What changed in this filing

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Item 5. Other Information

2012-08-13 compared with 2012-05-09 · 152 added, 121 removed, 597 unchanged (31% of the section changed)

20 unchanged sentences

Subsidiaries of the Registrant (1)

Certifications pursuant to Rule 13a-14(a) or 15(d)-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)

Certifications pursuant to Rule 13a-14(a) or 15(d)-14(a) under the Securities Exchange Act of 1934, as amended, as adopted

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (3)

Certifications pursuant to Rule 13a-14(a) or 15(d)-14(a) under the Securities Exchange Act of 1934, as amended, as adopted

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (3)

Certifications pursuant to 18 U.S.C.

10 unchanged sentences

XBRL Taxonomy Extension Definition Linkbase Document (5)

Incorporated by reference to the registrant’s registration statement on Form S-1, File no.

Incorporated by reference to the registrant’s registration statement on

Form S-1, File no.

333-163041, filed on November 12, 2009, as amended.

Incorporated by reference to the registrant’s quarterly report on Form 10-Q, File no.

filed on May 9, 2012.

Filed herewith.

2 unchanged sentences

Furnished herewith.

In accordance with Rule 406T of Regulation S-T, the information in these

exhibits shall not be deemed to be “filed”

for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,

or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement

or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such

In accordance with the requirements of

the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with Rule 406T of Regulation S-T, the information

in these exhibits shall not be deemed to be “filed”

for purposes of Section 18 of the Securities Exchange Act

of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into

any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth

by specific reference in such filing.

In accordance with the requirements of the

Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DEHAIER MEDICAL SYSTEMS LIMITED

August 13, 2012

/s/ Ping Chen

5 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011

Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2012 and 2011

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011

Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011

Condensed Consolidated Statements of Income and Comprehensive Income for the six and three months ended June 30, 2012 and 2011

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011

Notes to the Unaudited Condensed Consolidated Financial Statements

3 unchanged sentences

Cash and cash equivalents

Accounts receivable -less allowance for doubtful accounts of $860,826 and $859,509

Accounts receivable

-less allowance for doubtful accounts of $880,587 and $859,509

Other receivables

5 unchanged sentences

Property and equipment, net

Intangible assets, net

LIABILITIES AND EQUITY

11 unchanged sentences

Commitments and Contingency

Common shares, $0.002731 par value, 18,307,038 shares authorized, 4,565,000 and 4,560,000 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively

Common shares, $0.002731 par value, 18,307,038 shares authorized, 4,570,000 and 4,560,000 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively

Additional paid in capital

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

For the six months ended

For the three months ended

5 unchanged sentences

Operating Income

Financial expenses ( including interest expense of $27,163 and $16,177)

Financial expenses (including interest expense of $64,904, $26,993, $37,741 and $10,816 for the six and three months ended June 30, 2012 and 2011, respectively)

Non-operating Income

Change in fair value of warrants liability

Income before provision for income tax

Income before provision for income taxes and non-controlling interest

Provision for income tax

Non-Controlling interest in income

Non-Controlling interest in (income) loss

Net income attributable to Dehaier Medical Systems Limited

2 unchanged sentences

Comprehensive Income

Comprehensive loss (income) attributable to the non-controlling interest

Comprehensive income attributable to the non-controlling interest

Comprehensive income attributable to Dehaier Medical Systems Limited

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

For the three months ended

For the six months ended

Cash flows from operating activities

3 unchanged sentences

Change in fair value of warrants liability

Recovery of doubtful accounts

Changes in assets and liabilities:

Increase in accounts receivable

Decrease (Increase) in prepayments and other current assets

Increase in prepayments and other current assets

Decrease (Increase) in other receivables

Decrease in inventories

Decrease (Increase) in inventories

Decrease (Increase) in tax receivable

Increase (Decrease) Increase in accounts payable

Decrease (Increase) in advances from customers

Increase in accrued expenses and other current liabilities

Increase (Decrease) in accounts payable

Decrease in advances from customers

(Decrease) Increase in accrued expenses and other current liabilities

(Decrease) Increase in tax payable

1 unchanged sentence

Cash flows from investing activities

Capital expenditures and other additions

Acquisition of machinery and software copyrights

Advances to related parties

3 unchanged sentences

Repayment of bank loan

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of exchange rate fluctuations on cash and cash equivalents

35 unchanged sentences

the condensed consolidated financial position, results of operations and cash flows of the Company for the periods presented.

results of operations for the three months ended March 31, 2012 are not necessarily indicative of operating results expected for

the full year or future interim periods.

results of operations for the six and three months ended June 30, 2012 are not necessarily indicative of operating results expected

for the full year or future interim periods.

