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

                                    FORM 10-Q

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

               For the Quarterly Period Ended September 30, 2008

|_|  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     Of 1934
             For the Transition Period from _________ to _________

                        Commission file number: 000-29523

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


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

 2nd Floor, No. 17, Jinpan Road, Haikou, Hainan Province, China        570216
----------------------------------------------------------------     ----------
      (Address of principle executive offices)                       (Zip Code)

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

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

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer",  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


  Large accelerated filer      |_|        Accelerated filer                  |_|
  Non-accelerated filer        |_|        Smaller reporting company          |X|

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

As of September  30, 2008,  42,278,938  shares of China  Pharma  Holdings,  Inc.
common stock, par value $0.001 per share, were outstanding.

<PAGE>


                           China Pharma Holdings, Inc.

                                TABLE OF CONTENTS


Part I    Financial Information                                                1

Item 1.   Financial Statements                                                 1

          Condensed Consolidated Balance Sheets as of September 30, 2008
          and December 31, 2007 (unaudited)                                    1

          Condensed Consolidated Statements of Operations and Comprehensive
          Income for the Three Months Ended September 30, 2008
          and 2007 (unaudited)                                                 2

          Condensed  Consolidated  Statements of Cash Flows for the Nine
          Months Ended September 30, 2008 and 2007 (unaudited)                 3

          Notes to Condensed Consolidated Financial Statements (unaudited)     4

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                               10

Item 3.   Quantitative and Qualitative Disclosures About Market Risk          23

Item 4.   Controls and Procedures                                             24

Part II   Other Information                                                   24

Item 1    Legal Proceedings                                                   24

Item 2    Unregistered Sales of Equity Securities and Use of Proceeds         24

Item 3    Defaults upon Senior Securities                                     24

Item 4    Submission of Matters to a Vote of Security Holders                 24

Item 5    Other Information                                                   25

Item 6    Exhibits                                                            25

Signatures                                                                    26




<PAGE>
<TABLE>
<CAPTION>

                          PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements

                           CHINA PHARMA HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

                                                              September 30,    December 31,
                                                                  2008             2007
                                                               -----------      -----------
                                                                                (Restated)
<S>                                                            <C>              <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                    $ 5,838,678      $ 1,830,335
  Trade accounts receivable, less allowance for doubtful
    accounts of $4,124,577 and $2,440,852, respectively         31,670,231       18,572,976
  Other receivables, less allowance for doubtful
    accounts of $98,151 and $43,908, respectively                  189,794          413,596
  Advances to suppliers                                          2,276,440        2,757,320
  Inventory                                                     14,542,799       14,448,771
                                                               -----------      -----------
Total Current Assets                                            54,517,942       38,022,998
                                                               -----------      -----------
Non-current Assets:
  Property and equipment, net of accumulated depreciation of
    $1,350,913 and $1,003,802, respectively                      2,619,965        2,625,216
  Intangible assets, net of accumulated amortization of
    $465,132 and $221,715, respectively                          2,432,253        2,063,252
  Advances for purchases of intangible assets                    6,840,631          807,345
  Deferred tax assets                                              413,890          187,509
                                                               -----------      -----------
Total Non-current Assets                                        12,306,739        5,683,322
                                                               -----------      -----------
TOTAL ASSETS                                                   $66,824,681      $43,706,320
                                                               -----------      -----------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Trade accounts payable                                       $   505,704      $   297,299
  Accrued expenses                                                  47,450          261,301
  Accrued taxes payable                                            946,948          311,009
  Other payables                                                   130,652           86,161
  Advances from customers                                          674,135          261,583
  Short-term notes payable                                            --          2,693,428
                                                               -----------      -----------
Total Current Liabilities                                        2,304,889        3,910,781
                                                               -----------      -----------
  Research and development commitments                              36,381           34,181
                                                               -----------      -----------
Total Liabilities                                                2,341,270        3,944,962
                                                               -----------      -----------
Stockholders' Equity:
  Common stock, $0.001 par value, 60,000,000 shares
    authorized, 42,278,938 and 37,278,938 shares issued and
    outstanding, respectively                                       42,279           37,279
  Additional paid-in capital                                    21,062,586       11,678,606
  Foreign currency translation adjustment                        5,693,059        2,839,304
  Retained earnings                                             37,685,487       25,206,169
                                                               -----------      -----------
Total Stockholders' Equity                                      64,483,411       39,761,358
                                                               -----------      -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $66,824,681      $43,706,320
                                                               -----------      -----------



              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       1
<PAGE>

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


                                             For the three months              For the nine months
                                             ended September 30,               ended September 30,
                                          ----------------------------    ----------------------------
                                              2008             2007           2008            2007
                                          ------------    ------------    ------------    ------------

Revenue                                   $ 12,610,642    $  8,293,497    $ 35,606,490    $ 24,097,521
Cost of revenue                              6,494,266       4,413,052      17,730,026      13,018,566
                                          ------------    ------------    ------------    ------------

Gross profit                                 6,116,376       3,880,445      17,876,464      11,078,955
                                          ------------    ------------    ------------    ------------

Operating expenses:
  Selling expenses                             529,432         591,193       1,323,854         896,128
  General and administrative                   427,399         328,743       1,226,888         927,162
  Research and development                       5,581           5,941          42,807           5,942
  Bad debt expense, net of recoveries          459,500        (169,095)      1,539,313         910,718
                                          ------------    ------------    ------------    ------------
Total operating expenses                     1,421,912         756,782       4,132,862       2,739,950
                                          ------------    ------------    ------------    ------------

Income from operations                       4,694,464       3,123,663      13,743,602       8,339,005
                                          ------------    ------------    ------------    ------------

Non-operating income (expenses):
  Interest income                               26,224           4,400          31,259          29,808
  Interest expense                             (34,629)        (50,857)       (130,342)       (166,698)
  Other (expense) income                        (9,588)          7,549         (87,038)        582,827
                                          ------------    ------------    ------------    ------------
Total non-operating income (expense)           (17,993)        (38,908)       (186,121)        445,937
                                          ------------    ------------    ------------    ------------

Income before taxes                          4,676,471       3,084,755      13,557,481       8,784,942
Income tax expense                             424,993            --         1,078,163            --
                                          ------------    ------------    ------------    ------------
Net income                                $  4,251,478   $   3,084,755    $ 12,479,318    $  8,784,942
                                          ============    ============    ============    ============
Comprehensive income - foreign currency
    translation adjustments                    133,713         570,646       2,853,755       1,222,329
                                          ------------    ------------    ------------    ------------
Comprehensive income                      $  4,385,191    $  3,655,401    $ 15,333,073    $ 10,007,271
                                          ============    ============    ============    ============

Basic and Diluted Earnings Per Share      $      0.10     $       0.08    $       0.32    $       0.24
Basic and Diluted Weighted Average
    Shares Outstanding                      42,278,938      37,228,938      39,523,464      36,935,208
                                          ============    ============    ============    ============


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       2
<PAGE>

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

                                                      For the nine months ended
                                                            September 30,
                                                    ----------------------------
                                                        2008            2007
                                                    ------------    ------------
Cash Flows from Operating Activities:                                (Restated)

Net income                                          $ 12,479,318    $  8,784,942
Depreciation and amortization                            505,595         322,098
Compensation paid with warrants                          120,042            --
Gain on sale of intangibles                                 --          (572,446)
Changes in assets and liabilities:
  Trade accounts receivable                          (11,610,177)     (4,440,513)
  Other receivables                                      246,329         223,329
  Advances to suppliers                                  651,833      (2,504,684)
  Inventory                                              855,485      (2,965,836)
  Deferred tax assets                                   (209,434)           --
  Deferred offering costs                                   --            60,487
  Trade accounts payable                                 184,627         279,420
  Accrued expenses                                      (138,021)         83,034
  Accrued taxes payable                                  602,480            --
  Other payables                                         (48,535)       (134,647)
  Advances from customers                                386,922          47,448
                                                    ------------    ------------
Net Cash from Operating Activities                     4,026,464        (817,368)
                                                    ------------    ------------

Cash Flows from Investing Activities:
  Purchase of property and equipment                    (125,753)        (77,313)
  Purchase of intangible assets                         (428,641)     (1,993,288)
  Advances for purchases of intangibles               (5,856,412)           --
                                                    ------------    ------------
Net Cash from Investing Activities                    (6,410,806)     (2,070,601)
                                                    ------------    ------------

Cash Flows from Financing Activities:
  Proceeds from sale of common stock and warrants      9,268,938       3,797,183
  Payments of short term notes payable                (2,814,744)           --
                                                    ------------    ------------
Net Cash Proceeds from Financing Activities            6,454,194       3,797,183
                                                    ------------    ------------

Effect of Exchange Rate Changes on Cash                  (61,509)        149,995
                                                    ------------    ------------
Net Change in Cash                                     4,008,343       1,059,209
                                                    ------------    ------------
Cash and Cash Equivalents at Beginning of Period       1,830,335         656,441
                                                    ------------    ------------
Cash and Cash Equivalents at End of Period          $  5,838,678    $  1,715,650
                                                    ------------    ------------


Supplemental Cash Flow Disclosure:
  Cash paid for interest                            $    130,342    $    115,841
  Cash paid for income taxes                           1,289,596            --


</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.



