CHINA PHARMA HOLDINGS, INC.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
CPHI$0.57+7.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001213900-24-028731
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001213900-25-026280
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 65 current paragraphs.
23 unchanged; 32 reworded; 10 added; 12 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
In April 2024, Helpson began serving as a Contract Manufacturing Organization (CMO) for a project, undertaking its R&D and post-market commercial production. This initiative generated approximately $50,000 in revenue within the year. Under the contract terms, once the product is launched, the company will continue providing production services, further boosting sales revenue and ensuring sustained cash inflows. This project successfully completed process verification in January 2025 and is currently undergoing stability testing. Registration with the National Medical Products Administration (NMPA) is expected in the third quarter of 2025. Moving forward, we will leverage our competitive advantages as a CMO, including our highly skilled technical team, state-of-the-art facilities, multiple production lines, ample capacity, extensive manufacturing expertise, and a robust quality management system.
Current report
The most significant revenue decrease in terms of dollar amount was in the “Digestive Diseases” category. It generated $0.20 million for the year ended December 31, 2024, compared to $1.09 million for the year ended December 31, 2023, which represented a decrease of $0.89 million. This decrease was mainly due to the decrease in sales of the Omeprazole due to market fluctuation, as the market demand returned to normal after the demand spiked in the same period of 2023.
Current report
Our “CNS Cerebral & Cardio Vascular” product category generated $1.35 million in sales revenue for the year ended December 31, 2024, compared to $1.62 million for the same period last year, which represented a decrease of $0.27 million. This decrease was mainly due to the decrease in sales of Ozagrel Sodium for Injection due to market fluctuation.
Current report
Notably, during the year ended December 31, 2024, the company generated an OEM income of $53,338, accounting for 1% of our total revenue.
Current report
Gross Loss and Loss Margin
Current report
Gross loss for the year ended December 31, 2024 was $2.0 million, compared to $0.3 million for the year ended December 31, 2023. Our gross loss margin for the year ended December 31, 2024 was 43.8%, compared to 4.0% for the year ended December 31, 2023. The main reasons for the increase in the gross loss rate were: the rise in idle equipment costs of approximately $0.66 million, the increase in inventory impairment provisions of approximately $0.86 million, and the significant decline in product sales.
Current report
Bad Debt Expense (reversal of allowance for credit losses)
Current report
Our allowance for credit losses for the year ended December 31, 2024 was $5,702, as compared to reversal of bad debt expense of $15,757 for the same period in 2023.
Current report
Our bad debt expense for the year ended December 31, 2024 was $5,702, as compared to reversal of allowance for credit losses of $15,757 in 2023.
Current report
The change in weighted-average shares and per-share amounts reflects the impact of two reverse stock splits: a 1-for-10 split effective March 6, 2023, and a 1-for-5 split effective March 6, 2024. These splits reduced the number of outstanding shares, with all share and per-share amounts retroactively restated for all periods presented in the accompanying consolidated financial statements.
Removed paragraphs (12)
Previous report
Helpson will continue to optimize its product structure and actively respond to the current health needs of human beings.
Previous report
Market Trends
Previous report
As a generic drug company, Helpson is presented with a huge domestic market. Helpson believes that through further upgrades and better conformity with Chinese consistency evaluations, which are based on European and American production standards, it will be able to export the products to overseas markets. In China’s market, Helpson believes that in the future, cost management and control ability will gradually become important factors in determining the competitiveness of generic pharmaceutical enterprises. Although price control leads to a decline in the profitability, enterprises who win the CP have a good chance of achieving bulk pricing to increase their market share and support their continuous innovation and transformation. On a separate note, growing and advancing consumer demand in China drives the increase of discretionary consumption. With the improvement of residents’ quality of life, the healthcare demand is also changing. Helpson believes that there is a large number of unmet demands in comprehensive healthcare and internet healthcare sectors.
