10-Q

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)

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Balance Sheets

As of September 30, 2010 and December 31, 2009

 (Unaudited)

	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

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

- 1 - -

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Income

For The Three and Nine Months Ended September 30, 2010 and 2009

(Unaudited)

	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

 The accompanying notes are an integral part of these interim condensed consolidated financial statements.

- 2 - -

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Comprehensive Income (Loss)

For The Three and Nine Months Ended September 30, 2010 and 2009

(Unaudited)

	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

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

- 3 - -

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Cash Flows

For The Nine Months Ended September 30, 2010 and 2009

(Unaudited)

	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

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

- 4 - -

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Interim Condensed Consolidated Statements of Shareholders' Equity

As of September 30, 2010 and December 31, 2009

(Unaudited)

	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

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

- 5 - -

CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES

Notes To Interim Condensed Consolidated Financial Statements

(Unaudited)

Note 1 – Organization and Basis of Presentation

China Housing & Land Development, Inc., (the “Company”) is a Nevada corporation, incorporated on July 6, 2004 under the name Pacific Northwest Productions Inc., (“Pacific”). On May 5, 2006, the Company changed its name to China Housing & Land Development, Inc.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries, Xi'an Tsining Housing Development Company Inc. ("Tsining"), Xi'an New Land Development Co. ("New Land"), Manstate Assets Management Limited (“Manstate”), Xi’an Xinxing Property Management Co., Ltd. (“Xinxing Property”), Puhua (Xi’an) Real Estate Development Co., Ltd. (“Puhua”), Success Hill Investments Limited (“Success Hill”), Wayfast Holdings Limited (“Wayfast”), Clever Advance Limited (“Clever Advance”), Gracemind Holdings Limited (“Gracemind”), Treasure Asia Holdings Limited (Treasure Asia”), Suodi Co., Ltd. (“Suodi”) (see Note 2) and XinXing FangZhou Housing Development Co., Ltd. (“FangZhou”) (collectively, the "Subsidiaries"). FangZhou was incorporated on March 31, 2010 for future real estate development projects. All inter-company balances and transactions have been eliminated on consolidation. The accompanying unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the Company's consolidated financial position as at September 30, 2010 and results of operations and cash flows for the periods ended September 30, 2010 and 2009. These adjustments consist of normal recurring items. The results of operations for any interim period are not necessarily indicative of results for the full year.

The unaudited interim condensed consolidated financial statements are based on accounting principles that are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (“2009 Annual Report”); except as disclosed below. They do not include certain footnote disclosures and financial information normally included in annual consolidated financial statements prepared in accordance with GAAP and, therefore, should be read in conjunction with the audited consolidated financial statements and notes included in the Company's 2009 Annual Report.

Accounting Principles Recently Adopted

In June 2009, the FASB issued FASB Accounting Standard Update (“ASU”) No. 2009-17, “Consolidations (Topic 810): Improvement to Financial Reporting by Enterprises Involved with Variable Interest Entities”. ASU No. 2009-17 eliminates certain scope exceptions previously permitted, provides additional guidance for determining whether an entity is a variable interest entity, and requires companies to more frequently reassess whether they must consolidate variable interest entities. The changes also replace the previously required quantitative approach to determining the primary beneficiary of a variable interest entity with a requirement for an enterprise to perform a qualitative analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. The adoption on January 1, 2010 of this standard did not have a material effect on the Company’s consolidated financial statements, as the Company does not currently have any variable interest or interests that give it a controlling financial interest in a variable interest entity.

In January 2010, the FASB issued ASU 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements”. ASU No. 2010-06 amends existing disclosure requirements about fair value measurement and clarifies and provides additional disclosure requirements related to recurring and non-recurring fair value measurements. ASU No. 2010-06 became effective for the Company on January 1, 2010. The adoption of this ASU did not have a material impact on the Company‘s consolidated financial statements.

In February 2010, the FASB issued ASU 2010-09, “Subsequent Events (ASC Topic 855) Amendments to Certain Recognition and Disclosure Requirements”.  ASU 2010-09 requires SEC filers to evaluate subsequent events through the date the financial statements are issued and removes the requirement to disclose a date in both issued and revised financial statements through which subsequent events were evaluated.   The Company adopted the pronouncement for interim periods ending after March 31, 2010.  The adoption did not have a material effect on the Company’s consolidated financial statements.

- 6 - -

Note 1 – Organization and Basis of Presentation (continued)

Accounting Principles Recently Adopted (continued)

In March 2010, the FASB issued ASU No. 2010-11, “Scope Exception Related to Embedded Credit Derivatives”. The provisions of ASU 2010-11 amend ASC Topic 815, “Derivatives and Hedging”, to provide clarification on the bifurcation scope exception for embedded credit derivative features. ASU 2010-11 was effective for the Company on July 1, 2010. The adoption did not have material impact on the Company’s consolidated financial statements.

New Accounting Pronouncement Not Yet Adopted

In April 2010, the FASB issued ASU 2010-13 “Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades”. ASU 2010-13 updates ASC 718 to codify the consensus reached in EITF Issue No. 09-J, “Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades”. ASU 2010-13 clarifies that share-based payment awards with an exercise price denominated in the currency of a market in which a substantial portion of the underlying equity security trades should not be considered to meet the criteria requiring classification as a liability. The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. Early adoption is permitted. The provisions of ASU 2010-13 are not expected to have an impact on the Company’s consolidated financial statements.

In July 2010, the FASB issued ASU 2010-20 “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses” which expands the disclosure requirements concerning the credit quality of an entity’s financing receivables and its allowance for credit losses. ASU 2010-20 is effective for interim and annual reporting periods beginning on or after December 15, 2010. The Company does not expect the adoption of this guidance will have a material impact on the Company’s consolidated financial statements.

Foreign exchange rates used:

	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

Reclassifications

Certain reclassifications have been made to the prior periods’ financial statements to conform to the 2010 presentation. The effects of the reclassifications were not material to the Company’s unaudited interim condensed consolidated financial statements.

Note 2 – Acquisition

On January 15, 2010, Tsining signed an equity purchase agreement with the original shareholders of Suodi and acquired 100% ownership of Suodi. Suodi is engaged in land development in Xian’s rural area and Suodi’s only significant asset is a land use right to a tract of land located in the rural area of Xian. The Company intends to develop the land held by Suodi.

The purchase was closed with cash payments and Company’s own shares.

The cash payments consisted of (1) an initial cash payment of $0.73 million (RMB 5 million) payable on January 20, 2010; (2) an additional cash payment of $0.73 million (RMB 5 million) payable on March 30, 2010; and (3) a final cash payment of $1.48 million (RMB 10 million) payable on June 30, 2010. The Company has paid the entire amount as of September 30, 2010 according to the payment schedule.

During the first quarter of fiscal 2010, the Company initially issued 1,118,403 shares to the original shareholders of Suodi. As an ongoing negotiation effort, the Company and the original shareholders of Suodi finalized the number of shares to be 720,380 on August 10, 2010. The difference of 398,023 common stock were returned to the Company on October 1, 2010.

The measurement date of the Suodi acquisition was determined to be January 15, 2010, the date the equity purchase agreement was signed. The fair value of the purchase price was determined by adding $2,937,180 cash (RMB 20 million) payments and $3,241,710, the fair value of the 720,380 shares issued 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 measurement date of the acquisition.

- 7 - -

Note 2 – Acquisition (continued)

Since the only significant asset acquired is the land use right for a tract of land and the Company did not retain any employees of Suodi, the acquired assets do not constitute a business and the acquisition is not a business combination. Therefore, the acquisition was accounted for as an asset acquisition and the purchase price was allocated to the identifiable assets and liabilities assumed based on their estimated fair values.

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

Note 3 – Mandatorily Redeemable Preferred Stock and Noncontrolling Interest

On November 5, 2008, the Company and Prax Capital (“Prax”) entered into a joint venture agreement to develop 79 acres within China Housing’s Baqiao project located in Xi’an. Prax invested $29.3 million for a 25% interest in Puhua through obtaining 1,000 Class A shares of Success Hill (“Class A Shares”) with various distribution rights. Prax’s initial investments were recorded as noncontrolling interests in the consolidated financial statement.

During the first quarter of 2010, the Company proposed to redeem Prax’s 1,000 Class A shares in Success Hill in order to fix the maximum return on Prax’s initial investment. Both parties then entered into an Amended and Restated Shareholders’ Agreement on May 10, 2010. Effective January 1, 2010, the Company agreed with Prax to redeem all Prax’s Class A Shares within three years by December 31, 2012 for consideration of the USD equivalent of $86.09 million (RMB 576 million).

As Prax’s interest in the consolidated subsidiaries meets the definition of a mandatorily redeemable financial instrument, it is reported within liabilities as mandatorily redeemable noncontrolling interests in subsidiaries on the Company’s consolidated balance sheet and initially measured at the fair value of cash that would be due and payable to Prax under the Amended and Restated Shareholder agreement.

As at January 1, 2010, the Company recorded a liability of $42,600,511 reflecting the fair value of the redemption amount of Prax’s interest and eliminated the original noncontrolling interest in the equity on the consolidated balance sheet. The difference of $14,229,043 between the carrying value of the original noncontrolling interests and the fair value of redemption amount of Prax’s interest has been reflected as a charge to noncontrolling interests. Subsequently, the Company recorded accretion cost on these redeemable noncontrolling interests using the effective interest method based on effective interest rate of 45%. The related accretion cost incurred for the three and nine months ended September 30, 2010 were $5,044,349 and $13,752,833, respectively (2009 - $Nil and $Nil) and was capitalized in real estate construction in progress.

