UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 FORM
        10-QSB
 (Mark
        One)
  x
              QUARTERLY
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 
 For
        the quarterly period ended June 30, 2007
 
 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 small business issuer as specified in its charter)
 
 Nevada
              20-1334845(State
                  or other jurisdiction
              (IRS
                  Employerof
                  incorporation or organization)
              Identification
                  No.)
 
 6
        Youyi Dong Lu, Han Yuan 4 Lou
 Xi'An,
        Shaanxi Province
 China
        710054
 (Address
        of principal executive offices)
 86-029-82582632
 (Issuer's
        telephone number)
 N/A
 (Former
        name, former address and former fiscal year,
 if
        changed since last report)
 
 Check
        whether the issuer (1) filed all reports required to be filed by
        Section
 13
        or 15(d) of the Exchange Act during the past 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 is a shell company (as defined
        in
 Rule
        12b-2 of the Exchange Act). Yes o No x
 
 State
        the number of shares outstanding of each of the issuer's classes of
        common
 equity,
        as of the latest practicable date: As of August 14, 2007
        -30,096,585
 shares
        of common stock
 
 
 Transitional
        Small Business Disclosure Format (check one): Yes o No x
  
 
 CHINA
        HOUSING & LAND DEVELOPMENT, INC.
 Index
 
 Page
                NumberPART
                  I.
              
              FINANCIAL
                  INFORMATIONItem
                  1.
              
              Financial
                  StatementsConsolidated
                  Balance Sheets as of June 30, 2007 (unaudited) and December 31,
                  2006
              2Consolidated
                  Statements of Income and Other Comprehensive Income for the three
                  and six
                  months periods endedJune
                  30,2007 and 2006 (unaudited)
              3Consolidated
                  Statements of Cash Flows for the six month periods ended June 30,
                  2007 and 2006 (unaudited)
              4Notes
                  to Consolidated Financial Statements (unaudited)
              5Item
                  2.
              
              Management's
                  Discussion and Analysis or Plan of Operations
              23Item
                  3.
              
              Controls
                  and Procedures
              29PART
                  II.
              
              OTHER
                  INFORMATIONItem
                  1.
              
              Legal
                  Proceedings
              30Item
                  2.
              
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              30Item
                  3.
              
              Defaults
                  Upon Senior Securities
              30Item
                  4.
              
              Submission
                  of Matters to a Vote of Security Holders
              30Item
                  5.
              
              Other
                  Information
              30Item
                  6.
              
              Exhibits
              30SIGNATURES
              
              
              31EX-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
  CHINA
                  HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARYCONSOLIDATED
                  BALANCE SHEETSAS
                  OF JUNE 30, 2007 AND DECEMBER 31, 2006June
                  30,
                2007
              
              
              December
                  31, 2006(Unaudited)ASSETSCash
              
              $
              7,835,924
              
              $
              379,633Cash
                  - restricted
              
              
              1,240,994
              
              
              1,108,271Accounts
                  receivable, net of allowance for doubtfulaccounts
                  of $81,184 and 79,118, respectively
              
              
              2,233,857
              
              
              3,070,516Notes
                  receivable, net
              
              
              1,042,244
              
              
              2,127,271Real
                  estateFinished
                  projects
              
              
              32,681,491
              
              
              37,247,436Construction
                  in progress
              
              
              23,798,062
              
              
              9,730,650Total
                  real estate held for development or sale
              
              
              56,479,553
              
              
              46,978,086Property
                  and equipment, net
              
              
              5,605,277
              
              
              17,701,896Assets
                  held for sale
              
              
              12,384,197
              
              
              -Advance
                  to suppliers
              
              
              890,969
              
              
              493,570Receivables,
                  deferred charges and other assets
              
              
              2,093,527
              
              
              986,039Exclusive
                  development rights
              
              
              2,266,610
              
              
              -Goodwill
              
              
              29,490,569
              
              
              -Total
                  assets
              
              $
              121,563,721
              
              $
              72,845,282LIABILITIESAccounts
                  payable
              
              $
              9,527,514
              
              $
              5,324,815Advances
                  from customers
              
              
              1,652,738
              
              
              2,902,426Accrued
                  expenses
              
              
              283,766
              
              
              1,738,584Payable
                  to original shareholders
              
              
              27,374,821
              
              
              5,462,798Income
                  and other taxes payable
              
              
              13,145,643
              
              
              11,386,169Other
                  payables
              
              
              3,391,172
              
              
              2,572,838Loans
                  from employees
              
              
              2,530,770
              
              
              1,037,842Loans
                  payable
              
              
              12,220,295
              
              
              23,206,852Warrants
                  liability
              
              
              2,220,465
              
              
              -Total
                  liabilities
              
              
              72,347,184
              
              
              53,632,324SHAREHOLDERS'
                  EQUITYCommon
                  stock: $.001 par value, authorized 100,000,000 shares
              
              
              30,067
              
              
              20,619issued
                  and outstanding 30,067,208 and 20,619,223, respectivelyAdditional
                  paid in capital
              
              
              28,141,431
              
              
              7,192,600Statutory
                  reserves
              
              
              2,472,458
              
              
              2,150,138Retained
                  earnings
              
              
              16,715,243
              
              
              14,414,181Capital
                  contribution receivable
              
              
              -
              
              
              (5,462,798
              )Accumulated
                  other comprehensive income
              
              
              1,857,338
              
              
              898,218Total
                  shareholders' equity
              
              
              49,216,537
              
              
              19,212,958Total
                  liabilities and shareholders' equity
              
              $
              121,563,721
              
              $
              72,845,282
  2
  CHINA
                  HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARYCONSOLIDATED
                  STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOMEFOR
                  THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2007 AND
                  2006Three
                  months ended June 30,
              Six
                  months ended June 30,2007
              
              
              2006
              
              
              2007
              
              
              2006(Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)
              
              
              (Unaudited)REVENUESale
                  of properties
              
              $
              11,135,812
              
              $
              18,290,210
              
              $
              19,181,388
              
              $
              36,239,053Other
                  income
              
              
              882,778
              
              
              81,606
              
              
              1,033,399
              
              
              155,841Total
                  revenue
              
              
              12,018,590
              
              
              18,371,816
              
              
              20,214,787
              
              
              36,394,894COSTS
                  AND EXPENSESCost
                  of properties sold
              
              
              8,315,189
              
              
              10,815,816
              
              
              14,566,647
              
              
              22,343,292Selling,
                  general and administrative expenses
              
              
              622,867
              
              
              1,818,925
              
              
              1,120,946
              
              
              3,449,441Other
                  expense
              
              
              3,060
              
              
              128,326
              
              
              35,679
              
              
              246,806Interest
                  expense
              
              
              307,651
              
              
              27,415
              
              
              515,527
              
              
              58,928Loss-change
                  in fair value of warrants
              
              
              11,204
              
              
              -
              
              
              11,204
              
              
              -Total
                  costs and expense
              
              
              9,259,971
              
              
              12,790,482
              
              
              16,250,003
              
              
              26,098,467INCOME
                  BEFORE PROVISION FOR INCOME TAXES
              
              
              2,758,619
              
              
              5,581,334
              
              
              3,964,784
              
              
              10,296,427PROVISION
                  FOR INCOME TAXES
              
              
              927,739
              
              
              1,841,192
              
              
              1,341,402
              
              
              3,397,821NET
                  INCOME
              
              
              1,830,880
              
              
              3,740,142
              
              
              2,623,382
              
              
              6,898,606GAIN
                  (LOSS) ON FOREIGN EXCHANGE
              
              
              678,248
              
              
              -
              
              
              959,113
              
              
              (168,521
              )OTHER
                  COMPREHENSIVE INCOME
              
              $
              2,509,128
              
              $
              3,740,142
              
              $
              3,582,495
              
              $
              6,730,085WEIGHTED
                  AVERAGE SHARES OUTSTANDINGBASIC
              
              
              26,312,014
              
              
              19,084,193
              
              
              23,453,110
              
              
              17,550,616DILUTED
              
              
              26,386,036
              
              
              19,090,808
              
              
              23,527,132
              
              
              17,557,231EARNINGS
                  PER SHAREBASIC
              
              $
              0.07
              
              $
              0.20
              
              $
              0.11
              
              $
              0.39DILUTED
              
              $
              0.07
              
              $
              0.20
              
              $
              0.11
              
              $
              0.39
  3
 CHINA
                  HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARYCONSOLIDATED
                  STATEMENTS OF CASH FLOWSFOR
                  THE SIX MONTHS ENDED JUNE 30, 2007 AND 20062007
              
              
              2006(Unaudited)
              
              
              (Unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  income
              
              $
              2,623,382
              
              $
              6,898,606Adjustments
                  to reconcile net income to cash
                  provided
                    by (used in) operating activities:Depreciation
              
              
              176,107
              
              
              113,326Exchange
                  loss (gains)
              
              
              133,465
              
              
              (336,151
              )Gain
                  on disposal of fixed assets and inventory
              
              
              (702,314
              )
              
              -Amortization
                  of stock issued for investor relations fees
              
              
              66,370
              
              
              -Loss-change
                  in fair value of warrants
              
              
              11,204
              
              
              -(Increase)
                  decrease in assets:Accounts
                  receivable
              
              
              944,207
              
              
              -Real
                  estate
              
              
              525,434
              
              
              (8,036,107
              )Advance
                  to suppliers
              
              
              (222,916
              )
              
