UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     Of 1934

                For the Quarterly Period Ended September 30, 2007

[.]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     Of 1934

              For the Transition Period from _________ to _________

                        Commission file number: 000-29523

                           China Pharma Holdings, Inc.
             (Exact name of registrant as specified on its charter)

               Delaware                                    73-1564807
     (State or other jurisdiction of                     (IRS Employer
      incorporation or organization)                   Identification No.)


         2nd Floor, No. 17, Jinpan Road, Haikou, Hainan Province, China
                    (Address of principle executive offices)

                            0086-898-66811730 (China)
              (Registrant's telephone number, including area code)
                                   Copies to:

                                   Charles Law
                                King and Wood LLP
                        Suite 1175, 125 S Market Street,
                               San Jose, CA 95113


Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the past 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act. Yes [ ] No [X]

As of September  30, 2007,  37,228,938  shares of China  Pharma  Holdings,  Inc.
common stock, par value $0.001 per share, were outstanding.


Transitional Small Business disclosure format: Yes [ ] No [X]

<PAGE>


                           China Pharma Holdings, Inc.

                                TABLE OF CONTENTS


Part I    Financial Information                                                1

Item 1.   Financial Statements                                                 1

          Condensed Consolidated Balance Sheets - September 30, 2007 and
          December 31, 2006 (unaudited)
                                                                               1

          Condensed Consolidated Statements of Operations and Comprehensive
          Income - Three and Nine months ended September 30, 2007 and 2006
          (unaudited)                                                          2

          Condensed  Consolidated  Statements  of Cash Flows - Nine months
          ended September 30, 2007 and 2006 (unaudited)                        3

          Notes to Condensed Consolidated Financial Statements (unaudited)     4

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                            7

Item 3.   Controls and Procedures                                             19

Part II   Other Information                                                   19

Item 1    Legal proceedings                                                   19

Item 2    Unregistered Sales of Equity Securities and Use of Proceeds         20

Item 3    Defaults upon senior securities                                     20

Item 4    Submission of matters to a vote of security holders                 20

Item 5    Other information                                                   20

Item 6    Exhibits                                                            20

Signatures                                                                    21





<PAGE>
<TABLE>
<CAPTION>


Item 1 Financial Statements (Unaudited)

                           CHINA PHARMA HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                                                            September 30,  December 31,
                                                                2007          2006
                                                             -----------   -----------
<S>                                                          <C>           <C>

ASSETS
Current Assets:
Cash and cash equivalents                                    $ 1,715,650   $   656,441
Trade accounts receivable, less allowance for doubtful
accounts of $2,554,705 and $1,562,494, respectively           17,118,699    12,101,979
Other receivables, less allowance for doubtful
accounts of $54,910 and $27,517, respectively                    726,200       355,554
Deferred offering costs                                             --          59,390
Advances to suppliers                                          4,903,250     2,255,877
Inventory                                                     13,716,136    10,277,887
                                                             -----------   -----------
Total Current Assets                                          38,179,935    25,707,128
                                                             -----------   -----------
Non-current Assets:
Property and equipment, net of accumulated depreciation of
$935,328 and $619,649, respectively                            2,621,864     2,725,173
Intangible assets, net of accumulated amortization of
$229,433 and $135,656, respectively                            2,065,264        65,344
Deferred tax assets                                               17,403        16,736
                                                             -----------   -----------
Total Non-current Assets                                       4,704,531     2,807,253
                                                             -----------   -----------
TOTAL ASSETS                                                 $42,884,466   $28,514,381
                                                             -----------   -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable                                       $   781,630   $   477,291
Accrued expenses                                                 193,154       104,216
Accrued taxes payable                                            175,084       167,419
Other payables                                                    56,407       185,096
Advances from customers                                          195,977       141,871
Accounts payable -related parties                                   --          22,650
Short-term notes payable                                       6,794,296     6,533,649
                                                             -----------   -----------
Total Current Liabilities                                      8,196,548     7,632,192
                                                             -----------   -----------
Research and development commitments                              33,255        31,980
                                                             -----------   -----------
Total Liabilities                                              8,229,803     7,664,172
                                                             -----------   -----------
Stockholders' Equity:
Common stock, $0.001 par value, 60,000,000 shares
authorized, 37,228,938 and 34,723,056 shares issued and
outstanding, respectively                                         37,229        34,723
Additional paid-in capital                                    11,559,656     7,764,979
Foreign currency translation adjustment                        1,886,200       663,871
Retained earnings                                             21,171,578    12,386,636
                                                             -----------   -----------
Total Stockholders' Equity                                    34,654,663    20,850,209
                                                             -----------   -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $42,884,466   $28,514,381
                                                             -----------   -----------
</TABLE>



           See the accompanying footnotes to the unaudited condensed,
                       consolidated financial statements.


                                       1
<PAGE>
<TABLE>
<CAPTION>


                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)

                                             For the three months             For the nine months
                                              ended September 30,             ended September 30,
                                          ----------------------------    ----------------------------
                                               2007            2006            2007            2006
                                          ------------    ------------    ------------    ------------
<S>                                       <C>             <C>             <C>             <C>


Revenue                                   $  8,293,497    $  5,015,272    $ 24,097,521    $ 13,721,587
Cost of revenue                              4,413,042       2,521,205      13,018,566       7,151,898
                                          ------------    ------------    ------------    ------------

Gross profit                                 3,880,455       2,494,067      11,078,955       6,569,689
                                          ------------    ------------    ------------    ------------

Operating expenses:
Selling expenses                               422,098          42,966         896,128         213,350
General and administrative                     328,743         100,650       1,912,266         333,654
Research and development                         5,941         125,359         846,822         124,715
2007 Bad debt expense (recovery)                  --           152,142            --           (28,349)
                                          ------------    ------------    ------------    ------------
Total operating expenses                       756,782         421,117       3,655,216         643,370
                                          ------------    ------------    ------------    ------------

Income from operations                       3,123,673       2,072,950       7,423,739       5,926,319
                                          ------------    ------------    ------------    ------------

Non-operating income (expenses):
Interest income                                  4,400             408          29,808             588
Interest expense                               (50,857)        (39,872)       (166,698)        (87,690)
Other income                                     7,549            --         1,498,093            --
                                          ------------    ------------    ------------    ------------
Total non-operating income (expense)           (38,908)        (39,464)      1,361,203         (87,102)
                                          ------------    ------------    ------------    ------------

Income before taxes                          3,084,765       2,033,486       8,784,942       5,839,217
Income tax expense                                --          (326,661)           --          (730,560)
                                          ------------    ------------    ------------    ------------
Net income                                $  3,084,765    $  1,706,825    $  8,784,942    $  5,108,657
                                          ============    ============    ============    ============
Comprehensive income - foreign currency        570,646          25,307       1,222,329         137,964
translation adjustments                   ------------    ------------    ------------    ------------
Comprehensive income                      $  3,655,411    $  1,732,132    $ 10,007,271    $  5,246,621
                                          ============    ============    ============    ============

Basic and diluted earnings per common     $       0.08    $       0.05    $       0.24    $       0.15
share                                     ============    ============    ============    ============

Weighted-average common shares              37,228,938      34,723,056      36,935,208      34,723,056
outstanding                               ============    ============    ============    ============


</TABLE>


            See the accompanying footnotes to the unaudited condensed
                       consolidated financial statements.




