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

                                   FORM 10-QSB

                                   (Mark One)

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

                For the Quarterly Period Ended September 30, 2006

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

              For the Transition Period from _________ to _________

                        Commission file number: 000-29523

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

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


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

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

                                   Charles Law
                                King and Wood LLP
                               650 Page Mill Road,
                               Palo Alto, CA 94304



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

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

As of the November 3, 2006,  34,723,056  shares of China Pharma  Holdings,  Inc.
common stock, par value $0.001 per share, were outstanding.

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

<PAGE>

                           China Pharma Holdings, Inc.

                                TABLE OF CONTENTS


PART I  FINANCIAL INFORMATION

ITEM 1  Financial Statements                                        F-1 thru F-6
ITEM 2  Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                           1-11

ITEM 3  Controls and Procedures                                               11

PART II OTHER INFORMATION

ITEM 1  Legal proceedings                                                     11
ITEM 2  Unregistered Sales of Equity Securities and use of proceeds           11
ITEM 3  Defaults upon senior securities                                       11
ITEM 4  Submission of matters to a vote of security holders                   11
ITEM 5  Other information                                                     11
ITEM 6  Exhibits                                                              12

SIGNATURES                                                                    13

EXHIBITS

================================================================================














<PAGE>

                                TABLE OF CONTENTS

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

                                                                            Page
                                                                            ----

Condensed Consolidated Balance Sheets, September 30, 2006 (unaudited),
and December 31, 2005                                                        F-1

Condensed Consolidated Statements of Operations (unaudited), for the
three months ended September 30, 2006 and 2005, and for nine months
ended September 30, 2006 and from January 12, 2005 (Date of Inception)
through September 30, 2005                                                   F-2

Condensed Consolidated Statements of Cash Flows (unaudited), for the
nine months ended September 30, 2006 and from January 12, 2005 (Date
of Inception) through September 30, 2005                                     F-3

Notes to the Condensed Consolidated Financial Statements (unaudited)         F-4



















<PAGE>
<TABLE>
<CAPTION>

Item 1. Financial Statements

                           CHINA PHARMA HOLDINGS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                                         September 30,   December 31,
                                                              2006            2005
                                                         -------------   -------------
<S>                                                      <C>             <C>
                                                          (unaudited)
ASSETS
Current Assets:
Cash and cash equivalents                                $     193,390   $     461,220
Trade accounts receivable, less allowance for doubtful
accounts of $988,511 and $1,412,353, respectively           11,297,389       5,709,762
Non-trade receivables, less allowance for doubtful
accounts of $38,116 and $111,029, respectively                 494,473         385,957
Advances to suppliers                                        2,011,603       2,123,729
Inventory                                                    8,552,037       5,785,196
                                                         -------------   -------------
Total Current Assets                                        22,548,892      14,465,864
                                                         -------------   -------------
Non-current Assets:
Property and equipment, net                                  2,771,944       2,808,342
Intangible assets, net                                          70,104          96,406
Deferred tax assets                                            124,908         130,458
                                                         -------------   -------------
Total Non-current Assets                                     2,966,956       3,035,206
                                                         -------------   -------------
TOTAL ASSETS                                             $  25,515,848     $17,501,070
                                                         -------------   -------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable                                   $   1,051,080   $     679,104
Accrued expenses                                               347,371          15,625
Taxes payable                                                  376,174         565,236
Other payables                                                  69,158         250,317
Advances from customers                                         83,749          50,755
Short-term notes payable                                     2,147,335            --
Short-term notes payable to former shareholders              4,304,371            --
Dividends payable                                                 --         4,209,889
                                                         -------------   -------------
Total Current Liabilities                                    8,379,238       5,770,926
                                                         -------------   -------------
Research and development commitments                            31,578          30,966
                                                         -------------   -------------
Total Liabilities                                            8,410,816       5,801,892
                                                         -------------   -------------
Shareholders' Equity:
Common stock, $0.001 par value, 60,000,000 shares
authorized, 34,723,056 shares issued and outstanding            34,722          34,723
Additional paid-in capital                                   7,764,979       7,764,979
Accumulated other comprehensive income                         397,124          99,926
Retained earnings                                            8,908,207       3,799,550
                                                         -------------   -------------
Total Shareholders' Equity                                  17,105,032      11,699,178
                                                         -------------   -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY               $  25,515,848     $17,501,070
                                                         -------------   -------------
</TABLE>

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

                                      F-1
<PAGE>
<TABLE>
<CAPTION>

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

                                                                                                For the period
                                                                                               from January 12,
                                                                                                2005 (Date of
                                                                             For the nine         Inception)
                                           For the three months              months ended          through
                                            ended September 30,              September 30,       September 30,
                                   ----------------    ----------------    ----------------    ----------------
                                         2006                2005                2006                2005
                                   ----------------    ----------------    ----------------    ----------------
<S>                                <C>                 <C>                 <C>                 <C>
Revenue                            $      5,015,272    $      2,601,294    $     13,721,587    $      3,093,824
Cost of revenue                           2,521,205           1,617,399           7,151,898           1,942,393
                                   ----------------    ----------------    ----------------    ----------------

