<SEC-DOCUMENT>0001144204-17-044784.txt : 20170823
<SEC-HEADER>0001144204-17-044784.hdr.sgml : 20170823
<ACCEPTANCE-DATETIME>20170823170026
ACCESSION NUMBER:		0001144204-17-044784
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20170823
FILED AS OF DATE:		20170823
DATE AS OF CHANGE:		20170823

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Lianluo Smart Ltd
		CENTRAL INDEX KEY:			0001474627
		STANDARD INDUSTRIAL CLASSIFICATION:	SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34661
		FILM NUMBER:		171047620

	BUSINESS ADDRESS:	
		STREET 1:		RM 2108, 21ST FL, NO. 20 SHIJINGSHAN RD
		STREET 2:		CHINA RAILWAY CONSTRUCTION BUILDING
		CITY:			SHIJINGSHAN DISTRICT, BEIJING
		STATE:			F4
		ZIP:			100040
		BUSINESS PHONE:		(8610)8860-9850

	MAIL ADDRESS:	
		STREET 1:		RM 2108, 21ST FL, NO. 20 SHIJINGSHAN RD
		STREET 2:		CHINA RAILWAY CONSTRUCTION BUILDING
		CITY:			SHIJINGSHAN DISTRICT, BEIJING
		STATE:			F4
		ZIP:			100040

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Dehaier Medical Systems Ltd
		DATE OF NAME CHANGE:	20091015
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>v473896_6k.htm
<DESCRIPTION>6-K
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 0"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>U.S. SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, DC 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 6-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REPORT OF FOREIGN PRIVATE ISSUER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PURSUANT TO RULE 13a-16 OR 15d-16 UNDER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the six months ended June 30, 2017</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Commission File Number: 001-34661</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 14pt"><B>Lianluo
Smart Limited</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Room 2108, 21<SUP>st</SUP> Floor, No. 20
Shijingshan Road,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Shijingshan District, Beijing 100040</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Address of principal executive offices)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F. Form 20-F&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#120;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Form
40-F&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><BR>
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): <FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): <FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Explanatory Note:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 32pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Registrant is filing
this Report on Form 6-K to report its financial results for the six months ended June 30, 2017 and to discuss its recent corporate
developments.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; border-bottom: Black 2pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LIANLUO SMART LIMITED</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 6-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: #D0DDEF; border-collapse: collapse">
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 91%; padding: 0; text-underline-color: black; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black; vertical-align: baseline">Special
    Note Regarding Forward-Looking Statements</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 9%; padding: 0; text-underline-color: black; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ii</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding: 0; text-underline-color: black; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-underline-color: black; text-align: right; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding: 0; text-underline-color: black; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black; vertical-align: baseline">Management&rsquo;s
    Discussion and Analysis of Financial Condition and Results of Operations</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-underline-color: black; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding: 0; text-underline-color: black; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-underline-color: black; text-align: right; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding: 0; text-underline-color: black; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Black; vertical-align: baseline">Exhibits</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-underline-color: black; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding: 0; text-underline-color: black; text-align: left; text-indent: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-underline-color: black; text-align: right; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding: 0; text-underline-color: black; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial Statements</FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-underline-color: black; text-align: right; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-1</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Page; Sequence: 2; Options: NewSection; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">&nbsp;<!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></TD><TD STYLE="width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Special Note Regarding Forward-Looking
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 32pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have made statements
in this report that constitute forward-looking statements. Forward-looking statements involve risks and uncertainties, such as
statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking
statements by terminology such as &ldquo;anticipate&rdquo;, &ldquo;estimate&rdquo;, &ldquo;plan&rdquo;, &ldquo;project&rdquo;,
&ldquo;continuing&rdquo;, &ldquo;ongoing&rdquo;, &ldquo;expect&rdquo;, &ldquo;we believe&rdquo;, &ldquo;we intend&rdquo;, &ldquo;may&rdquo;,
&ldquo;should&rdquo;, &ldquo;could&rdquo; and similar expressions. These statements involve estimates, assumptions, known and unknown
risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances
or achievements expressed or implied by the forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Examples of forward-looking statements include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">projections</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">of
revenue, earnings, capital structure and other financial items;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">statements</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">of
our plans and objectives;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">statements</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">regarding