                                       2
<PAGE>


                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



                                                   For the nine   For the nine
                                                   months ended   months ended
                                                   September 30,  September 30,
                                                       2007           2006
                                                   -----------    -----------
Cash Flows from Operating Activities:
Net income                                         $ 8,784,942    $ 5,108,657
Depreciation and amortization                          322,098        288,142
Changes in assets and liabilities:
Trade accounts receivable                           (4,440,513)    (5,405,382)
Other receivables                                     (349,117)       (99,868)
Advances to suppliers                               (2,504,684)       152,181
Inventory                                           (2,965,836)    (2,618,835)
Deferred tax assets                                       --            8,029
Deferred offering costs                                 60,487           --
Trade accounts payable                                 279,420        354,002
Accrued expenses                                        83,034         11,071
Accrued taxes payable                                     --         (197,707)
Other payables                                        (134,647)       144,450
Advances from customers                                 47,448         31,586
                                                   -----------    -----------
Net Cash Used in Operating Activities                 (817,368)    (2,223,674)
                                                   -----------    -----------

Cash Flows from Investing Activities:
Purchase of property and equipment                     (77,313)      (169,508)
Purchase of intangible assets                       (1,993,288)          --
                                                   -----------    -----------
Net Cash (Used) by Investing Activities             (2,070,601)      (169,508)
                                                   -----------    -----------

Cash Flows from Financing Activities:
Proceeds from sale of common stock and warrants      3,797,183           --
Proceeds from short term notes payable                    --        2,120,150
                                                   -----------    -----------
Net Cash Proceeds from Financing Activities          3,797,183      2,120,150
                                                   -----------    -----------

Effect of Exchange Rate Changes on Cash                149,995          5,199
                                                   -----------    -----------
Net Change in Cash                                   1,059,209       (267,833)
                                                   -----------    -----------
Cash and Cash Equivalents at Beginning of Period       656,441        461,220
                                                   -----------    -----------
Cash and Cash Equivalents at End of Period         $ 1,715,650    $   193,387
                                                   -----------    -----------



     See the accompanying footnotes to the unaudited condensed
                       consolidated financial statements.



                                       3
<PAGE>



                           CHINA PHARMA HOLDINGS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2007
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited condensed consolidated financial statements of China
Pharma Holdings,  Inc. (the Company) and its subsidiaries were prepared pursuant
to the rules and  regulations  of the  United  States  Securities  and  Exchange
Commission.  Certain  information  and note  disclosures  normally  included  in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations.  Management of the Company (Management)  believes
that the following  disclosures are adequate to make the  information  presented
not misleading. These condensed consolidated financial statements should be read
in conjunction with the audited consolidated  financial statements and the notes
thereto included in the Company's Form 10-KSB report for the year ended December
31, 2006.

These  unaudited  condensed   consolidated   financial  statements  reflect  all
adjustments  (consisting  only of normal  recurring  adjustments)  that,  in the
opinion  of  Management,  are  necessary  to  present  fairly  the  consolidated
financial  position  and  results of  operations  of the Company for the periods
presented.  Operating  results for the nine months ended  September 30, 2007 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending December 31, 2007.

Organization - Onny  Investment  Limited (Onny) was  incorporated in the British
Virgin  Islands on  January  12,  2005 and was a  development  stage  enterprise
through June 15, 2005. On June 16, 2005,  Onny  acquired all of the  outstanding
shares of Hainan  Helpson  Medical &  Biotechnology  Co., Ltd, a privately  held
Chinese joint venture (Helpson) and emerged from the development stage.

On October 19, 2005, Onny was reorganized as a wholly owned  subsidiary of China
Pharma Holdings, Inc., formerly TS Electronics (the Company).

Nature of  Operations - Helpson  manufactures  and markets  several  Western and
Chinese medicines sold mainly to hospitals and private retailers in The People's
Republic of China  (PRC),  through its  marketing  department  located in Hainan
Province. There are also nine other offices, with sales representatives in other
provinces and cities  throughout the PRC.  Helpson's other operating  activities
include biochemical products, health products, and cosmetics.

Accounting  Estimates - The  preparation  of financial  statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and liabilities  and the disclosures of contingent  assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting periods.  Actual results could differ
from those estimates.

Basic and Diluted  Earnings  per Common  Share - Basic and diluted  earnings per
common share are computed by dividing net income by the weighted-average  number
of common  shares  outstanding.  As of September 30, 2007  potentially  dilutive



                                       4
<PAGE>

securities includes warrants outstanding to purchase a total of 1,252,941 shares
of Company common stock at an exercise  price of $2.38 per share.  These are not
included in the computation of fully diluted earnings per share as the effect is
anti-dilutive  due to the exercise  price of the warrants  exceeding  the market
price of the stock at September 30, 2007. There are no anti-dilutive  securities
outstanding at September 30, 2006.

Recently Issued  Accounting  Pronouncements - In September 2006, the FASB issued
Statement  of  Financial   Accounting  Standards  (SFAS)  No.  157,  Fair  Value
Measurements  (SFAS 157), which defines fair value,  establishes a framework for
measuring fair value in generally  accepted  accounting  principles and requires
additional  disclosures about fair value measurements.  SFAS 157 aims to improve
the  consistency  and  comparability  of fair value  measurements  by creating a
single definition of fair value. The Statement emphasizes that fair value is not
entity-specific,  but  instead  is a  market-based  measurement  of an  asset or
liability. SFAS 157 upholds the requirements of previously issued pronouncements
concerning fair value  measurements and expands the required  disclosures.  This
Statement  is  effective  for  financial  statements  issued  for  fiscal  years
beginning  after  November 15, 2007,  however  earlier  application is permitted
provided the reporting entity has not yet issued  financial  statements for that
fiscal  year.  The Company  does not believe  that the adoption of SFAS 157 will
have a material effect on its consolidated financial statements.

