China Pharma Holdings, Inc. Reports Second Quarter 2018 Financial Results

HAIKOU CITY,China,Aug. 15,2018 -- China Pharma Holdings,Inc. (NYSE MKT: 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 quarter ended June 30,2018.

Second Quarter Highlights

Revenue increased8.8% to $3.2million in the second quarter 2018 from $3.0million in the same period of 2017;

Gross profit was$0.6 million for each of the three months ended June 30,2018 and 2017,respectively. Gross margin was 18.3% in the second quarter of 2018,compared to 22.2% in the same period of 2017;

Loss from operations was $0.9million in the second quarter of 2018 compared to $2.1 million in the same period of 2017,a decrease of $1.2 million;

Net loss was $1.0 million in the second quarter of 2018 compared to $2.3 million in the same period of 2017. Loss per common share was $(0.02) per basic and diluted share in the second quarter of 2018 compared to$(0.05) per basic and diluted share in the same period of 2017.

In a statement from Ms. Zhilin Li,China Pharma's Chairman and CEO,"It is the Company's top priority to actively and steadily increase sales and it is encouraging to see increasing revenue in this quarter. Management will continue to vigorously promote sales through active participation in recent provincial market openings to receive new drug tender offers and through further penetration into the market."Ms. Li continued,"The ongoing generic drug consistency evaluations and reform of China's drug production registration and review policies will continue to have a significant impact on the current performance and future development of Chinese pharmaceutical manufacturers,including us,and may gradually change business patterns of the industry. We will continue to actively adapt to state policy guidance and further evaluate market conditions for our current existing products,pipeline products,and competition in the market in order to optimize our development strategy."

Second Quarter Results

Revenue increased by 8.8% to $3.2 million for the three months ended June 30,2018,as compared to $3.0 million for the three months ended June 30,2017. This increase was mainly due to market volatility.

Gross profit was $0.6 million for each of the three months ended June 30,2018 and 2017. Our gross profit margin in the three months ended June 30,2018 was 18.3% compared to 22.2% in the same period last year. This decrease was primarily due to an increase in sales of lower margin products during this period compared to the sales performance in the same period last year.

Our selling expenses for the three months ended June 30,2018 were $0.7 million,a decrease of $0.1 million,compared to $0.8 million for the three months ended June 30,2017.Selling expenses accounted for 22.5% of the total revenue in the three months ended June 30,2018 compared to 27.5% in the same period last year.

Our general and administrative expenses for the three months ended June 30,2018 were $0.4 million,which represented a decrease of $0.3 million compared to $0.6 million in the same period last year. General and administrative expenses accounted for 11.1% and 21.0% of our total revenues in three months ended June 30,respectively.

Net Loss for the three months ended June 30,2018 was $1.0 million,compared to net loss of $2.3 million for the three months ended June 30,2017.

Six Months Results

Revenue increased by 9.5% to $6.8 million for the six months ended June 30,as compared to $6.2 million for the six months ended June 30,2017. This increase was mainly due to market volatility.

Gross profit for the six months ended June 30,2018 was $1.6 million,compared to $1.4 million in the same period in 2017. The gross profit margin in the six months ended June 30,2018 was 24.1% compared to 22.0% in the same period in 2017. The increase was mainly due to the increase in sales of higher margin products in the first half of 2018.

Net loss for the six months ended June 30,2018 was $1.3 million,compared to net loss of $3.3 million in the same period 2017. The decrease in net loss was mainly the result of increase in revenue and decreased expenses in the six months ended June 30,2018.

Financial Condition

As of June 30,the Company had cash and cash equivalents of $1.9 million compared to $2.0 million as of December 31,2017. Working capital increased to $3.4 million as of June 30,2018 from $3.1 million as of December 31,2017; and the current ratio was both 1.3 times at June 30,2018 and December 31,2017,respectively.

Our net accounts receivable balance was $2.4 million as of June 30,compared to $2.3 million as of December 31,2017.

Conference Call

The Company will hold a conference call at 8:30am E.T. on August 15,to discuss the financial results of the second quarter 2018. Listeners may access the call by dialing 1-866-519-4004 for domestic callers or 65-671-350-90 for international callers,Conference ID # 6869537. A recording of the call will be accessible through August 23,2018 by dialing 1-855-452-5696 or 61-281-990-299 for international callers,Conference ID #6869537.

About China Pharma Holdings,Inc.

China Pharma Holdings,Inc. is a specialty pharmaceutical company that develops,manufactures and markets a diversified portfolio of products focused on conditions with a high incidence and high mortality rates in China,including cardiovascular,CNS,infectious,and digestive diseases. The Company's cost-effective,high-margin 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,which may include,but are not limited to,such factors as 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:

China Pharma Holdings,Inc.

