Kirin International Holding, Inc.

On April 16, 2019, the Company entered into a Sales Agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (the “Agent”), pursuant to which the Company may offer and sell from time to time up to an aggregate of $100,000,000 shares of the Company’s common stock (the “Placement Shares”), through the Agent. The offer and sale of the Placement Shares, if any, will be made through a prospectus supplement, dated April 16, 2019, to the prospectus included in the Company’s Registration Statement on Form S-3 (File No. 333-223788) (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission (“SEC”) on September 13, 2018. The Company intends to use the net proceeds from this offering for general working capital purposes.

Our general and administrative expenses consist of salaries, office expenses, utilities, business travel, amortization expenses (including legal expenses, accounting expenses and other professional service expenses) and stock compensation. General and administrative expenses were $468,524 for the three months ended March 31, 2019, compared to $1,149,088 for the three months ended March 31, 2018, a decrease of $680,564 primarily due to a decrease in share-based compensation expenses for professional services.

As a result of the factors described above, operating loss was $468,524 for the three months ended March 31, 2019, compared to operating loss of $1,149,088 for the three months March 31, 2018, a decrease of operating loss of $680,564, or approximately 59%. The decrease of loss from operations for each of these three months are mainly because of reduced expenses related to share-based compensation expenses for professional services.

We are aware that a class action complaint has been filed on January 2, 2019 with the United States District Court, Eastern District of New York on January 2, 2019 on behalf of Michael Behrendsen against the Company, Xiangyao Liu, Xin Zheng and Tsz-Kit Chan (Civil Action Number 1:19-cv-00024-DLI-LB) (the “Complaint”). The two-count Complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act. Lead counsel and lead plaintiff for the plaintiff-class was recently appointed, and pursuant to the latest Stipulation and Order, must either indicate whether they intend to rely on the initial Complaint or to file an amended complaint.

On January 23, 2019, we filed a defamation lawsuit in the New York Supreme Court, New York County, against Hindenburg Research, Nathan Anderson, ClaritySpring Securities, LLC and ClaritySpring Inc. (collectively, “Defendants”) in response to their coordinated and orchestrated market manipulation scheme to disseminate false, misleading and defamatory content to the marketplace regarding the Company for the purpose of inflicting substantial reputational harm on us for Defendants’ own financial gain. The impetus for the action was a false, misleading and defamatory unsigned article published on December 6, 2018 through one of the Defendants’ aliases, “Hindenburg Research,” which erroneously accused us of making fraudulent misrepresentations in our public filings with the U.S. Securities and Exchange Commission or intentionally omitting material information in those filings, laundering money through sham transactions for the benefit of our Chief Executive Officer, and being ensnared in a catastrophic liquidity crisis rendering the Company worthless. An amended complaint, substantially similar to the initial complaint, was filed on January 25, 2019.  Service was effectuated on the Defendants on January 29, 2019, who moved to dismiss the case. The Defendants’ motion is currently pending before the Court and is returnable on June 5, 2019. Discovery is stayed pending resolution of the motion.