UNITED
STATES
|
SECURITIES
AND EXCHANGE COMMISSION
|
Washington,
D.C. 20549
|
FORM
10-Q
|
(Mark
One)
|
x QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended September 30,
2010
|
o TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
|
For
the transition period from ________________ to
_______________
|
000-51429
|
(Commission
file number)
|
CHINA
HOUSING & LAND DEVELOPMENT,
INC.
|
(Exact
name of registrant as specified in its
charter)
|
|
Nevada
|
20-1334845
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS
Employer Identification
No.)
|
6
Youyi Dong Lu, Han Yuan 4 Lou
|
Xi'An,
Shaanxi Province
|
China
710054
|
(Address
of principal executive offices)
|
86-029-8258-2632
|
(Issuer's
telephone number)
|
N/A
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
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 preceding 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 x No o
|
Indicate
by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post
such files). Yes x No o
|
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 “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.
|
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
(Do
not check if a smaller
reporting
company)
|
Smaller
reporting company
x
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes o No x
|
The
number of shares of Common Stock outstanding on November 11, 2010 was
32,685,331 shares.
|
CHINA
HOUSING & LAND DEVELOPMENT,
INC.
|
Index
|
.
|
Page
Number
|
|||
PART
I
|
FINANCIAL
INFORMATION
|
1 | ||
Item
1.
|
Financial
Statements
|
1
|
||
Interim
Condensed Consolidated Balance Sheets as of September 30, 2010 (unaudited)
and
December 31, 2009
|
1
|
|||
Interim
Condensed Consolidated Statements of Income for the three and nine months
ended
September
30, 2010 and
2009 (unaudited)
|
2
|
|||
Interim
Condensed Consolidated Statements of Comprehensive Income for the three
and
nine
months ended September 30, 2010 and 2009 (unaudited)
|
3
|
|||
Interim
Condensed Consolidated Statements of Cash Flows for the nine months ended
September
30, 2010 and 2009 (unaudited)
|
4
|
|||
Interim
Condensed Consolidated Statements of Shareholders’
Equity
As
at September 30, 2010 and December 31, 2009 (unaudited)
|
5
|
|||
Notes
to Interim Condensed Consolidated Financial Statements
(unaudited)
|
6
|
|||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
17
|
||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
38
|
||
Item
4.
|
Controls
and Procedures
|
38
|
||
PART
II.
|
OTHER
INFORMATION
|
39
|
||
Item
1.
|
Legal
Proceedings
|
39
|
||
Item
1A.
|
Risk
Factors
|
39
|
||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
39
|
||
Item
3.
|
Defaults
Upon Senior Securities
|
39
|
||
Item
4.
|
(Removed
and reserved)
|
39
|
||
Item
5.
|
Other
Information
|
39
|
||
Item
6.
|
Exhibits
|
39
|
||
SIGNATURES
|
||||
EX-31.1
|
(Certifications
required under Section 302 of the Sarbanes-Oxley Act of
2002)
|
|||
EX-31.2
|
(Certifications
required under Section 302 of the Sarbanes-Oxley Act of
2002)
|
|||
EX-32.1
|
(Certifications
required under Section 906 of the Sarbanes-Oxley Act of
2002)
|
|||
EX-32.2
|
(Certifications
required under Section 906 of the Sarbanes-Oxley Act of
2002)
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Cash
and cash equivalents
|
$
|
71,610,809
|
$
|
36,863,216
|
||||
Cash
- restricted
|
790,723
|
701,017
|
||||||
Accounts
receivable, net of allowance for doubtful
accounts
of $392,550 and $389,996, respectively
|
11,823,982,
|
6,088,482
|
||||||
Other
receivables, prepaid expenses and deposits, net
|
5,753,875
|
2,484,221
|
||||||
Real
estate held for development or sale
|
110,716,253
|
103,003,529
|
||||||
Property
and equipment, net
|
13,080,882
|
15,307,478
|
||||||
Asset
held for sale
|
13,987,503
|
14,301,564
|
||||||
Advance
to suppliers
|
4,497,831
|
10,368,386
|
||||||
Deposits
on land use rights
|
58,771,753
|
28,084,346
|
||||||
Intangible
assets, net
|
42,192,065
|
41,355,134
|
||||||
Goodwill
|
832,993
|
816,469
|
||||||
Deferred
financing costs
|
439,072
|
411,457
|
||||||
Total
assets
|
$
|
334,497,741
|
$
|
259,785,299
|
||||
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
19,658,037
|
$
|
20,706,263
|
||||
Advances
from customers
|
45,560,387
|
21,301,876
|
||||||
Accrued
expenses
|
2,482,097
|
5,587,837
|
||||||
Loans
payable
|
1,166,490
|
5,916,354
|
||||||
Income
and other taxes payable
|
13,789,950
|
8,194,659
|
||||||
Other
payables
|
5,147,919
|
4,524,288
|
||||||
Loans
from employees
|
5,383,006
|
2,864,824
|
||||||
Bank
loans
|
52,312,981
|
36,185,705
|
||||||
Deferred
tax liability
|
13,268,309
|
11,505,181
|
||||||
Warrants
liability
|
2,090,720
|
5,074,191
|
||||||
Fair
value of embedded derivatives
|
3,078,576
|
3,991,047
|
||||||
Convertible
debt
|
15,873,701
|
14,834,987
|
||||||
Mandatorily
redeemable noncontrolling interests in Subsidiaries
|
57,374,833
|
-
|
||||||
Total
liabilities
|
237,187,006
|
140,687,212
|
||||||
Commitments
and contingencies
|
||||||||
SHAREHOLDERS'
EQUITY
|
||||||||
Common
stock: $.001 par value, authorized 100,000,000 shares
|
||||||||
issued
and outstanding 33,083,354 and 31,884,969, respectively
|
33,083
|
31,885
|
||||||
Additional
paid in capital
|
38,995,679
|
35,461,706
|
||||||
Common
stock subscribed
|
-
|
252,118
|
||||||
Statutory
reserves
|
4,922,248
|
4,922,248
|
||||||
Retained
earnings
|
40,827,482
|
39,895,179
|
||||||
Accumulated
other comprehensive income
|
12,532,243
|
10,163,483
|
||||||
Total
China Housing & Land Development, Inc. shareholders’
equity
|
97,310,735
|
90,726,619
|
||||||
Noncontrolling
interests
|
-
|
28,371,468
|
||||||
Total
shareholders' equity
|
97,310,735
|
119,098,087
|
||||||
Total
liabilities and shareholders' equity
|
$
|
334,497,741
|
$
|