These unaudited condensed consolidated financial statements should be read in conjunction

41 unchanged sentences

Significant accounting estimates reflected in the Company's condensed consolidated financial statements include revenue recognition,

allowance for doubtful accounts, warranty obligation, warrants liability, Stock-based compensation and useful lives of property

and equipment.

allowance for doubtful accounts, warranty obligation, warrants liability, Stock-based compensation and useful lives of intangible

assets, and property and equipment.

Actual results could differ from those estimates.

13 unchanged sentences

Management has determined that an allowance of $880,587 (RMB5,596,250) and $859,509 (RMB5,419,725)

was appropriate at March 31, 2012 and December 31, 2011 respectively.

was appropriate at June 30, 2012 and December 31, 2011 respectively.

Advances to Suppliers and Advances from

1 unchanged sentence

in the PRC, often makes advance payments to suppliers for unassembled parts, or receives advance payments from customers.

to suppliers were $3,747,665 and $4,348,847 as of March 31, 2012 and December 31, 2011, respectively, which were included in prepayments

to suppliers were $4,754,727 and $4,348,847 as of June 30, 2012 and December 31, 2011, respectively, which were included in prepayments

and other current assets.

Advances from customers were $194,197 and $303,000 as of March 31, 2012 and December 31, 2011, respectively.

Advances from customers were $237,653 and $303,000 as of June 30, 2012 and December 31, 2011, respectively.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

39 unchanged sentences

The reserve for obsolescence was $50,756 (RMB322,556)

and $51,154 (RMB322,556) as of March 31, 2012 and December 31, 2011, respectively, and the provision is included in the operating

and $51,154 (RMB322,556) as of June 30, 2012 and December 31, 2011, respectively, and the provision is included in the operating

expenses in the condensed consolidated statements of operations.

14 unchanged sentences

Motor vehicles

Intangible Assets

Intangible assets are recorded at cost

less accumulated amortization.

Amortization are calculated on a straight-line basis over the following estimated useful lives:

Leasehold improvements

Shorter of the useful lives or the lease term

Software copyrights

Other software

Impairment of Long-Lived Assets

63 unchanged sentences

The reserve for warranty costs was $332,072 (RMB2,110,361),

$334,680 (RMB2,110,361) at March 31, 2012 and December 31, 2011, respectively.

Warranty expense for the three months ended March

31, 2012 and 2011 was $8,311 and $29,527, respectively.

$334,680 (RMB2,110,361) at June 30, 2012 and December 31, 2011, respectively.

Warranty expense for the six and three months ended

June 30, 2012 and 2011 was $25,081, $106,648, $16,770 and $77,121, respectively.

Earnings per Share

6 unchanged sentences

common shares.

The average stock price for the year of 2011 did not exceed the exercise price of the outstanding warrants;

none of the outstanding warrants were included in the diluted earnings per share.

Common stock equivalents having anti-dilutive effect on earnings per share are excluded from the calculation of

diluted earning s per share.

Value Added Tax

2 unchanged sentences

Stock-Based Compensation

The Company follows the provisions of

ASC 718-10, “Compensation-Stock Compensation”.

The Company has a share incentive plan which authorizes the issuance

of up to 10% of the number of shares outstanding.

The Company follows the provisions of ASC

718-10, “Compensation-Stock Compensation”.

The Company has a share incentive plan which authorizes the issuance of

up to 10% of the number of shares outstanding.

Pursuant to the plan, the Company may issue options to purchase its common shares

20 unchanged sentences

it is more likely than not that some portion or all of the deferred tax assets will not be realized.

As of March 31, 2012, the

Company recorded a deferred tax asset for the temporary differences arising from allowance for doubtful accounts and certain accrued

As of June 30, 2012, the Company

recorded a deferred tax asset for the temporary differences arising from allowance for doubtful accounts and certain accrued expenses.

The company believes it can utilize the deferred tax asset to offset future taxable income.

Therefore, no valuation allowance

has been provided as of March 31, 2012 and December 31, 2011.

Therefore, no valuation allowance has

been provided as of June 30, 2012 and December 31, 2011.

ASC 740-10 prescribes a recognition threshold

12 unchanged sentences

The Company had filed its 2008 and 2009 Value

Added Tax (“VAT”) returns for some of its customers during the year 2011 and three months ended March 31, 2012.

the potential VAT liabilities on these VAT returns occurred in current period were also accrued and included in the accompanying

condensed consolidated financial statements.

Added Tax (“VAT”) returns for some of its customers during the year 2011 and six months ended June 30, 2012.

potential VAT liabilities on these VAT returns occurred in current period were also accrued and included in the accompanying condensed

consolidated financial statements.

The implementation of ASC 740-10 resulted

in no material liability for unrecognized tax benefits.

As of March 31, 2012 and December 31, 2011, the Company did not have a

liability for any unrecognized tax benefits.

The Company recognizes interest and penalties, if any, related to unrecognized tax

benefits as income tax expense in the statement of operations.

