----

----

| 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   o(Do not check if a smaller reporting company) | 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 its Quarterly Report on Form 10-Q filed with the SEC on August 9, 2010 (the “June 2010 Form 10-Q”); and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | for the three- and nine-month periods ended September 30, 2010 and 2009, included in 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 an amendment to the June 2010 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; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | file this Amended 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 |   |
| September 30, 2010                         |   |          |        |   |        |   |       |     |   |
| Derivative warrant liability               |   | $             | -           |   |        | $      | 727,952    |     |   | $ | 727,952 |   |
| Total liabilities                          |   |          | 11,032,117  |   |        |   | 727,952    |     |   |   | 11,760,069 |   |
| Additional paid-in capital                 |   |          | 24,041,616  |   |        |   | (852,957   | )        |   |   | 23,188,659 |   |
| Retained earnings                          |   |          | 78,328,698  |   |        |   | 125,005    |     |   |   | 78,453,703 |   |
| Total stockholders' equity                 |   |          | 110,508,787 |   |        |   | (727,952   | )        |   |   | 109,780,835 |   |
| 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 |   |
| September 30, 2009                    |   |          |        |   |        |   |       |     |   |   |   |   |
| Current assets                             |   | $             | 70,014,382  |   |        | $      | -          |     |   | $ | 70,014,382 |   |
| Total assets                               |   |          | 95,309,006  |   |        |   | -          |     |   |   | 95,309,006 |   |
| Current liabilities                        |   |          | 10,098,285  |   |        |   | -          |     |   |   | 10,098,285 |   |
| Research and development commitments       |   |          | 36,563      |   |        |   | -          |     |   |   | 36,563 |   |
| Derivative warrant liability               |   |          | -           |   |        |   | 2,226,754  |     |   |   | 2,226,754 |   |
| Total liabilities                          |   |          | 10,134,848  |   |        |   | 2,226,754  |     |   |   | 12,361,602 |   |
| Common stock                               |   |          | 42,279      |   |        |   | -          |     |   |   | 42,279 |   |
| Additional paid-in capital                 |   |          | 21,066,338  |   |        |   | (852,957   | )        |   |   | 20,213,381 |   |
| Retained earnings                          |   |          | 58,166,838  |   |        |   | (1,373,797 | )        |   |   | 56,793,041 |   |
| Foreign currency translation adjustment    |   |          | 5,898,703   |   |        |   | -          |     |   |   | 5,898,703 |   |
| Total stockholders' equity                 |   |          | 85,174,158  |   |        |   | (2,226,754 | )        |   |   | 82,947,404 |   |
| Total liabilities and stockholders' equity |   |          | 95,309,006  |   |        |   | -          |     |   |   | 95,309,006 |   |

----

| Statements of Operations and                  |   | As Previously |       |   |        |   |       | As       |   |
|-----------------------------------------------|--------|---------------|------------|--------|-------------|--------|------------|----------|--------|
| Comprehensive Income Amounts                  |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Three Months Ended September 30, 2010 |   |          |       |   |        |   |       |     |   |
| Derivative gain                               |   | $             | -          |   |        | $      | 429,687    |     |   | $ | 429,687 |   |
| Net other income (expense)                    |   |          | (36,520    | )      |        |   | 429,687    |     |   |   | 393,167 |   |
| Income before income taxes                    |   |          | 6,158,978  |   |        |   | 429,687    |     |   |   | 6,588,665 |   |
| Net income                                    |   |          | 5,484,927  |   |        |   | 429,687    |     |   |   | 5,914,614 |   |
| Comprehensive income                          |   |          | 7,259,502  |   |        |   | 429,687    |     |   |   | 7,689,189 |   |
| Basic and diluted earnings per share          |   | $             | 0.13       |   |        | $      | 0.01       |     |   | $ | 0.14 |   |
| For the Three Months Ended September 30, 2009 |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                               |   | $             | -          |   |        | $      | (1,673,102 | )        |   | $ | (1,673,102 | ) |
| Net other expense                             |   |          | (20,480    | )      |        |   | (1,673,102 | )        |   |   | (1,693,582 | ) |
| Income before income taxes                    |   |          | 8,030,978  |   |        |   | (1,673,102 | )        |   |   | 6,357,876 |   |
| Net income                                    |   |          | 7,163,228  |   |        |   | (1,673,102 | )        |   |   | 5,490,126 |   |
| Comprehensive income                          |   |          | 7,249,124  |   |        |   | (1,673,102 | )        |   |   | 5,576,022 |   |
| Basic and diluted earnings per share          |   | $             | 0.17       |   |        | $      | (0.04      | )        |   | $ | 0.13 |   |
|                                          |   |          |       |   |        |   |       |     |   |   |   |   |
| Statements of Operations and                  |   | As Previously |       |   |        |   |       |     | As     |   |
| Comprehensive Income Amounts                  |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Nine Months Ended September 30, 2010  |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative gain                               |   | $             | -          |   |        | $      | 1,795,196  |     |   | $ | 1,795,196 |   |
| Net other expense                             |   |          | (126,483   | )      |        |   | 1,795,196  |     |   |   | 1,668,713 |   |
| Income before income taxes                    |   |          | 16,852,579 |   |        |   | 1,795,196  |     |   |   | 18,647,775 |   |
| Net income                                    |   |          | 15,055,830 |   |        |   | 1,795,196  |     |   |   | 16,851,026 |   |
| Comprehensive income                          |   |          | 17,248,103 |   |        |   | 1,795,196  |     |   |   | 19,043,299 |   |
| Basic and diluted earnings per share          |   | $             | 0.35       |   |        | $      | 0.04       |     |   | $ | 0.39 |   |
| For the Nine Months Ended September 30, 2009  |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                               |   | $             | -          |   |        | $      | (1,963,177 | )        |   | $ | (1,963,177 | ) |
| Net other expense                             |   |          | (77,878    | )      |        |   | (1,963,177 | )        |   |   | (2,041,055 | ) |
| Income before income taxes                    |   |          | 16,838,722 |   |        |   | (1,963,177 | )        |   |   | 14,875,545 |   |
| Net income                                    |   |          | 15,127,019 |   |        |   | (1,963,177 | )        |   |   | 13,163,842 |   |
| Comprehensive income                          |   |          | 15,306,104 |   |        |   | (1,963,177 | )        |   |   | 13,342,927 |   |
| Basic and diluted earnings per share          |   | $             | 0.36       |   |        | $      | (0.05      | )        |   | $ | 0.31 |   |
|                                          |   |          |       |   |        |   |       |     |   |   |   |   |
|                                          |   |          |       |   |        |   |       |     |   |   |   |   |
|                                          |   | As Previously |       |   |        |   |       |     | As     |   |
| Statements of Cash Flows Amounts              |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Nine Months Ended September 30, 2010  |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                                    |   | $             | 15,055,830 |   |        | $      | 1,795,196  |     |   | $ | 16,851,026 |   |
| Derivative gain                               |   |          | -          |   |        |   | (1,795,196 | )        |   |   | (1,795,196 | ) |
| For the Nine Months Ended September 30, 2009  |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                                    |   | $             | 15,127,019 |   |        | $      | (1,963,177 | )        |   | $ | 13,163,842 |   |
| Derivative loss                               |   |          | -          |   |        |   | 1,963,177  |     |   |   | 1,963,177 |   |