259,785,299
|
3
Months
|
3
Months
|
9
Months
|
9
Months
|
|||||||||||||
September
30,
2010
|
September
30,
2009
|
September30,
2010
|
September
30,
2009
|
|||||||||||||
REVENUES
|
||||||||||||||||
Sale
of properties
|
$
|
31,455,921
|
$
|
22,728,282
|
$
|
99,067,368
|
$
|
56,835,091
|
||||||||
Other
income
|
2,592,853
|
1,152,408
|
5,148,115
|
3,689,359
|
||||||||||||
Total
revenues
|
34,048,774
|
23,880,690
|
104,215,483
|
60,524,450
|
||||||||||||
COST
OF SALES
|
||||||||||||||||
Cost
of sales of properties
|
22,568,245
|
15,991,559
|
74,821,470
|
40,130,502
|
||||||||||||
Cost
of other income
|
571,224
|
469,656
|
1,684,851
|
1,420,556
|
||||||||||||
Total
cost of sales
|
23,139,469
|
16,461,215
|
76,506,321
|
41,551,058
|
||||||||||||
Gross
margin
|
10,909,305
|
7,419,475
|
27,709,162
|
18,973,392
|
||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Selling,
general, and administrative expenses
|
2,873,590
|
2,501,688
|
9,170,039
|
5,853,458
|
||||||||||||
Security
registration expenses
|
-
|
579,775
|
-
|
1,786,517
|
||||||||||||
Stock
based compensation
|
-
|
87,777
|
-
|
87,777
|
||||||||||||
Other
expenses
|
232,493
|
284,044
|
420,525
|
474,167
|
||||||||||||
Interest
expense
|
433,666
|
417,809
|
1,388,166
|
1,202,786
|
||||||||||||
Accretion
expense on convertible debt
|
363,624
|
311,319
|
1,038,732
|
889,305
|
||||||||||||
Total
operating expenses
|
3,903,373
|
4,182,412
|
12,017,462
|
10,294,010
|
||||||||||||
NET
INCOME FROM BUSINESS OPERATION
|
7,005,932
|
3,237,063
|
15,691,700
|
8,679,382
|
||||||||||||
CHANGE
IN FAIR VALUE OF DERIVATIVES
|
||||||||||||||||
Loss
on extinguishment of debt
|
-
|
-
|
2,180,492
|
-
|
||||||||||||
Change
in fair value of embedded derivatives
|
(958,688)
|
(2,695,306)
|
(2,832,023)
|
3,017,272
|
||||||||||||
Change
in fair value of warrants
|
(405,821)
|
(3,042,752)
|
(3,203,085)
|
4,012,736
|
||||||||||||
Total
change in fair value of derivatives
|
(1,364,509)
|
(5,738,058)
|
(3,854,616)
|
7,030,008
|
||||||||||||
Income
before provision for income taxes
and
noncontrolling interest
|
8,370,441
|
8,975,121
|
19,546,316
|
1,649,374
|
||||||||||||
Provision
for income taxes
|
1,926,345
|
(3,652,886)
|
4,467,337
|
(1,591,331)
|
||||||||||||
Recovery
of deferred income taxes
|
(31,370)
|
-
|
(82,367)
|
-
|
||||||||||||
NET
INCOME
|
6,475,466
|
12,628,007
|
15,161,346
|
3,240,705
|
||||||||||||
Charge
to noncontrolling interest
|
-
|
86,121
|
(14,229,043)
|
279,155
|
||||||||||||
NET
INCOME ATTRIBUTABLE TO
CHINA
HOUSING & LAND DEVELOPMENT, INC.
|
$
|
6,475,466
|
$
|
12,714,128
|
$
|
932,303
|
$
|
3,519,860
|
||||||||
WEIGHTED
AVERAGE SHARES OUTSTANDING
|
||||||||||||||||
Basic
|
33,082,573
|
31,134,137
|
32,911,414
|
30,987,760
|
||||||||||||
Diluted
|
37,374,784
|
32,972,253
|
35,636,354
|
30,996,953
|
||||||||||||
NET
INCOME (LOSS) PER SHARE
|
||||||||||||||||
Basic
|
0.20
|
0.41
|
0.03
|
0.11
|
||||||||||||
Diluted
|
0.15
|
0.24
|
(0.05)
|
0.11
|
3
Months
|
3
Months
|
9
Months
|
9
Months
|
|||||||||||||
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|||||||||||||
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
|
|
|
|||||||||||||
NET
INCOME
|
$ | 6,475,466 | $ | 12,628,007 | $ | 15,161,346 | $ | 3,240,705 | ||||||||
|
||||||||||||||||
OTHER
COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
Gain
(loss) in foreign exchange
|
1,561,913 | 69,244 | 2,368,760 | (242,176 | ) | |||||||||||
|
||||||||||||||||
COMPREHENSIVE
INCOME
|
8,037,379 | 12,697,251 | 17,530,106 | 2,998,529 | ||||||||||||
|
||||||||||||||||
Charge
to noncontrolling interest
|
- | 86,121 | (14,229,043 | ) | 279,155 | |||||||||||
|
||||||||||||||||
Comprehensive
income attributable to China Housing & Land Development,
Inc.
|
$ | 8,037,379 | $ | 12,783,372 | $ | 3,301,063 | $ | 3,277,684 |
September
30,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$
|
15,161,346
|
$ |
3,240,705
|
||||
Adjustments
to reconcile net income to cash provided by (used in) operating
activities:
|
||||||||
Bad
debt recovery
|
-
|
80,713
|
||||||
Depreciation
|
901,085
|
471,788
|
||||||
(Gain)
loss on disposal of fixed assets
|
(287,460)
|
50,501
|
||||||
Gain
on disposal of assets held for sale
|
(1,134,675)
|
-
|
||||||
Amortization
of deferred financing costs
|
115,873
|
115,873
|
||||||
Recovery
of future income taxes
|
(82,367)
|
-
|
||||||
Loss
on extinguishment of debt
|
2,180,492
|
-
|
||||||
Stock
based compensation
|
-
|
87,777
|
||||||
Security
registration expenses settled with common stocks
|
-
|
1,786,517
|
||||||
Change
in fair value of embedded derivatives
|
(2,832,023)
|
4,012,736
|
||||||
Change
in fair value of warrants
|
(3,203,085)
|
3,017,272
|
||||||
Accretion
expense on convertible debt
|
1,038,732
|
889,305
|
||||||
Non-cash
proceeds from sales
|
-
|
(31,673)
|
||||||
(Increase)
decrease in assets:
|
||||||||
Accounts
receivable
|
(1,986,986)
|
(4,702,750)
|
||||||
Other
receivable and prepaid expense
|
(3,218,104)
|
(568,727)
|
||||||
Real
estate held for development or sale
|
2,340,492
|
(35,859,057)
|
||||||
Advances
to suppliers
|
5,631,869
|
(159,660)
|
||||||
(Deposit)
refund on land use rights
|
(29,559,410)
|
11,534,025
|
||||||
Deferred
selling costs
|
-
|
(344,134)
|
||||||
Deferred
financing costs
|
(140,684)
|
-
|
||||||
Increase
(decrease) in liabilities:
|
||||||||
Accounts
payable
|
(1,470,626)
|
8,103,243
|
||||||
Advance
from customers
|
23,391,607
|
(135,544)
|
||||||
Accrued
expense
|
10,609,030
|
1,165,695
|
||||||
Other
payables
|
515,184
|
(1,941,379)
|
||||||
Income
and other taxes payable
|
5,388,733
|
(1,621,435)
|
||||||
Net
cash provided by (used in) operating activities
|
23,359,023
|
(10,808,209)
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Change
in restricted cash
|
(74,047)
|
