Kirin International Holding Inc (OTCMKTS:KIRI) Tries for Three Dollars

The green march that Kirin International Holding Inc (OTCMKTS:KIRI) is charting over the last few sessions continued yesterday. The stock put on another 7% and stopped at $2.95 per share, after briefly hitting prices over three dollars per share a couple of times over the session.

KIRI is a bit of a weird case, as it’s a public company traded on the U.S. OTC marketplace, but it is headquartered in China and conducts its operations in China as well. KIRI cropped up among the most heavily traded OTC stocks by dollar volume after a press release that is just as curious.

KIRI announced that it signed a memorandum of understanding with two other privately held companies with the intention to acquire from them 100% interest in an entity named “Wuhan Yangtze River New Port Logistics Co.”, which operates a logistics center on the Yangtze river. The deal appears to be a little out of KIRI‘s league, with its $1.66 billion valuation.

To secure the deal, KIRI intends to issue 166,000,000 common shares, valued at $10 a pop – a massive difference from the company’s price on the open market. The planned share issuance is also a lot to take in, considering KIRI last reported having 20 million outstanding common shares.

Here is the company’s balance sheet published in its latest quarterly report:

• $10.4 million in cash
• $359 million in total assets
• $300 million in total liabilities
• $36.3 million in Q2 revenues
• $4.3 million in Q2 net income

Some may have reservations about these rather juicy numbers, stemming from the fact that KIRI operates outside of the reach of any U.S. institution which may demand a review of said financials. At any rate, given that KIRI was trading for under $1 earlier this summer and that its $1.6 billion deal is still a non-binding MoU, it may be best if investors keep their excitement in check.