Unaudited Condensed Consolidated Financial Statements:

The accompanying unaudited condensed consolidated financial statements of RBC Life Sciences, Inc. (sometimes hereinafter referred to collectively as “we”, “our”, “RBC” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the U.S. (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and disclosures that are normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to these rules and regulations. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”), previously filed with the SEC.

In the opinion of management, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation of the Company's results for the interim periods have been included. The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. Subsequent events were evaluated through the issuance date of the condensed consolidated financial statements.

The unaudited consolidated financial statements presented in this Amendment No. 1 restates the unaudited condensed consolidated financial statements of the Company contained in the Company's Quarterly Report on Form 10-Q filed with the SEC on August 13, 2012.

On March 5, 2013, the Audit Committee of the Company's Board of Directors determined that the Company's previously issued unaudited condensed consolidated financial statements for the three and six months ended June 30, 2012 contained an error in accounting with respect to the replacement of the roof of the Company's facility in Irving, Texas in 2012 and the related application of insurance proceeds received as a result of a hailstorm that occurred in the prior year. As a result, the Audit Committee, in consultation with management and Lane Gorman Trubitt, PLLC., the Company's independent registered public accounting firm, concluded that the Company's unaudited financial statements included in the Form 10Q for the periods ended June 30, 2012 should no longer be relied upon and should be restated.

The Company's roof on its facility in Irving, Texas was severely damaged by a hailstorm in May 2011. The Company carried replacement cost insurance coverage, subject to a $10,000 deductible with respect to such roof. In November 2011, the insurance carrier agreed that the roof was an insured loss, and replacement of the roof would be reimbursed, subject to the deductible. The Company engaged a contractor, and the roof was replaced, with the work completed in April, 2012.

Because the existing roof was still serviceable on the date of the hailstorm, the Company believed that the replacement of the roof and reimbursement from the insurance company represented necessary maintenance, and did not represent the acquisition of a capital asset, nor did it materially change the expected useful life or the value of the building taken as a whole. Accordingly, the repair costs and offsetting insurance proceeds were reported in general and administrative expense on the Company's condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2012.

Subsequently, in consultation with the Company's independent registered public accounting firm, the Company concluded that, pursuant to the provisions of ASC 605-40-25, the damage to the old roof represented an involuntary conversion of a non-monetary asset. Under ASC 605-40-25, to the extent that the cost of a non-monetary asset differs from the amount of monetary assets received, the transaction results in the realization of a gain or loss that shall be recognized. The correction of this error has resulted in the capitalization of the cost of the roof replacement on the Company's condensed consolidated balance sheet as of June 30, 2012. The correction also results in the recognition of a casualty gain on the Company's condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2012, and reclassification of amounts presented on the Company's condensed consolidated statements of cash flows for the six months ended June 30, 2012.

Restatements

The following table reflects the restatement for each line on the Company's condensed consolidated balance sheet as of June 30, 2012:



	As of June 30, 2012
	Original Balance			Adjustment		Restated Balance
Line Item
Property and equipment, net	$	4,280,724		$	449,535	$	4,730,259
Total assets	18,602,921			449,535		19,052,456
Accrued liabilities	1,061,498			3,400		1,064,898
Total current liabilities	6,360,459			3,400		6,363,859
Deferred income taxes	969,109			149,442		1,118,551
Accumulated deficit	(4,002,660		)	296,693		(3,705,967		)
Total shareholders' equity	9,824,294			296,693		10,120,987
Total liabilities and shareholders' equity	18,602,921			449,535		19,052,456

The following table reflects the restatement for each line item on the Company's condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2012:




	Three Months Ended June 30, 2012								Six Months Ended June 30, 2012
	Original Balance		Adjustment			Restated Balance			Original Balance			Adjustment			Restated Balance
Line Item
General and administrative	$	2,369,885	$	(10,000	)	$	2,359,885		$	4,689,830		$	(10,000	)	$	4,679,830
Depreciation and amortization	123,463		3,528			126,991			246,180			3,528			249,708
Casualty gain	—		(443,064		)	(443,064		)	—			(443,064		)	(443,064		)
Total operating expenses	3,379,354		(449,536		)	2,929,818			6,595,174			(449,536		)	6,145,638
Operating profit (loss)	75,775		449,536			525,311			(11,261		)	449,536			438,275
Earnings (loss) before income taxes	43,741		449,536			493,277			(76,197		)	449,536			373,339
Provision (benefit) for income taxes	20,621		152,842			173,463			(26,379		)	152,842			126,463
Net earnings (loss)	23,120		296,694			319,814			(49,818		)	296,694			246,876
Comprehensive income (loss)	30,149		296,694			326,843			(56,780		)	296,694			239,914

Net earnings per share:
Basic	$0.00		$0.01			$0.01			$0.00			$0.01			$0.01
Diluted	$0.00		$0.01			$0.01			$0.00			$0.01			$0.01

Weighted average common shares outstanding
Diluted	22,272,490		—			22,272,490			22,228,834			43,656			22,272,490

The following table reflects the restatement for each line item on the Company's condensed consolidated statements of cash flows for the six months ended June 30, 2012:




	As of June 30, 2012
	Original Balance			Adjustment			Restated Balance
Net earnings (loss)	$	(49,818	)	$	296,694		$	246,876
Depreciation and amortization	279,355			3,528			282,883
Deferred income taxes	(33,616		)	149,442			115,826
Casualty gain	—			(443,064		)	(443,064		)
Accounts payable and accrued liabilities	(34,572		)	3,400			(31,172		)
Net cash provided by (used in) operating activities	(526,370		)	10,000			(516,370		)
Purchase of property and equipment	(69,928		)	(635,247		)	(705,175		)
Insurance proceeds	—			625,247			625,247
Net cash used in investing activities	(69,928		)	(10,000		)	(79,928		)

New Accounting Pronouncement

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220) - Presentation of Comprehensive Income ("ASU 2011-05"). ASU 2011-05 requires an entity to present components of net income and other comprehensive income either in one continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and must be applied retrospectively. The Company adopted the provisions of ASU 2011-05 as of January 1, 2012 using the single continuous statement presentation. The adoption of this guidance did not have a material effect on the Company's consolidated financial statements.