                                       3
<PAGE>


                           CHINA PHARMA HOLDINGS, INC.
              UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            AS OF SEPTEMBER 30, 2008

NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited condensed consolidated financial statements of China
Pharma Holdings,  Inc. (the Company) and its subsidiaries were prepared pursuant
to the rules and  regulations  of the  United  States  Securities  and  Exchange
Commission.  Certain  information  and note  disclosures  normally  included  in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations.  Management of the Company (Management)  believes
that the following  disclosures are adequate to make the  information  presented
not misleading. These condensed consolidated financial statements should be read
in conjunction with the audited consolidated  financial statements and the notes
thereto  included in the Company's  Form 10-K report for the year ended December
31, 2007.

These  unaudited  condensed   consolidated   financial  statements  reflect  all
adjustments  (consisting  only of normal  recurring  adjustments)  that,  in the
opinion  of  Management,  are  necessary  to  present  fairly  the  consolidated
financial  position  and  results of  operations  of the Company for the periods
presented.  Operating  results for the nine months ended  September 30, 2008 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending December 31, 2008.

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

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

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

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

Basic and Diluted  Earnings  per Common  Share - Basic and diluted  earnings per
common share are computed by dividing net income by the weighted-average  number
of common  shares  outstanding.  As of September  30, 2008 and 2007  potentially
dilutive  securities  includes  warrants  outstanding  to  purchase  a total  of
2,652,941  and  1,252,941  shares,  respectively,  of Company  common stock with


                                       4
<PAGE>

exercise  prices  ranging  from  $2.38 to $3.50 per  share.  These have not been
included  in  the   computation  of  earnings  per  share  as  their  effect  is
antidilutive.

Recently  Enacted  Accounting  Standards  - In  September  2006,  the  Financial
Accounting  Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements,
which defines fair value,  establishes  a framework for measuring  fair value in
generally  accepted  accounting  principles and expands  disclosures  about fair
value  measurements.  SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007, and interim  periods  within those fiscal years.  In February
2008, the FASB issued FASB Staff Position (FSP FIN) No. 157-2 which extended the
effective date for certain  nonfinancial assets and nonfinancial  liabilities to
fiscal years  beginning after November 15, 2008. The adoption of the portions of
SFAS No.  157 that  were not  postponed  by (FSP  FIN) No.  157-2 did not have a
material impact on our consolidated  financial statements.  The Company does not
expect the adoption of the postponed portions of SFAS No. 157 to have a material
impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations",  and
SFAS No. 160,  "Noncontrolling  Interests in Consolidated Financial Statements".
SFAS No.  141(R)  requires  an  acquirer  to  measure  the  identifiable  assets
acquired,  the  liabilities  assumed  and any  non-controlling  interest  in the
acquiree at their fair values on the  acquisition  date, with goodwill being the
excess value over the net identifiable  assets acquired.  SFAS No. 160 clarifies
that a non-controlling  interest in a subsidiary should be reported as equity in
the consolidated financial statements, consolidated net income shall be adjusted
to  include  the net  income  attributed  to the  non-controlling  interest  and
consolidated comprehensive income shall be adjusted to include the comprehensive
income attributed to the non-controlling  interest.  The calculation of earnings
per share  will  continue  to be based on  income  amounts  attributable  to the
parent. SFAS No. 141(R) and SFAS No. 160 are effective for financial  statements
issued for fiscal years  beginning  after  December 15, 2008.  Early adoption is
prohibited. SFAS No. 141(R) and SFAS No. 160 are not expected to have a material
impact on our results of operations or financial position.

In March  2008,  the FASB issued SFAS No.  161,  "Disclosures  about  Derivative
Instruments  and Hedging  Activities",  an amendment  of SFAS No. 133.  SFAS 161
applies to all derivative  instruments and  non-derivative  instruments that are
designated and qualify as hedging  instruments  pursuant to paragraphs 37 and 42
of SFAS 133 and related  hedged  items  accounted  for under SFAS 133.  SFAS 161
requires entities to provide greater transparency through additional disclosures
about  how  and  why an  entity  uses  derivative  instruments,  how  derivative
instruments  and related  hedged items are  accounted for under SFAS 133 and its
related interpretations, and how derivative instruments and related hedged items
affect an entity's financial  position,  results of operations,  and cash flows.
SFAS 161 is effective as of the beginning of an entity's  first fiscal year that
begins after  November 15, 2008.  The Company does not expect SFAS 161 to have a
material impact on its results of operations or financial position.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally  Accepted
Accounting Principles." SFAS 162 will provide framework for selecting accounting
principles to be used in preparing  financial  statements  that are presented in
conformity  with  U.S.  generally  accepted  accounting  principles  (GAAP)  for
nongovernmental  entities.  SFAS 162 will be  effective  60 days  following  the


                                       5
<PAGE>
<TABLE>
<CAPTION>
Securities and Exchange  Commission's  approval of the Public Company Accounting
Oversight  Board  (PCAOB)  amendments  to AU Section  411.  The Company does not
expect the  adoption  of SFAS 162 will have a material  impact on its  financial
condition or results of operation.

Restatement  of Financial  Statements -  Subsequent  to March 2008,  the Company
realized that the December 31, 2007 consolidated  financial statements needed to
be revised to correct an  overstatement  of advances paid to suppliers in amount
of $ 724,628,  an overstatement of other receivables in amount of $ 82,717,  and
an  understatement of advance for purchase of intangible assets in the amount of
$ 807,345.  The Company  concluded that advances made for purchase of intangible
assets  should  be  treated  as a  long-term  asset.  This  correction  was  not
considered  material in accordance  with SAB 108 for the year ended December 31,
2007 but is  considered  significant.  As a result,  the Company  corrected  the
financial  statements for December 31, 2007. The corrected  consolidated balance
sheet is included in these financial statements.  The correction of the December
31, 2007  financial  statements  had no effect on the  previously  reported  net
income. The effect of the restatement was as follows:

                                                          Reported      Restatement      As Restated
                                                        ------------    ------------    ------------
<S>                                                                                     <C>
Consolidated Balance Sheet as of December 31, 2007
Other receivables                                       $    496,313    $    (82,717)   $    413,596
Advances to suppliers                                      3,481,948        (724,628)      2,757,320
Total Current Assets                                      38,830,343        (807,345)     38,022,998
Advances for purchase of intangible assets                      --           807,345         807,345
                                                        ------------    ------------    ------------
TOTAL ASSETS                                            $ 43,706,320    $       --      $ 43,706,320
                                                        ------------    ------------    ------------

Consolidated Statement of Cash Flows
For the year ended December 31, 2007
Other receivables                                       $   (111,660)   $     79,426    $    (32,234)
Advances to suppliers                                     (1,028,119)       (853,332)     (1,881,451)
Net Cash provided by Operating Activities                  2,801,898        (773,906)      2,027,992
Advance for purchase of intangible assets                       --           773,906         773,906
Net Cash used in Investing Activities                     (1,479,531)        773,906        (705,625)
                                                        ------------    ------------    ------------
Net Change in Cash                                      $  1,173,894    $       --      $  1,173,894
                                                        ------------    ------------    ------------
</TABLE>

NOTE 2 - INVENTORY

Inventory consisted of the following:

                            September 30,        December 31,
                                2008                2007
                            -----------          -----------
Raw materials               $11,448,741          $12,521,536
Work in progress                 21,895               60,404
Finished goods                3,072,162            1,866,831
                            -----------          -----------
   Total Inventory          $14,542,799          $14,448,771
                            -----------          -----------


NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


                                       6
<PAGE>


                                      September 30,       December 31,
                                         2008                 2007
                                      -----------         -----------
Permit of land use                    $   410,888         $   385,102
Building                                1,870,960           1,753,547
Plant, machinery and equipment          1,447,960           1,341,996
Motor vehicle                             129,215              37,193
Office equipment                          110,834              88,210
Construction in progress                    1,021              22,970
                                      -----------         -----------
   Total                                3,970,878           3,629,018
Less: accumulated depreciation         (1,350,913)         (1,003,802)
                                      -----------         -----------
Property and Equipment, net           $ 2,619,965         $ 2,625,216
                                      -----------         -----------


Depreciation  is computed on a  straight-line  basis over the  estimated  useful
lives of the assets as follows:

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



For the nine months ended September 30, 2008 and 2007,  depreciation expense was
$303,064 and $202,532, respectively.