In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial  Assets and  Financial  Liabilities,  including  an  amendment of FASB
Statement No. 115 (SFAS 159). This  pronouncement  permits entities to choose to
measure many  financial  instruments  and certain other items at fair value that
are not currently  required to be measured at fair value.  SFAS 159 is effective
as of the beginning of an entity's  first fiscal year that begins after November
15,  2007.  The  impact  of  adopting  SFAS  159 on the  Company's  consolidated
financial statements, if any, has not yet been determined.



NOTE 2 - INVENTORY

Inventory consisted of the following:

                           September 30,  December 31,
                               2007          2006
                            -----------   -----------
Raw materials               $10,622,087   $ 8,458,181
Work in progress              3,035,280     1,579,410
Finished goods                   58,769       240,296
                            -----------   -----------
Total Inventory             $13,716,136   $10,277,887
                            -----------   -----------


NOTE 3 - INCOME TAXES

The Company accounts for its income taxes in accordance with SFAS No. 109, which
requires recognition of deferred tax assets and liabilities and their respective
tax bases and any tax credit carry forwards  available.  Deferred tax assets and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.



                                       5
<PAGE>


According  to federal law in the People's  Republic of China (PRC),  enterprises
with foreign  investment and foreign  enterprises  doing business in the PRC are
generally subject to federal  enterprise income tax at a rate of 30%.  Effective
at the beginning of 2006 and extending through 2007, the PRC granted the Company
a tax holiday  that  allows the  Company to be exempt from income  taxes for the
first two profitable  years.  This tax holiday  further allows the Company to be
exempt from 50% of income  taxes during the third  through the fifth years.  The
reduced tax rate for 2008 through 2010 is 15%. Additionally,  Hainan province is
considered a developing  economic region which has a reduced  statutory tax rate
of 15%, which results in a tax holiday rate of 7.5% during the third through the
fifth years of profitability.

The Company has a deferred tax asset based upon the temporary  differences  from
the allowance for bad debt.  The Company has also incurred  various other taxes,
comprised  primarily of business taxes,  value-added  taxes,  urban construction
taxes,  education surcharges and others. Any unpaid amounts are reflected on the
balance sheets as accrued taxes payable.



NOTE 4 - NOTES PAYABLE

Short  Term  Notes  Payable - During  the third  quarter  of 2006,  the  Company
borrowed a total of $2,196,113 from a bank. The loans bear interest with a range
of 6.45% to 6.77%,  principal  and accrued  interest  are due July and August of
2007 and are collateralized by land use rights, machinery and equipment. On July
13, 2007 the Company renewed the loans with the bank. The renewed loan principal
and accrued interest are due on April 25, 2008.

Short Term Notes Payable to Former  Shareholders  - In January 2006, the Company
converted  its dividend  payable of  $4,402,147  into  short-term  notes bearing
interest at a rate of 2.25% per annum.  As of September 30, 2007 these notes and
accrued interest remain outstanding.



NOTE 5 - STOCKHOLDERS' EQUITY

On February 1, 2007, the Company  completed an offering of units priced at $1.70
per unit  consisting  of one share of  Company  common  stock  and a warrant  to
purchase  one-half of a share of Company  common  stock at an exercise  price of
$2.38 per share.  The Company received gross proceeds in the aggregate amount of
$4,259,900.  The net proceeds,  after deduction of related offering  expenses of
$462,717  amounted to  $3,797,183.  The Company issued an aggregate of 2,505,882
shares of common stock and issued  three-year  warrants to purchase an aggregate
of 1,252,941  shares of Company's common stock to 17 accredited  investors.  The
proceeds  were  allocated  to the  warrants  based  upon  their  fair  value  or
$2,010,219,  and the  balance of the  proceeds  was  allocated  to the shares of
common stock. The fair value of the warrants, determined using the Black-Scholes
Option Pricing Model, was calculated using the following assumptions:  risk free
interest rate of 4.80%,  expected  dividend yield of 0%, expected  volatility of
124.39% and an expected life of 3 years.

The common  shares and the shares  underlying  the  warrants  have  registration
rights and,  accordingly a registration  statement was filed with the Securities
Exchange Commission on March 30, 2007 within the 60 day period prescribed by the
registration rights agreement. The registration statement was declared effective
on May 4, 2007.




                                       6
<PAGE>

NOTE 6 - TRANSFERS OF TECHNOLOGY

During the first quarter of 2007,  the Company  entered into  agreements to sell
certain pharmaceutical  formulas presently in the research and development stage
with two separate  transactions to third parties for an aggregate sales price of
$1,479,792  which is recorded as other income,  transfer (sales) tax of $73,990,
which has been  recorded  as part of general  and  administrative  expenses  and
$836,404  recorded  as  research  and  development  expense in the  accompanying
statement  of  operations  and  comprehensive  income for the nine months  ended
September 30, 2007. The amounts due under the contracts  were  collected  during
the second quarter of 2007.

During the third quarter of 2007, the Company entered into agreements to acquire
certain  pharmaceutical  formulas  from  an  unrelated  party  for  cash  for an
aggregate purchase price of $1,993,388. This has been recorded under the caption
Intangible assets in the accompanying balance sheet as of September 30, 2007.



NOTE 7 - CONTINGENCIES

Economic  environment  -  Significantly  all of  the  Company's  operations  are
conducted  in  the  PRC,  and  therefore  the  Company  is  subject  to  special
considerations  and  significant  risks not typically  associated with companies
operating in the United States of America.  These risks  include,  among others,
the political,  economic and legal  environments and fluctuations in the foreign
currency  exchange  rate.  The  Company's  results may be adversely  affected by
changes in the  political  and social  conditions  in the PRC, and by changes in
governmental  policies with respect to laws and  regulations,  anti-inflationary
measures,  currency  conversion and remittance  abroad, and rates and methods of
taxation, among other things.

In addition,  all of the Company's  revenue is denominated in the PRC's currency
of Renminbi  ("CNY" or "(Y)"),  which must be  converted  into other  currencies
before  remittance  out of the PRC.  Both  the  conversion  of CNY into  foreign
currencies and the remittance of foreign  currencies  abroad require approval of
the PRC government.


Item 2. Management's Discussion and Analysis or Plan of Operation

The following  discussion should be read in conjunction with China Pharma Inc.'s
consolidated  financial  statements and related notes included elsewhere in this
Current Report on Form 10-QSB.

