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<SEC-DOCUMENT>0001010549-09-000753.txt : 20091110
<SEC-HEADER>0001010549-09-000753.hdr.sgml : 20091110
<ACCEPTANCE-DATETIME>20091110162346
ACCESSION NUMBER:		0001010549-09-000753
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20090930
FILED AS OF DATE:		20091110
DATE AS OF CHANGE:		20091110

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA PHARMA HOLDINGS, INC.
		CENTRAL INDEX KEY:			0001106644
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				731564807
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34471
		FILM NUMBER:		091172317

	BUSINESS ADDRESS:	
		STREET 1:		2ND FLOOR, NO. 17, JINPAN ROAD
		STREET 2:		HAIKOU
		CITY:			HAINAN PROVINCE
		STATE:			F4
		ZIP:			570216
		BUSINESS PHONE:		8689866811730

	MAIL ADDRESS:	
		STREET 1:		2ND FLOOR, NO. 17, JINPAN ROAD
		STREET 2:		HAIKOU
		CITY:			HAINAN PROVINCE
		STATE:			F4
		ZIP:			570216

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TS ELECTRONICS INC
		DATE OF NAME CHANGE:	20030818

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SOFTSTONE INC
		DATE OF NAME CHANGE:	20030128

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SOFTSTONE INC /DE/
		DATE OF NAME CHANGE:	20010808
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>cph10q093009.htm
<TEXT>
<html>
    <head>
        <title></title>
    </head>

    <body style="FONT-SIZE: 11pt; FONT-FAMILY: 'TIMES NEW ROMAN'">
        <p style="FONT-SIZE: 10pt; BORDER-TOP-STYLE: double; BORDER-TOP-COLOR: #000000; FONT-FAMILY: 'Times New Roman', Times, serif">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="center"><font style="FONT-SIZE: 10.5pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">&nbsp;<strong>UNITED STATES<br>
        SECURITIES AND EXCHANGE COMMISSION<br>
        Washington, D.C. 20549<br>
        </strong>&nbsp; <br>
        <strong><font size="4">FORM 10-Q</font></strong></font></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="justify"><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'WINGDINGS'">x </font><font style="FONT-SIZE: 10.5pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT Of 1934</font></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">For the Quarterly Period Ended September 30, 2009</font></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="justify"><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'WINGDINGS'">o </font><font style="FONT-SIZE: 10.5pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT Of 1934</font></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="justify">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="center"><font size="2">For the Transition Period from _________ to _________</font><br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="center"></p>

        <p></p>

        <p align="center"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr>
                <td width="100%" colspan="2">
                    <p align="center"><font size="2">Commission file number: 000-29523</font></p>
                </td>
            </tr>

            <tr>
                <td width="100%" colspan="2">
                </td>
            </tr>

            <tr>
                <td width="100%" colspan="2">
                    <p align="center"><strong><font size="6">China Pharma Holdings, Inc.</font></strong></p>
                </td>
            </tr>

            <tr>
                <td width="100%" colspan="2">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'TIMES NEW ROMAN'" align="center"><font style="FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">(Exact name of registrant as specified on its charter)</font></p>
                </td>
            </tr>

            <tr>
                <td width="100%" colspan="2">&nbsp;</td>
            </tr>

            <tr>
                <td width="50%">
                    <p align="center"><font size="2"><u>Delaware</u></font></p>
                </td>

                <td width="50%">
                    <p align="center"><font size="2"><u>73 -1564807</u></font></p>
                </td>
            </tr>

            <tr>
                <td width="50%">
                    <p align="center"><font size="2">(State or other jurisdiction of <font style="FONT-SIZE: 10.5pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">incorporation or organization)</font></font></p>
                </td>

                <td width="50%">
                    <p align="center"><font size="2">(IRS Employer Identification No.)</font></p>
                </td>
            </tr>

            <tr>
                <td width="50%">&nbsp;</td>

                <td width="50%">
                </td>
            </tr>

            <tr>
                <td width="50%">
                    <p align="center"><font size="2"><u>2<sup><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'TIMES NEW ROMAN'">nd</font></sup></u> <u><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'TIMES NEW ROMAN'">Floor, No. 17, Jinpan Road, Haikou, Hainan Province, China</font></u></font></p>
                </td>

                <td width="50%">
                    <p align="center"><font size="2">&nbsp;<u><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'TIMES NEW ROMAN'">570216</font></u></font></p>
                </td>
            </tr>

            <tr>
                <td width="50%">
                    <p align="center"><font size="2">(Address of principle executive offices)</font></p>
                </td>

                <td width="50%">
                    <p align="center"><font size="2">&nbsp;(Zip Code)</font></p>
                </td>
            </tr>

            <tr>
                <td width="50%">&nbsp;</td>

                <td width="50%">
                </td>
            </tr>

            <tr>
                <td colspan="2">
                    <p align="center"><font size="2"><u>0086-<font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'TIMES NEW ROMAN'">898-</font> <font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'TIMES NEW ROMAN'">66811730 (China)</font></u></font></p>
                </td>
            </tr>

            <tr>
                <td colspan="2">
                    <p align="center"><font size="2">(Registrant's telephone number, including area code)</font></p>
                </td>
            </tr>
        </table>
        <br>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">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
        <font face="Wingdings">x </font>No&nbsp;<font face="Wingdings">o</font>&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">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 &ldquo;large accelerated filer&rdquo;, &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule 12b-2 of the Exchange Act. (Check one):</p>

        <p></p>

        <p align="center"></p>

        <table style="MARGIN-LEFT: 0in" cellspacing="0" cellpadding="0" width="622" align="center" border="0">
            <tr>
                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="middle" width="238">&nbsp;</td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="middle" width="96">&nbsp;</td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="middle" width="236">&nbsp;</td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="middle" width="50">&nbsp;</td>
            </tr>

            <tr>
                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="238">
                    <p align="left"><font size="2">Large accelerated filer</font></p>
                </td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="96">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'WINGDINGS'" size="2">o</font></p>
                </td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="236">
                    <p style="FONT-SIZE: 10.5pt; MARGIN: 0pt 0.1in 0pt 0in; TEXT-INDENT: 0px" align="left"><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">Accelerated filer</font></p>
                </td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="50">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><font face="Wingdings"><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'WINGDINGS'" size="2">o</font></font></p>
                </td>
            </tr>

            <tr>
                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="238">
                    <p align="left"><font size="2">Non-accelerated filer</font></p>
                </td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="96">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><font style="FONT-SIZE: 10.5pt; FONT-FAMILY: 'WINGDINGS'" size="2">o</font></p>
                </td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="236">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">Smaller reporting company</font></p>
                </td>

                <td style="PADDING-RIGHT: 0.01in; PADDING-LEFT: 0.01in; PADDING-BOTTOM: 0.01in; PADDING-TOP: 0.01in" valign="top" width="50">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><font style="FONT-FAMILY: 'WINGDINGS'" size="2">x</font></p>
                </td>
            </tr>
        </table>
        <br>
        <br>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes&nbsp;<font face="Wingdings">o</font> No&nbsp;<font face="Wingdings">x</font>&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">As of November 10, 2009, 42,278 ,938 shares of China Pharma Holdings, Inc. common stock, par value $0.001 per share, were outstanding.</p>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'COURIER NEW'" align="center"><font style="FONT-SIZE: 11pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">&nbsp; </font></p>

        <p></p>
        <!-- CONTINUOUS SECTION BREAK -->

        <p></p>

        <div title="EE+ Page Header" style="MARGIN-BOTTOM: 12pt" align="center">
            <b><font style="FONT-SIZE: 11pt; FONT-FAMILY: 'TIMES NEW ROMAN'">China Pharma Holdings, Inc.</font></b>
        </div>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'COURIER NEW'" align="center"><b><font style="FONT-SIZE: 11pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">TABLE OF CONTENTS</font></b></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'COURIER NEW'" align="center">&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'COURIER NEW'" align="center"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="94%"><font face="Times New Roman" size="2">Part I&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Information</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman" size="2">1</font></td>

                <td align="left" width="2%"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 1.&nbsp;&nbsp;&nbsp; Financial Statements</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">1</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Condensed Consolidated Balance Sheets as of&nbsp;September 30, 2009 and December 31, 2008 (Unaudited)</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">1</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td>
                </td>

                <td>
                </td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Months Ended&nbsp;September 30, 2009 and 2008 (Unaudited)</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">2</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Condensed Consolidated Statements of Cash Flows for the&nbsp;Nine&nbsp;&nbsp;Months Ended </font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right">
                </td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ccdbe3">
                <td colspan="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font face="Times New Roman" size="2">September 30, 2009 and 2008 (Unaudited)</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>

                <td colspan="3">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">3</font></p>
                </td>
            </tr>

            <tr bgcolor="#ffffff">
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Notes to Condensed Consolidated Financial Statements (Unaudited)</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">4</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 2.&nbsp;&nbsp; Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">8</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 3.&nbsp;&nbsp; Quantitative and Qualitative Disclosures About Market Risk</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">15</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 4.&nbsp;&nbsp; Controls and Procedures</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">15</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Part II&nbsp;&nbsp;&nbsp; Other Information</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td>
                </td>