----

| PART I                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | FINANCIAL INFORMATION                                                                       | Page     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
| Item 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Financial Statements.                                                                       | 1   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Condensed Consolidated Balance Sheets                                                       |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | As of September 30, 2010 and December 31, 2009 (Unaudited)                                  | 2   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Condensed Consolidated Statements of Operations and Comprehensive Income                    |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | For the Three Months and Nine Months Ended September 30, 2010 and 2009 (Unaudited)          | 3   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Condensed Consolidated Statements of Cash Flows                                             |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | For the Nine Months Ended September 30, 2010 and 2009 (Unaudited)                           | 4   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Notes to Condensed Consolidated Financial Statements (Unaudited)                            | 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                                  | 26  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
| Item 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Controls and Procedures.                                                                    | 26  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
| PART II                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | OTHER INFORMATION                                                                           |     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
| Item 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Other Information                                                                           | 27  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
| Item 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Exhibits                                                                                    | 27  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |     |
| Exhibits/Certifications                                                                                                                                           | 28                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                        |
| Signatures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 29                                                                                     |

----

----

| CHINA PHARMA HOLDINGS, INC.                                       |   |
|-------------------------------------------------------------------|--------|
| CONDENSED CONSOLIDATED BALANCE SHEETS                             |   |
|                                                              |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |
|                                                              |   | September 30, |   |   | December 31, |   |
|                                                              |   | 2010 |   |   | 2009 |   |
|                                                              |   | (As Restated - Note 1) |   |
| ASSETS                                                            |   |   |   |   |   |   |
| Current Assets:                                                   |   |   |   |   |   |   |
| Cash and cash equivalents                                         |   | $ | 4,561,432 |   |   | $ | 3,634,753 |   |
| Trade accounts receivable, less allowance for doubtful            |   |   |   |   |   |   |   |   |
| accounts of $2,976,077 and $2,718,358, respectively               |   |   | 56,792,742 |   |   |   | 51,238,339 |   |
| Other receivables, less allowance for doubtful                    |   |   |   |   |   |   |   |   |
| accounts of $21,880 and $3,556, respectively                      |   |   | 132,280 |   |   |   | 78,525 |   |
| Advances to suppliers                                             |   |   | 3,358,113 |   |   |   | 1,798,446 |   |
| Inventory                                                         |   |   | 19,861,057 |   |   |   | 14,233,073 |   |
| Deferred tax assets                                               |   |   | 523,840 |   |   |   | 319,820 |   |
| Total Current Assets                                              |   |   | 85,229,464 |   |   |   | 71,302,956 |   |
| Advances for purchases of property and equipment and              |   |   |   |   |   |   |   |   |
| intangible assets                                                 |   |   | 3,574,496 |   |   |   | 3,599,949 |   |
| Property and equipment, net of accumulated depreciation of        |   |   |   |   |   |   |   |   |
| $2,661,208 and $2,020,462, respectively                           |   |   | 6,394,538 |   |   |   | 6,705,873 |   |
| Intangible assets, net of accumulated amortization of             |   |   |   |   |   |   |   |   |
| $2,082,188 and $1,359,048, respectively                           |   |   | 26,342,406 |   |   |   | 19,332,284 |   |
| TOTAL ASSETS                                                      |   | $ | 121,540,904 |   |   | $ | 100,941,062 |   |
|                                                              |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                              |   |   |   |   |   |   |   |   |
| Current Liabilities:                                              |   |   |   |   |   |   |   |   |