This  filing  contains  forward-looking  statements.  The  words  "anticipated,"
"believe," "expect",  "plan," "intend," "seek," "estimate,"  "project," "could,"
"may,"  and  similar  expressions  are  intended  to  identify   forward-looking
statements. These statements include, among others, information regarding future
operations,  future  capital  expenditures,  and  future  net  cash  flow.  Such
statements  reflect  China  Pharma  management's  current  views with respect to
future events and  financial  performance  and involve risks and  uncertainties,
including  but  not  limited  to  changes  in  general   economic  and  business
conditions,  changes in foreign,  political,  social,  and economic  conditions,



                                       7
<PAGE>

regulatory initiatives and compliance with governmental regulations, the ability
to increase  market share,  and various other matters,  many of which are beyond
China  Pharma's  control.  Should  one or more of these  risks or  uncertainties
occur, or should underlying  assumptions  prove to be incorrect,  actual results
may vary materially and adversely from those anticipated, believed, estimated or
otherwise indicated. Consequently, all of the forward-looking statements made in
this filing are  qualified by these  cautionary  statements  and there can be no
assurance of the actual results or developments.


I. The Nine Months Ended September 30, 2007 In Brief

During the nine months ended September 30, 2007,  China Pharma continued to show
sound growth and outstanding  financial  performance.  For the nine months ended
September 30, 2007,  the Company's  total revenue  increased by over 75.62% to a
record  high of $24 million  compared  to $14 million for the nine months  ended
September  30, 2006.  This rapid  growth was due to increased  sales of existing
products and the  products  that were  developed  during the second half year of
2006. This was consistent with China Pharma's strategy of launching new products
in an increasingly competitive market and exploring potential domestic markets.

The financial  performance for the nine months ended September 30, 2007 improved
compared to the nine months ended September 30, 2006.  Gross profit increased by
68.64%  to  $11.08  million  and net  income,  not  including  foreign  currency
translation  adjustment,  increased by 71.96% to $8.78 million.  This growth was
attributable to the development of new product  processes and  strengthening our
marketing.

For the nine  months  ended  September  30,  2007,  earnings  per  common  share
increased  61.66% to $0.24 per  share  compared  to $0.15 per share for the nine
months ended  September 30, 2006.  China Pharma started  working  closely with a
variety of  professional  pharmaceutical  research  institutions to deliver more
functional products tailored to the demands of the end-user.  Management's goals
are centered on achieving  stable  profit  growth.  Accordingly,  we operate the
business based on strategic principles, which have proven successful. Thoroughly
exploring the potential in the pharmaceutical field is the key to our success.

We are also concerned with corporate  governance as a modern enterprise.  In the
near future,  we will  establish a more  systematic  and long  lasting  internal
controls   process  for   prospective   development   and  the  benefit  of  our
shareholders.


II. Business Overview

China Pharma is primarily engaged in the research, development, manufacture, and
marketing  of  pharmaceutical  and  nutritional  supplements.  During  2007,  we
launched two new products, Alginic Sodium Diester and Granisetron hydrochloride.

We plan to expand our  biotechnology  product  series.  Based on the  foundation
established  by some of  Helpson's  widely  recognized  medicine  labels such as
Neurotrophicpeptide,  we have  launched and will continue to launch a variety of



                                       8
<PAGE>

biological medicine, including the injected hepatocyte growth-promoting factors,
which are expected to fuel additional growth beyond that of Neurotrophicpeptide.

One of our products, Buflomedil Hydrochloride (including raw material, injection
and troche) has been recognized in the following ways:

o    Designated  as the key  technology  project  in Hainan  in 2003 by  Hai'kou
     Municipality.

o    Received  the best  commercialized  technology  award in  Hainan in 2004 by
     Hainan Scientific and Technological Result Examination Committee.

o    Awarded the  national  key new  products  certificate  in 2003 by the State
     Science and  Technology  Department,  State  Taxation  Bureau,  Ministry of
     Commerce,  State Bureau of Quality Supervision,  Inspection and Quarantine,
     and State Environmental Protection Bureau.

In  2003,  Helpson  attained  GMP  authentication  and  the  prize  as the  best
enterprise  for  supporting  SARS  medicine  awarded  by  Hainan  Food  and Drug
Administration, demonstrating our industry leadership. For the nine months ended
September  30,  2007,  our  products  have  been  distributed  to  more  than 29
provinces, sovereignties, and autonomous regions around China. Our products have
been sold in more than 29 provinces,  sovereignties,  and autonomous regions. We
have 16 sales offices and approximately 680 proxy agents throughout the PRC. The
main  channels we use to deliver our products are as follows:  (1)  Distribution
system (Proxy Agents); (2) Direct sale system to hospitals;  (3) Distribution of
products to end-market through local medical companies.

Onny Investment Limited (Onny) was incorporated in the British Virgin Islands on
January 12, 2005 and was a development  stage enterprise  through June 15, 2005.
On June 16, 2005, Onny acquired all of the outstanding  shares of Hainan Helpson
Medical &  Biotechnology  Co.,  Ltd, a  privately  held  Chinese  joint  venture
(Helpson) and emerged from the development  stage. On October 19, 2005, Onny was
reorganized as a wholly owned subsidiary of China Pharma Holdings, Inc. formerly
TS Electronics, (the Company).

Additionally,  on February 1, 2007, China Pharma fulfilled a fund raising equity
offering of units priced at $1.70 each  consisting  of one share of common stock
and a warrant to  purchase  one-half  of a share of common  stock at an exercise
price of $2.38 per share.  China Pharma received gross proceeds in the aggregate
amount of $4,259,900.  The net proceeds,  after  deducting the related  offering
expenses  of $462,717  amounted to  $3,797,183.  In total,  we issued  2,505,882
shares of common stock and issued  three-year  warrants to purchase an aggregate
of 1,252,941 shares of common stock to 17 accredited investors.


III. Trend in the Market.

Studies  show that due to the  expansion  and aging of the  world's  population,
ever-growing  numbers  of people  have  age-related  diseases,  such as  cancer,
Alzheimer's  disease,  diabetes and  rheumatoid  arthritis.  These diseases have
already become prevalent,  especially in developed areas. In a growing and aging
population, people need to find more effective methods of treatment.



                                       9
<PAGE>

Patient  empowerment  has been a factor  in  high-quality  healthcare.  Many are
better  informed about the importance of health issues and medical  advancement.
Naturally,  people  today are  demanding  greater  care and access to the latest
medical procedures and medicines.