Gross profit                              2,494,067             983,895           6,569,689           1,151,431
                                   ----------------    ----------------    ----------------    ----------------

Operating expenses:
Selling expenses                             42,966              43,098             213,350              47,588
Research and development                    125,359                --               124,715                --
General and administrative                  100,650              77,346             333,654              35,772
Bad debt expense (recovery)                 152,142             169,229             (28,349)            230,881
                                   ----------------    ----------------    ----------------    ----------------
Total operating expenses                    421,117             289,673             643,370             314,241
                                   ----------------    ----------------    ----------------    ----------------

Income from operations                    2,072,950             694,222           5,926,319             837,190
                                   ----------------    ----------------    ----------------    ----------------

Non-operating income (expenses):
Interest income                                 408                 266                 588                 266
Interest expense                            (39,872)           (124,734)            (87,690)           (153,629)
                                   ----------------    ----------------    ----------------    ----------------
Total non-operating income
(expense)                                   (39,464)           (124,468)            (87,102)           (153,363)
                                   ----------------    ----------------    ----------------    ----------------

Income before taxes                       2,033,486             569,754           5,839,217             683,827
Income tax expense                         (326,621)            (54,726)           (730,560)            (64,247)
                                   ----------------    ----------------    ----------------    ----------------
Net income                         $      1,706,865    $        515,028    $      5,108,657    $        619,580
                                   ----------------    ----------------    ----------------    ----------------
Comprehensive income - foreign
currency translation adjustments             25,307                --               137,964                --
                                   ----------------    ----------------    ----------------    ----------------
Comprehensive income               $      1,732,172    $        515,028    $      5,246,621    $        619,580
                                   ----------------    ----------------    ----------------    ----------------

Basic and diluted earnings per
common share                       $           0.05    $           0.11    $           0.15    $           0.07
                                   ----------------    ----------------    ----------------    ----------------

Weighted-average common shares
outstanding                              34,723,056           4,731,413          34,723,056           9,377,713
                                   ----------------    ----------------    ----------------    ----------------
</TABLE>

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

                                      F-2
<PAGE>
<TABLE>
<CAPTION>

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

                                                                        For the period
                                                                       from January 12,
                                                                        2005 (Date of
                                                     For the nine         Inception)
                                                     months ended          through
                                                     September 30,       September 30,
                                                         2006                2005
                                                   ----------------    ----------------
<S>                                                <C>                 <C>
Cash Flows from Operating Activities:
Net income                                         $      5,108,657    $        619,580
Depreciation and amortization                               288,142              77,841
Loss on disposal of property and equipment                     --                  --
Accretion of discount on notes payable                         --                86,505
Deferred tax assets                                           8,029             (12,721)
Changes in assets and liabilities:
Trade accounts receivable                                (5,405,382)         (1,523,777)
Non-trade receivables                                       (99,868)           (433,383)
Advances to suppliers                                       152,181           1,148,183
Inventory                                                (2,618,835)         (1,433,501)
Trade accounts payable                                      354,002           1,725,177
Accounts payable related parties                               --               109,959
Accrued expenses                                             11,071              55,912
Taxes payable                                              (197,707)             28,751
Other payables                                              144,450            (475,013)
Advances from customers                                      31,586              14,933
                                                   ----------------    ----------------
Net Cash Used in Operating Activities                    (2,223,674)            (11,554)
                                                   ----------------    ----------------

Cash Flows from Investing Activities:
Capital expenditures                                       (169,508)            (14,597)
Net cash received in purchase of Subsidiary                    --               132,016
Proceeds from note receivable                                  --                11,336
                                                   ----------------    ----------------
Net Cash (Used) Provided by Investing Activities           (169,508)            128,755
                                                   ----------------    ----------------

Cash Flows from Financing Activities:
Payment of dividend payable                                    --               (65,818)
Proceeds from notes payable                               2,120,150                --
Proceeds from issuance of common stock                         --             3,509,698
                                                   ----------------    ----------------
Net Cash Proceeds from Financing Activities               2,120,150           3,443,880
                                                   ----------------    ----------------

Effect of Exchange Rate Changes in Cash                       5,199                --
                                                   ----------------    ----------------
Net Change in Cash                                         (267,833)          3,561,081
                                                   ----------------    ----------------

Cash and Cash Equivalents at Beginning of Period            461,220                   1
                                                   ----------------    ----------------
Cash and Cash Equivalents at End of Period         $        193,387    $      3,561,082
                                                   ----------------    ----------------

Supplemental Cash Flow Disclosures:
Cash paid for interest                             $         87,690    $           --
Cash paid for income taxes                         $        851,335    $           --
Non-cash Financing Activities:
Interest accrued on dividends payable              $         11,212    $           --
</TABLE>

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

                                      F-3
<PAGE>

                           CHINA PHARMA HOLDINGS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2006
                                   (unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited condensed consolidated financial statements of China
Pharma  Holdings,  Inc.  (the  "Company")  and its  subsidiaries  were  prepared
pursuant  to the rules and  regulations  of the  United  States  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included  in  financial   statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in the  United  States  of  America  have  been
condensed or omitted pursuant to such rules and  regulations.  Management of the
Company  ("Management")  believes that the following disclosures are adequate to
make the  information  presented not misleading.  These  condensed  consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements and the notes thereto included in the Company's Form 10-KSB
report for the year ended December 31, 2005.