Previous report
In addition, the Office of the State Council issued “Pilot Plan for Marketing Authorization Holders” on May 24, 2016, allowing eligible drug research and development institutions and scientific researchers to become Marketing Authorization Holders (“MAH”) by obtaining drug marketing authorization and drug approval numbers from the State Council. This policy uses a management model of separating drug marketing authorization and drug production licenses, thereby allowing MAHs to produce pharmaceuticals themselves or to consign production to other pharmaceutical manufacturers. This policy not only transitions the production practices to meet the European and United States standards by separating drug approval and production qualifications, thereby changing the existing model of bundling drug approval codes to pharmaceutical manufacturers in China, but also serves as a supplement to the ongoing consistency evaluations policy.
Previous report
In general, demand for pharmaceutical products continues its steady growth in China. Helpson believes the ongoing generic drug consistency evaluations and reform of China’s drug production registration and review policies will have major effects on the future development of our industry and may change its business patterns. Helpson will continue to actively adapt to the national policy guidance and further evaluate market conditions for the existing products then adjust accordingly, and compete in the market in order to optimize the development strategy.
Previous report
Sales revenues in the “Digestive Diseases” category was $1.09 million of sales revenue in 2023, which represented an increase of $0.68 million compared to $0.41 million in 2022. This increase was mainly due to an increase in sales of the Omeprazole due to market fluctuation.
Previous report
Sales revenue in the “CNS Cerebral & Cardio Vascular” category was $1.62 million in 2023, which represented a decrease of $0.08 million compared to $1.70 million in 2022. The sales revenue of this category in 2023 is similar to that in 2022, because the increase and decrease in sales of various products due to market fluctuations offset each other.
Previous report
Gross Loss and Gross Loss Margin
Previous report
Gross loss for the year ended December 31, 2023 was $0.3 million, compared to $0.5 million in 2022. Our gross loss margin in 2023 was 4.0%, compared to 6.1% in 2022.
Previous report
Bad Debt Benefit
Previous report
Our bad debt benefit for the year ended December 31, 2023 was $15,757, as compared to $93,851 in 2022.
Previous report
Our bad debt benefit for the year ended December 31, 2023 was $15,757, as compared to $93,851 in 2022.
Reworded paragraphs (32)
Previous wording
China’s consistency evaluation of generic drugs continues to proceed in 2023. Helpson has always taken the task of promoting the consistency evaluation as a top priority, and worked on them actively. However, for each drug’s consistency evaluation, due to the continuous dynamic changes of the detailed consistency evaluation policies, market trends, expected investments, and expected returns of investment (“ROI”), the whole industry, including Helpson, has been making slow progresses in terms of the consistency evaluation. One of the flagship products, Candesartan tablets, a hypertension product, has passed generic-drug-consistency-evaluation in early August 2023.
Current wording
China’s consistency evaluation of generic drugs continues to proceed for the year ended December 31, 2024. Helpson has always taken the task of promoting the consistency evaluation as a top priority, and worked on them actively. However, for each drug’s consistency evaluation, due to the continuous dynamic changes of the detailed consistency evaluation policies, market trends, expected investments, and expected returns of investment (“ROI”), the whole industry, including Helpson, has been making slow progresses in terms of the consistency evaluation. One of the flagship products, Candesartan tablets, a hypertension product, has passed generic-drug-consistency-evaluation in early August 2023.
Previous wording
In addition, Helpson continues to explore the field of comprehensive healthcare. Comprehensive healthcare is a general concept proposed by the Chinese government according to the development of the times, social needs and changes in disease spectrum. According to the Outline of “Healthy China 2030” issued by Chinese government in October 2016, the total size of China’s health service industry is expected to reach RMB 16 trillion (approximately $2.5 trillion) by 2030. This industry focuses on people’s daily life, aging and diseases, pays attention to all kinds of risk factors and misunderstandings affecting health, calls for self-health management, and advocates the comprehensive care throughout the entire process of life. It covers all kinds of health-related information, products, and services, as well as actions taken by various organizations to meet the health needs. In response to this trend, Helpson launched Noni enzyme, a natural, Xeronine-rich antioxidant food supplement at the end of 2018. It also launched wash-free sanitizers and masks, in 2020, to address the market needs caused by COVID-19 in China. As Chinese government officially terminated its zero-case policy, now the responsibility to protect people from the impact of COVID-19 falls more to the citizens themselves, and masks and sanitizers have been more and more popular due to increasing demand. Helpson has sufficient production capacity for medical masks, surgical masks, KN95 masks, and N95 masks, which meets the personal needs for protection against the epidemic outbreak. Helpson’s N95 medical protective mask has received registration certificate by the end of 2022 and right now has been selling in the mainland China nationwide.