Helpson views this market trend as an opportunity. However, the best way to take
advantage of this  opportunity  is to identify our  business  risks  beforehand.
Generally speaking, there are three aspects of risks:

o External Risk

In recent years, the Chinese medical system has been reformed,  resulting in the
State  Department's  establishment  of a  basic  medical  insurance  system  for
employees. Considering the social environment and the governmental policy in the
pharmaceutical industry in PRC, a large increase in sales can be expected due to
local  government  involvement in the industry.  Competition will also be strong
across the industry  overall.  Currently,  the Company's  existing  products are
competitive  in  the  market  and  possess  growth  potential.  However,  from a
long-term  perspective,  some major western medicine  producers are also seeking
Chinese market share. This will make the Company face strong  competition in the
natural medicine market sector.

o Operation Risk

One of the major  uncertainties in the Company is the purchase of raw materials.
Raw materials are primarily affected by the geographical,  island environment of
Hainan  Province.  Because of high  transportation  costs and the need to supply
production requirements,  the Company has to store large amounts of inventory to
maintain consistent  production levels. In addition,  partial raw materials need
to be specially  ordered  which further  increases the need to store  inventory.
Finally,  due to the increasing  sales, the Company must store a large volume of
packaging material.

o Foreign Currency Risk

Substantially  all of our  operations  are  conducted  in the PRC. Our sales and
purchases are conducted  within the PRC in Chinese  Renminbi.  As a result,  the
effect of the exchange  rate  fluctuation  would  inevitably be considered to be
material to our business operations.

All of our revenues and expenses are accounted  for in Renminbi.  But we use the
United  States  dollar (USD) for  financial  reporting  purposes.  Conversion of
Renminbi  into foreign  currencies  is  regulated by the People's  Bank of China
through a unified floating exchange rate system. Although the PRC government has
stated its  intention  to support the value of the  Renminbi,  there could be no
assurance  that such  exchange rate will not become  volatile  again or that the
Renminbi  will  not  devalue   significantly  against  the  USD.  Exchange  rate
fluctuations may adversely affect the value, in USD terms, of our net assets and
income derived from its operations in the PRC.



                                       10
<PAGE>
<TABLE>
<CAPTION>


IV.  Analysis of financial  performance for the three months ended September 30,
     2007


                            CHINA PHARMA HOLDING INC
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            and COMPREHENSIVE INCOME
                                   (unaudited)

                                           For the three months
                                            ended September 30,            Change          Variance
                                        ----------------------------
                                            2007           2006
                                        ------------    ------------    ------------
<S>                                     <C>             <C>             <C>             <C>

Revenue                                 $  8,293,497    $  5,015,272    $  3,278,225         65.36%
                                                                        ============

Cost of revenue                            4,413,042       2,521,205       1,891,837         75.04%
                                        ------------    ------------    ------------    ------------

Gross profit                               3,880,455       2,494,067       1,386,388         55.59%
                                        ------------    ------------    ------------    ------------

Operation expenses:
 Selling expenses                            422,098          42,966         379,132        882.40%
 Genenral and administrative                 328,743         100,650         228,093        226.62%
 Research and development                      5,941         125,359        (119,418)       -95.26%
 Bad debt expense (recovery)                    --           152,142        (152,142)      -100.00%
                                        ------------    ------------    ------------    ------------
Total operating expenses                     756,782         421,117         335,665         79.71%
                                        ------------    ------------    ------------    ------------

Income from operations                     3,123,673       2,072,950       1,050,723         50.69%
                                        ------------    ------------    ------------    ------------

Non-operating income(expenses):
 Interest income                               4,400             408           3,992        978.43%
 Interest expense                            (50,857)        (39,872)        (10,985)        27.55%
 Other income                                  7,549            --             7,549
                                        ------------    ------------    ------------    ------------
Total non-operating income(expense)          (38,908)        (39,464)            556         -1.41%
                                        ------------    ------------    ------------    ------------

Income before taxes                        3,084,765       2,033,486       1,051,279         51.70%
Income tax expense                              --          (326,661)        326,661       -100.00%
                                        ------------    ------------    ------------    ------------
Net income                              $  3,084,765    $  1,706,825    $  1,377,940         80.73%
                                        ============    ============    ============    ============
Comprehensive income -foreign
currency translation adjustments             570,646          25,307         545,339       2154.89%
                                        ------------    ------------    ------------    ------------
Comprehensive income                    $  3,655,411    $  1,732,132    $  1,923,279        111.04%
                                        ============    ============    ============    ============

Basic and diluted earnings per common
                                        ------------    ------------    ------------    ------------
share                                   $       0.08    $       0.05    $       0.03         68.57%
                                        ============    ============    ============    ============

Weighted-average common shares
outstanding                               37,228,938      34,723,056       2,505,882          7.22%
                                        ============    ============    ============    ============

</TABLE>


Revenues

Revenues  for the three  months  ended  September  30,  2007 is in the amount of
around  $8.3  million,  there is an  approximately  $3.28  million  (or  65.36%)
increase  as  compared  to  the  corresponding  period  in  2006.  The  dramatic
improvement  in sales  revenue was due to the following  reasons;  on the demand
side, taking advantage of the booming of China's economy, the demand for medical
products  increased a lot. On the supply side,  our output has been  expanded to
cope with the increased market demands,  more efforts have been put in marketing
of our  products,  and  distribution  channels  have been  widened.  Our matured
products have been well-accepted by customers,  the revenues from these products
increased  steadily  (23%  more  than  corresponding  figure  last  year) and it
contributes  approximately  $1.18  million to the total  increase of revenues in
this quarter.  Some of the maturated products that achieved large increases are;
Andrographolide  has  increased by 135.07%,  Cefaclor  has  increased by 99.63%,
Neurotrophicpetide  increased  by 72.58%,  Buflomedil  has  increased by 64.12%.
Products  which had been  introduced  last year are in the  maturity  stage now,
revenues from these products  increased as well, and it contributes around $0.45
million  to the  total  increase  of  revenues  in this  quarter.  Some of those



                                       11
<PAGE>

products  that show good  increase in revenues  are,  Ozagrel has  increased  by
$0.397  million.  Finally,  the new products that have been introduced this year
matched with the market demand, and are well-recognized by the customers, and it
contributes $1.39 million to the total increase in revenues this quarter, within
this increase,  Granisetron  hydrochloride has contributed  $0.779 million,  and
Alginic Sodium Diester has contributed $0.58 million.

Cost of revenue

Cost of revenue for the three months ended September 30, 2007 was  approximately
$4.41 million, it accounts for about 53.21% of the revenues,  as compared to the
$2.52 million costs for the third quarter last year, the amount has increased by
$1.89  million or 75%,  this was  primarily  due to the increase in sales volume
this quarter.

Gross profit

Compared  with the gross  profits  of the  corresponding  period in 2006  (gross
profit $2.49 million,  gross margin  49.73%),  gross profit for the three months
ended  September 30, 2007 has  increased by about $1.39  million or 55.59%,  and
reached at around $3.88 million, the gross margin is 46.79%. The improved profit
was due to the substantially increase in revenues this period.