the capabilities and capacities of our business operations;</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">statements</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">of
expected future economic performance; and</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">assumptions</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">underlying
statements regarding us or our business.</FONT></TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The ultimate correctness
of these forward-looking statements depends upon a number of known and unknown risks and events. Many factors could cause our actual
results to differ materially from those expressed or implied in our forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we cannot
assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes
no obligation to update this forward-looking information. Nonetheless, the Company reserves the right to make such updates from
time to time by press release, periodic report or other method of public disclosure without the need for specific reference to
this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create
an obligation to provide any other updates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 3; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">&nbsp;<!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->ii<!-- Field: /Sequence --></TD><TD STYLE="width: 33%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Management&rsquo;s Discussion and Analysis
of Financial Condition and Results of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 32pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The following discussion
and analysis of the company&rsquo;s financial condition and results of operations should be read in conjunction with our unaudited
condensed consolidated financial statements and the related notes included elsewhere in this report. In this report, the terms
&ldquo;we&rdquo;, &ldquo;the Company&rdquo; and &ldquo;our&rdquo; refer to Lianluo Smart Limited, a British Virgin Islands company
(&ldquo;Lianluo Smart&rdquo;), Beijing Dehaier Medical Technology Company Limited (&ldquo;BDL&rdquo;), and Lianluo Connection Medical
Wearable Device Technology (Beijing) Co., Ltd. (&ldquo;LCL&rdquo;), our operating subsidiaries in the People&rsquo;s Republic of
China. On June 30, 2017, the Company terminated its wholly-owned subsidiary Breathcare LLC, which is located in the US and is not
conducting any business. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results
and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result
of various factors.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Certain prior year
balances were reclassified to conform to the current year's presentation with consideration of reflecting two of the Company&rsquo;s
consolidated entities, Beijing Dehaier Technology Co., Limited (&ldquo;BTL&rdquo;) and Breathcare LLC, as discontinued operations.
None of these reclassifications had an impact on reported financial position or cash flows for any of the periods presented.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>On June 9, 2017,
the Company held its 2017 Annual Meeting of Shareholders. During the meeting the Company approved the amendment and restatement
of the Company&rsquo;s Amended and Restated Memorandum and Articles of Association (the &ldquo;New M&amp;AAs&rdquo;) to re-classify
and re-designate the Company&rsquo;s Common Shares into two classes of Common Shares. The Company&rsquo;s authorized share capital
of 50,000,000 Common Shares, par value of US$0.002731 per share, was divided into 37,888,889 Class A Common Shares (the &ldquo;Class
A Common Shares&rdquo;) and 12,111,111 Class B Common Shares (the &ldquo;Class B Common Shares&rdquo;). Class A Common Shares have
one vote per share, while Class B Common Shares have ten votes per share. Class B Common Shares convert automatically into Class
A Common Shares upon transfer, and all Class B Common Shares automatically convert into the same number of Class A Common Shares
as soon as the current Class B shareholders in aggregate beneficially own less than 605,555 Class B Common Shares, which is equivalent
to 5% of the total issued and outstanding Class B Common Shares as of the expected date of effectiveness of the New M&amp;AA.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This section should
be read together with the unaudited condensed consolidated financial statements attached as an exhibit to this report on Form 6-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 4; Options: NewSection; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Business Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our company develops
and distributes medical devices, focusing primarily on sleep respiratory solutions to Obstructive Sleep Apnea Syndrome (&ldquo;OSAS&rdquo;)
since 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">After completing our
strategic transformation in 2016, we are going to focus on three main product portfolios: smart medical wearable devices, smart
devices and smart ecosystem platforms. Currently, we are operating the smart medical wearable devices products, and the Company
is looking forward to develop new and high-tech products for our smart devices and smart ecosystem platforms portfolios in global
range.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We design, develop
and market our own branded medical products and medical components. Since we do not operate any fully scaled manufacturing facilities,
we contract some of the medical components to outside manufacturers in China. Most of our branded products require light assembly
by us before distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While we sell our products
primarily through distributors, we also make direct sales to hospitals, clinics and government health bureaus. We continue to further
our market reach by introducing newer and more advanced product lines that address different end-user needs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For our smart medical
wearable device products we target 4 markets: (i) public hospitals, (ii) private check-up centers, (iii) pension and health management
institutions and (iv) insurance companies and individuals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are focused on the
promotion of sleep respiratory solutions and service in public hospitals and seek to develop our distribution channels for such
products. We see market opportunities to expand our user base and increase adoption rates for our products, as we have delivered
an increased number of watches and detectors to hospitals to use with patients. We believe our products can fill a gap in the market,
as many of our competitors&rsquo; products provide only examination services, while ours also offer treatment and effect evaluation.
