----

----

| x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
|---|------------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
|---|-------------------------------------------------------------------------------------------|

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

| Large accelerated filer                                               | o | Accelerated filer       | o |
|---------------------------------------------------------------------------------|---|-------------------------------------------------------|---|
| Non-accelerated filer   (Do not check if a smaller reporting company) | o | Smaller reporting company                   | x |

----

| ·   | for the three month period ended March 31, 2010 and 2009, included in its Quarterly Report on Form 10-Q filed with the SEC on May 10, 2010 (the “March 2010 Form 10-Q”); |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | for the three- and six-month periods ended June 30, 2010 and 2009, included in the June 2010 Form 10-Q; and |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | for the three- and nine-month periods ended September 30, 2010 and 2009, included in its Quarterly Report on Form 10-Q filed with the SEC on November 10, 2010 (the “September 2010 Form 10-Q”); |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | file an amendment to the March 2010 Form 10-Q, which will contain restated financial information for the three-month periods ended March 31, 2010 and 2009 reflecting the corrections made in response to these accounting errors; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | file this Amended Form 10-Q, which will contain restated financial information for the three- and six-month periods ended June 30, 2010 and 2009 reflecting the corrections made in response to these accounting errors; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | file an amendment to the September 2010 Form 10-Q, which will contain restated financial information for the three- and nine-month periods ended September 30, 2010 and 2009 reflecting the corrections made in response to these accounting errors. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   | As Previously |        |   |        |   |       | As       |   |
|--------------------------------------------|--------|---------------|-------------|--------|-------------|--------|------------|----------|--------|
| Balance Sheet Amounts                      |   | Reported      |        |   | Restatement |   |       | Restated |   |
| June 30, 2010                              |   |          |        |   |        |   |       |     |   |
| Derivative warrant liability               |   | $             | -           |   |        | $      | 1,157,640  |     |   | $ | 1,157,640 |   |
| Total liabilities                          |   |          | 12,675,966  |   |        |   | 1,157,640  |     |   |   | 13,833,606 |   |
| Additional paid-in capital                 |   |          | 23,981,130  |   |        |   | (852,957   | )        |   |   | 23,128,173 |   |
| Retained earnings                          |   |          | 72,843,772  |   |        |   | (304,683   | )        |   |   | 72,539,089 |   |
| Total stockholders' equity                 |   |          | 103,188,800 |   |        |   | (1,157,640 | )        |   |   | 102,031,160 |   |
| December 31, 2009                          |   |          |        |   |        |   |       |     |   |   |   |   |
| Derivative warrant liability               |   | $             | -           |   |        | $      | 2,523,148  |     |   | $ | 2,523,148 |   |
| Total liabilities                          |   |          | 10,544,965  |   |        |   | 2,523,148  |     |   |   | 13,068,113 |   |
| Additional paid-in capital                 |   |          | 21,178,114  |   |        |   | (852,957   | )        |   |   | 20,325,157 |   |
| Retained earnings                          |   |          | 63,272,868  |   |        |   | (1,670,191 | )        |   |   | 61,602,677 |   |
| Total stockholders' equity                 |   |          | 90,396,097  |   |        |   | (2,523,148 | )        |   |   | 87,872,949 |   |
| June 30, 2009                              |   |          |        |   |        |   |       |     |   |   |   |   |
| Current assets                             |   | $             | 64,372,150  |   |        | $      | -          |     |   | $ | 64,372,150 |   |
| Total assets                               |   |          | 85,928,588  |   |        |   | -          |     |   |   | 85,928,588 |   |
| Current liabilities                        |   |          | 7,967,030   |   |        |   | -          |     |   |   | 7,967,030 |   |
| Research and development commitments       |   |          | 36,524      |   |        |   | -          |     |   |   | 36,524 |   |
| Derivative warrant liability               |   |          | -           |   |        |   | 553,952    |     |   |   | 553,952 |   |
| Total liabilities                          |   |          | 12,675,966  |   |        |   | 553,952    |     |   |   | 13,229,918 |   |
| Common stock                               |   |          | 42,279      |   |        |   | -          |     |   |   | 42,279 |   |
| Additional paid-in capital                 |   |          | 21,066,338  |   |        |   | (852,957   | )        |   |   | 20,213,381 |   |
| Retained earnings                          |   |          | 51,003,610  |   |        |   | 299,005    |     |   |   | 51,302,615 |   |
| Foreign currency translation adjustment    |   |          | 5,812,807   |   |        |   | -          |     |   |   | 5,812,807 |   |
| Total stockholders' equity                 |   |          | 77,925,034  |   |        |   | (553,952   | )        |   |   | 77,371,082 |   |
| Total liabilities and stockholders' equity |   |          | 85,928,588  |   |        |   | -          |     |   |   | 85,928,588 |   |