Current wording
In addition, Helpson continues to explore the field of comprehensive healthcare. Comprehensive healthcare is a general concept proposed by the Chinese government according to the development of the times, social needs and changes in disease spectrum. According to the Outline of “Healthy China 2030” issued by Chinese government in October 2016, the total size of China’s health service industry is expected to reach RMB 16 trillion (approximately $2.5 trillion) by 2030. This industry focuses on people’s daily life, aging and diseases, pays attention to all kinds of risk factors and misunderstandings affecting health, calls for self-health management, and advocates the comprehensive care throughout the entire process of life. It covers all kinds of health-related information, products, and services, as well as actions taken by various organizations to meet the health needs. In response to this trend, Helpson launched Noni enzyme, a natural, Xeronine-rich antioxidant food supplement at the end of 2018. It also launched wash-free sanitizers and masks, in 2020, to address the market needs caused by COVID-19 in China. As Chinese government officially terminated its zero-case policy, now the responsibility to protect people from the impact of COVID-19 falls more to the citizens themselves, and masks and sanitizers have been popular since COVID-19. Helpson has sufficient production capacity for medical masks, surgical masks, KN95 masks, and N95 masks, which also meets the personal needs for protection against other respiratory infectious diseases. Helpson’s N95 medical protective mask has received registration certificate at the end of 2022 and has been on the market in the mainland China nationwide.
Previous wording
Revenue was $7.0 million for the year ended December 31, 2023, which represented a decrease of $1.1 million, as compared to $8.1 million for the year ended December 31, 2022. This decline was mainly due to an increasing number of drugs from other medicine providers being included in national CP, while Helpson’s related products have not passed consistency evaluation. As Helpson’s related products are not qualified to participate in CP, the resulting sales has decreased.
Current wording
Revenue was $4.5 million for the year ended December 31, 2024, which represented a decrease of $2.5 million, as compared to $7.0 million for the year ended December 31, 2023. This decline was mainly due to an increasing number of drugs from other medicine providers being included in national CP, while Helpson’s peer products have not passed consistency evaluation. As a result, they are not qualified to participate in CP, the resulting sales has decreased.
Previous wording
The most significant revenue decrease in terms of dollar amount was in the “Anti-Viral/ Infection & Respiratory” product category, it generated $3.57 million in 2023, compared to $4.94 million in 2022, which represented a decrease of $1.37 million. This decrease was mainly due to a decrease in sales of Helpson’s Roxithromycin Dispersible Tablet due to the inclusion of this product in the seventh round of CP, and the Roxithromycin produced by Helpson not passing the consistency evaluation, therefore not eligible to participate in CP.
Current wording
The “Anti-Viral/ Infection & Respiratory” product category generated $2.75 million for the year ended December 31, 2024, compared to $3.57 million for the year ended December 31, 2023, which represented a decrease of $0.82 million. This decrease was mainly due to a decrease in sales of Helpson not passing the consistency evaluation of Roxithromycin and therefore not being able to participate in CP.
Previous wording
Sales revenue in the “Other” product category was $0.73 million in 2023, compared to $1.06 million in 2022, which represented a decrease of $0.33 million. This decrease was mainly due to a decrease in sales of the Vitamin B6 for Injection due to market fluctuation, and change in foreign exchange rate.
Current wording
“Others” product category generated $0.18 million in sales revenue for the year ended December 31, 2024, compared to $0.73 million for the same period last year, which represented a decrease of $0.55 million. This decrease was mainly due to the decrease in sales of Vitamin B6 for Injection due to market volatility.
