Kirin International Holding Inc (OTCMKTS:KIRI) Revs Its Engines

After a gut-wrenching slip from $3.16 down to $1.69 per share that took place over the past few weeks, Kirin International Holdings Inc (OTCMKTS:KIRI) shuffled up by a massive 37% on Friday. Share volume heated up once more, at its heaviest for the past month, with 97 thousand shares changing hands.

First things first – KIRI is a company based in China, which conducts its operations in China and is headquartered in Beijing. This clarification should be made right at the start, as it might explain some curious things about the company’s valuation, share price, balance sheet figures and PR.

Here is what KIRI, an OTC pink sheet entity, reported in its last quarterly for the period ended June 2015:

• $10.4 million in cash
• $300 million in total liabilities
• $36.3 million in Q2 revenues
• $4.3 million in Q2 net income

The company dropped a long-winded press release last Thursday, informing of a memorandum of understanding signed with two private corporations named Jasper Lakes Holdings Limited and Crestlake Holdings Limited. According to the MoU, KIRI seeks to acquire 100% equity in what is called the “Wuhan Yangtze River Newport Logistics Center”.

According to the release, KIRI is to issue 166,000,000 million shares of common stock in the deal, with each share valued at $10 – over 300% above the company’s Friday close. KIRI last reported having 20.5 million outstanding common shares. Investors should probably decipher the reasoning behind this deal, the planned share issuance and the per-share price on their own. The fact that KIRI actually dropped 17% on the day the news came out should be of some assistance.

It should also be pointed out that the deal is not finalized yet, as it’s just a memorandum of understanding at this point, which is generally a non-binding, non-final agreement. KIRI has not put up any official SEC filings relating to the deal.