----

| Statements of Operations and             |   | As Previously |       |   |        |   |       | As       |   |
|------------------------------------------|--------|---------------|------------|--------|-------------|--------|------------|----------|--------|
| Comprehensive Income Amounts             |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Three Months Ended June 30, 2010 |   |          |       |   |        |   |       |     |   |
| Derivative gain                          |   | $             | -          |   |        | $      | 807,005    |     |   | $ | 807,005 |   |
| Net other income (expense)               |   |          | (46,230    | )      |        |   | 807,005    |     |   |   | 760,775 |   |
| Income before income taxes               |   |          | 5,909,668  |   |        |   | 807,005    |     |   |   | 6,716,673 |   |
| Net income                               |   |          | 5,276,249  |   |        |   | 807,005    |     |   |   | 6,083,254 |   |
| Comprehensive income                     |   |          | 5,679,502  |   |        |   | 807,005    |     |   |   | 6,486,507 |   |
| Basic and diluted earnings per share     |   | $             | 0.12       |   |        | $      | 0.02       |     |   | $ | 0.14 |   |
| For the Three Months Ended June 30, 2009 |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                          |   | $             | -          |   |        | $      | (24,278    | )        |   | $ | (24,278 | ) |
| Net other expense                        |   |          | (29,751    | )      |        |   | (24,278    | )        |   |   | (54,029 | ) |
| Income before income taxes               |   |          | 4,772,375  |   |        |   | (24,278    | )        |   |   | 4,748,097 |   |
| Net income                               |   |          | 4,286,144  |   |        |   | (24,278    | )        |   |   | 4,261,866 |   |
| Comprehensive income                     |   |          | 4,291,842  |   |        |   | (24,278    | )        |   |   | 4,267,564 |   |
| Basic earnings per share                 |   | $             | 0.10       |   |        | $      | -          |     |   | $ | 0.10 |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
| Statements of Operations and             |   | As Previously |       |   |        |   |       |     | As     |   |
| Comprehensive Income Amounts             |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Six Months Ended June 30, 2010   |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative gain                          |   | $             | -          |   |        | $      | 1,365,509  |     |   | $ | 1,365,509 |   |
| Net other income (expense)               |   |          | (89,963    | )      |        |   | 1,365,509  |     |   |   | 1,275,546 |   |
| Income before income taxes               |   |          | 10,693,601 |   |        |   | 1,365,509  |     |   |   | 12,059,110 |   |
| Net income                               |   |          | 9,570,903  |   |        |   | 1,365,509  |     |   |   | 10,936,412 |   |
| Comprehensive income                     |   |          | 9,988,601  |   |        |   | 1,365,509  |     |   |   | 11,354,110 |   |
| Basic and diluted earnings per share     |   | $             | 0.22       |   |        | $      | 0.03       |     |   | $ | 0.25 |   |
| For the Six Months Ended June 30, 2009   |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                          |   | $             | -          |   |        | $      | (290,075   | )        |   | $ | (290,075 | ) |
| Net other expense                        |   |          | (57,398    | )      |        |   | (290,075   | )        |   |   | (347,473 | ) |
| Income before income taxes               |   |          | 8,807,744  |   |        |   | (290,075   | )        |   |   | 8,517,669 |   |
| Net income                               |   |          | 7,963,791  |   |        |   | (290,075   | )        |   |   | 7,673,716 |   |
| Comprehensive income                     |   |          | 8,056,980  |   |        |   | (290,075   | )        |   |   | 7,766,905 |   |
| Basic and diluted earnings per share     |   | $             | 0.19       |   |        | $      | (0.01      | )        |   | $ | 0.18 |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   | As Previously |       |   |        |   |       |     | As     |   |
| Statements of Cash Flows Amounts         |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the six months ended June 30, 2010   |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                               |   | $             | 9,570,903  |   |        | $      | 1,365,509  |     |   | $ | 10,936,412 |   |
| Derivative gain                          |   |          | -          |   |        |   | (1,365,509 | )        |   |   | (1,365,509 | ) |
| For the six months ended June 30, 2009   |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                               |   | $             | 7,963,791  |   |        | $      | (290,075   | )        |   | $ | 7,673,716 |   |
| Derivative loss                          |   |          | -          |   |        |   | 290,075    |     |   |   | 290,075 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     | Page   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|----------|--------|
| PART I                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |     FINANCIAL INFORMATION                                                    |     |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Financial Statements.                                                                       | 1        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Condensed Consolidated Balance Sheets                                                       |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | As of June 30, 2010 (Unaudited) and December 31, 2009                                       | 2        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Condensed Consolidated Statements of Operations and Comprehensive Income                    |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | For the Three Months and Six Months Ended June 30, 2010 and 2009 (Unaudited)                | 3   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Condensed Consolidated Statements of Cash Flows                                             |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | For the Six Months Ended June 30, 2010 and 2009 (Unaudited)                                 | 4        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Notes to Consolidated Financial Statements                                                  |  5  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
| Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
| Item 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |     Quantitative and Qualitative Disclosures about Market Risk               |  24 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Controls and Procedures.                                                                    | 24       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
| PART II                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | OTHER INFORMATION                                                                           |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
| Item 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Exhibits                                                                                    | 25       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |     |
| Signatures                                                                                                                                           | 26                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                        |
| Exhibits/Certifications                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  27                                                                                    |

