EX-99.1 2 v426467_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

CONDENSED CONSOLIDATED BALANCE SHEETS

 (UNAUDITED)

		June 30,				December 31,
		2015				2014
		US$				US$
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			346,626				1,727,763
Accounts receivable, less allowance for doubtful accounts of
$2,301,708 and $1,600,920 at June 30, 2015 and December 31, 2014, respectively			10,596,563				11,828,134
Contract Deposits			1,829,530				1,823,235
Other receivables, less allowance for doubtful accounts of
$598,747 and $598,747 at June 30, 2015 and December 31, 2014, respectively			1,811,322				1,707,799
Advances to Suppliers			4,092,600				4,862,222
Prepayment and other current assets			1,889,600				2,396,787
Inventories, net			5,901,851				6,202,065
Tax receivable			189,732				138,986
Deferred tax asset			-				407,539
Total Current Assets			26,657,824				31,094,530
Deposits for purchase of property, plant and equipment			4,000,999				3,480,509
Deposits for purchase of property, plant and equipment-related party			1,800,083				1,498,627
Property and equipment			3,739,200				4,673,666
Intangible assets			5,590,698				6,197,942
Total Assets			41,788,804				46,945,274
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings			2,455,500				2,440,500
Accounts payable			704,701				270,523
Advances from customers			206,651				167,285
Accrued expenses and other current liabilities			496,891				509,697
Taxes payable			121,428				156,024
Warranty obligation			135,045				134,220
Total Current Liabilities			4,120,216				3,678,249
OTHER LIABILITIES
Warrants liability			313,416				553,060
Total Liabilities			4,433,632				4,231,309
Commitments and Contingency
Equity
Common shares, $0.002731 par value, 18,307,038 shares authorized, 5,845,675 and 5,808,675 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively			15,965				15,864
Additional paid in capital			18,908,902				18,719,965
Retained earnings			13,939,994				19,142,337
Accumulated other comprehensive income			3,602,260				3,382,707
Total Dehaier Medical Systems Limited shareholders' equity			36,467,121				41,260,873
Non-controlling interest			888,051				1,453,092
Total equity			37,355,172				42,713,965
Total liabilities and equity			41,788,804				46,945,274

F-1

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(LOSS)

(UNAUDITED)

		Six Months Ended
		June 30				June 30
		2015				2014
Product revenue			698,999				6,277,260
Service income			241,842				104,919
Revenue			940,841				6,382,179
Product costs			1,049,506				4,177,210
Service costs			513,819				13,842
Costs of revenue			1,563,325				4,191,052
Gross profit (loss)			(622,484	)			2,191,127
General and administrative expense			(2,324,812	)			(1,589,243	)
Provision for doubtful accounts			(687,626	)			(18,481	)
Impairment loss for intangible assets			(489,843	)			-
Impairment loss for fixed assets			(631,587	)			-
Selling expense			(771,460	)			(552,443	)
Operating Income(Loss)			(5,527,812	)			30,960
Financial expenses ( including interest expense of $77,243 and $83,130)			(78,033	)			(63,955	)
Other income			717				-
Change in fair value of warrants liability			239,644				1,527,835
Income (loss) before provision for income tax and non-controlling interest			(5,365,484	)			1,494,840
Income tax expense			(408,072	)			(118,995	)
Net income			(5,773,556	)			1,375,845
Less: net income (loss) attributable to non-controlling interest			(571,213	)			(22,568	)
Net income(loss) attributable to Dehaier Medical Systems Limited			(5,202,343	)			1,398,413
Net income(loss)			(5,773,556	)			1,375,845
Other comprehensive income (loss)
Foreign currency translation gain (loss)			225,726				(685,441	)
Comprehensive Income (loss)			(5,547,830	)			690,404
-less comprehensive income (loss) attributable to the non-controlling interest			(565,041	)			(53,154	)
Comprehensive income(loss) attributable to Dehaier Medical Systems Limited			(4,982,789	)			743,558
Earnings (loss) per share
-Basic			(0.89	)			0.26
-Diluted			(0.89	)			0.26
Weighted average number of common shares used in computation
-Basic			5,839,303				5,321,968
-Diluted			5,873,172				5,419,026

F-2

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		For the six months ended
		June 30,
		2015				2014
		US$				US$
Cash flows from operating activities
Net income			(5,773,556	)			1,375,845
Adjustments to reconcile net income to net cash (used in) provided by operating activities
Stock-based compensation expense			152,788				349,576
Depreciation and amortization			444,218				301,341
Change in fair value of warrants liability			(239,644	)			(1,527,835	)
Provision for deferred tax assets			408,072				-
Provision for doubtful accounts			687,626				18,481
Write-off of prepayment and other current assets			820,954				-
Provision for inventory obsolescence			637,651				77,096
Impairment loss for intangible assets for traditional medical business			489,843				-
Impairment loss for fixed assets for traditional medical business			631,587				-
Changes in assets and liabilities:
Decrease(Increase) in accounts receivable			610,373				(36,590	)
Decrease in prepayments and other current assets			491,115				3,156,478
Increase in other receivables			(96,255	)			(1,567,908	)
Increase in inventories			(300,943	)			(1,986,022	)
Increase in tax receivable			(49,652	)			(313,171	)
Increase in accounts payable			430,436				117,009
Increase in advances from customers			38,154				61,740
Decrease in accrued expenses and other current liabilities			(15,257	)			(42,641	)
(Decrease)Increase in taxes payable			(35,384	)			393,525
Net cash provided by (used in) operating activities			(667,874	)			376,924
Cash flows from investing activities
Capital expenditures and other additions			(752,389	)			(4,726,762	)
Net cash used in investing activities			(752,389	)			(4,726,762	)
Cash flows from financing activities
Proceeds from bank loan			2,434,500				2,944,000
Repayment of bank loan			(2,437,500	)			(2,948,700	)
Net proceeds from option exercises			36,250				-
Net proceeds from issuance of common stock			-				6,066,546
Net cash provided by financing activities			33,250				6,061,846
Effect of exchange rate fluctuations on cash and cash equivalents			5,876				(28,817	)
Net decrease in cash and cash equivalents			(1,381,137	)			1,683,191
Cash and cash equivalents at beginning of period			1,727,763				2,592,945
Cash and cash equivalents at end of period			346,626				4,276,136
Supplemental cash flow information
Income tax paid			115,032				69,769
Interest paid			77,309				83,130
Uncollected option exercise proceeds recorded as other receivable			-				110,200

F-3