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, 2006, are
not  necessarily  indicative  of the results  that may be expected  for the year
ending December 31, 2006.

Organization - Onny Investment  Limited ("Onny") was incorporated in the British
Virgin  Islands  on  January  12,  2005.  Through  June  15,  2005,  Onny  was a
development  stage  enterprise with no activities  except for the acquisition of
Hainan Helpson Medical & Biotechnology Co., Ltd ("Helpson"), as discussed below.
Upon the  acquisition  of Helpson  and its  operations,  Onny  emerged  from the
development stage. On June 16, 2005, Onny acquired all of the outstanding shares
of Helpson.

On October 19, 2005,  Onny was  reorganized as a wholly-owned  subsidiary of the
Company.  The  reorganization  was  accomplished  through the exchange of 29,700
shares of Onny common stock for 20,555,329  shares of the Company's common stock
and for the  commitment of the Company to issue an additional  4,723,056  shares
upon  amending  its  articles  of  incorporation.  The  exchange of shares was a
851-for-1  exchange  ratio. In addition,  the prior Onny preferred  shareholders
exchanged  their 10,000 shares of Onny common stock for 6,944,611  shares of the
Company's common stock for a 694-for-1 exchange ratio.  Additionally,  the prior
Onny preferred  shareholders  converted  their  preferred stock into Onny common
shares.  The  reorganization  of Onny into the Company was recognized as a stock
split  of the  common  stock  of Onny  and  the  effective  issuance  by Onny of
2,500,060   shares  of  common   stock  to  the   Company's   pre-reorganization
shareholders   and  the  assumption  of  $4,473  of  liabilities.   The  reverse
acquisition of the Company was recognized as a non-monetary exchange.

Pursuant to a written consent from stockholders  received on March 15, 2006, the
Company  amended its  articles of  incorporation  on May 1, 2006 to increase its
authorized shares from 30,000,000 shares to 60,000,000 shares.

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).  The  marketing  department  is in Hainan  Province and
there are also nine 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


                                      F-4
<PAGE>

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.  There were no dilutive common shares outstanding
at September 30, 2006.

NOTE 2 - ACQUISITION

On May 25,  2005,  Onny  entered  into an  agreement  with the  shareholders  of
Helpson, a privately held PRC joint venture, in which Onny agreed to acquire and
the shareholders of Helpson agreed to sell, all of the outstanding common shares
of Helpson in exchange for the  assumption of  obligations to make cash payments
to the Helpson  shareholders  in the form of common stock dividends from Helpson
of  $4,154,041,  the  assumption  of  $4,646,409  of other  liabilities  and the
issuance of non-interest  bearing  promissory notes totaling  $3,413,265 payable
three months  after  Helpson  obtains a business  license in the PRC as a wholly
foreign  owned  entity.  Helpson  obtained such license on June 16, 2005 and the
shares of Helpson were transferred to Onny on that date. Since June 16, 2005 was
recognized  as the date of the  acquisition,  the  promissory  notes  became due
September 16, 2005.

Since  Helpson is an operating  company and control of Helpson  changed upon the
closing of the acquisition  agreement,  Onny is the accounting  acquirer and has
recognized the  acquisition  of Helpson as a business  combination in accordance
with   Statements  of  Financial   Accounting   Standards   No.  141,   Business
Combinations.  On April 25,  2005,  Helpson  declared a dividend  to the selling
shareholders of $4,154,041 which equaled  Helpson's  retained  earnings at March
31, 2005 less deferred income tax assets of $86,985 that are not considered part
of  distributable  profits  under PRC law.  The fair  value of the net assets of
Helpson was  determined  by appraisal.  The cost of the net assets  exceeded the
fair value.  That excess was  allocated  as a pro-rata  reduction of the amounts
that otherwise would have been assigned to the non-current assets acquired.

NOTE 3 - INVENTORY

Inventory consisted of the following:

                                  September 30, 2006     December 31, 2005
                                  ------------------     ------------------
Raw materials                     $        5,897,875     $        4,673,352
Work in process                              189,740                819,146
Finished goods                             2,464,422                292,698
  Total Inventory                 $        8,552,037     $        5,785,196

NOTE 4 - INCOME TAXES

The Company  accounts  for its income  taxes in  accordance  with  Statement  of
Financial  Accounting  Standards No. 109, which requires recognition of deferred
tax  assets  and  liabilities  for  future  tax  consequences   attributable  to
differences  between the financial statement carrying amounts of existing 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.  Helpson is receiving the tax benefits
resulting  from a reduced tax rate from 30% to 15%, and through the end of 2005,
received a reduced tax of 7.5% as a result of operating in a developing economic
area in the PRC.