110,130
|
||||||
Purchase
of property and equipment
|
(1,123,185)
|
(587,595)
|
||||||
Notes
receivable collected
|
-
|
212,140
|
||||||
Cash
acquired from acquisition
|
2,179
|
519,309
|
||||||
Proceed
from sale of property and equipment
|
864,518
|
194,006
|
||||||
Proceeds
from sale of assets held for sale
|
412,252
|
-
|
||||||
Net
cash provided by investing activities
|
81,717
|
447,990
|
||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Loans
from banks
|
34,151,372
|
12,444,063
|
||||||
Repayments
of bank loans
|
(19,077,303)
|
(18,447,426)
|
||||||
Loans
from or repayment to employees, net
|
2,414,989
|
678,545
|
||||||
Repayments
of loans payable
|
(7,536,715)
|
(3,841,072)
|
||||||
Proceeds
from exercise of warrants
|
-
|
1,184,662
|
||||||
Net
cash provided by (used in) financing activities
|
9,952,343
|
(7,981,228)
|
||||||
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
33,393,083
|
(18,341,447)
|
||||||
Effects
of foreign currency exchange
|
1,354,510
|
5,237
|
||||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
36,863,216
|
37,425,340
|
||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
71,610,809
|
$ |
19,089,130
|
Common
Stock
|
Common
stock
|
Additional
paid
|
Statutory
|
Retained
|
Comprehensive
|
Noncontrolling
|
||||||||||||||||||||||||||||||
Shares
|
Par
Value
|
subscribed
|
in
capital
|
reserves
|
earnings
|
income
|
Interest
|
Totals
|
||||||||||||||||||||||||||||
BALANCE,
December 31, 2009
|
31,884,969 | $ | 31,885 | $ | 252,118 | $ | 35,461,706 | $ | 4,922,248 | $ | 39,895,179 | $ | 10,163,483 | $ | 28,371,468 | $ | 119,098,087 | |||||||||||||||||||
Common
stock issued on
exercise
of stock options
|
62,014 | 62 | (252,118 | ) | 252,056 | - | - | - | - | - | ||||||||||||||||||||||||||
Common
stock issued for acquisition of Suodi
|
1,118,403 | 1,118 | - | 5,031,695 | - | - | - | - | 5,032,813 | |||||||||||||||||||||||||||
Non-controlling
interest reclassified to mandatorily
redeemable
preferred
stock
|
- | - | - | - | - | - | - | (28,371,468 | ) | (28,371,468 | ) | |||||||||||||||||||||||||
Net
income
|
- | - | - | 3,117,934 | 3,117,934 | |||||||||||||||||||||||||||||||
Charge
to noncontrolling interest
|
- | - | - | - | - | (14,229,043 | ) | - | - | (14,229,043 | ) | |||||||||||||||||||||||||
Foreign
currency
translation
adjustment
|
- | - | - | - | - | - | (27,684 | ) | - | (27,684 | ) | |||||||||||||||||||||||||
BALANCE,
March 31, 2010
|
33,065,386 | 33,065 | - | 40,745,457 | 4,922,248 | 28,784,070 | 10,135,799 | - | 84,620,639 | |||||||||||||||||||||||||||
Net
income
|
- | - | - | - | - | 5,567,946 | - | - | 5,567,946 | |||||||||||||||||||||||||||
Foreign
currency
translation
adjustment
|
- | - | - | - | - | - | 834,531 | - | 834,531 | |||||||||||||||||||||||||||
BALANCE,
June 30, 2010
|
33,065,386 | 33,065 | - | 40,745,457 | 4,922,248 | 34,352,016 | 10,970,330 | - | 91,023,116 | |||||||||||||||||||||||||||
Common
stock issued for warrants
exercised
|
17,968 | 18 | - | 41,326 | - | - | - | - | 41,344 | |||||||||||||||||||||||||||
Common stock to be
returned
(note
2)
|
- | - | - | (1,791,104 | ) | - | - | - | - | (1,791,104 | ) | |||||||||||||||||||||||||
Net
Income
|
- | - | - | - | - | 6,475,466 | - | - | 6,475,466 | |||||||||||||||||||||||||||
Foreign
currency
translation
adjustment
|
- | - | - | - | - | - | 1,561,913 | - | 1,561,913 | |||||||||||||||||||||||||||
BALANCE,
September 30, 2010
|
33,083,354 | $ | 33,083 | $ | - | $ | 38,995,679 | $ | 4,922,248 | $ | 40,827,482 | $ | 12,532,243 | $ | - | $ | 97,310,735 |
September
30,
2010
|
December
31,
2009
|
September
30,
2009
|
||||||||||
Period end
RMB/U.S. Dollar exchange rate
|
6.6905
|
6.8259
|
6.8262
|
|||||||||
Average
RMB/U.S. Dollar exchange rate
|
6.7677
|
6.8307
|
6.8306
|
Purchase
Price
|
$
|
6,178,890
|
||
Value
assigned to assets and liabilities:
|
||||
Assets:
|
||||
Cash
|
$
|
2,176
|
||
Land
use right
|
7,865,482
|
|||
Liabilities:
|
||||
Due
to original shareholders
|
103,083
|
|||
Deferred
tax liability related to the land use right acquired
|
1,585,685
|
|||
Total
net assets
|
$
|
6,178,890
|
Noncontrolling Interest
|
||||
Noncontrolling
interests at December 31, 2009
|
$
|
28,371,468
|
||
Reclassify
to mandatorily redeemable noncontrolling interests in
subsidiaries
|
(28,371,468)
|
|||
Noncontrolling
interests at September 30, 2010
|
$
|
-
|
Mandatory
Redeemable Noncontrolling Interests
in
Subsidiaries
|
||||
Mandatory
redeemable noncontrolling interests in subsidiaries at December 31,
2009
|
$
|
-
|
||
Initial
fair value of mandatorily redeemable noncontrolling interests in
subsidiaries
|
42,600,511
|
|||
Capitalized
accretion cost on mandatorily redeemable noncontrolling interests in
subsidiaries
|
13,752,833
|
|||
Difference
in foreign exchange translation
|
1,021,489
|
|||
Mandatorily
redeemable noncontrolling interests in subsidiaries at September 30,
2010
|
$
|
57,374,833
|
Date
|
||||
December
31, 2010
|
$
|
29,893,132
|
||
December
31, 2011
|
29,893,132
|
|||
December
25, 2012
|
26,305,956
|
|||
Total
|
$
|
86,092,220
|
(1)
|
The
Company issued 1,118,403 shares of common stock, which was valued at
$5,032,813 in connection with the acquisition of Suodi during the first
quarter of fiscal 2010. Of these common stock, 398,023 shares of
common stock valued at $1,791,103 was returned to the Company on
October 1, 2010 (note
2).
|
(2)
|
In
accordance with the Amended and Restated Shareholders’ Agreement with
Prax, the Company reclassified Prax’s interest in the consolidated
subsidiaries from noncontrolling interest in equity to liability and
recorded $14,229,043, the difference between the carrying value of the
original noncontrolling interest and the fair value of redemption amount,
as a charge to the noncontrolling
interest.