| Trade accounts payable                                            |   | $ | 4,400,332 |   |   | $ | 3,957,923 |   |
| Accrued expenses                                                  |   |   | 55,043 |   |   |   | 47,435 |   |
| Accrued taxes payable                                             |   |   | 2,180,851 |   |   |   | 1,528,691 |   |
| Other payables                                                    |   |   | 75,560 |   |   |   | 58,191 |   |
| Advances from customers                                           |   |   | 1,030,766 |   |   |   | 1,037,693 |   |
| Other payables - related parties                                  |   |   | 303,644 |   |   |   | 75,741 |   |
| Short-term notes payable                                          |   |   | 2,985,921 |   |   |   | 3,802,726 |   |
| Total Current Liabilities                                         |   |   | 11,032,117 |   |   |   | 10,508,400 |   |
| Long-term research and development commitments                    |   |   | - |   |   |   | 36,565 |   |
| Derivative warrant liability                                      |   |   | 727,952 |   |   |   | 2,523,148 |   |
| Total Liabilities                                                 |   |   | 11,760,069 |   |   |   | 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;     |   |   |   |   |   |   |   |   |
| 43,393,642 shares and 42,308,350 shares outstanding, respectively |   |   | 43,393 |   |   |   | 42,308 |   |
| Additional paid-in capital                                        |   |   | 23,188,659 |   |   |   | 20,325,157 |   |
| Retained earnings                                                 |   |   | 78,453,703 |   |   |   | 61,602,677 |   |
| Accumulated foreign currency translation adjustment               |   |   | 8,095,080 |   |   |   | 5,902,807 |   |
| Total Stockholders' Equity                                        |   |   | 109,780,835 |   |   |   | 87,872,949 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        |   | $ | 121,540,904 |   |   | $ | 100,941,062 |   |

----

| CHINA PHARMA HOLDINGS, INC.                     |   |
|-------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |   |
| AND COMPREHENSIVE INCOME                        |   |
| (Unaudited)                                     |   |
|                                            |   | For the Three Months Ended |   |   | For the Nine Months Ended |   |
|                                            |   | September 30, |   |   | September 30, |   |
|                                            |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                            |   | (As Restated - Note 1) |   |
| Revenue                                         |   | $ | 18,680,390 |   |   | $ | 15,522,953 |   |   | $ | 50,414,254 |   |   | $ | 42,116,290 |   |
| Cost of revenue                                 |   |   | 11,055,254 |   |   |   | 8,979,083 |   |   |   | 29,610,973 |   |   |   | 23,724,155 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                    |   |   | 7,625,136 |   |   |   | 6,543,870 |   |   |   | 20,803,281 |   |   |   | 18,392,135 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling expenses                                |   |   | 449,295 |   |   |   | 807,231 |   |   |   | 1,653,763 |   |   |   | 2,013,915 |   |
| General and administrative expenses             |   |   | 873,157 |   |   |   | 521,676 |   |   |   | 2,420,412 |   |   |   | 1,563,330 |   |
| Bad debt expense (benefit)                      |   |   | 107,186 |   |   |   | (2,836,495 | ) |   |   | 215,707 |   |   |   | (2,101,710 | ) |
| Total operating expenses                        |   |   | 1,429,638 |   |   |   | (1,507,588 | ) |   |   | 4,289,882 |   |   |   | 1,475,535 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government subsidy income                       |   |   | - |   |   |   | - |   |   |   | 465,663 |   |   |   | - |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                          |   |   | 6,195,498 |   |   |   | 8,051,458 |   |   |   | 16,979,062 |   |   |   | 16,916,600 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                 |   |   | 1,147 |   |   |   | 3,956 |   |   |   | 13,305 |   |   |   | 25,265 |   |
| Interest expense                                |   |   | (37,667 | ) |   |   | (24,436 | ) |   |   | (139,788 | ) |   |   | (103,143 | ) |
| Derivative gain (loss)                          |   |   | 429,687 |   |   |   | (1,673,102 | ) |   |   | 1,795,196 |   |   |   | (1,963,177 | ) |
| Net other income (expense)                      |   |   | 393,167 |   |   |   | (1,693,582 | ) |   |   | 1,668,713 |   |   |   | (2,041,055 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes                      |   |   | 6,588,665 |   |   |   | 6,357,876 |   |   |   | 18,647,775 |   |   |   | 14,875,545 |   |
| Income tax expense                              |   |   | (674,051 | ) |   |   | (867,750 | ) |   |   | (1,796,749 | ) |   |   | (1,711,703 | ) |
| Net income                                      |   |   | 5,914,614 |   |   |   | 5,490,126 |   |   |   | 16,851,026 |   |   |   | 13,163,842 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income - foreign currency   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| translation adjustment                          |   |   | 1,774,575 |   |   |   | 85,896 |   |   |   | 2,192,273 |   |   |   | 179,085 |   |
| Comprehensive income                            |   | $ | 7,689,189 |   |   | $ | 5,576,022 |   |   | $ | 19,043,299 |   |   | $ | 13,342,927 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per Share:                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                           |   | $ | 0.14 |   |   | $ | 0.13 |   |   | $ | 0.39 |   |   | $ | 0.31 |   |
| Diluted                                         |   | $ | 0.14 |   |   | $ | 0.13 |   |   | $ | 0.39 |   |   | $ | 0.31 |   |

