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

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Aug 13, 2021, 16:30 ET

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