----

----

| CHINA PHARMA HOLDINGS, INC.                                       |   |
|-------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED BALANCE SHEETS                             |   |
| (Unaudited)                                                       |   |
|                                                              |   |   |   |   |   |   |
|                                                              |   | June 30, |   |   | December 31, |   |
|                                                              |   | 2010 |   |   | 2009 |   |
|                                                              |   | (As Restated - Note 1) |   |
| ASSETS                                                            |   |   |   |   |   |   |
| Current Assets:                                                   |   |   |   |   |   |   |
| Cash and cash equivalents                                         |   | $ | 4,528,115 |   |   | $ | 3,634,753 |   |
| Trade accounts receivable, less allowance for doubtful            |   |   |   |   |   |   |   |   |
| accounts of $2,833,981 and $2,718,358, respectively               |   |   | 54,868,863 |   |   |   | 51,238,339 |   |
| Other receivables, less allowance for doubtful                    |   |   |   |   |   |   |   |   |
| accounts of $8,304 and $3,556, respectively                       |   |   | 104,763 |   |   |   | 78,525 |   |
| Advances to suppliers                                             |   |   | 2,717,044 |   |   |   | 1,798,446 |   |
| Inventory                                                         |   |   | 19,306,706 |   |   |   | 14,233,073 |   |
| Deferred tax assets                                               |   |   | 467,274 |   |   |   | 319,820 |   |
| Total Current Assets                                              |   |   | 81,992,765 |   |   |   | 71,302,956 |   |
| Advances for purchases of property and equipment and              |   |   |   |   |   |   |   |   |
| intangible assets                                                 |   |   | 4,072,982 |   |   |   | 3,599,949 |   |
| Property and equipment, net of accumulated depreciation of        |   |   |   |   |   |   |   |   |
| $2,418,184 and $2,020,462, respectively                           |   |   | 6,409,424 |   |   |   | 6,705,873 |   |
| Intangible assets, net of accumulated amortization of             |   |   |   |   |   |   |   |   |
| $1,820,516 and $1,359,048, respectively                           |   |   | 23,389,595 |   |   |   | 19,332,284 |   |
| TOTAL ASSETS                                                      |   | $ | 115,864,766 |   |   | $ | 100,941,062 |   |
|                                                              |   |   |   |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                              |   |   |   |   |   |   |   |   |
| Current Liabilities:                                              |   |   |   |   |   |   |   |   |
| Trade accounts payable                                            |   | $ | 6,343,401 |   |   | $ | 3,957,923 |   |
| Accrued expenses                                                  |   |   | 52,783 |   |   |   | 47,435 |   |
| Accrued taxes payable                                             |   |   | 1,301,152 |   |   |   | 1,528,691 |   |
| Other payables                                                    |   |   | 59,434 |   |   |   | 58,191 |   |
| Advances from customers                                           |   |   | 1,024,755 |   |   |   | 1,037,693 |   |
| Other payables - related parties                                  |   |   | 75,741 |   |   |   | 75,741 |   |
| Short-term notes payable                                          |   |   | 3,818,700 |   |   |   | 3,802,726 |   |
| Total Current Liabilities                                         |   |   | 12,675,966 |   |   |   | 10,508,400 |   |
| Long-term research and development commitments                    |   |   | - |   |   |   | 36,565 |   |
| Derivative warrant liability                                      |   |   | 1,157,640 |   |   |   | 2,523,148 |   |
| Total Liabilities                                                 |   |   | 13,833,606 |   |   |   | 13,068,113 |   |
| 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;     |   |   |   |   |   |
| 43,393,644 shares and 42,308,350 shares outstanding, respectively |   |   | 43,393 |   |   |   | 42,308 |   |
| Additional paid-in capital                                        |   |   | 23,128,173 |   |   |   | 20,325,157 |   |
| Retained earnings                                                 |   |   | 72,539,089 |   |   |   | 61,602,677 |   |
| Accumulated foreign currency translation adjustment               |   |   | 6,320,505 |   |   |   | 5,902,807 |   |
| Total Stockholders' Equity                                        |   |   | 102,031,160 |   |   |   | 87,872,949 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        |   | $ | 115,864,766 |   |   | $ | 100,941,062 |   |

----

| CHINA PHARMA HOLDINGS, INC.                     |   |
|-------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |   |
| AND COMPREHENSIVE INCOME                        |   |
| (Unaudited)                                     |   |
|                                            |   |   |   |   |   |   |
|                                            |   | For the Three Months Ended |   |   | For the Six Months Ended |   |
|                                            |   | June 30, |   |   | June 30, |   |
|                                            |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                            |   | (As Restated - Note 1) |
| Revenue                                         |   | $ | 16,631,354 |   |   | $ | 13,601,355 |   |   | $ | 31,733,864 |   |   | $ | 26,593,337 |   |
| Cost of revenue                                 |   |   | 9,587,417 |   |   |   | 7,681,845 |   |   |   | 18,555,719 |   |   |   | 14,745,072 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                    |   |   | 7,043,937 |   |   |   | 5,919,510 |   |   |   | 13,178,145 |   |   |   | 11,848,265 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                                |   |   | 621,580 |   |   |   | 603,924 |   |   |   | 1,204,468 |   |   |   | 1,206,684 |   |
| General and administrative expenses             |   |   | 894,507 |   |   |   | 553,607 |   |   |   | 1,547,255 |   |   |   | 1,041,654 |   |
| Bad debt expense, net of recoveries             |   |   | 37,615 |   |   |   | (40,147 | ) |   |   | 108,521 |   |   |   | 734,785 |   |
| Total operating expenses                        |   |   | 1,553,702 |   |   |   | 1,117,384 |   |   |   | 2,860,244 |   |   |   | 2,983,123 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government subsidy income                       |   |   | 465,663 |   |   |   | - |   |   |   | 465,663 |   |   |   | - |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                          |   |   | 5,955,898 |   |   |   | 4,802,126 |   |   |   | 10,783,564 |   |   |   | 8,865,142 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                 |   |   | 5,401 |   |   |   | 10,720 |   |   |   | 12,158 |   |   |   | 21,309 |   |
| Interest expense                                |   |   | (51,631 | ) |   |   | (40,471 | ) |   |   | (102,121 | ) |   |   | (78,707 | ) |
| Derivative gain (loss)                          |   |   | 807,005 |   |   |   | (24,278 | ) |   |   | 1,365,509 |   |   |   | (290,075 | ) |
| Net other income (expense)                      |   |   | 760,775 |   |   |   | (54,029 | ) |   |   | 1,275,546 |   |   |   | (347,473 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes                      |   |   | 6,716,673 |   |   |   | 4,748,097 |   |   |   | 12,059,110 |   |   |   | 8,517,669 |   |
| Income tax expense                              |   |   | (633,419 | ) |   |   | (486,231 | ) |   |   | (1,122,698 | ) |   |   | (843,953 | ) |
| Net income                                      |   |   | 6,083,254 |   |   |   | 4,261,866 |   |   |   | 10,936,412 |   |   |   | 7,673,716 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income - foreign currency   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| translation adjustment                          |   |   | 403,253 |   |   |   | 5,698 |   |   |   | 417,698 |   |   |   | 93,189 |   |
| Comprehensive income                            |   | $ | 6,486,507 |   |   | $ | 4,267,564 |   |   | $ | 11,354,110 |   |   | $ | 7,766,905 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per Share:                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                           |   | $ | 0.14 |   |   | $ | 0.10 |   |   | $ | 0.25 |   |   | $ | 0.18 |   |
| Diluted                                         |   | $ | 0.14 |   |   | $ | 0.10 |   |   | $ | 0.25 |   |   | $ | 0.18 |   |