|
September
30,
2010
|
December
31,
2009
|
|||||||
Other
receivable
|
$
|
1,941,576
|
$
|
1,222,028
|
||||
Allowance
for bad debts
|
(210,725)
|
(206,545)
|
||||||
Prepaid
expenses
|
266,143
|
261,836
|
||||||
Prepaid
other tax expenses
|
1,514,896
|
1,206,902
|
||||||
Deposit
for acquisition (note
19)
|
2,241,985
|
-
|
||||||
Other
receivables and prepaid expenses
|
$
|
5,753,875
|
$
|
2,484,221
|
September
30,
2010
|
December
31,
2009
|
|||||||
Completed
projects
|
$ | 11,053,744 | $ | 20,417,820 | ||||
Construction
in progress
|
99,662,509 | 82,585,709 | ||||||
Total
real estate held for development or sale
|
$ | 110,716,253 | $ | 103,003,529 |
September
30,
2010
|
December
31,
2009
|
|||||||
Buildings
and improvements
|
$
|
6,363,940
|
$
|
5,286,461
|
||||
Income
producing properties and improvements
|
7,620,423
|
11,095,868
|
||||||
Electronic
equipment
|
399,488
|
330,218
|
||||||
Vehicles
|
459,859
|
425,099
|
||||||
Office
furniture
|
140,649
|
182,309
|
||||||
Computer
software
|
174,321
|
174,995
|
||||||
Total
|
15,158,680
|
17,494,950
|
||||||
Accumulated
depreciation
|
(2,077,798)
|
(2,187,472)
|
||||||
Property
and equipment, net
|
$
|
13,080,882
|
$
|
15,307,478
|
September
30,
2010
|
December
31,
2009
|
|||||||
Intangible
acquired
|
$
|
48,268,223
|
$
|
47,310,765
|
||||
Accumulated
amortization
|
(6,076,159)
|
(5,955,631)
|
||||||
Intangible
asset, net
|
$
|
42,192,065
|
$
|
41,355,134
|
September
30,
2010
|
December
31,
2009
|
|||||||
Accrued
expenses
|
$
|
1,756,089
|
$
|
2,252,903
|
||||
Accrued
interest on loans
|
726,008
|
3,334,934
|
||||||
Total
|
$
|
2,482,097
|
$
|
5,587,837
|
September
30, 2010
|
December
31,
2009
|
|||||||
Payable
to original shareholders of New Land (i)
|
$
|
1,077,058
|
$
|
5,916,354
|
||||
Payable
to original shareholders of Suodi (ii)
|
89,432
|
-
|
||||||
Total
|
$
|
1,166,490
|
$
|
5,916,354
|
(i)
|
The
balance as of December 31, 2009 included $4,860,661 unsecured loans
payable to previous shareholders of New Land. The Company has paid off
this balance as of September 30, 2010.
The
remaining balance of $1,077,059 as of September 30, 2010 (December 31,
2010 - $1,055,693) represents additional loans made by these shareholders,
which were also due in December 2009. The loans bear interest at 10%
per annum. Until such time as final payments are arranged, the loans
remain outstanding and the Company continues to pay interest at 10%
per annum.
|
(ii)
|
On
January 15, 2010, the Company completed the acquisition of Suodi
(note 2). The
payable to original shareholders of Suodi represents the remaining
balance due to the original shareholders of Suodi assumed by the
Company when acquiring Suodi.
|
September
30,
2010
|
December
31,
2009
|
|||||||
Xi'an
Rural Credit Union Zao Yuan Rd. Branch
|
||||||||
Due
July 3, 2010, annual interest is at 8.496 percent, secured by the
Company's
Jun
Jing Yuan I, Han Yuan and Xin Xing Tower projects
|
$
|
-
|
$
|
2,930,017
|
||||
Due
July 2, 2011, annual interest is at 8.614 percent, secured by the
Company's
Jun
Jing Yuan I, Han Yuan and Xin Xing Tower projects
|
2,690,382
|
-
|
||||||
China
Construction Bank, Xi'an Branch
|
||||||||
Due
August 27, 2011, annual interest is at a floating interest rate based on
110% of the
People’s
Bank of China prime rate, secured by the Company's Jun Jing Yuan II
project
|
-
|
3,223,018
|
||||||
Due
September 8, 2012, annual interest is at a floating interest rate based on
110% of the
People’s
Bank of China prime rate, secured by the Company's Jun Jing Yuan II
project
|
-
|
12,452,571
|
||||||
Xinhua
Trust Investments Ltd.
|
||||||||
Due
February 10, 2012, annual interest is at 10 percent, secured by the
24G project
|
22,419,849
|
-
|
||||||
Commercial
Bank Weilai Branch
|
||||||||
Due
August 29, 2010, annual interest is at 10.21 percent, secured by the
Company's
Jun
Jing Yuan I and XinXing Tower projects
|
-
|
5,127,528
|
||||||
Annual
interest is at 7.29 percent, secured by the Company's Jun Jing Yuan I and
XinXing
Tower
projects and guaranteed by Tsining. $747,328 is payable on December 20,
2010;
$747,328
is payable on March 20, 2011; $1,494,657 is payable on June 20, 2011,
and
$1,793,588
is payable on August 29, 2011
|
4,782,901
|
-
|
||||||
Bank
of Beijing, Xi’an Branch
|
||||||||
Due
December 10, 2012, annual interest is at the prime rate of People’s
Bank of China,
secured
by the PuHua project with a minimum repayment of $7.47 million required
by
December
31, 2011.
|
22,419,849
|
12,452,571
|
||||||
Total
|
$
|
52,312,981
|
$
|
36,185,705
|
Fair
Value Measurements Using
|
Assets/Liabilities
|
|||||||||||||||
Level
1
|
Level
2
|
Level3
|
At
Fair Value
|
|||||||||||||
Warrants
liability
|
$
|
-
|
$
|
2,090,720
|
$
|
-
|
$
|
2,090,720
|
||||||||
Fair
value of embedded derivatives
|
-
|
3,078,576
|
-
|
3,078,576
|
||||||||||||
Total
|
$
|
-
|
$
|
5,169,296
|
$
|
-
|
$
|
5,169,296
|
Fair
Value Measurements Using
|
Assets/Liabilities
|
|||||||||||||||
Level
1
|
Level
2
|
Level3
|
At
Fair Value
|
|||||||||||||
Cash
equivalents
|
$
|
4,395,025
|
$
|
-
|
$
|
-
|
$
|
4,395,025
|
||||||||
Warrants
liability
|
-
|
5,074,191
|
-
|
5,074,191
|
||||||||||||
Fair
value of embedded derivatives
|
-
|
3,991,047
|
-
|
3,991,047
|
||||||||||||
Total
|
$
|
4,395,025
|
$
|
9,065,238
|
-
|
$
|
13,460,263
|
Immediately
before the
Amendment
date of
June
10, 2010
|
Immediately
after the
Amendment
date of
June
10, 2010
|
Loss
on
extinguishment
of
debt
recognized
|
||||||||||
Fair
value of warrants liability
|
$ | 1,370,585 | $ | 1,631,525 | $ | 260,940 | ||||||
Fair
value of embedded derivatives
|
1,570,542 | 3,490,094 | 1,919,552 | |||||||||
Total
|
$ | 2,941,127 | $ | 5,121,619 | $ | 2,180,492 |
Expected
life
|
2.64
- 2.72 years
|
|||
Expected
volatility
|
105 | % | ||
Risk-free
interest rate
|
1.10 - 1.14 | % | ||
Dividend
yield
|
0 | % |
September 30,
2010
|
December 31, 2009
|
|||||||
Expected
life
|
2.33
- 2.42 years
|
3.08
– 3.16 years
|
||||||
Expected
volatility
|
105 | % | 105 | % | ||||
Risk-free
interest rate
|
0.49 - 0.51 | % | 1.74% - 1.78 | % | ||||
Dividend
yield
|
0 | % | 0 | % |
|
1.