                <td><font face="Times New Roman, Times, serif" size="2">15</font></td>

                <td>
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left"><font face="Times New Roman" size="2">&nbsp;&nbsp; </font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right">
                </td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 1&nbsp;&nbsp;&nbsp; Legal Proceedings</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">15</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td align="left">&nbsp;</td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="right">
                </td>

                <td align="right">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 2&nbsp;&nbsp;&nbsp; Unregistered Sales of Equity Securities and Use of Proceeds</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">16</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td align="left">&nbsp;</td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="right">
                </td>

                <td align="right">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 3&nbsp;&nbsp;&nbsp; Defaults upon Senior Securities</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">16</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 4&nbsp;&nbsp;&nbsp; Submission of Matters to a Vote of Security Holders</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">16</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td align="left">&nbsp;</td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="right">
                </td>

                <td align="right">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 5&nbsp;&nbsp;&nbsp; Other Information</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">16</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td align="left">&nbsp;</td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="right">
                </td>

                <td align="right">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Item 6&nbsp;&nbsp;&nbsp; Exhibits</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">16</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr bgcolor="#ffffff">
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left"><font face="Times New Roman" size="2">Signatures</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman" size="2">17</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p></p>

        <p></p>

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            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">PART I FINANCIAL INFORMATION</font></b></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><font size="2"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">ITEM 1</font></b><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">. Financial Statements</font></b></font></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">CHINA PHARMA HOLDINGS, INC.</font></b></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">CONDENSED CONSOLIDATED BALANCE SHEETS</font></b></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">(Unaudited)</font></b></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"></p>

            <table cellspacing="0" cellpadding="0" width="100%" border="0">
                <tr valign="bottom">
                    <td align="left" width="66%">
                    </td>

                    <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="left" width="2%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td width="12%">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>September 30,</strong></font></p>
                    </td>

                    <td align="left" width="3%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td width="12%">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>December 31,</strong></font></p>
                    </td>

                    <td align="left" width="2%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left">
                    </td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2009</strong></font></p>
                    </td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2008</strong></font></p>
                    </td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>
                </tr>

                <tr>
                    <td colspan="3"><strong>&nbsp;</strong> </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>ASSETS</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current Assets:</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">3,844,777</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">6,927,149</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable, less allowance for doubtful&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;accounts of $2,415,886 and $4,474,175, respectively</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">49,018,104</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">36,008,095</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables, less allowance for doubtful&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;accounts of $20,306 and $54,242, respectively</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">115,414</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">163,957</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances to suppliers</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">1,868,111</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">3,031,694</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">14,915,582</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">13,139,750</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">252,394</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">461,596</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>Total Current Assets</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">70,014,382</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">59,732,241</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Non-current Assets:</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net of accumulated depreciation of&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$1,863,014 and $1,483,267, respectively</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">6,872,135</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">6,738,368</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net of accumulated amortization of&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$1,132,055 and $547,567, respectively</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">15,321,200</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">6,162,549</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances for purchases of intangible assets and property&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and equipment</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">3,101,289</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">2,838,679</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>Total Non-current Assets</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">25,294,624</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">15,739,596</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>TOTAL ASSETS</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">95,309,006</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">75,471,837</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td align="left">&nbsp;</td>

                    <td align="left">
                    </td>

                    <td align="left">
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>LIABILITIES AND STOCKHOLDERS' EQUITY</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Current Liabilities:</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts payable</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">3,638,398</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">1,049,268</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">44,864</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">56,075</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued taxes payable</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">1,456,375</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">1,170,003</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">276,227</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">42,813</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances from customers</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">804,176</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">693,178</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables - related parties</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">75,741</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">75,741</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term notes payable</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">3,802,504</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">2,480,231</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>Total Current Liabilities</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">10,098,285</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">5,567,309</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long term research and development commitments</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">36,563</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">36,474</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>Total Liabilities</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">10,134,848</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">5,603,783</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Stockholders' Equity:</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.001 par value; 60,000,000 shares&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorized; 42,278,938 shares issued and outstanding</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">42,279</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">42,279</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">21,066,338</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">21,066,338</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">58,166,838</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">43,039,819</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated comprehensive income&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- foreign currency translation adjustment</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">5,898,703</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">5,719,618</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>Total Stockholders' Equity</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">85,174,158</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">69,868,054</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY</strong></font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">95,309,006</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">75,471,837</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>
            </table>
            <br>
            <br>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font size="2">The accompanying notes are an integral part of these condensed consolidated financial statements.</font></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
                <a name="PAGENUM"><font face="Times New Roman" size="2">1</font></a>
            </div>

            <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
                <hr width="100%" color="#000000" size="2">
            </div>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>
        </div>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"><!-- CONTINUOUS SECTION BREAK --></p>

        <p></p>

        <div title="EE+ Page Header" style="MARGIN-BOTTOM: 12pt">
            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">CHINA PHARMA HOLDINGS, INC.</font></b></p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS </font></b></p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">AND COMPREHENSIVE INCOME </font></b></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">(Unaudited)</font></b></p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"></p>

            <table cellspacing="0" cellpadding="0" width="100%" border="0">
                <tr>
                    <td align="left" width="43%">
                    </td>

                    <td align="left" width="1%">
                    </td>

                    <td align="left" width="1%">
                    </td>

                    <td align="right" width="1%">
                    </td>

                    <td align="right" colspan="4">
                        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'TIMES NEW ROMAN'" align="center"><strong>For the three months</strong></p>
                    </td>

                    <td align="left" width="3%">
                    </td>

                    <td align="right" width="1%">
                    </td>

                    <td colspan="4">
                        <p align="center"><font size="2"><strong>For the nine months</strong></font></p>
                    </td>

                    <td align="left" width="2%">
                    </td>
                </tr>

                <tr>
                    <td align="left" width="43%">
                    </td>

                    <td align="left" width="1%">
                    </td>

                    <td align="left" width="1%">
                    </td>

                    <td align="right" width="1%">
                    </td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" colspan="4">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="center"><font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; FONT-FAMILY: 'TIMES NEW ROMAN'"><strong>ended September 30,</strong></font></p>
                    </td>

                    <td align="left" width="3%">
                    </td>

                    <td align="right" width="1%">
                    </td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" colspan="4">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="center"><font style="FONT-WEIGHT: normal; FONT-SIZE: 10pt; FONT-FAMILY: 'TIMES NEW ROMAN'"><strong>ended September 30,</strong></font></p>
                    </td>

                    <td align="left" width="2%">
                    </td>
                </tr>

                <tr valign="bottom">
                    <td align="left" width="43%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" width="10%">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2009</strong></font></p>
                    </td>

                    <td align="left" width="3%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" width="10%">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2008</strong></font></p>
                    </td>

                    <td align="left" width="3%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" width="10%">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2009</strong></font></p>
                    </td>

                    <td align="left" width="3%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" width="10%">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2008</strong></font></p>
                    </td>

                    <td align="left" width="2%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr>
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Revenue</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">15,522,953</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">12,610,642</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">42,116,290</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">35,606,490</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Cost of revenue</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">8,979,083</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">6,494,266</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">23,724,155</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">17,730,026</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td align="left">&nbsp;</td>

                    <td align="left">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Gross profit</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">6,543,870</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">6,116,376</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">18,392,135</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">17,876,464</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Operating expenses (benefit):</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling expenses</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">807,231</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">529,432</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">2,013,915</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">1,323,854</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">521,676</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">410,287</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">1,563,330</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">1,324,452</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt expense (benefit)</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(2,836,495</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">491,781</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(2,101,710</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">1,571,594</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Total operating expenses (benefit)</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(1,507,588</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">1,431,500</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">1,475,535</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">4,219,900</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td align="left">&nbsp;</td>

                    <td align="left">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>

                    <td align="right">
                    </td>

                    <td align="right">
                    </td>

                    <td align="left">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Income from operations</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">8,051,458</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">4,684,876</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">16,916,600</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">13,656,564</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td align="left">&nbsp;</td>

                    <td align="left">
                    </td>

                    <td align="left">
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Non-operating income (expenses):</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">3,956</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">26,224</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">25,265</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">31,259</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(24,436</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(34,629</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(103,143</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">(130,342</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Total non-operating income (expense)</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(20,480</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(8,405</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(77,878</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">(99,083</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr bgcolor="#ffffff">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Income before taxes</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">8,030,978</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">4,676,471</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">16,838,722</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">13,557,481</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Income tax expense</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">867,750</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">424,993</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">1,711,703</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">1,078,163</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Net income</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">7,163,228</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">4,251,478</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">15,127,019</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">12,479,318</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ffffff">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Basic earnings per share</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">0.17</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">0.10</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">0.36</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">0.32</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Basic weighted average shares outstanding</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">42,278,938</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">42,278,938</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">42,278,938</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">39,523,464</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Net income</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">7,163,228</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">4,251,478</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">15,127,019</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">12,479,318</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Foreign currency translation adjustments</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">85,896</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">133,713</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">179,085</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right"><font face="Times New Roman, Times, serif" size="2">2,853,755</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left"><font face="Times New Roman, Times, serif" size="2">Comprehensive income</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">7,249,124</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">4,385,191</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">15,306,104</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right"><font face="Times New Roman, Times, serif" size="2">15,333,073</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>
            </table>
            <br>
            <br>
        </div>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><!-- CONTINUOUS SECTION BREAK --><!-- CONTINUOUS SECTION BREAK --></p>

