Dehaier to Begin Providing Sleep Respiratory Solutions For Hospitals Across China

Dehaier Medical Systems Ltd.

("Dehaier" or the "Company"), an emerging leader in the development, assembly, marketing and sale of medical devices and sleep respiratory products in China, today announced that it is preparing to introduce its Sleep Respiratory Solutions to its first wave of customers in 3A hospitals located in different provinces and province-level cities throughout China. The Sleep Respiratory Solutions and products will assist doctors to provide obstructive sleep apnea syndrome ("OSAS") screening and diagnosis, early intervening treatment, treatment evaluation and other related services for OSAS patients. With the Morpheus Ox advanced sleep apnea monitoring software from Israel, Dehaier itself has developed wearable sleep diagnostic device DHR-998, the CPAP device and the photoplethysmography ("PPG") sensor. These four key components have been certified by China's Food and Drug Administration ("CFDA"). China has more than one thousand sleep respiratory departments and centers in public hospitals nationwide. Dehaier surveyed nearly 200 hospitals in seven provinces and five Tier I cities in China and found that respiratory departments with OSAS diagnosis have an average of 2.13 hospital beds per department. These departments saw an aggregate of approximately 94,000 cases per year. All of such departments currently use Polysomnography ("PSG") for OSAS diagnosis. In current PSG diagnosis, patients wear multiple electrodes on different parts of the body and must stay overnight at the hospital for diagnosis. As a result, diagnostic efficiency is limited by the number of hospital beds. Moreover, due to its greater complexity, PSG tends to require more direct supervision and assistance with device operation and report generation. By contrast, Dehaier's sleep respiratory solution allows respiratory departments to diagnose more patients than could physically stay in the departments' dedicated hospital beds, as the patients conduct the diagnostic step in their own homes. Patients using Dehaier's sleep diagnostic system only have to wear a small watch-sized device with an inductive cable to complete the diagnosis and data collection step at home. The physiological data is then uploaded to a cloud-based server for analysis by the Morpheus Ox software and diagnostic reports can be generated and printed by doctors in less than 10 minutes. According to Dehaier's clinical trials in different hospitals, the system and PSG testing accuracy and sensitivity are essentially identical. The implementation of sleep respiratory solution will not only improve the efficiency of diagnosis but also cut down waiting time, and is expected to increase use in outpatient sleep respiratory diagnosis. Mr. Ping Chen, Chairman and Chief Executive Officer of Dehaier Medical, stated, "After several clinical trials, optimizations and upgrades, our ready-to-use, effective and cloud-based systems and products are ready to be a strong supplementary system to the traditional PSG sleep respiratory diagnosis approach. We expect our system will increase the demand for outpatient sleep monitoring and diagnosis services, and will make cloud-based data and patient record-keeping an attainable goal. In addition, we expect revenues from our system sales will be supplemented by ongoing revenues from sales of single-use PPG sensors. As we are about to provide the first batch of systems and products to our model hospitals, we will be able to quickly locate the OSAS patients, provide different models of CPAP devices, conduct treatment, and provide the curative effect evaluation services. We are excited about the opportunities this new product line offers to users and our company."