Previous wording
For the year ended December 31, 2023, revenue breakdown by product category experienced certain variances compared with that of the prior year. Sales in the “Anti-Viral/Infection & Respiratory” product category represented 51% and 61% of total sales in the years ended December 31, 2023 and 2022, respectively. The “CNS Cerebral & Cardio Vascular” category represented 23% of total revenue in 2023, compared to 21% in 2022. The “Digestive Diseases” category represented 16% and 5% of total revenue in 2023 and 2022, respectively. The “Other” category represented 10% and 13% of revenues in 2023 and 2022, respectively.
Current wording
For the year ended December 31, 2024, revenue breakdown by product category experienced certain variances compared with that of the prior year. Sales in the “Anti-Viral/Infection & Respiratory” product category represented 61% and 51% of total sales in the years ended December 31, 2024 and 2023, respectively. The “CNS Cerebral & Cardio Vascular” category represented 30% of total revenue for the year ended December 31, 2024, compared to 23% for the year ended December 31, 2023. The “Digestive Diseases” category represented 4% and 16% of total revenue for the years ended December 31, 2024 and 2023, respectively. The “Other” category represented 4% and 10% of revenues for the years ended December 31, 2024 and 2023, respectively.
Previous wording
For the year ended December 31, 2023, our cost of revenue was $7.3 million, or 104.0% of total revenue, which represented a decrease of $1.3 million from $8.6 million, or 106.1% of total revenue, in 2022. The decrease in cost is mainly due to the difference in the proportion of different products to total revenue this year and last year.
Current wording
For the year ended December 31, 2024, our cost of revenue was $6.5 million, or 143.8% of total revenue, which represented a decrease of $0.78 million from $7.3 million, or 104.0% of total revenue, in 2023. The decrease in the dollar value of cost of revenues in the twelve months ended December 31, 2024 was mainly because that the decrease in revenue; and the increase in ratio of costs to revenue was mainly due to the increase in idle equipment costs due to reduced production, as well as the increased inventory impairments.
Previous wording
Our selling expenses for the year ended December 31, 2023 were $0.8 million, a decrease of $0.3 million compared to $1.1 million for the year ended December 31, 2022. Selling expenses accounted for 11.1% of the total revenue in 2023 compared to 13.2% in 2022. Because of the adjustments in the sales practices and Chinese national CP, we reduced selling expenses to efficiently support the sales and the collection of accounts receivable, especially in the context of the increasing impact of CP, like other players in the industry, we have reduced the promotion expenses.
Current wording
Our selling expenses for the year ended December 31, 2024 were $0.53 million, a decrease of $0.25 million compared to $0.78 million for the year ended December 31, 2023. Selling expenses accounted for 11.7% of the total revenue for the year ended December 31, 2024 compared to 11.1% for the year ended December 31, 2023. Because of the adjustments in the sales practices and Chinese national CP, we reduced selling expenses to efficiently support the sales and the collection of accounts receivable, especially in the context of the increasing impact of CP, like other players in the industry, we have reduced the promotion expenses.
Previous wording
Our general and administrative expenses for the year ended December 31, 2023 were $1.2 million, a decrease of $0.7 million compared to $1.9 million for the year ended December 31, 2022. General and administrative expenses accounted for 17.0% and 23.4% of our total revenues in 2023 and 2022, respectively. The decrease in administrative expenses was mainly due to the higher exchange rate of the RMB against the US dollar in 2023 and the higher government subsidies obtained in 2023.
Current wording
Our general and administrative expenses for the year ended December 31, 2024 were $1.78 million, an increase of $0.32 million compared to $1.47 million for the year ended December 31, 2023. General and administrative expenses accounted for 39.4% and 20.9% of our total revenues for the years ended December 31, 2024 and 2023, respectively. Reason for this increase was the amortization expenses related to the purchased patent technology in 2024.
Previous wording
Our research and development expenses for the year ended December 31, 2023 was $0.24 million, compared to $0.19 million in 2022. Research and development expenses accounted for 3.4% and 2.3% of our total revenues in 2023 and 2022, respectively. These increased research and development expenditures in 2023 was mainly due to the fact that as the contract progressed, the expenditure for Candesartan consistency evaluation was higher in 2023 as compared to 2022.