        <p></p>

        <div title="EE+ Page Footer" style="MARGIN-TOP: 12pt">
            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">The accompanying notes are an integral part of these condensed consolidated financial statements.</font></p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>
        </div>
        <!-- NEXT PAGE SECTION BREAK  -->

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">2</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr width="100%" color="#000000" noshade size="2">
        </div>

        <p></p>

        <div title="EE+ Page Header" style="MARGIN-BOTTOM: 12pt">
            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">CHINA PHARMA HOLDINGS, INC.</font></b></p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</font></b></p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font size="2"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">FOR THE </font></b><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">NINE</font></b><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">MONTHS ENDED </font></b><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">SEPTEMBER 30</font></b><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">,
            200</font></b></font><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">9<br>
            (Unaudited)</font></b></p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"></p>

            <table cellspacing="0" cellpadding="0" width="100%" border="0">
                <tr valign="bottom">
                    <td align="left" width="627">
                    </td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="center" colspan="4"><strong><font face="Times New Roman, Times, serif" size="2">For the nine months ended September 30,</font></strong></td>

                    <td align="left" width="2%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left" width="627">
                    </td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" width="125">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2009</strong></font></p>
                    </td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" width="125">
                        <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2008</strong></font></p>
                    </td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr>
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2"><strong>Cash Flows from Operating Activities:</strong>&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">15,127,019</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">12,479,318</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt expense (benefit)</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(2,101,710</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">1,571,594</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">986,310</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">505,595</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation paid with warrants</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">--</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">120,042</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain or loss on disposal of property and equipment</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">4,027</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">--</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">210,171</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(209,434</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities:&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(10,845,652</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(13,130,468</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">82,949</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">195,026</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances to suppliers</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">1,170,103</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">651,833</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(1,742,681</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">855,485</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts payable</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">2,772,775</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">184,627</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(11,339</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(138,021</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued taxes payable</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">393,724</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">602,480</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">233,155</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(48,535</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances from customers</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">109,238</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">386,922</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Net Cash from Operating Activities</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">6,388,089</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">4,026,464</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Cash Flows from Investing Activities:</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td width="125">
                    </td>

                    <td>
                    </td>

                    <td width="9">
                    </td>

                    <td width="125">
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(255,273</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(125,753</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of intangible assets</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(7,622,877</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(428,641</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" colspan="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances for purchases of intangibles and&nbsp;&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;property and equipment</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(2,921,715</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(5,856,412</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceed from sale of property and equipment</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">1,096</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">--</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Net Cash from Investing Activities</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(10,798,769</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(6,410,806</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr bgcolor="#ffffff">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Cash Flows from Financing Activity:</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td width="125">
                    </td>

                    <td>
                    </td>

                    <td width="9">
                    </td>

                    <td width="125">
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of short term notes payable</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">3,799,775</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">--</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments of short term notes payable</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(2,484,468</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(2,814,744</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock and warrants</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">--</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">9,268,938</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Net Cash from Financing Activity</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">1,315,307</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">6,454,194</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ffffff">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">Effect of Exchange Rate Changes on Cash</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">13,001</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(61,509</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Net Increase (Decrease) in Cash and Cash Equivalents</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">(3,082,372</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">4,008,343</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Cash and Cash Equivalents at Beginning of Period</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">6,927,149</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 1px solid" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">1,830,335</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Cash and Cash Equivalents at End of Period</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">3,844,777</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">5,838,678</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr bgcolor="#ccdbe3">
                    <td colspan="3">&nbsp;</td>

                    <td colspan="3">
                    </td>

                    <td colspan="3">
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2"><strong>Supplemental Cash Flow Disclosure:</strong></font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td>
                    </td>

                    <td width="125">
                    </td>

                    <td>
                    </td>

                    <td width="9">
                    </td>

                    <td width="125">
                    </td>

                    <td>
                    </td>
                </tr>

                <tr valign="bottom" bgcolor="#ccdbe3">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">103,143</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                    <td align="right" width="125"><font face="Times New Roman, Times, serif" size="2">130,342</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>

                <tr valign="bottom" bgcolor="#ffffff">
                    <td align="left" width="627"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes</font></td>

                    <td align="left" width="15"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">1,413,306</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td align="right" width="9"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                    <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="125"><font face="Times New Roman, Times, serif" size="2">1,289,596</font></td>

                    <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
                </tr>
            </table>
            <br>
            <br>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">&nbsp;</p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font size="2">The accompanying notes are an integral part of these condensed consolidated financial statements.</font></p>

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            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><!-- CONTINUOUS SECTION BREAK --><!-- CONTINUOUS SECTION BREAK --></p>
        </div>

        <p></p>

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            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">CHINA PHARMA HOLDINGS, INC.</font></b></p>

            <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS<br>
            (Unaudited)</font></b></p>
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE 1 - BASIS OF PRESENTATION</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The accompanying unaudited condensed consolidated financial statements of China Pharma Holdings, Inc. and its subsidiaries (the Company) 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 Annual
        Report on Form 10-K for the year ended December 31, 2008.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">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, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b><i>Nature of Operations</i></b> Through Hainan Helpson Medical &amp; Biotechnology Co. Ltd., a wholly-owned subsidiary (Helpson), the Company manufactures and markets a diverse product portfolio of Western and Chinese medicines sold mainly to hospitals and private retailers in The People's Republic of China (the PRC), through its marketing
        department located in Hainan Province. There are also sixteen other offices, with sales representatives in other provinces and cities throughout the PRC.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b><i>Accounting Estimates</i></b> <b>-</b> 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.</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b><i>Allowance for Bad Debts</i></b> - During the three months ended September 30, 2009, the Company determined that its previous estimates of uncollectible accounts receivable were not realized. As a result, the Company revised its estimate of the allowance for doubtful accounts at September 30, 2009 to $2,415,886 based on an analysis of the
        economy and the&nbsp;industry's bad debt experience rate. The change in the estimate&nbsp;resulted in a bad debt benefit during the three and nine months ended September 30, 2009 of $2,836,495 and $2,101,710, respectively.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b><i>Basic and Diluted Earnings per Common Share</i></b> <b>-</b> 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, 2009 and 2008, potentially dilutive securities includes warrants outstanding to purchase a total of 2,969,607 shares
        and 2,952,941 shares, respectively, of the Company&rsquo;s common stock with exercise prices ranging from $2.38 to $3.60 per share. These potentially issuable shares were not included in the compensation of diluted earnings per share as their effect would have been anti-dilutive.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b><i>Recently Enacted Accounting</i></b> <b><i>Standards</i></b> <b>-</b> In June 2009, the Financial Accounting Standards Board (the FASB) issued authoritative guidance on the consolidation of variable interest entities, which is effective for us in the first quarter of 2010. The new guidance requires revised evaluations of whether entities
        represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. We believe adoption of this new guidance will not have a material impact on our consolidated financial statements.</p>

        <div title="EE+ Page Footer" style="MARGIN-TOP: 12pt">
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        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">In August 2009, the FASB issued a new accounting standard which provides additional guidance on the measurement of liabilities at fair value.&nbsp;When a quoted price in an active market for the identical liability is not available, the new standard requires that the fair value of a liability be measured using one or more of the valuation
        techniques that should maximize the use of relevant observable inputs and minimize the use of unobservable inputs.&nbsp;In addition, an entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of a liability.&nbsp;This standard will be effective for us in the fourth quarter of 2009. We do not expect the adoption will have a material impact on our consolidated financial statements.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">In October 2009, the FASB issued a new accounting standard which provides guidance for arrangements with multiple deliverables. The new standard requires an entity to allocate arrangement consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices.&nbsp;In addition, the new standard
        eliminates the use of the residual method of allocation and requires the relative-selling-price method in all circumstances in which an entity recognizes revenue for an arrangement with multiple deliverables.&nbsp;In October 2009, the FASB also issued a new accounting standard which changes revenue recognition for tangible products containing software and hardware elements.&nbsp;If certain requirements are met, revenue arrangements that contain tangible products with software elements
        that are essential to the functionality of the products are scoped out of the existing software revenue recognition accounting guidance and will be accounted for under the multiple-element arrangements revenue recognition guidance discussed above. Both standards will be effective for us in the first quarter of 2011.&nbsp;Early adoption is permitted.&nbsp;We do not expect the adoption of these accounting standards will have a material impact on our consolidated financial statements.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE 2 - INVENTORY</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">Inventory consisted of the following:</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"></p>

