United States securities and exchange commission logo
September 26, 2023
Zhilin Li
Interim Chief Financial Officer
China Pharma Holdings, Inc.
Second Floor, No. 17, Jinpan Road
Haikou, Hainan Province, China, 570216
Re: China Pharma
Holdings, Inc.
Form 10-K for
Fiscal Year Ended December 31, 2022
Filed March 30,
2023
Response dated
September 8, 2023
File No. 001-34471
Dear Zhilin Li:
We have reviewed your response and have the following comments.
In some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2022
Item 1. Business, page 1
1. We note your response
to comment 5 and re-issue in part. Please disclose your intentions
to distribute earnings,
or affirmatively disclose the lack thereof. Please also discuss
the tax consequences,
if any, of the cash flow transfer between China Pharma and
Helpson through China
Pharma s wholly owned subsidiary Onny Investment Limited,
which you mention on
page 4.
Management's Discussion and Analysis of Financial Condition and Results
of Operations, page
46
2. In your response to
prior comment 7, you state, "...deferred payments by state-owned
hospitals and local
medicine distributors is the reason for the Company s relatively long
credit term, as the
customers payments to the Company are contingent on their receipt of
Zhilin Li
FirstName LastNameZhilin
China Pharma Holdings, Inc.Li
Comapany 26,
September NameChina
2023 Pharma Holdings, Inc.
September
Page 2 26, 2023 Page 2
FirstName LastName
the payments from state-owned hospitals and local medicine
distributors." You also
state, "...the Company s main customers are drug distributors, not
state-owned hospitals,
therefore, the Company does not receive payments directly from
hospitals." Please
address the following regarding your response:
Tell us and revise to disclose the extent to which there are
contractual provisions in
your arrangements with your distributor customers that make them
"contingent on
their receipt of the payments from state-owned hospitals and
local medicine
distributors." Explain what you mean that such payments are
contingent on these
receipts.
Tell us and revise to disclose the insight that you have into
the receipts of your
customer distributors from their state-owned hospital and local
medicine distributor
customers. Clarify the extent to which you have insight into
pricing discounts,
contractual adjustments, or other allowance adjustments to
revenue between your
customer distributors from their state-owned hospital and local
medicine distributor
customers.
Expand your MD&A disclosure to discuss the risks and
uncertainties of collecting
the amounts that are contingently payable based on your
distributor customers'
receipt of the payments from state-owned hospitals and local
medicine distributors.
As part of your disclosure, explain how you evaluate the amounts
due from the state-
owned hospitals and local medicine distributors to your customers
as part of your
evaluation of the collectability of your receivables from your
distributor customers.
Tell us in detail how you evaluated the guidance in ASC 606 to
determine whether
the revenue from your distributor customers that is contingent on
their receipt of the
payments from state-owned hospitals and local medicine
distributors should be
constrained until that contingency has been resolved.
We note your statement, "...the Company has no write-off in
fiscal years ended
December 31, 2022 and 2021." You also propose to disclose, on
page 52 of the
amended Form 10-K, "For customers (i) whose business license has
been cancelled
or expired; (ii) whose key business certificates such as GSP
(Good Supply Practice)
license have been invalid or revoked; (iii) who have no ability
to continue operations,
or (iv) who are encountering other issues that lead to accounts
receivable
unrecoverable, the receivable will be written-off as per the
resolution of our Board of
Directors." However, tell us and revise to clarify how you
determined whether you
have experienced adjustments to revenue such as pricing
discounts, contractual
adjustments, or other revenue adjustments that are other than
credit related. Explain
how you determined whether your revenue should be reported "net"
of such
contractual adjustments.
General
Zhilin Li
China Pharma Holdings, Inc.
September 26, 2023
Page 3
3. We note your response to comment 8 and re-issue in part. Please
prominently disclose the
risk that the Chinese government may intervene or influence your
operations at any time
and that this could result in a material change in your operations
and/or the value of your
securities.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Tracie Mariner, Staff Accountant, at (202) 551-3744 or
Kevin Vaughn,
Branch Chief, at (202) 551-3494 if you have questions regarding comments on the
financial
statements and related matters. Please contact Dillon Hagius, Staff Attorney,
at (202) 551-
7967 or Jason Drory, Staff Attorney, at (202) 551-8342 with any other
questions.
FirstName LastNameZhilin Li Sincerely,
Comapany NameChina Pharma Holdings, Inc.
Division of
Corporation Finance
September 26, 2023 Page 3 Office of Life
Sciences
FirstName LastName