Current wording
Our research and development expenses for the year ended December 31, 2024 was $0.28 million, compared to $0.24 million for the year ended December 31, 2023. Research and development expenses accounted for 6.3% and 3.4% of our total revenues for the years ended December 31, 2024 and 2023, respectively. These expenditures were mainly spent on the consistency evaluation of the existing products.
Previous wording
The amount of net accounts receivable that was past due (or the amount of accounts receivable that was more than 180 days old) was $0.01 million and $0.03 million as of December 31, 2023 and 2022, respectively.
Current wording
The amount of net accounts receivable that was past due (or the amount of accounts receivable that was more than 180 days old) was $0.06 million and $0.01 million as of December 31, 2024 and 2023, respectively.
Previous wording
The following table illustrates our accounts receivable aging distribution in terms of the percentage of the total accounts receivable, respective gross accounts receivables as well as the allocated allowance for doubtful accounts as of December 31, 2023 and 2022:
Current wording
The following table illustrates our trade accounts receivable aging distribution in terms of the percentage of the total accounts receivable, respective gross accounts receivables as well as the allocated allowance for credit losses as of December 31, 2024 and 2023:
Previous wording
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 365 days old, 70% of accounts receivable that are between 365 days and 720 days old, and 100% of accounts receivable that are greater than 720 days old.
Current wording
Our allowance for credit losses estimate practice using the current expected credit loss method considers 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 credit loss allowance based on age of the accounts receivables: 10% of accounts receivable that are between 180 days and 365 days old, 70% of accounts receivable that are between 365 days and 720 days old, and 100% of accounts receivable that are greater than 720 days old.
Previous wording
Our allowance for doubtful accounts as a percentage of accounts receivable was 96.5% and 97.5% as of December 31, 2023 and 2022, respectively. The 1% decrease is due to the write-off of accounts receivable in 2023.
Current wording
Our allowance for credit losses as a percentage of accounts receivable of trade accounts receivable was 98.3% and 96.5% as of December 31, 2024 and 2023, respectively.
Previous wording
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 $13.8 million and $16.7 million as of December 31, 2023 and December 31, 2022, respectively. The changes in the allowances for doubtful accounts during the years ended December 31, 2023 and 2022 were as follows:
Current wording
We recognize credit losses per actual write-offs as well as changes of allowance for credit losses. To the extent that our current allowance for credit losses 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 credit losses balances were $13.6 million and $13.8 million as of December 31, 2024 and December 31, 2023, respectively. The changes in the allowances for credit losses of trade accounts receivable during the years ended December 31, 2024 and 2023 were as follows:
Previous wording
Our operating loss for the year ended December 31, 2023 was $2.8 million, compared to $3.5 million in 2022.
Current wording
Our operating loss for the year ended December 31, 2024 was $4.59 million, compared to $2.75 million in 2023.
Previous wording
Net interest expense was $0.33 million for the year ended December 31, 2023 and $0.42 million for the year ended December 31, 2022.
Current wording
Net interest expense was $0.15 million for the year ended December 31, 2024 and $0.33 million for the year ended December 31, 2023.
Previous wording
Net loss for the year ended December 31, 2023 was $3.1 million, compared to net loss of $3.9 million for the year ended December 31, 2022. The decrease in net loss was mainly a result of the decline in expenses more than the decline in revenue.
Current wording
Net loss for the year ended December 31, 2024 was $4.74 million, compared to net loss of $3.08 million for the year ended December 31, 2023. The increase in net loss was mainly a result of the decline in expenses more than the decline in revenue.
Previous wording
Loss per basic and diluted common share was $0.91 for the year ended December 31, 2023 and $3.78 for the year ended December 31, 2022, respectively.
Current wording
Loss per basic and diluted common share was $0.27 for the year ended December 31, 2024 and $0.91 for the year ended December 31, 2023, respectively.
Previous wording
The number of basic and diluted weighted-average outstanding shares used to calculate loss per share was 3,383,573 for 2023, as compared to 1,051,371 for 2022.
Current wording
The number of basic and diluted weighted-average outstanding shares used to calculate loss per share was 17,463,723 for 2024, as compared to 3,383,573 for 2023.