        <table cellspacing="0" cellpadding="0" width="75%" align="center" border="0">
            <tr valign="bottom">
                <td align="left" width="401">
                </td>

                <td align="left" width="19"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="26"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>September 30,</strong></font></p>
                </td>

                <td align="left" width="6%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="right" width="8"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>December 31,</strong></font></p>
                </td>

                <td align="left" width="2%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="401">
                </td>

                <td align="left" width="19"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="left" width="26"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td style="BORDER-BOTTOM: black 1px solid" width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2009</strong></font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="right" width="8"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td style="BORDER-BOTTOM: black 1px solid" width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2008</strong></font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td width="401"><font face="Times New Roman, Times, serif" size="2">Raw materials</font></td>

                <td align="left" width="19"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="26"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">7,988,396</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="8"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">10,836,039</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="401"><font face="Times New Roman, Times, serif" size="2">Work in process</font></td>

                <td align="left" width="19"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="26"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">--</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="8"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">111,867</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="401"><font face="Times New Roman, Times, serif" size="2">Finished goods</font></td>

                <td align="left" width="19"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="26"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">6,927,186</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="8"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">2,191,844</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="401"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp; <strong>Total Inventory</strong></font></td>

                <td align="left" width="19"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="26"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">14,915,582</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="8"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">13,139,750</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE 3 - PROPERTY AND EQUIPMENT</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">Property and equipment consisted of the following:</p>

        <p style="MARGIN-TOP: 11.3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left"></p>

        <table cellspacing="0" cellpadding="0" width="75%" align="center" border="0">
            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="3%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>September 30,</strong></font></p>
                </td>

                <td align="left" width="6%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="right" width="1%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>December 31,</strong></font></p>
                </td>

                <td align="left" width="2%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td style="BORDER-BOTTOM: black 1px solid" width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2009</strong></font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td style="BORDER-BOTTOM: black 1px solid" width="100">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>2008</strong></font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">Permit of land use</font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">411,940</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">410,942</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">Buildings</font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">2,229,312</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">1,871,206</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">Plant, machinery and equipment</font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">4,562,157</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">1,497,004</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">Motor vehicle</font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">135,119</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">135,204</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">Office equipment</font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">105,936</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">106,918</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">Construction in progress</font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">1,290,685</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">4,200,361</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<strong>Total</strong></font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">8,735,149</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="100"><font face="Times New Roman, Times, serif" size="2">8,221,635</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2">Less: accumulated depreciation</font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">(1,863,014</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td style="BORDER-BOTTOM: black 1px solid" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">(1,483,267</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">)</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="411"><font face="Times New Roman, Times, serif" size="2"><strong>Property and Equipment, net</strong></font></td>

                <td align="left" width="12"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">6,872,135</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right"><font face="Times New Roman, Times, serif" size="2">$</font></td>

                <td style="BORDER-BOTTOM: black 2.25pt double" align="right" width="100"><font face="Times New Roman, Times, serif" size="2">6,738,368</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>
        </table>

        <p>&nbsp;</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">5</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR">Construction in progress consists of machinery and construction supplies that have been paid for, but are not yet completed and placed into production. Once the machinery is working or the facility in use, it is moved into plant, machinery and equipment and depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the
        assets as follows:</p>

        <p style="MARGIN-TOP: 11.3pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="75%" align="center" border="0">
            <tr valign="bottom">
                <td style="BORDER-BOTTOM: black 1px solid" width="367">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>Asset</strong></font></p>
                </td>

                <td align="left" width="112"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="left" width="73"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td style="BORDER-BOTTOM: black 1px solid" width="149">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>Life - years</strong></font></p>
                </td>

                <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="367"><font face="Times New Roman, Times, serif" size="2">Permit of land use</font></td>

                <td align="left" width="112"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="73"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="149">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">40 - 70</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="367"><font face="Times New Roman, Times, serif" size="2">Buildings</font></td>

                <td align="left" width="112"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="73"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="149">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">20 - 35</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="367"><font face="Times New Roman, Times, serif" size="2">Plant, machinery and equipment</font></td>

                <td align="left" width="112"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="73"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="149">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">10</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td align="left" width="367"><font face="Times New Roman, Times, serif" size="2">Motor vehicle</font></td>

                <td align="left" width="112"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="73"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="149">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">5 - 10</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td align="left" width="367"><font face="Times New Roman, Times, serif" size="2">Office equipment</font></td>

                <td align="left" width="112"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="73"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="149">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">5</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>
        </table>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">For the three and nine months ended September 30, 2009 and 2008, depreciation expense was $178,954, $101,149, $403,569 and $303,064, respectively.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE 4 - INTANGIBLE ASSETS</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Intangible assets represent the costs of patents, trademarks, licenses, techniques and formulas. Amortization of intangible assets was $248,491, $72,100, $582,741 and $202,531 for the three and nine months ended September 30, 2009 and 2008, respectively. SFDA-certified medical formulas are amortized over the expected life of the related medicine
        once production and sales commence.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE 5 &ndash; ADVANCES FOR PURCHASES OF INTANGIBLE ASSSETS</b> <b>AND PROPERTY AND EQUIPMENT</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">In order to expand the number of medicines manufactured and marketed by the Company, the Company has entered into purchase contracts with independent and university laboratories. The contracts are for the purchase of established medical formulas for which the related patents have expired (generic medicines). Prior to entering into the contracts,
        the independent laboratories typically have completed all required research and development to determine the medical formula for and the method of production of the generic medicine. If the Company enters into a contract prior to the determination of the medical formula for a medicine, contract costs incurred to establish the medical formula are recognized as research and development expense. Research and development expense was $44,741 and $42,807 for the nine months ended September
        30, 2009 and 2008, respectively. The contracts with the laboratories are primarily for certification of the manufacturing process and authorization by the State Food and Drug Administration (the SFDA) to sell the generic medicines. Under the terms of each contract, the Company is required to make progress payments to the laboratory; however, the payments are fully refundable in the event that the laboratory fails to obtain SFDA certification of the generic medicine under the contract.
        Payments made prior to the completion of the related progress are recorded as advances for purchases of intangible assets.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The Company is also increasing production capabilities with new machinery and facilities. As is common in the PRC, the Company prepays for much of the machinery and construction supplies. The prepayments are capitalized as advances for purchases of property and equipment until the construction begins or the machinery is delivered to the
        Company.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE</b> <b>6</b> <b>&ndash;</b> <b>SHORT-TERM NOTES PAYABLE</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">On December 24, 2008 the Company entered into a note payable for a line of credit with the bank collateralized by certain land use rights, buildings, machinery and equipment. The outstanding advance made under the line of credit was $2,480,231 at December 31, 2008 and bore interest at a rate of 6.372% and matures on November 23, 2009. The loan
        was personally guaranteed by Ms. Zhilin Li, the Company&rsquo;s Chief Executive Officer. No additional compensation was paid to Ms. Li for her guarantee of the note payable. The line of credit was paid in full in July, 2009.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">6</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">On July 2, 2009</font>, <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">the Company entered into a note payable for</font> <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">a revolving line of credit with a bank bearing interest at a rate of 5.31%</font> <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">that
        is</font> <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">collateralized by certain land use rights, buildings, machinery and equipment.</font> <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">The line of credit expires on June 30, 2010. The outstanding advance made under the line of credit was $3,802,504 at September 30, 2009. There are no additional amounts available to the Company under this line of credit.</font></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>N</b><b>OTE</b> <b>7</b> <b>- INCOME TAXES</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The Company accounts for its income taxes in accordance with FAS ASC 140-10, which requires recognition of deferred tax assets and liabilities 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.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Undistributed earnings of Helpson, the Company&rsquo;s foreign subsidiary, since its acquisition, amounted to approximately $57.1 million at September 30, 2009. Those earnings, as well as the investment in Helpson of approximately $19.2 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 (net of 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.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">Under current tax law in China, the Company will be subject to the following enterprise income tax rates:</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"></p>

        <table cellspacing="0" cellpadding="0" width="50%" align="center" border="0">
            <tr valign="bottom">
                <td align="left" width="32%">
                </td>

                <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="5%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="92"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="194">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>Enterprise Income</strong> </font></p>
                </td>

                <td align="left" width="2%"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>
            </tr>

            <tr valign="bottom">
                <td style="BORDER-BOTTOM: black 1px solid">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;Year</strong></font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td align="right" width="92"><font face="Times New Roman, Times, serif" size="2"><strong>&nbsp;</strong> </font></td>