|
As
at December 31, 2009, the Company had accrued $252,118 of stock-based
compensation to the former CFO and directors as common stock subscribed. A
total of 62,014 shares of common stock were issued on January 19,
2010.
|
|
2.
|
The Company
initially issued 1,118,403 shares of common stock for the acquisition
of Suodi (note
2). The shares were valued at $5,031,695 based on a price per share
of $4.50, the closing price of the Company’s common stock on Nasdaq on
January 15, 2010, the day the acquisition of Suodi
closed.
|
|
3.
|
35,936
warrants issued in 2008 were exercised on a cashless basis and 17,968
shares of common stock were issued. The 35,936 warrants were valued at
$41,344 upon exercise and were recorded as additional paid in
capital.
|
|
4.
|
The
original shareholders of Suodi will return 398,023 shares of common stock
to the Company (note
2). The common stock was valued at
$1,791,104.
|
September 30, 2010
|
December 31, 2009
|
|||||
Expected
life
|
1.61
years
|
2.36
years
|
||||
Expected
volatility
|
105%
|
105%
|
||||
Risk-free
interest rate
|
0.36%
|
1.33%
|
||||
Dividend
yield
|
0%
|
0%
|
Number of
Warrants
Outstanding
|
Weighted Average
Exercise
Price
|
|||||||
December
31, 2009
|
3,976,883
|
$
|
5.07
|
|||||
Exercised
|
35,936
|
6.07
|
||||||
Expired
|
-
|
-
|
||||||
September
30, 2010
|
3,940,947
|
$
|
5.06
|
Outstanding Warrants
|
|||||
Exercise
Price
|
Number
|
Average Remaining
Contractual Life
|
|||
$
|
4.50
|
2,539,416
|
1.61
years
|
||
$
|
6.07
|
1,401,531
|
2.42
years
|
||
$
|
5.06
|
3,940,947
|
1.90
years
|
For
the three months ended
|
For
the nine months ended
|
|||||||||||||||
September
30, 2010 |
September
30, 2009 |
September
30, 2010 |
September
30, 2009 |
|||||||||||||
Interest
income
|
$ | 57,484 | $ | 87,650 | $ | 235,576 | $ | 128,528 | ||||||||
Government
reimbursement of infrastructure costs
|
- | 259,837 | - | 1,213,127 | ||||||||||||
Rental
income
|
201,778 | 643,861 | 1,042,715 | 1,812,814 | ||||||||||||
Income
from property management services
|
788,456 | 116,710 | 2,264,897 | 322,313 | ||||||||||||
Gain
on disposal of fixed assets
|
265,812 | - | 287,460 | 16,945 | ||||||||||||
Gain
on disposal of asset held for sale
|
1,134,675 | - | 1,134,675 | - | ||||||||||||
Miscellaneous
income
|
144,648 | 44,350 | 182,792 | 195,632 | ||||||||||||
$ | 2,592,853 | $ | 1,152,408 | $ | 5,148,115 | $ | 3,689,359 |
3
months
|
3
months
|
9
months
|
9
months
|
|||||||||||||
September
30, 2010
|
September
30, 2009
|
September
30, 2010
|
September
30, 2009
|
|||||||||||||
Numerator
|
||||||||||||||||
Net
income attributable to
China
Housing & Land Development, Inc. – basic
|
$ | 6,475,466 | $ | 12,714,128 | $ | 932,303 | $ | 3,519,860 | ||||||||
Effect
of dilutive securities
|
||||||||||||||||
Warrants –
change in fair value
|
(405,821 | ) | (2,380,672 | ) | (369,884 | ) | - | |||||||||
Convertible
debt
–
change in fair value and interest expense
|
(595,064 | ) | (2,555,212 | ) | (2,319,064 | ) | - | |||||||||
Income
(loss) attributable to
China
Housing & Land Development, Inc. – diluted
|
$ | 5,474,581 | $ | 7,778,244 | $ | (1,756,645 | ) | $ | 3,519,860 | |||||||
Denominator
|
||||||||||||||||
Weighted
average shares outstanding – basic
|
33,082,573 | 31,134,137 | 32,911,414 | 30,987,760 | ||||||||||||
Effect
of dilutive securities
Common
Stock subscribed
|
- | 27,278 | - | 9,193 | ||||||||||||
Warrants
|
701,547 | 195,039 | 291,706 | |||||||||||||
Convertible
debt
|
3,590,664 | 1,615,799 | 2,433,234 | - | ||||||||||||
Weighted
average shares outstanding – diluted
|
37,374,784 | 32,972,253 | 35,636,354 | 30,996,953 | ||||||||||||
Earnings
per share
|
||||||||||||||||
Basic
earnings per share
|
$ | 0.20 | $ | 0.41 | $ | 0.03 | $ | 0.11 | ||||||||
Diluted
earnings (loss) per share
|
$ | 0.15 | $ | 0.24 | $ | (0.05 | ) | $ | 0.11 |
Payment
due by period
|
||||||||||||||||||||||||||||
Commitments
and Contingencies
|
Total
|
Less
than
1
year
|
1-2
years
|
2-3
years
|
3-4
years
|
4-5
years
|
After
5
years
|
|||||||||||||||||||||
Operating
leases
|
$ | 806,405 | $ | 171,731 | $ | 100,739 | $ | 78,137 | $ | 78,137 | $ | 78,137 | $ | 299,524 | ||||||||||||||
Consulting
contract
|
280,248 | 280,248 | - | - | - | - | - | |||||||||||||||||||||
Land
use rights
|
3,587,176 | 941,634 | 2,645,542 | - | - | - | - | |||||||||||||||||||||
Acquisition
of Xinxing Construction
|
4,483,970 | 4,483,970 | - | - | - | - | - | |||||||||||||||||||||
Total
|
$ | 9,157,799 | $ | 5,877,583 | $ | 2,746,281 | $ | 78,137 | $ | 78,137 | $ | 78,137 | $ | 299,524 |
September
30,
2010
|
December
31,
2009
|
|||||||
Fair
value of warrants liability
|
$
|
2,090,720
|
$
|
5,074,191
|
||||
Fair
value of embedded derivatives
|
$
|
3,078,576
|
$
|
3,991,047
|
Investor
Warrants:
|
9/30/2010
|
12/31/2009
|
||||||
Strike
price
|
6.07
|
6.07
|
||||||
Market
price
|
2.00
|
4.13
|
||||||
Valuation
date
|
9/30/2010
|
12/31/2009
|
||||||
Expiry
date
|
2/28/2013
|
2/28/2013
|
||||||
Volatility
|
105.00
|
%
|
105.00
|
%
|
||||
Risk
free rate
|
0.51
|
%
|
1.78
|
%
|
||||
Option
value
|
0.70453
|
2.43971
|
||||||
#
of warrants
|
1,401,531
|
1,437,467
|
||||||
Value
|
1,401,531
|
3,507,000
|