----

| CHINA PHARMA HOLDINGS, INC.                      |   |
|--------------------------------------------------|--------|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  |   |
| (Unaudited)                                      |   |
|                                             |   |   |   |   |   |   |
|                                             |   | For the Nine Months Ended |   |
|                                             |   | September 30, |   |
|                                             |   | 2010 |   |   | 2009 |   |
|                                             |   | (As Restated - Note 1) |   |
| Cash Flows from Operating Activities:            |   |   |   |   |   |   |
| Net income                                       |   | $ | 16,851,026 |   |   | $ | 13,163,842 |   |
| Depreciation and amortization                    |   |   | 1,271,251 |   |   |   | 986,310 |   |
| Stock based compensation                         |   |   | 281,587 |   |   |   | - |   |
| Bad debt expense (benefit)                       |   |   | 215,707 |   |   |   | (2,101,710 | ) |
| Derivative (gain) loss                           |   |   | (1,795,196 | ) |   |   | 1,963,177 |   |
| Deferred tax assets                              |   |   | (193,953 | ) |   |   | 210,171 |   |
| Changes in assets and liabilities:               |   |   |   |   |   |   |   |   |
| Trade accounts receivable                        |   |   | (4,610,175 | ) |   |   | (10,841,625 | ) |
| Other receivables                                |   |   | (69,154 | ) |   |   | 82,949 |   |
| Advances to suppliers                            |   |   | (1,495,898 | ) |   |   | 1,170,103 |   |
| Inventory                                        |   |   | (5,239,859 | ) |   |   | (1,742,681 | ) |
| Trade accounts payable                           |   |   | 277,275 |   |   |   | 2,772,775 |   |
| Accrued expenses                                 |   |   | (30,168 | ) |   |   | (11,339 | ) |
| Accrued taxes payable                            |   |   | 609,646 |   |   |   | 393,724 |   |
| Other payables                                   |   |   | 15,972 |   |   |   | 233,155 |   |
| Advances from customers                          |   |   | (27,982 | ) |   |   | 109,238 |   |
| Net Cash Provided by Operating Activities        |   |   | 6,060,079 |   |   |   | 6,388,089 |   |
|                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities:            |   |   |   |   |   |   |   |   |
| Advances for purchases of property and equipment |   |   |   |   |   |   |   |   |
| and intangible assets                            |   |   | (1,615,399 | ) |   |   | (2,921,715 | ) |
| Purchase of property and equipment               |   |   | (219,904 | ) |   |   | (255,273 | ) |
| Purchase of intangible assets                    |   |   | (5,311,961 | ) |   |   | (7,621,781 | ) |
| Net Cash Used in Investing Activities            |   |   | (7,147,264 | ) |   |   | (10,798,769 | ) |
|                                             |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activity:              |   |   |   |   |   |   |   |   |
| Proceeds from issuance of notes payable          |   |   | 2,934,100 |   |   |   | 3,799,775 |   |
| Payments of notes payable                        |   |   | (3,814,330 | ) |   |   | (2,484,468 | ) |
| Borrowing from a related party                   |   |   | 227,903 |   |   |   | - |   |
| Proceeds from exercise of warrants               |   |   | 2,583,000 |   |   |   | - |   |
| Net Cash Provided by Financing Activity          |   |   | 1,930,673 |   |   |   | 1,315,307 |   |
|                                             |   |   |   |   |   |   |   |   |
| Effect of Exchange Rate Changes on Cash          |   |   | 83,191 |   |   |   | 13,001 |   |
| Net Increase (Decrease) in Cash                  |   |   | 926,679 |   |   |   | (3,082,372 | ) |
| Cash and Cash Equivalents at Beginning of Period |   |   | 3,634,753 |   |   |   | 6,927,149 |   |
| Cash and Cash Equivalents at End of Period       |   | $ | 4,561,432 |   |   | $ | 3,844,777 |   |
|                                             |   |   |   |   |   |   |   |   |
| Supplemental Cash Flow Information:              |   |   |   |   |   |   |   |   |
| Cash paid for interest                           |   | $ | 139,494 |   |   | $ | 103,143 |   |
| Cash paid for income taxes                       |   |   | 1,889,810 |   |   |   | 1,413,306 |   |

