PR Newswire | Aug 13, 2021 04:30PM EDT

08/13 15:30 CDT

China Pharma Holdings, Inc. Reports Second Quarter 2021 Financial Results HAIKOU, China, Aug. 13, 2021

HAIKOU, China, Aug. 13, 2021 /PRNewswire/ -- 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 the financial results for the quarter ended June 30, 2021.

Revenue decreased by 35.9% to $2.4 million for the three months ended June 30, 2021, as compared to $3.8 million for the three months ended June 30, 2020. Net loss for the three months ended June 30, 2021 was $0.8 million, or $0.02 per basic and diluted per share, as compared to net income of $0.01 million for the same period a year ago, or $0.00 per basic and diluted per share in the same period in 2020. This decrease for revenue and net income was mainly due to a one-time foreign trade of COVID-19 testers that contributed approximately $1.7 million to our revenue in the second quarter of 2020, while we did not have similar kind of income in the quarter ended June 30, 2021. Excluding the impact of the one-time deal, our sales increased by 15% over the same period last year.

As of July 10, 2021, we have fully repaid the RMB 80 million (approximately $12.4 million) of the eight-year construction loan facility, which had been fully utilized through May 7, 2014, per the payback schedule. We believe that this will reduce the pressure on the Company's future cash flow and interest expenses.

Revenue was $4.8 million and $5.5 million for the six months ended June 30, 2021 and 2020, respectively. Net loss for the six months ended June 30, 2021 was $1.6 million, as compared to net loss of $0.6 million for the six months ended June 30, 2020. The deterioration of the financial performance in the first half of 2021 was also mainly due to the one-time trade of COVID-19 testers in the same period last year; however, it was partially off-traded by the increase in sales of our products portfolio.

Ms. Zhilin Li, China Pharma's Chairman and CEO, commented, "In this quarter, the company continued to focus on the consistency evaluation of existing listed products. Our hypertensive drug Candesartan has passed the bioequivalence experiment, which is the key experiment of the consistency evaluation. At present, we have submitted the application materials to the National Medical Products Administration. In addition, we observed an increasing amount of COVID-19 confirmed cases in several cities in China recently. Therefore, we have correspondingly strengthened the production and sales of our epidemic prevention materials, such as medical surgical masks."

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 policies in Hainan Free Trade Port that encourage the development, manufacture and commercialization of pharmaceutical and comprehensive healthcare products for the benefit of human health. We see considerable opportunities ahead of us and are working to accelerate our growth in specialty pharma and Traditional Chinese Medicine (TCM)."

About China Pharma Holdings, Inc.

China Pharma Holdings, Inc. (NYSE American: CPHI) 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.

- FINANCIAL TABLES FOLLOW -

CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, December 31,

2021 2020

ASSETS

Current Assets:

Cash and cash equivalents $ 1,754,868 $ 957,653

Banker's acceptances - 53,736

Trade accounts receivable, less allowance for doubtful

accounts of $18,316,990 and $18,150,493, respectively 409,675 501,892

Other receivables, less allowance for doubtful

accounts of $30,142 and $22,320, respectively 63,770 27,652

Advances to suppliers 2,963 2,238

Inventory 2,978,060 3,705,119

Prepaid expenses 54,034 73,668

Total Current Assets 5,263,370 5,321,958

Property, plant and equipment, net 14,346,122 15,564,200

Operating lease right of use asset 169,807 49,687

Intangible assets, net 164,942 182,146

TOTAL ASSETS $ 19,944,241 $ 21,117,991

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Trade accounts payable $ 687,052 $ 1,234,594

Accrued expenses 332,393 177,359

Other payables 3,051,694 2,748,208

Advances from customers 525,579 719,786

Borrowings from related parties 2,824,019 2,134,428

Operating lease liability 83,707 52,070

Construction loan facility 2,167,149 2,298,886

Current portion of lines of credit 2,523,181 2,038,345

Total Current Liabilities 12,194,774 11,403,676

Non-current Liabilities:

Lines of credit, net of current portion 325,072 904,228

Operating lease liability, net of current portion 86,186

Deferred tax liability 813,636 805,556

Total Liabilities 13,419,668 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; 95,000,000 shares authorized;