----

| CHINA PHARMA HOLDINGS, INC.                      |   |
|--------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  |   |
| (Unaudited)                                      |   |
|                                             |   |   |   |   |   |   |
|                                             |   | For the Six Months Ended |   |
|                                             |   | June 30, |   |
|                                             |   | 2010 |   |   | 2009 |   |
|                                             |   | (As Restated - Note 1) |   |
| Cash Flows from Operating Activities:            |   |   |   |   |   |   |
| Net income                                       |   | $ | 10,936,412 |   |   | $ | 7,673,716 |   |
| Depreciation and amortization                    |   |   | 841,762 |   |   |   | 558,866 |   |
| Stock based compensation                         |   |   | 221,101 |   |   |   | - |   |
| Deferred income taxes                            |   |   | (145,552 | ) |   |   | (115,762 | ) |
| Derivative (gain) loss                           |   |   | (1,365,509 | ) |   |   | 290,075 |   |
| Changes in assets and liabilities:               |   |   |   |   |   |   |   |   |
| Trade accounts receivable                        |   |   | (3,402,232 | ) |   |   | (6,798,955 | ) |
| Other receivables                                |   |   | (25,809 | ) |   |   | 74,139 |   |
| Advances to suppliers                            |   |   | (907,559 | ) |   |   | 703,994 |   |
| Inventory                                        |   |   | (4,994,669 | ) |   |   | (1,716,958 | ) |
| Trade accounts payable                           |   |   | 2,404,264 |   |   |   | 2,426,525 |   |
| Accrued expenses                                 |   |   | (31,448 | ) |   |   | 3,133 |   |
| Accrued taxes payable                            |   |   | (233,065 | ) |   |   | (81,466 | ) |
| Other payables                                   |   |   | 1,014 |   |   |   | 7,819 |   |
| Advances from customers                          |   |   | (17,231 | ) |   |   | 36,727 |   |
| Net Cash Provided by Operating Activities        |   |   | 3,281,479 |   |   |   | 3,061,853 |   |
|                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities:            |   |   |   |   |   |   |   |   |
| Advances for purchases of property and equipment |   |   |   |   |   |   |   |   |
| and intangible assets                            |   |   | (2,018,906 | ) |   |   | (3,813,857 | ) |
| Purchase of property and equipment               |   |   | (108,842 | ) |   |   | (232,624 | ) |
| Purchase of intangible assets                    |   |   | (2,852,168 | ) |   |   | (2,308,941 | ) |
| Net Cash Used in Investing Activities            |   |   | (4,979,916 | ) |   |   | (6,355,422 | ) |
|                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activity:              |   |   |   |   |   |   |   |   |
| Proceeds from exercise of warrants               |   |   | 2,583,000 |   |   |   | - |   |
| Net Cash Provided by Financing Activity          |   |   | 2,583,000 |   |   |   | - |   |
|                                             |   |   |   |   |   |   |   |   |
| Effect of Exchange Rate Changes on Cash          |   |   | 8,799 |   |   |   | 9,221 |   |
| Net Increase (Decrease) in Cash                  |   |   | 893,362 |   |   |   | (3,284,348 | ) |
| Cash and Cash Equivalents at Beginning of Period |   |   | 3,634,753 |   |   |   | 6,927,149 |   |
| Cash and Cash Equivalents at End of Period       |   | $ | 4,528,115 |   |   | $ | 3,642,801 |   |
|                                             |   |   |   |   |   |   |   |   |
| Supplemental Cash Flow Information:              |   |   |   |   |   |   |   |   |
| Cash paid for interest                           |   | $ | 102,121 |   |   | $ | 85,429 |   |
| Cash paid for income taxes                       |   |   | 2,906,168 |   |   |   | 1,115,831 |   |

----

----

|                                               |   | For the Three Months |       |   | For the Six Months |   |
|----------------------------------------------------|--------|----------------------|------------|--------|--------------------|--------|
|                                               |   | Ended June 30,       |       |   | Ended June 30,     |   |
|                                               |   | 2010                 |       |   | 2009               |   |   | 2010 |   |   | 2009 |   |
|                                               |   | (As Restated)        |       |
| Net income                                         |   | $                    | 6,083,254  |   |               | $      | 4,261,866 |   |   | $ | 10,936,412 |   |   | $ | 7,673,716 |   |
| Basic weighted-average common shares outstanding   |   |                 | 43,393,644 |   |               |   | 42,278,938 |   |   |   | 43,261,567 |   |   |   | 42,278,938 |   |
| Effect of dilutive securities:                     |   |                 |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                                           |   |                 | 93,793     |   |               |   | - |   |   |   | 280,592 |   |   |   | - |   |
| Options                                            |   |                 | 10,202     |   |               |   | - |   |   |   | 8,141 |   |   |   | - |   |
| Diluted weighted-average common shares outstanding |   |                 | 43,497,639 |   |               |   | 42,278,938 |   |   |   | 43,550,300 |   |   |   | 42,278,938 |   |
| Basic earnings per share                           |   | $                    | 0.14       |   |               | $      | 0.10 |   |   | $ | 0.25 |   |   | $ | 0.18 |   |
| Diluted earnings per share                         |   | $                    | 0.14       |   |               | $      | 0.10 |   |   | $ | 0.25 |   |   | $ | 0.18 |   |