----

----

|                                               |   | For the Three Months Ended |       |   | For the Nine Months Ended |   |
|----------------------------------------------------|--------|----------------------------|------------|--------|---------------------------|--------|
|                                               |   | September 30,              |       |   | September 30,             |   |
|                                               |   | 2010                       |       |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
|                                               |   | (As Restated)              |       |
| Net income                                         |   | $                          | 5,914,614  |   |                      | $      | 5,490,126 |   |   | $ | 16,851,026 |   |   | $ | 13,163,842 |   |
| Basic weighted-average common shares outstanding   |   |                       | 43,393,642 |   |                      |   | 42,278,938 |   |   |   | 43,306,075 |   |   |   | 42,278,938 |   |
| Effect of dilutive securities:                     |   |                       |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Warrants                                           |   |                       | -          |   |                      |   | - |   |   |   | 186,203 |   |   |   | - |   |
| Options                                            |   |                       | 13,533     |   |                      |   | - |   |   |   | 11,052 |   |   |   | - |   |
| Diluted weighted-average common shares outstanding |   |                       | 43,407,175 |   |                      |   | 42,278,938 |   |   |   | 43,503,330 |   |   |   | 42,278,938 |   |
| Basic earnings per share                           |   | $                          | 0.14       |   |                      | $      | 0.13 |   |   | $ | 0.39 |   |   | $ | 0.31 |   |
| Diluted earnings per share                         |   | $                          | 0.14       |   |                      | $      | 0.13 |   |   | $ | 0.39 |   |   | $ | 0.31 |   |

|                                                      |   | For the Three Months Ended |      |   | For the Nine Months Ended |   |
|-----------------------------------------------------------|--------|----------------------------|-----------|--------|---------------------------|--------|
|                                                      |   | September 30,              |      |   | September 30,             |   |
|                                                      |   | 2010                       |      |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Warrants with exercise prices of $3.00 to $3.80 per share |   |                       | 1,916,666 |   |                      |   | 2,969,607 |   |   |   | 736,111 |   |   |   | 2,969,607 |   |
| Options with an exercise price of $3.47 per share         |   |                       | 200,000   |   |                      |   | - |   |   |   | 133,333 |   |   |   | - |   |
| Total                                                     |   |                       | 2,116,666 |   |                      |   | 2,969,607 |   |   |   | 869,444 |   |   |   | 2,969,607 |   |

----

|                                       |   | As Previously |        |   |        |   |       | As       |   |
|--------------------------------------------|--------|---------------|-------------|--------|-------------|--------|------------|----------|--------|
| Balance Sheet Amounts                      |   | Reported      |        |   | Restatement |   |       | Restated |   |
| September 30, 2010                         |   |          |        |   |        |   |       |     |   |
| Derivative warrant liability               |   | $             | -           |   |        | $      | 727,952    |     |   | $ | 727,952 |   |
| Total liabilities                          |   |          | 11,032,117  |   |        |   | 727,952    |     |   |   | 11,760,069 |   |
| Additional paid-in capital                 |   |          | 24,041,616  |   |        |   | (852,957   | )        |   |   | 23,188,659 |   |
| Retained earnings                          |   |          | 78,328,698  |   |        |   | 125,005    |     |   |   | 78,453,703 |   |
| Total stockholders' equity                 |   |          | 110,508,787 |   |        |   | (727,952   | )        |   |   | 109,780,835 |   |
| 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 |   |
| September 30, 2009                         |   |          |        |   |        |   |       |     |   |   |   |   |
| Current assets                             |   | $             | 70,014,382  |   |        | $      | -          |     |   | $ | 70,014,382 |   |
| Total assets                               |   |          | 95,309,006  |   |        |   | -          |     |   |   | 95,309,006 |   |
| Current liabilities                        |   |          | 10,098,285  |   |        |   | -          |     |   |   | 10,098,285 |   |
| Research and development commitments       |   |          | 36,563      |   |        |   | -          |     |   |   | 36,563 |   |
| Derivative warrant liability               |   |          | -           |   |        |   | 2,226,754  |     |   |   | 2,226,754 |   |
| Total liabilities                          |   |          | 10,134,848  |   |        |   | 2,226,754  |     |   |   | 12,361,602 |   |
| Common stock                               |   |          | 42,279      |   |        |   | -          |     |   |   | 42,279 |   |
| Additional paid-in capital                 |   |          | 21,066,338  |   |        |   | (852,957   | )        |   |   | 20,213,381 |   |
| Retained earnings                          |   |          | 58,166,838  |   |        |   | (1,373,797 | )        |   |   | 56,793,041 |   |
| Foreign currency translation adjustment    |   |          | 5,898,703   |   |        |   | -          |     |   |   | 5,898,703 |   |
| Total stockholders' equity                 |   |          | 85,174,158  |   |        |   | (2,226,754 | )        |   |   | 82,947,404 |   |
| Total liabilities and stockholders' equity |   |          | 95,309,006  |   |        |   | -          |     |   |   | 95,309,006 |   |

