HAIKOU, China, March 31, 2022 /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 financial
results for the fiscal year ended December
31, 2021.
Full Year Highlights
- Revenue was $9.6 million in fiscal year 2021,
compared to $10.9 million in fiscal
year 2020;
- Gross margin was 3.7% in fiscal year 2021, compared to 18.0% in
fiscal year 2020;
- Loss from operations was $2.9 million in fiscal year
2021, compared to $2.6 million
in fiscal year 2020;
- Net loss was $3.4 million in
fiscal year 2021, compared to $2.9 million in fiscal year 2020. Loss
per common share was both $0.07 per basic and
diluted share in fiscal year 2021 and 2020, respectively.
Ms. Zhilin Li, China Pharma's
Chairman and CEO, commented, "Affected by the centralized drug
procurement policy in China, our
products continued to bear huge price pressure in 2021, which
negatively affected our income. In addition, the sporadic outbreaks
of COVID-19 in several cities in China in 2021 and the related quarantine and
control also negatively affect our sales and marketing activities.
In terms of the progress of consistency evaluation, we had
submitted the application materials of our existing key product,
candesartan, to the National Medical Products Administration by the
end of 2021."
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 early-and-pilot-implementation
policies in Hainan Free Trade Port. In the context of the
epidemic, we have experienced great challenges. However, we also
see considerable opportunities ahead of us thanks to those
favorable policies that encourage the development, manufacture and
commercialization of pharmaceutical and comprehensive healthcare
products for the benefit of human health, and are working to
accelerate our growth in professional high-end pharmaceutical
manufacturing"
Full Year Results
Revenue was $9.6 million for the
year ended December 31, 2021, which
represented a decrease of $1.2
million, as compared to $10.9
million for the year ended December
31,2020. This was mainly due to the increase of our
existing product sales revenue in 2021 did not exceed the one-time
foreign trade orders recognized in 2020, which was approximately
$1.7 million.
For the year ended December 31,
2021, our cost of revenue was $9.3
million, or 96.4% of total revenue, which represented an
increase of $0.4 million from
$8.9 million, or 82.0% of total
revenue, in 2020. The increase in the proportion of costs to
revenue is mainly due to the decline in revenue.
Gross profit for the year ended December
31, 2021 was $0.3 million,
compared to $2.0 million in 2020. Our
gross profit margin in 2021 was 3.6% compared to 18.0% in 2020. The
decrease in our gross profit margin was mainly due to that on
one hand, the one-time COVID-19 tester transaction we had in
2020 had a relatively high gross margin, on the other
hand, the price decrease of our key products and the cost
increase in our main raw materials and some packaging
materials this year.
Our selling expenses for the year ended December 31, 2021 were $1.5 million, a decrease of $0.7 million compared to $2.2 million for the year ended December 31, 2020. Selling expenses
accounted for 15.5% of the total revenue in 2021 compared to 20.4%
in 2020. Because of adjustments in our sales practices and
Chinese national centralized drug procurement, we reduced selling
expenses to efficiently support our sales and the collection of
accounts receivable. Especially in the context of the increasing
impact of centralized drug procurement, like other players in the
industry, we have reduced the promotion expenses.
Our general and administrative expenses for the year ended
December 31, 2021 were
$1.7 million, remained close to
the amount of $1.8 million in
2020. General and administrative expenses accounted for 17.1% and
16.8% of our total revenues in 2021 and 2020,
respectively.
Our research and development expenses for the year ended
December 31, 2021 was
$0.32 million, compared to
$0.38 million in 2020. Research
and development expenses accounted for 3.3% and 3.5% of our total
revenues in 2021 and 2020, respectively. These expenditures were
mainly spent on the consistency evaluation of our existing
products.
Our bad debt benefit for the year ended December 31, 2021 was $255,215, as compared to bad debt expenses
of $115,186 in
2020.
Our operating loss for the year ended December 31, 2021 was $2.9 million, compared to an operating
loss of $2.6 million in 2020.
The increase in Loss from Operations was mainly due to the
decrease in revenue in 2021.
Net Loss for year ended December 31,
2021 was $3.4 million, or
$0.07 each basic and diluted share,
compared to net loss of $2.9 million,
or $0.07 each basic and diluted share
for the year ended December 31, 2020.
The increase in net loss was mainly a result of the decrease in
revenue.
Financial Condition
As of December 31, 2021, the
Company had cash and cash equivalents of $4.9 million compared to $1.0 million as of December 31, 2020.