|                                                      |   | For the Three Months |      |   | For the Six Months |   |
|-----------------------------------------------------------|--------|----------------------|-----------|--------|--------------------|--------|
|                                                      |   | Ended June 30,       |      |   | Ended June 30,     |   |
|                                                      |   | 2010                 |      |   | 2009               |   |   | 2010 |   |   | 2009 |   |
| Warrants with exercise prices of $3.00 to $3.80 per share |   |                 | 1,822,873 |   |               |   | 2,969,607 |   |   |   | 1,668,719 |   |   |   | 2,969,607 |   |
| Options with an exercise price of $3.47 per share         |   |                 | 200,000   |   |               |   | - |   |   |   | 200,000 |   |   |   | - |   |
| Total                                                     |   |                 | 2,022,873 |   |               |   | 2,969,607 |   |   |   | 1,868,719 |   |   |   | 2,969,607 |   |

----

|                                       |   | As Previously |        |   |        |   |       | As       |   |
|--------------------------------------------|--------|---------------|-------------|--------|-------------|--------|------------|----------|--------|
| Balance Sheet Amounts                      |   | Reported      |        |   | Restatement |   |       | Restated |   |
| June 30, 2010                              |   |          |        |   |        |   |       |     |   |
| Derivative warrant liability               |   | $             | -           |   |        | $      | 1,157,640  |     |   | $ | 1,157,640 |   |
| Total liabilities                          |   |          | 12,675,966  |   |        |   | 1,157,640  |     |   |   | 13,833,606 |   |
| Additional paid-in capital                 |   |          | 23,981,130  |   |        |   | (852,957   | )        |   |   | 23,128,173 |   |
| Retained earnings                          |   |          | 72,843,772  |   |        |   | (304,683   | )        |   |   | 72,539,089 |   |
| Total stockholders' equity                 |   |          | 103,188,800 |   |        |   | (1,157,640 | )        |   |   | 102,031,160 |   |
| December 31, 2009                          |   |          |        |   |        |   |       |     |   |   |   |   |
| Derivative warrant liability               |   | $             | -           |   |        | $      | 2,523,148  |     |   | $ | 2,523,148 |   |
| Total liabilities                          |   |          | 10,544,965  |   |        |   | 2,523,148  |     |   |   | 13,068,113 |   |
| Additional paid-in capital                 |   |          | 21,178,114  |   |        |   | (852,957   | )        |   |   | 20,325,157 |   |
| Retained earnings                          |   |          | 63,272,868  |   |        |   | (1,670,191 | )        |   |   | 61,602,677 |   |
| Total stockholders' equity                 |   |          | 90,396,097  |   |        |   | (2,523,148 | )        |   |   | 87,872,949 |   |
| June 30, 2009                              |   |          |        |   |        |   |       |     |   |   |   |   |
| Current assets                             |   | $             | 64,372,150  |   |        | $      | -          |     |   | $ | 64,372,150 |   |
| Total assets                               |   |          | 85,928,588  |   |        |   | -          |     |   |   | 85,928,588 |   |
| Current liabilities                        |   |          | 7,967,030   |   |        |   | -          |     |   |   | 7,967,030 |   |
| Research and development commitments       |   |          | 36,524      |   |        |   | -          |     |   |   | 36,524 |   |
| Derivative warrant liability               |   |          | -           |   |        |   | 553,952    |     |   |   | 553,952 |   |
| Total liabilities                          |   |          | 12,675,966  |   |        |   | 553,952    |     |   |   | 13,229,918 |   |
| Common stock                               |   |          | 42,279      |   |        |   | -          |     |   |   | 42,279 |   |
| Additional paid-in capital                 |   |          | 21,066,338  |   |        |   | (852,957   | )        |   |   | 20,213,381 |   |
| Retained earnings                          |   |          | 51,003,610  |   |        |   | 299,005    |     |   |   | 51,302,615 |   |
| Foreign currency translation adjustment    |   |          | 5,812,807   |   |        |   | -          |     |   |   | 5,812,807 |   |
| Total stockholders' equity                 |   |          | 77,925,034  |   |        |   | (553,952   | )        |   |   | 77,371,082 |   |
| Total liabilities and stockholders' equity |   |          | 85,928,588  |   |        |   | -          |     |   |   | 85,928,588 |   |

