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<DIV style="WIDTH: 662px">
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B></B>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B></B>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B>UNITED STATES</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B>Washington, D.C. 20549</B></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B>Form 10</B>-<B>Q</B></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><U>X &nbsp;&nbsp;&nbsp;</U>QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt" align=center><B>For
the quarterly period ended March 31, 2009</B></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center>___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px" align=center>For the
transition period from ____ to ____</P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>&nbsp;(Exact name of registrant as specified in its charter)</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=267></TD>
<TD width=174></TD>
<TD width=240></TD></TR>
<TR>
<TD vAlign=top width=267>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>Colorado</P></TD>
<TD vAlign=top width=174>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>0-31751</P></TD>
<TD vAlign=top width=240>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>84-1536518</P></TD></TR>
<TR>
<TD vAlign=top width=267>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>(State or other jurisdiction of incorporation)</P></TD>
<TD vAlign=top width=174>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>(Commission File Number)</P></TD>
<TD vAlign=top width=240>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>(IRS Employer Identification Number)</P></TD></TR>
<TR>
<TD vAlign=top width=441 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=240>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=681 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>No.30 Guanghua Street, Xiaojingyu Xiang, Wanbailin
District</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>Taiyuan City, Shanxi Province, China P.C. 030024</P></TD></TR>
<TR>
<TD vAlign=top width=681 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>(Address of principal executive
offices)</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt"
align=center>Registrant&#146;s telephone number, including area code: &nbsp;(303)
885-5501</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities 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 <B>X</B> &nbsp;&nbsp;No ___</P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of
&#147;large accelerated filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148;
in Rule 12b-2 of the Exchange Act.</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=359></TD>
<TD width=29></TD>
<TD width=232></TD>
<TD width=39></TD></TR>
<TR>
<TD vAlign=top width=359>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Large
accelerated filer</P></TD>
<TD vAlign=top width=29>
<P>&nbsp;</P></TD>
<TD vAlign=top width=232>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Accelerated
filer</P></TD>
<TD vAlign=top width=39>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=359>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Non-accelerated
filer (Do not check if a smaller reporting company)</P></TD>
<TD vAlign=top width=29>
<P>&nbsp;</P></TD>
<TD vAlign=top width=232>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Smaller
reporting company</P></TD>
<TD vAlign=top width=39>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;<B>X</B></P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes &nbsp;&nbsp;No <B>X</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Indicate
the number of shares outstanding of each of the issuer's classes of stock, as of
the latest practicable date.</P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=338></TD>
<TD width=286></TD></TR>
<TR>
<TD vAlign=top width=338>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Class of Securities</P></TD>
<TD vAlign=top width=286>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Shares Outstanding at March 31, 2009</P></TD></TR>
<TR>
<TD vAlign=top width=338>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Common Stock, no par value</P></TD>
<TD vAlign=top width=286>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>76,205,000</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=center><BR></P><A name=_Toc133030766></A><A
name=_Toc143508260></A><A name=_Toc143509054></A><A name=_Toc143509150></A><A
name=_Toc166657191></A><A name=_Toc166657341></A><A name=_Toc183245748></A>
<P style="MARGIN-TOP: 10px; MARGIN-BOTTOM: 0px"><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 1 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 13pt"><B>PART
1 - FINANCIAL INFORMATION</B></P>
<P style="MARGIN: 0px"><BR></P><A name=_Toc133030767></A><A
name=_Toc183245749></A>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; LINE-HEIGHT: 13pt"><B>ITEM
1. </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>FINANCIAL
STATEMENTS</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: normal">(a)
The unaudited financial statements of registrant for nine months ended March 31,
2009, follow. &nbsp;The financial statements reflect all adjustments which are,
in the opinion of management, necessary to a fair statement of the results for
the interim period presented<FONT style="FONT-SIZE: 12pt">.</FONT></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B><U>TABLE OF CONTENTS</U></B></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P
style="PADDING-RIGHT: 1px; MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; LINE-HEIGHT: 14pt">Balance
Sheets </P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 616px; LINE-HEIGHT: 14pt">3</P>
<P
style="PADDING-RIGHT: 1px; MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; LINE-HEIGHT: 14pt">Statements
of Operations and Comprehensive Income (Unaudited)</P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 616px; LINE-HEIGHT: 14pt">4</P>
<P
style="PADDING-RIGHT: 1px; MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; LINE-HEIGHT: 14pt">Statement
of Changes in Stockholders&#146; Equity (Unaudited)</P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 616px; LINE-HEIGHT: 14pt">5</P>
<P
style="PADDING-RIGHT: 1px; MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; LINE-HEIGHT: 14pt">Statements
of Cash Flows (Unaudited)</P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 616px; LINE-HEIGHT: 14pt">6</P>
<P
style="PADDING-RIGHT: 1px; MARGIN-TOP: 0px; FONT-SIZE: 12pt; MARGIN-BOTTOM: -18px; LINE-HEIGHT: 14pt">Notes
to Unaudited Financial Statements</P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 12pt; MARGIN: 0px; TEXT-INDENT: 616px; LINE-HEIGHT: 14pt">7</P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center>&nbsp;</P>
<P style="MARGIN: 0px" align=center>&nbsp;</P>
<P style="MARGIN: 0px" align=center>&nbsp;</P>
<P style="MARGIN: 0px" align=center><BR>&nbsp;</P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 2 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; MARGIN-BOTTOM: 0px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: normal; FONT-FAMILY: Times"
align=center>&nbsp;<A name=_Toc180382994></A><FONT
style="FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman"><B>LONGWEI PETROLEUM
INVESTMENT HOLDING LIMITED</B></FONT></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>BALANCE SHEETS AS OF MARCH 31, 2009 AND JUNE 30, 2008</B></P>
<P style="MARGIN: 0px" align=center><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=366></TD>
<TD width=11></TD>
<TD width=2></TD>
<TD width=12></TD>
<TD width=3></TD>
<TD width=121></TD>
<TD width=3></TD>
<TD width=3></TD>
<TD width=3></TD>
<TD width=5></TD>
<TD width=11></TD>
<TD width=108></TD>
<TD width=2></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>March 31,
2009</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=110
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>June 30,
2008</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Unaudited</P></TD>
<TD vAlign=top width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=center><B>ASSETS</B></P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Current assets:</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Cash and
cash equivalents</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">$</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,617,989 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,632,879
</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Accounts
receivable</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;26,688,372 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,134,507 </P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Inventories</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;14,370,467 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,052,841 </P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Advance to
suppliers</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;37,307,230 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,327,067 </P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Deposits</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=110
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>12,683,880