              8,828,114Other
                  receivable and deferred charges
              
              
              (1,234,706
              )
              
              (937,652
              )Increase
                  (decrease) in liabilities:Accounts
                  payable
              
              
              1,617,561
              
              
              8,851,752Advances
                  from customers
              
              
              (1,306,372
              )
              
              (26,259,743
              )Accrued
                  expense
              
              
              (1,536,651
              )
              
              5,217,918Other
                  payable
              
              
              1,913,614
              
              
              710,305Income
                  and other taxes payable
              
              
              1,446,096
              
              
              -Net
                  cash provided by (used in) operating activities
              
              
              4,454,481
              
              
              (4,949,632
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Change
                  in restricted cash
              
              
              (102,776
              )
              
              -Purchase
                  of buildings, equipment and automobiles
              
              
              256,904
              
              
              (340,885
              )Notes
                  receivable collected
              
              
              1,095,005
              
              
              -Purchase
                  of intangible assets
              
              
              -
              
              
              (2,660
              )Cash
                  from acquisition
              
              
              50,701
              
              
              -Net
                  cash provided by (used in) investing activities
              
              
              1,299,834
              
              
              (343,545
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Loan
                  proceeds
              
              
              -
              
              
              6,225,000Payments
                  on loans
              
              
              (11,426,243
              )
              
              (537,840
              )Loans
                  from employees
              
              
              1,446,255
              
              
              -Proceeds
                  from issuance of common stock and warrants
              
              
              23,036,138
              
              
              935,250Payments
                  to original shareholder
              
              
              (11,409,312
              )
              
              -Net
                  cash provided by financing activities
              
              
              1,646,838
              
              
              6,622,410INCREASE
                  IN CASH
              
              
              7,401,153
              
              
              1,329,233EFFECTS
                  ON FOREIGN CURRENCY EXCHANGE
              
              
              55,138
              
              
              2,168CASH,
                  beginning of period
              
              
              379,633
              
              
              30,746CASH,
                  end of period
              
              $
              7,835,924
              
              $
              1,362,147
  4
  **Note
        1 - Organization and basis of presentation**
 
 Organization
 
 China
        Housing & Land Development, Inc. (the “Company”) is a Nevada corporation,
        incorporated on July 6, 2004 under the name Pacific Northwest Productions
        Inc.
        On May 6, 2006, the Company changed its name to China Housing & Land
        Development Inc. The Company, through its subsidiary Xian Tsining Housing
        Development Company Inc. (XTHDC), is engaged in acquisition, development,
        management, and sale of commercial and residential real estate properties
        located primarily in Xi'an city, the People’s Republic of China
        (PRC).
 
 XTHDC
        was
        established during May 1992 as a state-owned enterprise, whose former name
        is
        Xian New Star Group Real Estate Development Co. Ltd, and was formerly the
        logistics department of Lan Zhou Military area of the People's Liberation
        Army
        of China. The Company was reorganized as a limited liability company with
        equity
        capital invested by management personnel in September 1999. The Company is
        a
        Chinese registered limited liability company with a legal structure similar
        to a
        regular corporation and a limited liability company. The Articles of Association
        provide for a 54 year term beginning September 7, 1999 with registered capital
        of approximately $3,140,000 (RMB26,000,000). On March 28, 2002, the registered
        capital of Tsining was increased to approximately $6,050,000 (RMB50,000,000).
 
 On
        April
        21, 2006, XTHDC entered into and closed a share purchase agreement with Pacific
        Northwest Productions, Inc. (“Pacific”), a public shell in the United States of
        Americaincorporated
        in the state of Nevada.
        Pursuant to the purchase agreement, Pacific acquired all of the issued and
        outstanding capital stock of XTHDC in exchange for 16,000,000 (post-split)
        shares of Pacific’s common stock.
 
 Concurrently
        with the closing of the purchase agreement and as a condition thereof, Pacific
        entered into an agreement with Deljit Bains and Davinder Bains, its executive
        officers, pursuant to which they each returned 4,000,000 (post-split) shares
        (8,000,000 shares in total) of Pacific common stock to Pacific for cancellation.
        They were not compensated in any way for the cancellation of their shares
        of
        Pacific common stock. Upon completion of the foregoing transactions, Pacific
        had
        an aggregate of 20,000,000 shares of common stock issued and outstanding.
 
 As
        a
        result of the merger, XTHDC’s stockholders own approximately 80% of the combined
        company and the directors and executive officers of XTHDC became the directors
        and executive officers of Pacific. Accordingly, the transaction has been
        accounted for as a reverse acquisition of Pacific by XTHDC resulting in a
        recapitalization of XTHDC. XTHDC is deemed to be the purchaser and surviving
        company for accounting purposes. Accordingly, its assets and liabilities
        are
        included in the balance sheet at their historical book values and the results
        of
        operations of XTHDC have been presented for the comparative prior period.
 
 In
        addition, on May 5, 2006, Pacific changed its name to China Housing & Land
        Development, Inc. (hereafter referred to as the “Company”) and the stockholders
        approved a stock dividend of seven shares for each share held, which has
        been
        accounted for as an eight to one forward stock split. All shares and per
        share
        data have been restated retrospectively.
  5
 In
        2007, the Company acquired 100% equity of
        Xi’an New Land Development Co., Ltd. See note 2 for details of acquisition.
  Xi’an
        New Land Development Co., LTD (“New Land”) was
        originally incorporated in September, 2003 in Xi’an city in Shaanxi province,
        China .
        In 2006, New Land entered into an agreement with BaQiao District Government
        of
        Xi’an City to develop BaQiao Science & Technology Industrial Park, a
        provincial development zone in Shaan’xi Province to cooperate
        with New Land to develop and purchase approximately 487 acres in BaQiao Park.
        The
        agreement covers period from July 2006 to June 2011. New Land is responsible
        for the installation and maintenance of all basic infrastructures, including
        water, electricity, gas supply, telecommunication and sewer systems. In return, New
        Land will be given the exclusive rights to obtain 487 acres land use
        right.
 
 **Note
        2 - Acquisition**
 
 On
        March 9, 2007, the Company entered into a Shares Transfer Agreement (the
        Agreement) to acquire 32 million shares of Xi'an New Land Development Co.,
        Ltd.
        (New Land), representing 100% equity ownership of New Land. The acquisition
        was
        effective on May 31, 2007. The total purchase price for the acquisition is
        RMB
        270 million, approximately $35 million. The total purchase price includes
        1) an
        initial cash payment of RMB 5 million, approximately $610,000, payable within
        20
        days after the signing of the Agreement, 2) an additional cash payment of
        RMB 57
        million, approximately $7.2 million, and 3) a promissory note of the aggregate
        amount of RMB 208 million, approximately $26.2 million, bearing 10% interest
        with a maturity of January
        30, 2009. As of June 30, 2007, the total payable to original shareholders
        amounted to $27,374,821.
 
 The
        fair value of New Land was RMB 28.5 million, approximately $3.7 million as
        of
        May 31, 2007 except for the Company’s exclusive development right for BaQiao
        Project. Based on an independent appraisal report, the Company’s exclusive
        development right is valued at RMB 17.2 million, approximately $2.26 million.
        Pursuant to SFAS 141, Business Combination, the excess of purchase price
        over
        total fair value acquired is recorded as goodwill. Subsequently, the Company
        recorded $29.5M of goodwill after the acquisition.
  Acquired
                    (Assumed)Item
                
                Book
                    Value
                
                by
                    the CompanyCurrent
                    assets
                
                $
                297,131
                
                $
                297,131Inventory
                
                
                8,824,887
                
                
                8,824,887Property,
                    plant, and equipment
                
                
                103,212
                
                
                103,212Exclusive
                    rights
                
                
                -
                
                
                2,266,610Goodwill
                
                
                -
                
                
                29,490,569Total
                    assets
                
                
                9,225,230
                
                
                40,982,409Current
                    liability
                
                
                5,477,408
                
                
                5,477,408Total
                    liabilities
                
                
                5,477,408
                
                
                5,477,408Net
                    assets
                
                $
                3,747,822
                
                $
                35,505,001
  The
        financial data of New Land from June 1 to June 30, 2007 is included in the
        Company’s consolidated financial statements.
 
  6
  **Pro
          Forma**
 
 The
          following unaudited pro forma condensed income statement for the six months
          ended June 30, 2007 was prepared under Generally Accepted Accounting Principles
          and as if the acquisition
          of New Land had occurred on January 1, 2006. The pro forma information
          may not
          be indicative of the results that actually would have occurred if the
          acquisition had been in effect from and on the dates indicated or which
          may be
          obtained in the future.
 For
                    the six months ended
                
                
                For
                    the year endedJune
                    30,
                  2007
                
                
                December
                    31, 2006Total
                    revenue
                
                $
                20,214,787
                
                $
                32,785,718Cost
                    of Goods Sold
                
                
                14,566,647
                
                
                21,236,598Gross
                    Profit
                
                
                5,648,140
                
                
                11,549,120Operating
                    Expenses
                
                
                1,625,563
                
                
                4,576,201Income
                    Tax
                
                
                1,341,402
                
                
                2,333,444Net
                    Income
                
                $
                2,681,175
                
                $
                4,639,475
  **Note
        3 - Summary of significant accounting policies**
 
 Principles
        of consolidation and basis of presentation
 
 The
        accompanying consolidated financial statements include the accounts of China
        Housing & Land Development, Inc. and its wholly owned subsidiaries, XTHDC
        and New Land. All material inter-company accounts and transactions have been
        eliminated in consolidation. The accompanying consolidated financial statements
        have been prepared in conformity with accounting principles generally accepted
        in the United States of America.
  Use
        of
        estimates
  The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates.
 