NOTE 4 - INTANGIBLE ASSETS

Intangible  assets  represent  the  costs  on  patents,  trademarks,   licenses,
techniques and formulas.  Intangible  assets have a  weighted-average  remaining
useful life of approximately  9.0 years.  Amortization of intangible  assets was
$202,535 and $119,566  for the nine months  ended  September  30, 2008 and 2007,
respectively.

NOTE 5 - DEBT

Short Term Notes Payable -On July 13, 2007, the Company  entered into a new line
of credit with the bank collateralized by certain land use rights, machinery and
equipment.  The outstanding advance made under the line of credit was $2,324,278
at December 31, 2007. The line of credit was renewed during the first quarter of
2008 with due dates of  August  and  September  of 2008  with  interest  payable
monthly  at the  rate of  7.84%.  The  line of  credit  was  paid in full on the
maturity dates.

Short Term Notes Payable to Former  Shareholders  - In January 2006, the Company
converted  its dividend  payable of  $4,402,147  into  short-term  notes bearing
interest at a rate of 2.25% per annum.  The final principal  balance of $369,150
was paid in January,  2008. The accrued interest of $213,545 was paid during the
second quarter of 2008.


NOTE 6 - INCOME TAXES


                                       7
<PAGE>

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

Undistributed  earnings of the Company's  foreign  subsidiary since  acquisition
amounted to  approximately  $35.4 million at September 30, 2008. Those earnings,
as well as the investment in the subsidiaries of approximately $22.8 million are
considered to be indefinitely  reinvested and, accordingly,  no U.S. federal and
state  income  taxes have been  provided  thereon.  Upon  distribution  of those
earnings in the form of dividends or otherwise,  the Company would be subject to
both U.S.  income taxes  (subject to an adjustment  for foreign tax credits) and
withholding   taxes  payable  to  the  PRC.   Determination  of  the  amount  of
unrecognized  deferred U.S. income tax liability is not practical because of the
complexities associated with its hypothetical calculation; however, unrecognized
foreign  tax  credits  may be  available  to  reduce a portion  of the U.S.  tax
liability.

On March 16,  2007,  the  National  People's  Congress  of China  passed the new
Enterprise Income Tax Law, (EIT Law), and on December 6, 2007, the State Council
of China issued the Implementation Regulations for the EIT Law which took effect
on January 1, 2008. The EIT Law and  Implementation  Regulations  Rules impose a
unified EIT of 25% on all  domestic-invested  enterprises  and Foreign  Invested
Entities, or FIEs, unless they qualify under certain limited exceptions.

The Company is located in a special region, which had a 15% corporate income tax
rate  before  the new EIT  Law.  The new  EIT  Law  abolished  the  preferential
corporate  income tax rate in the special region.  However,  because the Company
was in  existence  prior to the March 16,  2007  China tax law  change,  it will
gradually  transition to the new 25% tax rate over the next five years  starting
on January 1, 2008. The phase-in  income tax rate is 18% for 2008, 20% for 2009,
22% for 2010, 24% for 2011, and 25% for 2012 and after. The Company is permitted
to use their remaining tax holiday, which was 0% in 2007 and will be a favorable
income  tax  rate of 50% of the EIT  Rate or 9% in  effect  during  fiscal  2008
through  2010  as  determined  by  the  PRC  government  and  the  regional  tax
authorities.

As a result of the above changes,  starting from 2008, the Company's  enterprise
income tax rate will be:
                                        Enterprise Income Tax Rate
                Year                         For China Pharma
           --------------               --------------------------
                2008                                9%
                2009                               10%
                2010                               11%
                2011                               24%
           2012 and after                          25%


The Company has also  incurred  various  other  taxes,  comprised  primarily  of
business  taxes,   value-added  taxes,  urban  construction   taxes,   education
surcharges and others. Any unpaid amounts are reflected on the balance sheets as
accrued taxes payable.

NOTE 7 - STOCKHOLDERS' EQUITY


                                       8
<PAGE>

On May 30, 2008 the Company  completed  an offering of Units priced at $2.00 per
Unit consisting of one share of Company common stock and a three-year warrant to
purchase one-fourth of one share of Company common stock at an exercise price of
$2.80 per  share.  The  Company  issued  5,000,000  shares  of common  stock and
three-year  warrants  to  purchase  1,250,000  shares  of  common  stock  to  17
accredited investors for gross proceeds of $10,000,000.  The net proceeds, after
deduction of related offering expenses of $731,062,  amounted to $9,268,938.  In
addition,  the placement agent in the transaction was issued three-year warrants
to purchase  300,000  shares of common  stock at an exercise  price of $2.98 per
share.  The proceeds were allocated to the warrants  issued to the investors and
the  placement  agent based upon their fair values of  $1,090,342  and $249,366,
respectively  and the balance of the proceeds of $8,952,511 was allocated to the
shares of common  stock.  The fair value of the warrants,  determined  using the
Black-Scholes   Option  Pricing  Model,   was  calculated  using  the  following
assumptions:  risk free interest rate of 2.93%,  expected  dividend yield of 0%,
expected volatility of 62.9% and an expected life of 3 years.

The common  shares and the shares  underlying  the  warrants  have  registration
rights, and the Company was required to file a registration  statement including
said shares with the Securities and Exchange  Commission.  In the event that the
Company did not file a registration statement within 45 days of the closing date
of the offering, or the registration  statement is not declared effective within
the 90 or 120  day  time  periods  from  the  closing  date  as  defined  in the
registration rights agreement,  or if the Company fails to keep the registration
statement  effective,  the  Company  will be  required  to pay a penalty to each
investor equal to one percent (1%) of the purchase price for each 30 day period.
The Company filed a  registration  statement  with the  Securities  and Exchange
Commission on July 11, 2008 and it was declared  effective  August 12, 2008. The
Company has not accrued any penalty under the registration  rights agreement but
will evaluate any liability  related to the  effectiveness  of the  registration
statement at the end of each reporting period.

On June 24, 2008,  the Company  issued  three-year  warrants to purchase  75,000
shares of Company  common  stock at $2.80 per share and  three-year  warrants to
purchase  75,000  shares of the  Company's  common stock at $3.60 per share to a
vendor valued at $90,487.  The value was recorded as general and  administrative
expense in the accompanying financial statements as of the date of issuance.

Also on June 24, 2008, the Company issued three-year warrants to purchase 25,000
shares of Company  common  stock at $3.00 per share and  three-year  warrants to
purchase  25,000  shares of the  Company's  common stock at $3.50 per share to a
vendor valued at $29,554.  The value was recorded as general and  administrative
expense in the accompanying financial statements as of the date of issuance.

The fair values of the warrants  issued on June 24, 2008,  determined  using the
Black-Scholes   Option  Pricing  Model,  were  calculated  using  the  following
assumptions:  risk free interest rate of 3.14%,  expected  dividend yield of 0%,
expected volatility of 61.3% and an expected life of 3 years.

The Company also has outstanding  warrants to purchase an aggregate of 1,202,941
shares of Company's  common stock at an exercise  price of $2.38 per share which
expire on January 29, 2010.


                                       9
<PAGE>

NOTE 8 - CONTINGENCIES

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

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

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

The  following  discussion  should  be read in  conjunction  with  China  Pharma
Holdings,  Inc.'s  ("China  Pharma"  or  "the  Company)  consolidated  financial
statements and related notes  included  elsewhere in this Current Report on Form
10-Q.

