Dehaier Medical Systems Ltd. Announces Strategic Cooperation Agreement with Taiyo Nippon Sanso Shenwei to Develop and Distribute Home Oxygen Therapy Services

BEIJING, April 21, 2011 /PRNewswire-Asia-FirstCall/ -- Dehaier Medical Systems Ltd. (Nasdaq: DHRM) (“Dehaier” or the “Company”), an emerging leader in the development, assembly, marketing and sale of medical devices and homecare medical products in China, today announced that its wholly owned subsidiary has signed a tripartite strategic cooperation agreement with Taiyo Nippon Sanso Shenwei (Shanghai) Medical Gas Co., Ltd (“Taiyo-Shanghai”) and Beijing Orient Medical Gas Co., Ltd (“Beijing Orient”) to develop oxygen therapy services for the home use market in Beijing. Leveraging the expertise of each company, this agreement incorporates oxygen production, filling, selling and service for home medical oxygen in Beijing.

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Under terms of the agreement, Taiyo-Shanghai will provide professional technology and experience, Beijing Orient will be responsible for oxygen production and logistics service, and Dehaier will be responsible for marketing, development, logistics and sales.

“In Shanghai, home oxygen therapy is largely funded by insurance programs, with Taiyo-Shanghai currently serving approximately 90% of this market with its 10 liter oxygen tanks. Beijing‘s market for home oxygen is at an earlier stage than Shanghai‘s market; however, we believe it is soon to follow suit,” said Mr. Ping Chen, Chief Executive Officer of Dehaier. “Currently, Beijing‘s home oxygen therapy market is fragmented and not supported by medical insurance programs. However, we foresee continued demand and no dominant competitor in the Beijing market. Through this strategic cooperation and our strong distribution network, we believe that Dehaier is ideally suited to emerge as a leader in this emerging market opportunity with our high profile brand partners. Additionally, with growing customer demand and maturing service channels, we believe that medical insurance coverage could arrive in the near-term. If it does, we expect to see increased opportunities in oxygen therapy service market in Beijing.”

About Taiyo Nippon Sanso Shenwei (Shanghai) Medical Gas Co., Ltd

Taiyo-Shanghai is a joint venture company that provides medical gases for home use. The joint venture was established in July 2009 by Taiyo Nippon Sanso Corporation, a company publicly traded on the Tokyo Stock Exchange (TYO:4091) (“TNSC”) and local company Shanghai Shenwei Medical Gas Co., Ltd. TNSC was founded in 1910 and is a supplier of oxygen and other industrial gases. In 1935, TNSC built Japan‘s first air separation plant. It currently exports these plants around the world and is well known internationally as a leader in this field.

About Beijing Orient Medical Gas Co., Ltd

Beijing Orient manufactures, markets and supplies oxygen products and related services, and also assembles and provides services for medical gas projects, such as medical gas supply systems, PSA oxygen concentrator systems, compressors, call and intercom systems and purification systems. Established in 1993, Beijing Orient has developed a sound service network for home-use medical gas. Beijing Orient also engages in research and development related to health care gases and provides consulting services to customers in the medical gas industry.

About Dehaier Medical Systems Ltd.

Dehaier is an emerging leader in the development, assembly, marketing and sale of medical products in China, including respiratory and oxygen homecare medical products. The company develops and assembles its own branded medical devices and homecare medical products from third-party components. The company also distributes products designed and manufactured by other companies, including medical devices from IMD (Italy), Welch Allyn (USA), HEYER (Germany), Timesco (UK), ResMed (Australia), eVent Medical (US) and JMS (Japan). Dehaier’s technology is based on two patents, six pending patents, and proprietary technology. More information may be found at http://www.chinadhr.com.

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, changes in technology, economic conditions, the impact of competition and pricing, government regulation, future developments in payment for and demand for medical equipment and services, implementation of and performance under the joint venture agreement by all parties, 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.

SOURCE Dehaier Medical Systems Ltd.