 Foreign
        currency translation
 
 As
        of
        June 30, 2007, the accounts of the Company are maintained in their functional
        currency the Chinese Yuan Renminbi (RMB). The reporting currency for the
        consolidated financial statements is the United States Dollars (USD). In
        accordance with Statement of Financial Accounts Standards ("SFAS") No. 52,
        "Foreign Currency Translation," all assets and liabilities were translated
        at
        the exchange rate on the balance sheet date, stockholder's equity are translated
        at the historical rates and statement of operations are translated at the
        weighted average exchange rate for the period. Cash flows are also translated
        at
        the weighted average exchange rate for the year; therefore, amounts reported
        on
        the statement of cash flows will not necessarily agree with changes in the
        corresponding balances on the balance sheet.
 
 The
        resulting translation adjustments are reported under other comprehensive
        income
        in accordance with SFAS No. 130, "Reporting Comprehensive Income."
 
  7
  Revenue
          recognition
 
 Real
          estate sales are reported in accordance with the provisions of Statement
          of
          Financial Accounting Standard No. 66, “Accounting for Sales of Real Estate”.
          Profit from the sales of development properties, less 5% business tax,
          is
          recognized by the full accrual method when the sale is consummated. A sale
          is
          not considered consummated until (1) the parties are bound by the terms
          of a
          contract, (2) all consideration has been exchanged, (3) any permanent financing
          of which the seller is responsible has been arranged, (4) all conditions
          precedent to closing have been performed, (5) the seller does not have
          substantial continuing involvement with the property, and (6) the usual
          risks
          and rewards of ownership have been transferred to the buyer. Sales transactions
          not meeting all the conditions of the full accrual method are accounted
          for
          using the deposit method of accounting. Under the deposit method, all costs
          are
          capitalized as incurred, and payments received from the buyer are recorded
          as a
          deposit liability. Real estate rental income, less 5% business tax, is
          recognized on the straight-line basis over the terms of the tenancy
          agreements.
  For
        Company financed sales, the Company is recognizing sales based on the full
        accrual method provided that the buyer’s initial and continuing investment is
        adequate according to SFAS No. 66. The initial investment is the buyer’s
        down-payment less the loan amount provided by the Company. Interest on these
        loans is amortized over the terms of the loans.
  Real
        estate capitalization and cost allocation
  Residential
        properties completed or under construction are stated at cost or estimated
        net
        realizable value, whichever is lower. Costs include land and land improvements,
        direct construction costs and development costs, including predevelopment
        costs,
        interest on indebtedness, real estate taxes, insurance, construction overhead
        and indirect project costs. Selling and advertising costs are expensed as
        incurred. Total estimated costs of multi-unit developments are allocated
        to
        individual units based upon specific identification methods.
  Land
        and
        improvement costs include land, land improvements, interest on indebtedness
        and
        real estate taxes. Appropriate costs are allocated to projects on the basis
        of
        acreage, dwelling units and relative sales value. Land held for development
        and
        improvements are stated at cost or estimated net realizable value, whichever
        is
        lower.
  Land
        and
        land improvements applicable to condominiums, town homes and single-family
        homes, are transferred to construction in progress when construction
        commences.
 
 Capitalization
        of interest
 
 Interest
        incurred during construction is capitalized into construction in progress.
        All
        other interest is expensed as incurred.
 
 For
        the
        six months ended June 30, 2007, interest incurred by the Company was $1,511,195
        and capitalized interest for the same period was $995,668. For the six months
        ended June 30, 2006, interest incurred by the Company was $1,059,604 and
        capitalized interest for the same period was $1,000,676.
 
 Concentrations
 
 The
        Company sells residential and commercial units to residents and small business
        owners. The Company had one major customer that accounted for approximately
        47%
        of the Company’s sales for the six months ended June 30, 2007 and accounts
        receivable for this customer at June 30, 2007 amounted to $1,752,262. There
        was
        no major customer that accounted for over 5% of the Company’s sales for the six
        months ended June 30, 2006.
  8
  The
        Company is dependent on third-party sub-contractors, manufacturers, and
        distributors for all of construction services and supply of construction
        materials. Construction services or products purchased from the Company’s five
        largest subcontractors/suppliers accounted for 54% and 41% of the Company’s
        purchases for the six months ended June 30, 2007 and 2006, respectively.
        Accounts payables to these subcontractors/suppliers amounted to $3,623,038
        and
        $2,574,122 at June 30, 2007 and 2006, respectively.
 
 The
        Company's operations are carried out in the People's Republic of China.
        Accordingly, the Company's business, financial condition and results of
        operations may be influenced by the political, economic and legal environments
        in the People's Republic of China, by the general state of the People's Republic
        of China’s economy. The Company's business may be influenced by changes in
        governmental policies with respect to laws and regulations, anti-inflationary
        measures, currency conversion and remittance abroad, and rates and methods
        of
        taxation, among other things.
 
 Cash
        and concentration of risk
 
 Cash
        includes cash on hand and demand deposits in accounts maintained with
        state-owned banks within the PRC. Total cash in state-owned banks at June
        30,
        2007 and December 31, 2006 amounted to $7,710,211 and $353,762, respectively,
        of
        which no deposits are covered by insurance. The Company has not experienced
        any
        losses in such accounts and believes it is not exposed to any risks on its
        cash
        in bank accounts.
 
 Restricted
        cash
  The
        bank
        grants mortgage loans to home purchasers and will credit these amounts to
        the
        Company's bank account once title passes. If the houses are not completed
        and
        the new home owners have no ownership documents to secure the loan, the bank
        will deduct 10% of the home owner’s loan from the Company's bank account and
        transfer that amount to a designated bank account classified on the balance
        sheet as restricted cash. Interest earned on the restricted cash is credited
        to
        the Company's normal bank account. The bank will release the restricted cash
        after home purchasers have obtained the ownership documents to secure the
        mortgage loan. Total restricted cash amounted to $1,240,994 and $1,108,271
        as of
        June 30, 2007 and December 31, 2006, respectively.
 
 Accounts
        receivable-trade
 
 Accounts
        receivable-trade consists of balances due from customers for the sale of
        residential and commercial units in the PRC. The Company provides an allowance
        for doubtful accounts equal to the estimated uncollectible amounts. The
        Company’s estimated uncollectible amounts are based on historical collection
        experience and a review of the current status of trade accounts receivable.
        It
        is reasonably possible that the Company’s estimate of the allowance for doubtful
        accounts will change. Accounts receivable are presented net of an allowance
        for
        doubtful accounts of $2,233,857 and $3,070,516 at June 30, 2007 and December
        31,
        2006, respectively.
 
 Notes
        receivable
 
 The
        Company finances sales to certain new home owners. Financing agreements are
        signed and the loans are due in 1 to 3 years. The loans are non-interest
        bearing, therefore the Company has calculated imputed interest and discounted
        the carrying amount of notes receivable. Notes receivable are presented net
        of
        unamortized interest and allowance for doubtful accounts.
  9
  June
                    30,
                  2007
                
                
                December
                    31, 2006(Unaudited)Notes
                    receivable
                
                $
                1,203,615
                
                $
                2,290,378Less:
                    unamortized interest
                
                
                (29,669
                )
                
                (34,710
                )Less:
                    allowance for doubtful accounts
                
                
                (131,702
                )
                
                (128,397
                )Notes
                    receivable, net
                
                $
                1,042,244
                
                $
                2,127,271
  Other
        receivables
 
 Other
        receivables consist of various cash advances to unrelated companies and
        individuals which the management of the Company have business relationships.
        These amounts are not related to operations of the Company, are unsecured,
        non-interest bearing and generally are short term in nature. The balances
        of
        other receivables were $2,243,177 and $1,282,831 as of June 30, 2007 and
        December 31, 2006, respectively. Other receivables are reviewed annually
        as to
        whether their carrying value has become impaired. The Company has established
        an
        allowance for doubtful accounts of $304,981 and $309,692 as of June 30, 2007
        and
        December 31, 2006, respectively
 
 Advances
        to suppliers
 
 Advances
        to suppliers consist of amounts paid in advance to contractors and vendors
        for
        services and materials that have not been performed or received and generally
        relate to the development and construction of residential units in the PRC.
        Advances amounted to $890,969 and $493,570 as of June 30, 2007 and December
        31,
        2006, respectively.
 
 Real
        estate inventory (Inventory or Inventories)
 
 Real
        estate inventories represent real estate held for development or sale and
        consist of residential and commercial units under construction and units
        completed. Inventories are stated at the lower of cost or net realizable
        value.
        If the inventory is determined to be impaired, it will be written down to
        its
        fair market value. Inventory costs include land use right, land development
        and
        home construction costs, engineering costs, insurance costs, wages, real
        estate
        taxes, and interest related to development and construction. All costs are
        accumulated by specific projects and allocated to residential and commercial
        units within the respective projects. The Company leases the land for the
        residential unit sites under land use rights with various terms from the
        government of the PRC. The Company evaluates the carrying value for impairment
        based on the undiscounted future cash flows of the assets. Write-downs of
        inventory deemed to be impaired would be recorded as adjustments to the cost
        basis. No Impairment loss was incurred or recorded for the six months ended
        June
        30, 2007 and 2006.
 
