SecProbe.io

CORRESP
1
filename1.htm

China Pharma Holdings, Inc.

Second Floor, No. 17, Jinpan Road

Haikou, Hainan Province, China, 570216

October 18, 2023

VIA EDGAR TRANSMISSION

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Life Sciences

100 F Street NE

Washington, D.C. 20549-3561

Attn: Dillon Hagius and Jason Drory

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 Messrs. Hagius and Drory:

This letter is being furnished
in response to the comments of the staff (the “Staff”) of the Division of Corporation Finance of the Securities and
Exchange Commission (the “Commission”) that was contained in the Staff’s letter dated September 26, 2023 (the
“Comment Letter”), to China Pharma Holdings, Inc. (the “Company”) with respect to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Commission on March 30, 2023 (the “Original
Form 10-K”) and Amendment No.1 to the Form 10-K/A submitted with the Commission as correspondence on September 8, 2023 (the
“Amended 10-K/A”).

This letter provides the Company’s
responses to the Staff’s comments contained in the Comment Letter. The text of the Staff’s comments is set forth in bold below,
followed by the responses of the Company and the Company’s proposed revised disclosure in Italic. Once the comments are cleared,
with the permission of the Staff, to the extent applicable, the Company will incorporate such disclosure to the upcoming Annual Report
on Form 10-K for the year ended December 31, 2023 to be filed with the Commission publicly.

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.

Response: In response to the
Staff’s comment, the Company notes to the Staff that it has no intention to distribute any earnings. In addition, the Company proposes
to revise its disclosure as following:

“Intercompany activities between the holding company
and our subsidiaries

As of the date of
this report, none of our subsidiaries has distributed any dividends to China Pharma, nor has China Pharma distributed any dividends to
the investors. The Company currently has no intention to distribute earnings to the shareholders and investors. The tables below present
cash flow transfer between China Pharma and Helpson, through China Pharma’s wholly owned subsidiary Onny Investment Limited (“Onny”)
for the year ended December 31, 2022 and 2021. The Company’s management understands that there is no tax consequences for cash flow
transfers between China Pharma and Helpson through Onny.”

    For the year ended December 31, 2022

    No.

    Transfer from

    Transfer to

    Approximate value ($)

    Note

    1

    China Pharma (via Onny)

    Helpson

    1,300,000

    For Helpson’s operations

    For the year ended December 31, 2021

    No.

    Transfer from

    Transfer to

    Approximate value ($)

    Note

    1

    China Pharma (via Onny)

    Helpson

    3,000,000

    For Helpson’s operations

    2

    Helpson (via Onny)

    China Pharma

    320,000

    For the payment of the agent service fees of China Pharma

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 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.

Response: In response to the
Staff’s comment, the Company notes to the Staff that there are no explicit contractual provisions regarding the payment of Account
Receivables to us "contingent on their receipt of the payments from state-owned hospitals and local medicine distributors" per
se. The Company meant it is what its customers typically do in practice, as a matter of implied consensus. If in the event the length
of collection term is deviated from its past pattern of any particular customer, the Company will adjust its credit term.

 · 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.

Response: In response to the
Staff’s comment, the Company notes to the Staff that the Company does not have much insight on the receipt of its customer distributors
from their state-owned hospitals.

 · 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.

    2

Response: In response to the
Staff’s comment, the Company notes to the Staff that the Company does not have any such contractual provisions that give the distributors
the right to pay the Company depending on their receipts from state-owned hospitals, as clarified under bulletin point 1 of this comment
2. In terms of the evaluation method regarding the collectability of its receivables from the distributor customers, it had been previously
disclosed in the Amended 10-K/A as following:

“Our
bad debt allowance estimate practice is that we consider accounts receivable balances aged within 180 days current, except for any individual
uncollectible account assessed by management. We account for the following respective percentage as bad debt allowance based on age of
the accounts receivables: 10% of accounts receivable that are between 180 days and 365360 days old, 70% of accounts receivable that are
between 360 days and 720 days old, and 100% of accounts receivable that are greater than 720 days old.

Our allowance
for doubtful accounts as a percentage of accounts receivable was 97.5% and 96.2% as of December 31, 2022 and 2021, respectively. The
increase of 1.3% is due to a higher percentage of accounts receivable over 720 days old.

We conduct
analysis and review on accounts receivables for customers on a specific, per-customer basis in the fourth fiscal quarter of each fiscal
year. 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.

We recognize
bad debt expenses per actual write-offs as well as changes of allowance for doubtful accounts. To the extent that our current allowance
for doubtful accounts is higher than that of the previous period, we recognize a bad debt expense for the difference during the current
period, and when the current allowance is lower than that of the previous period, we recognize a bad debt credit for the difference. The
allowance for doubtful account balances were $16.7 million and $18.3 million as of December 31, 2022 and December 31, 2021, respectively.”

 · 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.

Response: In response to the
Staff’s comment, the Company notes to the Staff that there is no such contractual provision with the hospitals and distributors,
as discussed above.

 · 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.

    3

Response: In response to the
Staff’s comment, the Company notes to the Staff that in its daily operations, it recognizes revenue when the goods are transferred
to its customers. Contractual pricing and quantities are known and fixed at the time of transfer. As such, the amount of consideration
which the Company is entitled to is known. Therefore, the Company has not experienced adjustments to revenue such as pricing discounts,
contractual adjustments, or other revenue adjustments that are other than those credit related.

General

 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.

Response: In response to the
Staff’s comment, the Company proposes to insert a new risk factor as following:

“The Chinese government
may intervene or influence our business at any time. That may negatively influence our operation, intervene our ability to continue listing
on U.S. exchange and the value of our shares may significantly decline or be worthless, which would materially affect the interest of
our stockholders.

The Chinese
central or local governments may impose new, stricter regulations or interpretations of existing regulations that would require additional
expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions
in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy
or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in
China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.

As such, our
business segments may be subject to various government and regulatory interference in the provinces in which they operate. The Company
could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government
sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties
for any failure to comply. The Chinese government may intervene or influence our operations at any time with little advance notice, which
could result in a material change in our operations and in the value of our shares.”

We thank the Staff for your review
of the foregoing. If you have any questions, please do not hesitate to contact the undersigned at hellen@chinapharmaholdings.com, or Elizabeth
Fei Chen of Pryor Cashman LLP, the outside counsel to the Company, at echen@pryorcashman.com (Tel: 212-326-0199).

    Very truly yours,

    By:
    /s/ Zhilin Li

    Name:
    Zhilin Li

    Title:
    Chief Executive Officer

    cc:
    Elizabeth Fei Chen, Esq.

    4