To date, we have established strategic cooperation with China&rsquo;s two largest medical check-up centers, Meinian Onehealth Healthcare
(Group) Co., Ltd (SZ: 002044) and iKang Healthcare Group, Inc. (Nasdaq: <FONT STYLE="color: black">KANG</FONT>), to reach their
approximately 18 million clients every year. We plan to expand our presence in China&rsquo;s check-up center market to nearly 30
cities around the country this year. As of the date of this report, we have agreed to cooperate with multiple check-up centers
in 15 cities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 5; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Besides the smart medical
wearable devices products, the company also expanded its business in smart device and smart ecosystem platform. These two product
portfolios are new strategies for the Company and we are currently contributing more efforts into development of proper and reliable
products. We expect to have our first product available in 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Recent Business Developments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>From January 5 to
January 8, 2017, the Company displayed its sleep diagnostic products at the 2017 Consumer Electronics Show in Las Vegas. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>On June 24, 2017,
the Company attended 7th Academic Sleep Conference held by the Medical Doctor Branch of the Shandong Doctors Association.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Growth Strategies</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;We plan to expand
our product portfolios in smart wearable medical device and start to provide reliable products in smart device and smart ecosystem
platforms through continuing investments in research and development and pursuing attractive opportunities to acquire complementary
products and technologies and strategic collaboration with partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In smart wearable medical
device products, we plan to establish an accurate, efficient and innovative sleep diagnostic system by developing advanced technologies
and focusing on research and development of proprietary products to provide a sleep respiratory solution. We will broaden and differentiate
our target markets by cooperating with different types of medical institutions and individual customers across China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will keep continuously
distributing our sleep respiratory solutions to hospitals, check-up centers and other healthcare institutions in China to penetrate
the domestic market of OSAS diagnosis, and to grow sales and service revenues. We will develop our sleep respiratory solution business
by active marketing and expanding, and leverage our well-established distribution network resources to reach more and more potential
customers and partners. At the same time, our support of organizations like the Air Force General Hospital has positioned our products
well for academic research projects. We expect that such research involving our products will enhance our products reputation among
professionals and lead to customer base awareness. We will also establish additional model hospitals and physical check-up centers
to promote our products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the smart device
and smart ecosystem platform products, we are dedicated to the development and distribution of easy-using smart devices for sports,
social contact, entertainment, remote-control and family health management. However, until the date of this report, we did not
have products available to the market and expect to bring in our first product to the market in 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 6; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Results of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the six months
ended June 30, 2017 and 2016, our total revenues amounted to approximately $0.42 million and $5.14 million, respectively. For the
first half year of 2017, we continued to strategically reduce our sales of traditional medical equipment; as a result, such traditional
revenues have largely disappeared as we are continuing to seek new revenue drivers. We continue to focus on developing medical
products and services based on mobile technology, including comprehensive sleep respiratory solutions for OSAS and patient care
management. To date, these revenues from these new products have not yet replaced our traditional revenue sources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Traditional medical
equipment distribution has faced a very competitive market since 2014. The Company has largely left this market. We selectively
reduced investment in traditional medical equipment distribution and intensified our efforts to launch our wearable solutions and
products for OSAS in public hospitals and private physical check-up centers throughout China, fully exploring our developed distribution
channels. We are currently focusing on developing our smart wearable diagnosis and analysis systems for OSAS in public hospitals
and private physical check-up centers throughout China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Beginning in the fourth
quarter of 2014, the company began establishing relationships with many 3-A grade hospitals to launch our wearable solutions and
products for OSAS, driving the market growth in the regions around the 3-A grade hospitals, which has helped push forward our strategic
market expansion for public hospitals. Up until now, our wearable diagnosis and analysis systems for OSAS have been successfully
delivered to more than 100 3-A grade hospitals throughout China over the past three years. We plan to complete our pilot program
covering all 3-A grade hospitals in all provinces, cities and autonomous regions throughout China within the next three years.
