EX-99.1 2 v449781_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,				December 31,
		2016				2015
		US$				US$
		(UNAUDITED)				(RESTATED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	216,460			$	624,724
Accounts receivable, net			177,139				619,412
Other receivables, net			23,355				67,059
Advances to suppliers - third parties			482,235				598,095
Advance to supplier - related party			-				875,044
Inventories, net			782,691				3,975,114
Prepaid expense			7,581				-
Due from related party			3,140				-
Current assets held for discontinued operation			-				70,093
Total Current Assets			1,692,601				6,829,541
Property and equipment, net			2,418,039				2,249,185
Intangible assets, net			4,163,486				4,448,804
Long-term prepaid expense			78,789				308,925
Total Assets		$	8,352,915			$	13,836,455
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings		$	1,505,000			$	1,541,000
Short-term borrowings - related party			2,723,298				2,175,892
Accounts payable			282,392				275,551
Accounts payable - related party			17,211				-
Advances from customers			19,900				42,980
Accrued expenses and other current liabilities			2,016,590				1,798,354
Taxes payable			168,891				114,112
Warranty obligation			64,069				11,708
Current liabilities held for discontinued operation			96,415				407,257
Total Current Liabilities			6,893,766				6,366,854
OTHER LIABILITIES
Warrants liability			271				162,736
Total Liabilities			6,894,037				6,529,590
Commitments and Contingency
Equity
Common shares, $0.002731 par value, 18,307,038 shares authorized, 6,821,889 and 6,194,475 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively			18,632				16,918
Additional paid in capital			21,249,902				19,810,905
Accumulated deficit			(23,471,594	)			(16,377,900	)
Accumulated other comprehensive income			2,931,149				2,989,116
Total Dehaier Medical Systems Limited shareholders' equity			728,089				6,439,039
Non-controlling interest			730,789				867,826
Total equity			1,458,878				7,306,865
Total liabilities and equity		$	8,352,915			$	13,836,455

F-1

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
		For six months ended
		June 30,
		2016				2015
		US$				US$
						(RESTATED)
Revenues		$	5,465,645			$	388,934
Costs of revenue			(8,111,950	)			(487,282	)
Gross loss			(2,646,305	)			(98,348	)
Service incomes			11,935				195,156
Service expenses			(23,316	)			(47,693	)
General and administrative expenses			(2,812,342	)			(1,027,796	)
Provision for doubtful accounts			(340,509	)			1,608
Loss from warrant redemption			(1,091,719	)			-
Selling expenses			(598,944	)			(458,039	)
Operating loss			(7,501,200	)			(1,435,112	)
Financial expenses			(71,849	)			(76,113	)
Other incomes			1,282				-
Other expenses			(2,078	)			(1,919	)
Change in fair value of warrants liability			137,439				239,644
Loss before provision for income tax and non-controlling interest			(7,436,406	)			(1,273,500	)
Provision for income tax (expense) benefit			(858	)			115,032
Net loss from continuing operations			(7,437,264	)			(1,158,468	)
Net income (loss) from discontinued operations			224,856				(2,465,857	)
Net loss			(7,212,408	)			(3,624,325	)
Less: net loss attributable to non-controlling interest			(118,714	)			(24,197	)
Net loss attributable to Dehaier Medical Systems Limited		$	(7,093,694	)		$	(3,600,128	)
Net loss from continuing operations		$	(7,437,264	)		$	(1,158,468	)
Net income (loss) from discontinued operations			224,856				(2,465,857	)
Other comprehensive income
Foreign currency translation gain (loss)			(76,291	)			79,748
Comprehensive loss			(7,288,699	)			(3,544,577	)
-less comprehensive loss attributable to the non-controlling interest			(137,037	)			(17,816	)
Comprehensive loss attributable to Dehaier Medical Systems Limited		$	(7,151,662	)		$	(3,526,761	)
Loss per share
-Basic and diluted		$	(1.13	)		$	(0.62	)
Weighted average number of common shares used in computation
-Basic and diluted			6,281,650				5,839,303

F-2

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		For the six months ended
		June 30,
		2016				2015
		US$				US$
						(RESTATED)
Cash flows from operating activities
Net loss		$	(7,212,408	)		$	(3,624,325	)
Net income (loss) from discontinued operations			224,856				(2,465,857	)
Net loss from continuing operations			(7,437,264	)			(1,158,468	)
Adjustments to reconcile net income to net cash (used in) provided by operating activities
Stock-based compensation expense			575,368				152,788
Depreciation and amortization			523,446				276,835
Change in fair value of warrants liability			(137,439	)			(239,644	)
Provision (benefit) for doubtful accounts			340,509				(1,608	)
Change in warranty reserve			53,513				-
Loss from warrant redemption			1,091,719				-
Provision for inventory obsolescence			2,706,597				-
Changes in assets and liabilities:
Decrease in accounts receivable			389,284				100,815
(Increase) Decrease  in advance to suppliers-third party			(51,266	)			411,960
Decrease (Increase) in advance to suppliers-related party			875,044				(186,866	)
Decrease (Increase)  in other receivables			27,247				(874,248	)
Increase in due from related party			(3,140	)			(98,220	)
Decrease (Increase) in inventories			145,796				(463,650	)
Increase in prepaid expenses			-				(19,378	)
Increase in long-term prepaid expenses			(65,736	)			(26,079	)
Increase in accounts payable			6,841				486,034
Increase in accounts payable --related party			17,212				-
(Decrease) Increase in advances from customers			(23,080	)			43,906
Increase (Decrease) in accrued expenses and other current liabilities			123,236				(108,209	)
Increase (Decrease)  in taxes payable			54,779				(177,236	)
Net cash used in operating activities from continuing operations			(787,334	)			(1,881,268	)
Net cash used in operating activities from discontinued operations			(15,901	)			(290,707	)
Net cash used in operating activities			(803,235	)			(2,171,975	)
Cash flows from investing activities
Capital expenditures and other additions			(1,620	)			(3,420	)
Net cash used in investing activities			(1,620	)			(3,420	)
Cash flows from financing activities
Proceeds from related party			608,228				671,202
Proceeds from bank loan			-				2,443,695
Repayments of bank loan			-				(2,443,695	)
Net proceeds from option exercises			10,150				36,250
Net proceeds from issuance of common stock			1,116,744				-
Payment for warrant redemption			(1,116,744	)			-
Net cash provided by financing activities			618,378				707,452
Effect of exchange rate fluctuations on cash and cash equivalents			(221,787	)			86,556
Net decrease in cash and cash equivalents			(408,264	)			(1,381,387	)
Cash and cash equivalents at beginning of year			624,724				1,727,763
Cash and cash equivalents at end of period		$	216,460			$	346,376
Supplemental cash flow information
Income tax paid		$	-			$	-
Interest paid		$	72,320			$	77,309

F-3