----

| Statements of Operations and             |   | As Previously |       |   |        |   |       | As       |   |
|------------------------------------------|--------|---------------|------------|--------|-------------|--------|------------|----------|--------|
| Comprehensive Income Amounts             |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Three Months Ended June 30, 2010 |   |          |       |   |        |   |       |     |   |
| Derivative gain                          |   | $             | -          |   |        | $      | 807,005    |     |   | $ | 807,005 |   |
| Net other income (expense)               |   |          | (46,230    | )      |        |   | 807,005    |     |   |   | 760,775 |   |
| Income before income taxes               |   |          | 5,909,668  |   |        |   | 807,005    |     |   |   | 6,716,673 |   |
| Net income                               |   |          | 5,276,249  |   |        |   | 807,005    |     |   |   | 6,083,254 |   |
| Comprehensive income                     |   |          | 5,679,502  |   |        |   | 807,005    |     |   |   | 6,486,507 |   |
| Basic and diluted earnings per share     |   | $             | 0.12       |   |        | $      | 0.02       |     |   | $ | 0.14 |   |
| For the Three Months Ended June 30, 2009 |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                          |   | $             | -          |   |        | $      | (24,278    | )        |   | $ | (24,278 | ) |
| Net other expense                        |   |          | (29,751    | )      |        |   | (24,278    | )        |   |   | (54,029 | ) |
| Income before income taxes               |   |          | 4,772,375  |   |        |   | (24,278    | )        |   |   | 4,748,097 |   |
| Net income                               |   |          | 4,286,144  |   |        |   | (24,278    | )        |   |   | 4,261,866 |   |
| Comprehensive income                     |   |          | 4,291,842  |   |        |   | (24,278    | )        |   |   | 4,267,564 |   |
| Basic earnings per share                 |   | $             | 0.10       |   |        | $      | -          |     |   | $ | 0.10 |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
| Statements of Operations and             |   | As Previously |       |   |        |   |       |     | As     |   |
| Comprehensive Income Amounts             |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Six Months Ended June 30, 2010   |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative gain                          |   | $             | -          |   |        | $      | 1,365,509  |     |   | $ | 1,365,509 |   |
| Net other income (expense)               |   |          | (89,963    | )      |        |   | 1,365,509  |     |   |   | 1,275,546 |   |
| Income before income taxes               |   |          | 10,693,601 |   |        |   | 1,365,509  |     |   |   | 12,059,110 |   |
| Net income                               |   |          | 9,570,903  |   |        |   | 1,365,509  |     |   |   | 10,936,412 |   |
| Comprehensive income                     |   |          | 9,988,601  |   |        |   | 1,365,509  |     |   |   | 11,354,110 |   |
| Basic and diluted earnings per share     |   | $             | 0.22       |   |        | $      | 0.03       |     |   | $ | 0.25 |   |
| For the Six Months Ended June 30, 2009   |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                          |   | $             | -          |   |        | $      | (290,075   | )        |   | $ | (290,075 | ) |
| Net other expense                        |   |          | (57,398    | )      |        |   | (290,075   | )        |   |   | (347,473 | ) |
| Income before income taxes               |   |          | 8,807,744  |   |        |   | (290,075   | )        |   |   | 8,517,669 |   |
| Net income                               |   |          | 7,963,791  |   |        |   | (290,075   | )        |   |   | 7,673,716 |   |
| Comprehensive income                     |   |          | 8,056,980  |   |        |   | (290,075   | )        |   |   | 7,766,905 |   |
| Basic and diluted earnings per share     |   | $             | 0.19       |   |        | $      | (0.01      | )        |   | $ | 0.18 |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   |          |       |   |        |   |       |     |   |   |   |   |
|                                     |   | As Previously |       |   |        |   |       |     | As     |   |
| Statements of Cash Flows Amounts         |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the six months ended June 30, 2010   |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                               |   | $             | 9,570,903  |   |        | $      | 1,365,509  |     |   | $ | 10,936,412 |   |
| Derivative gain                          |   |          | -          |   |        |   | (1,365,509 | )        |   |   | (1,365,509 | ) |
| For the six months ended June 30, 2009   |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                               |   | $             | 7,963,791  |   |        | $      | (290,075   | )        |   | $ | 7,673,716 |   |
| Derivative loss                          |   |          | -          |   |        |   | 290,075    |     |   |   | 290,075 |   |

----

|            |   | June 30, |       |   | December 31, |   |
|-----------------|--------|----------|------------|--------|--------------|--------|
|            |   | 2010     |       |   | 2009         |   |
| Raw materials   |   | $        | 10,135,138 |   |         | $      | 9,353,076 |   |
| Finished goods  |   |     | 9,171,568  |   |         |   | 4,879,997 |   |
| Total Inventory |   | $        | 19,306,706 |   |         | $      | 14,233,073 |   |

|                           |   | June 30, |       |   | December 31, |   |
|--------------------------------|--------|----------|------------|--------|--------------|--------|
|                           |   | 2010     |       |   | 2009         |   |
| Permit of land use             |   | $        | 413,694    |   |         | $      | 411,963 |   |
| Building                       |   |     | 2,238,807  |   |         |   | 2,229,442 |   |
| Plant, machinery and equipment |   |     | 5,477,397  |   |         |   | 5,223,872 |   |
| Motor vehicle                  |   |     | 135,695    |   |         |   | 135,127 |   |
| Office equipment               |   |     | 122,061    |   |         |   | 109,440 |   |
| Construction in progress       |   |     | 439,954    |   |         |   | 616,491 |   |
| Total                          |   |     | 8,827,608  |   |         |   | 8,726,335 |   |
| Less: accumulated depreciation |   |     | (2,418,184 | )      |         |   | (2,020,462 | ) |
| Property and Equipment, net    |   | $        | 6,409,424  |   |         | $      | 6,705,873 |   |

| Asset                          |   |  Life - years |
|--------------------------------|--------|--------------------|
| Permit of land use             |   | 40 - 70            |
| Building                       |   | 20 - 35            |
| Plant, machinery and equipment |   | 10                 |
| Motor vehicle                  |   | 5 - 10             |
| Office equipment               |   | 5                  |

----

----

|           |   | Enterprise Income Tax Rate |
|----------------|--------|----------------------------|
| Year           |   |                       |
| 2010           |   | 11%                        |
| 2011           |   | 24%                        |
| 2012 and after |   | 25%                        |

|                   |   | For the Three Months |    |   | For the Six Months |   |
|------------------------|--------|----------------------|---------|--------|--------------------|--------|
|                   |   | Ended June 30,       |    |   | Ended June 30,     |   |
|                   |   | 2010                 |    |   | 2009               |   |   | 2010 |   |   | 2009 |   |
| Current                |   | $                    | 706,632 |   |               | $      | 479,027 |   |   | $ | 1,268,250 |   |   | $ | 959,715 |   |
| Deferred               |   |                 | (73,213 | )      |               |   | 7,204 |   |   |   | (145,552 | ) |   |   | (115,762 | ) |
| Net Income Tax Expense |   | $                    | 633,419 |   |               | $      | 486,231 |   |   | $ | 1,122,698 |   |   | $ | 843,953 |   |