Previous wording
Our principal source of liquidity is cash generated from operations, bank lines of credit and the convertible note payable. Currently the Company has not witnessed or expected to encounter any difficulties to refinance those lines of credit this year. As of December 31, 2023, the aggregated advance from our CEO was $1,133,809 for use in operations. Our cash and cash equivalents were $1.42 million, representing 8.6% of our total assets, as of December 31, 2023, as compared to $2.03 million, representing 11.4% of our total assets as of December 31, 2022. All of the $1.42 million of cash and cash equivalents as of December 31, 2023 are considered to be reinvested indefinitely in the Company’s Chinese subsidiary, Helpson, and are not expected to be available for payment of dividends or for other payments to its parent company or to its shareholders.
Current wording
Our principal source of liquidity is cash generated from operations and bank lines of credit. Currently the Company has not witnessed or expected to encounter any difficulties to refinance those lines of credit this year. As of December 31, 2024, the aggregated advance from our CEO was$1,144,985 for use in operations. Our cash and cash equivalents were $0.63 million, representing 4.2% of our total assets, as of December 31, 2024, as compared to $1.42 million, representing 8.6% of our total assets as of December 31, 2023. All of the $0.63 million of cash and cash equivalents as of December 31, 2024 are considered to be reinvested indefinitely in the Company’s Chinese subsidiary, Helpson and are not expected to be available for payment of dividends or for other payments to its parent company or to its shareholders.
Previous wording
The Company obtained various lines of credit in details described under Note 7 to its audited condensed consolidated financial statements contained in this annual report which is incorporated by reference herein.
Current wording
The Company obtained various lines of credit in details described under Note 8 to its audited consolidated financial statements contained in this report which is incorporated by reference herein.
Previous wording
China Pharma issued a convertible note to an institutional accredited investor as disclosed in Note 8 to the audited condensed consolidated financial statements contained in this report which is incorporated by reference herein.
Current wording
China Pharma issued a convertible note to an institutional accredited investor as disclosed in Note 9 to the audited consolidated financial statements contained in this report which is incorporated by reference herein.
Previous wording
Although the Company obtained additional lines of credit in 2023, there can be no assurance that the Company will be able to achieve its future strategic goals, including the launch of new products. This raises substantial doubt about the Company’s ability to continue as a going concern. Although our Chairperson and Chief Executive Officer had advanced funds for working capital in 2023, there can be no assurances that this will continue in the future. We may seek additional debt or equity financing as necessary when we believe the market conditions are the most advantageous to us and/or require us to reduce certain discretionary spending, which could have a material adverse effect on our ability to achieve our business objectives. There can be no assurance that any additional financing will be available on acceptable terms, if at all.
Current wording
Although the Company obtained additional lines of credit for the year ended December 31, 2024, there can be no assurance that the Company will be able to achieve its future strategic goals, including the launch of new products. This raises substantial doubt about the Company’s ability to continue as a going concern. Although our Chairperson and Chief Executive Officer had advanced funds for working capital for the year ended December 31, 2024, there can be no assurances that this will continue in the future. We may seek additional debt or equity financing as necessary when we believe the market conditions are the most advantageous to us and/or require us to reduce certain discretionary spending, which could have a material adverse effect on our ability to achieve our business objectives. There can be no assurance that any additional financing will be available on acceptable terms, if at all.
Previous wording
Net cash used in operating activities was $0.70 million in the year ended December 31, 2023, compared to $0.41 million in 2022.
Current wording
Net cash used in operating activities was $0.47million in the year ended December 31, 2024, compared to $0.70 million in the same period in 2023.
Previous wording
As of December 31, 2023, our net accounts receivable was $0.50 million, an increase of $0.08 million from $0.42 million as of December 31, 2022.
Current wording
As of December 31, 2024, our net trade accounts receivable was $0.23 million, a decrease of $0.27 million from $0.50 million as of December 31, 2023.
Previous wording
As of December 31, 2023, total inventory was $3.7 million, compared to $2.9 million as of December 31, 2022.
Current wording
As of December 31, 2024, total inventory was $2.27 million, compared to $3.73 million as of December 31, 2023.