                <td style="BORDER-BOTTOM: black 1px solid" width="194">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2"><strong>Tax Rate</strong></font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td>
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">2009</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="92"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="194">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">10</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td>
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">2010</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="92"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="194">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">11</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ccdbe3">
                <td>
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">2011</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="92"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="194">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">24</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom" bgcolor="#ffffff">
                <td>
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">2012 and after</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="right" width="92"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td width="194">
                    <p align="center"><font face="Times New Roman, Times, serif" size="2">25</font></p>
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">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.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE</b> <b>8</b> <b>- STOCKHOLDERS' EQUITY</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">As of September 30, 2009, the Company has outstanding warrants to purchase an aggregate of 2,969,607 shares of Company's common stock at exercise prices ranging from $2.38 to $3.60 per share, which expire from January 29, 2010 through January 2, 2012.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">On September 2, 2009, the board of directors of the Company adopted the 2009 Stock Option Plan, under which a total of 1,000,000 shares of the Company&rsquo;s common stock are available for issuance to directors, officers, employees, and eligible consultants.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">7</font></a>
        </div>

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            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE</b> <b>9</b> <b>- CONTINGENCIES</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b><i>Economic environment</i></b> <b>-</b> 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. The unfavorable changes in global macroeconomic factors may also adversely affect the
        Company&rsquo;s operations.<br>
        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.<a name="FIS_MANAGEMENT_ANALYSIS"></a></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE</b> <b>1</b><b>0</b> <b>&ndash; CONCENTRATIONS</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">At September 30, 2009, one customer accounted for 12.3% of accounts receivable.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">For the nine months ended September 30, 2009, two customers accounted for 24.4% and 12.6% of sales, respectively. For the nine months ended September 30, 2008, two customers accounted for 15.3% and 12.4% of sales, respectively.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">For the nine months ended September 30, 2009, purchases from three suppliers accounted for 34.3%, 30.1% and 16.1% of raw material purchases, respectively. For the nine months ended September 30, 2008, purchases from two suppliers accounted for 23.1% and 23.3% of raw material purchases, respectively.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>NOTE 11 &ndash; SUBSEQUENT EVENTS</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">On October 13, 2009 the Company issued options to purchase 100,000 shares of common stock at an exercise price of $2.75 per share to an officer of the Company pursuant to its 2009 Stock Option Plan. The option vests in two equal tranches on April 28, 2010 and September 30, 2010 and expire two years from the respective vesting dates. The exercise
        price for the options represented 85% of the market price on the date of grant. The value of the option of $134,600 was determined using the Black Scholes option pricing model using the simplified method based on the closing market price of $3.23 per share and assumptions for the risk free interest rate of 1.42%,volatility of 79.1%, and a estimated life of 1.4 years.&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Item</b> <b>2. Management&rsquo;s Discussion and Analysis</b> <b>of Financial Condition and Results</b> <b>of</b> <b>O</b><b>peration</b><b>s</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The following discussion should be read in conjunction with China Pharma Holdings, Inc.'s (&ldquo;China Pharma&rdquo; or the &ldquo;Company&rdquo;) consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><i>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.</i></p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">8</font></a>
        </div>

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            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><font style="FONT-FAMILY: 'TIMES NEW ROMAN'"><strong>1.&nbsp;&nbsp;&nbsp; Business Overview</strong> </font></p>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">China Pharma Holdings, Inc. is a fast growing pharmaceutical company dedicated to providing high-quality generic and branded pharmaceutical products for a wide range of high incidence and high mortality conditions in China. We have a strong focus on bringing new and first-to-market generic medicines to market through in-house R&amp;D and also
        through purchasing of medical formulas with many institutions. Over the past 15 years we have successfully commercialized 19 products with approvals from the State Food and Drug Administration of China (the &ldquo;SFDA&rdquo;).</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><br>
        Our diverse portfolio includes products for treatment of central nervous system diseases, cerebral and cardio vascular disorders, infectious diseases and respiratory and digestive illnesses. The Company's cost-effective, high margin business model is driven by market demand and supported by eight scalable Goods Manufacturing Practice (&ldquo;GMP&rdquo;) certified production lines covering our major dosage forms or products. Our broad and expanding distribution network covers 30
        provinces and municipalities in China. Hainan Helpson Medical &amp; Biotechnology Co., Ltd (&ldquo;Helpson&rdquo;), located in Haikou City in Hainan Province, China, is our main operating unit and wholly owned subsidiary. China Pharma is registered in Delaware, USA.</p>

        <p dir="ltr" style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">Proven Record of Success</font></b></p>

        <blockquote dir="ltr" style="MARGIN-RIGHT: 0px">
            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in" align="justify">2008: granted GMP 5-year re-certification</p>
                    </td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">January 2008: Bumetanine was approved by the SFDA and taken to market</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">May 2008: Raised $10 million through a Private-Investment-in &ndash;Public-Equity (&ldquo;PIPE&rdquo;) financing.</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">Second half of 2008: Began Dry Powder Capacity expansion</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">October 2008: New antibiotic formula received SFDA approval to enter clinical trials</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">January 2009: Liver disease product, Tiopronin, received SFDA production approval</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td valign="top" colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">February 2009: Anti-hypertension drug, Candesartan, received SFDA approval to enter clinical trials</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td valign="top" colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">June 2009: Rosuvastatin (a generic form of Crestor, for indication of high blood cholesterol level), received SFDA approval to enter clinical trials.</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td valign="top" colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">August 2009: Omeprazole injections (a generic form of a well-know PPI) received SFDA production approval.</td>
                </tr>
            </table>

            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.3in" align="left"></p>

            <table style="FONT-SIZE: 10pt; COLOR: black; FONT-FAMILY: 'Times New Roman'">
                <tr>
                    <td valign="top" colspan="2">
                        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'WINGDINGS'">u&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
                    </td>

                    <td valign="top">September 30, 2009: China Pharma began trading on NYSE/Amex under the ticker symbol of &ldquo;CPHI&rdquo;.</td>
                </tr>
            </table>
        </blockquote>

        <p dir="ltr" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Strategy for Growth &ndash;</b> We are positioned in a rapidly growing industry in the fastest growing economy in the world. Furthermore, the recently announced Healthcare Reform in China implies significant additional revenue opportunities for pharmaceutical enterprises supported by government initiatives. The increase in demand from
        these sources should allow us to grow organically at a healthy pace. In addition, the new products from our pipeline (such as the generic version of Crestor) present us with growth opportunities once these products come on line. Finally, the Healthcare Reform will change the current landscape of the Chinese pharmaceutical industry which we think will create many attractive acquisition opportunities. We plan to use these opportunities to the fullest extent possible and hope to continue
        our rate of growth in the future.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Strong Revenue Growth and High Margins -</b> We have experienced very rapid growth in sales of our therapeutics. Historically, our gross profit margin has been at 40%-50%. Our comparatively flat marketing and selling network and distribution system has enabled us to keep our net income margin (net income as a percentage of total revenue) at
        30%-40%. We are able to compete in the highly competitive pharmaceutical industry through our diversified product line, cost control measures and a strong sales network. Our experienced management team, market insights, and strong, in-house and collaborative third-party research resources enable us to reestablish and launch generic products based on market demand.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">9</font></a>
        </div>

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        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>2.&nbsp;&nbsp;&nbsp;&nbsp; Recent Developments</b><br>
        </p>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">As announced previously, we launched Tiopronin, our new drug for hepatitis, during the second quarter of 2009. So far the sales pace of Tiopronin is progressing better than planned, generating approximately $820,000 in revenue during the third quarter. During the quarter we also announced that China Pharma received SFDA production approval for
        Omeprazole for injections. Omeprazole is a well-know Proton Pump Inhibitor (PPI) which is widely utilized to treat gastroesophageal reflux disease (GERD), Omeprazole is on China&rsquo;s National Medical Reimbursement Insurance List, allowing insured patients to receive reimbursement for the cost of injections, and has been included in the WHO (World Health Organization) Model List of Essential Medicines in March 2009. Sales of Omeprazole has been kicked off on the fourth quarter of this
        year.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The registration process with the SFDA, which includes clinical trials for products in our pipeline, continues to perform on track or better than expected. We expect to complete Phase I of our Anti-Biotic combination clinical trial during the fourth quarter of this year. Feedback from our Rusovastatin (Crestor generic) clinical trial is also
        very positive, with the program being oversubscribed as more patients want to participate in the trial than we have slots for. We continue to expect these trials to be completed in the previously announced time frame.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">We continue to make progress in our collection of accounts receivable during the third quarter. As of now we feel the accounts receivable situation is under control and starting to improve, and our net operating cash flow is positive and increasing. While our accounts receivable remain quite large at the present time, we are moving toward our goal,
        and we would like to reiterate that collections continue to be a focus of management and we expect further improvement in the quarters ahead.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The Ministry of Health of China announced in September the names of the 307 drugs on the Essential Drug List. China Pharma has two drugs in its portfolio of 19 drugs on this list: Vitamin B6 for injection and Cefalexin capsules. These two products currently represent only a small amount of revenue for us (combined less than 10% of total
        revenue). We expect the gross margins of these two products to move slightly lower in the coming quarters but sales volume of these products to increase as the Healthcare Reform moves forward. Overall, we expect these two products to increase their contribution to net income in the coming quarters.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>3.&nbsp;&nbsp;&nbsp; Market Trends</b><br>
        </p>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The growth of China&rsquo;s pharmaceutical market is driven by China&rsquo;s rapid economic growth. 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
        resulting increase in age-related disorders; the urban migration of the population; and improved awareness of self-health care. Credit Suisse estimates that Chinese pharmaceutical market will grow at a compounded annual growth rate of 15.5% from 2008 to 2015, stemming from 2008 market size base of $32 billion.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The recent Healthcare Reform program announced by the Chinese government will have a real and significant impact on all healthcare related industries in China, including the pharmaceutical industry. Over all, the government plans to provide a basic, universal healthcare system to all citizens of China. While the government was slow to announce
        specifics of the plan, the recent release of the final Essential Drug List (the &ldquo;EDL&rdquo;) was the first major concrete step to implement the reform. The implementation of the EDL is expected to be phased in next few years gradually, and products on the EDL are expected to experience an increase in volume while having their margins lowered. That being said, the price adjustments announced by the government have been milder than the market originally anticipated. It is also
        important to realize that the government wants to set a pricing range target (high and low), in making sure that the prices of essential drugs are affordable on the one hand, and allow drug companies a fair profit on the other. We believe the effect of the Reform will be significant if not immediate. We are making ourselves more nimble and are ready to modify our strategies to the new environment when it becomes a reality. We are adjusting our sales and marketing strategy, to further
        penetrate the lower-tier healthcare facilities market which is one of the focuses of the current Healthcare Reform.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">10</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>4.&nbsp;&nbsp;&nbsp;&nbsp; Results of Operations</b><br>
        </p>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">The following table presents the results of operations of the Company for the three months ended September 30, 2009 and 2008; both are given in US dollars.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"></p>