	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

The mandatory redemption schedules are as follow:

Date
December 31, 2010	$	29,893,132
December 31, 2011		29,893,132
December 25, 2012		26,305,956
Total	$	86,092,220

- 8 - -

Note 4 – Supplemental Disclosure of Cash Flow Information

Income taxes paid for the nine months ended September 30, 2010 and 2009 amounted to $320,530 and $42,135, respectively. Interest paid for the nine months ended September 30, 2010 and 2009 amounted to $7,389,232 and $2,223,011, respectively.

The following non-cash investing and financing activities are included in the interim condensed consolidated financial statements:

(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.

Note 5 – Other Receivables, Prepaid Expenses and Deposits

Other receivables and prepaid expenses consisted of the following at September 30, 2010 and December 31, 2009:

	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

Note 6 – Real Estate Held for Development or Sale

The following summarizes the components of real estate inventories at September 30, 2010 and December 31, 2009:

	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

Interest on debts and accretion costs on mandatorily redeemable noncontrolling interest in subsidiaries incurred by the Company for the three and nine months ended September 30, 2010 was $6,420,373 and $18,523,786, respectively (September 30, 2009 - $1,057,898 and $3,450,234). The Company capitalized $6,025,188 in construction in progress during the three months ended September 30, 2010 (September 30, 2009 - $640,089), and the Company capitalized $17,251,537 in construction in progress during the nine months ended September 30, 2010 (September 30, 2009 - $2,251,580).

- 9 - -

Note 7 – Property and Equipment

Property and equipment consisted of the following at September 30, 2010 and December 31, 2009:

	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

Depreciation expense for the three months ended September 30, 2010 and 2009 amounted to $307,588 and $156,762, respectively. Depreciation expense for the nine months ended September 30, 2010 and 2009 amounted to $901,085 and $471,788, respectively. The depreciation expense was included in the selling, general and administrative expenses.

Note 8 – Intangible Asset

The intangible asset consists of the following at September 30, 2010 and December 31, 2009:

	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

Amortization expense for the three and nine months ended September 30, 2010 amounted to $Nil and $Nil, respectively (September 30, 2009 - $Nil and $4,360,003). The amortization expense was capitalized in the real estate construction in progress.

Note 9 – Accrued Expenses

	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

Note 10 – Loans payable

	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.

- 10 - -

Note 11 – Loans from Employees

The Company has borrowed monies from certain employees to fund the Company’s construction projects. These unsecured loans bear interest at rates ranging between 8% and 10% per annum and are available to all employees.

Included in these loans are loans from the Company’s President and an immediate family member of the President for $672,595 (December 31, 2009 - $Nil) and $1,055,228 (December 31, 2009 - $854,100), respectively.

Note 12 – Bank loans

Bank loans represent amounts due to various banks. These loans generally can be renewed with the banks when they expire. Bank loans as of September 30, 2010 and December 31, 2009 consisted of the following:

	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

All loans are used to finance construction projects. All interest paid was capitalized and allocated to various real estate construction projects.

On June 28, 2008, the Company signed a strategic partnership Memorandum of Understanding (“MOU”) with China Construction Bank Xi’an Branch that established a RMB 1 billion (approximately US$149 million) credit line for real estate development by the Company and its subsidiaries. All loans from China Construction Bank Xi’an Branch were fully repaid as at September 30, 2010.

Under the MOU, the Company and its Subsidiaries are required to set up a basic deposit account with China Construction Bank, to maintain a current ratio of not less than 90% and to maintain liabilities to assets ratio of not greater than 65%. Due to the change of corporate structure of the Company, China Construction Bank Xi’an Branch has clarified the current ratio and liabilities to assets ratio calculations to only include the financial information of Tsining and New Land. As of September 30, 2010, the current ratio was approximately 112.6%, and the liabilities to assets ratio was approximately 58.1%.

The bank loans balances were secured by certain of the Company’s real estate held for development or sales with a carrying value of $13,987,502 (December 31, 2009 - $91,657,685) and certain buildings and income producing properties and improvements with a carrying value of $9,747,369 at September 30, 2010 (December 31, 2009 - $9,738,804). The weighted average interest rate on bank loans as at September 30, 2010 was 11.70% (December 31, 2009 – 6.6%).

- 11 - -

Note 13 – Fair Value of Financial Instruments

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of the measurement date, September 30, 2010, and the basis for that measurement, by level within the fair value hierarchy:

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

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of the measurement date, December 31, 2009, and the basis for that measurement, by level within the fair value hierarchy:

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

Note 14 – Convertible Debt

On January 28, 2008, the Company issued Senior Secured Convertible Debt due in 2013 (the "Convertible Debt") and warrants to subscribe for common shares for an aggregate purchase price of $20 million. The Convertible Debt bears interest at 5% per annum (computed based on the actual days elapsed in a period of 360 days) of the RMB notional principle amount, payable quarterly in arrears in U.S. Dollars on the first business day of each calendar quarter and on the maturity date. In addition, 1,437,467 five-year warrants were granted with a strike price of $6.07 per common share and are callable if certain stock price thresholds are met. Approximately 215,620 warrants are also available as a management incentive if certain milestones are met. If the aggregate principal amount of the Convertible Debt is reduced to $10 million or less as a result of repayment by the Company or as a result of any optional conversion by the Investors or mandatory conversion by the Company of the Convertible Debt, then each Investor agrees to surrender to the Company warrants for an aggregate number of shares of common stock equal to such Investors’ pro rata share of 107,810 shares. If the aggregate principal amount of the Convertible Debt is reduced to $Nil as a result of repayment by the Company or as a result of any optional conversion by the Investors or mandatory conversion by the Company of the Convertible Debt, then each Investor agrees to surrender to the Company warrants in addition to the 107,810 warrants surrendered pursuant to the $10 million reduction noted above for an aggregate number of shares of common stock equal to such Investor’s pro rata share of 107,810 shares. The Company may hold in treasury and reissue to the officers and directors of the Company any warrants surrendered by the Investors. As of September 30, 2010, the Company did not repay any principle of Convertible Debt and the Investors did not deliver any optional conversion requests to the Company.

The Investors have the right to convert up to 45% ($9 million) of the principal amount of the Convertible Debt into common shares at an initial conversion price of $5.57, subject to an upward adjustment. The Company, at its discretion, may redeem the remaining non-convertible portion of Convertible Debt ($11 million) (the “Non-convertible Portion”) at 100% of the principle amount, plus any accrued and unpaid interest. The warrants associated with the Convertible Debt grant the Investors the right to acquire shares of common stock at $6.07 per share, subject to customary anti-dilution adjustments. The warrants may be exercised to purchase common stock at any time up to and including February 28, 2013.

On June 10, 2010, the Company and the Investors entered into an amendment (the “Amendment”), which grants investors the rights to convert the $11 million Non-convertible Portion of the Convertible Debt at an conversion price of $5.57. The rights expire 5 business days after the effective date that a registration statement is filed by the Company registering the shares to be issued on the conversion.

- 12 - -

Note 14 – Convertible Debt (continued)

The warrants issued in 2008 were amended as well to permit the investors to exercise the warrants on a cashless basis and receive one common share for every two warrants held if the investor converts at least 55% of face amount of Convertible Debt held.

Upon entering the Amendment, certain investors have agreed to convert 55% of the aggregate face amount of debt to common shares and convert the warrants by receiving one common share for every two warrants held within 5 business days after the effective date of the registration statement filed by the Company.

Due to the substantive change of the conversion feature on the Non-convertible portion, the Amendment is treated as a debt extinguishment on the Non-convertible portion. The deemed proceeds of the revised $11 million Non-convertible Portion are allocated to the embedded derivative and to the cost associated with the change in the terms of the outstanding warrants. The remaining proceeds were then allocated to the carrying value of the convertible debt.

During the three and nine months period ended September 30, 2010, the Company recorded a loss on extinguishment of debt of $Nil and $2,180,492 (2009 -$Nil and $Nil), respectively, which consist of:

	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

The fair value of warrants and embedded derivatives immediately before and after the Amendment date were calculated using the Cox-Ross-Rubinstein Binomial Lattice Model (the “CRR Model”) with the following assumptions:

Expected life	2.64 - 2.72 years
Expected volatility		105	%
Risk-free interest rate		1.10 - 1.14	%
Dividend yield		0	%

The fair value change on the debt portion was not material.

The Convertible Debt is secured by a first priority, perfected security interest in certain shares of common stock of Lu Pingji, the Chairman of the Company. The Convertible Debt is subject to events of default customary for convertible securities and for a secured financing.

Both the warrant and embedded conversion option associated with the Convertible Debt meet the definition of a derivative instrument according to the standard, “Accounting for Derivative Instruments and Hedging Activities”.  Because the warrant and the convertible debt are denominated in U.S. dollars but the Company’s functional currency is the Chinese RMB, the exemption from derivative instrument accounting provided by the standard is not available and therefore the warrant and embedded conversion option are recorded as a derivative instrument liability and periodically marked-to-market. The fair value of the warrants and embedded conversion option at September 30, 2010 were determined to be $1,401,531 and $3,078,576, respectively (December 31, 2009 - - $3,507,000 and $3,991,047), using the CRR Model with the following assumptions:

	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	%

For the three months ended September 30, 2010, the Company recorded a decrease in fair value for the warrants and embedded derivatives of $224,605 and $958,688, respectively (September 30, 2009 – decrease of $662,080 and $2,695,306). For the nine months ended September 30, 2010, the Company recorded a decrease in fair value for the warrants and embedded derivatives of $2,064,143 and $2,832,023 respectively (September 30, 2009 – increase of $3,604,502 and $3,017,273), in the unaudited condensed consolidated statement of income (loss).