 No
        depreciation is provided for construction in progress. Construction overhead
        and
        selling expenses are expensed as incurred.
  Assets
        held for sale
 
 The
        Company intends to sell one of its fixed assets with net book value of
        $12,384,197 as of June 30, 2007. There is no asset held for sale as of December
        31, 2006.
  10
  Property
        and equipment
 
 Property
        and equipment are recorded at cost. Depreciation is computed using the
        straight-line method over the estimated useful lives of the assets. Depreciation
        expense for the six months ended June 30, 2007 and 2006 amounted to $176,107
        and
        $113,326, respectively. Estimated useful lives of the assets are as
        follows:
  Estimated
                    Useful LifeBuildings
                
                
                30
                    yearsVehicles
                
                
                6
                    yearsElectronic
                    equipment
                
                
                5
                    yearsOffice
                    furniture
                
                
                5
                    years
  Maintenance,
        repairs and minor renewals are charged directly to expenses as incurred.
        Major
        additions and betterment to property and equipment are capitalized.
 
 Long-lived
        assets
  Effective
        January 1, 2002, the Company adopted Statement of Financial Accounting Standards
        No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
        ("SFAS
        144"), which addresses financial accounting and reporting for the impairment
        or
        disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for
        the
        Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
        Of,"
        and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
        the Results of Operations for a Disposal of a Segment of a Business." The
        Company periodically evaluates the carrying value of long-lived assets to
        be
        held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
        to be recorded on long-lived assets used in operations when indicators of
        impairment are present and the undiscounted cash flows estimated to be generated
        by those assets are less than the assets' carrying amounts. In that event,
        a
        loss is recognized based on the amount by which the carrying amount exceeds
        the
        fair market value of the long-lived assets. Loss on long-lived assets to
        be
        disposed of is determined in a similar manner, except that fair market values
        are reduced for the cost of disposal. Based on its review, the Company believes
        there was no impairment of its long-lived assets as of June 30,
        2007.
  Fair
        value of financial instruments
 
 Statement
        of Financial Accounting Standards No. 107, “Disclosures About Fair Value of
        Financial Instruments” requires disclosure of the fair value of financial
        instruments held by the Company. SFAS 107 defines the fair value of financial
        instruments as the amount at which the instrument could be exchanged in a
        current transaction between willing parties. The Company considers the carrying
        amount of cash, accounts receivable, other receivables, accounts payable,
        accrued liabilities and other payables to approximate their fair values because
        of the short period of time between the origination of such instruments and
        their expected realization and their current market rate of interest. Management
        believes the interest rate on notes reflect rates currently available. Thus,
        the
        carrying value of loans payable approximates fair value.
 
 Accounts
        payable
 
 Accounts
        payable consists of balances due to subcontractors and suppliers. Accounts
        payable amounted to $9,527,516 and $5,324,815 at June 30, 2007 and December
        31,
        2006,
 respectively.
  11
  Advances
        from customers
 
 Advances from
        customers represent prepayments by customers for home purchases. The Company
        records these prepayments as advances from customers when the payments are
        received. Advances from customers amounted to $1,652,738 and $2,902,426 at
        June
        30, 2007 and December 31, 2006, respectively.
 
 Other
        payables
 
 Other
        payables consist of various cash advances from unrelated companies and
        individuals which management of the Company have business relationships.
        These
        amounts are not related to operations of the Company, are unsecured,
        non-interest bearing and generally are short term in nature. Other payables
        amounted to $3,391,172 and $2,572,838 as of June 30, 2007 and
        December 31,
        2006, respectively .
 
 Advertising
        costs
 
 Advertising
        and sales promotion costs are expensed as incurred. Advertising expense totaled
        $124,016 and $32,610 for the six months ended June 30, 2007 and 2006
        respectively.
 
 Warranty
        costs
 
 Generally,
        the Company provides all of its customers with a limited (half a year to
        5
        years) warranty period for defective workmanship.
 
 The Company
        accrues estimated warranty costs into the cost of its homes as a liability
        after
        each project is closed based on the Company's historical experience, which
        normally is less than 0.2% of total cost of the project. Any excess amounts
        are
        expensed in the period when they occur. Many of the items relating to
        workmanship are completed by the existing labor force utilized to construct
        other new houses and are therefore already factored into the labor and overhead
        costs of another project. Any significant material defects are generally
        under
        warranty with the Company's suppliers. Currently, the Company retains 5%
        of the
        total construction contract from the construction contractors for a period
        of
        one year after the completion of the construction. Such retention amounts
        will
        be used to pay for any repair expense incurred due to defects in the
        construction. The Company has not historically incurred any significant
        litigation requiring additional specific reserves for its product offerings.
        As
        of June 30, 2007 and December 31, 2006, the Company has accrued $68,682 as
        warranty costs.
 
 Income
        taxes
 
 The
        Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
        the
        recognition of deferred tax assets and liabilities for the expected future
        tax
        consequences of events that have been included in the financial statements
        or
        tax returns. Under this method, deferred income taxes are recognized for
        the tax
        consequences in future years of differences between the tax bases of assets
        and
        liabilities and their financial reporting amounts at each period end based
        on
        enacted tax laws and statutory tax rates applicable to the periods in which
        the
        differences are expected to affect taxable income. Valuation allowances are
        established, when necessary, to reduce deferred tax assets to the amount
        expected to be realized. At June 30, 2007 and 2006, there was no significant
        book to tax differences
  12
  The
        Company adopted FASB Interpretation 48, “Accounting for Uncertainty in Income
        Taxes” (“FIN 48”), as of January 1, 2007. A tax position is recognized as a
        benefit only if it is “more likely than not” that the tax position would be
        sustained in a tax examination, with a tax examination being presumed to
        occur.
        The amount recognized is the largest amount of tax benefit that is greater
        than
        50% likely of being realized on examination. For tax positions not meeting
        the
“more likely than not” test, no tax benefit is recorded. The adoption had no
        affect on the Company’s financial statements.
 
 Local
        PRC income tax
 
 The
        Company is governed by the Income Tax Law of the PRC concerning Chinese
        registered limited liability companies. Under the Income Tax Laws of the
        PRC,
        Chinese enterprises are generally subject to an income tax at an effective
        rate
        of 33% (30% state income taxes plus 3% local income taxes) on income reported
        in
        the statutory financial statements after appropriate tax adjustments, unless
        the
        enterprise is located in a specially designated region for which more favorable
        effective tax rates are applicable. The provision for income taxes at June
        30
        consisted of the following:
  2007
                
                
                2006(Unaudited)
                
                
                (Unaudited)Provision
                  for China income and local
                  tax
                
                $
                1,341,402
                
                $
                3,397,821Deferred
                    taxes
                
                
                -
                
                
                -Total
                    provision for income taxes
                
                $
                1,341,402
                
                $
                3,397,821
  The
        following table reconciles the U.S. statutory rates to the Company’s effective
        tax rate at June 30,
  2007
                
                2006U.S.
                    statutory rates
                
                
                34.0
                %
                
                34.0
                %Foreign
                    income not recognized in USA
                
                
                (34.0)
                
                
                (34.0)China
                    income taxes
                
                
                33.0
                
                
                33.0Totals
                
                
                33.0
                %
                
                33.0
                %
  Beginning
        January 1, 2008, the new Enterprise Income Tax (“EIT”) law will replace the
        existing laws for Domestic Enterprises (“DES”) and Foreign Invested Enterprises
        (“FIEs”). The new standard EIT rate of 25% will replace the 33% rate currently
        applicable to both DES and FIEs. The two years tax exemption, three years
        50%
        tax reduction tax holiday for production-oriented FIEs will be eliminated.
        The
        Company is currently evaluating the effect of the new EIT law will have on
        its
        financial position.
 
 Sales
        and additional taxes
 
 In
        June
        2006, the Emerging Issues Task Force (EITF) reached a consensus on EITF No.
        06-3, How Taxes Collected from Customers and Remitted to Governmental
        Authorities Should Be Presented in the Income Statement (EITF No. 06-3).
        EITF
        No. 06-3 permits that such taxes may be presented on either a gross basis
        or a
        net basis as long as that presentation is used consistently. The adoption
        of
        EITF No. 06-3 on January 1, 2007 did not impact our consolidated financial
        statements. We present the taxes within the scope of EITF No. 06-3 on a net
        basis.
  13
  All
        sales
        recognized are subject to sales and additional taxes of 5.61% and are payable
        to
        local government. This amount is included in cost of properties sold. Sales
        and
        additional taxes incurred for the six months ended June 30, 2007 and 2006
        were
        $1,076,076 and $2,033,011, respectively.
 
 Basic
        and diluted earning per share
  Earning
        per share is calculated in accordance with the Statement of Financial Accounting
        Standards No. 128 (“SFAS No. 128”), “Earnings per share”. SFAS No. 128
        superseded Accounting Principles Board Opinion No.15 (APB 15). Net earning
        per
        share for all periods presented has been restated to reflect the adoption
        of
        SFAS No. 128. Basic net earning per share is based upon the weighted average
        number of common shares outstanding. Diluted net earning per share is based
        on
        the assumption that all dilutive convertible shares and stock warrants were
        converted or exercised. Dilution is computed by applying the treasury stock
        method.
  Under
        this method, options and warrants are assumed to be exercised at the beginning
        of the period (or at the time of issuance, if later), and as if funds obtained
        thereby were used to purchase common stock at the average market price during
        the period.
 