Although awareness of OSAS in China is still relatively low, we aim to use increased marketing efforts to encourage further adoption
of our OSAS products in hospitals and other institutions where we have already successfully launched. Our business target has gradually
expanded from sleep centers, respiratory departments, and E.N.T. departments to other hospital departments with strong demand for
sleep monitoring including those accommodating patients seeking care (inpatient and outpatient) for key chronic diseases, such
as hypertension, heart disease, diabetes, and strokes. According to the statistics on the patients seeking care for hypertension,
heart disease, diabetes, and stroke in China, the number of discharged patients in 2013 alone was 16 million. Based on that, the
company has targeted those patients at eight hundred of China&rsquo;s 3-A grade hospitals, providing them with sleep diagnostic
services. We expect sleep disorder diagnosis capacity will continue to grow steadily for those patients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 7; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have also targeted
the private physical check-up centers market. Our wearable OSAS diagnosis and analysis system has successively been launched in
the testing outlets of Ciming Aoya Hospital and Songqiao&rsquo;s high-end physical check-up center. At the beginning of 2015, the
company launched a series of test-runs of the wearable OSAS diagnosis and analysis system in iKang, Meinian Onehealth Healthcare,
Ciming, Songqiao and other large private physical check-up centers and health management chain institutions in Beijing and Shanghai.
The above mentioned private physical check-up groups altogether have about 450 check-up centers around China, and number of these
chains&rsquo; customers amounts to over 20 million per year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, we are
seeking to cooperate with commercial health insurance companies to develop sleep respiratory solutions; we expect to work with
insurance companies to launch health insurance program providing OSAS diagnosis and analysis for their insureds. We will continue
to focus on sleep health with our comprehensive OSAS solution system, seeking to become the leading domestic product and service
provider in this field.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Six Months Ended June 30, 2017 Compared
to Six Months Ended June 30, 2016</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that historical
period-to-period comparisons of operating results should not be relied upon as indicative of future performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Revenues</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our total revenue from
continuing operations decreased by 91.9% from $5.14 million for the six months ended June 30, 2016 to $0.42 million for the six
months ended June 30, 2017. In the first half year of 2017, our sales decline was mainly due to our business focus on our sleep
respiratory solutions and services for OSAS of higher margins in order to reduce our gross loss. The revenues of business and products
with lower margins decreased by $4.46 million. We redirected our operations from unprofitable products to the sleep respiratory
solutions of higher margins by marketing and expanding OSAS diagnosis. To capture market and the strategy of sales promotion, we
suffered a loss from the sleep respiratory solutions business. Our management believes that we will be able to improve our product
margins of sleep respiratory solutions and will make the relevant products become an important growth factor of the Company in
the following years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Costs of Revenue</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our costs of revenue
from continuing operations decreased by 85.5% from $7.79 million for the six months ended June 30, 2016 to $1.13 million for the
six months ended June 30, 2017. The decrease of our cost of revenues resulted from reduction of our sales. The cost of products
was higher than our revenue because the fixed manufacturing costs including depreciation and amortization cost increased $4.3 million
due to the shortening of depreciation period and the addition of the new equipment. Meanwhile, the fixed labor costs increased
with the rise of the labor salary rate. We are managing the cost factor by reducing the fixed costs, especially at our labor costs,
through providing more flexible salary structure to our employees and improve its earning ability under the lower gross loss strategy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 8; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Gross Loss&#9;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our gross loss from
continuing operations decreased from $2.65 million for the six months ended June 30, 2016 to $0.71 million in the same period of
2017. The downward trends in revenue and cost of the solutions and service of lower gross margins led to the significant decrease
of the net loss. Moreover, the Company enhanced its inventory management system over the slow-moving inventory items and significantly
decreased the impairment of the slow-moving inventory compared to that of the same period of 2016, which lowered the cost of goods
sold and narrowed the net loss from our operations. However, this was partially offset by the higher percentage of fixed depreciation
and labor costs in our cost of revenue structure. Thus, we are redesigning our salary structure to bring in more flexible payroll
structure to help us reduce the percentage of our fixed cost. Currently, we cannot conclude whether we will be able to successfully
restructure our cost structure or ensure that the new structure will be accepted by our employees. Meanwhile, we also accelerate
our development at new products. Our management believes the Company&rsquo;s operation will likely to be improved from time to
time with the development of our more profitable products. By reducing our reliance on our less profitable medical devices assembly
and distribution businesses, we are able to leverage our resources to develop smart health products and services, which we see
as a positive development and focus for the future of our Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Service Income</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our service income
decreased from $11,935 in the six months ended June 30, 2016 to $9,689 in the same period of 2017. The decrease of the service
income was mainly due to the decrease in after-sale repair income and commissions in this period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Service Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our service expenses
decreased from $17,728 in the six months ended June 30, 2016 to $485 in the same period of 2017. The decrease of the service expense
was mainly due to the decrease in after-sale repairing expense in this period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Operating Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our operating expenses
from continuing operations decreased by 66.7% from $4.70 million for the six months ended June 30, 2016 to $1.57 million for the
six months ended June 30, 2017. The most significant components of our six-month operating expenses are general and administrative
expenses and selling expenses and loss from warrant redemption, which are discussed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Operating Expenses&mdash;General
and Administrative Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">General and administrative
expenses consist primarily of salaries and benefits and related costs for our administrative personnel and management, stock based
compensation and expenses associated with our research and development, registration of patent and intellectual property rights
in China and abroad, fees and expenses of our outside advisers, including legal, audit and patent register expenses, expenses associated
with our administrative offices, and the depreciation of equipment used for administrative purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 9; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our general and administration expenses
from continuing operations significantly decreased by 54.5% from $2.75 million for the six months ended June 30, 2016 to $1.25
million for the six months ended June 30, 2017. This decline was mainly due to the decrease of research and development expenses
of sleep respiratory business and the decrease of professional service expenses, which was mainly due to negotiation with our service
providers. We will continue to decrease the general and administrative expenses to maintain the competitive advantage of its profitable
business. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Operating Expenses&mdash;Provision