This  filing  contains  forward-looking  statements.  The  words  "anticipated",
"believe",  "expect", "plan", "intend", "seek", "estimate",  "project", "could",
"may"  and  similar   expressions  are  intended  to  identify   forward-looking
statements. These statements include, among others, information regarding future
operations,  future  capital  expenditures,  and  future  net  cash  flow.  Such
statements reflect  management's current views with respect to future events and
financial  performance  and involve risks and  uncertainties,  including but not
limited to  changes in general  economic  and  business  conditions,  changes in
foreign, political, social, and economic conditions,  regulatory initiatives and
compliance with governmental regulations,  the ability to increase market share,
and various  other  matters,  many of which are beyond China  Pharma's  control.
Should one or more of these risks or uncertainties  occur, or should  underlying
assumptions  prove to be  incorrect,  actual  results  may vary  materially  and
adversely from those anticipated,  believed,  estimated or otherwise  indicated.
Consequently,  all of the  forward-looking  statements  made in this  filing are
qualified by these  cautionary  statements  and there can be no assurance of the
actual results or developments.

China Pharma Holdings,  Inc. is a specialty  pharmaceutical company with rapidly
growing profit that develops,  manufactures,  and markets  treatments for a wide
range of high  incidence  and high  mortality  conditions  in  China,  including
cardiovascular,   central  nervous  system  (CNS),  infectious,   and  digestive
diseases. The Company's cost- effective, high margin business model is driven by
market  demand  and  supported  by  8  scalable  Good   Manufacturing   Practice
Regulations (GMP)-certified production lines covering the major dosage forms. In
addition, the Company has a broad and expanding distribution network across more
than 29 provinces,  municipalities and autonomous regions and possesses a strong
research  and   development   (R&D)  platform  from  numerous   well-established
collaborations  with  prestigious  universities.  The Company is  registered  in
Delaware,  USA.  Hainan  Helpson  Medical &  Biotechnology  Co., Ltd  (Helpson),
located in Haikou City, Hainan Province,  China, is a wholly owned subsidiary of
Onny Investment Limited, which is wholly owned by China Pharma Holdings, Inc.


                                       10
<PAGE>

Strong Revenue Growth and High Margins - For the nine months ended September 30,
2008, the Company  generated  $35.61 million in revenue from  therapeutic  sales
compared  to  $24.10  million  over the same  period  in 2007,  an  increase  of
$11,508,969  or 47.76%.  The gross margin  achieved by our company was 50.21% of
total revenue for the nine months ended September 30, 2008, which is higher than
the 45.98% of the  corresponding  period in 2007,  and higher than the  industry
average gross margin of 34.2%.  We are able to compete in the highly  fragmented
pharmaceutical industry through our diversified  therapeutics line, cost control
and strong sales network.  Our experienced  management team, market insights and
strong R&D  capabilities  that enable us to develop and launch new and  improved
generic products based on market demand.

Proven  Record of Success - We have a proven track  record of success.  We are a
profitable  company with a low cost, high margin business model. We are seeing a
rapid growth in sales with a constant growth in income,  due to our focus on the
largest segments of China's pharmaceutical market. We have eight different types
of modern  production  lines with  capacity  to meet future  demands.  We have a
portfolio of over 30  specifications  of drugs that focus on the  treatment  of:
CNS, cardiovascular,  cerebrovascular, infectious diseases and other therapeutic
areas  of  high  incidence  in  China.  Among  these  two  are  market  leaders:
PuSenOK(TM) and Buflomedil hydrochloride for which we were awarded the "National
Key New  Product"  by the  Ministry of Science and  Technology  of the  People's
Republic of China (PRC) with the State  Administration of Taxation,  Ministry of
Commerce of the PRC, General  Administration of Quality Supervision,  Inspection
and Quarantine of the PRC, and State Environmental Protection  Administration of
China.  In addition,  our growth strategy is supported by the needs of a dynamic
pharmaceutical industry.

Clear Strategy for Growth - We are part of a rapidly growing industry,  in which
we are a leader in generic  drugs.  Directed  by market  needs,  we combine  our
internal  R&D with  strategic  alliances  and  co-operation,  to promote new and
improved products targeting China's most prevalent diseases such as CNS disease,
cardio-/cerebrovascular  disease,  digestive disease, and infectious disease. In
addition,  we produce  products  in a variety of  delivery  forms  which  target
specific patient groups,  and research and develop new or improved  dosage-forms
of  existing  products.  We have nine drugs on track to launch,  including a new
anti-drug-resistance  antibiotic which has already passed the PRC State Food and
Drug Administration (SFDA) technical evaluation and entered clinical trials, and
three drugs waiting for SFDA production approval.  Through strategic mergers and
acquisition (M&A) and through  capitalization of this fragmented market, we will
improve our product  portfolio  and push our  integrated  growth;  maintain  and
develop new marketing  channels;  and leverage our existing retailing network in
China's newly  expanded  market to raise our overall  market share.  The organic
growth of the Chinese  pharmaceutical  market has  already and will  continue to
direct the company's development.

I. Summary of nine months ended September 30, 2008

In the nine months ended September 30, 2008,  China Pharma  continued to display
stable growth and outstanding financial  achievement.  For the nine months ended
September  30, 2008,  the Company's  total  revenue  increased by over 47.76% to
$35.61  million,  compared to $24.10 million for the nine months ended September
30, 2007. This rapid growth was due to increased sales of existing products, and
increase in market share of new products.

The  operational  performance  for the nine months ended  September 30, 2008 was
clearly  improved  compared to the nine months ended  September 30, 2007.  Gross


                                       11
<PAGE>

profit increased 61.36% to $17.88 million and net income,  not including foreign
currency translation adjustment, increased 42.05% to $12.48 million. This growth
was  attributable  to increased  promotion of sales,  and  increased  efforts in
accounts receivable (A/R) collection. These benefits are from China Pharma's low
cost, high margin business model,  and experienced  management  team, as well as
from R&D which follows market needs.

For the nine  months  ended  September  30,  2008,  earnings  per  common  share
increased  32.75% to $0.32 per  share  compared  to $0.24 per share for the nine
months ended  September 30, 2007.  China Pharma is working  closely with various
pharmaceutical research institutions to develop more products to meet customers'
needs. Our focus is to create a steady increase in revenue.  We have seen in the
past  that  a  successful  strategy  is  the  key  to  company  operation.  Full
exploration  of the potential of the  pharmaceutical  domain is essential to our
success.

We have also enhanced  internal  controls for accounting  and reporting.  In the
near future,  we will develop a more systematic and continuous  internal control
system for the  long-term  development  of the  company  and the  benefit of our
stakeholders and prospective investors.

II. Business Overview

China  Pharma  Holdings,   Inc.,  is  one  of  China's  leading   pharmaceutical
manufacturers   which  engages   research  and  development   institutions   for
market-ready  formulas to mass  produce.  In 2008,  we  launched a new  diuretic
product:  Bumetanide;  in November  2008,  we were granted  approval for our new
formula antibiotic to enter clinical trials.

We plan to expand our biotechnology  product portfolio.  Based on the foundation
established  by  some  of  our  widely   recognized   medicine  brands  such  as
Cerebroprotein,  for the  treatment  of memory  decline  and  attention  deficit
disorder  (ADD),  we have  offered  and  will  continue  to offer a  variety  of
biological  medicines.   These  products,   including  the  injected  hepatocyte
growth-promoting  factors,  are  expected to fuel  additional  growth in revenue
beyond what Cerebroprotein has provided.

One of our products,  Buflomedil Hydrochloride (which includes the raw material,
the injectable form of the product,  and tablet form) has received the following
recognitions, awards and designations:

o    The key technology project in Hainan in 2003 by Haikou Municipality.

o    The "National Key New  Products"  certificate  in 2003 by the State Science
     and Technology  Department,  State Taxation  Bureau,  Ministry of Commerce,
     State Bureau of Quality Supervision,  Inspection and Quarantine,  and State
     Environmental Protection Bureau.

o    The  "Best  Commercialized  Technology"  award in  Hainan in 2004 by Hainan
     Scientific and Technological Result Examination Committee.