Selling Expenses

The  selling  expenses  for the  three  months  ended  September  30,  2007 have
increased a lot (by $379,132) and reached at $422,098,  it represents  55.78% of
the total  operating  expenses.  During this year,  to broaden our market  share
further,  we have  spent a lot of money in  marketing  of our  products,  70 new
salespersons have been recruited, in line with this, traveling expenses,  office
expenses and salaries have increased.

General & Administrative Expenses

General and  administrative  expenses  incurred  this quarter are  $328,743;  it
stands for around  43% of the total  operating  expenses.  It has  increased  by
$228,093  as  compared to the  corresponding  period last year.  This was mainly
caused by a large sum of expenses spend in design of new packaging style (amount
to $94 thousands),  and because the carrying amount of the intangible assets has
increased, the amortization expenses of intangible asset have also increased (by
around $34 thousands),  and as a result of the increased sales volume, traveling
fees and office expense have increased a lot as well.

Income from operations

Income from operations has increased by approximately  $1.05 million and came to
$3.12  million,  which is,  increased by 50.69%.  This is a result of the 55.59%
increase in gross profit.



                                       12
<PAGE>

Interest income

Interest income has increased by $3,992 compared with the  corresponding  period
last  year,  this was  caused by the  generous  cash  inflows  this year and the
resulted increase in cash balances.

Interest expense

Interest  expense has increased by $10,985 for the year ended 30 September 2007;
the  reason   was,   a  sum  of  loans   (?12,000,000@6.4496%   per  year,   and
?5,000,000@6.7721%  per year) have  expired  and have been  repaid,  and shortly
after the  repayment,  we entered  into a new  contract  of loan,  the amount is
?17,000,000 and the interest is 7.182% per year. As the interest rate increases,
interest expenses increase as well.

Income tax expense

For the three months ended  September 30, 2007,  the company has no tax expense,
because the company has been granted a tax holiday by the  government,  and this
allowed the company to be exempted from income taxes in 2007.

Net income

Although  expenses have been increased this quarter compared with last year, the
huge  increase in revenue and gross profit and  exempted  from income taxes made
this quarter's net income improved to $3,084,765(1), that is, 80.73% higher than
the net income of $1,706,825 for the three months ended September 30, 2006.







-----------------------------------
(1) Exclude the effects of foreign currency translation.




                                       13
<PAGE>
<TABLE>
<CAPTION>

V.   Analysis of financial  performance  for the nine months ended September 30,
     2007

                            CHINA PHARMA HOLDING INC
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            and COMPREHENSIVE INCOME
                                   (unaudited)

                                             For the nine months
                                             ended September 30,            Change        Variance
                                        ----------------------------
                                            2007            2006
                                        ------------    ------------
<S>                                     <C>             <C>             <C>             <C>

Revenue                                 $ 24,097,521    $ 13,721,587    $ 10,375,934         75.62%
                                        ------------    ------------    ------------    ------------
Cost of revenue                           13,018,566       7,151,898       5,866,668         82.03%
                                        ------------    ------------    ------------    ------------

Gross profit                              11,078,955       6,569,689       4,509,266         68.64%
                                        ------------    ------------    ------------    ------------

Operation expenses:
 Selling expenses                            896,128         213,350         682,778        320.03%
 Genenral and administrative               1,912,266         333,654       1,578,612        473.13%
 Research and development                    846,822         124,715         722,107        579.01%
 Bad debt expense(recovery)                     --           (28,349)         28,349       -100.00%
                                        ------------    ------------    ------------    ------------
Total operating expenses                   3,655,216         643,370       3,011,846        468.14%
                                        ------------    ------------    ------------    ------------

Income from operations                     7,423,739       5,926,319       1,497,420         25.27%
                                        ------------    ------------    ------------    ------------
Non-operating income(expenses):
 Interest income                              29,808             588          29,220       4969.39%
 Interest expense                           (166,698)        (87,690)        (79,008)        90.10%
 Other income                              1,498,093            --         1,498,093
                                        ------------    ------------    ------------    ------------
Total non-operating income(expense)        1,361,203         (87,102)      1,448,305      -1662.77%
                                        ------------    ------------    ------------    ------------

Income before taxes                        8,784,942       5,839,217       2,945,725         50.45%
Income tax expense                              --          (730,560)        730,560       -100.00%
                                        ------------    ------------    ------------    ------------
Net income                              $  8,784,942    $  5,108,657    $  3,676,285         71.96%
                                        ============    ============    ============    ============
Comprehensive income -foreign
currency translation adjustments           1,222,329         137,964       1,084,365        785.98%
                                        ------------    ------------    ------------    ------------
Comprehensive income                    $ 10,007,271    $  5,246,621    $  4,760,650         90.74%
                                        ============    ============    ============    ============
Basic and diluted earnings per common
share                                   $       0.24    $       0.15    $       0.09         61.66%
                                        ============    ============    ============    ============
Weighted-average common shares
outstanding                               36,935,208      34,723,056       2,212,152          6.37%


</TABLE>


Revenues

Revenues  reached at $24 million at the end of September 30 2007, as compared to
last year (about $14  million);  there is an increase of $10  million,  that is,
75.62%. All three quarters outperformed last year's corresponding  figures, this
is due to the improvement of our output and distribution channels, and increased
market  recognition  of our products.  Revenues  from our matured  products have
increased  dramatically,  and the newly introduced products,  due to the correct
market targeting,  are  well-welcomed by the customers,  and it brought us $3.46
millions of revenues.



                                       14
<PAGE>

Cost of revenues

Cost of revenue for the nine months ended September 30, 2007 was approximately
$13 million, it accFounts for about 54% of the revenues, as compared to the $7.2
million costs for the third quarter last year, the amount has increased by $5.87
million or 82.3%, this is a result of increased sales volume.

Gross profit

Compared  with the gross  profits for the nine month  ended 2006  (gross  profit
$6.57  million,  gross  margin  47.88%),  gross profit for the nine months ended
September 30, 2007 has increased by approximately  $4.51 million or 68.64%,  and
reached at around  $11.08  million,  the gross  margin is 45.98%.  The  improved
profit is due to the huge increase in revenues this period.

Selling Expenses

Selling expenses have increased by $0.68 million,  reached at $0.89 million;  it
represents 24.51% of the total operating costs. Due to our marketing potency has
been strengthened,  the demand to our products increases.  There is a great leap
in our output to cope with the demand,  and marketing expenses have increased as
more salesperson's salaries and traveling expenses have to be paid.