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total current assets</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;87,984,058 &nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90,831,174 </P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P>&nbsp;</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Construction in progress</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,852,728
&nbsp;&nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Property, plant and equipment,
net</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,348,640 </P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=110
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>2,637,326</P></TD></TR>
<TR>
<TD width=366>
<P>&nbsp;</P></TD>
<TD width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total assets</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=15
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;116,185,426 </P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=16
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=110
colSpan=2>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 40px">93,468,500</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"><B>LIABILITIES AND
STOCKHOLDERS&#146; EQUITY</B></P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Current liabilities:</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Accounts
payable</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
&nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;165,231</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 13px; LINE-HEIGHT: 13pt">Convertible
notes payable, net of discount of $ 0 and $636,742, respectively</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,147,868 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,508,135
</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Accrued
payables</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;685,677
</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;798,436
</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 13px">Taxes
payable</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,413,994 </P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=110
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,455,223
</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total current
liabilities</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,247,539 </P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=110
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,927,025
</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total liabilities</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,247,539 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,927,025
</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P>&nbsp;</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center><B>STOCKHOLDERS&#146;
EQUITY </B></P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: normal">Common
Stock; no par value, 100,000,000 shares authorized, 76,205,000 &nbsp;and
<FONT style="FONT-SIZE: 11pt">&nbsp;</FONT>76,205,000 shares issued and
outstanding as of 03/31/09 and 06/30/08, respectively</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,008,712 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>7,008,712</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Additional paid-in
capital</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,528,180 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>1,528,180</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Retained earnings</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;89,654,719 </P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;68,742,653 </P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Accumulated other comprehensive
income </P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;11,746,276 </P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=110
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,261,930 </P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P>&nbsp;</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total stockholders&#146; equity
</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;109,937,887 </P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=110
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>88,541,475</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P>&nbsp;</P></TD>
<TD vAlign=top width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=124 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=6 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=110 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=366>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total liabilities and
stockholders&#146; equity</P></TD>
<TD vAlign=top width=11>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=14
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=124
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;116,185,426 </P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=6
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=8
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=121
colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;93,468,500
</P></TD></TR></TABLE>
<P style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>See accompanying notes
to the unaudited financial statements<A name=eolPage74></A></P>
<P style="MARGIN: 0px" align=center><BR></P><A name=_Toc180382995></A>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 3 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED</B></P>
<P style="PADDING-RIGHT: 0px; MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"
align=center><B>STATEMENTS<A name=FIS_INCOME_STATEMENT></A> OF INCOME AND
COMPREHENSIVE INCOME (Unaudited)</B></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center><B>FOR THREE MONTHS AND
NINE MONTHS</B><FONT style="FONT-FAMILY: SimSun"><B> </FONT>ENDED MARCH 31, 2009
AND 2008</B></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;</P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=23></TD>
<TD width=174></TD>
<TD width=10></TD>
<TD width=23></TD>
<TD width=16></TD>
<TD width=102></TD>
<TD width=9></TD>
<TD width=10></TD>
<TD width=85></TD>
<TD width=9></TD>
<TD width=14></TD>
<TD width=7></TD>
<TD width=15></TD>
<TD width=109></TD>
<TD width=5></TD>
<TD width=16></TD>
<TD width=69></TD>
<TD width=27></TD></TR>
<TR>
<TD vAlign=bottom width=197 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=247
colSpan=6>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center><B>Three months
ended March 31,</B></P></TD>
<TD vAlign=top width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=265
colSpan=8><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center><B>Nine
months ended March 31,</B></P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>2009</B></P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109
colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>2008</B></P></TD>
<TD vAlign=top width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>2009</B></P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=96
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right><B>2008</B></P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Net revenues:</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=top width=7>
<P>&nbsp;</P></TD>
<TD vAlign=top width=15>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109>
<P>&nbsp;</P></TD>
<TD vAlign=top width=5>
<P>&nbsp;</P></TD>
<TD vAlign=top width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product
sales</P></TD>
<TD vAlign=bottom width=16>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;46,622,276 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>30,213,210 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;139,308,969 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>98,581,486
</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agency service</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;3,097,818 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>2,265,492
</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,529,598 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>10,115,682 </P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;49,720,094 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>32,478,702 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;147,838,567 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>108,697,168 </P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Cost of
revenues</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product
sales</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;40,049,434 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>22,180,278 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;116,588,344 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>75,917,662
</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agency service</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
&nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>473,088
</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
&nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>1,269,204
</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;40,049,434 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>22,653,366 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;116,588,344 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>77,186,866 &nbsp;</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Gross