The carrying value of the Convertible Debt is accreted to its stated amount on maturity using the effective interest method. The effective interest rate was determined to be 15.42%. The carrying value of Convertible Debt on September 30, 2010 was $15,873,701 (December 31, 2009 - $14,834,987). Related interest expense and accretion expense for the three months ended September 30, 2010 was $264,859 and $363,624, respectively (September 30, 2009 - $269,221 and $311,319), and for the nine months ended September 30, 2010 was $791,958 and $1,038,732 respectively (September 30, 2009 - $798,894 and $889,305).

- 13 - -

Note 15 – Shareholders' Equity

Common stock

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.

Warrants

Pursuant to accounting guidance, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settle in a Company's Own Stock", the warrants issued contain a provision permitting the holder to demand payment based on a valuation in certain circumstances. Therefore, the Company recorded the warrants issued through private placements in 2007 as a liability at their fair value on the date of grant and then revalued them to $689,090 at September 30, 2010 (December 31, 2009 - $1,567,191) using the CRR Binomial Lattice Model with the following assumptions:

	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%

The gain from the change in fair value of warrants for the three months ended September 30, 2010 was $181,216 (September 30, 2009 – loss of $662,080), and the gain for the nine months ended September 30, 2010 were $878,002 (September 30, 2009 – loss of $1,353,688).

Including the fair value of warrants associated with the convertible debt (note 14), the total warrant liability as at September 30, 2010 was $2,090,720 (December 31, 2009 - $5,074,191). The total gain from the change in fair value of warrants for the three months ended September 30, 2010 was $405,821 (September 30, 2009 – gain of $3,042,752). The total gain from the change in fair value of warrants for the nine months ended September 30, 2010 was $3,203,085 (September 30, 2009 – loss of $4,012,736).

The following is a summary of the warrant activity:

	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

The following summarizes the weighted-average information about the outstanding warrants as at September 30, 2010:

		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

- 14 - -

Note 16 – Other Income

	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

Note 17 – Earnings (Loss) per Share

Earnings per share for the three and nine months ended September 30, 2010, and 2009 were determined by dividing net income (loss) attributable to China Housing & Land Development, Inc. for the periods by the weighted average number of both basic and diluted shares of common stock and common stock equivalents outstanding.

	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

Note 18 – Commitments and Contingencies

The Company leases part of its office and hotel space under various operating lease agreements with expiry dates between the years 2010 and 2019.

The Company entered into a consulting service contract with a third party. The contract has a set payment schedule which will be realized in less than a year.

The Company also has two land use rights with unpaid balances of approximately $0.9 million and $2.6 million. The balances are not due until the vendor removes the existing building on the land and changes the zoning status of the land use right certificate. Based on the current condition, the Company estimates that the balances will be paid in two years.

The Company entered into an acquisition agreement with Shaanxi Xinxing Construction Co. Ltd. (“Xinxing Construction”) on September 30, 2010 (note 19)for $6,725,955 (RMB 45 million). The Company has paid $2,241,985 (RMB 15 million) (note 5) as a deposit and will pay the remaining balance of $4,483,970 (RMB 30 million) within one year.

All future payments required under the various agreements are summarized below.

	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

- 15 - -

Note 19 – Subsequent Events

The Company signed an Equity Transfer Agreement on September 30, 2010 with the shareholders of Shaanxi Xinxing Construction Co., Limited (“Xinxing Construction”) to acquire all outstanding common shares of Xinxing Construction. Xinxing Construction is one of the Company’s construction contractors. One of the Company’s executive officers’ spouse owns 37.83% of common stock of Xinxing Construction.  The Company expects to achieve better construction quality control and cost reduction through the acquisition of Xinxing Construction.

The total purchase price is approximately $6.73 million (RMB 45 million). The Company has made a $2,241,985 (RMB 15 million) deposit (note 5). The remaining balance will be paid by (1) a cash payment of $1,494,657 (RMB 10 million) payable on October 7, 2010, (2) an additional cash payment of $1,494,657 (RMB 10 million) payable on November 30, 2010 and (3) a final cash payment of $1,494,657 (RMB 10 million) payable on February 28, 2011.

If the Company does not make the scheduled payments within 45 days of the scheduled payment dates, there will be a 1% per month penalty on the scheduled payment amounts if the Company does not make the payments.

Based on the nature of the agreement and mutual understanding between the Company and the shareholders of Xinxing Construction, the original shareholders and management of Xinxing Construction transferred the control and operations of Xingxing Construction to the Company on October 1, 2010.

The acquisition will be treated as business combination. The effective control date is October 1, 2010 and the balance sheet and the operations of Xinxing Construction will be consolidated into the consolidated financial statements of the Corporation effective on the same day.

During the three and nine months ended September 30, 2010, the Company has incurred $3,524,880 and $13,348,295      construction costs, respectively, to Xinxing Construction (September 30, 2009 - $6,539,492 and $13,838,016). The construction costs were recorded as construction in progress and expensed as cost of sales of properties when revenues were recognized.

The Company also had $6,793,121 payable and $3,437,830 prepayments to suppliers to Xinxing Construction as of September 30, 2010 (December 31, 2009 - $8,211,171 and $9,266,910).

- 16 - -

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Form 10-Q are not historical facts and are forward-looking statements, which can be identified by the use of terminology such as estimates, projects, plans, believes, expects, anticipates, intends, or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Form 10-Q reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties, and other factors affecting our operations, market growth, services, products, and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events and conditions that may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation: our ability to attract and retain management to integrate and maintain technical information and management information systems; our ability to raise capital when needed and on acceptable terms and conditions; the intensity of competition; and general economic conditions.

All written and oral forward-looking statements made in connection with this Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.

Critical Accounting Policies and Estimates

We prepare our interim condensed consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of our assets and liabilities, (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these estimates based on our own experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and reasonable assumptions, which together form our basis for making judgments about matters that are inherently uncertain. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

When reading our interim condensed consolidated financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgment and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements.

The unaudited interim condensed consolidated financial statements are based on accounting principles that are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (“2009 Annual Report”). They do not include certain footnote disclosures and financial information normally included in annual consolidated financial statements prepared in accordance with GAAP and, therefore, should be read in conjunction with the audited consolidated financial statements and notes included in the Company's 2009 Annual Report.

Warrants and derivative liability

As of September 30, 2010, the Company has approximately $2.1 million of warrants liability and $3.1 million of fair value of embedded derivatives on the balance sheet, representing approximately 0.9% and 1.3% of the total liabilities, respectively.

We utilize the Cox-Rubinstein-Ross (“CRR”) Binomial Lattice Model to estimate the fair values of warrants liability and embedded derivatives. The CRR model depends on the following assumptions: the Company’s common stock price underlying the warrants; strike price; conversion price; expected life; expected volatility; risk free interest rate; and dividend rate. We used the CRR Binomial Lattice Model for the past 3 years. We do not expect any significant changes to the assumptions except for the common share price and the expected volatility.

We estimate the fair value of warrants liability and embedded derivatives every quarter and recognize the change of fair value as gain or loss on our current quarter consolidated statement of income. The fair values of warrants liability and embedded derivatives have changed during the past few years according to the valuation models and the fair values are positively related to the market share price movement and the volatility.

During the three months ended September 30, 2010, our common stock price experienced fluctuations with the price decreasing from $2.26 on July 1, 2010 to $2.00 on September 30, 2010. The decrease in stock price caused a decrease in fair value for warrants liability and embedded derivatives. As a result, we recognized approximately $0.41 million as a change in fair value of warrants and $0.96 million as a change in fair value of embedded derivatives, which are all non-cash gains.

The following table summarizes the fair value of warrant liability and embedded derivative as at various periods.

	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

- 17 - -

The following tables summarize all the warrants and conversion option outstanding and the assumptions used for their valuations as of September 30, 2010 and December 31, 2009.

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

(1)  The increase of shares issuable on conversion is due to the Amendment entered into by the Company and the Investors, which grants investors the rights to convert the $11 million Non-convertible Portion of the Convertible Debt on June 10, 2010. Please refer to Note 14 to Financial Statements for detailed information.

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Real estate held for development or sale, intangible asset and deposits on land use rights

We evaluate the recoverability of our real estate developments taking into account several factors including, but not limited to, our plans for future operations, prevailing market prices for similar properties and projected cash flows.

We review real estate projects, whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, we measure impairment by comparing the carrying value to the estimated undiscounted future cash flows expected resulting from the use of the assets and their eventual disposition. If the total of the expected undiscounted cash flow is less than the carrying amount of the assets, we recognize an impairment loss based on the fair value of the assets.

Our significant judgments and estimates related to impairment include our determination if an event has occurred to warrant an impairment test. If a test is required, other significant judgments and estimates will include our expectations of future cash flows and the calculation of the fair value of the impaired assets.

When real estate costs are determined to be impaired, they are written down to their estimated net realizable value. The Company evaluates the carrying value for impairment based on the undiscounted future cash flows of the assets. Write-downs of real estate costs deemed impaired are recorded as adjustments to the cost basis. There has been no impairment on real estate inventories and no impairment loss has been recorded for the three and nine months ended September 30, 2010 and 2009.

The following summarizes the components of real estate inventories as at September 30, 2010 and December 31, 2009:

	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

Intangible asset

The Company’s intangible asset is related to the exclusive rights to develop 487 acres of land in the Baqiao area acquired in 2007. The Company believes that the cooperation agreement with Baqiao District Government will be extended after June 2011. Based on the prevailing market condition in Xi’an city we concluded that there is no impairment.