for Doubtful Accounts</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our provision for doubtful
accounts from the continuing operation decreased by 92.6% from the amount of $321,754 for the six months ended June 30, 2016 to
provision for doubtful accounts of $23,657 for the six months ended June 30, 2017. This decrease was mainly due to our efforts
at managing our client creditability.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Operating Expenses&mdash;Loss
from Warrant Redemption</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the six months
ended June 30, 2016, we reported a loss of $1,091,719 from warrant redemption. No such transactions occurred during the same period
in 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Operating Expenses&mdash;Selling
Expenses</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our selling expenses
consist primarily of salaries and related expenses for personnel engaged in sales, marketing and customer support functions, and
costs associated with advertising and other marketing activities, and depreciation expenses related to equipment used for sales
and marketing activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our selling expenses
from continuing operations decreased by 44.1% from $0.54 million for the six months ended June 30, 2016 to $0.30 million for the
six months ended June 30, 2017. The decline in selling expenses was mainly resulted from the decrease of the depreciation of furniture
in sales department, the marketing expenses and the travel expenses. We will keep managing our expenditures in selling activities,
which will improve the market development of the profitable products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Operating Loss</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
foregoing, we generated an operating loss of approximately $2.28 million in the six months ended June 30, 2017, compared to operating
loss of approximately $7.35 million in the same period of 2016. Operating loss decreased by 69.0%, mainly because of the reduced
sale of lower gross margin products, and the decreased general and administrative expenses, loss from warrant redemption and selling
expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 10; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Change in Fair Value
of Warrants Liability</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the six months
ended June 30, 2017, the gain related to changes in the fair value of warrants liability decreased by 100% from $137,439 to $0
for the six months ended June 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Net Loss from Continuing
Operations</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
foregoing, we had net loss from continuing operations of approximately $2.15 million for the six months ended June 30, 2017, compared
to net loss from continuing operations of approximately $7.29 million in the same period of 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Net Loss from Discontinued
Operations</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We discontinued the
unprofitable businesses and entity to concentrate the Company&rsquo;s resources to develop its mobile health business and profitable
products, including wearable sleep respiratory business, to focus more on its major businesses. As a result of this strategy shifting,
we had net loss from discontinued operations of approximately $9,031 for the six months ended June 30, 2017, compared to approximately
a net income from discontinued operations of $76,405 in the same period of 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Net Loss</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of the
foregoing, we had net loss of approximately $2.16 million for the six months ended June 30, 2017, compared to net loss of approximately
$7.21 million in the same period of 2016. After deduction of non-controlling interest in loss, net loss attributable to the Company
was approximately $2.16 million and $7.09 million for the six months ended June 30, 2017 and 2016, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Liquidity and Capital Resources</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 37pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Cash Flows and Working
Capital</I></B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of June 30, 2017,
we had $7,167,677 in cash and cash equivalents. As of December 31, 2016, we had $10,787,690 in cash and cash equivalents. Net cash
decreased during the six months ended June 30, 2017 mainly because the Company entered into a loan agreement with Digital Grid
to provide a loan of $3 million for 6 months with 3.5% yearly interest rate. Digital Grid is the wholly-owned subsidiary of Hangzhou
Lianluo Interactive Information Technology Co., Ltd (&ldquo;Lianluo Interactive&rdquo;), which is the largest shareholder of the
Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of June 30, 2017,
our currently available working capital was $10.82 million. As of December 31, 2016, our working capital was $10.22 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<!-- Field: Page; Sequence: 11; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Operating Activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net cash used in operating
activities was $2,078,008 for the six months ended June 30, 2017, as compared to $803,235 used in operating activities for the
same period in 2016. The reasons for this change are mainly as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="width: 96%; text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net loss from continuing operations was $2.15 million for the six months ended June 30, 2017, a decrease of approximately $5.14 million from net loss of $7.29 million for the same period of 2016, as a result of the factors described above.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD>
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-based compensation expense incurred $0.23 million for the six months ended June 30, 2017, while in the same period of 2016, stock-based compensation expense incurred $0.58 million. The decrease was mainly due to the reduction in the employee number of options pool. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</FONT></TD>
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation and amortization incurred $1,073,764 for the six months ended June 30, 2017, as a result of depreciation expenses of $875,323 from our property and equipment and amortization expenses of $198,441 from our intangible assets, respectively. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iv)</FONT></TD>
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A recovery gain from inventory obsolescence was $47,345 for the six months ended June 30, 2017, as a result of our efforts at enhancing our inventory management system, while in the same period of 2016, provision for inventory obsolescence was $2.71 million.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(v)</FONT></TD>
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts receivable from continuing operations decreased by $84,885 for the six months ended June 30, 2017, compared with an increase of $175,426 in the same period of 2016. The decrease in accounts receivable for the six months ended June 30, 2017 was mainly due to a tightened credit and collection policy.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(vi)</FONT></TD>
    <TD STYLE="text-underline-color: black; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories from continuing operations increased by $566,511 for the six months ended June 30, 2017, compared with a decreased of $145,796 in the same period of 2016. The increase in inventories for the six months ended June 30, 2017 was mainly prepared for production.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Investing Activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net cash used in investing
activities for the six months ended June 30, 2017 was $3.02 million, compared to $1,620 for the same period of 2016. The increased
cash used in investing activities for the six months ended June 30, 2017 was mainly attributable to a loan agreement with Digital
Grid to provide a loan of US$3 million for 6 months with 3.5% yearly interest rate. Digital Grid is a wholly-owned subsidiary of
Hangzhou Lianluo Interactive Information Technology Co., Ltd. (&ldquo;Lianluo Interactive&rdquo;), which is the largest shareholder
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B><I>Financing Activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net cash provided by
financing activities for the six months ended June 30, 2017 was $1.49 million, compared to $0.62 million provided by investing
activities for the same period of 2016. We received remaining proceeds of $1,492,538 from issuance of 11,111,111 common shares
to Lianluo Interactive in 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


