CHINA PHARMA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

December 31,

December 31,

2020

2019

ASSETS

Current Assets:

Cash and cash equivalents

$         957,653

$      1,074,979

Restricted cash

–

109,908

Banker’s acceptances

53,736

45,756

Trade accounts receivable, less allowance for doubtful

accounts of $18,150,493 and $17,575,100, respectively

501,892

635,371

Other receivables, less allowance for doubtful

accounts of $27,289 and $22,729, respectively

27,652

46,643

Advances to suppliers

2,238

404

Inventory

3,705,119

3,588,824

Prepaid expenses

73,668

77,120

Total Current Assets

5,321,958

5,579,005

Property, plant and equipment, net

15,564,200

16,313,827

Operating lease right of use asset

49,687

136,779

Intangible assets, net

182,146

205,611

TOTAL ASSETS

$    21,117,991

$    22,235,222

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Trade accounts payable

$      1,234,594

$      1,366,330

Accrued expenses

177,359

189,880

Other payables

2,748,208

3,560,332

Advances from customers

719,786

505,398

Borrowings from related parties

2,134,428

2,071,986

Operating lease liability, current portion

52,070

91,306

Current portion of construction loan facility

2,298,886

2,150,168

Current portion of lines of credit

2,038,345

–

Bankers’ acceptance notes payable

–

109,908

Total Current Liabilities

11,403,676

10,045,308

Non-current Liabilities:

Construction loan facility

–

2,150,168

Lines of credit, net of current portion

904,228

–

Operating lease liability, net of current portion

–

48,701

Deferred tax liability

805,556

753,444

Total Liabilities

13,113,460

12,997,621

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 43,579,557 shares issued and outstanding, respectively

45,580

43,580

Additional paid-in capital

24,452,684

23,590,204

Retained deficit

(28,839,179)

(25,972,402)

Accumulated other comprehensive income

12,345,446

11,576,219

Total Stockholders’ Equity

8,004,531

9,237,601

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$    21,117,991

$    22,235,222

CHINA PHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

For the Years

Ended December 31,

2020

2019

Revenue

$       10,866,449

$       10,923,936

Cost of revenue

8,913,543

9,441,752

Gross profit

1,952,906

1,482,184

Operating expenses:

Selling

2,215,394

2,352,610

General and administrative

1,822,655

2,289,520

Research and development

377,964

229,637

Bad debt

115,186

3,153

Impairment loss

–

17,015,117

Total operating expenses

4,531,199

21,890,037

Loss from operations

(2,578,293)

(20,407,853)

Other income (expense):

Interest income

5,675

27,527

Interest expense

(294,159)

(321,718)

Net other expense

(288,484)

(294,191)

Loss before income taxes

(2,866,777)

(20,702,044)

Income tax benefit

–

–

Net loss

(2,866,777)

(20,702,044)

Other comprehensive income – foreign currency

translation adjustment

769,227

259,130

Comprehensive income (loss)

$        (2,097,550)

$      (20,442,914)

Loss per share:

Basic and diluted

$                 (0.07)

$                 (0.48)

Weighted average shares outstanding

43,623,273

43,579,557

CHINA PHARMA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years

Ended December 31,

2020

2019

Cash Flows from Operating Activities:

Net loss

$     (2,866,777)

$   (20,702,044)

Depreciation and amortization

2,679,470

2,928,799

Inventory write off

–

253,465

Bad debt expense

115,186

3,153

Impairment loss

–

17,015,117

Changes in assets and liabilities:

Trade accounts and other receivables

(613,678)

(478,918)

Advances to suppliers

(1,708)

(361)

Inventory

807,592

1,999,978

Trade accounts payable

(214,015)

324,180

Other payables and accrued expenses

(15,217)

391,171

Change in bankers’ acceptance notes payable

(111,160)

(1,158,728)

Advances from customers

169,736

(12,875)

Prepaid expenses

8,311

45,375

Net Cash Provided by Operating Activities

(42,260)

608,312

Cash Flows from Investing Activities:

Purchases of property and equipment

(867,307)

(136,003)

Net Cash Used in Investing Activities

(867,307)

(136,003)

Cash Flows from Financing Activities:

Payments of construction term loan

(2,174,669)

(2,174,399)

Proceeds from lines of credit

2,856,066

–

Payments of line of credit

(72,489)

–

Borrowings and interest from related party

206,908

691,459

Repayments to related party

(191,639)

(245,830)

Net Cash Used in Financing Activities

624,177

(1,728,770)

Effect of Exchange Rate Changes on Cash

58,156

(19,179)

Net Decrease in Cash, Cash Equivalents and Restricted Cash

(227,234)

(1,275,640)

Cash and Cash Equivalents at Beginning of Period

1,184,887

2,460,527

Cash, Cash Equivalents and Restricted Cash at End of Period

$          957,653

$       1,184,887

Cash and Cash Equivalents

957,653

1,074,979

Restricted cash

–

109,908

Cash, Cash Equivalents and Restricted Cash at End of Period

957,653

1,184,887

Supplemental Cash Flow Information:

Cash paid for income taxes

$                     –

$                     –

Cash paid for interest

$          237,530

$          299,164

Supplemental Noncash Investing and Financing Activities:

Accounts receivable collected with banker’s acceptances

$          687,347

$          869,625

Conversion of officer wages to common stock

864,480

–

Inventory purchased with banker’s acceptances

682,791

843,867

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

229,673

229,644