As of December 31, 2021, our net
accounts receivable was $0.7 million, compared to $0.5 million as of December 31, 2020.
For the year ended December 31,
2021, net cash used in operating activities was
$0.25 million, as compared
to $0.04 million in 2020.
Receipt of Audit Opinion with Going Concern Explanatory
Paragraph
The audit opinion issued by the Company's independent registered
public accounting firm relating to the Company's audited
consolidated financial statements (the "financial
statements") for the year ended December 31, 2021 included a going
concern explanatory paragraph. The financial statements were
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2021, which was
filed with the Securities and Exchange Commission on March 30, 2022. The explanatory paragraph in the
opinion of the Company's independent registered public
accounting firm notes that as discussed in Note 1 to the
financial statements, the Company incurred recurring losses from
operations, has net current liabilities and an accumulated deficit
that raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters
are also described in Note 1 to the financial statements and the
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
About China Pharma Holdings, Inc.
China Pharma Holdings, Inc. 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.
Contact:
Diana Huang
+86-15595806797
hps@chinapharmaholdings.com
- FINANCIAL TABLES FOLLOW –
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
4,859,059
|
|
$
957,653
|
Banker's
acceptances
|
|
91,362
|
|
53,736
|
Trade accounts
receivable, less allowance for doubtful
|
|
|
|
|
accounts of
$18,312,707 and $18,150,493, respectively
|
|
714,475
|
|
501,892
|
Other receivables,
less allowance for doubtful
|
|
|
|
|
accounts of $32,210
and $27,289, respectively
|
|
29,564
|
|
27,652
|
Advances to
suppliers
|
|
471
|
|
2,238
|
Inventory
|
|
3,339,686
|
|
3,705,119
|
Prepaid
expenses
|
|
58,792
|
|
73,668
|
Total Current
Assets
|
|
9,093,409
|
|
5,321,958
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
13,280,559
|
|
15,564,200
|
Operating lease right
of use asset
|
|
127,958
|
|
49,687
|
Intangible assets,
net
|
|
147,841
|
|
182,146
|
TOTAL
ASSETS
|
|
$
22,649,767
|
|
$
21,117,991
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
926,749
|
|
$
1,234,594
|
Accrued
expenses
|
|
298,452
|
|
177,359
|
Other
payables
|
|
1,884,161
|
|
2,748,208
|
Advances from
customers
|
|
210,028
|
|
719,786
|
Borrowings from
related parties
|
|
2,779,690
|
|
2,134,428
|
Operating lease
liability
|
|
85,282
|
|
52,070
|
Construction loan
facility
|
|
-
|
|
2,298,886
|
Current portion of
lines of credit
|
|
4,328,936
|
|
2,038,345
|
Total Current
Liabilities
|
|
10,513,298
|
|
11,403,676
|
Non-current
Liabilities:
|
|
|
|
|
Convertible,
redeemable note payable, net of issue discount
|
|
5,250,000
|
|
-
|
Lines of credit, net
of current portion
|
|
-
|
|
904,228
|
Operating lease
liability, net of current portion
|
|
44,181
|
|
-
|
Deferred tax
liability
|
|
824,407
|
|
805,556
|
Total
Liabilities
|
|
16,631,886
|
|
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;
|
|
|
|
|
47,339,557 shares and
45,579,557 shares issued and outstanding, respectively
|
47,340
|
|
45,580
|
Additional paid-in
capital
|
|
25,645,367
|
|
24,452,684
|
Retained
deficit
|
|
(32,238,655)
|
|
(28,839,179)
|
Accumulated other
comprehensive income
|
|
12,563,829
|
|
12,345,446
|
Total
Stockholders' Equity
|
|
6,017,881
|
|
8,004,531
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
$
22,649,767
|
|
$
21,117,991
|
|
|
|
|
|
|
|
-
|
|
-
|
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
AND COMPREHENSIVE
LOSS
|
(Unaudited)
|
|
|
|
|
|
For the
Years
|
|
Ended December
31,
|
|
2021
|
|
2020
|
Revenue
|
$
9,641,925
|