<!-- Field: Page; Sequence: 12; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B><I>Off-Balance Sheet Commitments
and Arrangements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have not entered
into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered
into any derivative contracts that are indexed to our shares and classified as shareholder&rsquo;s equity or that are not reflected
in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred
to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable
interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing,
hedging or research and development services with us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibits</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The following documents
are filed herewith:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 11%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Number</B></P></TD>
    <TD STYLE="width: 1%; text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 88%; border-bottom: black 1pt solid; text-underline-color: black; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Document</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: right">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.1</FONT></TD>
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2017 and 2016</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Page; Sequence: 13; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 32pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: center">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>LIANLUO SMART LIMITED</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 51%; text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 5%; text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 44%; text-underline-color: black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">August 23, 2017</FONT></TD>
    <TD STYLE="text-underline-color: black; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; text-underline-color: black; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/&nbsp;&nbsp;&nbsp;&nbsp;Ping Chen</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Ping Chen</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Chief Executive Officer</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Principal Executive Officer) and</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: left">&nbsp;</TD>
    <TD STYLE="text-underline-color: black; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Duly Authorized Officer</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<!-- Field: Page; Sequence: 14; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>



<P STYLE="margin: 0"></P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v473896_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0; text-align: right"><B>Exhibit 99.1</B></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">LIANLUO SMART LIMITED AND SUBSIDIARIES</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">CONSOLIDATED BALANCE SHEETS</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">June 30,</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">US$</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">US$</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right">(UNAUDITED)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">ASSETS</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">CURRENT ASSETS:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; font-size: 10pt; text-align: left">Cash</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">7,167,677</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">10,787,690</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Accounts receivable, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,353</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">78,113</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Other receivables</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">23,525</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">89,520</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Other receivables, net-related party</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">32,649</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Loan to related party</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,000,000</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Advances to suppliers</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">537,714</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">238,776</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Inventories, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">750,772</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">136,916</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Assets held for discontinued operations</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,133</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Total Current Assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,515,690</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">11,336,148</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Property and equipment, net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">607,384</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,406,140</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Intangible assets, net</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,725,554</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,809,849</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total Assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">15,848,628</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">16,552,137</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">LIABILITIES AND EQUITY</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">CURRENT LIABILITIES:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Accounts payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">46,366</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">72,451</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Advances from customers</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">177,736</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">106,521</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Accrued expenses and other current liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">468,263</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">643,324</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Warranty obligation</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">146,271</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Due to related parties</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">146,507</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt">Total Current Liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">692,365</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,115,074</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Commitments and Contingency</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: normal; font-style: normal; text-align: left">Common shares, $0.002731 par value, 50,000,000 shares authorized, <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; font-style: normal">17,312,586 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively&nbsp;</FONT></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">47,281</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">47,281</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Additional paid in capital</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">40,875,142</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">39,150,635</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Accumulated deficit</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(28,661,152</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(26,499,675</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Accumulated other comprehensive income</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,894,992</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,738,822</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 1pt">Total Equity</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">15,156,263</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">15,437,063</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total Liabilities and Equity</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">15,848,628</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">16,552,137</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<!-- Field: Page; Sequence: 1; Options: NewSection -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><B>LIANLUO SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS</B></P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal"><B>(UNAUDITED)</B></FONT></P>




