China Housing & Land Development, Inc.

In August 2015, FASB issued ASU 2015- 14 “Revenue from Contracts with Customer (Topic 606): Deferral of the effective date”. The amendments in this Update defer the effective date of the Update 2014-09 for all entities by one year. For public business entities, certain not-for profit entities, and certain employee benefit plans, the effective date is changed to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company is currently assessing the impact of the new standard on its interim condensed consolidated financial statements.

During the second quarter of 2015, the Company issued 57,500 shares of Common Stock, with a value determined to be $75,900, to the Chairman, CFO, COO, and Directors of the Company to compensate for services provided. The shares were released during the third quarter, and accordingly $75,900 of compensation expense was recognized during the three and nine months ended September 30, 2015 (September 30, 2014 - $Nil and $894,240).

The Company entered into a land purchase agreement, where the total consideration for the land is $5,398,287. The Company has paid $4,090,880 by the end of the third quarter of 2015 as deposit for land use right and is obliged to pay the remaining amount $1,307,407 within the next 3 months.

The intense real estate market competition in Xi’an as a whole has resulted in a heavy pressure on real estate enterprises. According to a report by China Real Estate Information Corporation (“CRIC”), in September of 2015, the new supply area of Xi’an real estate reached 1.34 million square meters, however the sale area was less than 1 million square meters, dropped by 49.4% month on month, at the end of the third quarter of 2015, the inventory of Xi’an real estate reached a high level of 37.5 million square meters and consequently, the supply and demand relationship has deteriorated continuously. In an environment of increased competition and slower sales, real estate companies have promoted sales at the expense of several gross margins. Combined with the continual rise in land costs and the adjustment of the real estate prices, the costs of real estate developers continue to rise and profit margins are contracting. Under these challenges, the Company sticks to the strategy that “cash is of paramount importance”. In the third quarter of 2015, the Company increased its promotion efforts to sell the residential housing, but the sales are not satisfactory to the Company. As a result, the gross profit decreased by 31.5% compared to the third quarter of 2014.

According to a report by CRIC, in September, the new supply area of Xi’an real estate reached 1.34 million square meters, however the sale area is less than 1 million square meters, dropped by 49.4%, at the end of the third quarter of 2015, the inventory of Xi’an real estate reached a high level of 37.5 million square meters and consequently, the supply and demand relationship has deteriorated continuously. The intense real estate market competition in Xi’an as a whole has resulted in a heavy pressure to the Company’s future sales and gross profit. There is also relatively high market risk. However, the consistent tightening of credit policies on the real estate industry nationwide has resulted in a relatively poor credit environment, with more funds flowing to the real economy. Moreover, given that more funds are flowing to the stock markets, it is hard for real estate enterprises to obtain financing. In the meantime, credit sources have flown to large enterprises, making it more difficult for small and medium real estate enterprises to raise funds, creating a huge challenge for the Company. In 2015, the Company will stick to the strategy that “cash is of paramount importance”, increase sales promotion, control investment, strengthen its financing efforts, endeavor to obtain more financing, and try all kinds of possibilities to ensure its proper operation and vigorous development.