                                      F-5
<PAGE>

NOTE 5 - NOTES PAYABLE

Short Term Notes Payable During the third quarter of 2006, the Company  borrowed
a total of $2,147,335 from a bank. The loans bear interest with a range of 6.14%
to  6.45%,   principal   and  accrued   interest  are  due  July  2007  and  are
collateralized by land use rights, machinery and equipment.

Short Term Notes Payable to Former  Shareholders  In January  2006,  the Company
converted  its dividend  payable of  $4,304,371  into  short-term  notes bearing
interest at a rate of 2.25% per annum.  As of September 30, 2006 these notes and
accrued interest remain outstanding.

NOTE 6 - STOCKHOLDERS' EQUITY

On October 19,  2005,  the Company  acquired  all of the issued and  outstanding
common  stock of Onny;  thus,  Onny  became a  wholly  owned  subsidiary  of the
Company.  The  reorganization of Onny into the Company was recognized as a stock
split  of the  common  stock  of Onny  and  the  effective  issuance  by Onny of
2,500,060   shares  of  common   stock  to  the   Company's   pre-reorganization
shareholders.  The  number of common  shares  issued  and  outstanding  has been
restated in the accompanying  condensed  consolidated  financial statements on a
retroactive basis for the effects of the stock split.

NOTE 7 - CONTINGENCIES

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

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












                                      F-6
<PAGE>

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

The  following  discussion of China Pharma  Holdings,  Inc.'s  ("China  Pharma")
financial condition and results of operations should be read in conjunction with
its  financial  statements  and  the  related  notes,  and the  other  financial
information included in this information statement.


FORWARD-LOOKING STATEMENTS

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

This  filing  contains  forward-looking  statements.  The  words  "anticipated,"
"believe," "expect",  "plan," "intend," "seek," "estimate,"  "project," "could,"
"may,"  and  similar  expressions  are  intended  to  identify   forward-looking
statements. These statements include, among others, information regarding future
operations,  future  capital  expenditures,  and  future  net  cash  flow.  Such
statements  reflect  China  Pharma  management's  current  views with respect to
future events and  financial  performance  and involve risks and  uncertainties,
including, without limitation, general economic and business conditions, changes
in foreign, political,  social, and economic conditions,  regulatory initiatives
and compliance  with  governmental  regulations,  the ability to achieve further
market penetration and additional customers,  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.

OVERVIEW

On June 16, 2005, Onny acquired all of the outstanding common shares of Helpson,
a privately  held  Chinese  joint  venture,  in exchange for the  assumption  of
obligations  to make cash  payments to the Helpson  shareholders  in the form of
common stock dividends from Helpson of $4,154,041,  the assumption of $4,646,409
of other liabilities and the issuance of non-interest  bearing  promissory notes
totaling  $3,413,265  payable  three  months after  Helpson  obtained a business
license in the PRC as a wholly foreign owned entity.  The acquisition of Helpson
was recognized as a business combination.

On October  19,  2005,  Onny issued  10,000  preferred  shares in  exchange  for
$4,313,000 in cash, net of offering costs and estimated  registration costs, and
on that same date, those preferred shares were converted into 10,000 Onny common
shares.  Also on  October  19,  2005,  Onny was  reorganized  as a  wholly-owned
subsidiary of the Company.  The  reorganization was accomplished by the original
Onny common shareholder  exchanging her 29,700 Onny common shares for 20,555,329
common  shares of China Pharma and for the  commitment  by China Pharma to issue
the  original  Onny common  shareholder  4,723,056  common  shares  following an
amendment of the China Pharma articles of incorporation increasing the number of


                                       1
<PAGE>

common  shares  authorized  to 60,000,000  shares.  In addition,  the prior Onny
preferred  shareholders  exchanged their 10,000 Onny common shares for 6,944,611
common shares of China Pharma.

China Pharma is primarily engaged in the research, development, manufacture, and
marketing of pharmaceutical and nutritional supplements. We launched an anti-flu
product named  PuSenOK,  which is the only anti flu medicine in the market mixed
with pseudo ephedrine  hydrochloride,  that has a non-drowsy formula and a runny
nose suppressant.  We plan to expand our biotechnology  product series. Based on
the  foundation  established  by some of Helpson's  widely  recognized  medicine
labels such as Neurotrophicpeptide,  we will also launch a variety of biological
medicines,   including  the  brain  peptide   injection,   injected   hepatocyte
growth-promoting factors, as well as new genetic medicines, rh-CNTF and rh-aFGF,
which will give us a new growth following that of Neurotrophicpeptide.

Our  products  have  been  sold in more than 20  provinces,  sovereignties,  and
autonomous regions around China. Our sales network covers approximately 16 sales
offices and approximately 550 proxy agents.  The main channels we use to deliver
our products include:  (1) Distribution  system (Proxy Agency);  (2) Direct sale
system to  hospitals;  (3) Direct  representation  in clinic  hospitals  through
medical  representatives;  and (4)  Distribution  of products  to local  medical
companies through logistics companies.



Our recent business activities include:

Year 2005:  Helpson launched a new anti-flu medicine: PusenOK.