Our scalable, GMP-certified manufacturing has been recognized in China. In 2003,
our manufacturing  capabilities  attained GMP authentication and we were awarded
"Best  Enterprise  for  Supporting  SARS  Medicine"  by  Hainan  Food  and  Drug
Administration.  We have an extensive distribution network with 16 sales offices
and  approximately 680 proxy agents covering 30 provinces,  municipalities,  and
autonomous  regions  around  China.  Our main market  channels  are  generalized
schemes  of  preferences   (GSP)  certified  medical  companies  which  directly
distribute to hospitals and the final market.


                                       12
<PAGE>

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

Furthermore,  on May 30, 2008 the Company  completed an offering and issued five
million  shares  of  common  stock at a  purchase  price of $2.00  per share and
three-year  warrants to  purchase an  aggregate  of 1.25  million  shares of the
Company's  common  stock at an exercise  price of $2.80 per share.  Net proceeds
from the offering of approximately  $9.3 million are expected to be used for the
expansion of the Company's  existing product line, new drug  development,  sales
and marketing, and to supplement general working capital purposes.

III. Market Trends

Statistics  show that the rise in the  world's  aging  population  has led to an
increasing  incidence  of  age-related  diseases,  such as  cancer,  Alzheimer's
disease,  diabetes,  and heart  disease.  These  diseases  have  already  become
prevalent,  particularly  in  developed  areas.  China  Pharma is  dedicated  to
delivering  more  effective  treatments for these diseases of high incidence and
high mortality.

The growth of China's  pharmaceutical  market is driven by the  country's  rapid
economic growth, the highest in economic history.  Increased healthcare spending
by the Chinese  Government to reform the healthcare  system has already  greatly
improved the accessibility to and desire for medical care.  Important additional
factors  include:  the aging of the population  and the  consequent  increase in
age-related  disorders;  the urban  migration  of the  population;  and improved
awareness of self-health care. According to IMS forecasts, China will become the
seventh  largest  pharmaceutical  market  in the  world in 2009  and the  second
largest in 2020, with a market capacity of US$220 billion.

We view  this  market  trend as an  opportunity.  However,  the best way to take
advantage of this  opportunity  is to identify our  business  risks  beforehand.
There are three areas of risk:

o    External Risk

In recent years, the Chinese medical system has been reformed,  resulting in the
State  Department's  establishment  of a  basic  medical  insurance  system  for
employees.  Considering the effects of the social environment,  local government
involvement and government policies on the pharmaceutical industry in the PRC, a
large increase in sales can be expected.  Competition will also be strong across
the industry  overall.  Currently,  our existing products are competitive in the
market and possess growth potential. However, from a long-term perspective, some
major western medicine producers are also seeking Chinese market share. This may
present us with strong competition in the China pharma market.

o    Operation Risk

One of the major uncertainties in our industry is the purchase of raw materials.
Raw materials are primarily  affected by the geography and island environment of


                                       13
<PAGE>
<TABLE>
<CAPTION>

Hainan Province.  Because of high transportation costs and the need to guarantee
production supply  requirements,  we have to store large amounts of inventory to
maintain  consistent  production levels. In addition,  part of the raw materials
need  to be  specially  ordered  which  further  increases  the  need  to  store
inventory. Finally, due to the increasing sales, we must store a large volume of
finished product and packaging material.

o    Foreign Currency Risk

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

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

IV. Analysis for the three months ended September 30, 2008

The following  table presents the operations of the Company for the three months
ended September 30, 2008 and September 30, 2007; both are given in USD.


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

                                                                  For the three months
                                                                  ended September 30,
                                             ------------------------------------------------------------
                                                 2008             2007          change         variance
                                             ------------    ------------    ------------    ------------
<S>                                                                                          <C>
Revenue                                      $ 12,610,642    $  8,293,497       4,317,145          52.05%
Cost of revenue                                 6,494,266       4,413,052       2,081,214          47.16%
                                             ------------    ------------    ------------    ------------

Gross profit                                    6,116,376       3,880,445       2,235,931          57.62%
                                             ------------    ------------    ------------    ------------

Operating expenses:
Selling expenses                                  529,432         591,193         (61,761)        -10.45%
General and administrative                        427,399         328,743          98,656          30.01%
Research and development                            5,581           5,941            (360)         -6.06%
Bad debt expense, net of recoveries               459,500        (169,095)        628,595        -371.74%
                                             ------------    ------------    ------------    ------------
Total operating expenses                        1,421,912         756,782         665,130          87.89%
                                             ------------    ------------    ------------    ------------

Income from operations                          4,694,464       3,123,663       1,570,801          50.29%
                                             ------------    ------------    ------------    ------------


                                       14
<PAGE>

                                                                  For the three months
                                                                  ended September 30,
                                             ------------------------------------------------------------
                                                 2008             2007          change         variance
                                             ------------    ------------    ------------    ------------
Non-operating income (expenses):
Interest income                                    26,224           4,400          21,824         496.00%
Interest expense                                  (34,629)        (50,857)         16,228         -31.91%
Other (expense) income                             (9,588)          7,549         (17,137)       -227.01%
                                             ------------    ------------    ------------    ------------
Total non-operating income (expense)              (17,993)        (38,908)         20,915         -53.76%
                                             ------------    ------------    ------------    ------------

Income before taxes                             4,676,471       3,084,755       1,591,716          51.60%
Income tax expense                                424,993            --           424,993
                                             ------------    ------------    ------------    ------------
Net income                                   $  4,251,478    $  3,084,755       1,166,723          37.82%
                                             ============    ============    ============    ============
Comprehensive income - foreign currency
    translation adjustments                       133,713         570,646        (436,933)        -76.57%
                                             ------------    ------------    ------------    ------------
Comprehensive income                         $  4,385,191    $  3,655,401         729,790          19.96%
                                             ============    ============    ============    ============
Basic and Diluted Earnings Per Share         $       0.10    $       0.08            0.02          21.36%
                                             ============    ============    ============    ============
Basic and Diluted Weighted Average
    Shares Outstanding                         42,278,938      37,228,938       5,050,000          13.56%
                                             ============    ============    ============    ============
</TABLE>

Revenue

We generated  approximately  $12.61  million  revenue for the three months ended
September 30, 2008, an increase of $4.31 million,  which means a 52.05% increase
compared to $8.29 million of the corresponding period in 2007. This increase was
primarily  due to increased  marketing  and  promotional  activities to increase
sales of existing  products as well as contribution from the expansion of market
share by new  products.  In the third  quarter,  Pusen OK  continued  its strong
growth  trend,  and  realized  revenue  of $1.75  million or 14.18% of the total
income for the period, an increase of approximately $0.972 million or 124.23% on
the same period in 2007. Pusen OK, the company's  flagship  product,  is China's
only  generic  version of Aleve-D  TM,  and is the most  efficient,  non-drowsy,
12-hour slow release nasal  decongestant,  fever reducing and pain relief agent.
Aside from this, during this period,  another product with a large  contribution
to sales revenue was Buflomedil with  approximately  $1.11 million,  or 9.01% of
total  sales  revenue,  an  increase of $265,413 or 31.27% on the same period in
2007,  Roxithromycin  revenue increased 135.24% to approximately $0.920 million,
or 7.44% of the total revenue. This year's launch,  Bumetanide, due to increases
in market recognition and market acceptance also made a significant contribution
to the sales  revenue,  this  period it  generated  revenue  of $0.972  million,
accounting for 7.86% of total sales  revenue.  Another aspect is that because of
the government  reorganization of the pharmaceutical industry the pharmaceutical
marketing  environment has greater  transparency than previously.  The Company's
distribution  network  in China  has  already  expanded  to reach 30  provinces,
municipalities and autonomous regions.  Moreover, the improvements in production
capacity  have  facilitated  large  growth  in  sales  of the new  and  existing
products.

The  cost of  revenue  for the  three  months  ended  September  30,  2008,  was
approximately  $6.49  million  or  51.50%  of  total  revenue,  compared  to the
corresponding  period  of 2007,  which  was  $4.41  million  or  53.21% of total
revenue.  The main reason for the increase in the cost of revenue was because of
the  corresponding  increase in revenue for the three months up to September 30,
2008, the cost margin also fell slightly.

Gross Profit


                                       15
<PAGE>

Gross Profit for the three months ended  September  30, 2008 was $6.12  million,
and accounted for 48.50% of total revenue.  It has increased by 57.65%, or $2.24
million,  compared  to $3.88  million  or 46.79% of total  revenue  of the third
quarter of 2007.  The increased  sales in new products and high margin  products
resulted in the corresponding substantial increase in gross profit.