According to the agreement with Baqiao District Government, at the beginning of each year, the Company will prepare the annual work plan and have it approved by Baqiao District Government. The annual work plan will include the detailed projects that will be started during that year and the Baqiao District Government is responsible for the land clearance. Due to the delay of land clearance progress, certain scheduled projects have been postponed. The Baqiao District Government acknowledged the delay and informed us of their intention to extend the agreement. Currently, we have 389 acres of land undeveloped and $42.2 million in intangible assets. If there’s any event that leads the Company to believe it’s unlikely to extend the agreement, we will assess the impairment of the intangible asset and write off the intangible asset from our balance sheet.

As of September 30, 2010 and December 31, 2009, intangible asset consists of the following:

	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

The Company evaluates its intangible assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Based on the estimated future cash flows, the Company records a write-down for impairments, if appropriate. For the three and nine months ended September 30, 2010 and 2009, the Company did not record any impairment loss.

The Company amortized the intangible asset based on the percentage of the profit margin realized over the total expected profit margin to be realized from the 487 acre land in the Baqiao project. Amortization expense for the three months ended September 30, 2010 and 2009 amounted to $0 and $0, respectively. Amortization for the nine months ended September 30, 2010 and 2009 amounted to $0 and $4,360,003, respectively. The amortization for the nine months ended September 30, 2009 was due to the acquisition of land for the Puhua project. The amortization was capitalized in the real estate construction in progress.

Management re-evaluated the expected profit margin from the 487 acres of land regularly and recalculated the intangible amortization related to the 2007 land sales and the 2009 land acquired based on the new estimate.

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Deposits on land use rights

	September 30, 2010		December 31, 2009
Deposits on land use rights		58,771,753		28,084,346

The increase in Deposits on land use rights was mainly due to the deposits the Company paid for land use rights for JunJing III, Park Plaza, and Golden Bay project between December 31, 2009 and September 30, 2010.

The Company conducts regular reviews of the deposits on land use right. After review and assessment, the Company concluded that there was no significant decrease in the market price and therefore no impairment write-down was required. According to E House (China) Real Estate Research Institute the average residential sale price in Xi’an city was stable in the fiscal quarter ended September 30, 2010. The average sale price increased to 6,560 RMB per square meter (approximately US$ 969 per square meter) from 5,862 RMB per square meter (approximately US$ 859 per square meter) in the second quarter 2010, representing about an 11.9% increase quarter-over-quarter.

Material trends and uncertainties that may impact continuing operations

Changes in national and regional economic conditions, as well as in areas where we conduct our operations and where prospective purchasers of our homes live, may result in more caution on the part of homebuyers resulting in fewer home purchases. According to data from the Xi’an Bureau of Statistics, Xi’an city’s real estate transaction volume (in terms of sq. meter signed) increased about 2.4% in the third quarter of 2010 compared to the same period of 2009. All our projects are currently in Xi’an city. During the third quarter of 2010, our revenue generated from the sale of properties increased approximately 38.4% over same period of 2009.

Virtually all purchasers of our homes finance their acquisitions through lenders providing mortgage financing. A substantial increase in mortgage interest rates or unavailability of mortgage financing would adversely affect the ability of prospective homebuyers to obtain the financing they need in order to purchase our homes, as well as the ability of prospective move-up homebuyers to sell their current homes. For example, if mortgage financing became less available, demand for our homes could decline. A reduction in demand could also have an adverse effect on the pricing of our homes because we (and our competitors) may reduce prices in an effort to compete for home buyers. A reduction in pricing could result in a decline in revenues and margins. We do not expect any substantial change in current mortgage policy or the prevailing mortgage rate in the near future.

The real estate development industry is capital intensive, requiring significant up-front expenditures to acquire land and begin development. Accordingly, we incur substantial indebtedness to finance our homebuilding and land development activities. Although we believe that internally generated funds and current borrowing capacity will be sufficient to fund our capital and other expenditures (including land acquisition, development and construction activities), the amounts available from such sources may not be adequate to meet our needs. If such sources are not sufficient, we would seek additional capital in the form of debt or equity financing from a variety of potential sources, including bank financing and/or securities offerings. The availability of borrowed funds, to be utilized for land acquisition, development and construction, may be greatly reduced, and the lending community may require larger amounts of equity to be invested by borrowers in a project in connection with new loans. Failure to obtain sufficient capital to fund planned capital and other expenditures could have a material adverse effect on our business.

In addition, regulatory requirements could force us to incur significant liabilities and operating expenses and could restrict our business activities. We are subject to statutes and rules regulating, among other things, certain developmental matters, building and site design, and matters concerning the protection of health and the environment. Our operating expenses may be increased by governmental regulations such as building permit allocation ordinances and impact and other fees and taxes, which may be imposed to defray the cost of providing certain governmental services and improvements. Any delay or refusal from government agencies to grant the necessary licenses, permits and approvals could have an adverse effect on our operations.

As of September 30, 2010, we had $71,610,809 of cash and cash equivalents, compared to $36,863,216 as of December 31, 2009, representing an increase of $34,747,593.

The Company believes that the combination of present capital resources, internally generated funds, and unused financing sources are more than adequate to meet cash requirements for the year 2010. We intend to meet our liquidity requirements, including capital expenditures related to the purchase of land for the development of future projects, through cash provided by operations and additional funds raised by future financings. Upon acquiring land for future development, we intend to raise funds to develop our projects by obtaining mortgage financing mainly from local banking institutions with which we have done business in the past. We believe that our relationships with these banks are in good standing and that our real estate will secure the loans needed. We believe that adequate cash will be available to fund our operations.

- 20 - -

BUSINESS

The Company is a leading developer of residential and commercial properties in northwest China. The Company is based in Xi’an, the capital city of China’s Shaanxi province. Since 1992, the Company has been engaged in the acquisition, development, management and sales of residential and commercial real estate properties and land through its subsidiaries in China.

The Company is the first Chinese real estate development company traded on NASDAQ.

By leveraging its background and capabilities, the Company has been able to capitalize on the supply of available land to develop residential and commercial properties, further increase its brand recognition in the development of medium sized residential and commercial real estate projects in greater Xi'an.

The Company is the leading non-government middle-and-upper income residential real estate development company in Xi'an.

Our Property Projects

We provide three fundamental types of real estate development products:

▪  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.

Our projects can be classified into one of four stages of development:

▪ 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.

- 21 - -

 Projects under construction

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

JunJing II: JunJing II is located at 38 East Hujiamiao, Xi’an, with a total gross floor area (“GFA”) of approximately 248,568 square meters. It is the first Canadian style residential community with “green and energy-saving” characteristics in Xi’an and has won the “National Energy Saving Project” award. The project is divided into 2 phases, namely JunJing II Phase One and JunJing II Phase Two. We started the construction of JunJing II Phase One in the third quarter of 2007 and started the pre-sale campaign in the third quarter of 2007.

The construction of Phase Two commenced in the fourth quarter of 2009 and pre-sales started within the same quarter. As of September 30, 2010, the contract revenue for Phase Two was $88.9 million, of which we have recognized $77.9 million in revenues. Revenue will continue to be recognized as the construction progresses.

Puhua: The Puhua project, the Company’s 79 acre joint venture located in the Baqiao project, has a total land area of 192,582 square meters and an expected gross floor area of approximately 640,000 square meters. In November 2008, the Company entered into an agreement with Prax Capital China Real Estate Fund I, Ltd., to form a joint venture. The joint venture was formed in late 2008, subject to certain conditions and approvals, which have been satisfied. Prax Capital Real Estate Holdings Limited invested US$29.3 million. The joint venture acquired the land use rights early in the third quarter of 2009.

The construction of the Puhua project began in June 2009. The whole project, which consists of four phases, is expected to be completed in the third quarter of 2014, with estimated revenues of $700 million. The Company began accepting pre-sale contracts for units in the Puhua Phase One project on October 24th, 2009. As of September 30, 2010, the contract revenue for Puhua project is $69.3 million, of which we have recognized $33.5 million.

Projects under planning and in progress

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

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Baqiao New Development Zone:  On March 9, 2007, we entered into a Share Transfer Agreement with the shareholders of Xi’an New Land Development Co., Ltd. (New Land), under which the Company acquired 32,000,000 shares of New Land, constituting 100 percent equity ownership of New Land. This acquisition gave the Company the exclusive right to develop and sell 487 acres of land in a newly designated satellite city of Xi’an.

Xi’an has designated the Baqiao District as a major resettlement zone in which the city expects 900,000 middle to upper income inhabitants to settle. The Xi’an government intends to create a successful development comparable to the development of Pudong in Shanghai which has resulted in new economic opportunities and provided housing for Shanghai’s growing population.

The Xi’an municipal government plans to invest 50 billion RMB (over $6 billion) in infrastructure for the Baqiao New Development Zone. The construction of a large-scale public wetland park is well underway; which will embellish the natural environment adjacent to our Baqiao project.

Through its New Land subsidiary, the Company sold approximately 18.4 acres to another developer in 2007 and generated approximately $24.41 million in revenue.

In 2008, we initiated a joint venture with Prax Capital Real Estate Holdings Limited (Prax Capital) to develop 79 acres within the Baqiao project, which represents the first phase of the Baqiao project’s development. Prax Capital invested $29.3 million in cash in the joint venture. The project is further described in the Puhua section.

After selling 18.4 acres and placing 79 acres in the joint venture, about 389 acres remained available for the Company to develop in the Baqiao project.