Year 2003:  Helpson gained GMP authentication.

Year 2003:  Helpson  named "the best  enterprise  for storing SARS  medicine" by
            Hainan Food and Drug Administration.

Year 2000:  Helpson  awarded as one of 50 best  enterprises  in Hainan by Hainan
            Economic and Trade Bureau and Hainan Statistical Bureau.



Product Buflomedil Hydrochloride (Raw material; injection; & troche)

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

-    Received 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.

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


                                       2
<PAGE>

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  which have been prepared
in  accordance  with  generally  accepted  accounting  principles  in the United
States.  We believe the  following  are the critical  accounting  policies  that
impact the financial  statements,  some of which are based on management's  best
estimates  available at the time of  preparation.  Actual  experience may differ
from these estimates.

Use of 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  disclosures  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenue and expenses  during the reporting  period.  Actual results could differ
from those estimates.

Accounts  Receivable - During the normal course of business,  we keep  unsecured
credit to our customers and review our accounts receivable on a regular basis to
determine  if the bad debt  allowance  is adequate at the end of the period.  We
record an allowance for bad debts  approximately 8% of our outstanding  accounts
receivable  at the end of the  period  in  accordance  with  generally  accepted
accounting principles in the PRC.

Intangibles  - Under the  Statement of  Accounting  Standards  ("SFAS") No. 142,
"Goodwill  and Other  Intangible  Assets," all  goodwill and certain  intangible
assets determined to have indefinite lives are not amortized, but are tested for
impairment at least annually.  Other intangible  assets are amortized over their
useful  lives and  reviewed  for  impairment  in  accordance  with SFAS No.  144
"Accounting for Impairment or Disposal of Long-Lived Assets."

Revenue  Recognition  - We  recognize  revenue  when all  four of the  following
criteria are met: (i)  persuasive  evidence has been  received  that there is an
enforceable  agreement;  (ii) the products  have been  delivered or the services
have been  performed;  (iii) the  selling  price is fixed or  determinable;  and
(iv) collectibility is reasonably assured.

Concentrations  and  Credit  Risks  - As  all of the  Company's  operations  are
conducted in the PRC, and therefore our operations may be adversely  affected by
significant  political,  economic and social  uncertainties in the PRC. Although
the Chinese  government  has pursued  economic  reform  policies in the past, we
cannot  assure you that the  Chinese  government  will  continue  to pursue such
policies or that such policies will not be significantly altered,  especially in
the  event  of a  change  in  leadership,  social  or  political  disruption  or
unforeseen   circumstances   affect  China's  political,   economic  and  social
conditions.

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

We could give no  assurance  that the Chinese  government's  pursuit of economic
reforms will be consistent or effective.

Research and Development  Costs - Research and development costs are expensed as


                                       3
<PAGE>

incurred.  The costs of  material  and  equipment  acquired or  constructed  for
research and  development and having  alternative  future uses are classified as
property and equipment and depreciated over their estimated useful lives.

Foreign Currency  Translation - Our functional currency is the Chinese Yuan. Our
financial  statements  are  translated  into United  States  dollars,  using the
exchange rates at the end of the period as to assets and liabilities and average
exchange  rates as to revenue and expenses.  Capital  accounts are translated at
their  historical  exchange rates when the transaction  occurred.  Net gains and
losses  resulting  from  foreign  exchange  translations  are  included  in  the
statements of operations and stockholders' equity as other comprehensive income.
The  quotation of the  exchange  rates does not imply free  convertibility.  All
foreign exchange transactions continue to take place either through the People's
Bank of China or other banks  authorized  to buy and sell foreign  currencies at
the exchange rate quoted by the People's Bank of China. Approval by the People's
Bank of China or other institutions  requires us to submit a payment application
form together with invoices, shipping documents and signed contracts.


Results of Operations

The following  table sets forth our statements of operations for the nine months
ended  September  30,  2006,  for the  period  from  January  12,  2005 (date of
inception)  through  September 30, 2005 and for the three months ended September
30, 2006 and 2005 in U.S. dollars.















                                       4
<PAGE>
<TABLE>
<CAPTION>

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

                                                                                                For the period
                                                                                               from January 12,
                                                                                                2005 (Date of
                                                                             For the nine         Inception)
                                           For the three months              months ended          through
                                            ended September 30,              September 30,       September 30,
                                   ----------------    ----------------    ----------------    ----------------
                                         2006                2005                2006                2005
                                   ----------------    ----------------    ----------------    ----------------
<S>                                <C>                 <C>                 <C>                 <C>
Revenue                            $      5,015,272    $      2,601,294    $     13,721,587    $      3,093,824
Cost of revenue                           2,521,205           1,617,399           7,151,898           1,942,393
                                   ----------------    ----------------    ----------------    ----------------

Gross profit                              2,494,067             983,895           6,569,689           1,151,431
                                   ----------------    ----------------    ----------------    ----------------