45,579,557 shares and 45,579,557 shares issued and outstanding, respectively 45,580 45,580

Additional paid-in capital 24,452,684 24,452,684

Retained deficit (30,431,267) (28,839,179)

Accumulated other comprehensive income 12,457,576 12,345,446

Total Stockholders' Equity 6,524,573 8,004,531

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 19,944,241 $ 21,117,991

CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

For the Three Months For the Six Months

Ended June 30, Ended June 30,

2021 2020 2021 2020

Revenue $ 2,415,559 $ 3,770,723 $ 4,773,930 $ 5,534,678

Cost of revenue 2,344,559 2,620,925 4,430,200 4,190,441

Gross profit 71,000 1,149,798 343,730 1,344,237

Operating expenses:

Selling expenses 445,478 727,642 823,813 1,053,737

General and administrative expenses 329,758 322,445 738,756 711,004

Research and development expenses 53,456 30,044 243,542 78,863

Bad debt (benefit) expense (4,744) (5,318) (12,965) 24,928

Total operating expenses 823,948 1,074,813 1,793,146 1,868,532

(Loss) income from operations (752,948) 74,985 (1,449,416) (524,295)

Other income (expense):

Interest income 579 1,212 985 1,598

Interest expense (72,392) (63,144) (143,657) (125,147)

Net other expense (71,813) (61,932) (142,672) (123,549)

(Loss) income before income taxes (824,761) 13,053 (1,592,088) (647,844)

Income tax expense - - - -

Net (loss) income (824,761) 13,053 (1,592,088) (647,844)

Other comprehensive income (loss) - foreign currency

translation adjustment 183,455 5,796 112,130 (191,236)

Comprehensive (loss) income $ (641,306) $ 18,849 $ (1,479,958) $ (839,080)

(Loss) Earnings per share:

Basic and diluted $ (0.02) $ 0.00 $ (0.03) $ (0.01)

Weighted average shares outstanding 45,579,557 43,579,557 45,579,557 43,579,557

CHINA PHARMA HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months

Ended June 30,

2021 2020

Cash Flows from Operating Activities:

Net loss $ (1,592,088) $ (647,844)

Depreciation and amortization 1,400,647 1,305,070

Bad debt (benefit) expense (12,965) 24,928

Inventory write off 121,604

Changes in assets and liabilities:

Trade accounts and other receivables (120,757) (305,183)

Advances to suppliers (702) (279,380)

Inventory 890,435 (14,136)

Trade accounts payable (558,912) (323,470)

Other payables and accrued expenses 447,500 199,781

Change in bankers' acceptance notes payable - 115,468

Advances from customers (201,063) 95,579

Prepaid expenses 25,421 (323,553)

Net Cash Provided by (Used in) Operating Activities 399,120 (152,740)

Cash Flows from Investing Activities:

Purchases of property and equipment (15,022) (840,449)

Net Cash Used in Investing Activities (15,022) (840,449)

Cash Flows from Financing Activities:

Payments of construction term loan (154,516) (142,209)

Payments of line of credit (896,194) -

Borrowings and interest from related party 932,876 90,551

Repayments to related party (251,861) -

Proceeds from lines of credit 772,581 1,919,818

Net Cash provided by Financing Activities 402,886 1,868,160

Effect of Exchange Rate Changes on Cash 10,231 (23,318)

Net Increase in Cash, Cash Equivalents and Restricted Cash 797,215 851,653

Cash and Cash Equivalents at Beginning of Period 957,653 1,184,887

Cash, Cash Equivalents and Restricted Cash at End of Period $ 1,754,868 $ 2,036,540

Cash and Cash Equivalents 1,754,868 1,813,544

Restricted cash - 222,996

Cash, Cash Equivalents and Restricted Cash at End of Period 1,754,868 2,036,540

Supplemental Cash Flow Information:

Cash paid for income taxes $ - $ -

Cash paid for interest $ 121,090 $ 118,374

Supplemental Noncash Investing and Financing Activities:

Accounts receivable collected with banker's acceptances $ 195,021 $ 270,453

Inventory purchased with banker's acceptances 249,198 304,520

Right-of-use assets obtained in exchange for operating lease obligations 168,077

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SOURCE China Pharma Holdings, Inc.