JunJing III: JunJing III is near our JunJing II project and the city expressway. It has an expected total gross floor area of approximately 7,501 square meters. The project will consist of 3 high rise buildings, each 28 to 30 stories high. The project is targeting middle to high income customers who require a high quality living environment with convenient transportation to the city center. We started construction during the third quarter of 2010 and expect pre-sales to begin during the fourth quarter of 2010. The total estimated revenues from this project are approximately $46 million. JunJing III project was delayed for one quarter due to changes in relevant government procedure on land acquisition. We do not expect further changes on such procedures.

Park Plaza: In July 2009, the Company entered into a Letter of Intent to acquire 44,250 square meters of land in the center of Xi'an for the Park Plaza project. The Company intends to develop a large mid-upper income residential and commercial development project on this site, with a gross floor area of 162, 000 square meters. The four-year construction of Park Plaza is expected to begin in the fourth quarter 2010. We anticipate accepting pre-sale purchase agreements in the first quarter of 2011, and revenues from pre-sale agreements will be recognized when all revenue recognition criteria have been met. The total revenue from Park Plaza is estimated to be $154 million. The Park Plaza project was delayed for one quarter due to changes in relevant government procedure on land acquisition. We do not expect further changes on such procedures.

Golden Bay: The Golden Bay project is located within the Baqiao project, with a total gross floor area of 378,887 square meters. The Golden Bay project will consist of residential buildings as well as a commercial area. Construction is anticipated to begin in the fourth quarter of 2010, and we expect to begin accepting pre-sale purchase agreements in the third quarter of 2011.

 Completed Projects with units available for sale

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

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JunJing II Phase One: JunJing II Phase One consists of 13 residential buildings and 3 auxiliary buildings, including one kindergarten, with a gross floor area of about 136,012 square meters. As of September 30, 2010, JunJing II Phase One has contributed approximately $80 million in revenues. By September 30, 2010, we had sold 1,186 units in the project, which accounts for about 99.4% of all available units totaling approximately 133,428 square meters and about 98.0% of available GFA. This project was delivered to customers at the end of October, 2009.

Tsining Home IN: 88 North Xingqing Road, Xi’an. Located near the city center, the Home IN project consists of 215 two to three bedroom western-style apartments. The total construction area is 30,072 square meters. The project, completed in December 2003, generated total sales of $13.7 million.

Tsining-24G: 133 Changle Road, Xi’an. 24G is a redevelopment of an existing 26 floor building, located in the center of the most developed commercial belt of the city. This upscale development includes secure parking, cable TV, hot water, air conditioning, natural gas access, internet connection and exercise facilities. This project was awarded “The Most Investment Potential Award in Xi’an City” in 2006. Target Customers were white-collar workers, small business owners and traders as well as entrepreneurs. Total area available for residential use was 43,563 square meters, covering 773 one to three bedroom service apartments. The project started construction in June 2005 and was completed in June 2006 with total sales of $42.1 million.

Tsining JunJing Garden I: 369 North Jinhua Road, Xi’an. JunJing Garden I was the first German style residential & commercial community in Xi’an, designed by the world-famous WSP architectural design house. Its target customers were local middle income families. The project has 15 residential apartment buildings consisting of 1,671 one to five bedroom apartments. The Garden features secure parking, cable TV, hot water, heating systems and access to natural gas. Total GFA available was 167,931 square meters. JunJing Garden I was also a commercial venture that houses small businesses serving the needs of JunJing Garden I residents and the surrounding residential communities. The project was completed in September 2006 and generated total revenue of $49.57 million.

CONSOLIDATED OPERATING RESULTS

Three Months Ended September 30, 2010 Compared With Three Months Ended September 30, 2009

Revenues

Our revenues are mainly derived from the sale of residential and commercial units and buildings, infrastructure work we perform for the local government and land development projects in the Baqiao area.

In the third quarter of 2010, most of our revenues came from Tsining JunJing II Phases Two and Puhua Phase One Project. JunJing II Phase Two consists of 12 buildings, mainly middle and high rises, and began to accept pre-sale contracts in the third quarter of 2009. Puhua Phase One consists of 7 garden houses, 2 mid-rises and 4 high-rises buildings with total expected revenues of approximately $118.6 million. We officially started the pre-sales in the fourth quarter of 2009 and we recognized approximately $10.1 million in the third quarter of 2010.

	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

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Revenues from the sale of properties

The revenues from the sale of properties in the three months ended September 30, 2010increased 38.4 percent to $31,455,921 from $22,728,282 in the same period of 2009. The increase was primarily due to the increased revenue from Tsining JunJing II Phase Two and Puhua Project. The presale of Puhua Phase One and Phase Two started in the fourth quarter of 2009 and the third quarter of 2010, respectively. Puhua Project has four phases, which are expected to be completed in 2014.

The following table summarizes details of our most significant projects:

	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

- 25 - -

Revenues from projects under construction

Puhua Phase One and Phase Two

Puhua Phase One consists of 7 garden houses, 2 mid-rises and 4 high-rises buildings with total expected revenues of approximately $118.6 million. Puhua Phase Two consists of 11 mid-rises and high-rises. The pre-sale of Phase One began in the fourth quarter of 2009 while the pre-sale of Phase Two started in the third quarter of 2010. During the third quarter of 2010, for Puhua Phase One and Phase Two projects, we were able to secure $12.1million and $9.6 million in contract sales respectively, and we recognized revenue of approximately $10.1 million and $3.0 million, respectively.

Tsining JunJing II Phase Two

Tsining JunJing II Phase Two consists of 12 middle-rise and high-rise buildings with total expected revenues of approximately $95.1 million. We started the pre-sales for JunJing II Phase Two in the third quarter of 2009. During the three months ended September 30, 2010, our contract sales totaled $ 8.5 million sales for 76 units and we were able to recognized revenue of approximately $15.0 million using the percentage of completion method.

Please note that the method of percentage of completion was utilized to recognize revenue from January 1, 2008. Only revenue recognition of Tsining JunJing II and Puhua Project is determined under this method. The percentages of completion of the construction for each building as at September 30, 2010 are shown below:

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	%

The above represent all of the buildings under construction in JunJing II Phase Two, Puhua Phase One, and Puhua Phase Two.

- 26 - -

Revenues from projects completed

The revenue from completed projects totaled $3,350,647 for the three months ended September 30, 2010, compared to $1,793,053 during the same period of 2009. The increase was mainly due to the completion of JunJing II Phase One which was reclassified to completed projects during the fourth quarter of fiscal 2009, and also the increased revenue from sales of JunJing I commercial space.

Other income

Other income includes property management fees, rental income, revenues from the disposal of fixed assets as well as government’s allowance for the equivalent cost of interest on the Company’s investments required to support infrastructure construction, continued river management and suburban planning for the entire Baqiao high-technology industrial park. We recognized $2,592,853 in other income for the three months ended September 30, 2010 compared with $1,152,408 in the same period of 2009. The 125 percent increase can be explained by the following table which summarizes the breakdown of the other income and their changes during the three months ended September30, 2010 and 2009:

	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.

Cost of sales of properties

The cost of sales of properties and land in the three months ended September 30, 2010 increased 41.13 percent to $22,568,245 compared with $15,991,559 in the same period of 2009. The increase was primarily a result of the increased sales in our current selling projects, mainly JunJing II Phase Two, Puhua Phase One and Phase Two projects. As JunJing II Phase Two project is approaching its ending phase, i.e. the project has a high percentage of completion, we were able to recognize additional cost of properties and land in accordance with additional recognized revenue.

Gross profit and profit margin

Gross profit for the three months ended September 30, 2010 was $10,909,305, representing an increase of 47.3 percent from $7,419,475 in the same period of 2009. The gross profit margin for the three months ended September 30, 2010 was 32.0 percent, compared to 31.0 percent in the same period of 2009. Gross profit and gross profit margin increased sequentially due to increased sales and average selling prices of Jun Jing II Phase Two and Puhua projects as well as from the sale of commercial space at certain existing projects which typically carry a higher gross margin than residential apartment sales.

- 27 - -

Selling, general and administrative expenses

Selling, general and administrative expenses (SG&A) for the three months ended September 30, 2010 increased 14.9 percent to $2,873,590 from $2,501,688 in the same period of 2009. The increase in SG&A is associated with the increased sales and increased projects compared with the same period of 2009. SG&A as a percentage of total revenue decreased to 8.4% in the third quarter of 2010 from 10.5% in the third quarter of 2009.

Stock-based compensation

We had no stock-based compensation incurred during the third quarter of 2010 compared to stock-based compensation of $87,777 during the same period of 2009 to our former CFO.

Other expenses

Other expenses consist mainly of late delivery settlements and maintenance costs. Other expenses in the three months ended September 30, 2010 decreased 18.1 percent to $232,493, compared with $284,044 in the same period of 2009.

Net income from business operation and operating profit margin

Net income from business operation in the three months ended September 30, 2010 was $7,005,932 compared with $3,237,063 in the same period of 2009, primarily due to the higher revenues generated by Tsining JunJing II Phase Two and Puhua Phase One and Phase Two projects. As a result, the operating profit margin was 20.1 percent for the third quarter of 2010 compared with 13.6 percent for the same period of 2009 which was in line with our business model. The increase of operating profit and operating profit margin is mainly due to increased sales and increased gross margin.

Interest expense

Interest expense in the three months ended September 30, 2010 increased 3.8 percent to $433,666 from $417,809 in the same period of 2009. This is primarily due to the increase in employee loan interest.