        <table cellspacing="0" cellpadding="0" width="80%" border="0">
            <tr>
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">&nbsp;</td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="center"><font size="2">3 Months ended&nbsp;September 30,&nbsp;</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 15.3pt">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid"><font size="2">&nbsp;</font></td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">2009</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">2008</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Revenue</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$ 15,522,953</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$ 12,610,642</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Cost of Revenue</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">8,979,083</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">6,494,266</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Gross Profit</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">6,543,870</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">6,116,376</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Selling Expenses</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">807,231</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">592,432</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">General and Admin Expenses</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">521,676</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">410,287</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Bad Debt Expense</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">(2,836,495)</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">491,781</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Income from Operations</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">8,051,458</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">4,684,876</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Interest Income</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">3,956</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">26,224</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Interest Expense</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">(24,436)</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">(34,629)</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 15.3pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Income Tax Expense</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">867,750</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">424,993</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Net Income</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$ 7,163,228</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$ 4,251,478</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid; BORDER-BOTTOM: black 1px solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Net Income per Share</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid; BORDER-BOTTOM: black 1px solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.17 </font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid; BORDER-BOTTOM: black 1px solid" width="150">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.10</font></p>
                </td>
            </tr>
        </table>
        <br>
        <br>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Revenue</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">For the three months ended September 30, 2009, we saw an increase of 23% in year-over-year revenue to $15.5 million. This is an increase of $2.9 million from the $12.6 million we generated in the corresponding period of 2008.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Notably, third quarter sales in the Anti-Viro/Infection &amp; Respiratory product category rose by 36% over the same period a year ago to approximately $6.1 million. Our CNS and Cerebral &amp; Cardio Vascular drugs performed steadily by generating $5.6 million revenue during the third quarter, compared to $5.9 million in the same period of 2008.
        Our Other Products category (including our tumor drug Granisetron and various other products) saw an increase of 36% over last year to $2.3 million. Our Digestive product sales rose by 184% to $1.5 million, mainly due to the sales contribution from our new product Tiopronin. During this quarter we saw Tiopronin generating close to $800,000 in sales. This is progressing better than expected.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Cost of Revenue / Gross Profit</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">For the three months ended September 30, 2009, Cost of revenue was approximately $9 million or 58% of total revenue, compared to the corresponding period of 2008, which was $6.5 million or 52% of total revenue. The higher total cost of revenue was mainly due to a higher volume of lower margin products sold.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">11</font></a>
        </div>

        <div title="EE+ Page Break" style="FONT-SIZE: 1pt; PAGE-BREAK-AFTER: always; WIDTH: 100%; HEIGHT: 1px">
            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Gross Profit</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Gross Profit for the three months ended September 30, 2009 was $6.5 million, which is about 7% higher compared to the $6.1 million for the third quarter of 2008. Gross profit margin for the current quarter is 42%, compared to 49% in the third quarter of 2008. In light of the ongoing Healthcare Reform, along with other pharmaceutical companies,
        we are facing some pricing pressures. The lower gross profit margin in the third quarter of 2009 was also due to higher volume of lower margin products sold.</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Selling Expense</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The selling expense of the three months ended September 30, 2009 was approximately $0.81 million, an increase of approximately $0.28 million, or 52%, compared to approximately $0.53 million of the three months ended September 30, 2008. The main reason for this increase was our continued investment in our distribution channels and increased
        marketing presence of our products.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>G &amp; A Expense</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The general and administrative expenses for the three months ended September 30, 2009 was $0.52 million, an increase of $0.11 million, or 27%, compared to $0.41 million for the same period in 2008. This increase reflects higher operating expenses that occurred as a result of expanded business operations.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Bad Debt Expense (Benefit)</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">As to the peculiarity of the Chinese pharmaceutical market environment, deferred payments to pharmaceutical companies by state-owned hospitals and local medicine distributors are a normal phenomenon. Over 90% of our drugs are sold to state-owned hospitals and local medicine distributors, which creates slow collections of our trade receivables.
        Since the majority of hospitals in China are backed by the government, management believes that the deferred payments from state-owned hospitals are secure and will eventually be collected. So far, China Pharma has not lost any receivables in its 15 years history of doing business with hospitals.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Because we have comparatively long receivable cycles, management had set very conservative bad debt allowance estimates in our early days as a public company.&nbsp; Over the past few years, our collection record has been good with no record of losing any receivables. Therefore, in recent quarters we began to review our bad debt allowance
        estimate to align our estimates to be more in line with our experience and also industry collection standards. After analyzing a number of factors including macro economy and industry bad debt experience rates, management revised bad debt allowance estimates. &nbsp;</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">As of September 30, 2009, we adjusted bad debt allowance down to $2.4 million from $5.2 million on June 30<sup>th</sup> 2009. This represents a bad debt benefit of $2.8 million.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Income from Operation</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The operating income for the three months ended September 30, 2009 is approximately $8.1 million, compared to $4.7 million for the same period in 2008, an increase of $3.4 million, or 72%. The main reasons for the higher operating income in the third quarter of 2009 are higher gross profit and also the change in estimate on bad debt
        allowance.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Interest Income&nbsp;</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">The interest income for the three months ended September 30, 2009 is $3,956 from our bank deposit. In the third quarter of 2008 we had interest income of $26,224. The variance is mainly due to change of balance from the proceeds of the PIPE we completed in the first half of 2008.</p>

        <div title="PAGENUM" style="MARGIN-TOP: 12pt" align="center">
            <a name="PAGENUM"><font face="Times New Roman" size="2">12</font></a>
        </div>

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            <hr width="100%" color="#000000" size="2">
        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Interest Expense</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Interest expense for the three months ended September 30, 2009 is approximately $24,436, compared to $34,629 of the same period of 2008.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Income Tax Expense<br>
        </b>Enterprise income tax expense for the three months ended September 30, 2009 was $867,750, while the third quarter 2008 income tax expense was $424,993. We have been granted a &lsquo;tax holiday&rsquo; with a favorable rate of 50% of the tax rate. This year we pay our enterprise income tax at the rate of 10% while our tax rate in 2008 was 9%.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Net Income</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The net income for the three months ended September 30, 2009 was approximately $7.2 million, which was $2.9 million higher than that for the three months ended September 30, 2008, of approximately $4.3 million. This is an increase of about 68%. For the three months ended September 30, 2009, earnings per common share is $0.17 per share, compared
        to $0.10 of the third quarter of 2008.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>5.&nbsp;&nbsp;&nbsp; Liquidity and Capital Resources</b><br>
        </p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Our principal sources of liquidity are cash generated from operations and short term bank loans. As of September 30, 2009, cash and cash equivalents were $3,844,777, a decrease of $3 million from $6,927,149 as of December 31, 2008. This was primarily due to our cash used in investing activities being more than the cash provided by operating
        activities.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">During the third quarter of 2009, we were able to improve our operating cash flow compared to the previous quarter by improving accounts receivable collection and expanding our credit on payables. While we have made progress, improving accounts receivable collection continues to be a focus of the management team and we expect to make further
        progress in the quarters to come.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Based on our current operating plan, management believes that cash provided by operations plus proceeds from bank loans will be sufficient to meet our working capital and new formula acquisitions in the foreseeable future. However, if events or circumstances occur and we do not meet our operating plan as expected, we may be required to seek
        additional capital and/or reduce certain discretionary spending, which could have a material adverse effect on our ability to achieve our business objectives. We may seek additional financing, which may include debt and/or equity financing. There can be no assurance that any additional financing will be available on acceptable terms, if at all. Any equity financing may result in dilution to existing stockholders and any debt financing may include restrictive covenants.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="70%" border="0">
            <tr>
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">&nbsp;</td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid" colspan="2">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'ARIAL'" align="center"><font face="Times New Roman, Times, serif" size="2">9 Months ended September 30</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'ARIAL'" align="right"><font face="Times New Roman, Times, serif" size="2">2009</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; FONT-FAMILY: 'ARIAL'" align="right"><font face="Times New Roman, Times, serif" size="2">2008</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 13.8pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Net Cash Provided (Used by) Operating Activities</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$&nbsp;&nbsp;&nbsp; 6,388,089 </font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$&nbsp;&nbsp; 4,030,216 </font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 13.8pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Net Cash Used in Investing Activities</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">(10,798,769)</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">(6,410,806)</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 13.8pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Net Cash Provided by Financing Activities</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">1,315,307 </font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">6,454,194 </font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 13.8pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Effect of Exchange Rate change on Cash</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">13,001 </font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">(61,509)</font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 14.5pt" bgcolor="#ccdbe3">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Cash &amp; Equivalent Beginning Balance</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">6,927,149 </font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 0.8pt solid; BORDER-LEFT: #333333 0.8pt solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">1,830,335 </font></p>
                </td>
            </tr>