Operating expenses:
Selling expenses                             42,966              43,098             213,350              47,588
Research and development                    125,359                --               124,715                --
General and administrative                  100,650              77,346             333,654              35,772
Bad debt expense (recovery)                 152,142             169,229             (28,349)            230,881
                                   ----------------    ----------------    ----------------    ----------------
Total operating expenses                    421,117             289,673             643,370             314,241
                                   ----------------    ----------------    ----------------    ----------------

Income from operations                    2,072,950             694,222           5,926,319             837,190
                                   ----------------    ----------------    ----------------    ----------------

Non-operating income (expenses):
Interest income                                 408                 266                 588                 266
Interest expense                            (39,872)           (124,734)            (87,690)           (153,629)
                                   ----------------    ----------------    ----------------    ----------------
Total non-operating income
(expense)                                   (39,464)           (124,468)            (87,102)           (153,363)
                                   ----------------    ----------------    ----------------    ----------------

Income before taxes                       2,033,486             569,754           5,839,217             683,827
Income tax expense                         (326,621)            (54,726)           (730,560)            (64,247)
                                   ----------------    ----------------    ----------------    ----------------
Net income                         $      1,706,865    $        515,028    $      5,108,657    $        619,580
                                   ----------------    ----------------    ----------------    ----------------
Comprehensive income - foreign
currency translation adjustments             25,307                --               137,964                --
                                   ----------------    ----------------    ----------------    ----------------
Comprehensive income               $      1,732,172    $        515,028    $      5,246,621    $        619,580
                                   ----------------    ----------------    ----------------    ----------------

Basic and diluted earnings per
common share                       $           0.05    $           0.11    $           0.15    $           0.07
                                   ----------------    ----------------    ----------------    ----------------

Weighted-average common shares
outstanding                              34,723,056           4,731,413          34,723,056           9,377,713
                                   ----------------    ----------------    ----------------    ----------------
</TABLE>

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

                                       5
<PAGE>

Three Months Ended September 30, 2006 and 2005

Revenues for the three  months  ended  September  30, 2006 were  $5,015,272,  an
increase of  $2,413,978,  or 92.80%,  from the  revenue of $  2,601,294  for the
comparable  period in 2005.  The  increase  was  primarily  because a continuing
market  demand in featured  products  and a relative  favorable  pricing for the
well-developed  products  compared to other  ordinary  medicines.  Additionally,
parts  of  products  also  present  a  rewarding  performance  in  sales  for  a
competitive price in the market.


Meanwhile,  as the  increase  in sales,  corresponding  costs,  both  direct and
indirect  costs have also been  growing.  Cost of revenue  for the three  months
ended  September 30, 2006 was  $2,521,205,  an increase of $903,806,  or 55.88%,
from  $1,617,399 for the comparable  period in 2005.  Gross profit for the three
months ended  September 30, 2006 was $2,494,067,  an increase of $1,510,172,  or
153%,  from $983,895 for the  comparable  period in 2005.  In general,  with the
increase  of  marketability  for  most  of  products,   including  new  products
introduced in the Company, gross margin has also been increasing accordingly.


With the  increase in  revenue,  the  Company  makes  effort to realize a better
budget of all related expenses. The selling expenses were $ 42,966 for the three
months ended September 30, 2006, a slight decrease of $132 from $ 43,098 for the
comparable period in 2005. Research and development (R&D) expenses were $125,359
for the three months ended  September  30, 2006 which was mainly for the payment
of  clinical   trial   achievement   by  other  R&D   institutes.   General  and
administrative  expenses were $252,792 for the three months ended  September 30,
2006, an increase of $6,217 from $246,575 for the comparable period in 2005.


Income tax expenses were  $326,621 for the three month ended  September 30, 2006
compared with $54,726 for corresponding period in 2005. The Company accounts for
its income taxes in accordance with Statement of Financial  Accounting Standards
No. 109, which requires  recognition of deferred tax assets and  liabilities for
future tax  consequences  attributable  to  differences  between  the  financial
statement  carrying  amounts  of  existing  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.  Because  Helpson is in its first five years of operations,  it
received  tax  benefits  resulting  from a reduced tax rate from 30% to 15% as a
result of operating in a developing economic area in the PRC.


Generally,  as the  growth  of sales  and a  satisfactory  control  of costs and
related  expenses,  net income for the three months ended September 30, 2006 was
$1,706,865, an increase of $1,191,837 from $515,028 for the comparable period in
2005.





                                       6
<PAGE>

                           China Pharma Holdings Inc.