<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">For Six Months Ended</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">June 30,</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">US$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">US$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; font-size: 10pt; text-align: justify">Revenues - third parties</TD><TD STYLE="width: 1%; font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; color: #002060; text-align: right">397,643</TD><TD STYLE="width: 1%; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; color: #002060; text-align: right">5,142,878</TD><TD STYLE="width: 1%; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Revenues - related parties</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">17,911</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px">Revenues</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">415,554</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">5,142,878</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left">Costs of revenue - third parties</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(1,093,048</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(7,790,628</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Costs of revenue - related parties</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(37,252</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px; padding-bottom: 1pt">Costs of revenue</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right; border-bottom: Black 1pt solid">(1,130,300</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right; border-bottom: Black 1pt solid">(7,790,628</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px">Gross loss</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(714,746</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,647,750</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Service incomes</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">9,689</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">11,935</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Service expenses</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(485</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(17,728</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">General and administrative expenses</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(1,251,099</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,749,079</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Provision for doubtful accounts</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(23,657</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(321,754</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Loss from warrant redemption</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(1,091,719</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Selling expenses</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(299,852</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(536,418</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px">Operating loss</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,280,150</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(7,352,513</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 9px">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Financial incomes (expenses)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">10,269</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(71,939</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Other incomes</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">138,463</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Other expenses</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(21,028</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(1,800</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Change in fair value of warrants liability</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">137,439</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 27px">Loss before provision for income tax and non-controlling interest</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,152,446</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(7,288,813</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-left: 27px">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Provision for income taxes</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Net loss from continuing operations</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,152,446</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(7,288,813</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Discontinued operations:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Loss from disposal of discontinued component, net of taxes</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(9,581</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Income from operations of discontinued component, net of taxes</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">550</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">76,405</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Net loss</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,161,477</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(7,212,408</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Less: net loss attributable to non-controlling interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right; border-bottom: Black 1pt solid">(118,714</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 2.5pt">Net loss attributable to Lianluo Smart Limited</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">(2,161,477</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">(7,093,694</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Net loss from continuing operations</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,152,446</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(7,288,813</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Net income (loss) from discontinued operations</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(9,031</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">76,405</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Other comprehensive income (loss):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 9px">Foreign currency translation gain (loss)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">156,170</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(76,291</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; font-style: normal; text-align: left; padding-left: 18px">Comprehensive <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal"><B>loss</B></FONT></TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(2,005,307</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(7,288,699</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 18px">&nbsp;- less comprehensive loss attributable to the non-controlling interest</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(137,037</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 18px">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 27px">Comprehensive loss attributable to Lianluo Smart Limited</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">(2,005,307</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">(7,151,662</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 27px">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Basic and diluted</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">(0.12</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">(1.13</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Weighted average number of common shares used in computation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Basic and diluted</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">17,312,586</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">6,281,650</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<!-- Field: Page; Sequence: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">&nbsp;<B>LIANLUO SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>CONSOLIDATED
STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal"><B>(UNAUDITED)</B></FONT></P>