Previous wording
During the year ended December 31, 2023, net cash used in investing activities was $0.01 million, compared to $0.40 million for the year ended December 31, 2022.
Current wording
During the year ended December 31, 2024, net cash used in investing activities was $0.29 million, compared to $0.01 million for the year ended December 31, 2023. This was mainly due to the investment in the development of a medicine formula.
Previous wording
Cash flow provided by financing activities was $0.07 million in the year ended December 31, 2023; compared to cash flow used in financing activities of $1.77 million in the year ended December 31, 2022.
Current wording
Cash flow provided by financing activities was $0.03 million in the twelve months ended December 31, 2024; compared to $0.07 million for the same period for the year ended December 31, 2023.
Previous wording
According to relevant PRC laws, companies registered in the PRC, including our PRC subsidiary, Helpson, are required to allocate at least ten percent (10%) of their after-tax net income, as determined under the accounting standards and regulations in the PRC, to statutory surplus reserve accounts until the reserve account balances reach fifty percent (50%) of the companies’ registered capital prior to their remittance of funds out of the PRC. Allocations to these reserves and funds can only be used for specific purposes and are not transferrable to the parent company in the form of loans, advances or cash dividends. As of December 31, 2023 and December 31, 2022, Helpson’s net assets totaled $(2,289,000) and $(190,000), respectively. Due to the restriction on dividend distribution to overseas shareholders, the amount of Helpson’s net assets that was designated for general and statutory capital reserves, and thus could not be transferred to our parent company as cash dividends, was 50% of Helpson’s registered capital, which was both $8,145,000 as of December 31, 2023 and December 31, 2022, respectively. The amount that Helpson must set aside for the statutory surplus fund accounts exceeds its total net assets at December 31, 2023 and 2022. There were no allocations to the statutory surplus reserve accounts during the twelve months ended December 31, 2023.
Current wording
According to relevant PRC laws, companies registered in the PRC, including our PRC subsidiary, Helpson, are required to allocate at least ten percent (10%) of their after-tax net income, as determined under the accounting standards and regulations in the PRC, to statutory surplus reserve accounts until the reserve account balances reach fifty percent (50%) of the companies’ registered capital prior to their remittance of funds out of the PRC. Allocations to these reserves and funds can only be used for specific purposes and are not transferrable to the parent company in the form of loans, advances or cash dividends. As of December 31, 2024 and December 31, 2023, Helpson’s net assets totaled ($6,197,000) and ($5,273,000), respectively. Due to the restriction on dividend distribution to overseas shareholders, the amount of Helpson’s net assets that was designated for general and statutory capital reserves, and thus could not be transferred to our parent company as cash dividends, was 50% of Helpson’s registered capital, which was both $8,145,000 as of December 31, 2024 and December 31, 2023, respectively. The amount that Helpson must set aside for the statutory surplus fund accounts exceeds its total net assets at December 31, 2024 and December 31, 2023. There were no allocations to the statutory surplus reserve accounts during the twelve months ended December 31, 2024.
Previous wording
The Chinese government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of China. Our businesses and assets are primarily denominated in RMB. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires the submission of a payment application form together with certain invoices and executed contracts. The currency exchange control procedures imposed by Chinese government authorities may restrict the ability of Helpson, our Chinese subsidiary, to transfer its net assets to our parent company through loans, advances or cash dividends.
Current wording
The Chinese government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of China. Our businesses and assets are primarily denominated in RMB. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires the submission of a payment application form together with certain invoices and executed contracts. The currency exchange control procedures imposed by Chinese government authorities may restrict Helpson, our Chinese subsidiary, from transferring its net assets to our parent company through loans, advances or cash dividends.
Previous wording
Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. Please refer to Note 1 to our consolidated financial statements, “Organization and Significant Accounting Policies” for the discussion of our critical accounting policies.
Current wording
Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. The discussion of our critical accounting policies contained in Note 1 to our consolidated financial statements, “Organization and Significant Accounting Policies”, included in the Company’s annual report on Form 10-K for fiscal year ended December 31, 2024, which is incorporated herein by reference.