          Unaudited Condensed Consolidated Pro-forma Income Statements
                  For the Nine Months Ended September 30, 2005


Revenues                                                            $ 8,539,578
Cost of revenues                                                      5,272,156
--------------------------------------------------------------------------------
Gross profit                                                          3,267,422
--------------------------------------------------------------------------------

Operating expenses
  Selling expenses                                                       86,894
  General and administrative                                            618,695
--------------------------------------------------------------------------------
Total operating expenses                                                705,589
--------------------------------------------------------------------------------

Income from operations                                                2,561,833
--------------------------------------------------------------------------------

Non-operating income (expense)
  Interest income                                                           671
  Interest expense                                                     (313,482)
  Other income                                                          220,763
--------------------------------------------------------------------------------
Non-operating income (expense)                                          (92,048)
--------------------------------------------------------------------------------

  Income before taxes                                                 2,469,785
Income tax expense                                                     (166,635)
--------------------------------------------------------------------------------

Net income                                                          $ 2,303,150
--------------------------------------------------------------------------------



For the nine months ended September 30, 2006 and Pro Forma September 30, 2005


With large  increase of sales in some  classical  medicines,  particularly,  the
products of AFGF, Roxithromycin dispersible tablets and Gastrodin Injection have
predominantly  accounted  over 10% in total.  Revenues for the nine months ended
September 30, 2006 were $13,721,587, an increase of $5,182,009, or 60.68 %, from
the revenue of approximately  $8,539,578 the comparable  period in 2005. This is
because new products have entered into market  quickly this year.  The above new
products primarily include Gastrodin injection and Pesudophedrine  Hydrochloride
(or  PuSenOK  (TM)).  Secondly,  the  distribution  network  has spread over the
majority of provinces in China. Finally,  increased output of products ensured a
significant improvement in sales since the manufacturing capacity in Company has
expanded.

Meanwhile,  as the  increase  of sales,  the cost of revenue for the nine months
ended  September  30,  2006  was  approximately   $7,151,898,   an  increase  of
approximately  $1,879,742, or 35.65%, from $ 5,272,156 for the nine months ended
September  30, 2005.  Our gross margin for the nine months ended  September  30,
2006 was 47.88% as compared with 38.26% for the nine months ended  September 30,
2005, mostly for the distribution of new products to market.  Those new products
are of high gross margin comparatively.


                                       7
<PAGE>

Research  and  development  expenses  were  approximately  $125,359 for the nine
months ended  September 30, 2006;  comparatively,  there was no R&D expenses for
the nine months ended  September 30, 2005.  The increase in the R&D  expenditure
for new  products  was due to the  Company's  gradual  strengthened  ability  in
self-production  of new  products in  additional  to the purchase of outside R&D
technology.

Selling expenses were approximately $213,350 for the nine months ended September
30, 2006, an increase of $126,456,  or 145.52%, from $86,894 for the nine months
ended September 30, 2005. General and administrative expenses were $ 333,654 for
the nine months ended  September  30,  2006, a decrease of $285,041,  or 46.07%,
from $ 618,695  for the nine  months  ended  September  30,  2005.  Since  major
customers of the Company are  hospitals  and most of the products of the Company
are  distributed  through  agents,  the  selling  expenses  were  lower than the
industry average level against the revenue realized in total. The reason for the
decrease of general and  administrative  expenses is mainly  because the Company
expects to better  manage  their  ordinary  operating  outlays  while  expanding
business scale.

Non-operating  incomes/expenses include interest income and interest expense and
other income/expenses of $(87,102) for the nine months ended September 30, 2006.
It was $(92,048) for the nine months ended  September 30, 2005. The major reason
for the increase was  partially as the increase in the interest  expense for the
nine months ended September 30, 2006.

In the nine months ended  September 30, 2006 we had a credit for income taxes of
$730,560,  which  resulted from income tax after  benefiting  from  preferential
income tax rate.

As the foregoing analysis, our net income increase from $ 2,303,150 for the nine
months  ended  September  30,  2005 to $  5,108,657  for the nine  months  ended
September  30, 2006.  In the nine months ended  September 30, 2006 we also had a
foreign   currency   translation   adjustment  of  $137,964  which  resulted  in
comprehensive income of $5,246,621 as a consequence.


Liquidity and Capital Resources

As of September 30, 2006, we had cash and cash  equivalents  of $193,390,  which
decreased  by 58.06%  compared to the ending  balance as of December 31, 2005 of
$461,220.  We have historically  financed our business operations through equity
financing. During the nine months ended September 30, 2006, the Company borrowed
$2,120,150.

Net cash used for operating  activities for the nine months ended  September 30,
2006 totaled  $2,223,674  as compared to $449,095 for the period ended  December
31,  2005.  The large  increase in net cash used for  operating  activities  was
primarily the result of the significant  increase in inventory and trade account
receivables  during the first nine months and the three  months as of  September
30, 2006.  The relatively  higher  storage was for  prudential  purpose due to a
specific location of the Company, where is in Hainan Province. Meanwhile, as for
pharmaceutical  industry,  there is normally a credit period for collection,  so


                                       8
<PAGE>

the trade account receivables have increased with the increase in sales. But the
Company is timely to make payment on purchase of raw  material and  accordingly,
the net cash used for operating activities increased.

Net cash utilized for investing  activities for the nine months ended  September
30,  2006  amounted to $169,508  compared to $341,522  net cash  outflow for the
period ended December 31, 2005. The net cash used was primarily as the result of
capital expenditures for the nine months ended September 30, 2006.

