What changed in this filing

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Item 5. Other Information

2012-11-13 compared with 2012-08-13 · 151 added, 121 removed, 628 unchanged (30% of the section changed)

Other Information

The following documents are filed herewith:

37 unchanged sentences

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.

11 unchanged sentences

DEHAIER MEDICAL SYSTEMS LIMITED

August 13, 2012

November 13, 2012

/s/ Ping Chen

5 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011

Notes to the Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CURRENT ASSETS:

2 unchanged sentences

-less allowance for doubtful accounts of $898,900 and $859,509

Contract Deposits

Other receivables

Advances to Suppliers

Prepayment and other current assets

18 unchanged sentences

Commitments and Contingency

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

Common shares, $0.002731 par value, 18,307,038 shares authorized,4,590,000 and 4,560,000 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively

Additional paid in capital

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

For the six months ended

INCOME AND COMPREHENSIVE INCOME

For the nine months ended

September 30,

For the three months ended

September 30,

Costs of revenue

(10,098,506 )

Service income

3 unchanged sentences

Operating Income

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)

Financial expenses (including interest expense of $107,965, $53,915, $43,061 and $26,922 for the nine and three months ended September 30, 2012 and 2011, respectively)

Non-operating Income

15 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF

For the six months ended

For the nine months ended

September 30,

Cash flows from operating activities

Adjustments to reconcile net income to net cash used in operating activities

Adjustments to reconcile net income to net cash (used in) provided by operating activities

Stock-based compensation expense

1 unchanged sentence

Change in fair value of warrants liability

Recovery of doubtful accounts

Provision for doubtful accounts

Changes in assets and liabilities:

1 unchanged sentence

Increase in prepayments and other current assets

Decrease (Increase) in other receivables

Increase in other receivables

Decrease (Increase) in inventories

Decrease (Increase) in tax receivable

Increase (Decrease) in accounts payable

Decrease in advances from customers

(Decrease) Increase in accrued expenses and other current liabilities

(Decrease) Increase in tax payable

Net cash used in operating activities

Decrease in accounts payable

Increase (Decrease) in advances from customers

Increase (Decrease) in accrued expenses and other current liabilities

Increase (Decrease) in tax payable

Net cash (used in) provided by operating activities

Cash flows from investing activities

13 unchanged sentences

Interest paid

Issuance of common shares for investment relation activities

The accompanying notes are an integral

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

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

with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year

ended December 31, 2011, filed on March 19, 2012.

results of operations for the nine and three months ended September 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 with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K

for the year ended December 31, 2011, filed on March 19, 2012.

Basis of Consolidation

22 unchanged sentences

of BTL’s assets and liabilities included in the Condensed Consolidated Balance Sheets are as follows:

September 30,

Total current assets

8 unchanged sentences

Use of Estimates

The preparation of the condensed consolidated

financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported

amounts of revenues and expenses during the reporting periods.

Estimates are adjusted to reflect actual experience when necessary.

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 intangible

assets, and property and equipment.

The preparation of the unaudited condensed

consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements

and the reported amounts of revenues and expenses during the reporting periods.

Estimates are adjusted to reflect actual experience

when necessary.

Significant accounting estimates reflected in the Company's unaudited condensed consolidated financial statements

include revenue recognition, 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 $898,900 (RMB5,650,224) and $859,509 (RMB5,419,725)

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

was appropriate at September 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 $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 $237,653 and $303,000 as of June 30, 2012 and December 31, 2011, respectively.

to suppliers were $5,196,015 and $4,348,847 as of September 30, 2012 and December 31, 2011.

Advances from customers were $201,883

and $303,000 as of September 30, 2012 and December 31, 2011, respectively.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

16 unchanged sentences

The fair value of the warrants liability is measured each reporting

period with the resulting change in fair value recorded in the condensed consolidated statement of income and comprehensive income

(see Note 12).

period with the resulting change in fair value recorded in the unaudited condensed consolidated statement of income and comprehensive

income (see Note 12).

The accounting standards regarding fair

19 unchanged sentences

The reserve for obsolescence was $51,316 (RMB322,556)

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.

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

expenses in the unaudited condensed consolidated statements of operations.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

86 unchanged sentences

The reserve for warranty costs was $335,739 (RMB2,110,361),

$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.

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

Warranty expense for the nine and three months

ended September 30, 2012 and 2011 was $38,692, $163,538, $13,611 and $56,890, respectively.

Earnings per Share

38 unchanged sentences

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

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.

As of September 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 June 30, 2012 and December 31, 2011.

Therefore, no valuation

allowance has been provided as of September 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 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.

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

All the 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 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.

As of September 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 nine months ended September 30, 2012 and 2011, the Company

did not incur any interest or penalties.

Income tax returns for the year prior to

2009 are no longer subject to examination by tax authorities.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

MEDICAL SYSTEMS LIMITED AND AFFILIATE

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED

2 unchanged sentences

Other receivables consist of the following:

September 30,

Due from suppliers

Deposits for ongoing contracts

Employee advances

1 unchanged sentence

and other current assets consist of the following:

Advances to suppliers

September 30,

Prepayment for equipment purchase

2 unchanged sentences

Property and equipment consist of the following:

September 30,

Land use rights

6 unchanged sentences

Depreciation and amortization expense was

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

$399,135, $333,580, $152,687 and $113,604 for the nine and three months ended September 30, 2012 and 2011 ,

respectively.