 Stock-based
        compensation
 
 The
        Company records stock-based compensation pursuant to Statement of Financial
        Accounting Standards No. 123 (revised 2004), "Share-Based Payments,"
        ("FAS123R"), which established standards for the accounting for transactions
        in
        which an entity exchange its equity instruments for goods or services. This
        statement requires companies to measure the cost of services received in
        exchange for an award of equity instruments based on the grant-date fair
        value
        of the award. The cost will be recognized over the period of services
        rendered.
 
 Comprehensive
        income
 
 Comprehensive
        income consists of net income and foreign currency translation gains and
        losses
        affecting shareholders’ equity that, under generally accepted accounting
        principles, are excluded from net income. Gain(Loss) on foreign exchange
        translation totaled $959,120 and $(168,521) for the six months ended June
        30,
        2007 and 2006, respectively.
  Statement
        of cash flows
  In
        accordance with Statement of Financial Accounting Standards No. 95, "Statement
        of Cash Flows," cash flows from the Company's operations is calculated based
        upon the local currencies. As a result, amounts related to assets and
        liabilities reported on the statement of cash flows will not necessarily
        agree
        with changes in the corresponding balances on the balance sheet.
 
 Derivative
        financial instruments
 
 The
        Company accounts for its warrants in accordance with FAS No. 133, “Accounting
        for Derivatives Instruments and Hedging Activity,” and EITF 0019 which requires
        the warrants to be carried on the balance sheet at fair value and to mark
        to
        market at each reporting period. The warrants are reported as liability on
        the
        balance sheet when issued and any changes in the fair value is reported as
        charge to income statement.
  14
  Recent
        pronouncements
  In
        September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles (GAAP), and expands disclosures
        about
        fair value measurements. This Statement applies under other accounting
        pronouncements that require or permit fair value measurements, the Board
        having
        previously concluded in those accounting pronouncements that fair value is
        the
        relevant measurement attribute. Accordingly, this Statement does not require
        any
        new fair value measurements. However, for some entities, the application
        of this
        Statement will change current practice. This Statement is effective for
        financial statements issued for fiscal years beginning after November 15,
        2007,
        and interim periods within those fiscal years. The management is currently
        evaluating the effect of this pronouncement on its financial
        statements **.**
  In
        February 2007, the Financial Accounting Standards Board (‘‘FASB’’) issued
        Statement of Financial Accounting Standards (‘‘SFAS’’) No. 159, The Fair Value
        Option for Financial Assets and Financials Liabilities — Including an Amendment
        of FASB Statement No. 115. This standard permits measurement of certain
        financial assets and financial liabilities at fair value. If the fair value
        option is elected, the unrealized gains and losses are reported in earnings
        at
        each reporting date. Generally, the fair value option may be elected on an
        instrument-by-instrument basis, as long as it is applied to the instrument
        in
        its entirety. The fair value option election is irrevocable, unless a new
        election date occurs. SFAS No. 159 requires prospective application and also
        establishes certain additional presentation and disclosure requirements.
        The
        standard is effective as of the beginning of the fiscal year that begins
        after
        November 15, 2007. The Company is currently evaluating the provisions
        of SFAS No. 159 to determine the potential impact, if any, the adoption will
        have on the Company’s financial statements.
 
 In
        June 2007, the
        FASB
        issued FASB Staff Position No. EITF 07-3, “Accounting for Nonrefundable Advance
        Payments for Goods or Services Received for use in Future Research and
        Development Activities” (“FSP EITF 07-3”), which addresses whether nonrefundable
        advance payments for goods or services that used or rendered for research
        and
        development activities should be expensed when the advance payment is made
        or
        when the research and development activity has been performed. Management
        believes this pronouncement has no effect on the Company’s financial
        statements.
 
 **Note
        4 - Supplemental disclosure of cash flow information**
 
 Income
        taxes paid amounted to $0 and $0 for the six months ended June 30, 2007 and
        2006, respectively. Interest (net of amount capitalized) paid for the six
        months
        ended June 30, 2007 and 2006 amounted to $309,630 and $58,928, respectively.
 
 Noncash
        financing transactions included 60,000 shares of common stock issued to an
        investor relations company in consideration of a one year consulting service
        valued at $131,400 in 2007.
 
 Noncash
        financing transactions included reclassification of notes receivable from
        accounts receivable of $1,042,244.
 
 Noncash
        investing activities included exchange of fixed asset with one of the Company’s
        contractors for $864,850 in 2007 and 66,154 warrants issued to placement
        agents
  15
  **Note
        5 - Real estate inventories**
 
 The
        following summarizes the components of real estate inventories as of June
        30,
        2007 and December 31, 2006:
  June
                    30,
                  2007
                
                
                December
                    31, 2006(Unaudited)Finished
                    projects
                
                $
                32,681,491
                
                $
                37,247,436Construction
                    in progress
                
                
                23,798,062
                
                
                9,730,650Total
                    real estate held for development or sale
                
                $
                56,479,553
                
                $
                46,978,086
  **Note
        6 - Receivables, deferred charges and other assets**
 
 Receivables,
        deferred charges and other assets consist of the following as of June 30,
        2007
        and December 31, 2006:
  June
                    30,
                  2007
                
                
                December
                    31, 2006(Unaudited)Other
                    receivable
                
                $
                2,243,177
                
                $
                1,282,831Allowance
                    for doubtful Accounts
                
                
                (309,692
                )
                
                (301,920
                )Prepaid
                    expenses
                
                
                160,042
                
                
                5,128Receivables,
                    deferred charges and other assets
                
                $
                2,093,527
                
                $
                986,039
  **Note
        7 - Intangibles**
 
 The
        Company’s intangibles consist of goodwill (see note 2 for goodwill) and
        exclusive development rights to acquire 487 acre of land use right in Shaanxi
        province. This value is determined by an independent appraisal report dated
        March 31, 2007. The future benefit of this exclusive right is valued at
        $36,451,800. The Company evaluates intangible assets for impairment, at least
        on
        an annual basis and whenever events or changes in circumstances indicate
        that
        the carrying value may not be recoverable from its estimated future cash
        flows.
        As of June 30, 2007, the Company believes there is no impairment issue of
        the
        intangibles.
 
 **Note
        8 - Property and equipment, net**
 
 Property
        and equipment consist of the following as of June 30, 2007 and December 31,
        2006:
  June
                    30,
                  2007
                
                
                December
                    31, 2006(Unaudited)Buildings
                    and improvements
                
                $
                6,036,192
                
                $
                18,255,045Machinery
                    and equipment
                
                
                126,049
                
                
                117,081Transportation
                    equipment
                
                
                77,790
                
                
                55,598Furniture
                    and fixture
                
                
                128,662
                
                
                95,519Totals
                
                
                6,368,693
                
                
                18,523,243Accumulated
                    depreciation
                
                
                (763,416
                )
                
                (821,347
                )Property
                    and equipment, net
                
                $
                5,605,277
                
                $
                17,701,896
  **Note
        9 - Accounts receivable**
  Accounts
        receivable consist of the following as of June 30, 2007 and December 31,
        2006:
  16
  June
                    30, 2007
                
                December
                    31, 2006(Unaudited)Accounts
                    receivable
                
                $
                2,315,041
                
                $
                3,149,634Allowance
                    for doubtfulaccounts
                
                
                (81,184
                )
                
                (79,118
                )Accounts
                    receivable, net
                
                $
                2,233,857
                
                $
                3,070,516
  **Note** **10
        -** **Loans from employees**
 
 The
        Company has borrowed monies from certain employees to fund the Company’s
        construction projects. The loans bear interest ranging from 7% to 12% and
        the
        principal matures within one to three years. Loans from employees amounted
        to
        $2,530,770 and $1,037,842 as of June 30, 2007 and December 31, 2006,
        respectively.
 
 **Note
        11 - Loans payable**
 
 Loans
        payable represent amounts due to various banks and are due on demand or normally
        within one year. These loans generally can be renewed with the banks when
        expired. Loans payable consisted of the following as of June 30, 2007 and
        December 31, 2006:
  17
  June
                    30,
                  2007
                
                
                December
                    31,
                  2006(Unaudited)Commercial
                    Bank Weilai Branchdue
                    August 7, 2007, annual interest rate isat
                    9.945%, secured by the Company'sXin
                    Xin Gangwan, Xin Xin Tower andMing
                    Yuan Projects
                
                $
                5,260,000
                
                $
                5,128,000Shannxi
                    International Trust Investment Co.,due
                    on demand, annual interest is at 10.80%,secured
                    by 14 units of the Company'sXin
                    Xin In House and Harbor projects
                
                
                -
                
                
                2,564,000Shannxi
                    International Trust Investment Co.,due
                    September 20, 2007, annual interest is at10.80%,
                    secured by six commercial units ofthe
                    Company's Jun Jin Yuan project
                
                
                516,795
                
                
                503,826Merchant
                    bank Xi'an high and new technologydevelopment
                    zone branch, due June 27, 2007annual
                    interest is at 19.20%, secured by theCompany's
                    Jun Jin Yuan project
                
                
                -
                
                
                403,830Construction
                    Bank Zhuque Road Branch,due
                    May 6, 2007, annual interest is at 6.21%,secured
                    by the Company's Jun Jin Yuan project
                
                
                -
                
                
                4,107,528Construction
                    Bank Zhuque Road Branch,due
                    July 6, 2007, annual interest is at 6.91%,secured
                    by the Company's Jun Jin Yuan project
                
                
                -
                
                
                2,564,000Commercial
                    Bank Weilai Branch,due
                    December 31, 2007, annual interest is at9.79%,
                    secured by the Company's 24G project
                
                
                6,443,500
                
                
                6,410,000Various
                    loans on demand,to
                    unrelated parties, at various interest rate
                
                
                -
                
                
                1,525,668Total
                
                $
                12,220,295
                
                $
                23,206,852
  All
        loans
        were borrowed for construction projects. Interest paid was capitalized during
        the periods of construction and allocated to various construction projects.
        When
        the projects are completed, interest incurred from these loans is
        expensed.