----

|                         |   |         |       |   | Cumulative |   |     | January 1,  |   |
|------------------------------|--------|--------------|------------|--------|------------|--------|----------|-------------|--------|
|                         |   | December 31, |       |   | Effect     |   |     | 2009        |   |
|                         |   | 2008         |       |   | Adjustment |   |     | As Restated |   |
| Derivative warrant liability |   | $            | -          |   |       | $      | 263,577  |        |   | $ | 263,577 |   |
| Additional paid-in capital   |   |         | 21,066,338 |   |       |   | (852,957 | )           |   |   | 20,213,381 |   |
| Retained earnings            |   |         | 43,039,819 |   |       |   | 589,380  |        |   |   | 43,629,199 |   |

|                    |   | May 27, |    |   | January 1, |   |    | June 30, |   |   | December 31, |   |   | June 30, |      |
|-------------------------|--------|---------|---------|--------|------------|--------|---------|----------|--------|--------|--------------|--------|--------|----------|-----------|
|                    |   | 2008    |    |   | 2009       |   |    | 2009     |   |   | 2009         |   |   | 2010     |      |
| Risk free interest rate |   |    | 2.93    | %      |       |   | 2.93    | %        |   |   | 1.64         | %      |   |     | 2.93      | % |   |   | 1.00 | % |
| Expected life, in years |   |    | 3.00    |   |       |   | 2.41    |     |   |   | 1.91         |   |   |     | 1.41      |   |   |   | 0.91 |   |
| Expected dividend rate  |   |    | 0       | %      |       |   | 0       | %        |   |   | 0            | %      |   |     | 0         | % |   |   | 0 | % |
| Volatility              |   |    | 67.21   | %      |       |   | 67.21   | %        |   |   | 80.24        | %      |   |     | 67.21     | % |   |   | 74.99 | % |
| Fair value              |   | $       | 852,957 |   |       | $      | 263,577 |     |   | $      | 553,952      |   |   | $        | 2,523,148 |   |   | $ | 1,157,639 |   |

----

----

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

----

| ·   | We completed the clinical trials earlier this year for Candesartan, a front-line drug therapy for the treatment of hypertension. Since then, we have completed all testing procedures for this new product, and we are currently waiting for the final production approval from SFDA. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | We continue to receive positive feedback from patients during our clinical trial of Rosuvastatin, a generic form of Crestor. The majority of the patients in the clinical trial have completed the treatment cycle. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The clinical trial for our anti-drug-resistant antibiotic combination drug is also progressing on schedule, and the Phase I part of the trial is nearly completed. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                        |   | Three Months Ended June 30, |       |   |              |   |       | Six Months Ended June 30, |   |   |              |   |
|---------------------------------------------|--------|-----------------------------|------------|--------|-------------------|--------|------------|---------------------------|--------|--------|-------------------|--------|
|                                        |   | 2010(as restated)           |       |   | 2009(as restated) |   |       | % Chg                     |   |   | 2010(as restated) |   |   | 2009(as restated) |   |   | % Chg |   |
| Revenue                                     |   | $                           | 16,631,354 |   |              | $      | 13,601,355 |                      |   |   | 22                | %      |   | $ | 31,733,864 |   |   | $ | 26,593,337 |   |   |   | 19 | % |
| Cost of Revenue                             |   |                        | 9,587,417  |   |              |   | 7,681,845  |                      |   |   | 25                | %      |   |   | 18,555,719 |   |   |   | 14,745,072 |   |   |   | 26 | % |
| Gross Profit                                |   |                        | 7,043,937  |   |              |   | 5,919,510  |                      |   |   | 19                | %      |   |   | 13,178,145 |   |   |   | 11,848,265 |   |   |   | 11 | % |
| Selling Expenses                            |   |                        | 621,580    |   |              |   | 603,924    |                      |   |   | 3                 | %      |   |   | 1,204,468 |   |   |   | 1,206,684 |   |   |   | 0 | % |
| General and Admin Expenses                  |   |                        | 894,507    |   |              |   | 553,607    |                      |   |   | 62                | %      |   |   | 1,547,255 |   |   |   | 1,041,654 |   |   |   | 49 | % |
| Bad Debt Expense (Benefit)                  |   |                        | 37,615     |   |              |   | (40,147    | )                         |   |   |              |   |   |   | 108,521 |   |   |   | 734,785 |   |   |   |   |   |
| Income from Operations                      |   |                        | 5,955,898  |   |              |   | 4,802,126  |                      |   |   | 24                | %      |   |   | 10,783,564 |   |   |   | 8,865,142 |   |   |   | 22 | % |
| Derivative Gains (Loss)                     |   |                        | 807,005    |   |              |   | (24,278    | )                         |   |   |              |   |   |   | 1,365,509 |   |   |   | (290,075 | ) |   |   |   |   |
| Income Tax Expense                          |   |                        | (633,419   | )      |              |   | (486,231   | )                         |   |   | 30                | %      |   |   | (1,122,698 | ) |   |   | (843,953 | ) |   |   | 33 | % |
| Net Income                                  |   | $                           | 6,083,254  |   |              | $      | 4,261,866  |                      |   |   | 43                | %      |   | $ | 10,936,412 |   |   | $ | 7,673,716 |   |   |   | 43 | % |
| Basic Net Income per Share                  |   | $                           | 0.14       |   |              | $      | 0.10       |                      |   |   | 39                | %      |   | $ | 0.25 |   |   | $ | 0.18 |   |   |   | 38 | % |
| Basic Weighted Average Shares Outstanding   |   |                        | 43,393,644 |   |              |   | 42,278,938 |                      |   |   |              |   |   |   | 43,261,567 |   |   |   | 42,278,938 |   |   |   |   |   |
| Diluted Net Income per Share                |   | $                           | 0.14       |   |              | $      | 0.10       |                      |   |   | 39                | %      |   | $ | 0.25 |   |   | $ | 0.18 |   |   |   | 38 | % |
| Diluted Weighted Average Shares Outstanding |   |                        | 43,497,639 |   |              |   | 42,278,938 |                      |   |   |              |   |   |   | 43,550,300 |   |   |   | 42,278,938 |   |   |   |   |   |