Amendment to the Convertible Debt and Warrants Issued on January 28, 2008

In order to reduce our outstanding debt and interest payment, we reached an agreement with the investors to retire US$11 million of non convertible portion of the US$20 million 5% Senior Secured Convertible Notes, which were issued to the investors in January 2008, thus making the US$ 11 million non-convertible portion convertible. The investors also agreed to exercise all their outstanding warrants associated with the 5% Senior Secured Convertible Notes once a new registration statement covering the US$ 11 million Convertible Notes is declared effective by the Securities and Exchange Commission.

On June 10, 2010, the Company and the investors entered into an amendment (the “Amendment”), which grants the investors the rights to convert the $11 million Non-convertible Portion of the Convertible Notes. The rights expire in 5 business days after the effective date that a registration statement is filed by the Company registering the shares underlying the Notes.

The warrants issued in 2008 were also amended to permit the investors to exercise the warrants on a new provision (in addition to the original cashless exercise provision) to receive one common share for every two warrants held if the investor converts at least 55% of face amount of Convertible Notes held.

In addition, certain investors have agreed to convert 55% of the aggregate face amount of notes to common shares within 5 business days of the effective date of the registration statement filed by the Company. If the investors fail to convert at least 55% of the aggregate amount of the notes this provision lapses and this portion of notes becomes non-convertible and revert back to the terms as if the Amendment did not occur.

- 28 - -

Due to the substantive change of the conversion feature on the Non-convertible Portion, the Amendment is treated as a debt extinguishment on the Non-convertible portion. The deemed proceeds of the revised $11 million Non-convertible Portion are allocated to the embedded derivative and to the cost associated with the change in the terms of the outstanding warrants. The remaining proceeds were then allocated to the carrying value of the convertible debt.

During the second quarter of fiscal 2010, the Company recorded a loss on extinguishment of debt of $2,180,492, which consists of:

	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

The fair value of warrants and embedded derivatives immediately before and after the Amendment date were calculated using the Cox-Ross-Rubinstein Binomial Lattice Model (the “CRR Model”) with the following assumptions:

Expected life	2.64 - 2.72 years
Expected volatility	105%
Risk-free interest rate	1.10 - 1.14%
Dividend yield	0%

The fair value change on the debt portion is not material. There is no gain or loss on extinguishment of debt for the three and nine months ended September 30, 2009.

The Convertible Debt is secured by a first priority, perfected security interest in certain shares of common stock of Lu Pingji, the Chairman of the Company. The Convertible Debt is subject to events of default customary for convertible securities and for a secured financing.

Change in fair value of embedded derivative

The embedded derivative is related to the Company’s $20 million Convertible Debt offering completed in January 2008. The change in the fair value of embedded derivatives was a periodic adjustment to the estimated cost to the Company which was provided by the Cox-Ross-Rubinstein Binomial Lattice valuation model (CRR model)

The CRR model depends on the following assumptions: the Company’s common stock price underlying the warrants; strike price; conversion price; expected life; expected volatility; risk free interest rate; and dividend rate. During the third quarter of 2010, our common stock price experienced large fluctuations with the price decreasing from $2.26 on July 1, 2010 to $2.00 on September 30, 2010. The decrease in stock price and expected volatility caused a decrease in fair value for warrants and the change of fair value was booked as a reverse of non-cash expense.

The company recorded a gain of $958,688 in the change in fair value of embedded derivatives in the three months ended September 30, 2010 compared with a gain of $2,695,306 in the same period of 2009.

Change in fair value of warrants

In 2006, 2007 and 2008, the Company issued warrants in conjunction with the issuance of common shares or Convertible Debt. The warrants permit the investors to buy additional common shares at the prices specified in the warrant agreements.

An investor typically only exercises a warrant to buy common shares when the stock price is higher than the warrant exercise price. The investor pays the exercise price and the Company covers the difference between the warrant exercise price and the share price at the time of conversion.

In addition, the Company was required to estimate the fair value of its remaining warrants outstanding and adjust the value as appropriate, and it chose to use the Cox-Ross-Rubinstein Binomial Lattice valuation model to estimate their fair value.

The change in fair value of warrants resulted in a gain of $405,821 in the three months ended September 30, 2010, compared to a gain of $3,042,752 during the same period of 2009, which consisted of the periodic adjustment to the estimated cost to the company to provide the common shares, assuming that all of the warrants are exercised sometime in the future. The basis for estimating the cost to provide the common shares was provided by the valuation model. The CRR model depends on the following assumptions: the Company’s common stock price underlying the warrants; strike price; expected life; expected volatility; risk free interest rate; and dividend rate. During the third quarter of 2010, our common stock price experienced large fluctuations with the price decreasing from $2.26 on July 1, 2010 to $2.00 on September 30, 2010. The decrease in stock price and expected volatility caused a decrease in fair value for warrants and the change of fair value was booked as a reverse of non-cash expense. During the third quarter of 2009, our common stock price experienced large fluctuations with the price decreasing from $5.58 on July 1, 2009 to $3.85 on September 30, 2009. The increase in stock price and expected volatility caused an increase in fair value for warrants and the change of fair value was booked as a non-cash expense.

- 29 - -

Security registration expenses

Pursuant to the agreement with the investors of the 5% Senior Secured Convertible Debt (Note 14), the Company was required to pay the investors certain late registration payments (“Late Payments”) if the company failed to file a Registration Statement within 60 days of the closing date of the 5% Senior Secured Convertible Debt. The Company commenced negotiations with the investors of the 5% Senior Secured Convertible Debt to waive the Late Payments in December 2008, as both parties believed that the registration statement would become effective within a short period of time. However, as the registration statement did not become effective as of September 2009, the investors of the 5% Senior Secured Convertible Debt had decided to claim the Late Payments.

The security registration expenses were $0 for the three months ended September 30, 2010 because the Company has settled the Late Payments in fiscal 2009, compared with $579,775 in the same period of 2009.

Provision of current income taxes

The current income taxes provision for the three months ended September 30, 2010 was $1,926,345 compared with $3,652,886 recovery of income tax. The recovery of income taxes for the three months ended September 30, 2009 was due to the tax settlement between Hao Tai and the local tax bureau. Due to the settlement the Company recovered around $4.86 million in the third quarter of 2009.

Net income

Net income for the three months ended September 30, 2010 decreased 48.7 percent to $6,475,466 compared to $12,714,128 in the same period of 2009.

The decline in net income was a result of multiple factors. We recorded $5.7 million gain in change in four value of derivatives in the third quarter of 2009; the gain in change in fair value of derivatives for the third quarter of 2010 was only $1.4 million. We also had $4.86 million gain in recovery of income taxes in the third quarter of 2009 compared with $0.03 million in the third quarter of 2010.

Basic and diluted earnings per share

Basic earnings per share was $0.20 in the three months ended September 30, 2010, compared to $0.41 in the same period of 2009. Diluted earnings per share was $0.15 in the three months ended September 30, 2010, compared to $0.24 in the same period of 2009. The number of shares outstanding doesn’t change significantly from year to year. Earnings available to distribute decreased to $6,475,466 in third quarter of 2010 from $12,714,128 in the third quarter of 2009.

Common shares used to calculate basic and diluted EPS

The weighted average shares outstanding used to calculate basic earnings per share was 33,082,573 shares in the three months ended September 30, 2010 and 31,134,137 shares in the same period of 2009. The weighted average shares outstanding used to calculate the diluted earnings per share was 37,374,784 shares in the three months ended September 30, 2010 and 32,972,253 shares in the same period of 2009. The dilution is related to warrants and convertible notes which had a dilutive effect.

Foreign exchange

The company operates in China and the functional currency is Chinese Renminbi (RMB) but the reporting currency is U.S. dollar, based on the exchange rate of the two currencies. The accrued gain (loss) on foreign exchange results from the fluctuation of exchange rates which are applied when translating the operating results. The gain on foreign exchange in the three months ended September 30, 2010 was $1,561,913, compared with a gain of $69,244 in the same period of 2009. The increase in gain on foreign exchange was due to foreign exchange fluctuations during the period.

Nine months Ended September 30, 2010 Compared With Nine Months Ended September 30, 2009

Revenues

In the nine months ended September 30, 2010, most of our revenues came from Puhua Project, Tsining JunJing II Phases One and Two, JunJing II Phase One consists of 13 residential buildings and 3 auxiliary buildings, including one kindergarten, with a gross floor area of about 136,012 square meters. This project began to be delivered to customers at the end of October, 2009. JunJing II Phase Two consists of 12 buildings, mainly middle and high rises, and began to accept pre-sale contracts in the third quarter of 2009. Puhua Phase One consists of 7 garden houses, 2 mid-rises and 4 high-rises buildings with total expected revenues of approximately $116.2 million. We officially started the pre-sales in the fourth quarter of 2009 and recognized approximately $33.4 million from Puhua Phase One and Puhua Phase Two for the nine months ended as of September 30, 2010.

- 30 - -

	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

Revenues from the sale of properties

The revenues from the sale of properties in the nine months ended September 30, 2010increased 74.3 percent to $99,067,368 from $56,835,091 in the same period of 2009. The increase was primarily due to the increased revenue from Tsining JunJing II Phase Two, and Puhua Project. The pre-sale of Phase One began in the fourth quarter of 2009 while the pre-sale of Phase Two started in the third quarter of 2010.

The following table summarizes details of our most significant projects:

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	%

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Revenues from projects under construction

Tsining JunJing II Phase Two

Tsining JunJing II Phase Two consists of 12 middle-rise and high-rise buildings with total expected revenues of approximately $93.4 million. We officially started the pre-sales in the third quarter of 2009 and were able to secure $48.4 million in contract sales for 468 units of which we recognized approximately $56 million for the 9 months ended September 30, 2010.