**Note
        12 - Shareholders’ equity**
  Common
          stock
  On
          June
          28, 2006, the Company entered into securities purchase agreements with
          accredited investors and completed the sale of $1,075,000 of the Company’s
          common stock and common stock purchase warrants. The securities sold were
          an
          aggregate of 330,769 shares of common stock and 99,231 warrants. Each warrant
          is
          exercisable for three years at $3.60 per share. Pursuant to the terms of
          the
          warrant, each investor has contractually agreed to restrict its ability
          to
          exercise the warrants to an amount which would not exceed the difference
          between
          the number of shares of common stock beneficially owned by the holder or
          issuable upon exercise of the warrant held by such holder and 9.9% of the
          outstanding shares of common stock of the Company. New York Global Securities,
          Inc. acted as the placement agent of the transaction.
  18
  In
          connection with the offering, the Company paid a placement fee of 10% of
          the
          proceeds in cash, together with other expenses in the amount of 3% of the
          proceeds, in cash. In addition, the placement agent was issued warrants
          to
          purchase 66,154 shares of common stock on the same terms and conditions
          as the
          investors.
  Pursuant
          to securities purchase agreements with accredited investors dated July
          7, 2006,
          the Company received $124,975 and issued 38,454 shares of common stock
          and
          11,536 warrants. Each warrant is exercisable for three years at $3.60 per
          share.
  In
          connection with the offering, the Company paid a placement fee of 10% of
          the
          proceeds in cash, together with other expenses in the amount of 3% of the
          proceeds, in cash. In addition, the placement agent was issued warrants
          to
          purchases 7,691 shares of common stock on the same terms and conditions
          as the
          investors.
  Pursuant
          to securities purchase agreements with accredited investors dated August
          21,
          2006, the Company received $812,500 and issued 250,000 shares of common
          stock
          and 75,000 warrants. Each warrant is exercisable for three years at $3.60
          per
          share.
  In
          connection with the offering, the Company paid a placement fee of 10% of
          the
          proceeds in cash, together with non-accountable expenses in the amount
          of 3% of
          the proceeds, in cash. In addition, the placement agent was issued warrants
          to
          purchase 50,000 shares of common stock on the same terms and conditions
          as the
          investors.
  19
  The
          Company filed the registration statement registering the resale of shares
          of the
          Company's Common Stock and those issuable upon exercise of the Warrants
          on
          August 21, 2006 and the registration statement was effective on September
          14,
          2006.
 
 On
          January 15, 2007, the Company issued 60,000 shares of common stock to an
          investor relations company in consideration for one year of consulting
          service
          through December 31, 2007. The 60,000 shares of common stock have been
          recorded
          at $2.19 per share or $131,400 based on the trading price of the shares
          at
          January 12, 2007. This amount is included in prepaid expenses and is being
          amortized over the service period.
 
 Pursuant
          to securities purchase agreements with accredited investors dated May 7,
          2007,
          the Company received $25,006,978 and issued 9,261,847 shares of common
          stock and
          2,778,554 Warrants. Each Warrant is exercisable for five years at $4.50
          per
          share. In connection with the offering, the Company paid a 7% placement
          fee. The
          Company has filed a registration statement registering the resale of the
          subject
          shares which went effective on May 29, 2007.
 
 According
          to Section 4.8, Anti-Dilute of the Share Purchase Agreements dated June
          28,
          2006, July 7, 2006 and August 21, 2006, the Company issued 126,138 shares
          common
          stock and 27,418 warrants; additionally, the Company reduced the exercise
          price
          of all related warrants from $3.60 to $3.31.
  Pursuant
          to EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and
          Potentially Settle in, a Company’s Own Stock,” the warrants contain a provision
          permitting the holder to demand payment based on a Black Scholes valuation
          in
          certain circumstances. Therefore under EITP 00-19 and SFAS. 133, the Company
          recorded the warrants as a liability at their fair value on date of grant
          and
          then marked them to $2,220,465 as of June 30, 2007. The change in fair
          value
          totaled $11,204 and was recorded as a loss on fair value of warrants.
 
 The
          Company has placed 510,000 shares of management owned common stock into
          an
          escrow as part of a "make good obligation." This provision stipulates that
          in
          the event that the after-tax net income of the Company during fiscal year
          2007
          is less than $16.3 million and $35.8 million in fiscal 2008, management
          will
          distribute these escrow shares pro-rata to investors who participated in
          the May
          7 private placement. This transaction qualifies for equity accounting under
          SFAS. 133.
 
 20
 
 Warrants
 
 Following
        is a summary of the warrant activity:
 Weighted
                
                AverageWarrants
                
                Warrants
                
                Average
                    Exercise
                
                RemainingOutsanding
                
                
                Exercisable
                
                
                Price
                
                
                Contractual
                    LifeOutstanding,
                    December 31, 2006
                
                
                309,612
                
                
                309,612
                
                $
                3.31
                
                
                2.31Granted
                
                
                2,805,972
                
                
                2,805,972
                
                
                4.50
                
                
                5.00Forfeited
                
                
                -
                
                
                -
                
                
                -
                
                
                -Exercised
                
                
                -
                
                
                -
                
                
                -
                
                
                -Outstanding,
                    June 30, 2007
                
                
                3,115,584
                
                
                3,115,584
                
                $
                4.37
                
                
                4.55


Statutory
        reserves
 
 In
        accordance with the laws and regulations of the PRC, a wholly-owned Foreign
        Invested Enterprises’ income, after the payment of the PRC income taxes, shall
        be allocated to the statutory surplus reserves, the proportion of allocation
        for
        reserve funds is no less than 10 percent of the profit after tax until the
        accumulated amount of allocation for statutory surplus reserve funds reaches
        50
        percent of the registered capital. Statutory reserves represent restricted
        retained earnings.
  Statutory
        surplus reserves are to be utilized to offset prior years’ losses, or to
        increase its share capital. When the statutory surplus reserve fund of a
        limited
        liability company converts its surplus reserves to capital in accordance
        with a
        shareholders’ resolution, the company will either distribute new shares in
        proportion to the number of shares held by the each shareholder, or increase
        the
        par value of each share. Except for the reduction of losses incurred, any
        other
        usage should not result in this reserve balance falling below 25% of the
        registered capital.
 
 Pursuant
        to the board of directors’ resolution, the Company transferred 10% of its net
        income, as determined in accordance with the PRC accounting rules and
        regulations, to a statutory surplus reserve fund until such reserve balance
        reaches 50% of the Company’s registered capital.
 
 The
          transfer to this reserve must be made before distributions of any dividends
          to
          shareholders. For the six months ended June 30, 2007 and 2006, the Company
          appropriated $322,320 and $859,345, respectively to this surplus reserve.
   **Note
        13 - Employee welfare plan**
 
 Regulations
        in the PRC require the Company to contribute to a defined contribution
        retirement plan for all permanent employees. The Company established a
        retirement pension insurance, unemployment insurance, health insurance and
        house
        accumulation fund for the employees during the term they are employed. The
        amount contributed to the fund is based on a certain percentage on the base
        salaries set forth by the provincial and city government. For the months
        ended
        June 30, 2007 and 2006, the Company made contributions in the amount
        of $11,602 and $14,296, respectively.
  21
 
 **Note
        14 - Earnings per share**
  Earnings
        per share for six months ended June 30, 2007 and 2006 were determined by
        dividing net income for the periods by the weighted average number of both
        basic
        and diluted shares of common stock and common stock equivalents outstanding.
  June
                  30, 2007
              
              June
                  30, 2006(Unaudited)
              
              (Unaudited)Net
                  income for basic earnings per share
              
              $
              2,623,382
              
              $
              6,898,606Weighted
                  average shares used in basic computation
              
              
              23,453,110
              
              
              17,550,616Diluted
                  effect of warrants
              
              
              74,022
              
              
              6,615Weighted
                  average shares used in diluted computation
              
              
              23,527,132
              
              
              17,557,231Earnings
                  per shareBasic
              
              $
              0.11
              
              $
              0.39Diluted
              
              $
              0.11
              
              $
              0.39


**Note
        15 - Commitments and contingencies**


The
        Company leases part of its office space under long-term, non-cancelable
        operating lease agreements. The leases expire on 12/31/2008.
 
 The
        following is a schedule of future minimum rental payments required under
        the
        operating lease agreements:
  Year
                    ending
                
                OfficeJune
                    30,
                
                Lease2007
                
                $
                67,5852008
                
                
                67,585$
                135,170




Rental
        expense for the six months ended June 30, 2007 and 2006 amounted to $20,826
        and
        $51,570, respectively.