Investor Warrants: 5-7-2007
|
9/30/2010
|
12/31/2009
|
||||||
Strike
price
|
4.50
|
4.50
|
||||||
Market
price
|
2.00
|
4.13
|
||||||
Valuation
date
|
9/30/2010
|
12/31/2009
|
||||||
Expiry
date
|
5/9/2012
|
5/9/2012
|
||||||
Vlolatility
|
105.00
|
%
|
105.00
|
%
|
||||
Risk
free rate
|
0.36
|
%
|
1.33
|
%
|
||||
Option
value
|
0.27136
|
0.61711
|
||||||
#
of warrants
|
2,539,416
|
2,539,416
|
||||||
Value
|
689,189
|
1,567,191
|
Conversion
Option Valuation:
|
9/30/2010
|
12/31/2009
|
||||||
Strike
price
|
5.57
|
5.57
|
||||||
Market
price
|
2.00
|
4.13
|
||||||
Valuation
date
|
9/30/2010
|
12/31/2009
|
||||||
Expiry
date
|
1/28/2013
|
1/28/2013
|
||||||
Volatility
|
105.00
|
%
|
105.00
|
%
|
||||
Risk
free rate
|
0.49
|
%
|
1.74
|
%
|
||||
Option
value
|
0.85738
|
2.47002
|
||||||
Host
Value – principal
|
20,000,000
|
9,000,000
|
||||||
Host
Value – interest
|
0
|
0
|
||||||
Shares
issuable on conversion (1)
|
3,590,664
|
1,615,799
|
||||||
Option
value – principal
|
3,078,576
|
3,991,048
|
||||||
Derivative
value
|
3,078,576
|
3,991,048
|
September
30, 2010
|
December
31, 2009
|
|||||||
Finished
projects
|
$
|
11,053,744
|
$
|
20,417,820
|
||||
Construction
in progress
|
99,662,509
|
82,585,709
|
||||||
Total
real estate held for development or sale
|
$
|
110,716,253
|
$
|
103,003,529
|
September
30, 2010
|
December
31, 2009
|
|||||||
Intangible
acquired
|
$
|
48,268,223
|
$
|
47,310,765
|
||||
Accumulated
amortization
|
(6,076,159)
|
(5,955,631
|
)
|
|||||
Intangible
assets, net
|
$
|
42,192,065
|
$
|
41,355,134
|
September
30, 2010
|
December
31, 2009
|
|||||||
Deposits
on land use rights
|
58,771,753
|
28,084,346
|
▪
|
High-rise
apartment buildings, typically 19 to 33 stories, usually constructed of
steel-reinforced concrete that are completed within approximately 24
months of securing all required
permits.
|
▪
|
Mid-rise
apartment buildings, typically 7 to 18 stories, usually constructed of
steel-reinforced concrete that are completed within 12 to 18 months
of securing all required
permits.
|
▪
|
Low-rise
apartment buildings and villas, typically 2 to 6 stories, often
constructed of steel-reinforced concrete that are completed within
approximately 12 months of securing all required
permits.
|
▪
|
Projects
in planning, in which we have purchased the development and or land
use rights for parcels of land as part of our project development
pipeline. The completion of projects on these sites is subject to adequate
financing, permits, licensing and certain market
conditions;
|
▪
|
Projects
in process, which include developments where we have typically secured the
development and land use rights, and where the site planning,
architecture, engineering and infrastructure work is in
progress;
|
▪
|
Projects
under construction, where the building construction has started but has
not yet been completed; and
|
▪
|
Completed
projects with units available for sale, where the construction has been
finished and most of the units in the buildings have been sold or
leased.
|
Project name
|
Type of
Projects
|
Actual or
Estimated
Construction
Period
|
Actual or
Estimated
Pre-sale
Commencement
Date
|
Total Site
Area
(m2)
|
Total GFA
(m2)
|
Sold GFA by
September
30, 2010
(m2)
|
||||||||||||||||||||||||||||||||||
JunJing
II
Phase
Two
|
Multi-Family
residential
&
Commercial
|
Q2/2009
-
Q2/2011
|
Q3/2009
|
29,800
|
122,136
|
114,878
|
||||||||||||||||||||||||||||||||||
Puhua
Phase One
|
Multi-Family
residential
&
Commercial
|
Q2/2009
-
Q3/2011
|
Q4/2009
|
47,600
|
139,730
|
71,125
|
||||||||||||||||||||||||||||||||||
Puhua
Phase Two
|
Multi-Family
residential
&
Commercial
|
Q2/2010
-Q3/2012
|
Q2/2010
|
47.300
|
218,635
|
39,516
|
Project name
|
Total
Number of
Units
|
Number of
Units sold by
September
30, 2010
|
Percentage
of Completion by September 30, 2010
|
Estimated
Revenue
($ million)
|
Contract
Revenue by
September
30, 2010
($ million)
|
Recognized
Revenue by
September
30,
2010
($ million)
|
||||||||||||
JunJing
II
Phase
Two
|
1,015
|
985
|
86.8%
|
93.4
|
88.9
|
77.9
|
||||||||||||
Puhua
Phase One
|
840
|
597
|
49.7%
|
98.3
|
41.5
|
29.8
|
||||||||||||
Puhua
Phase Two
|
1,284
|
138
|
26.6%
|
177.0
|
12.6
|
3.6
|
Project
name
|
Type of
Projects
|
Estimated
Construction
Period
|
Estimated
Pre-sale
Commencement
Date
|
Total Site
Area
(m2)
|
Total GFA
(m2)
|
Total
Number of
Units
|
|||||||||||||||
Baqiao
New
Development
Zone
|
Land
Development
|
2009
- 2020
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
JunJing
III
|
Multi-Family
residential
&
Commercial
|
Q3/2010
- Q3/2012
|
Q4/2010
|
7,510
|
47,153
|
434
|
|||||||||||||||
Park
Plaza
|
Multi-Family
residential
&
Commercial
|
Q4/2010
- Q4/2014
|
Q1/2011
|
44,250
|
180,000
|
2,000
|
|||||||||||||||
Golden
Bay
|
Multi-Family
residential
&
Commercial
|
Q4/2010
- Q4/2014
|
Q2/2011
|
146,099
|
378,887
|
N/A
|
Project name
|
Type of
Projects
|
Completion
Date
|
Total Site
Area
(m2)
|
Total GFA
(m2)
|
Total
Number of
Units
|
Number of
Units sold by
September
30, 2010
|
||||||||||||||||
JunJing
II Phase One
|
Multi-Family
residential
&
Commercial
|
Q4/2009
|
39,524
|
141,601
|
1,193
|
1,186
|
||||||||||||||||
Tsining
Home IN