Puhua Phase One and Phase Two

Puhua Phase One consists of 7 garden houses, 2 mid-rises and 4 high-rises buildings with total expected revenues of approximately $116.2 million. Puhua Phase Two consists of 11 mid-rises and high-rises. The pre-sale of Phase One began in the fourth quarter of 2009 and we were able to secure $68.4 million in contract sales for the 9 months ended September 30, 2010 of which we recognized approximately $33.4 million for the 9 months ended September 30.

Revenues from projects completed

The revenue from completed projects totaled $9,506,768 for the nine months ended September 30, 2010, compared to $4,613,537 during the same period of 2009. The increase was mainly due to JunJing II Phase One which was completed and reclassified to completed projects during the fourth quarter of fiscal 2009, and increased sales of commercial space at JunJing I project.

Other income

Other income includes property management fees, rental income, revenues from the disposal of fixed assets as well as government’s allowance for the equivalent cost of interest on the Company’s investments required to support infrastructure construction, continued river management and suburban planning for the entire Baqiao high-technology industrial park. We recognized $5,148,115 in other income for the nine months ended September 30, 2010 compared with $3,689,359 in the same period of 2009. The 39.5 percent increase can be explained by the following table which summarizes the breakdown of the other income and their changes during the nine months ended September 30, 2010 and 2009:

	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.

Cost of sales of properties

The cost of sales of properties in the nine months ended September 30, 2010 increased 86.4 percent to $74,821,470 compared with $40,130,502 in the same period of 2009. The increase was primarily a result of the increased sales in our current selling projects, mainly JunJing II Phase Two, Puhua Phase One and Phase Two projects.

Gross profit and profit margin

Gross profit for the nine months ended September 30, 2010 was $27,709,162, representing an increase of 46.0 percent from $18,973,392 in the same period of 2009. The gross profit margin for the nine months ended September 30, 2010 was 26.6 percent compared with 31.3 percent in the same period of 2009. Gross profit and gross profit margin increased sequentially due to increased sales and average selling prices of Jun Jing II Phase Two and Puhua projects as well as from the sale of commercial space at some existing projects in the third quarter of 2010 which typically carry a higher gross margin than residential apartment sales.

Selling, general and administrative expenses

Selling, general and administrative expenses (SG&A) for the nine months ended September 30, 2010 increased 56.7 percent to $9,170,039 from $5,853,458 in the same period of 2009. The increase in SG&A is associated with the increased sales and increased projects compared with the same period of 2009. This quarter’s SG&A mainly include marketing expenses associated with Puhua project, as we started our marketing road show in other provinces in Western China. The initiation of JunJing III also increased administrative and marketing expenses. SG&A accounted for 8.8 percent of total revenue for the nine months ended September 30, 2010 compared to 9.7 percent for the same period in 2009.

- 32 - -

Stock-based compensation

We incurred no stock-based compensation for the nine months ended September 30, 2010 compared to the 87,777 compensation to the former CFO of the Company.

Other expenses

Other expenses consist mainly of late delivery settlements and maintenance costs. Other expenses in the nine months ended September 30, 2010 decreased 11.3 percent to $420,525 compared with $474,167 in the same period of 2009.

Net income from business operation and operating profit margin

Net income from business operation in the nine months ended September 30, 2010 was $15,691,700 compared with $8,679,382 in the same period of 2009, primarily due to the higher revenues generated by Tsining JunJing II Phase Two and Puhua Phase One and Phase Two projects. The operating profit margin was 15.1 percent for the nine months ended September 30, 2010 compared with 14.3 percent for the same period of 2009. The decline in operating profit margin was primarily due to the sales of the commercial building which had higher gross margin.

Interest expense

Interest expense in the nine months ended September 30, 2010 increased 15.4 percent to $1,388,166 from $1,202,786 in the same period of 2009. This increase was primarily due to the increase of employee loan interest.

Amendment to the Convertible Debt and Warrants Issued on January 28, 2008

See discussion under the three months ended September 30, 2010 section above.

Change in fair value of embedded derivative

The embedded derivative is related to the Company’s $20 million Convertible Debt offering completed in January 2008. The change in the fair value of embedded derivatives was a periodic adjustment to the estimated cost to the Company, which was provided by the Cox-Ross-Rubinstein Binomial Lattice valuation model (CRR model).

The CRR model depends on the following assumptions: the Company’s common stock price underlying the warrants; strike price; conversion price; expected life; expected volatility; risk free interest rate; and dividend rate. During the first nine months of 2010, our common stock price experienced large fluctuations with the price decreasing from $4.13 on January 1, 2010 to $2.00 on September 30, 2010. The decrease in stock price and expected volatility caused a decrease in fair value for warrants and the change of fair value was booked as a reverse of non-cash expense.

The company recorded a gain of $2,832,023 from the change in fair value of embedded derivatives for the nine months ended September 30, 2010 compared with a loss of $3,017,272 in the same period of 2009.

Change in fair value of warrants

In 2006, 2007 and 2008, the Company issued warrants in conjunction with the issuance of common shares or Convertible Debt. The warrants permit the investors to buy additional common shares at the prices specified in the warrant agreements.

An investor typically only exercises a warrant to buy common shares when the stock price is higher than the warrant exercise price. The investor pays the exercise price and the Company covers the difference between the warrant exercise price and the share price at the time of conversion.

In addition, the Company was required to estimate the fair value of its remaining warrants outstanding and adjust the value as appropriate, and it chose to use the Cox-Ross-Rubinstein Binomial Lattice valuation model to estimate their fair value.

- 33 - -

The change in fair value of warrants was a reduction of value of $3,203,085 in the nine months ended September 30, 2010, compared to an increase in value of $4,012,736 during the same period of 2009, which consisted of the periodic adjustment to the estimated cost to the company to provide the common shares, assuming that all of the warrants will be exercised sometime in the future. The basis for estimating the cost to provide the common shares was provided by the valuation model. The CRR model depends on the following assumptions: the Company’s common stock price underlying the warrants; strike price; expected life; expected volatility; risk free interest rate; and dividend rate. During the nine months of 2010, our common stock price experienced large fluctuations with the price decreasing from $4.13 on 1 January, 2010 to $2.00 on September 30, 2010. The decrease in stock price and expected volatility caused a decrease in fair value for warrants and the change of fair value was booked as a reverse of non-cash expense.

Security registration expenses

Pursuant to the agreement with the investors of the 5% Senior Secured Convertible Debt (Note 14), the Company was required to pay the investors certain late registration payments (“Late Payments”) if the company failed to file a Registration Statement within 60 days of the closing date of the 5% Senior Secured Convertible Debt. The Company commenced negotiations with the investors of the 5% Senior Secured Convertible Debt to waive the Late Payments in December 2008, as both parties believed that the registration statement would become effective within a short period of time. However, as the registration statement did not become effective as of September 2009, the investors of the 5% Senior Secured Convertible Debt decided to claim the Late Payments.

The security registration expenses were $0 for the nine months ended September 30, 2010 because the Company has settled the Late Payments in fiscal 2009, compared with $1,786,517 in the same period of 2009.

Provision of current income taxes

The provision for current income taxes for the nine months ended September 30, 2010 was $4,467,337 compared with $1,591,331 recovery of income tax. The recovery of income taxes for the three months ended September 30, 2009 was due to the tax settlement between Hao Tai and the local tax bureau. Due to the settlement the Company recovered around $4.86 million in the third quarter of 2009.

Net income

Net income for the nine months ended September 30, 2010 increased 367.8 percent to $15,161,346 compared to $3,240,705 in the same period of 2009.

We believe that the increase in net income was a result of multiple factors. During the nine months ended September 30, 2010, we had more projects generating revenues, compared with the same period in 2009. We also spent more on marketing to enhance sales in light of tightened government policies. Our net income margin, due to the decrease of parking lots sales recovered to 14.5 percent in the third quarter of 2010 from 5.4 percent in the third quarter of 2010.

With the introduction of Puhua, we also expect the gross margin to improve slightly in the future, primarily because of its better quality and higher average price in Puhua. The average selling price increased to RMB 5,084.5 (approximately US$751) per square meter during the third quarter of 2010, compared with RMB4,249 (approximately US$622) per square meter when the company started pre-sales in October 2009.

The periodic revaluation of derivatives and warrants also contributed approximately $1.4 million during the quarter mainly due to the decrease of our common stock price.

Charge to non-controlling interest

On November 5, 2008, the Company and Prax Capital (“Prax”) entered into a joint venture agreement to develop 79 acres within China Housing’s Baqiao project located in Xi’an. Prax invested $29.3 million for a 25% interest in Puhua by obtaining 1,000 Class A shares of Success Hill (“Class A Shares”) with various distribution rights. Prax’s initial investments were recorded as noncontrolling interests in the consolidated financial statement.

During the first quarter of 2010, the Company proposed to redeem Prax’s 1000 Class A shares in Success Hill in order to fix the maximum return on Prax’s initial investment.  Both parties then entered into Amended and Restated Shareholders’ Agreement on May 10, 2010. Effective January 1, 2010, the Company will redeem from Prax, and Prax agrees to, all Prax’s Class A Shares within three years by December 31, 2012 for a consideration of the USD equivalent of $86.09 million (RMB 576 million).

As Prax’s interest in the consolidated subsidiaries meet the definition of a mandatorily redeemable financial instrument, it is reported within liabilities as mandatorily redeemable noncontrolling interests in subsidiaries on the Company’s consolidated balance sheet and initially measured at the fair value of cash that would be due and payable to Prax under the Amended and Restated Shareholder agreement.