----

| Statements of Operations and                  |   | As Previously |       |   |        |   |       | As       |   |
|-----------------------------------------------|--------|---------------|------------|--------|-------------|--------|------------|----------|--------|
| Comprehensive Income Amounts                  |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Three Months Ended September 30, 2010 |   |          |       |   |        |   |       |     |   |
| Derivative gain                               |   | $             | -          |   |        | $      | 429,687    |     |   | $ | 429,687 |   |
| Net other income (expense)                    |   |          | (36,520    | )      |        |   | 429,687    |     |   |   | 393,167 |   |
| Income before income taxes                    |   |          | 6,158,978  |   |        |   | 429,687    |     |   |   | 6,588,665 |   |
| Net income                                    |   |          | 5,484,927  |   |        |   | 429,687    |     |   |   | 5,914,614 |   |
| Comprehensive income                          |   |          | 7,259,502  |   |        |   | 429,687    |     |   |   | 7,689,189 |   |
| Basic and diluted earnings per share          |   | $             | 0.13       |   |        | $      | 0.01       |     |   | $ | 0.14 |   |
| For the Three Months Ended September 30, 2009 |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                               |   | $             | -          |   |        | $      | (1,673,102 | )        |   | $ | (1,673,102 | ) |
| Net other expense                             |   |          | (20,480    | )      |        |   | (1,673,102 | )        |   |   | (1,693,582 | ) |
| Income before income taxes                    |   |          | 8,030,978  |   |        |   | (1,673,102 | )        |   |   | 6,357,876 |   |
| Net income                                    |   |          | 7,163,228  |   |        |   | (1,673,102 | )        |   |   | 5,490,126 |   |
| Comprehensive income                          |   |          | 7,249,124  |   |        |   | (1,673,102 | )        |   |   | 5,576,022 |   |
| Basic and diluted earnings per share          |   | $             | 0.17       |   |        | $      | (0.04      | )        |   | $ | 0.13 |   |
|                                          |   |          |       |   |        |   |       |     |   |   |   |   |
| Statements of Operations and                  |   | As Previously |       |   |        |   |       |     | As     |   |
| Comprehensive Income Amounts                  |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Nine Months Ended September 30, 2010  |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative gain                               |   | $             | -          |   |        | $      | 1,795,196  |     |   | $ | 1,795,196 |   |
| Net other expense                             |   |          | (126,483   | )      |        |   | 1,795,196  |     |   |   | 1,668,713 |   |
| Income before income taxes                    |   |          | 16,852,579 |   |        |   | 1,795,196  |     |   |   | 18,647,775 |   |
| Net income                                    |   |          | 15,055,830 |   |        |   | 1,795,196  |     |   |   | 16,851,026 |   |
| Comprehensive income                          |   |          | 17,248,103 |   |        |   | 1,795,196  |     |   |   | 19,043,299 |   |
| Basic and diluted earnings per share          |   | $             | 0.35       |   |        | $      | 0.04       |     |   | $ | 0.39 |   |
| For the Nine Months Ended September 30, 2009  |   |          |       |   |        |   |       |     |   |   |   |   |
| Derivative loss                               |   | $             | -          |   |        | $      | (1,963,177 | )        |   | $ | (1,963,177 | ) |
| Net other expense                             |   |          | (77,878    | )      |        |   | (1,963,177 | )        |   |   | (2,041,055 | ) |
| Income before income taxes                    |   |          | 16,838,722 |   |        |   | (1,963,177 | )        |   |   | 14,875,545 |   |
| Net income                                    |   |          | 15,127,019 |   |        |   | (1,963,177 | )        |   |   | 13,163,842 |   |
| Comprehensive income                          |   |          | 15,306,104 |   |        |   | (1,963,177 | )        |   |   | 13,342,927 |   |
| Basic and diluted earnings per share          |   | $             | 0.36       |   |        | $      | (0.05      | )        |   | $ | 0.31 |   |
|                                          |   |          |       |   |        |   |       |     |   |   |   |   |
|                                          |   |          |       |   |        |   |       |     |   |   |   |   |
|                                          |   | As Previously |       |   |        |   |       |     | As     |   |
| Statements of Cash Flows Amounts              |   | Reported      |       |   | Restatement |   |       | Restated |   |
| For the Nine Months Ended September 30, 2010  |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                                    |   | $             | 15,055,830 |   |        | $      | 1,795,196  |     |   | $ | 16,851,026 |   |
| Derivative gain                               |   |          | -          |   |        |   | (1,795,196 | )        |   |   | (1,795,196 | ) |
| For the Nine Months Ended September 30, 2009  |   |          |       |   |        |   |       |     |   |   |   |   |
| Net income                                    |   | $             | 15,127,019 |   |        | $      | (1,963,177 | )        |   | $ | 13,163,842 |   |
| Derivative loss                               |   |          | -          |   |        |   | 1,963,177  |     |   |   | 1,963,177 |   |

----

|            |   | September 30, |       |   | December 31, |   |
|-----------------|--------|---------------|------------|--------|--------------|--------|
|            |   | 2010          |       |   | 2009         |   |
| Raw materials   |   | $             | 11,988,237 |   |         | $      | 9,353,076 |   |
| Finished goods  |   |          | 7,872,820  |   |         |   | 4,879,997 |   |
| Total Inventory |   | $             | 19,861,057 |   |         | $      | 14,233,073 |   |

|                           |   | September 30, |       |   | December 31, |   |
|--------------------------------|--------|---------------|------------|--------|--------------|--------|
|                           |   | 2010          |       |   | 2009         |   |
| Permit of land use             |   | $             | 420,519    |   |         | $      | 411,963 |   |
| Building                       |   |          | 2,275,741  |   |         |   | 2,229,442 |   |
| Plant, machinery and equipment |   |          | 5,651,132  |   |         |   | 5,223,872 |   |
| Motor vehicle                  |   |          | 137,933    |   |         |   | 135,127 |   |
| Office equipment               |   |          | 123,209    |   |         |   | 109,440 |   |
| Construction in progress       |   |          | 447,212    |   |         |   | 616,491 |   |
| Total                          |   |          | 9,055,746  |   |         |   | 8,726,335 |   |
| Less: accumulated depreciation |   |          | (2,661,208 | )      |         |   | (2,020,462 | ) |
| Property and Equipment, net    |   | $             | 6,394,538  |   |         | $      | 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               |   | 3-5                |