|
Multi-Family
residential
&
Commercial
|
Q4/2003
|
8,483
|
30,072
|
215
|
213
|
||||||||||||||||
Tsining-24G
|
Hotel,
Commercial
|
Q2/2006
|
8,227
|
43,563
|
773
|
766
|
||||||||||||||||
JunJing
I
|
Multi-Family
residential
&
Commercial
|
Q3/2006
|
55,588
|
167,931
|
1,671
|
1,644
|
Three months
|
Three months
|
|||||||
ended
|
ended
|
|||||||
Revenues by project:
|
September
30, 2010
|
September
30, 2009
|
||||||
US
dollars
|
||||||||
Project
Under Construction
|
||||||||
Tsining
JunJing II Phase One (Under construction on September 30,
2009)
|
$
|
-
|
$
|
12,130,788
|
||||
Tsining
JunJing II Phase Two
|
15,022,903
|
8,804,441
|
||||||
Puhua
Phase One
|
10,104,983
|
-
|
||||||
Puhua
Phase Two
|
2,977,388
|
-
|
||||||
-
|
-
|
|||||||
Projects
Completed
|
||||||||
Tsining
JunJing II Phase One
|
1,200,153
|
|||||||
Tsining
JunJing I
|
506,270
|
(88,081)
|
||||||
Tsining-24G
|
1,565,565
|
1,588,845
|
||||||
Additional
Project
|
78,659
|
292,289
|
||||||
$
|
31,455,921
|
$
|
22,728,282
|
3 Months Ended
|
3 Months Ended
|
|||||||
Revenues by project:
|
September
30, 2010
|
September
30, 2009
|
||||||
US$
|
||||||||
Project
Under Construction
|
- | |||||||
Puhua
Phase One Project contract sale
|
$ | 12,108,057 | - | |||||
Revenue
|
$ | 10,104,983 | - | |||||
Total
gross floor area (GFA) available for sale
|
139,730 | - | ||||||
GFA
sold during the period
|
14,145 | - | ||||||
Remaining
GFA available for sale
|
68,605 | - | ||||||
Phase
one percentage of completion
|
49.7 | % | - | |||||
Percentage
GFA sold during the period
|
10.1 | % | - | |||||
Percentage
GFA sold to date
|
45.4 | % | - | |||||
Average
sales price per GFA
|
850 | |||||||
|
||||||||
Puhua
Phase Two Project contract sale
|
$ | 9,538,222 | ||||||
Revenue
|
$ | 2,977,388 | ||||||
Total
gross floor area (GFA) available for sale
|
218,635 | |||||||
GFA
sold during the period
|
12,768 | |||||||
Remaining
GFA available for sale
|
179,119 | |||||||
Phase
two percentage of completion
|
26.6 | % | ||||||
Percentage
GFA sold during the period
|
5.8 | % | ||||||
Percentage
GFA sold to date
|
8.7 | % | ||||||
Average
sales price per GFA
|
747 | |||||||
Tsining
JunJing II Phase Two contract sales
|
8,515,737 | $ | 17,130,432 | |||||
Revenue
|
$ | 15,022,403 | $ | 8,804,441 | ||||
Total
gross floor area (GFA) available for sale
|
122,136 | 112,556 | ||||||
GFA
sold during the period
|
9,931 | 23,606 | ||||||
Remaining
GFA available for sale
|
7,258 | 86,494 | ||||||
Percentage
of completion
|
86.8 | % | 47.2 | % | ||||
Percentage
GFA sold during the period
|
8.1 | % | 21.0 | % | ||||
Percentage
GFA sold to date
|
94.1 | % | 23.2 | % | ||||
Average
sales price per GFA
|
$ | 857 | $ | 726 | ||||
Tsining
JunJing II Phase One contract sales (Revenues from the project was
recorded under project under construction in 2009 and recorded under
completed project in 2010)
|
$ | 1,200,153 | $ | 4,824,465 | ||||
Revenue
|
$ | 1,200,153 | $ | 12,130,788 | ||||
Total
gross floor area (GFA) available for sale
|
141,601 | 136,012 | ||||||
GFA
sold during the period
|
1,409 | 6,801 | ||||||
Remaining
GFA available for sale
|
- | 24,549 | ||||||
Percentage
of completion
|
100 | % | 94.4 | % | ||||
Percentage
GFA sold during the period
|
1 | % | 5.0 | % | ||||
Percentage
GFA sold to date
|
100 | % | 82.0 | % | ||||
Average
sales price per GFA
|
$ | 851 | $ | 709 |
Tsining JunJing II Phase two Buildings
|
Percentage of Completion
|
|||
10#
|
92.90
|
%
|
||
11#
|
97.20
|
%
|
||
12#
|
82.50
|
%
|
||
13#
|
93.91
|
%
|
||
16#
|
92.18
|
%
|
||
17#
|
94.96
|
%
|
||
18#
|
86.36
|
%
|
||
19#
|
94.94
|
%
|
||
22#
|
88.65
|
%
|
||
23#
|
88.72
|
%
|
||
24#
|
84.73
|
%
|
||
25#
|
80.89
|
%
|
Puhua Phase one
|
Percentage of Completion
|
|||
1#
|
61.97
|
%
|
||
2#
|
86.51
|
%
|
||
3#
|
35.98
|
%
|
||
4#
|
71.15
|
%
|
||
5#
|
39.49
|
%
|
||
6#
|
61.34
|
%
|
||
7#
|
31.42
|
%
|
||
8#
|
57.10
|
%
|
||
9#
|
56.02
|
%
|
||
10#
|
56.16
|
%
|
||
11#
|
32.71
|
%
|
||
12#
|
51.64
|
%
|
||
13#
|
48.15
|
%
|
Puhua Phase two
|
Percentage of Completion
|
|||
14#
|
26.34
|
%
|
||
15#
|
25.12
|
%
|
||
16#
|
30.37
|
%
|
||
17#
|
33.11
|
%
|
||
18#
|
25.74
|
%
|
||
19#
|
29.00
|
%
|
||
20#
|
29.12
|
%
|
||
21#
|
28.47
|
%
|
||
22#
|
25.37
|
%
|
||
23#
|
30.83
|
%
|
||
24#
|
25.12
|
%
|
For
the three months ended
|
||||||||
September
30,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Interest
income
|
$ | 57,484 | $ | 87,650 | ||||
Government
reimbursement of infrastructure costs (1)
|
- | 259,837 | ||||||
Rental
income (2)
|
201,778 | 643,861 | ||||||
Income
from property management services (3)
|
788,456 | 116,710 | ||||||
Gain
on disposal of fixed assets
|
265,812 | |||||||
Gain
on disposal of asset held for sale (4)
|
1,134,675 | - | ||||||
Miscellaneous
income
|
144,648 | 44,350 | ||||||
$ | 2,592,853 | $ | 1,152,408 |
(1)
|
There
is no more government reimbursement of infrastructure cost in year
2010.
|
(2)
|
The
decrease in rental income is due to sale of certain rental
properties.
|
(3)
|
The
increase is due to additional projects, especially JunJing II Phase
I.
|
(4)
|
This
item represents the disposal of a portion of JunJing II shopping mall
area.