| Product Category                       | Three Months Ended June 30 | Net Change | % Change |
|----------------------------------------|----------------------------|------------|----------|
|                                   | 2010                       | 2009       |     |   |
| CNS Cerebral & Cardio Vascular     | $ 4.9                      | $ 5.1      | -$ 0.2   | -5% |
| Anti-Viro/ Infection & Respiratory | $ 6.3                      | $ 5.2      | $ 1.1    | 21% |
| Digestive Diseases                     | $ 2.3                      | $ 1.0      | $ 1.3    | 129% |
| Other                                  | $ 3.2                      | $ 2.3      | $ 0.9    | 40% |

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|                                                                                 |   | China Pharma Holdings, Inc.                                    |   |
|--------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|
|                                                                                 |   | Reconciliation of Non-GAAP Adjusted Net Income and Diluted EPS |   |
|                                                                                 |   | (Unaudited, $ in thousand except share and per share data)     |   |
|                                                                                 |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   | For the Three Months Ended June 30,                            |   |   | For the Six Months Ended June 30, |   |
|                                                                                 |   | 2010                                                           |   |   |   |   |   | 2009 |   |   |   |   |   | 2010 |   |   |   |   |   | 2009 |   |   |   |   |
|                                                                                 |   | Net income                                                     |   |   | EPS |   |   | Net income |   |   | EPS |   |   | Net income |   |   | EPS |   |   | Net income |   |   | EPS |   |
| Adjusted net income, excluding approximate after-tax impact of derivative gain(loss) |   | $                                                              | 5,276  |   |   | $ | 0.12 |   |   | $ | 4,286 |   |   | $ | 0.10 |   |   | $ | 9,570 |   |   | $ | 0.22 |   |   | $ | 7,964 |   |   | $ | 0.19 |   |
|                                                                                 |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Add: Derivate Gain (Loss) (a)                                                        |   |                                                           | 807    |   |   |   | 0.02 |   |   |   | (24 | ) |   |   | 0.00 |   |   |   | 1,366 |   |   |   | 0.03 |   |   |   | (290 | ) |   |   | (0.01 | ) |
| Net income as reported (GAAP)                                                        |   | $                                                              | 6,083  |   |   | $ | 0.14 |   |   | $ | 4,262 |   |   | $ | 0.10 |   |   | $ | 10,936 |   |   | $ | 0.25 |   |   | $ | 7,674 |   |   | $ | 0.18 |   |

| (a) Represents the approximate amount that net income or EPS of the corresponding periods would have decreased by if derivative reclassification had not been made. |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|

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| Product Category                       | Six  Months Ended June 30 | Net Change | % Change |
|----------------------------------------|-------------------------------------|------------|----------|
|                                   | 2010                                | 2009       |     |   |
| CNS Cerebral & Cardio Vascular     | $ 10.2                              | $ 10.4     | -$ 0.2   | -2% |
| Anti-Viro/ Infection & Respiratory | $ 11.6                              | $ 9.3      | $ 2.4    | 26% |
| Digestive Diseases                     | $ 4.0                               | $ 1.4      | $ 2.6    | 179% |
| Other                                  | $ 5.9                               | $ 5.5      | $ 0.4    | 8% |

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|                                      |   | Six Months Ended June 30 |       |
|-------------------------------------------|--------|--------------------------|------------|
|                                      |   | 2010                     |       |   | 2009 |   |
| Net Cash Provided by Operating Activities |   | $                        | 3,281,479  |   |   | $ | 3,061,853 |   |
| Net Cash Used in Investing Activities     |   |                     | (4,979,916 | ) |   |   | (6,355,422 | ) |
| Net Cash Provided by Financing Activities |   |                     | 2,583,000  |   |   |   | - |   |
| Effect of Exchange Rate change on Cash    |   |                     | 8,799      |   |   |   | 9,221 |   |
| Cash & Equivalent Beginning Balance   |   |                     | 3,634,753  |   |   |   | 6,927,149 |   |
| Cash & Equivalent Ending Balance      |   | $                        | 4,528,115  |   |   | $ | 3,642,801 |   |

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|                       | CHINA PHARMA HOLDINGS, INC. |                                                                                                                                                                                                                                                                            |
|----------------------------|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |                        |                                                                                                                                                                                                                                                                            |   |
| Date: March 15, 2011  | By:                         |  /s/ Zhilin Li                                           |   |
|                       |                        | Name: Zhilin Li                                                                                                                                                                                                                                                                 |   |
|                       |                        | Title: President and Chief Executive Officer                                                                                                                                                                                                                               |   |
|                       |                        | (principal executive officer)                                                                                                                                                                                                                                              |   |

| Date: March 15, 2011 | By:    |  /s/ Frank Waung                                    |   |
|----------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                 |   | Name: Frank Waung                                                                                                                                                                                                                       |   |
|                 |   | Title: Chief Financial Officer                                                                                                                                                                                                     |   |
|                 |   | (principal financial officer and principal                                                                                                                                                                                         |   |
|                 |   | accounting officer)                                                                                                                                                                                                                |   |

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