Selling Expense

The  selling   expense  of  the  three  months  ended   September  30  2008  was
approximately  $0.53 million,  a decrease of approximately  $60,000,  or 10.45%,
compared to  approximately  $0.59 million of the three months ended September 30
2007. The main reason for this drop was our strict control of expenditure  while
investing in our distribution channels and the marketing of our products.

G & A Expenses

The general and administrative  expenses of the three months ended September 30,
2008 has increased to approximately $0.43 million, an increase of $0.10 million,
or  30.01%,  compared  to $0.33  million  of the same  period of 2007.  The main
reasons for this increase were  increases in the cost of  consumables as well as
the  expansion  of  business  scale.  The  expenditure  on  each  item  is  also
correspondingly raised.

Collection of Bad Debt

For the three  months  ended  September  30,  2008,  allowance  for bad debt was
approximately $0.46 million;  however,  for the three months ended September 30,
2007, the allowance for bad debt was negative  $170,000.  This is an increase of
371.74%;  the main reason for the increase is that at September 30, 2007, we had
collected some long-aged bad debt, according to the calculations,  the collected
bad debt offset the bad debt allowance of the previous two quarters.

During the normal course of business, we give unsecured credit to our customers.
We  record  an  allowance  for bad debts  based on age of  outstanding  accounts
receivables  at the end of the  period in  accordance  with  generally  accepted
accounting  principles in the PRC. The percentage of a trade receivables that is
deemed  doubtful is as follows:  100% after 720 days;  50 % after 360 days;  and
7.5% up to 360 days. During the 15 years of operating  history,  the company has
never had any uncollected receivables.

In the Chinese pharmaceutical market environment, deferments in collections from
state owned hospitals are normal.  Over 90% of our drugs are sold to state-owned
hospitals,  which makes collections slow, but reliably collectible  demonstrated
by our collection of all receivables in the past.

Income from Operation

The  operating  income  for  the  three  months  ended  September  30,  2008  is
approximately  $4.69  million,  compared to $3.12  million of the same period of
2007, an increase of $1.57 million,  or 50.29%. The main reason was due to large
increases in revenue and gross profit, in addition to a fall in expenditures.


                                       16
<PAGE>
<TABLE>
<CAPTION>

Interest Income

Interest  income for the three  months  ended  September  30,  2008 is  $26,224,
compared to $4,400 of the same period of 2007.  The main reason is the  increase
in the bank deposit, which leads to an increase in the interest returns.

Interest Expense

Interest  expense for the three months ended September 30, 2008 is approximately
$35,000,  compared to $50,000 of the same period of 2007. The main reason is the
reduction in the  company's  working  capital loan,  leading to a  corresponding
reduction in the interest on the loan.

Income Tax Expense

Income tax expense for the three months ended September 30, 2008 was $424,993 or
3.37%  of  revenue,  while  the  company  did not  have  any  income  tax in the
corresponding  period in 2007, as the company was still in the  preferential tax
period. We have been granted a `tax holiday' granting a favorable rate of 50% of
the tax rates. This year we pay our tax at the rate of 9%.

Net Income

The net income for the three months ended  September  30,  2008,  excluding  the
effect of foreign exchange transactions,  was approximately $4.25 million, which
was $1.17  million  higher than that for the three  months ended  September  30,
2007, of approximately $3.08 million. It has increased by 37.82%.

V. Analysis for the nine months ended September 30, 2008

The following  table  presents the operations of the Company for the nine months
ended September 30, 2008 and September 30, 2007; both are given in USD.

                                                                 For the nine months
                                                                 ended September 30,
                                           --------------------------------------------------------------
                                                2008            2007           change         variance
                                           -------------   -------------    -------------   -------------
<S>                                                                                         <C>
Revenue                                    $ 35,606,490    $ 24,097,521        11,508,969          47.76%
Cost of revenue                              17,730,026      13,018,566         4,711,460          36.19%
                                           -------------   -------------    -------------   -------------

Gross profit                                 17,876,464      11,078,955         6,797,509          61.36%
                                           -------------   -------------    -------------   -------------

Operating expenses:
Selling expenses                              1,323,854         896,128           427,726          47.73%
General and administrative                    1,226,888         927,162           299,726          32.33%


                                       17
<PAGE>

Research and development                         42,807           5,942            36,865         620.41%
Bad debt expense, net of recoveries           1,539,313         910,718           628,595          69.02%
                                           -------------   -------------    -------------   -------------
Total operating expenses                      4,132,862       2,739,950         1,392,912          50.84%
                                           -------------   -------------    -------------   -------------

Income from operations                       13,743,602       8,339,005         5,404,597          64.81%
                                           -------------   -------------    -------------   -------------

Non-operating income (expenses):
Interest income                                  31,259          29,808             1,451           4.87%
Interest expense                               (130,342)       (166,698)           36,356         -21.81%
Other (expense) income                          (87,038)        582,827          (669,865)       -114.93%
                                           -------------   -------------    -------------   -------------
Total non-operating income (expense)           (186,121)        445,937          (632,058)       -141.74%
                                           -------------   -------------    -------------   -------------

Income before taxes                          13,557,481       8,784,942         4,772,539          54.33%
Income tax expense                            1,078,163               -         1,078,163
Net income                                   12,479,318       8,784,942         3,694,376          42.05%
Comprehensive income - foreign currency
    translation adjustments                   2,853,755       1,222,329         1,631,426         133.47%
Comprehensive income                         15,333,073      10,007,271         5,325,802          53.22%

Basic and Diluted Earnings Per Share               0.32            0.24              0.08          32.75%
Basic and Diluted Weighted Average           39,523,464      36,935,208         2,588,256           7.01%
    Shares Outstanding                     -------------   -------------    -------------   -------------

</TABLE>

Revenue

For the nine months ended  September  30, 2008,  revenue  reached  approximately
$35.61 million, an increase of approximately $11.51 million or 47.76%,  compared
with $24.10  million of the same period in 2007.  The main reasons for the large
increase in this year's third quarter  compared to the same period last year are
clear results from our efforts to increase  product  marketing and develop sales
channels as well as increased  recognition  of our  products on the market.  Our
older products  contributed  greatly to revenue;  Pusen OK increased markedly by
81.59%,  Cerebroprotein  by  62.63%,  and  Buflomedil  by 59.94%.  The  recently
launched  products also achieved wide  acceptance on the market:  Alginic Sodium
Diester,  Granisetron  Hydrochloride  realized  revenues of 172.38% and 108.68%,
respectively. Correct market positioning enabled our products to gain widespread
customer recognition.

Cost of Revenue

For  the  nine  months  ended  September  30,  2008,  the  cost of  revenue  was
approximately  $17.73  million,  or 49.79% of total revenue,  compared to $13.02
million of the same period of 2007, an increase of $4.71 million, or an increase
of 36.19%. The main reason for this kind of growth is the corresponding increase
in sales.

Gross Profit

For the nine months ended  September 30, 2008,  gross profit was $17.88  million
and the gross profit margins were 50.21%, gross profit for the nine months ended
September 30, 2007 was $11.08 million, and the gross profit margins were 45.98%.
The increase was $6.80 million,  or 61.36%. The main reason for this increase in


                                       18
<PAGE>

gross profit was the relatively  large increase in sales of high margin products
and new  products,  which  brought the large  increase in gross profit and gross
profit margins.

Selling expense

The selling expense for this period  increased by $0.43 million,  reaching $1.32
million,  and  accounting for 3.72% of sales  revenues.  The main reason for the
increase in cost is our  investment  to increase  marketing  activities  for our
products and expand our sales  network.  With this  increase in  marketing,  the
promotion costs, sales force wages, travel expenses and related costs all rose.

G&A Expense

The G&A expense for this period increased by approximately  $300,000, or 32.33%,
to  $1.23  million,  compared  with  $0.93  million  for the nine  months  ended
September 30, 2007,  and  accounted for 3.45% of the total  revenues from sales.
The main reason for the increase was the  expansion in the scale of  operations,
with the increase in operating activities, and the increases in the cost of many
items; the cost of each kind of service  organization such as auditors,  lawyers
etc., engaged in order for the company to fit the requirements of the US capital
market, also rose correspondingly.

