China Pharma (US:CPHI)2024-08-14 20:05Revenue Performance - Revenue decreased by 16.4% to $0.9 million for the three months ended June 30, 2024, compared to $1.1 million for the same period in 2023[106] - Revenue decreased by 25.0% to $2.3 million for the six months ended June 30, 2024, compared to $3.1 million for the same period in 2023, attributed to increased competition and ineligibility of certain products for national CP[132] Product Category Performance - The most significant revenue decrease was in the "Digestive Diseases" product category, which generated $0.04 million in sales, a decrease of 76% from $0.17 million year-over-year[107] - The "Anti-Viral/Infection & Respiratory" product category represented 52% of total sales in Q2 2024, up from 43% in Q2 2023[111] - The "CNS Cerebral & Cardio Vascular" product category represented 41% of total revenue in Q2 2024, compared to 32% in Q2 2023[111] Financial Losses - Gross loss for the three months ended June 30, 2024, was $1.01 million, with a gross loss margin of 109.8%, compared to a gross loss of $0.15 million and a margin of 13.4% in the same period in 2023[113] - The company's net loss for the three months ended June 30, 2024, was $1.4 million, compared to a net loss of $0.6 million for the same period in 2023, primarily due to increased costs[131] - Gross loss for the six months ended June 30, 2024, was $1.31 million, with a gross loss margin of 56.9%, compared to a gross profit margin of 1.0% in the same period in 2023[139] Expenses - Research and development expenses increased to $0.16 million, accounting for 17.8% of total revenues, up from 2.2% in the same period last year[116] - Research and development expenses increased to $0.20 million for the six months ended June 30, 2024, from $0.05 million in the same period in 2023, mainly due to drug consistency evaluation[143] - Selling expenses accounted for 9.6% of total revenue in the six months ended June 30, 2024, compared to 10.3% in the same period in 2023[140] - General and administrative expenses were $0.58 million for the six months ended June 30, 2024, compared to $0.53 million in the same period in 2023, representing 25.3% of total revenues[141] Cash and Assets - The company's cash and cash equivalents were $0.74 million as of June 30, 2024, down from $1.42 million as of December 31, 2023, representing 5.2% of total assets[150] - As of June 30, 2024, Helpson's net assets totaled $(4,375,345), a decrease from $(2,289,000) as of December 31, 2023[155] - The amount designated for statutory surplus reserves exceeds Helpson's total net assets as of June 30, 2024, and December 31, 2023[155] Regulatory and Market Context - The total size of China's health service industry is expected to reach RMB 16 trillion (approximately $2.5 trillion) by 2030, indicating significant market potential[104] - The Chinese government imposes controls on the conversion of RMB into foreign currencies, which may restrict Helpson from transferring net assets to the parent company[156] Accounting and Reporting - The financial statements are prepared in accordance with United States GAAP, requiring significant estimates and judgments by management[158] - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures[160] Other Financial Information - Bad debt expense for the three months ended June 30, 2024, was $8,476, compared to $4,047 for the same period in 2023[118] - The allowance for doubtful accounts as a percentage of accounts receivable was 98.2% as of June 30, 2024, up from 96.5% as of December 31, 2023[123] - There were no allocations to the statutory surplus reserve accounts during the six months ended June 30, 2024[155] - As of June 30, 2024, there were no off-balance sheet arrangements reported by the company[157] Product Certification - Helpson's N95 medical protective mask received registration certification at the end of 2022 and is currently sold nationwide in mainland China[104]