22


ITEM
        2.
        Management's Discussion and Analysis
 
 FORWARD
        LOOKING STATEMENTS
 
 Some
        of
        the statements contained in this Form 10-QSB that are not historical facts
        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-QSB, 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 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:
 
 l
            Our
                ability to attract and retain management, and to integrate and maintain
                technical information and management information systems; 
 l
            Our
                ability to raise capital when needed and on acceptable terms and
                conditions; 
 l
            The
                intensity of competition; and 
 l
            General
                economic conditions. 
 All
        written and oral forward-looking statements made in connection with this
        Form
        10-QSB 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.
  **Three
        Months Ended June, 2007 as Compared To Three Months Ended June 30,
        2006**
 
 Revenue
 
 We
        generated revenues of $12,018,590 for the three months ended June, 2007,
        a
        decrease of $6,353,226 or 35% compared to $18,371,816 for the three months
        ended
        June 30, 2006. The reason for the decrease is that in June 2006, the building
        project of 300,768 Sq.ft in 24G was completed, and all of pre-sale revenue
        of
        this project was recognized in the second quarter of 2006. and most of presale
        was commercial properties.
  23
 Revenue
        Contribution by Projects:
 (All
        numbers in USD millions)
 
 3
                  month period ended June 30, 2007
              
              3
                  month period ended June 30,2006Tsining-24G
              $
              10.4
              $
              6.5Commercial
              $
              0.8
              $
              5.4Residencial
              $
              9.6
              $
              1.1Junjing
                  Yuan I
              $
              1.2
              $
              11.5Commercial
              $
              0.1
              $
              0.3Residencial
              $
              1.1
              $
              11.2Tsining
                  GangWan
              $
              0.1
              $
              0.2Commercial
              $
              0.0
              $
              0.2Residencial
              $
              0.1
              $
              0.0Other
                  old projects
              $
              0.3
              $
              0.3Total
              $
              12.0
              $
              18.4
 
 For
        the
        three-month period ended June 30, 2007, we had revenues of $10,418,176 for
        Tsining-24G, $1,247,428 for Tsining JunJing I, and $352,986 for other projects.
        For the three-month period ended June 30, 2006, we had revenues of $6,464,758
        for Tsining-24G, $11,454,245 for Tsining JunJing I, and $452,813 for other
        projects.
  R **evenue
        Mix by product categories:**


Separated
        by product categories, for the three-month period ended June 30, 2007, 88%
        revenue was contributed by sales of residential properties, and 5% revenue
        was
        contributed by sales of commercial properties, and 7% revenue was contributed
        by
        others including rental income and other income. Compared to for the three-month
        period ended June 30, 2006, 67% revenue was contributed by sales of residential
        properties, and 33% revenue was contributed by sales of commercial properties,
        and 0.44% revenue was contributed by others including rental income and other
        income.
 
 24
 
 Costs
        and Expenses
 
 Our
        costs
        and expenses for the three months ended June 30, 2007 as compared to the
        three
        months ended June 30, 2007 were in line with the decreased revenue from the
        sale
        of properties.
 
 The
        cost
        of properties sold for the three months ended June 30, 2007 was $8,315,189,
        a
        decrease of $2,500,627 or 23% compared to $10,815,816 for the three months
        ended
        June 30, 2006. This is in line with the 35% decrease in revenues generated
        by
        the Company from the sale of properties during the same two
        periods.
 
 Other
        expenses for the three months ended June 30, 2007 was $3,060, a decrease
        of
        $125,226 or 98% compared to $128,326 for the three months ended June 30,
        2006.
 
 Our
        selling, general and administrative expenses for the three months ended June
        30,
        2007 was $622,867, a decrease of $1,196,058 or 66% compared to $1,818,925
        for
        the three months ended June 30, 2006. Selling, general and administrative
        expenses reflects our overhead expenses such as office rent, management and
        staff salaries, general insurance, accounting and legal expenses. We staff
        our
        sales department at fixed levels. As one project approaches the end of the
        sales
        cycle, the sales staff is shifted to the next project.
 
 Interest
        Expense
 
 We
        incurred interest expense for the three months ended June 30, 2007 of $307,651,
        an increase of $280,236 compared to $27,415 for the three months ended June
        30,
        2006. Capitalized interest for the three months ended June 30, 2007 was $466,544
        and capitalized interest for the same period in 2006 was $315,810. Interest
        expense increased in the second quarter of 2007 compared to 2006 is mainly
        due
        to the accrual of interest payable for acquisition of New Land.
 
 Operating
        Income before Income Tax
 
 We
        had
        operating income before income tax of $2,758,619 for the three months ended
        June
        30, 2007; a decrease of $2,822,715, compared to $5,581,334 for the three
        months
        ended June 30, 2006.
 
 For
        the
        three-month period ended June 30, 2007, 88% revenue was contributed by sales
        of
        residential properties compared to three-month period ended June 30, 2006
        the
        67% from Sales of residential properties. The profit margin on sales of
        residential properties was generally lower than commercial
        properties.
 
 Net
        Income
 
 Our
        net
        income for the three months ended June 30, 2007 was $1,830,880, a decrease
        of
        $1,909,262 compared to $3,740,142 for the three months ended June 30, 2006,
        which is a direct result of the decrease of revenues earned from the sale
        of
        properties.  For
        the
        three months ended June, 200 7,
        commercial revenue was almost 5% of total sales revenue compared to 33% for
        the
        three months ended June 30, 2006.
 
 **Six
        Months Ended June, 2007 as Compared To Six Months Ended June 30,
        2006**
  25
  Revenue
 
 We
        generated revenues of $20,214,787 for the three months ended June, 2007,
        a
        decrease of $16,180,107 or 44% compared to $36,394,894 for the three months
        ended June 30, 2006. The reason for the decrease is that as of June 30, 2006,
        7
        buildings made up of 706,792 sq.ft in Junjing Yuan I , and one building 300,768
        sq.ft in 24G was completed, and all pre-sales of these areas before the
        completion of the projects were recognized into revenue in the first and
        second
        quarters of 2006. These recognized pre sales were contributed the most part
        of
        the revenues for the first quarter and second quarter of 2006.
 
 Revenue
        Contribution by Project:
 (All
        numbers in USD millions)
  6
                  month period ended June 30, 2007
              
              
              6
                  month period ended June 30, 2006Tsining-24G
              
              $
              17.6
              
              $
              6.5Commercial
              
              $
              4.0
              
              $
              5.4Residencial
              
              $
              13.6
              
              $
              1.1Junjing
                  Yuan I
              
              $
              1.8
              
              $
              29.2Commercial
              
              $
              0.1
              
              $
              0.3Residencial
              
              $
              1.7
              
              $
              28.9Tsining
                  GangWan
              
              $
              0.2
              
              $
              0.3Commercial
              
              $
              0.0
              
              $
              0.2Residencial
              
              $
              0.2
              
              $
              0.1Other
                  projects
              
              $
              0.7
              
              $
              0.5Total
              
              $
              20.2
              
              $
              36.4
 
 
 For
        the
        Six-month period ended June 30, 2007, we had revenues of $1,781,543 for Tsining
        JunJing I, $17,615,445 for Tsining-24G, and $817,800 for other projects.
        For the
        Six-month period ended June 30, 2006, we had revenues of $29,139,094 for
        Tsining
        JunJing I, $6,465,222 for Tsining-24G, and $790,578 for other
        projects.
 
 R **evenue
        Mix by product categories:**
 
 
 
 Separated
        by product categories, for the six-month period ended June 30, 2007, 73%
        revenue
        was contributed by sales of residential properties, and 22% revenue was
        contributed by sales of commercial properties, and 5.11% revenue was contributed
        by others including rental income and other income. Compared to for the
        six-month period ended June 30, 2006, 83% revenue was contributed by sales
        of
        residential properties, and 17% revenue was contributed by sales of commercial
        properties, and 0.43% revenue was contributed by others including rental
        income
        and other income.
 
 26
  Costs
        and Expenses
 
 Our
        costs
        and expenses for the six months ended June 30, 2007 as compared to the six
        months ended June 30, 2007 were in line with the decreased revenue from the
        sale
        of properties.
 
 The
        cost
        of properties sold for the six months ended June 30, 2007 was $14,566,647,
        a
        decrease of $7,776,645 or 35% compared to $22,343,292 for the six months
        ended
        June 30, 2006. This is in line with the 47% decrease in revenues generated
        by
        the Company from the sale of properties during the same two
        periods.
 
 Other
        expenses for the six months ended June 30, 2007 was $35,679, a decrease of
        $211,127 or 86% compared to $246,806 for the six months ended June 30,
        2006.
 
 Our
        selling, general and administrative expenses for the six months ended June
        30,
        2007 was $1,120,946, a decrease of $2,328,495 or 68% compared to $3,449,441
        for
        the six months ended June 30, 2006. Selling, general and administrative expenses
        reflects our overhead expenses such as office rent, management and staff
        salaries, general insurance, accounting and legal expenses. We staff our
        sales
        department at fixed levels. As one project approaches the end of the sales
        cycle, the sales staff is shifted to the next project.
 