During the three months ended March 31, 2012 and 2011, the Company

did not incur any interest or penalties.

As of June 30, 2012 and December 31, 2011, the Company did not have a liability

for any unrecognized tax benefits.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits

as income tax expense in the statement of operations.

During the six months ended June 30, 2012 and 2011, the Company did not incur

any interest or penalties.

Income tax returns for the year prior to

23 unchanged sentences

Depreciation and amortization expense was

$118,724 and $109,373, for the three months ended March 31, 2012 and 2011 , respectively.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

$246,448, $219,976, $127,724 and $110,603 for the six and three months ended June 30, 2012 and 2011 ,

respectively.

MEDICAL SYSTEMS LIMITED AND AFFILIATE

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED

6 unchanged sentences

use rights are reported at the purchase price (RMB1,944,000 in 2002).

INTANGIBLE ASSETS, NET

Software Copyright

Accumulated and amortization

Intangible assets, net

Approximate future minimum amortizations

at June 30, for the next five years are 127,204 annually.

TAX RECEIVABLE

6 unchanged sentences

of the Company’s product used in contract and production can be used to offset the VAT due on sales of the product.

The tax receivable as of March 31, 2012

The tax receivable as of June 30, 2012

and December 31, 2011 represents VAT credit on the purchased products.

6 unchanged sentences

annually on May 14th.

Average interest rates for the three months ended March 31, 2012 and 2011 were 5.78% and 5.84%, respectively.

Average interest rates for the six months ended June 30, 2012 and 2011 were 7.22% and 5.84%, respectively.

Pursuant to the terms of the agreement, the line of credit is secured by BTL’s building (see note 5) and guaranteed by BDL

and an officer of the Company.

On June 14, 2011, the bank renewed the

Company's credit line that bears interest at a variable rate with payments due on January 20, 2012 and June 14, 2012 for RMB4,000,000

and RMB6,000,000, respectively.

On January 19, 2012, RMB 4,000,000 was paid.

On May 14, 2012, the bank renewed the Company's

credit line that bears interest at a variable rate with payments due on March 14, 2013 and May 14, 2013 for RMB3,000,000 and RMB7,000,000,

respectively.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

SHORT-TERM BORROWINGS (CONTINUED)

On February 2, 2012, the Company entered

3 unchanged sentences

of credit is guaranteed by an officer of the Company.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

NON-CONTROLLING INTEREST

8 unchanged sentences

through December 2012 for one year.

Approximate future minimum lease payments under these leases at March 31, 2012, are as follows:

Future payment for the twelve months ending March 31,

Rent expense for the three months ended

March 31, 2012 and 2011 was $21,478 and $17,279, respectively.

Approximate future minimum lease payments under these leases at June 30, 2012, are $50,000

for the twelve months ending June 30, 2013.

Rent expense for the six and three months

ended June 30, 2012 and 2011 was $43,467, $72,155, $21,989 and $54,876, respectively.

Employment Contracts

7 unchanged sentences

The Company has estimated its possible severance payments

of approximately $276,000 and $235,000 as of March 31, 2012 and December 31, 2011, respectively, which have not been reflected

in its condensed consolidated financial statements, because it is more likely than not that this will not be paid or incurred.

of approximately $270,000 and $235,000 as of June 30, 2012 and December 31, 2011, respectively, which have not been reflected in

its condensed consolidated financial statements, because it is more likely than not that this will not be paid or incurred.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

10 unchanged sentences

On January 9, 2012, Dehaier issued 5,000

unregistered common shares to an independent contractor.

The fair value of the shares on the issuance date based on the closing

price was $11,000.

restrict unregistered common shares to an independent contractor.

The fair value of the shares on the issuance date based on the

closing price was $11,000.

On April 5, 2012, Dehaier issued 5,000

restrict unregistered common shares to an independent contractor.

The fair value of the shares on the issuance date based on the

closing price was $12,000.

Statutory Surplus Reserves

15 unchanged sentences

reserve provisions will be determined by its board of directors.

As of March 31, 2012, BDL’s board of directors has not yet

As of June 30, 2012, BDL’s board of directors has not yet

made such determination.

2 unchanged sentences

as statutory surplus reserve, which is included as part of the non-controlling interest in the equity section.

For the three months

ended March 31, statutory surplus reserve activity was as follows:

For the three months ended

March 31, 2012

For the six months

ended June 30, statutory surplus reserve activity was as follows:

For the six months ended

June 30, 2012

Balance at December 31, 2011

Addition to statutory reserves

Balance at March 31, 2012

Balance at June 30, 2012

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

22 unchanged sentences

Outstanding as of December 31, 2011

Outstanding as of March 31, 2012

Outstanding as of June 30, 2012

Following is a summary of the status of options

outstanding and exercisable at March 31, 2012:

outstanding and exercisable at June 30, 2012:

Outstanding options

4 unchanged sentences

contractual life

For the three months ended March 31, 2012

and 2011, the Company recognized $27,390 and $0, respectively, as compensation expense under its stock option plan.