----

----

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

|                   |   | For the Three Months |    |   | For the Nine Months |   |
|------------------------|--------|----------------------|---------|--------|---------------------|--------|
|                   |   | Ended September 30,  |    |   | Ended September 30, |   |
|                   |   | 2010                 |    |   | 2009                |   |   | 2010 |   |   | 2009 |   |
| Current                |   | $                    | 722,452 |   |                | $      | 962,310 |   |   | $ | 1,990,702 |   |   | $ | 1,922,025 |   |
| Deferred               |   |                 | (48,401 | )      |                |   | (94,560 | ) |   |   | (193,953 | ) |   |   | (210,322 | ) |
| Net Income Tax Expense |   | $                    | 674,051 |   |                | $      | 867,750 |   |   | $ | 1,796,749 |   |   | $ | 1,711,703 |   |

----

|                         |   |         |       |   | 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, |   |    | September 30, |   |   | December 31, |   |   | September 30, |      |
|-------------------------|--------|---------|---------|--------|------------|--------|---------|---------------|--------|--------|--------------|--------|--------|---------------|-----------|
|                    |   | 2008    |    |   | 2009       |   |    | 2009          |   |   | 2009         |   |   | 2010          |      |
| Risk free interest rate |   |    | 2.93    | %      |       |   | 2.93    | %             |   |   | 1.45         | %      |   |          | 2.93      | % |   |   | 0.64 | % |
| Expected life, in years |   |    | 3.00    |   |       |   | 2.41    |          |   |   | 1.66         |   |   |          | 1.41      |   |   |   | 0.66 |   |
| Expected dividend rate  |   |    | 0       | %      |       |   | 0       | %             |   |   | 0            | %      |   |          | 0         | % |   |   | 0 | % |
| Volatility              |   |    | 67.21   | %      |       |   | 67.21   | %             |   |   | 79.26        | %      |   |          | 67.21     | % |   |   | 73.59 | % |
| Fair value              |   | $       | 852,957 |   |       | $      | 263,577 |          |   | $      | 2,226,754    |   |   | $             | 2,523,148 |   |   | $ | 727,952 |   |

----

----

----

----

----

| ·   | During the third quarter of 2010, we completed the Phase I clinical trials of our novel cephalosporin-based combination antibiotic. In Phase I, the clinical trials focused on the study of clinical pharmacology as well as the evaluation of safety on the human body, through observing tolerance and pharmacokinetics to provide support for dosage and drug delivery design. Phase II of the trial has commenced. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We completed the clinical trials earlier this year for Candesartan, a front-line drug therapy we developed 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 the SFDA. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We continue to receive positive feedback from patients during our clinical trial of Rosuvastatin, a generic form of Crestor we are developing. The majority of the patients in the clinical trial have completed the treatment cycle, and the final phase of the trial is near completion. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                        |   | Three Months Ended September 30th |       |   |              |   |       | Nine Months Ended September 30th |   |   |              |   |
|---------------------------------------------|--------|-----------------------------------|------------|--------|-------------------|--------|------------|----------------------------------|--------|--------|-------------------|--------|
|                                        |   | 2010(as restated)                 |       |   | 2009(as restated) |   |       | % Chg                            |   |   | 2010(as restated) |   |   | 2009(as restated) |   |   | % Chg |   |
| Revenue                                     |   | $                                 | 18,680,390 |   |              | $      | 15,522,953 |                             |   |   | 20                | %      |   | $ | 50,414,254 |   |   | $ | 42,116,290 |   |   |   | 20 | % |
| Cost of Revenue                             |   |                              | 11,055,254 |   |              |   | 8,979,083  |                             |   |   | 23                | %      |   |   | 29,610,973 |   |   |   | 23,724,155 |   |   |   | 25 | % |
| Gross Profit                                |   |                              | 7,625,136  |   |              |   | 6,543,870  |                             |   |   | 17                | %      |   |   | 20,803,281 |   |   |   | 18,392,135 |   |   |   | 13 | % |
| Selling Expenses                            |   |                              | 449,295    |   |              |   | 807,231    |                             |   |   | -44               | %      |   |   | 1,653,763 |   |   |   | 2,013,915 |   |   |   | -18 | % |
| General and Admin Expenses                  |   |                              | 873,157    |   |              |   | 521,676    |                             |   |   | 67                | %      |   |   | 2,420,412 |   |   |   | 1,563,330 |   |   |   | 55 | % |
| Bad Debt Expense (Benefit)                  |   |                              | 107,186    |   |              |   | (2,836,495 | )                                |   |   |              |   |   |   | 215,707 |   |   |   | (2,101,710 | ) |   |   |   |   |
| Income from Operations                      |   |                              | 6,195,498  |   |              |   | 8,051,458  |                             |   |   | -23               | %      |   |   | 16,979,062 |   |   |   | 16,916,600 |   |   |   | 0 | % |
| Derivative Gains (Loss)                     |   |                              | 429,687    |   |              |   | (1,673,102 | )                                |   |   |              |   |   |   | 1,795,196 |   |   |   | (1,963,177 | ) |   |   |   |   |
| Income Tax Expense                          |   |                              | (674,051   | )      |              |   | (867,750   | )                                |   |   | -22               | %      |   |   | (1,796,749 | ) |   |   | (1,711,703 | ) |   |   | 5 | % |
| Net Income                                  |   | $                                 | 5,914,614  |   |              | $      | 5,490,126  |                             |   |   | 8                 | %      |   | $ | 16,851,026 |   |   | $ | 13,163,842 |   |   |   | 28 | % |
| Basic Net Income per Share                  |   | $                                 | 0.14       |   |              | $      | 0.13       |                             |   |   | 5                 | %      |   | $ | 0.39 |   |   | $ | 0.31 |   |   |   | 25 | % |
| Basic Weighted Average Shares Outstanding   |   |                              | 43,393,642 |   |              |   | 42,278,938 |                             |   |   |              |   |   |   | 43,306,075 |   |   |   | 42,278,938 |   |   |   |   |   |
| Diluted Net Income per Share                |   | $                                 | 0.14       |   |              | $      | 0.13       |                             |   |   | 8                 | %      |   | $ | 0.39 |   |   | $ | 0.31 |   |   |   | 26 | % |
| Diluted Weighted Average Shares Outstanding |   |                              | 43,407,175 |   |              |   | 42,278,938 |                             |   |   |              |   |   |   | 43,503,330 |   |   |   | 42,278,938 |   |   |   |   |   |