<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><TR STYLE="vertical-align: bottom"><TD STYLE="font-size: 10pt"></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">For Six Months Ended</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">June 30,</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2016</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">US$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">US$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Cash flows from operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; font-size: 10pt; text-align: justify">Net loss</TD><TD STYLE="width: 1%; font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; color: #002060; text-align: right">(2,161,477</TD><TD STYLE="width: 1%; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">(7,212,408</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Less: net income (loss) from discontinued operations</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(9,031</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">76,405</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Net loss from continuing operations</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,152,446</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(7,288,813</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Stock-based compensation expense</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">231,969</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">575,368</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Depreciation and amortization</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,073,764</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">478,953</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Change in fair value of warrants liability</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(137,439</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Provision for doubtful accounts</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">23,657</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">321,754</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Change in warranty reserve</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(146,271</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">53,513</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Loss from warrant redemption</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1,091,719</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Provision (recovery gain) from inventory obsolescence</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(47,345</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,706,597</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Changes in assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Decrease (Increase) in accounts receivable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">84,885</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(175,426</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Increase in advances to suppliers</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(298,938</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(58,724</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Decrease&nbsp;&nbsp;in advance to supplier - related party</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">875,044</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">(Increase) Decrease&nbsp;&nbsp;in other receivables, net - related parties</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(32,649</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">21,337</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Decrease in other receivables</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">32,213</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">(Increase) Decrease in inventories</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(566,511</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">145,796</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Increase in long-term prepaid expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(27,212</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">(Decrease) Increase in accounts payable</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(26,085</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">235,068</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">(Decrease) Increase in accounts payable - related parties</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(146,507</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">17,212</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;Increase (Decrease) in advances from customers</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">71,215</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(23,080</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">(Decrease) Increase in accrued expenses and other current liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(175,061</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">122,703</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Increase in taxes payable</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">54,674</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Net cash used in operating activities from continuing operations</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(2,074,110</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,010,956</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Net cash used in (provided by) operating activities from discontinued operations</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(3,898</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">207,721</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">Net cash used in operating activities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,078,008</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(803,235</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Cash flows from investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Capital expenditures and other additions</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(16,415</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(1,620</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Loan to related party</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(3,000,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">Net cash used in investing activities</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(3,016,415</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(1,620</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Cash flows from financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Proceeds from related party loans</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">608,228</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Net proceeds from option exercises</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">10,150</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">Payments of warrant redemption</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(1,116,744</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Net proceeds from issuance of common stock</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">1,492,538</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">1,116,744</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Net cash provided by financing activities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,492,538</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">618,378</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">Effect of exchange rate fluctuations on cash and cash equivalents</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(18,128</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">(221,787</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Net decrease in cash</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(3,620,013</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">(408,264</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Cash at beginning of year</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">10,787,690</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">624,724</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Cash at end of period</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">7,167,677</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">216,460</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Less: cash at end of period from discontinued operations</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; color: #002060; text-align: right">92,605</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Cash at end of period from continuing operations</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">7,167,677</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">123,855</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify">Supplemental cash flow information</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Income tax paid</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-bottom: 2.5pt">Interest paid</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">219</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: #002060; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; color: #002060; text-align: right">72,320</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; color: #002060; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<!-- Field: Page; Sequence: 3; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 33%">&nbsp;</TD><TD STYLE="width: 34%; text-align: center">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></TD><TD STYLE="width: 33%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="margin: 0"></P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