Ms. Diana Na Huang

Phone: +86-898-6681-1730 (China)

Email: hps@chinapharmaholdings.com

- FINANCIAL TABLES FOLLOW -

CHINA PHARMA HOLDINGS,INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2018

2017

ASSETS

(Unaudited)

(Audited)

Current Assets:

Cash and cash equivalents

$ 1,935,527

$ 2,030,214

Restricted cash

1,626,352

709,796

Banker's acceptances

19,612

39,867

Trade accounts receivable,less allowance for doubtful

accounts of $18,238,248 and $18,209,734,respectively

2,367,188

2,293,120

Other receivables,less allowance for doubtful

accounts of $40,069 and $40,010,respectively

188,177

162,981

Advances to suppliers

341,200

461,307

Inventory

6,377,507

6,407,155

Prepaid expenses

221,132

185,647

Total Current Assets

13,076,695

12,290,087

Advances for purchases of intangible assets

23,319,133

23,722,954

Property,plant and equipment,net

21,584,492

23,541,003

Intangible assets,net

327,759

398,856

TOTAL ASSETS

$ 58,308,079

$ 59,952,900

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Trade accounts payable

$ 1,152,539

$ 1,141,138

Accrued expenses

195,046

276,368

Other payables

2,682,230

2,858,701

Advances from customers

586,282

581,132

Other payables - related parties

1,354,567

1,567

Current portion of construction loan facility

2,115,107

2,305,430

Bankers' acceptance notes payable

1,796

Total Current Liabilities

9,712,123

9,227,132

Non-current Liabilities:

Construction loan facility

6,798,559

6,916,291

Deferred tax liability

772,331

738,175

Total Liabilities

17,283,013

16,881,598

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;

43,579,557 shares and 43,557 shares outstanding,respectively

43,580

43,580

Additional paid-in capital

23,590,204

23,204

Retained earnings

4,178,280

5,479,809

Accumulated other comprehensive income

13,213,002

13,957,709

Total Stockholders' Equity

41,025,066

43,071,302

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 58,900

CHINA PHARMA HOLDINGS,INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(Unaudited)

For the Three Months

For the Six Months

Ended June 30,

Ended June 30,

2018

2017

2018

2017

Revenue

$ 3,173,711

$ 2,917,180

$ 6,789,395

$ 6,202,383

Cost of revenue

2,594,268,823

5,156,214

4,836,173

Gross profit

579,481

648,357

1,633,181

1,366,210

Operating expenses:

Selling expenses

716,220

803,434

1,394,550

1,521,071

General and administrative expenses

353,143

611,951

845,153

1,028,677

Research and development expenses

23,674

21,450

45,887

47,510

Bad debt expense

350,847

364,989

352,681

725,052

Impairment of long term assets

-

977,980

-

977,980

Total operating expenses

1,443,884

2,779,804

2,638,271

4,300,290

Loss from operations

(864,403)

(2,131,447)

(1,005,090)

(2,934,080)

Other income (expense):

Interest income

9,524

16,316

11,818

21,349

Interest expense

(130,580)

(142,205)

(259,682)

(281,169)

Net other expense

(121,056)

(125,889)

(247,864)

(259,820)

Loss before income taxes

(985,459)

(2,257,336)

(1,252,954)

(3,193,900)

Income tax expense

(22,590)

(30,574)

(48,575)

(60,908)

Net loss

(1,008,049)

(2,287,910)

(1,301,529)

(3,254,808)

Other comprehensive income (loss) - foreign

currency translation adjustment

(2,418,783)

1,890

(744,707)

1,488,482

Comprehensive loss

$ (3,426,832)

$ (1,279,020)

$ (2,046,236)

$ (1,766,326)

Loss per share:

Basic and diluted

$ (0.02)

$ (0.05)

$ (0.03)

$ (0.07)

Weighted average shares outstanding

43,557

43,557

CHINA PHARMA HOLDINGS,INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Six Months

Ended June 30,

2018

2017

Cash Flows from Operating Activities:

Net loss

$ (1,529)

$ (3,808)

Depreciation and amortization

1,714,328

1,628,380

Bad debt expense

352,052

Deferred income taxes

48,575

60,908

Inventory write off

148,565

-

Impairment of long term assets

-

977,980

Changes in assets and liabilities:

Trade accounts and other receivables

(767,978)

(6,262)

Advances to suppliers

113,520

(9,933)

Inventory

57,850

439,865

Trade accounts payable

35,235

(974,197)

Accrued taxes payable

(94,416)

(144,739)

Other payables and accrued expenses

(157,893)

(87,949)

Advances from customers

15,639

(173,692)

Prepaid expenses

(40,178)

45,817

Net Cash Provided by Operating Activities

124,399

(773,578)

Cash Flows from Investing Activities:

Purchases of property,plant and equipment

(29,982)

(51,808)

Net Cash Used in Investing Activities

(29,808)

Cash Flows from Financing Activity:

Payments of construction term loan

(157,071)

(145,750)

Net Cash Used in Financing Activity

(157,750)

Effect of Exchange Rate Changes on Cash

(32,033)

50,900

Net (Decrease) Increase in Cash and Cash Equivalents

(94,687)

(920,236)

Cash and Cash Equivalents at Beginning of Period

2,214

2,665,802

Cash and Cash Equivalents at End of Period

$ 1,527

$ 1,745,566

Supplemental Cash Flow Information:

Cash paid for income taxes

$ -

$ -

Cash paid for interest

$ 125,716

$ 410,509

Supplemental Noncash Investing and Financing Activities:

Issuance of banker's acceptances

$ 965,468

$ 1,435,381

Accounts receivable collected with banker's acceptances

268,630

227,274

Inventory purchased with banker's acceptances

288,982

210,787