            <tr style="HEIGHT: 13.8pt" bgcolor="#ffffff">
                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid; BORDER-BOTTOM: black 1px solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="left"><font size="2">Cash &amp; Equivalent Ending Balance</font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid; BORDER-BOTTOM: black 1px solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp; 3,844,777 </font></p>
                </td>

                <td style="BORDER-RIGHT: #333333 0.8pt solid; BORDER-TOP: #333333 1.5pt solid; BORDER-LEFT: #333333 0.8pt solid; BORDER-BOTTOM: black 1px solid">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt" align="right"><font size="2">$&nbsp;&nbsp; 5,842,430</font></p>
                </td>
            </tr>
        </table>
        <br>
        <br>

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        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><i><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Operating Activities:</font></i>&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Net Cash provided by operating activities was $6.4 million in the nine-month period ended September 30, 2009 compared to $4.0 million for the same period in 2008, an increase of $2.4 million, or 59%. The difference was due to better accounts receivable collection and other improvements in working capital management in 2009.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><i>Investing Activities:</i>&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Net cash used in investing activities in the nine months ended September 30, 2009 was $10.8 million. The majority of this was for our investment in a number of new drug formulas during the first 9 months of 2009. This is an increase of $4.4 million from the same period in 2008 of $6.4 million.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><i>Financing Activities:</i>&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">We increased our short term bank revolving line of credit by $1.3 million dollars during the nine month ending September 30, 2009 to $3.8 million. A year ago, we raised approximately $9 million in a PIPE transaction in May of 2008.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>6.&nbsp;&nbsp; Off-Balance Sheet Arrangements</b><br>
        </p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left">There were no off-balance sheet arrangements during the three or nine months ended September 30, 2009.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>7.&nbsp;&nbsp;&nbsp; Commitments</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">At September 30, 2009, the Company had no material commitments except for those expenditures incurred in the ordinary course of business.</font></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><font style="FONT-FAMILY: 'TIMES NEW ROMAN'"><b>8.&nbsp;&nbsp; Recently Enacted Accounting Pronouncements</b></font></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">In June 2009, the Financial Accounting Standards Board (the FASB) issued authoritative guidance on the consolidation of variable interest entities, which is effective for us in the first quarter of 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over
        such entities, and additional disclosures for variable interests. We believe adoption of this new guidance will not have a material impact on our consolidated financial statements.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">In August 2009, the FASB issued a new accounting standard which provides additional guidance on the measurement of liabilities at fair value.&nbsp;When a quoted price in an active market for the identical liability is not available, the new standard requires that the fair value of a liability be measured using one or more of the valuation
        techniques that should maximize the use of relevant observable inputs and minimize the use of unobservable inputs.&nbsp;In addition, an entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of a liability.&nbsp;This standard will be effective for us in the fourth quarter of 2009. We do not expect the adoption will have a material impact on our consolidated financial statements.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">In October 2009, the FASB issued a new accounting standard which provides guidance for arrangements with multiple deliverables. The new standard requires an entity to allocate arrangement consideration at the inception of an arrangement to all of its deliverables based on their relative selling prices.&nbsp;In addition, the new standard
        eliminates the use of the residual method of allocation and requires the relative-selling-price method in all circumstances in which an entity recognizes revenue for an arrangement with multiple deliverables.&nbsp;In October 2009, the FASB also issued a new accounting standard which changes revenue recognition for tangible products containing software and hardware elements.&nbsp;If certain requirements are met, revenue arrangements that contain tangible products with software elements
        that are essential to the functionality of the products are scoped out of the existing software revenue recognition accounting guidance and will be accounted for under the multiple-element arrangements revenue recognition guidance discussed above. Both standards will be effective for us in the first quarter of 2011.&nbsp;Early adoption is permitted.&nbsp;We do not expect the adoption of these accounting standards will have a material impact on our consolidated financial statements.</p>

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        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Item 3 &ndash; Quantitative and Qualitative Disclosures About Market Risks&nbsp; </font></b></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">The Company is subject to certain market risks, including changes in interest rates and currency exchange rates. &nbsp;The Company does not undertake any specific actions to limit those exposures.</p>

        <p></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Item 4 - Controls and Procedures</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Evaluation of Disclosure Controls and Procedures</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Our Chief Executive Officer and our Chief Financial Officer, after evaluating the effectiveness of the Company&rsquo;s &ldquo;disclosure controls and procedures&rdquo; (as defined in the Securities Exchange Act of 1934 (Exchange Act) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this quarterly report, has concluded that
        our disclosure controls and procedures were effective based on their evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="left"><b>Changes in Internal Controls over Financial Reporting</b></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
        reporting.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act (a) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission&rsquo;s rules and forms
        and (b) is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">A system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the system will meet its objectives. The design of a control system is based, in part, upon the benefits of the control system relative to its costs. Control systems can be circumvented by the individual acts of some persons,
        by collusion of two or more people, or by management override of the control. In addition, over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. In addition, the design of any control system is based in part upon assumptions about the likelihood of future events.</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" align="center"><b>PART II. OTHER INFORMATION</b></p>

        <p></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Item 1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Legal Proceedings</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">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.</p>

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        </div>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Item 2 - Unregistered Sales</b> <b>o</b><b>f Equity Securities</b> <b>a</b><b>nd Use</b> <b>o</b><b>f Proceeds</b>&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">None.&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Item 3 - Defaults</b> <b>u</b><b>pon Senior Securities</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">None.&nbsp;&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Item 4 - Submission</b> <b>o</b><b>f Matters</b> <b>t</b><b>o</b> <b>a</b> <b>Vote</b> <b>o</b><b>f Security Holders</b></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">On September 3, 2009, a majority of the outstanding shares of voting capital stock took the actions: 1) to approve our amended and restated Certificate of Amendment of Certificate of Incorporation, which will effect a reverse split of the Company&rsquo;s issued and outstanding common stock, par value $0.001 per share, at a ratio to be designated
        by the Board within a range of one-for-two (1:2) to one-for-three (1:3); and 2) to adopt the Company&rsquo;s 2009 Stock Option Plan. The shareholder approval was granted by written consent, in lieu of a special meeting of the shareholders. In order to provide information to our shareholders regarding the above actions, we filed a definitive information statement with the Securities and Exchange Commission on September 23, 2009 and delivered it to our shareholders of record as of the
        close of business on September 3, 2009.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Item 5 - Other Information</b></p>

        <p></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">None.&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"><b>Item 6 - Exhibits</b><br>
        &nbsp;<br>
        The following exhibits are filed herewith:</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">31.1 <a name="OLE_LINK5">&ndash;</a> 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.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR"></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">31.2 &ndash; 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.<br>
        &nbsp;<br>
        32.1 &ndash; Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.<br>
        &nbsp;<br>
        32.2 &ndash; Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</p>

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        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif" align="center"><b>SIGNATURES</b></p>

        <p></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">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.</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify">&nbsp;</p>

        <p style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR" align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <td align="left" width="49%"><font face="Times New Roman, Times, serif" size="2"><strong>China Pharma Holdings, Inc.</strong></font></td>

                <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="4%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="44%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td align="left">&nbsp;</td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Dated: November 10, 2009</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2"><u>/s/ Zhilin Li</u></font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">Zhilin Li</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">Chief Executive Officer,</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">President and Director</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td align="left">&nbsp;</td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr>
                <td align="left">&nbsp;</td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>

                <td align="left">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left"><font face="Times New Roman, Times, serif" size="2">Dated: November 10, 2009</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">/<u>s/ Frank Waung</u></font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">Frank Waung</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left">
                </td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">Chief Financial Officer</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
            </tr>
        </table>
        <br>
        <br>
        <br>

