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Natural Health Trends announced that the Securities and Exchange Commission has finally completed an investigation into the company involvement with two former executives charged with fraud.

As we told you last week, the two execs, Mark Woodburn and Terry LaCore did face civil charges related to this investigation and were each ordered to pay fines as well as agree not to hold executive positions for the next few years. Neither however had to either admit to or deny any wrongdoing in the case.

The investigation was launched almost two years ago, in October of 2006. The SEC was not only investigating the two former employees, but also the company’s actions regarding the fraudulent activity and subsequent firing of the two individuals.

After an investigation that NHT fully cooperated with, they received a letter this week from the SEC stating that they do not intent to recommend any enforcement action against the company.

NHT is thrilled to finally put this legal issue behind them. “Current management of the Company worked diligently to fully cooperate with the SEC in its investigation,” said the Company’s President, Chris Sharng. “We are pleased that no enforcement action has been recommended against the Company, and we look forward to continuing to focus on our business with this investigation behind us,” added Mr. Sharng.

With this investigation behind them, NHT can now fully tend problems regarding the trading, or non-trading of their stock, which has failed to meet the criteria needed for it to continue trading on the NASDAQ Capital Markets.

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Natural Health Trends (NASDAQ: BHIP) announced that it has received a deficiency letter from the NASDAQ Stock Market. The letter, received by the company on September 2nd, indicated that NHT is not in compliance with requirements to be listed on the NASDAQ Capital Market because for the last 30 business days, the bid price of its common stock has closed below $1.00. NHT Global trades under the symbol BHIP and the letter has no immediate effect on the trading of the stock.

According to the NASDAQ Marketplace Rule 4310(c)(4) NASDAQ must issue a deficiency letter when a company fails to meet minimum bid requirements-trading at or above $1.00- for 30 consecutive days. NHT will now have 180 days to meet requirements or face being delisted.

Natural Health Trends will have until March 9th, 2009 to meet criteria that would allow it to continue trading on the NASDAQ Capital Market. NHT must have their common stock close at or above $1.00 for a minimum of ten consecutive business days during this 180 day probationary period in order to remain on the Capital Market. If the company cannot meet those requirements, they face having their securities delisted.

While it seems that Natural Health Trends stock is not doing as well as the company would hope, their last quarterly statements show that the company continues to grow and increase sales significantly each quarter. NHT released a statement regarding the NASDAQ letter, sayting that it intends to “actively monitor the bid price for its common stock between now and March 9, 2009, and consider implementation of various options available to the company if its common stock does not trade at a level that is likely to regain compliance.”

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Natural Health Trends Corp, (NASDAQ: BHIP) announced their second quarter financial results. The company is happy to report that they have continued to grow and improve, and that sales have been growing steadily.

Sales in the second quarter of 2008 were $12.3 million, an improvement over the first quarter of 2008 when sales were $11.4 million. NHT was also pleased that second quarter operating losses fell from $698,000 in the first quarter of 2008 to only $364,000 in the second quarter.

Chris Sharng, the company’s president, said, “We were very pleased to see our cost-cutting and revenue-generating efforts begin to pay off in the second quarter. We stabilized our cash balance, and operating earnings of the business were positive, considering non-cash items such as depreciation and stock-based compensation totaled $500,000. We believe that the nascent revenue momentum we gained through certain personnel changes, compensation plan changes and dynamic training sessions were the drivers of this improvement.

The company expects that the summer season will be a bit slower, and coupled with Olympics which will affect their sales in Asia, they might see the numbers fall a bit. NHT says in the next quarter they will continue to focus on ways to improve gross profit margin as well as maintaining revenue momentum.

Unfortunately for the company, the stock has not responded very well over the past year. Hitting a 52-week high of over $7 per share, the price has been languishing at or below $1 for most of 2008.

If you could not be a part of the conference call that they company held today, not to worry, full second quarter results are available on the company’s website on the conference call page.

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Natural Health Trends (NHT) has just filed a lawsuit against one of their own. In a bizarre development, the company is suing Terry LaCore, the company’s founder and former director and executive officer.

The lawsuit claims that LaCore and his new company, bHIP Global, Inc., which is an energy drink company, has engaged in various unlawful activities including employee raiding, theft of confidential information and stealing trade secrets. The suit was filed in a state court in Dallas,Texas.

The lawsuit claims that LaCore illegally attempt to lure employees, distributors and vendors to his newest venture and persuaded them to break contracts. Natural Health Trends also claims that LaCore named his latest project using Natural Health Trend’s stock ticker symbol to confuse potential customers and investors.

NHT Global has been granted a temporary order to halt the use of confidential information as well as halting contact with any of their current employees.

Chris Sharng, President of Natural Health Trends Corp., said, “Our lawsuit describes dishonest and unethical conduct that is increasingly blatant. It seeks to stop that conduct and end an illegal assault on our relationships with our distributors, employees and vendors. We intend to use all legal means in any and all jurisdictions to prevent further attempts to undermine our business.”

These types of lawsuits are unfortunately pretty common in the MLM world and we’ve seen some battles go back and forth for quite some time (Quixtar vs. MonaVie). While i dont want to take sides, it does seem a bit odd, that Mr. LaCore, who was the founder of NHT and obviously is no longer involved with them, would choose to name a new venture, bHIP- I mean, i’m not a rocket scientist, but NHT Globals NASDAQ ticker is BHIP- that seems to me to be a bit more than a coincidence. Even their websites names are almost identical. We will keep you posted…..

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