MEDICAL SYSTEMS LIMITED AND AFFILIATE

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED

7 unchanged sentences

INTANGIBLE ASSETS, NET

September 30,

Software Copyright

2 unchanged sentences

Approximate future minimum amortizations

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

at September 30, for the next five years are 265,043 annually.

TAX RECEIVABLE

Tax receivable consists of the following:

September 30,

Value added tax receivable

4 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 June 30, 2012

The tax receivable as of September 30,

2012 and December 31, 2011 represents VAT credit on the purchased products.

These amounts can be used to offset the VAT due on sales

of the finished product.

These amounts can be used to offset the VAT due on

sales of the finished product.

SHORT-TERM BORROWINGS

The Company has a line of credit for RMB10,000,000

with a commercial bank in China to finance its working capital.

The credit line bears interest at a variable rate and is renewed

annually on May 14th.

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.

The Company has a line of credit for $1,590,915

(RMB10,000,000) with a commercial bank in China to finance its working capital.

The credit line bears interest at a variable rate

and is renewed annually on May 14th.

Average interest rates for the nine months ended September 30, 2012 and 2011 were 7.22% and

6.94%, 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 May 14, 2012, the bank renewed the Company's

12 unchanged sentences

Non-controlling interest consists of the following:

September 30,

Original paid-in capital

6 unchanged sentences

through December 2012 for one year.

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.

Approximate future minimum lease payments under these leases at September 30, 2012, are $84,000

for the twelve months ending September 30, 2013.

Rent expense for the nine and three months

ended September 30, 2012 and 2011 was $64,641, $131,229, $21,174 and $59,074, respectively.

Employment Contracts

7 unchanged sentences

The Company has estimated its possible severance payments

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.

of approximately $295,000 and $235,000 as of September 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

17 unchanged sentences

closing price was $12,000.

On August 22, 2012, Dehaier issued 20,000

restrict unregistered common shares to an independent contractor.

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

closing price was $32,000.

Statutory Surplus Reserves

15 unchanged sentences

reserve provisions will be determined by its board of directors.

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

made such determination.

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

yet made such determination.

Therefore, no amount was allocated to the statutory surplus reserve account.

1 unchanged sentence

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

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

For the nine months

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

For the nine months

ended September 30,

For the year ended

Balance –

beginning of period

Addition to statutory reserves

Balance at June 30, 2012

Balance –end of period

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

9 unchanged sentences

to acquire the Company’s common shares at an exercise price of $1.45 per share.

The options vest in equal annually installments

over the five years of the agreements.

As of December 29, 2011, none of the 450,000 options have been fully vested.

The options vest in equal annual installments

over the five years of the agreements beginning December 29, 2011.

The Company valued the stock options using

8 unchanged sentences

Outstanding as of December 31, 2011

Outstanding as of June 30, 2012

Outstanding as of September 30, 2012

Following is a summary of the status of options

outstanding and exercisable at June 30, 2012:

outstanding and exercisable at September 30, 2012:

Outstanding options

4 unchanged sentences

contractual life

For the six and three months ended June 30,

For the nine and three months ended September

30, 2012 and 2011, the Company recognized $82,471, $0, $27,691 and $0, respectively, as compensation expense under its stock option

8 unchanged sentences

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

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:

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

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

Carrying Value at

June 30, 2012

September 30, 2012

Fair Value Measurement at

June 30, 2012

September 30, 2012

Warrants liability

1 unchanged sentence

beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 2 inputs:

September 30,

Beginning balance

7 unchanged sentences

Outstanding as of December 31, 2011

Outstanding as of June 30, 2012

Outstanding as of September 30, 2012

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

1 unchanged sentence

FINANCIAL STATEMENTS

WARRANTS (CONTINUED)

Exercise Price

Weighted Average

Contractual Life

Outstanding as of December 31, 2010

Outstanding as of September 30, 2011

British Virgin Islands

16 unchanged sentences

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

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

The high technology certification will expire and be renewed in September

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

The Company renewed

the high technology company status to keep 15% income tax rate after September 30, 2012 and received the approval in October 2012.

The Company has not received the preferential tax rate certificate as of the filing date due to the long government procedures

for BTL is 25% in 2012 and 2011.

2 unchanged sentences

and is not subject to federal income tax.

As of June 30, 2012, Breathcare was inactive.

As of September 30, 2012, Breathcare was inactive.

DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE

3 unchanged sentences

Major Customers

For the six and three months ended June

For the nine and three months ended September

30, 2012, approximately 7% and 19% 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

For the nine and three months

ended September 30, 2011, approximately 10% and 22% of the Company’s revenues was received from one customer.

At September 30, 2012 and 2011, receivables

from four customers were approximately 7%, 7%, 7%, 6% and 10%, 9%, 8%, 8%, respectively.

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.

For the nine and three months ended September

30, 2012 and 2011, the Company’s two top selling products accounted, in the aggregate, for approximately 70%, 75%,59%, and

87%, 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 nine months ended

September 30,

For the three months ended

September 30,

Medical Devices

1 unchanged sentence

SUBSEQUENT EVENTS

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.

On October 16, 2012, the Company won a

government procurement contract with XinJiang Province to distribute medical equipments to Hospitals in XinJiang.

will be implemented by the end of 2012.

On October 29, 2012, the Company received

a government subsidies of RMB118,000 for the interests on short-term bank loan as High Technology Enterprise.

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