.2 to Current Report on Form&nbsp;8-K filed
on August&nbsp;3, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.29
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Severance Agreement dated as of February&nbsp;21, 2007 between Natural Health Trends Corp. and Stephanie Hayano
(incorporated by reference to Exhibit&nbsp;10.1 to Current Report on Form&nbsp;8-K filed on February&nbsp;26, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.30
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter agreement dated as of March&nbsp;1, 2006 between Natural Health Trends Corp. and Robert H. Hesse (incorporated
by reference to Exhibit&nbsp;10.2 to Current Report on Form&nbsp;8-K filed on March&nbsp;16, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.31
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Founder Compensation Agreement by and among Lexxus International, Inc., Natural Health Trends Corp., Rodney
Sullivan and Pam Sullivan, Michael Bray, and Jeff Provost (incorporated by reference to exhibit to Annual Report
on Form&nbsp;10-KSB filed on April&nbsp;16, 2002).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&#043;10.32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;1 to Founder Compensation Agreement by and among Lexxus International, Inc., Natural Health Trends
Corp., Rodney Sullivan and Pam Sullivan, Michael Bray, and Jeff Provost (incorporated by reference to Exhibit
10.7 to Annual Report on Form&nbsp;10-K filed on March&nbsp;31, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">14.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Worldwide Code of Business Conduct, as revised (incorporated by reference to Exhibit&nbsp;14.1 to Annual Report on
Form&nbsp;10-K filed on March&nbsp;28, 2007).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">14.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit&nbsp;14.2 to Annual Report on Form
10-K filed on March&nbsp;31, 2005).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of the Company (previously filed with Annual Report on Form&nbsp;10-K filed on March&nbsp;31, 2008).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Lane Gorman Trubitt, L.L.P. (previously filed with Annual Report on Form&nbsp;10-K filed on March&nbsp;31,
2008).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (previously filed with Annual Report on Form&nbsp;10-K filed on March&nbsp;31, 2008).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the Principal Executive Officer pursuant to Rule&nbsp;13a-14(a) of the Securities Exchange Act of
1934, as amended (the &#147;Exchange Act&#148;) (filed herewith).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the Principal Financial Officer pursuant to Rule&nbsp;13a-14(a) of the Exchange Act (filed herewith).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the Principal Executive Officer pursuant to Rule&nbsp;13a-14(b) of the Exchange Act and 18 U.S.C.
Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (previously filed with Annual
Report on Form&nbsp;10-K filed on March&nbsp;31, 2008).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the Principal Financial Officer pursuant to Rule&nbsp;13a-14(b) of the Exchange Act and 18 U.S.C.
Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002 (previously filed with Annual
Report on Form&nbsp;10-K filed on March&nbsp;31, 2008).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&#043;</TD>
    <TD>&nbsp;</TD>
    <TD>Management contract or compensatory plan</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>d56192exv31w1.htm
<DESCRIPTION>CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Chris T. Sharng, certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. I have reviewed this Amendment No.&nbsp;1 on Form 10-K/A of Natural Health Trends Corp.; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date: April 29, 2008&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Chris T. Sharng
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chris T. Sharng&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">President
(Principal Executive Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>d56192exv31w2.htm
<DESCRIPTION>CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 31.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">I, Timothy S. Davidson, certify that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. I have reviewed this Amendment No.&nbsp;1 on Form 10-K/A of Natural Health Trends Corp.; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date: April 29, 2008&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Timothy S. Davidson
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Timothy S. Davidson&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Financial Officer
(Principal Financial Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



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