China Pharma Holdings, Inc. Reports Fiscal Year 2021 Financial Results

HAIKOU,China,March 31,2022 -- China Pharma Holdings,Inc. (NYSE American: CPHI)("China Pharma," the "Company" or "We"),an NYSE American-listed corporation with a fully-integrated specialty pharmaceuticals subsidiary based in China,today announced financial results for the fiscal year ended December 31,2021.

Full Year Highlights

Revenue was$9.6million in fiscal year 2021,compared to $10.9 million in fiscal year 2020;

Gross margin was 3.7% in fiscal year 2021,compared to 18.0% in fiscal year 2020;

Loss from operations was $2.9million in fiscal year 2021,compared to $2.6 million in fiscal year 2020;

Net loss was $3.4million in fiscal year 2021,compared to $2.9million in fiscal year 2020. Loss per common share wasboth$0.07per basic and diluted share in fiscal year 2021 and 2020,respectively.

Ms. Zhilin Li,China Pharma's Chairman and CEO,commented,"Affected by the centralized drug procurement policy in China,our products continued to bear huge price pressure in 2021,which negatively affected our income. In addition,the sporadic outbreaks of COVID-19 in several cities in China in 2021 and the related quarantine and control also negatively affect our sales and marketing activities. In terms of the progress of consistency evaluation,we had submitted the application materials of our existing key product,candesartan,to the National Medical Products Administration by the end of 2021."

Ms. Li continued,"Overall,we are very optimistic about the Company's future given the strong foundation of our business and market,including the favorable early-and-pilot-implementation policies in Hainan Free Trade Port. In the context of the epidemic,we have experienced great challenges. However,we also see considerable opportunities ahead of us thanks to those favorable policies that encourage the development,manufacture and commercialization of pharmaceutical and comprehensive healthcare products for the benefit of human health,and are working to accelerate our growth in professional high-end pharmaceutical manufacturing"

Full Year Results

Revenue was $9.6 million for the year ended December 31,2021,which represented a decrease of $1.2 million,as compared to $10.9 million for the year ended December 31,2020. This was mainly due to the increase of our existing product sales revenue in 2021 did not exceed the one-time foreign trade orders recognized in 2020,which was approximately $1.7 million.

For the year ended December 31,our cost of revenue was $9.3 million,or 96.4% of total revenue,which represented an increase of $0.4 million from $8.9 million,or 82.0% of total revenue,in 2020. The increase in the proportion of costs to revenue is mainly due to the decline in revenue.

Gross profit for the year ended December 31,2021 was $0.3 million,compared to $2.0 million in 2020. Our gross profit margin in 2021 was 3.6% compared to 18.0% in 2020. The decrease in our gross profit margin was mainly due tothat on one hand,the one-time COVID-19 tester transactionwe had in 2020 had a relatively high gross margin,on the other hand,the price decrease of our key products and the cost increase in our main raw materials and some packaging materialsthis year.

Our selling expenses for the year ended December 31,2021 were $1.5 million,a decrease of $0.7 million compared to $2.2 million for the year ended December 31,2020.Selling expenses accounted for 15.5% of the total revenue in 2021 compared to 20.4% in 2020. Because of adjustments in our sales practices and Chinese national centralized drug procurement,we reduced selling expenses to efficiently support our sales and the collection of accounts receivable. Especially in the context of the increasing impact of centralized drug procurement,like other players in the industry,we have reduced the promotion expenses.

Our general and administrative expenses for the year ended December 31,2021were $1.7million,remained close to the amount of $1.8million in 2020. General and administrative expenses accounted for 17.1% and 16.8% of our total revenues in 2021and 2020,respectively.

Our research and development expenses for the year ended December 31,2021was $0.32million,compared to $0.38million in 2020. Research and development expenses accounted for 3.3% and 3.5% of our total revenues in 2021 and 2020,respectively. These expenditures were mainly spent on the consistency evaluation of our existing products.

Our bad debt benefitfor the year ended December 31,2021was $255,215,ascompared to bad debt expenses of $115,186in 2020.

