China Pharma Holdings, Inc. Reports First Quarter 2019 Financial Results

HAIKOU,China,May 15,2019 -- 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 quarter ended March 31,2019.

First Quarter Highlights

Revenue decreased 19.0% to $2.9 million in the first quarter 2019 from $3.6 million in the same period of 2018;

Gross margin was 22.4% in the first quarter 2019,compared to 29.1% in the same period of 2018;

Loss from operations was $0.3 million in the first quarter 2019 compared to $0.1 million in the same period of 2018,a deterioration of $0.2 million;

Net loss was $0.4 million in the first quarter 2019 compared to $0.3 million in the same period of 2018. Loss per common share was both $0.01 per basic and diluted share in the first quarter 2019 and 2018,respectively.

In a statement from Ms. Zhilin Li,China Pharma's Chairman and CEO,"We experienced certain market fluctuations in the first quarter of 2019,which has negatively impacted our revenue in this period. Management will continue to vigorously promote sales through active participation in recent provincial market openings to solicit new drug tender offers and allow China Pharma to expand its presence in these markets." Ms. Li continued,"In addition,we continued experiencing sustained pressure from the more stringent requirements of drug registration standards,consistency evaluations,and the challenging environment in our industry in this period. 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."

First Quarter Results

Revenue decreased by 19.0% to $2.9million for the three months ended March 31,2019,as compared to $3.6million for the three months ended March 31,2018. This decrease was mainly due to market fluctuations.

Gross profit for the three months ended March 31,2019 was $0.7million,as compared to $1.1million during the same period in 2018. Our gross profit margin in the three months ended March 31,2019 was 22.4%ascompared to 29.1% duringthe same period in 2018. The decreasein our gross profit margin was mainly due to thedecrease in revenue and the increased ratio of fixed cost to revenue.

Our selling expenses for the three months ended March 31,2019 and 2018 were$0.5million and $0.7 million,respectively.Selling expenses accounted for16.3% of the total revenue in the three months ended March 31,as compared to 18.8% during the same period in 2018. Because of adjustments in our sales practices,due to healthcare reform policies,we had reduced numberofpersonnel and expenses to efficiently support our sales and the collection of accounts receivable.

Our general and administrative expenses for the three months ended March 31,2019 were $0.4 million,which represented adecrease of $0.1million,ascompared to $0.5 million for the same period in 2018. General and administrative expenses accounted for 14.6% and 13.6% of our total revenues in the three months ended March 31,2019 and 2018,respectively.

Net loss for the three months ended March 31,2019was $0.4million,as compared to $0.3 million forthe same period a year ago. The increase in net loss was mainly the result of decreased revenue,whereasthe expenditures did not decrease in proportion to revenue,which wasdue to fixed costs.For the three months ended March 31,loss per basic and diluted common share was both $0.01.

Financial Condition

As of March 31,the Company had cash and cash equivalents of $1.0 million compared to $1.2 million as of December 31,2018.

As of March 31,our net accounts receivable was $0.8 million,compared to $0.9 million as of December 31,2018.

For the three months ended March 31,cash flow from operating activities was $0.1 million,as compared to $0.5 million for the same period in 2018.

Conference Call

The Company will hold a conference call at 8:30 am E.T. on May 15,2019 to discuss the results of the first quarter 2019. Listeners may access the call by dialing 1-866-519-4004 or 65-671-350-90 for international callers,Conference ID # 2397008. A replay of the call will be accessible through May 23,2019 by dialing 1-855-452-5696 or 61-281-990-299 for international callers,Conference ID # 2397008.

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 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. 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.

- FINANCIAL TABLES FOLLOW -

CHINA PHARMA HOLDINGS,INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

March 31,

December 31,

2019

2018

ASSETS

Current Assets:

Cash and cash equivalents

$ 961,277

$ 1,186,587

Restricted cash

976,622

1,273,940

Banker's acceptances

51,424

20,579

Trade accounts receivable,less allowance for doubtful

accounts of $18,295,892 and $17,815,075,respectively

845,401

916,931

Other receivables,less allowance for doubtful

accounts of $7,187 and $34,884,respectively

225,010

170,098

Advances to suppliers

108,454

47

Inventory

4,934,248

5,054,975

Prepaid expenses

118,701

123,759

Total Current Assets

8,221,137

8,746,916

Advances for purchases of intangible assets

17,490,101

17,069,587

Property and equipment,net

19,067,032

19,294,379

Operating lease right of use asset

212,587

-

Intangible assets,net

250,266

266,443

TOTAL ASSETS

$ 45,241,123

$ 45,377,325

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Trade accounts payable

$ 1,093,182

$ 1,060,934

Accrued expenses

117,241

310,804

Other payables

2,838,847

3,065,508

Advances from customers

526,247

525,647

Other payables - related parties

1,518,756

1,633,263

Operating lease liability,current portion

91,597

-

Current portion of construction loan facility

2,086,092

2,181,360

Bankers' acceptance notes payable

976,940

Total Current Liabilities

9,248,584

10,051,456

Non-current Liabilities:

Construction loan facility

4,470,197

4,362,720

Operating lease liability,net of current portion

122,229

-

Deferred tax liability

783,204

764,374

Total Liabilities

14,624,214

15,178,550

Commitments and Contingencies (Note 13)

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

Accumulated deficit

(5,688,089)

(5,270,358)

Accumulated other comprehensive income

12,671,214

11,835,349

Total Stockholders' Equity

30,616,909

30,198,775

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 45,325

CHINA PHARMA HOLDINGS,INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

For the Three Months

Ended March 31,

2019

2018

Revenue

$ 2,929,273

$ 3,615,684

Cost of revenue

2,272,743

2,561,984

Gross profit

656,530

1,053,700

Operating expenses:

Selling expenses

478,691

678,330

General and administrative expenses

428,817

492,010

Research and development expenses

69,918

22,213

Bad debt expense

13,312

1,834

Total operating expenses

990,738

1,194,387

Loss from operations

(334,208)

(140,687)

Other income (expense):

Interest income

3,257

2,294

Interest expense

(86,780)

(129,102)

Net other expense

(83,523)

(126,808)

Loss before income taxes

(417,731)

(267,495)

Income tax expense

-

(25,985)

Net loss

(417,731)

(293,480)

Other comprehensive income - foreign currency

translation adjustment

835,865

1,674,076

Comprehensive income (loss)

$ 418,134

$ 1,380,596

Loss per share:

Basic and diluted

$ (0.01)

$ (0.01)

Weighted average shares outstanding

43,557

43,557

CHINA PHARMA HOLDINGS,INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Three Months

Ended March 31,

2019

2018

Cash Flows from Operating Activities:

Net loss

$ (417,731)

$ (293,480)

Depreciation and amortization

795,483

861,430

Bad debt expense

13,834

Deferred income taxes

-

25,985

Non cash lease expense

1,233

-

Changes in assets and liabilities:

Trade accounts and other receivables

(145,935)

(266,479)

Advances to suppliers

(107,839)

(237,165)

Inventory

389,589

427,741

Trade accounts payable

6,079

196,434

Accrued taxes payable

(51,879)

(163,335)

Other payables and accrued expenses

(387,569)

(52,823)

Advances from customers

(12,285)

20,709

Prepaid expenses

8,065

2,888

Net Cash Provided by Operating Activities

90,523

523,739

Cash Flows from Investing Activities:

Purchases of property and equipment

(73,866)

(3,627)

Net Cash Used in Investing Activities

(73,627)

Cash Flows from Financing Activities:

Payments of construction term loan

(148,227)

(157,316)

Payments of related party payables

(119,561)

-

Net Cash Used in Financing Activities

(267,788)

(157,316)

Effect of Exchange Rate Changes on Cash

25,821

75,025

Net (Decrease) Increase in Cash and Cash Equivalents

(225,310)

437,821

Cash and Cash Equivalents at Beginning of Period

1,587

2,030,214

Cash and Cash Equivalents at End of Period

$ 961,277

$ 2,468,035

Supplemental Cash Flow Information:

Cash paid for income taxes

$ -

$ -

Cash paid for interest

$ 80,693

$ 125,716

Supplemental Noncash Investing and Financing Activities:

Issuance of banker's acceptances

$ 55,603

$ 443,748

Accounts receivable collected with banker's acceptances

175,793

133,053

Inventory purchased with banker's acceptances

145,614

148,924

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

236,055

-

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