Allowance for Bad Debt

For the nine months ended  September  30, 2008,  the  allowance for bad debt was
$1.54  million,  an increase of $0.63  million,  or 69.02%,  compared with $0.91
million  for the same period last year.  The main reason for this  increase  was
that following the  strengthening  in the revenue from sales, the absolute value
of the corresponding  accounts  receivables also increased.  For the nine months
ended  September  30, 2008,  the company  collected  $27.27  million of accounts
receivables,  of these,  $12.07 million of payments were owed for over one year.
The  company is now  actively  exploring  changes to the product  portfolio  and
developing  new sales  channels  and sales  tactics.  The company is striving to
fundamentally  change the large amount of accounts receivables and the long date
of sales situation.

Operating Income

The operating  income for the nine months ended  September 30, 2008,  was $13.74
million  accounting  for 38.60% of the revenue,  an increase of $5.40 million or
64.81% compared with $8.34 million  accounting for 34.62% of the revenue for the
same period last year.The main reason for this increase is the relatively  large
increase in sales and due to the high rise in margins in the nine  months  ended
September 30, 2008.

Income Tax expense

The income tax for the nine months ended  September 30, 2008 was $1.08  million,
or 3.03% of the total  revenue.  In the same  period of 2007,  the  company  was
exempt from paying  income tax as the company was still within the  preferential
tax period.  We have been granted a `tax holiday'  granting a favorable  rate of
50% of the tax rates. This year we pay our tax at the rate of 9%.

Net Income


                                       19
<PAGE>

Excluding the effects of foreign exchange  transactions,  the net income for the
nine months ended September 30, 2008,  increased by approximately  $3.69 million
reaching  $12.48  million.  For the  corresponding  period of 2007, it was $8.78
million,  an  increase  of 42.05%.  This kind of  increase  was due to the large
increases  in  revenue  and  income,  and  also  effective  control  of  cost of
expenditure.

VI. Financial Analysis

Cash flow analysis

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

                                                     For the nine months ended
                                                           September 30,
                                                   ----------------------------
                                                       2008            2007
                                                   ------------    ------------
Cash Flows from Operating Activities:                               (Restated)

Net income                                         $ 12,479,318    $  8,784,942
Depreciation and amortization                           505,595         322,098
Compensation paid with warrants                         120,042            --
Gain on sale of intangibles                                --          (572,446)
Changes in assets and liabilities:
  Trade accounts receivable                         (11,610,177)     (4,440,513)
  Other receivables                                     246,329         223,329
  Advances to suppliers                                 651,833      (2,504,684)
  Inventory                                             855,485      (2,965,836)
  Deferred tax assets                                  (209,434)           --
  Deferred offering costs                                  --            60,487
  Trade accounts payable                                184,627         279,420
  Accrued expenses                                     (138,021)         83,034
  Accrued taxes payable                                 602,480            --
  Other payables                                        (48,535)       (134,647)
  Advances from customers                               386,922          47,448
                                                   ------------    ------------
Net Cash from Operating Activities                    4,026,464        (817,368)
                                                   ------------    ------------

Cash Flows from Investing Activities:
  Purchase of property and equipment                   (125,753)        (77,313)
  Purchase of intangible assets                        (428,641)     (1,993,288)
  Advances for purchases of intangibles              (5,856,412)           --
                                                   ------------    ------------
Net Cash from Investing Activities                   (6,410,806)     (2,070,601)
                                                   ------------    ------------

Cash Flows from Financing Activities:
  Proceeds from sale of common stock and warrants     9,268,938       3,797,183
  Payments of short term notes payable               (2,814,744)           --
                                                   ------------    ------------
Net Cash Proceeds from Financing Activities           6,454,194       3,797,183
                                                   ------------    ------------


                                       20
<PAGE>


Effect of Exchange Rate Changes on Cash                 (61,509)        149,995
                                                   ------------    ------------
Net Change in Cash                                    4,008,343       1,059,209
                                                   ------------    ------------
Cash and Cash Equivalents at Beginning of Period      1,830,335         656,441
                                                   ------------    ------------
Cash and Cash Equivalents at End of Period         $  5,838,678    $  1,715,650
                                                   ------------    ------------


Supplemental Cash Flow Disclosure:
  Cash paid for interest                           $    130,342    $    115,841
  Cash paid for income taxes                          1,289,596            --


As of September 30, 2008,  the company  possessed  cash and cash  equivalents of
$5,838,678  compared with  $1,715,650 of the same period in 2007.  Compared with
the $1,830,335 of December 31, 2007, this is an increase of $4,008,313. The main
reason for the  increase in cash and cash  equivalents  is that on May 30, 2008,
the Company  completed an offering of Units priced at $2.00 per Unit  consisting
of one share of  Company  common  stock and a  three-year  warrant  to  purchase
one-fourth  of one share of Company  common stock at an exercise  price of $2.80
per share.  The Company issued  5,000,000  shares of common stock and three-year
warrants to purchase 1,250,000 shares of common stock to 17 accredited investors
for gross proceeds of $10,000,000.  The net proceeds, after deduction of related
offering  expenses  of  $731,062,  amounted  to  $9,268,938.  In  addition,  the
placement agent in the transaction  was issued  three-year  warrants to purchase
300,000 shares of common stock at an exercise price of $2.98 per share.

For the nine months ended  September  30, 2008,  net cash  utilized in operating
activities was $4.03 million,  an increase of $4.84 million or 592.61%  compared
with negative  $0.82 million of the same period of 2007.This  increase is due to
the company's  strengthening of Accounts Receivables  collections and the return
of loans which have met with remarkable success.

VII. Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements.

VIII. Commitments

At  September  30,  2008,  the Company had no material  commitments  for capital
expenditures other than for those  expenditures  incurred in the ordinary course
of business.

IX. Recently Enacted Accounting Pronouncements

In September  2006, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  157,  Fair Value
Measurements,  which  defines fair value,  establishes a framework for measuring
fair value in generally accepted  accounting  principles and expands disclosures
about  fair  value  measurements.  SFAS No. 157 is  effective  for fiscal  years
beginning  after  November 15,  2007,  and interim  periods  within those fiscal
years. In February 2008, the FASB issued FASB Staff Position (FSP FIN) No. 157-2
which  extended  the  effective  date  for  certain   nonfinancial   assets  and
nonfinancial  liabilities to fiscal years beginning after November 15, 2008. The
Company does not expect the  adoption of SFAS No. 157 to have a material  impact
on our consolidated financial statements.


                                       21
<PAGE>

In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial Assets and Financial  Liabilities.  SFAS No. 159 permits  companies to
choose to measure many  financial  instruments  and certain  other items at fair
value.  SFAS No. 159 is effective  for  financial  statements  issued for fiscal
years  beginning  after  November  15,  2007.  The  Company  does not expect the
adoption of SFAS No. 159 to have a material impact on our consolidated financial
statements.

In June 2007,  the Emerging  Issues Task Force of the FASB issued EITF Issue No.
07-3, "Accounting for Nonrefundable Advance Payments for Goods or Services to be
Used in Future  Research and  Development  Activities",  ("EITF  07-3") which is
effective for fiscal years beginning after December 15, 2007. EITF 07-3 requires
that  nonrefundable   advance  payments  for  future  research  and  development
activities  be deferred and  capitalized.  Such amounts will be recognized as an
expense as the goods are delivered or the related  services are performed.  EITF
07-3 is not expected to have a material  impact on our results of  operations or
financial position.

In December 2007, the FASB issued SFAS No. 141(R),  Business  Combinations,  and
SFAS No. 160,  Noncontrolling  Interests in Consolidated  Financial  Statements.
SFAS No.  141(R)  requires  an  acquirer  to  measure  the  identifiable  assets
acquired,  the  liabilities  assumed  and any  non-controlling  interest  in the
acquiree at their fair values on the  acquisition  date, with goodwill being the
excess value over the net identifiable  assets acquired.  SFAS No. 160 clarifies
that a non-controlling  interest in a subsidiary should be reported as equity in
the consolidated financial statements, consolidated net income shall be adjusted
to  include  the net  income  attributed  to the  non-controlling  interest  and
consolidated comprehensive income shall be adjusted to include the comprehensive
income attributed to the non-controlling  interest.  The calculation of earnings
per share  will  continue  to be based on  income  amounts  attributable  to the
parent. SFAS No. 141(R) and SFAS No. 160 are effective for financial  statements
issued for fiscal years  beginning  after  December 15, 2008.  Early adoption is
prohibited.  The Company has not yet determined  the effect on our  consolidated
financial statements, if any, upon adoption of SFAS No. 141(R) or SFAS No. 160.