General and administrative expenses

General and administrative expenses have increased by $1.58 million,  reached at
$1.91 million;  it represents 52.32% of the total operating costs. As more sales
volumes have been achieved,  more office expenses,  and traveling fees have been
incurred  this year,  and  because  the  increase  in  intangible  assets,  more
amortization  expenses  have  been  incurred  as well.  Also the  launch  of new
products is the reason for the increase.

Income from operations

Due to the generous  increase in gross profits,  there was an increase in income
from  operations from  approximately  $5.93 million for the nine months ended 30
Sep 2006 to  approximately  $7.42 million for the nine months ended 30 Sep 2007.
It is also due to the increase in revenues.

Other income

Due to the sale of the drug formula,  approximately $1.5 million of incomes were
earned for the nine months ended 30 September  2007. It accounts for about 6.22%
of the revenues.

Income tax expense

For the nine months ended  September  30, 2007,  the company has no tax expense,
because the company has been granted a tax holiday by the  government,  and this
allowed the company to be exempted from income taxes in 2007.

Net income



                                       15
<PAGE>


Excluding the effects of foreign currency translation, net income from the first
three quarters has increased by $3.68 million, and reached at $8.78 million. As
compared to the last year's net income ($5.11 million), there is an increase of
71.96%. The increase is due to the large improvements in revenues, together with
the other income earned.


VI. Analysis of the financial position


                           CHINA PHARMA HOLDINGS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



                                                   For the nine   For the nine
                                                   months ended   months ended
                                                   September 30,  September 30,
                                                       2007           2006
                                                   -----------    -----------
Cash Flows from Operating Activities:
Net income                                         $ 8,784,942    $ 5,108,657
Depreciation and amortization                          322,098        288,142
Changes in assets and liabilities:
Trade accounts receivable                           (4,440,513)    (5,405,382)
Other receivables                                     (349,117)       (99,868)
Advances to suppliers                               (2,504,684)       152,181
Inventory                                           (2,965,836)    (2,618,835)
Deferred tax assets                                       --            8,029
Deferred offering costs                                 60,487           --
Trade accounts payable                                 279,420        354,002
Accrued expenses                                        83,034         11,071
Accrued taxes payable                                     --         (197,707)
Other payables                                        (134,647)       144,450
Advances from customers                                 47,448         31,586
                                                   -----------    -----------
Net Cash Used in Operating Activities                 (817,368)    (2,223,674)
                                                   -----------    -----------

Cash Flows from Investing Activities:
Purchase of property and equipment                     (77,313)      (169,508)
Purchase of intangible assets                       (1,993,288)          --
                                                   -----------    -----------
Net Cash (Used) by Investing Activities             (2,070,601)      (169,508)
                                                   -----------    -----------

Cash Flows from Financing Activities:
Proceeds from sale of common stock and warrants      3,797,183           --
Proceeds from short term notes payable                    --        2,120,150
                                                   -----------    -----------
Net Cash Proceeds from Financing Activities          3,797,183      2,120,150
                                                   -----------    -----------

Effect of Exchange Rate Changes on Cash                149,995          5,199
                                                   -----------    -----------
Net Change in Cash                                   1,059,209       (267,833)
                                                   -----------    -----------
Cash and Cash Equivalents at Beginning of Period       656,441        461,220
                                                   -----------    -----------
Cash and Cash Equivalents at End of Period         $ 1,715,650    $   193,387
                                                   -----------    -----------


At the end of 30 September 2007, the cash and cash  equivalents  balance reached
at $1,715,650,  compared with the figure in 30 September  2006, it has increased
by around eight times.  This is a combined  result of an improvement in net cash
used in operating activities and an increase in net cash proceeds from financing
activities.



                                       16
<PAGE>

Net cash used in operating  activities fell from negative $2,223,674 to negative
$817,368; the improvement is partially due to the increased net income, and also
because of the improved collection of trade accounts receivables, however, there
is still a net outflow of cash from operating  activities,  because new products
have been introduced,  large amount of new material are purchased,  and advances
to suppliers have increased as well.

Cash outflows from investing  activities  have increased to $2,070,601;  this is
due to the purchase of intangible assets which cost the company $1,993,288.

Net cash proceeds from financing  activities  have increased to $3,797,183.  The
increase was due to the proceeds  from sale of common  stocks and warrants  that
have been taken place in February.  On February 1, 2007,  the company has issued
2,505,882  common  stocks at a price of $1.70 per share,  and every share with a
three year  embedded  warrant to purchase  one-half of a company's  shares at an
exercise  price of $2.38 per share.  The net proceeds from the offering of stock
and warrants was $3,797,183,  with $2,010,219  allocated to the warrants and the
rest  allocated to the shares of common  stocks.  The fair value of the warrants
were  determined  based  on the  Black-Scholes  Option  pricing  model,  and the
calculation  is based on the following  assumptions:  risk free interest rate of
4.8%,  expected  dividend yield of 0%,  expected  volatility of 124.39%,  and an
expected  life of 3 years.  The  common  shares and the  shares  underlying  the
warrants have registration  rights,  and a registration  statement was filled to
the Securities Exchange Commission on March 30, 2007 within the 60 day period as
prescribed by the registration rights agreement.


VII. Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements in the Company.


VIII. Recently Enacted Accounting Pronouncements

On January 1, 2006, we adopted SFAS No. 151,  Inventory  Costs - An Amendment of
ARB No. 43,  Chapter 4 (SFAS 151).  SFAS 151 amends the  guidance in ARB No. 43,
Chapter 4, Inventory Pricing,  to clarify the accounting for abnormal amounts of
idle facility expense,  freight, handling costs, and wasted material (spoilage).
Among other  provisions,  the new rule requires that items such as idle facility
expense, excessive spoilage, double freight, and re-handling costs be recognized
as current-period charges.  Additionally,  SFAS 151 requires that the allocation
of fixed  production  overhead to the costs of conversion be based on the normal
capacity of the production facilities.  The effects of adoption of SFAS 151 were
not material.

On January 1, 2006, we adopted SFAS No. 123 (revised 2004),  Share-Based Payment
(SFAS  123R),   which  revises  SFAS  No.  123,   Accounting   for   Stock-Based
Compensation.  SFAS 123R also superseded APB 25,  Accounting for Stock Issued to
Employees,  and amends SFAS No. 95,  Statement  of Cash Flows.  Under SFAS 123R,
share-based  payments  to  employees,  including  the fair  value of  grants  of
employee  stock options,  are  recognized in the income  statement at their fair
value, generally over the option vesting period. The effects of adoption of SFAS
123R were not material.