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| Product Category                       | Three Months Ended September 30 | Net Change | % Change |
|----------------------------------------|--------------------------------------|------------|----------|
|                                   | 2010                                 | 2009       |     |   |
| CNS Cerebral & Cardio Vascular     | $ 5.9                                | $ 5.6      | $ 0.3    | 5% |
| Anti-Viro/ Infection & Respiratory | $ 6.0                                | $ 6.1      | -$ 0.1   | -2% |
| Digestive Diseases                     | $ 2.4                                | $ 1.6      | $ 0.8    | 51% |
| Other                                  | $ 4.5                                | $ 2.3      | $ 2.2    | 100% |

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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 September 30,                       |   |   | For the Nine Months Ended September 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) and one-time bad debt estimate change |   | $                                                              | 5,485  |   |                                    | $      | 0.13   |       |   | $      | 4,263  |   |   | $          | 0.10   |   |   | $      | 15,056 |       |   | $      | 0.35   |   |   | $ | 12,569 |   |   | $ | 0.30 |   |
|                                                                                                                       |   |                                                           |   |   |                                    |   |   |       |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Add: Derivate Gain (Loss) (a)                                                                                              |   |                                                           | 430    |   |                                    |   | 0.01   |       |   |   | (1,673 | )      |   |       | (0.04  | )      |   |   | 1,795  |       |   |   | 0.04   |   |   |   | (1,963 | ) |   |   | (0.05 | ) |
|                                                                                                                       |   |                                                           |   |   |                                    |   |   |       |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted net income, excluding approximate after-tax impact of derivative gain (loss) (Non-GAAP)                           |   |                                                           | 5,915  |   |                                    |   | 0.14   |       |   |   | 2,590  |   |   |       | 0.06   |   |   |   | 16,851 |       |   |   | 0.39   |   |   |   | 10,606 |   |   |   | 0.25 |   |
|                                                                                                                       |   |                                                           |   |   |                                    |   |   |       |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Approximate after-tax impact of one-time bad debt estimate change (b)                                                      |   |                                                           | -      |   |                                    |   | -      |       |   |   | 2,900  |   |   |       | 0.07   |   |   |   | -      |       |   |   | -      |   |   |   | 2,558 |   |   |   | 0.06 |   |
|                                                                                                                       |   |                                                           |   |   |                                    |   |   |       |   |   |   |   |   |       |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income as reported (GAAP)                                                                                              |   | $                                                              | 5,915  |   |                                    | $      | 0.14   |       |   | $      | 5,490  |   |   | $          | 0.13   |   |   | $      | 16,851 |       |   | $      | 0.39   |   |   | $ | 13,164 |   |   | $ | 0.31 |   |

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|                                      |   | Nine Months Ended September 30 |       |
|-------------------------------------------|--------|--------------------------------|------------|
|                                      |   | 2010                           |       |   | 2009 |   |
| Net Cash Provided by Operating Activities |   | $                              | 6,060,079  |   |   | $ | 6,388,089 |   |
| Net Cash Used in Investing Activities     |   |                           | (7,147,264 | ) |   |   | (10,798,769 | ) |
| Net Cash Provided by Financing Activities |   |                           | 1,930,673  |   |   |   | 1,315,307 |   |
| Effect of Exchange Rate change on Cash    |   |                           | 83,191     |   |   |   | 13,001 |   |
| Cash & Equivalent Beginning Balance   |   |                           | 3,634,753  |   |   |   | 6,927,149 |   |
| Cash & Equivalent Ending Balance      |   | $                              | 4,561,432  |   |   | $ | 3,844,777 |   |

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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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