In March  2008,  the FASB  issued SFAS No.  161,  Disclosures  about  Derivative
Instruments and Hedging Activities. SFAS No. 161 amends SFAS No. 133, Accounting
for  Derivative   Instruments  and  Hedging   Activities  to  require   enhanced
disclosures  concerning the manner in which an entity uses  derivatives (and the
reasons it uses them), the manner in which  derivatives and related hedged items
are  accounted  for under  SFAS No.  133 and  interpretations  thereof,  and the
effects that derivatives and related hedged items have on an entity's  financial
position,  financial performance,  and cash flows. SFAS No. 161 is effective for
financial  statements  of  fiscal  years and  interim  periods  beginning  after
November  15,  2008.  The  Company  has not yet  determined  the  effects on its
consolidated financial statements,  if any, that may result upon the adoption of
SFAS 161.

In May  2008,  The US  Financial  Accounting  Standards  Board  (FASB)  and  the
International Accounting Standards Board (IASB) published consultative documents
that seek public  comment on two of the eight  phases of their joint  project to
develop an improved  conceptual  framework.  The  objective of the project is to
develop an improved  conceptual  framework that provides a sound  foundation for
developing future  accounting  standards.  Further,  in June 2008, The Financial
Accounting  Standards  Board (FASB) issued an Exposure  Draft (ED) of a proposed
Statement  of  Financial  Accounting  Standards,   Disclosure  of  Certain  Loss
Contingencies--an  amendment of FASB  Statements No. 5 and 141(R).  The proposed
Statement  would be effective  for fiscal years ending after  December 15, 2008,
and interim and annual periods in subsequent fiscal years. In addition,  on June
06, 2008,  the Financial  Accounting  Standards  Board (FASB) issued an Exposure
Draft (ED) of a proposed Statement of Financial Accounting Standards, Accounting
for Hedging  Activities--an  amendment of FASB  Statement  No. 133. The proposed


                                       22
<PAGE>

Statement  would require  application of the amended  hedging  requirements  for
financial  statements issued for fiscal years beginning after June 15, 2009, and
interim periods within those fiscal years.

X. Conclusion

The overall  performance  during the nine months  ended  September  30, 2008 was
outstanding.  As a public company in the  pharmaceutical  industry,  we focus on
product innovation.  In order to create innovative products that are tailored to
the  end  user,  we  must  concentrate  on  additional,  innovative  cooperative
engagements  with special R&D institutes for more  market-ready  products.  As a
result,  the  Company  will  continue  to actively  pursue the  development  and
distribution  of high-quality  products.  The  pharmaceutical  industry has been
called an " industry of eternal  sunrise",  and China Pharma  forecasts that our
clear growth strategy and the sustained  growth in market demand will ensure our
continued growth.

Item 3 - Quantitative and Qualitative Disclosures About Market Risks

We have exposure to market risk of changes in foreign  currency  exchange rates.
We neither hold nor issue financial  instruments for trading  purposes nor do we
make use of derivative instruments to hedge the risks discussed below.

Foreign Currency Exchange Rates

We collect revenue from operations  principally in the Chinese Renminbi.  All of
our local sales  revenue is collected in and  substantially  all of our expenses
are paid in the Chinese Renminbi. We face foreign currency rate translation risk
when our Chinese  subsidaries  results are  translated to U.S.  Dollars and with
respect to financial instruments denominated in foreign currencies.  Our results
of operations denominated in foreign currency are translated at the average rate
of exchange during the reporting period.  Assets and liabilities  denominated in
foreign  currencies at the balance sheet date are  translated at the market rate
of exchange  ruling at that date. The registered  equity capital  denominated in
the functional  currency is translated at the historical rate of exchange at the
time of capital contribution.

The  Chinese   Renminbi  had  remained   stable  against  the  U.S.   Dollar  at
approximately 8.28 Renminbi to 1.00 U.S. Dollar for several years and it was not
until July 21, 2005 that the Chinese  currency  regime was altered,  with a 2.1%
revaluation  versus the United States  Dollar.  This move  initially  valued the
Renminbi at 8.11 Renminbi per United States Dollar. In addition, the Renminbi is
no longer linked to the U.S.  currency but rather to a basket of currencies with
a 0.3% margin of fluctuation.  However,  there remains international pressure on
the Chinese  government to adopt an even more flexible currency policy and as of
September  30, 2008 the exchange rate was 6.8183  Renminbi to 1.00 U.S.  Dollar.
The exchange rate of Renminbi is subject to changes in the People's  Republic of
China's  government  policies  which are, to a large  extent,  dependent  on the
economic and  political  development  both  internationally  and locally and the
demand and supply of Renminbi in the domestic market.  There can be no assurance
that such exchange rate will continue to remain stable in the future amongst the
volatility of  currencies,  globalization  and the unstable  economies in recent
years. Since (i) our income and profit are mainly  denominated in Renminbi,  and
(ii) the payment of  dividends  will be in U.S.  dollars,  if any,  any exchange
fluctuation of the Renminbi  against other foreign  currencies  would  adversely
affect the value of the shares and dividends payable to shareholders, in foreign
currency terms.

Item 4 - Controls and Procedures


                                       23
<PAGE>

Disclosure  controls  and  procedures  are  designed  to ensure  that  financial
information  is  accumulated  and  communicated  to  management,  including  the
Company's  CEO and CFO in a timely  manner and then  processed,  summarized  and
reported  within the time  periods  specified  in the  Securities  and  Exchange
Commission's rules and forms.

As required by Rule 13a-15 under the Securities Exchange Act of 1934, within the
90 days prior to the filing  date of this  report,  the  Company  carried out an
evaluation  of the  effectiveness  of the design and  operation of the Company's
internal controls over disclosure and reporting procedures.  This evaluation was
carried out under the  supervision and with the  participation  of the Company's
management,  including  the  Company's  President,  CEO and CFO. The Company has
taken steps to improve our internal  controls over recording and reporting which
were  disclosed as a material  weakness in Item 8A "Controls and  Procedures" of
our Annual  Report on Form  10-KSB for the fiscal year ended  December  31, 2007
(the "2007 Form 10-KSB").

As part of this correction process, we recruited three independent directors and
formed an Audit Committee in February 2008 to supervise the implementation of an
Internal Audit Department and to oversee the financial  reporting of the Company
including direct  communication with our independent  auditors.  There have been
other changes in the Company's internal controls subsequent to our assessment to
improve internal controls as indicated in the 2007 Form 10-KSB.


                           PART II. OTHER INFORMATION

Item 1      Legal Proceedings

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

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

None.

Item 3 - Defaults upon Senior Securities

None.

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

On February  1, 2008,  a majority of the  outstanding  shares of voting  capital
stock  approved (1) to elect the  following  three  individuals  as  independent
members of the board of directors of the Company:  G. Michael  Bennett,  Yingwen
Zhang and Baowen Dong; and (2) to authorize the Company's  board of directors to
amend our Bylaws to reflect  the proper  name and  corporate  governance  of the
Company.  The shareholder  approval was granted by written consent, in lieu of a


                                       24
<PAGE>

special  meeting of the  shareholders.  In order to provide  information  to our
shareholders  regarding this action, we filed a definitive information statement
with the Securities and Exchange Commission on July 11, 2008 and delivered it to
our shareholders of record as of the close of business on February 1, 2008.

Item 5 - Other Information

None.

Item 6 - Exhibits

The following exhibits are filed herewith:

31.1 - Certification  pursuant to Rule 13a-14 and Rule 15d-14(a) of the Exchange
Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

31.2 - Certification  pursuant to Rule 13a-14 and Rule 15d-14(a) of the Exchange
Act, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

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

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



                                       25
<PAGE>

                                   SIGNATURES


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



China Pharma Holdings, Inc.

Dated: November 6, 2008                          By:  /s/ Zhilin Li
                                                 -----------------------
                                                 Zhilin Li
                                                 Chief Executive Officer,
                                                 President and Director


Dated: November 6, 2008                         By:  /s/ Xinhua Wu
                                                ----------------------
                                                Xinhua Wu
                                                Chief Financial Officer,
                                                and Director




                                       26