 Interest
        Expense
 
 We
        incurred interest expense for the six months ended June 30, 2007 of $515,527,
        an
        increase of $456,599 compared to $58,928 for the six months ended June 30,
        2006.
        For the six months ended June 30, 2007, capitalized interest for the same
        period
        was $1,059,604 and capitalized interest for the same period in 2006 was
        $1,000,676. Interest expense increased in 2007 as compared to 2006 since
        most
        projects were completed in 2006 and new projects did not start until second
        quarter of 2007, interest incurred during first quarter of 2007 was expensed
        rather than capitalized. Interest expense also increased due to interest
        expense
        incurred for acquisition of New Land.
  27
 
 Operating
        Income before Income Tax
  We
        had
        operating income before income tax of $3,964,784 for the six months ended
        June
        30, 2007; a decrease of $6,331,643, compared to $10,296,427 for the six months
        ended June 30, 2006.
 Net
        Income
 
 Our
        net
        income for the six months ended June 30, 2007 was $2,623,382, a decrease
        of
        $4,275,224 compared to $6,898,606 for the six months ended June 30, 2006,
        which
        is a direct result of, 7 buildings (706,792 sq.ft ) in Junjing Yuan I, and
        the
        one building (300,768 sq.ft) in 24G that were completed as of June 30, 2006,
        and
        all pre-sales of these areas were recognized into revenue in the first and
        second quarters of 2006. These recognized pre sales were contributed the
        most
        part of the revenues for the first quarter and second quarter of
        2006.
  Liquidity
        and Capital Resources
 
 Our
        principal demands for liquidity are for development of new properties and
        future
        property acquisitions and general corporate purposes. As of June 30, 2007,
        we
        had total mortgage indebtedness of $12,220,295 with a weighted average interest
        rate of 0.825% per month, payable quarterly. Future scheduled maturities
        of
        mortgages payable are as follows: August 7, 2007 -- $5,260,000; September
        20,
        2007 -- $516,795; December 31, 2007 -- $6,443,500. The mortgage debt is secured
        by assets of the Company.
 
 As
        of
        June 30, 2007, we had $9,076,918 of cash and cash equivalents on hand, an
        increase of $7,589,014 compared to $1,487,904 of cash and cash equivalents
        on
        hand as of December 31, 2006.
 
 As
        of
        June 30, 2007 accounts payable was $9,527,514 and other payables was $3,391,172.
        Our properties and equipment were $5,605,277. Receivables, deferred charges
        and
        other assets increased $2,093,527 compared to $986,039 as of December 31,
        2006.
        Advances to suppliers increased by $397,399 compared to $493,570 as of December
        31, 2006. Most of it was the advance payment on Land related expenses for
        the
        JunJing II project. Accounts payable increased $4,202,699 compared to $5,324,815
        as of December 31, 2006, other payables increased $818,334 compared to
        $2,572,838 as of December 31, 2006, and accrued expenses decreased $1,454,818
        compared to $1,738,584 as of December 31, 2006, while advances from customers
        decreased $1,249,688 compared to $2,902,426 as of December 31,
        2006.
 
 Our
        operating activities provided cash of $4,454,481 during the three months
        ended
        June 30, 2007. We used cash of $1,299,834 in investing activities during
        the
        three months ended June 30, 2007 primarily $1,095,005 for the Notes receivable
        funded. During the three months ended June 30, 2007. Cash used in financing
        activities was $1,646,838.
 
 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 possible
        cash
        investments. Upon acquiring land for future development, we intend to raise
        funds to develop our projects by obtaining mortgage financing 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.
 
 As
        part
        of our funding plan, on March 9, 2007, we entered into a Shares Transfer
        Agreement with the shareholders of Xi'an New Land Development Co., Ltd. ("New
        Land"), pursuant to which we have acquired 32,000,000 shares of New Land,
        constituting 100% equity ownership of New Land. Xi'an New Land Development
        Co.,
        LTD (“New Land”) is now in cooperation with BaQiao District Government of Xi'an
        City in developing BaQiao Science & Technology Industrial Park, a provincial
        development zone in Shaan'xi Province. Now, this acquisition is in process,
        in
        the future, China Housing will take the first steps in the primary land market,
        and also have the right to develop and sell 487 acres of property which has
        been
        targeted for new residential developments.
 
 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.
 
 28
  Subsequent
        Events
 
 Up
        to August
        14, 2007, New Land has signed the following three agreements with BaQiao
        municipal government:
 
 1. The
“Land Pre-reserve Contract” was signed on June 28, 2007. It is agreed that 115
        acres’ land will be reserved in 2007 and the company obtains the use and
        development rights to them. It is further agreed that the municipal government
        will be in charge of relocation of current inhabitants, which is expected
        to be
        done within three months.
  2.
        The
“Tax Refund Agreement” was signed. It stipulate tax bounty for different industrial and
        commercial tax paid by the company from 2007 to 2010 after the company’s
        headquarter move to the BaQiao district
 
 3.
        On
        July 26, 2007, the “Confirmation of Infrastructural Investment and Expenditure
        Settlement Agreement” was signed. It is agreed that, within 30 days of the
        agreement, a third-party audit entity will be engaged to audit expenditures
        the
        company has incurred in rubber dam construction on Ba River and the riverway
        renovation projects etc. The government will make a one-time lump sum
        reimbursement of the audited expenditures to the company plus interest accrued
        from when the expenditures were incurred at a rate prevailing for the same
        period benchmarked by the lending rate of Xi’an Commerce Bank plus 10% of the
        expenditures as infrastructural investment reward for the company. The
        reimbursement, interest and reward are expected to enter our financial
        statements in the third quarter of 2007.
 
 At
        present all the agreements have been signed, and the works set forth in the
        agreements commerce in full scale.
  Item
        3.
        Controls and Procedures
 
 The
        Chief
        Executive Officer and Chief Financial Officer conducted an evaluation of
        the
        effectiveness of the design and operation of the Company's disclosure controls
        and procedures (as defined in Rule 13a-15(e) under the Securities Exchange
        Act
        of 1934, as amended (the Exchange Act)) as of the end of the period covered
        by
        this report. Based on that evaluation, the Chief Executive Officer and Chief
        Financial Officer concluded that the Company's disclosure controls and
        procedures were effective as of the end of the period covered by this report.
        There were no significant changes in internal control over financial reporting
        (as defined in Rule 13a-15(e) under the Exchange Act) that occurred during
        the
        first quarter of 2007 that have materially affected, or are reasonably likely
        to
        materially affect, the Company's internal control over financial
        reporting.
  29
  Part
        II.
        OTHER INFORMATION
 
 Item
        1.
        Legal Proceedings
 
 Not
        applicable
  Item
        2.
        Unregistered Sales of Equity Securities and Use of Proceeds
  Pursuant
          to securities purchase agreements with accredited investors dated May 7,
          2007,
          the Company received $25,006,978 and issued 9,261,847 shares of common
          stock and
          2,778,554 Warrants. Each Warrant is exercisable for five years at $4.50
          per
          share. In connection with the offering, the Company paid a 7% placement
          fee. The
          Company has filed a registration statement registering the resale of the
          subject
          shares which went effective on May 29, 2007.
  The
            Company has placed 510,000 shares of management owned common stock into
            an
            escrow as part of a "make good obligation." This provision stipulates
            that in
            the event that the after-tax net income of the Company during fiscal
            year 2007
            is less than $16.3 million and $35.8 million in fiscal 2008, management
            will
            distribute these escrow shares pro-rata to investors who participated
            in the May
            7 private placement. This transaction qualifies for equity accounting
            under
            SFAS. 133.
 In
          addition, according to Section 4.8, Anti-Dilute of the Share Purchase Agreements
          dated June 28, 2006, July 7, 2006 and August 21, 2006, the Company issued
          126,138 shares common stock and 27,418 warrants to investors who are parties
          to
          such Share Purchase Agreements. Additionally, the Company reduced the exercise
          price of all related warrants from $3.60 to $3.31.
  Item
        3.
        Defaults Upon Senior Securities
 
 Not
        applicable
  Item
        4.
        Submission of Matters to a Vote of Security Holders
 
 The
        Company has filed a preliminary information statement on Schedule 14C on
        the
        adoption of the 2007 Stock Incentive Plan on August 8, 2007.
  Item
        5.
        Other Information
 
 Not
        applicable
  Item
        6.
        Exhibits
 
 (a)
        Exhibits
 
 Exhibit
                  Number
              Description
                  of Exhibit31.1
              Certification
                  of Principal Executive Officer pursuant to Rule 13a-14 and Rule
                  15d-14(a),
                  promulgated under the Securities and Exchange Act of 1934, as
                  amended31.2
              Certification
                  of Principal Financial Officer pursuant to Rule 13a-14 and Rule
                  15d 14(a),
                  promulgated under the Securities and Exchange Act of 1934, as
                  amended32.1
              Certification
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002(Chief Executive Officer)32.2
              Certification
                  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                  906 of
                  the Sarbanes-Oxley Act of 2002(Chief Financial
                  Officer)
  30
 SIGNATURES
 
 In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 China
                  Housing & Land Development, Inc.August
                  14  , 2007
              By:
              /s/
                  LU PINGJILu
                  Pingji
                Chief
                  Executive Officer
                (PrincipalExecutive
                  Officer)
 
 August
                  14  , 2007
              By:
              /s/
                  WAN YULONGWan
                  Yulong
                Chief
                  Financial Officer
                (Principal
                  Financial and
                Accounting
                  Officer)




31