Net cash  used for  financing  activities  during  the nine  months  of 2006 was
$2,120,150,  which was on  proceeds  from notes  payable in total,  compared  to
$1,248,727  for the period  ended  December  31,  2005.  The major cash used for
financing  activities  for the period ended December 31, 2005 was as a result of
the proceeds  from issuance of common stock,  amounting to  $7,804,175.  For the
nine month ended  September  30, 2006,  there were no proceeds  from issuance of
common  stock,  but the  Company  has  the  proceeds  from  notes  payable  of $
2,120,150.

As  of  September  30,  2006,  we  had  no  material   commitments  for  capital
expenditures other than for those expenditures incurred in an ordinary course of
business.


Off-Balance Sheet Arrangements


The Company had no off-balance sheet arrangements.


Commitments

In January 2006, the Company  converted its dividend  payable of $4,304,371 into
short-term notes bearing interest at the rate of 2.25% per annum.


Business Risk Analysis

1. External Risk.

In recent years, Chinese medical system reform has been occurring,  resulting in
the State Department  establishment of a basic medical  insurance system for the
workers  in  cities  and  towns.  Considering  the  social  environment  and the
governmental policy in pharmaceutical  industry in PRC, a higher speed in growth
of  sales  can be  expected  due  to a kind  of  regional  protectionism  in the
industry,  somehow.  However,  competition  would also be  intensive  across the
industry  overall.  Currently,  company's  existing  products are competitive in
market and possess  potential  growth power in its  existing  products and topic
selection,  however, from a long-term  perspective,  some major western medicine


                                       9
<PAGE>

producers are also dedicating into the Chinese market share. These will make the
company face intensive competition in this natural herb product market.

2. Operation Risk

One of the major  uncertainties in the Company is the purchase of raw materials.
Raw material is primarily  affected by the  geographical  environment  in Hainan
Province. As it takes quite a long way for transportation, in order for the need
of  production,  the Company has to store  appropriate  amount of inventory upon
according  inventory  budget.  In  addition,  partial raw  material  needs to be
specifically  ordered,  so relatively  higher  storage for  prudential  purpose.
Meanwhile,  since the  increasing  volume in sales,  the Company  needs to store
large volume of packaging  material,  so as to meet the needs of production  and
sales.

3. Foreign Currency Risk

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

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


New Accounting Pronouncements
In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections--a replacement of APB Opinion No. 20 and FASB Statement No. 3 ("SFAS
154"). This Statement replaces APB Opinion No. 20, Accounting Changes,  and FASB
Statement No. 3, Reporting  Accounting Changes in Interim Financial  Statements,
and changes the requirements for the accounting for and reporting of a change in
accounting  principle.  SFAS 154  requires  retrospective  application  to prior
period financial statements of a voluntary change in accounting principle unless
it is  impractical  to determine  period  specific  changes.  This  statement is
effective  for fiscal  periods  beginning  after  December  15,  2005 and is not
expected to have a significant impact on the Company's financial statements.

In November 2004, the Financial Accounting Standards Board, or FASB, issued FASB
Statement No. 151 "Inventory  Costs, an Amendment of ARB No. 43 Chapter 4" ("FAS
151").  FAS 151 is applicable for Inventory  costs incurred  during fiscal years
beginning after June 15, 2005. FAS 151 requires that items such as idle facility
expense,  excessive  spoilage,  double freight,  and rehandling be recognized as
current-period  charges  rather than being  included in inventory  regardless of
whether  the costs  meet the  criterion  of  abnormal  as defined in ARB 43. The
Company  does not believe  the  adoption  of the  standard  will have a material
impact on the Company  upon  adoption  in 2006 as the  Company has  historically
expensed such costs as incurred.


                                       10
<PAGE>

Management's Objective
Generally,  the Company is dedicating to achieve sustainable profits growth. Our
management  operates the business  orientated by relevant  strategic  principles
which have been proven  successful  over  periods.  Sufficiently  exploring  the
potential in pharmaceutical  field is the key to success. Our Company also takes
concerns on corporate governance as a modern enterprise improvement. Our Company
will establish a more systematic and  ever-lasting  process on internal  control
for our prospective development and to create benefits for our shareholders.

Item 3 - Control and Procedures

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

Currently,  we  are  in  the  process  of  revising  the  internal  control  and
procedures.

                           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

Not Applicable.

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

None.

Item 5 - Other Information

None.


                                       11
<PAGE>

Item 6 - Exhibits

(a)  Exhibits

     10.1* - Employment Agreement between Helpson and Zhilin Li

     10.2* - Employment Agreement between Helpson and Xinhua Wu

     10.3* - Employment Agreement between Helpson and Jian Yang

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

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

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

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

     *    which have been  incorporated  by  reference  to the  exhibits  to the
          SB-2/A filed on December 23, 2005, however,  typo errors regarding the
          annual salary were inadvertently  made on that employment  agreements.
          Therefore, the correct versions are filed here within.


















                                       12
<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 8, 2006                                 By: /s/ Zhilin Li
                                                        ------------------------
                                                        Zhilin Li
                                                        Chief Executive Officer,
                                                        President and Director


Dated: November 8, 2006                                 By: /s/ Xinhua Wu
                                                        ------------------------
                                                        Xinhua Wu
                                                        Chief Financial Officer,
                                                        and Director




















                                       13