                                       17
<PAGE>

In  December  2004,  the FASB issued SFAS No.  153,  Exchanges  of  Non-monetary
Assets--An  Amendment  of  APB  Opinion  No.  29,  Accounting  for  Non-monetary
Transactions  (SFAS 153).  SFAS 153  eliminated  the  exception  from fair value
measurement for non-monetary exchanges of similar productive assets in paragraph
21(b) of APB Opinion  No. 29,  Accounting  for  Non-monetary  Transactions,  and
replaced  it  with an  exception  for  exchanges  that  do not  have  commercial
substance.  SFAS 153  specifies  that a  non-monetary  exchange  has  commercial
substance  if the  future  cash  flows of the  entity  are  expected  to  change
significantly  as a result of the exchange.  The effects of adoption of SFAS 153
were not material.

In June  2005,  the FASB  issued  SFAS No.  154,  Accounting  Changes  and Error
Corrections,  a replacement of APB Opinion No. 20, Accounting Changes,  and FASB
No. 3, Reporting Accounting Changes in Interim Financial  Statements.  Statement
154 applies to all voluntary  changes in accounting  principle,  and changes the
requirements  for  accounting  for  and  reporting  of a  change  in  accounting
principle.  Statement 154 requires  retrospective  application to prior periods'
financial  statements of a voluntary change in accounting principle unless it is
impracticable.  It is effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005.  Earlier  application is
permitted for  accounting  changes and  corrections  of errors made occurring in
fiscal years  beginning  after June 1, 2005. The effects of adoption of SFAS 154
were not material.

In June 2005, the FASB Emerging  Issues Task Force (EITF) reached a consensus on
Issue No.05-6,  determining the Amortization Period for Leasehold  Improvements.
The  guidance  requires  that  leasehold  improvements  acquired  in a  business
combination  or purchased  subsequent  to the  inception of a lease be amortized
over the  lesser  of the  useful  life of the  assets  or a term  that  includes
renewals that are reasonably assured at the date of the business  combination or
purchase.  The guidance is effective for periods  beginning after June 29, 2005.
The effects of adoption of EITF No. 05-6 were not material.

In February  2006,  the FASB issued SFAS No. 155,  accounting for Certain Hybrid
Financial  Instruments -- an amendment of FASB  Statements No. 133 and 140 (SFAS
155).  SFAS 155 amends SFAS No. 133,  Accounting for Derivative  Instruments and
Hedging  Activities  and SFAS No.140,  Accounting for Transfers and Servicing of
Financial   Assets   and    Extinguishments   of   Liabilities,    and   related
interpretations.  SFAS155  permits  fair  value  remeasurement  for  any  hybrid
financial  instrument that contains an embedded  derivative that otherwise would
require bifurcation and clarifies which interest-only  strips and principal-only
strips are not subject to  recognition as  liabilities.  SFAS 155 eliminates the
prohibition  on a  qualifying  special-purpose  entity from holding a derivative
financial  instrument that pertains to a beneficial  interest other than another
derivative financial  instrument.  SFAS 155 is effective for the Company for all
financial  instruments  acquired or issued beginning January 1, 2007. The impact
of  adoption  of  this  statement  on  the  Company's   consolidated   financial
statements, if any, has not yet been determined.

In March  2006,  the FASB  issued  SFAS No. 156,  Accounting  for  Servicing  of
Financial  Assets - an amendment of FASB Statement No. 140 (SFAS 140).  SFAS 156
amends SFAS 140 Accounting  for Transfers and Servicing of Financial  Assets and
Extinguishments of Liabilities and related interpretations. SFAS 156 requires an
entity to  recognize  a  servicing  asset or  servicing  liability  each time it
undertakes  an  obligation  to service a financial  asset.  It also requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, if practicable. SFAS 156 permits an entity to use either



                                       18
<PAGE>

the amortization  method or the fair value measurement  method for each class of
separately  recognized servicing assets and servicing  liabilities.  SFAS 156 is
effective for the Company as of January 1, 2007.  The impact of adoption of this
statement on our  consolidated  financial  statements,  if any, has not yet been
determined.


VX. Conclusion

The overall  performance  during the nine months  ended  September  30, 2007 was
outstanding.  As a public company in the pharmaceutical  industry, we focused on
product innovation. In order to create products that are innovative and tailored
to the end user,  we must  concentrate  on R&D. As a result,  the  Company  will
continue to actively  pursue the  development  and  distribution of high-quality
products to the market.


Item 3 - Controls and Procedures

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the participation of the Company's management, including the Company's President
and  Chief  Executive  Officer  and Chief  Financial  Officer.  Based  upon that
evaluation,  the  Company's  President  and Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures  are  effective.  There  have  been  no  significant  changes  in the
Company's  internal  controls or in other  factors,  which  could  significantly
affect  internal  controls  subsequent  to the date the Company  carried out its
evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive and Chief Financial Officer as appropriate,  to allow timely decisions
regarding required disclosure.


                           PART II. OTHER INFORMATION


Item 1 Legal Proceedings

From  time to time,  we may  become  involved  in  various  lawsuits  and  legal
proceedings which arise in the ordinary course of business.  However, litigation
is subject to inherent  uncertainties,  and an adverse  result in these or other
matters may arise from time to time that may harm our business. We are currently
not aware of any such legal  proceeding  or claims  that we  believe  will have,
individually  or in the  aggregate,  a material  adverse effect on our business,
financial condition or operating results.



                                       19
<PAGE>


Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3 - Defaults upon Senior Securities

Not Applicable.

Item 4 - Submission of Matters to a Vote of Security Holders

None.

Item 5 - Other Information

None.

Item 6 - Exhibits

(a)   Exhibits

          31.1 -  Certification  of Chief  Executive  Officer  pursuant  to Rule
          13a-14 and Rule 15d-14(a) of the Exchange Act.

          31.2 -  Certification  of Chief  Financial  Officer  pursuant  to Rule
          13a-14 and Rule 15d-14(a) of the Exchange Act.

          32.1 -  Certification  of the Chief Executive  Officer  pursuant to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906 of the
          Sarbanes-Oxley Act of 2002.

          32.2 -  Certification  of the Chief Financial  Officer  pursuant to 18
          U.S.C.  Section  1350,  as  adopted  pursuant  to  Section  906 of the
          Sarbanes-Oxley Act of 2002.



                                       20
<PAGE>

                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



China Pharma Holdings, Inc.

Dated: November 13, 2007                        By: /s/ Zhilin Li
                                                -----------------------
                                                Zhilin Li
                                                Chief Executive Officer,
                                                President and Director


Dated: November 13, 2007                        By: /s/ Xinhua Wu
                                                ---------------------
                                                Xinhua Wu
                                                Chief Financial Officer,
                                                and Director