For the six and three months ended June 30,

2012 and 2011, the Company recognized $54,780, $0, $27,390 and $0, respectively, as compensation expense under its stock option

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

5 unchanged sentences

investor relations consultancy.

On January 10, 2012, the Company issued 100,000 warrants to Firs Trust Group, Inc., (“Firs

Trust”), the Company’s investor relations consultancy.

The Company had 257,500 warrants outstanding as of March 31,

All the warrants issued to “A&S”

have the right to purchase one share of common stock for an exercise price

of $10.00 per share with a term of 5 years.

All the warrants granted to Hawks have the right to purchase one share of common stock

for an exercise price of $9.60 per share with a term of 5 years.

All the warrants granted to Firs Trust have the right to purchase

one share of common stock for an exercise price of $4.00 per share with a term of 5 years.

The fair values of the outstanding warrants

at March 31, 2012 were calculated using the Black Scholes Model with the following assumptions:

On January 10, 2012, the Company issued 100,000 warrants to FirsTrust Group, Inc., (“FirsTrust”),

the Company’s investor relations consultancy.

The Company had 257,500 warrants outstanding as of June 30, 2012.

All the warrants

issued to “A&S”

have the right to purchase one share of common stock for an exercise price of $10.00 per share

with a term of 5 years.

All the warrants granted to Hawks have the right to purchase one share of common stock for an exercise

price of $9.60 per share with a term of 5 years.

All the warrants granted to Firs Trust have the right to purchase one share of

common stock for an exercise price of $4.00 per share with a term of 5 years.

The fair value of the outstanding warrants

at June 30, 2012 were calculated using the Black Scholes Model with the following assumptions:

Market price per share (USD/share)

7 unchanged sentences

within the fair value hierarchy of our financial assets and liabilities that were accounted for at fair value on a recurring basis

as of March 31, 2012 and December 31, 2011, respectively.

as of June 30, 2012 and December 31, 2011, respectively.

Carrying Value at

June 30, 2012

Fair Value Measurement at

March 31, 2012

June 30, 2012

Warrants liability

10 unchanged sentences

Outstanding as of December 31, 2011

Outstanding as of March 31, 2012

Outstanding as of June 30, 2012

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

19 unchanged sentences

Therefore, BDL used a 15% income tax rate to calculate the income

tax expense for the three months ended March 31, 2012 and 2011.

The high technology certification will expire and be renewed in

September 2012.

tax expense for the six months ended June 30, 2012 and 2011.

The high technology certification will expire and be renewed in September

for BTL is 25% in 2012 and 2011.

2 unchanged sentences

and is not subject to federal income tax.

As of March 31, 2012, Breathcare was inactive.

As of June 30, 2012, Breathcare was inactive.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

3 unchanged sentences

Major Customers

For the three months ended March 31, 2012,

approximately 27% of the Company’s revenues was received from one customer.

For the three months ended March 31, 2011, approximately

18% of the Company’s revenues was received from one customer.

At March 31, 2012 and 2011, receivables

For the six and three months ended June

30, 2012, approximately 10% and 15% of the Company’s revenues was received from one customer.

For the six and three months

ended June 30, 2011, approximately 13% and 15% of the Company’s revenues was received from one customer.

At June 30, 2012 and 2011, receivables

from four customers were approximately 9%, 9%, 8%, 8% and 12%, 10%, 10%, 9%, respectively.

For the three months ended March 31, 2012

and 2011, the Company’s three top selling products accounted, in the aggregate, for approximately 81% and 90%, respectively,

of its total net revenues.

For the six and three months ended June

30, 2012 and 2011, the Company’s three top selling products accounted, in the aggregate, for approximately 76%, 80%, 75%,

and 82%, respectively, of its total net revenues.

The following represents the revenues by

product line, all derived from China:

For the six months ended

For the three months ended

2 unchanged sentences

SUBSEQUENT EVENTS

The Company issued 5,000 shares to an investor

relationship consultant on April 5, 2012 pursuant to a consulting agreement signed on January 9, 2012.

The fair value of the shares

granted on April 5, 2012 was approximately $12,000 based on the closing price on that date.

On April 23, 2012, the Company signed a

strategic cooperation agreement with Timesco of London Ltd., to be its exclusive distributor in mainland China for Timesco’s

entire laryngoscope Optima series of products in the next three years.

In July 2012, the Company received approved

SFDA registration certificate for proprietary homecare medical CPAP product of Model DHR-CPAP-C5.

The certificate is valid until

July 1, 2016 and allows the Company to sell the products in mainland China.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information