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As at January 1, 2010, the Company recorded a liability of $42,600,511 reflecting the fair value of the redemption amount of Prax’s interest and eliminated the original noncontrolling interest in the equity on the consolidated balance sheet.  The difference of $14,229,043 between the carrying value of the original noncontrolling interests and the fair value of the redemption amount of Prax’s interest has been reflected as a charge to noncontrolling interests. Subsequently, the Company recorded accretion cost on these redeemable noncontrolling interests using the effective interest method based on an effective interest rate of 45%. The related accretion cost incurred for the three and nine months ended September 30, 2010 was $5,044,349 and $13,752,833, respectively (2009 - $Nil and $Nil) and was capitalized in real estate construction in progress.

Basic and diluted earnings per share

Basic earnings per share was $0.03 in the nine months ended September 30, 2010, compared to $0.11 in the same period of 2009. Diluted earnings per share was ($0.05) in the nine months ended September 30, 2010, compared to $0.11 in the same period of 2009. The number of shares outstanding doesn’t change significantly from year to year. Earnings available to distribute decreased from $3,519,860 for the nine months ended September 30, 2009 to $932,303 in the same period 2010. The negative EPS and Diluted EPS are mainly due to Prax restructuring which resulting in the recording of a one-time loss of ($14,229,043).

Common shares used to calculate basic and diluted EPS

The weighted average shares outstanding used to calculate basic earnings per share was 32,911,414 shares in the nine months ended September 30, 2010 and 30,987,760 shares in the same period of 2009. The weighted average shares outstanding used to calculate the diluted earnings per share was 35,636,354 shares in the nine months ended September 30, 2010 and 30,996,953 shares in the same period of 2009. The dilution is related to warrants and convertible notes which have a dilutive effect.

Foreign exchange

The company operates in China and the functional currency is Chinese Renminbi (RMB) but the reporting currency is U.S. dollars, based on the exchange rate of the two currencies. The fluctuation of exchange rates during the nine months ended September 30, 2010 and the same period of 2009, when translating the operating results and financial positions at different exchange rates, created the accrued gain on foreign exchange. The gain on foreign exchange in the nine months ended September 30, 2010 was $2,368,760, compared with the loss of $242,176 in the same period of 2009. The gain was due to significant appreciation of RMB.

Cash flow discussion

There is net cash inflow of $33,393,083 during the nine months ended September 30, 2010 compared with an $18,341,447 cash outflow during the same period of 2009.

The operating activity cash inflow was $23,359,023 in the nine months ended September 30, 2010 while its cash outflow of $10,808,209 in the same period of 2009. The increase is due to the increase of advances from customers amounting to 23,391,607.

A cash outflow of $81,717 in investing activities for the nine months ended September 30, 2010, compared with the cash inflow of $447,990 for the same period of 2009. The decrease is due to that the Company purchases more property and equipment during the nine months ended September 30, 2010.

There was a cash inflow of $9,952,343 for financing activities for the nine months ended September 30, 2010 compared with $7,981,228 of outflow in 2009 due to the additional bank loans drawn. 

Debt leverage

Total debt consists of Loans payable, Loans from employees, Bank loans, Convertible Debt and mandatorily redeemable noncontrolling interests in Subsidiaries.

Total debt outstanding as of September 30, 2010 was $132,111,011 compared with $59,801,870 on December 31, 2009. Net debt outstanding (total debt less cash) as of September 30, 2010 was $60,500,202 compared with $22,938,654 on December 31, 2009. The company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 38.3 percent on September30, 2010 and 20.2 percent on December 31, 2009, due to the addition of the mandatorily redeemable noncontrolling interests in Puhua.

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Liquidity and capital resources

Our principal liquidity demands are based on the development of new properties, property acquisitions, and general corporate purposes. As of September 30, 2010, we had $71,610,809 of cash and cash equivalents, compared to $36,863,216 as of December 31, 2009, an increase of $34,747,593. Along with progress in projects, we can use the internally generated cash flow to fund daily operation.

The Company leases part of its office and hotel space under various operating lease agreements with expiring dates between 2010 and 2019.

The Company entered into a consulting service contract with a third party, which has a set payment schedule and will be realized in less than a year.

The Company also had two land use rights with unpaid balances of approximately $0.9 million and $2.6 million. The balances are not due until the vendor removes the existing building on the land and changes the zoning status of the land use right certificate. Based on the current condition, the Company estimated that the balances will be paid in two years.

The Company entered into an acquisition agreement with Shaanxi Xinxing Construction Co. Ltd. (“Xinxing Construction”) on September 30, 2010 (note 19)for $6,725,955 (RMB 45 million). The Company has paid $2,241,985 (RMB 15 million) as a deposit and will pay the remaining balance of $4,483,970 (RMB 30 million) within one year.

All future payments required under the various agreements are summarized below.

	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

Financial obligations

As of September 30, 2010 we had total bank loans of $52,312,981 with a weighted average interest rate of 11.7 percent. Mortgage debt (total bank loans) is secured by the assets of the company.

Bank loans

All loans are used to finance construction projects. All interest paid was capitalized and allocated to various real estate construction projects.

On June 28, 2008, the Company signed a strategic partnership Memorandum of Understanding (“MOU”) with China Construction Bank Xi’an Branch that established a RMB 1 billion (approximately US$149 million) credit line for real estate development by the Company and its subsidiaries. All loans from China Construction Bank Xi’an Branch were fully repaid as at September 30, 2010.

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Under the MOU, the Company and its Subsidiaries are required to set up a basic deposit account with China Construction Bank, to maintain a current ratio of not less than 90% and to maintain liabilities to assets ratio of not greater than 65%. Due to the change of corporate structure of the Company, China Construction Bank Xi’an Branch has clarified the current ratio and liabilities to assets ratio calculations only include the financial information of Tsining and New Land. As of September 30, 2010, the current ratio was approximately 112.6%, and the liabilities to assets ratio was approximately 58.1%.

The bank loans balances were secured by certain of the Company’s real estate held for development or sales with a carrying value of $13,987,502 compared to $91,657,685 as of December 31, 2009 and certain buildings and income producing properties and improvements with a carrying value of $9,747,369 at September 30, 2010 compared to $9,738,804 as of December 31, 2009. The weighted average interest rate on bank loans as at September 30, 2010 was 11.7% compare to 6.6% as of December 31, 2009.

Bank loans represent amounts due to various banks. These loans generally can be renewed with the banks when they expire. Bank loans as of September 30, 2010 and December 31, 2009 consisted of the following:

	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

All loans are used to finance construction projects. All interest paid was capitalized and allocated to various construction projects.

Liquidity expectation

The Company believes that the combination of present capital resources, internally generated funds, and unused financing sources are more than adequate to meet cash requirements for the year 2010.

We intend to meet our liquidity requirements, including capital expenditures related to the purchase of land for the development of our future projects, through cash flow provided by operations and additional funds raised by future financings. Upon acquiring land for future developments, we intend to raise funds to develop our projects by obtaining mortgage financing mainly from local banking institutions with which we have done business in the past. We believe that our relationships with these banks are in good standing and that our real estate will secure the loans needed. We believe that adequate cash flow will be available to fund our operations.

The majority of the company's revenues and expenses were denominated primarily in renminbi (RMB), the currency of the People's Republic of China. There is no assurance that exchange rates between the RMB and the U.S. dollar will remain stable. The company does not engage in currency hedging. Inflation has not had a material impact on the company's business.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is subject to the following market risks, including but not limited to:

General Real Estate Risk

There is a risk that the Company’s property values could go down due to general economic conditions, a weak market for real estate generally, or changing supply and demand. The Company’s property held for sale value, approximately $110.7 million at the end of September 2010, may change due to market fluctuations. Currently, it is valued at our cost which is significantly below the market value.

Risk Relating to Property Sales

The Company may not be able to sell a property at a particular time for its full value, particularly in a poor market.

Foreign Currency Exchange Rate Risk

The Company is doing all of its business in the People’s Republic of China. All revenue and profit are denominated in RMB. When the RMB depreciates, it may adversely affect the Company’s financial performance. Specifically, since the Company’s recent $20 million senior Convertible Debt interest payment is denominated in U.S. dollars, the depreciation of the RMB may incur additional cost to its financial cost.

Item 4. Controls and Procedures

(a)     Evaluation of Disclosure Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)). Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective due to the identified significant deficiencies in our internal control over financial reporting described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009. The Company has engaged Ernst & Young to aid in the compliance with SOX 404.

(b)     Changes in Internal Control over Financial Reporting.

During the quarter ended September 30, 2010, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors.

We have no material changes to the risk factors previously disclosed in our Form 10-K, as amended, for the year ended December 31, 2009 and the additional risk factors disclosed in our quarterly report on Form 10-Q for the quarter ended June 30, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Item 5. Other Information

None.

Item 6. Exhibits

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Xiaohong Feng, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China Housing & Land Development, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 12, 2010	By:	/s/ Xiaohong Feng
		Xiaohong Feng
		(Chief Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Cangsang Huang, certify that:

1. I have reviewed this quarterly report on Form 10-Q of China Housing & Land Development, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 12, 2010	By:	/s/ Cangsang Huang
		Cangsang Huang
		(Chief Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of China Housing & Land Development, Inc. (the "Company") on Form 10-Q for the quarter ending September 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 12, 2010	By:	/s/ Xiaohong Feng
		Xiaohong Feng
		(Chief Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of China Housing & Land Development, Inc. (the "Company") on Form 10-Q for the quarter ending September 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 12, 2010	By:	/s/ Cangsang Huang
		Cangsang Huang
		Chief Financial Officer