|
Immediately
before the Amendment date of
June
10, 2010
|
Immediately
after the Amendment date of
June
10, 2010
|
Loss
on
extinguishment
of debt recognized
|
||||||||||
Fair
value of warrants liability
|
$ | 1,370,585 | $ | 1,631,525 | $ | 260,940 | ||||||
Fair
value of embedded derivatives
|
1,570,542 | 3,490,094 | 1,919,552 | |||||||||
Total
|
$ | 2,941,127 | $ | 5,121,619 | $ | 2,180,492 |
Expected
life
|
2.64
- 2.72 years
|
|||
Expected
volatility
|
105%
|
|||
Risk-free
interest rate
|
1.10
- 1.14%
|
|||
Dividend
yield
|
0%
|
Nine months
|
Nine months
|
|||||||
ended
|
ended
|
|||||||
Revenues by project:
|
September
30, 2010
|
September
30, 2009
|
||||||
US
dollars
|
||||||||
Project
Under Construction
|
||||||||
Tsining
JunJing II Phase One (Under construction on September 30,
2009)
|
$
|
-
|
$
|
45,457,017
|
||||
Tsining
JunJing II Phase Two
|
56,135,716
|
9,764,537
|
||||||
Puhua
Phase One
|
29,822,986
|
-
|
||||||
Puhua
Phase Two
|
3,601,898
|
-
|
||||||
-
|
-
|
|||||||
Projects
Completed
|
||||||||
Tsining
JunJing II Phase One
|
4,335,534
|
|||||||
Tsining
JunJing I
|
2,880,109
|
473,878
|
||||||
Tsining-24G
|
1,692,425
|
3,469,461
|
||||||
Additional
Project
|
598,700
|
670,198
|
||||||
$
|
99,067,368
|
$
|
56,835,091
|
Tsining JunJing II Phase two Buildings
|
Percentage of Completion
|
|||
10#
|
92.90
|
%
|
||
11#
|
97.20
|
%
|
||
12#
|
82.50
|
%
|
||
13#
|
93.91
|
%
|
||
16#
|
92.18
|
%
|
||
17#
|
94.96
|
%
|
||
18#
|
86.36
|
%
|
||
19#
|
94.94
|
%
|
||
22#
|
88.65
|
%
|
||
23#
|
88.72
|
%
|
||
24#
|
84.73
|
%
|
||
25#
|
80.89
|
%
|
Puhua Phase one
|
Percentage of Completion
|
|||
1#
|
61.97
|
%
|
||
2#
|
86.51
|
%
|
||
3#
|
35.98
|
%
|
||
4#
|
71.15
|
%
|
||
5#
|
39.49
|
%
|
||
6#
|
61.34
|
%
|
||
7#
|
31.42
|
%
|
||
8#
|
57.10
|
%
|
||
9#
|
56.02
|
%
|
||
10#
|
56.16
|
%
|
||
11#
|
32.71
|
%
|
||
12#
|
51.64
|
%
|
||
13#
|
48.15
|
%
|
Puhua Phase two
|
Percentage of Completion
|
|||
14#
|
26.34
|
%
|
||
15#
|
25.12
|
%
|
||
16#
|
30.37
|
%
|
||
17#
|
33.11
|
%
|
||
18#
|
25.74
|
%
|
||
19#
|
29.00
|
%
|
||
20#
|
29.12
|
%
|
||
21#
|
28.47
|
%
|
||
22#
|
25.37
|
%
|
||
23#
|
30.83
|
%
|
||
24#
|
25.12
|
%
|
For
the nine months ended
|
||||||||
September
30,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Interest
income
|
$ | 235,576 | $ | 128,528 | ||||
Government
reimbursement of infrastructure costs (1)
|
- | 1,213,127 | ||||||
Rental
income (2)
|
1,042,715 | 1,812,814 | ||||||
Income
from property management services (3)
|
2,264,897 | 322,313 | ||||||
Gain
on disposal of fixed assets
|
289,105 | 16,945 | ||||||
Gain
on disposal of asset held for sale (4)
|
1,134,675 | - | ||||||
Miscellaneous
income
|
181,147 | 195,631 | ||||||
$ | 5,148,115 | $ | 3,689,358 |
|
(1)
|
There
is no more government reimbursement of infrastructure cost in year
2010.
|
|
(2)
|
The
decrease of rental income is due to sale of certain rental
properties.
|
|
(3)
|
The
increase is due to additional projects, especially JunJing II Phase
I.
|
|
(4)
|
This
item represents the disposal of a portion of JunJing II shopping mall
area.
|
Payment
due by period
|
||||||||||||||||||||||||||||
Commitments
and Contingencies
|
Total
|
Less
than
1
year
|
1-2
years
|
2-3
years
|
3-4
years
|
4-5
years
|
After
5
years
|
|||||||||||||||||||||
Operating
leases
|
$ | 806,405 | $ | 171,731 | $ | 100,739 | $ | 78,137 | $ | 78,137 | $ | 78,137 | $ | 299,524 | ||||||||||||||
Consulting
contract
|
280,248 | 280,248 | - | - | - | - | - | |||||||||||||||||||||
Land
use rights
|
3,587,176 | 941,634 | 2,645,542 | - | - | - | - | |||||||||||||||||||||
Acquisition
of Xinxing Construction
|
4,483,970 | 4,483,970 | - | - | - | - | - | |||||||||||||||||||||
Total
|
$ | 9,157,799 | $ | 5,877,583 | $ | 2,746,281.1 | $ | 78,137.2 | $ | 78,137 | $ | 78,137 | $ | 299,524 |
September
30,
2010
|
December
31,
2009
|
|||||||
Xi'an
Rural Credit Union Zao Yuan Rd. Branch
|
||||||||
Due
July 3, 2010, annual interest is at 8.496 percent, secured by the
Company's Jun Jing Yuan I, Han Yuan and Xin Xing Tower
projects
|
$
|
-
|
$
|
2,930,017
|
||||
Due
July 2, 2011, annual interest is at 8.614 percent, secured by the
Company's Jun Jing Yuan I, Han Yuan and Xin Xing Tower
projects
|
2,690,382
|
-
|
||||||
China
Construction Bank, Xi'an Branch
|
||||||||
Due
August 27, 2011, annual interest is at a floating interest rate based on
110% of the People’s Bank of China prime rate, secured by the Company's
Jun Jing Yuan II project
|
-
|
3,223,018
|
||||||
Due
September 8, 2012, annual interest is at a floating interest rate based on
110% of the People’s Bank of China prime rate, secured by the Company's
Jun Jing Yuan II project
|
-
|
12,452,571
|
||||||
Xinhua
Trust Investments Ltd.
|
||||||||
Due
February 10, 2012, annual interest is at 10 percent, secured by the
24G project
|
22,419,849
|
-
|
||||||
Commercial
Bank Weilai Branch
|
||||||||
Due
August 29, 2010, annual interest is at 10.21 percent, secured by the
Company's Jun Jing Yuan I and XinXing Tower projects
|
-
|
5,127,528
|
||||||
Annual
interest is at 7.29 percent, secured by the Company's Jun Jing Yuan I and
XinXing Tower projects and guaranteed by Tsining. $747,328 is payable on
December 20, 2010; $747,328 is payable on March 20, 2011; $1,494,657 is
payable on June 20, 2011; $1,793,588 is payable on August 29,
2011
|
4,782,901
|
-
|
||||||
Bank
of Beijing, Xi’an Branch
|
||||||||
Due
December 10, 2012, annual interest is at the prime rate of People’s
Bank of China, secured by the PuHua project with a minimum repayment of
$7.47 million required by December 31, 2011.
|
22,419,849
|
12,452,571
|
||||||
Total
|
$
|
52,312,981
|
$
|
36,185,705
|