Dehaier Medical Receives US$20 Million Strategic Investment from Liaison Interactive

BEIJING, April 28, 2016 -- Dehaier Medical Systems Ltd. (DHRM) ("Dehaier Medical" or the "Company"), which develops, markets and sells medical devices and wearable sleep respiratory products in China and international markets, today announced that it entered into a definitive securities purchase agreement (the "Agreement") with Hangzhou Liaison Interactive Information Technology Co. Ltd. ("Liaison Interactive" or the "Purchaser"), a publicly listed company on the Shenzhen Stock Exchange (Trading Ticker: 002280) pursuant to which the Liaison Interactive has agreed to purchase 11,111,111 restricted common shares of the Company (the "Shares") for an aggregate of US$20,000,000 (the "Purchase Price"). The Purchase Price is US$1.80 per share, which represents a 35% premium to Dehaier Medical's closing price of $1.33 on April 27, 2016.

 

In consideration of the payment by the Buyer of the Purchase Price, the Buyer and its designees will also receive warrants to purchase 1,000,000 restricted common shares of the Company at a purchase price of US$2.20 per share (the "Warrants").  The Warrants are exercisable by the Buyer or its designees in whole or in part and are exercisable at any time after the Closing.

 

The Shares issued to the Purchaser have not been and are not being registered under the 1933 Act, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder or (B) the Buyer shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration. Closing under the Agreement is subject to compliance with customary closing conditions and is anticipated to occur on or before June 30, 2016.

 

"The Liaison Interactive investment dramatically improves our ability to expand our wearable medical device business and to launch other new smart wearable devices and mobile medical solutions over the next few years," said Mr. Ping Chen, Chief Executive Officer of Dehaier Medical. "The investment also helps optimize our overall strategies, increase our market penetration and strengthen our competitiveness in the medical wearable device segment.

 

"Liaison Interactive is committed to providing mobile internet products and services for its customers, including operation systems and software solutions platform, game publishing, distribution and smart wearable devices, which are currently a major focus of its business. Liaison Interactive entered the virtual reality ('VR') smart terminal market in 2015, acquiring 'Avegant Glyph' brand of hardware and software products. 'Avegant Glyph' is a retina glasses using VR technology, providing users ultimate visual experiences. We believe that by investing in the Company, Liaison Interactive can open up and further expand its strategic presence in the smart hardware space within the medical field. 

 

"Dehaier Medical, focusing on smart wearable medical devices and services for OSAS patients, has cooperated with hundreds of medical institutions in China and is attempting to expand into the individual customer-oriented smart hardware market. By leveraging Liaison Interactive's extensive customer base in the Chinese mobile internet market, Dehaier anticipates growing its market share in China. It is the exact type of collaboration that we would anticipate from a strategic investor like Liaison Interactive, and we believe it will lead to a new revenue stream for us in the future."

 

About Hangzhou Liaison Interactive Information Technology Co. Ltd.

 

Liaison Interactive, formerly known as Beijing Digital Grid Technology Co., Ltd. was founded in 2007 as a leading mobile Internet product and services provider in the industry. On October 24, 2014, China Securities Regulatory Commission approved the asset restructuring application of Beijing Digital Grid Technology Co., ltd. and the listed company Hangzhou New Century Information Technology Co., Ltd. After the restructuring, listed entity Liaison Interactive (002280) became China's first listed mobile Internet company. Liaison Interactive has three core business units. Digital Grid Department focuses on innovations in products and technologies. Interactive Entertainment Department focuses on mobile game developing and operating. Intelligent Hardware Department focuses on one of most important business strategies striving to be a world-class developer. Based in Beijing, Liaison Interactive has set up subsidiaries and branches in Shanghai, Guangzhou, Hong Kong, Shenzhen, Hangzhou, Nanjing, Shenyang and the U.S. For more information, please visithttp://www.lianluo.com.

 

About Dehaier Medical Systems Ltd.

 

Dehaier Medical develops, markets and sells medical products, including medical devices and wearable sleep respiratory products in China and international markets. The company develops and assembles its self-branded medical devices and sleep respiratory products from third-party components. Dehaier is committed to becoming the solution provider of medical smart wearable devices and professional services. Dehaier is transforming from a traditional medical equipment supplier to a high-tech enterprise in the field of mobile medical and smart wearable devices. The main business of Dehaier is providing overall solutions including accurate screening, efficient treatment and treatment evaluation for obstructive sleep apnea syndrome ("OSAS") patients. With the cutting-edge photoplethysomography analysis technology and state-of-the-art sleep diagnosis device, Dehaier made the first application of cloud technology in sleep medicine by managing to upload patients' records, patient information management, and analysis to the cloud. Dehaier Medical provides sleep diagnostic products and services for inpatients and outpatients in Chinese medical institutions including chronic diseases therapy departments in public hospitals, patients in private physical examination centers and VIP customers of life insurance companies. Dehaier Medical's technology is based on six patents and eleven software copyrights. More information may be found at http://www.dehaier.com.cn.

 

Forward-looking Statements

 

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, fulfillment of bids and contracts, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

 

For more information, please contact:

 

Dehaier Medical Systems Limited

Janice Wang

+86 10-5166-0080 ext. 211

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