Our operating loss for the year ended December 31,2021was $2.9million,compared to anoperating loss of $2.6 million in 2020. The increase in Loss from Operations was mainly due to the decrease in revenue in 2021.

Net Loss for year ended December 31,2021 was $3.4 million,or $0.07 each basic and diluted share,compared to net loss of $2.9 million,or $0.07 each basic and diluted share for the year ended December 31,2020. The increase in net loss was mainly a result of the decrease in revenue.

Financial Condition

As of December 31,the Company had cash and cash equivalents of $4.9million compared to $1.0million as of December 31,2020.

As of December 31,our net accounts receivable was $0.7million,compared to $0.5million as of December 31,2020.

For the year ended December 31,netcash used inoperating activities was $0.25million,as compared to$0.04 million in2020.

Receipt of Audit Opinion with Going Concern Explanatory Paragraph

The audit opinion issued by the Company's independent registered public accountingfirm relating to the Company's audited consolidated financial statements(the "financial statements")for the year ended December 31,2021included a going concernexplanatory paragraph. The financial statements were included in the Company's Annual Report on Form 10-K for the year ended December 31,which was filed with the Securities and Exchange Commission on March 30,2022. The explanatory paragraph in the opinion of the Company's independent registered public accountingfirm notes that as discussed in Note 1 to the financial statements,the Company incurred recurring losses from operations,has net current liabilities and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern.Management's plans in regard to these matters are also described in Note 1 to the financial statements and the financial statements do not include any adjustments that might result from the outcome of this uncertainty.

About China Pharma Holdings,Inc.

China Pharma Holdings,Inc. is a specialty pharmaceutical company that develops,manufactures and markets a diversified portfolio of products,focusing on conditions with high incidence and high mortality rates in China,including cardiovascular,CNS,infectious,and digestive diseases. The Company's cost-effective business model is driven by market demand and supported by new GMP-certified product lines covering the major dosage forms. In addition,the Company has a broad and expanding nationwide distribution network across all major cities and provinces in China. The Company's wholly-owned subsidiary,Hainan Helpson Medical & Biotechnology Co.,Ltd.,is located in Haikou City,Hainan Province. For more information about China Pharma Holdings,Inc.,please visit www.chinapharmaholdings.com. The Company routinely posts important information on its website.

Safe Harbor Statement

Certain statements in this press release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties may include,but are not limited to: the achievability of financial guidance; success of new product development; unanticipated changes in product demand; increased competition; downturns in the Chinese economy; uncompetitive levels of research and development; and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations,except as required by applicable law or regulation.

Contact:

Diana Huang

+86-15595806797

hps@chinapharmaholdings.com

- FINANCIAL TABLES FOLLOW –

CHINA PHARMA HOLDINGS,INC.

CONSOLIDATED BALANCE SHEETS

December 31,

December 31,

2021

2020

ASSETS

Current Assets:

Cash and cash equivalents

$ 4,859,059

$ 957,653

Banker's acceptances

91,362

53,736

Trade accounts receivable,less allowance for doubtful

accounts of $18,312,707 and $18,150,493,respectively

714,475

501,892

Other receivables,less allowance for doubtful

accounts of $32,210 and $27,289,respectively

29,564

27,652

Advances to suppliers

471

2,238

Inventory

3,339,686

3,705,119

Prepaid expenses

58,792

73,668

Total Current Assets

9,093,409

5,321,958

Property,plant and equipment,net

13,280,559

15,564,200

Operating lease right of use asset

127,958

49,687

Intangible assets,net

147,841

182,146

TOTAL ASSETS

$ 22,649,767

$ 21,117,991

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Trade accounts payable

$ 926,749

$ 1,234,594

Accrued expenses

298,452

177,359

Other payables

1,884,161

2,748,208

Advances from customers

210,028

719,786

Borrowings from related parties

2,779,690

2,134,428

Operating lease liability

85,282

52,070

Construction loan facility

-

2,298,886

Current portion of lines of credit

4,328,936

2,038,345

Total Current Liabilities

10,513,298

11,403,676

Non-current Liabilities:

Convertible,redeemable note payable,net of issue discount

5,250,000

-

Lines of credit,net of current portion

-

904,228

Operating lease liability,net of current portion

44,181

-

Deferred tax liability

824,407

805,556

Total Liabilities

16,631,886

13,113,460

Commitments and Contingencies (Note 9)

Stockholders' Equity:

Preferred stock,$0.001 par value; 5,000,000 shares authorized;

no shares issued or outstanding

-

-

Common stock,$0.001 par value; 95,000 shares authorized;

47,557 shares and 45,579,557 shares issued and outstanding,respectively

47,340

45,580

Additional paid-in capital

25,645,367

24,452,684

Retained deficit

(32,238,655)

(28,839,179)

Accumulated other comprehensive income

12,563,829

12,345,446

Total Stockholders' Equity

6,017,881

8,004,531

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 22,991

-

-

CHINA PHARMA HOLDINGS,INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(Unaudited)

For the Years

Ended December 31,

2021

2020

Revenue

$ 9,641,925

$ 10,866,449

Cost of revenue

9,292,655

8,913,543

Gross profit

349,270

1,952,906

Operating expenses:

Selling expenses

1,495,007

2,394

General and administrative expenses

1,651,024

1,822,655

Research and development expenses

318,964

377,964

Bad debt (benefit) expense

(255,215)

115,186

Total operating expenses

3,209,780

4,531,199

Loss from operations

(2,860,510)

(2,578,293)

Other income (expense):

Interest income

3,035

5,675

Interest expense

(542,001)

(294,159)

Net other expense

(538,966)

(288,484)

Loss before income taxes

(3,399,476)

(2,777)

Income tax expense

-

-

Net loss

(3,777)

Other comprehensive income (loss) - foreign currency

translation adjustment

218,383

769,227

Comprehensive loss

$ (3,181,093)

$ (2,097,550)

Loss per share:

Basic and diluted

$ (0.07)

$ (0.07)

Weighted average shares outstanding

46,129,256

43,623,273

CHINA PHARMA HOLDINGS,INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years

Ended December 31,

2021

2020

Cash Flows from Operating Activities:

Net loss

$ (3,476)

$ (2,777)

Depreciation and amortization

3,087,820

2,679,470

Bad debt (benefit) expense

(255,186

Stock option compensation

15,243

-

Original issue discount accretion

250,000

-

Changes in assets and liabilities:

Trade accounts and other receivables

(545,534)

(613,678)

Advances to suppliers

1,798

(1,708)

Inventory

1,011,905

807,592

Trade accounts payable

(332,779)

(214,015)

Other payables and accrued expenses

415,309

(15,217)

Change in bankers' acceptance notes payable

-

(111,160)

Advances from customers

(520,414)

169,736

Prepaid expenses

21,505

8,311

Net Cash Used in Operating Activities

(249,838)

(42,260)

Cash Flows from Investing Activities:

Purchases of property and equipment

(438,055)

(867,307)

Net Cash Used in Investing Activities

(438,307)

Cash Flows from Financing Activities:

Payments of construction term loan

(2,325,039)

(2,174,669)

Payments of line of credit

(2,526,542)

(72,489)

Borrowings and interest from related party

1,183,414

206,908

Repayments to related party

(562,659)

(191,639)

Proceeds from convertible redeemable debt

5,000

-

Proceeds from lines of credit

3,828,564

2,856,066

Net Cash (Used In) Provided By Financing Activities

4,597,738

624,177

Effect of Exchange Rate Changes on Cash

(8,439)

58,156

Net Increase in Cash,Cash Equivalents and Restricted Cash

3,901,406

(227,234)

Cash and Cash Equivalents at Beginning of Period

957,653

1,184,887

Cash,Cash Equivalents and Restricted Cash at End of Period

$ 4,653

Supplemental Cash Flow Information:

Cash paid for income taxes

$ -

$ -

Cash paid for interest

$ 218,232

$ 237,530

Supplemental Noncash Investing and Financing Activities:

Accounts receivable collected with banker's acceptances

$ 601,021

$ 687,347

Inventory purchased with banker's acceptances

565,079

682,791

Right-of-use assets obtained in exchange for operating lease obligations

168,606

229,673

Conversion of officer wages to common stock

-

864,480

-

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