|
$
10,866,449
|
Cost of
revenue
|
9,292,655
|
|
8,913,543
|
|
|
|
|
Gross
profit
|
349,270
|
|
1,952,906
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling
expenses
|
1,495,007
|
|
2,215,394
|
General and
administrative expenses
|
1,651,024
|
|
1,822,655
|
Research and
development expenses
|
318,964
|
|
377,964
|
Bad debt (benefit)
expense
|
(255,215)
|
|
115,186
|
Total operating
expenses
|
3,209,780
|
|
4,531,199
|
|
|
|
|
Loss from
operations
|
(2,860,510)
|
|
(2,578,293)
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest
income
|
3,035
|
|
5,675
|
Interest
expense
|
(542,001)
|
|
(294,159)
|
Net other
expense
|
(538,966)
|
|
(288,484)
|
|
|
|
|
Loss before income
taxes
|
(3,399,476)
|
|
(2,866,777)
|
Income tax
expense
|
-
|
|
-
|
Net
loss
|
(3,399,476)
|
|
(2,866,777)
|
Other comprehensive
income (loss) - foreign currency
|
|
|
|
translation
adjustment
|
218,383
|
|
769,227
|
Comprehensive
loss
|
$
(3,181,093)
|
|
$
(2,097,550)
|
Loss per
share:
|
|
|
|
Basic and
diluted
|
$
(0.07)
|
|
$
(0.07)
|
Weighted average
shares outstanding
|
46,129,256
|
|
43,623,273
|
CHINA PHARMA
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
For the
Years
|
|
|
Ended December
31,
|
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net loss
|
|
$
(3,399,476)
|
|
$
(2,866,777)
|
Depreciation and
amortization
|
|
3,087,820
|
|
2,679,470
|
Bad debt (benefit)
expense
|
|
(255,215)
|
|
115,186
|
Stock option
compensation
|
|
15,243
|
|
-
|
Original issue
discount accretion
|
|
250,000
|
|
-
|
Changes in assets and
liabilities:
|
|
|
|
|
Trade accounts and
other receivables
|
|
(545,534)
|
|
(613,678)
|
Advances to
suppliers
|
|
1,798
|
|
(1,708)
|
Inventory
|
|
1,011,905
|
|
807,592
|
Trade accounts
payable
|
|
(332,779)
|
|
(214,015)
|
Other payables and
accrued expenses
|
|
415,309
|
|
(15,217)
|
Change in bankers'
acceptance notes payable
|
|
-
|
|
(111,160)
|
Advances from
customers
|
|
(520,414)
|
|
169,736
|
Prepaid
expenses
|
|
21,505
|
|
8,311
|
Net Cash Used in
Operating Activities
|
|
(249,838)
|
|
(42,260)
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(438,055)
|
|
(867,307)
|
Net Cash Used in
Investing Activities
|
|
(438,055)
|
|
(867,307)
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Payments of
construction term loan
|
|
(2,325,039)
|
|
(2,174,669)
|
Payments of line of
credit
|
|
(2,526,542)
|
|
(72,489)
|
Borrowings and
interest from related party
|
|
1,183,414
|
|
206,908
|
Repayments to related
party
|
|
(562,659)
|
|
(191,639)
|
Proceeds from
convertible redeemable debt
|
|
5,000,000
|
|
-
|
Proceeds from lines
of credit
|
|
3,828,564
|
|
2,856,066
|
Net Cash (Used In)
Provided By Financing Activities
|
|
4,597,738
|
|
624,177
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash
|
|
(8,439)
|
|
58,156
|
Net Increase in
Cash, Cash Equivalents and Restricted Cash
|
|
3,901,406
|
|
(227,234)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
957,653
|
|
1,184,887
|
Cash, Cash
Equivalents and Restricted Cash at End of Period
|
|
$
4,859,059
|
|
$
957,653
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
-
|
|
$
-
|
Cash paid for
interest
|
|
$
218,232
|
|
$
237,530
|
|
|
|
|
|
Supplemental
Noncash Investing and Financing Activities:
|
|
|
|
|
Accounts receivable
collected with banker's acceptances
|
|
$
601,021
|
|
$
687,347
|
Inventory purchased
with banker's acceptances
|
|
565,079
|
|
682,791
|
Right-of-use assets
obtained in exchange for operating lease obligations
|
|
168,606
|
|
229,673
|
Conversion of officer
wages to common stock
|
|
-
|
|
864,480
|
|
|
|
|
|
|
|
-
|
|
|
View original
content:https://www.prnewswire.com/news-releases/china-pharma-holdings-inc-reports-fiscal-year-2021-financial-results-301514477.html
SOURCE China Pharma Holdings, Inc.