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            <a name="PAGENUM"><font face="Times New Roman" size="2">17</font></a>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>cph10qex311093009.htm
<TEXT>
<html>
    <head>
        <title></title>
    </head>

    <body style="FONT-SIZE: 10pt; FONT-FAMILY: 'TIMES NEW ROMAN'">
        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px; FONT-FAMILY: 'SIMHEI'" align="center"><b><font style="FONT-SIZE: 10.5pt; COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">Exhibit 31.1</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Certification of Chief Executive Officer</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Pursuant to Rule 13a-14(a) or Rule 15d-14(a) </font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">of the Securities Exchange Act of 1934, as amended</font></b></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">I, Zhilin Li, the Chief Executive Officer of China Pharma Holdings, Inc., certify that:<br>
        <br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of China Pharma Holdings, Inc;</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
        period covered by this report;</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods
        presented in this report;</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
        Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:</p>

        <p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries,
        is made known to us by others within those entities, particularly during the period in which this report is being prepared;<br>
        <br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
        statements for external purposes in accordance with generally accepted accounting principles;</p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 1in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind 1 Inch">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 1in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind 1 Inch" align="justify">d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small
        business issuer's internal control over financial reporting; and</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of
        directors (or persons performing the equivalent functions):</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 1in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind 1 Inch" align="justify">a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and<br>
        &nbsp;<br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.</p>

        <p align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="3"><font face="Times New Roman" size="2">&nbsp;&nbsp;Date:&nbsp;November 10, 2009</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="2"><font face="Times New Roman" size="2">&nbsp;&nbsp;By:</font></td>

                <td align="left" width="191"><font face="Times New Roman" size="2">&nbsp;<u>/s/ Zhilin Li</u></font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="191"><font face="Times New Roman" size="2">Zhilin Li</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td width="191"><font size="2">Chief Executive Officer</font></td>

                <td>
                </td>

                <td>
                </td>
            </tr>
        </table>
        <br>
        &nbsp;<br>

        <p></p>
        <br>
        <br>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>cph10qex312093009.htm
<TEXT>
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        <title></title>
        <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
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    <body text="#000000" vlink="#800000" link="#0000ff" bgcolor="#ffffff">
        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">Exhibit 31.2</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Certification of Chief Financial</font></b> <b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Officer</font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Pursuant to Rule 13a-14(a) or Rule 15d-14(a) </font></b></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">of the Securities Exchange Act of 1934, as amended</font></b></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">I, Frank Waung, the Chief Financial Officer of China Pharma Holdings, Inc., certify that:</p>

        <p align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="2">1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have reviewed this quarterly report on Form 10-Q of China Pharma Holdings, Inc;</font></p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
        period covered by this report;</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods
        presented in this report;</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
        Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:</p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="2">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
        information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;<br>
        <br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
        statements for external purposes in accordance with generally accepted accounting principles;</font></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 1in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind 1 Inch">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 1in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind 1 Inch" align="justify">d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small
        business issuer's internal control over financial reporting; and</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 0.5in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind .5 Inch" align="justify">5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of
        directors (or persons performing the equivalent functions):</p>

        <p></p>

        <p style="FONT-SIZE: 10pt; TEXT-INDENT: 1in; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify; EEPStyleName: Para Just 10pt TNR First Line Ind 1 Inch" align="justify">a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and<br>
        &nbsp;<br>
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.</p>

        <p align="justify"></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="3"><font face="Times New Roman" size="2">&nbsp;&nbsp;Date:&nbsp;November 10, 2009</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="2"><font face="Times New Roman" size="2">&nbsp;&nbsp;By:</font></td>

                <td align="left" width="191"><font face="Times New Roman"><font size="2">&nbsp;<u>/s/ Frank Waung</u></font></font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="191"><font face="Times New Roman" size="2">Frank Waung</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td width="191"><font size="2">Chief Financial Officer</font></td>
            </tr>
        </table>
        <br>
        <br>
    </body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>cph10qex321093009.htm
<TEXT>
<html>
    <head>
        <title></title>
        <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
        <!-- Control Number:                                                                  -->
        <!-- Rev Number:                                                                      -->
        <!-- Client Name:                                                                     -->
        <!-- Project Name:                                                                    -->
        <!-- Firm Name:                                                                       -->
    </head>

    <body text="#000000" vlink="#800000" link="#0000ff" bgcolor="#ffffff">
        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">Exhibit 32.1</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font size="2"><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">CERTIFICATION </font></b><b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">OF</font></b> <b><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">CHIEF EXECUTIVE OFFICER</font></b></font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font size="2"><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">PURSUANT TO</font></b> </font><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">18 U.S.C. SECTION 1350,<br>
        AS ADOPTED PURSUANT TO<br>
        SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 28px" align="justify"><font size="2"><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">In connection with the Quarterly Report of </font><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">China Pharma Holdings, Inc.</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">(the</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">"Company") on Form 10-Q</font>
        <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">for the period ended</font>&nbsp;<font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">September 30, 2009</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">as filed with the</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">Securities and Exchange Commission on the date hereof (the "Report"), I, </font><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">Zhilin Li</font>, Chief Executive
        Officer of the Company, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:</font></p>

        <p></p>

        <blockquote dir="ltr" style="MARGIN-RIGHT: 0px">
            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><font size="2"><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">(1) The Report fully complies with the requirements of section 13(a)or 15(d) of the Securities and Exchange Act of 1934; and<br>
            &nbsp; <br>
            (2) The information contained in the Report fairly presents, in all</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">material respects, the financial condition and result of</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">operations of the Company.</font></font></p>
        </blockquote>

        <p>&nbsp;</p>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="3"><font face="Times New Roman" size="2">&nbsp;&nbsp;Date:&nbsp;November 10, 2009</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="2"><font face="Times New Roman" size="2">&nbsp;&nbsp;By:</font></td>

                <td align="left" width="191"><font face="Times New Roman" size="2">&nbsp;<u>/s/ Zhilin Li</u></font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="191"><font face="Times New Roman" size="2">Zhilin Li</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td width="191"><font size="2">Chief Executive Officer</font></td>
            </tr>
        </table>
        <br>
        <br>
    </body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>cph10qex322093009.htm
<TEXT>
<html>
    <head>
        <title></title>
        <!-- Created by EDGAR Ease Plus (EDGAR Ease+) -->
        <!-- Control Number:                                                                  -->
        <!-- Rev Number:                                                                      -->
        <!-- Client Name:                                                                     -->
        <!-- Project Name:                                                                    -->
        <!-- Firm Name:                                                                       -->
    </head>

    <body text="#000000" vlink="#800000" link="#0000ff" bgcolor="#ffffff">
        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">Exhibit 32.2</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font size="2"><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">CERTIFICATION </font></b><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">OF CHIEF FINANCIAL OFFICER</font></b></font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center"><font size="2"><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">PURSUANT TO</font></b> </font><b><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'" size="2">18 U.S.C. SECTION 1350,<br>
        AS ADOPTED PURSUANT TO<br>
        SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><font size="2"><font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">&nbsp;&nbsp;&nbsp;&nbsp; In connection with the</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">Quarterly Report of </font><font style="FONT-FAMILY: 'TIMES NEW ROMAN'">China Pharma Holdings, Inc.</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">(the</font> "Company") on Form
        10-Q <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">for the period ended</font>&nbsp;<font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">September 30, 2009</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">as filed with the</font> <font style="COLOR: #000000; FONT-FAMILY: 'TIMES NEW ROMAN'">Securities and Exchange Commission on the date hereof (the "Report"), I, Frank Waung, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
        section 906 of the Sarbanes-Oxley Act of 2002, that:</font></font>&nbsp;</p>

        <blockquote dir="ltr" style="MARGIN-RIGHT: 0px">
            <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify"><font size="2">(1) The Report fully complies with the requirements of section 13(a)or 15(d) of the Securities and Exchange Act of 1934; and<br>
            &nbsp; <br>
            (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.</font></p>
        </blockquote>

        <p></p>

        <table cellspacing="0" cellpadding="0" width="100%" border="0">
            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="3"><font face="Times New Roman" size="2">&nbsp;&nbsp;Date:&nbsp;November 10, 2009</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="1%"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr>
                <td colspan="3">&nbsp;</td>

                <td colspan="3">
                </td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" colspan="2"><font face="Times New Roman" size="2">&nbsp;&nbsp;By:</font></td>

                <td align="left" width="191"><font face="Times New Roman"><font size="2">&nbsp;<u>/s/ Frank Waung</u></font></font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411">
                </td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="191"><font face="Times New Roman" size="2">Frank Waung</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left"><font face="Times New Roman" size="2">&nbsp;</font></td>
            </tr>

            <tr valign="bottom">
                <td align="left" width="411"><font face="Times New Roman" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></td>

                <td align="left" width="29"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td align="left" width="20"><font face="Times New Roman" size="2">&nbsp;</font></td>

                <td width="191"><font size="2">Chief Financial Officer</font></td>
            </tr>
        </table>
        <br>
        <br>
    </body>
</html>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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