profit</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;9,670,660 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>9,825,336 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31,250,223 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>31,510,302
</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Operating
Expenses</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67,026
</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>93,336 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;158,872
</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>202,998 </P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
selling, general and administrative expenses</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;641,900 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109
colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>2,964,692 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,760,200 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=96
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>4,815,267
&nbsp;</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;708,926 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>3,058,028
</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,919,072 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>5,018,265
&nbsp;</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Operating
profit</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;8,961,734 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>6,767,308 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,331,151 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>26,492,037
&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Other income and
(expenses)</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Interest
income</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,253
</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>6,303 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,223
</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>29,157 </P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Interest expense
and financial cost</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(48,492)</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>(21,466)</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(172,560)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>(24,228)</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Other
income/(expense)</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(44,239)</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>(15,163)
</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(160,337)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>4,929
</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Income before
income taxes</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;8,917,495 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>6,752,145 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,170,814 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>26,496,966
&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Income
taxes</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;(2,255,355)</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=109
colSpan=3><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>(1,688,036)</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7,258,748)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>(8,363,238)</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Net income</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;6,662,140 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>5,064,109 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,912,066 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>18,133,728
&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=justify>Other
comprehensive income</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign
currency translation adjustment</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(149,874)</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109
colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>3,076,127 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;484,346
</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=96
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>5,729,892
</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=top width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=top width=96 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Comprehensive income</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=16>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;6,512,266 </P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=10>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=109
colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>8,140,236 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=15>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,396,412 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=16>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=96
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>23,863,620 &nbsp;</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Basic net income per
share</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=16>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.09
</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=10>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=109
colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>0.07</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=15>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.27
</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=16>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=96
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>0.25</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Weighted average number of
shares outstanding</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=102>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76,205,000
</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=109
colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>75,000,000</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=109>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76,205,000 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=96
colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>72,643,636</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=23>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=208 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=109>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>See accompanying notes
to the unaudited financial statements.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 0.05pt"><BR></P><A name=eolPage75></A>
<P
style="MARGIN: 0px; LINE-HEIGHT: 0.05pt"><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 4 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P style="PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 0.05pt"
align=right><BR></P><A name=FIS_STOCKHOLDERS_EQUITY></A><A
name=_Toc180382996></A>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED</B></P>
<P style="PADDING-RIGHT: 0px; MARGIN-TOP: 9px; MARGIN-BOTTOM: 0px"
align=center><B>STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)</B></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center><B>FOR THE NINE MONTHS
ENDED MARCH 31, 2009</B></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=186></TD>
<TD width=64></TD>
<TD width=7></TD>
<TD width=60></TD>
<TD width=10></TD>
<TD width=70></TD>
<TD width=13></TD>
<TD width=67></TD>
<TD width=7></TD>
<TD width=8></TD>
<TD width=76></TD>
<TD width=6></TD>
<TD width=9></TD>
<TD width=85></TD></TR>
<TR>
<TD vAlign=top width=186>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=64>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Common stock </P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>shares</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=60>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Common stock
amount</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Additional paid-in
capital</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=13>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=67>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Retained
earnings</P></TD>
<TD vAlign=top width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=8>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=76>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Accumulated other
comprehen- sive income</P></TD>
<TD vAlign=top width=6>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=85>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Total
stockholders&#146; equity</P></TD></TR>
<TR>
<TD vAlign=top width=186>
<P>&nbsp;</P></TD>
<TD vAlign=top width=64>
<P>&nbsp;</P></TD>
<TD vAlign=top width=7>
<P>&nbsp;</P></TD>
<TD vAlign=top width=60>
<P>&nbsp;</P></TD>
<TD vAlign=top width=10>
<P>&nbsp;</P></TD>
<TD vAlign=top width=70>
<P>&nbsp;</P></TD>
<TD vAlign=top width=13>
<P>&nbsp;</P></TD>
<TD vAlign=top width=67>
<P>&nbsp;</P></TD>
<TD vAlign=top width=7>
<P>&nbsp;</P></TD>
<TD vAlign=top width=8>
<P>&nbsp;</P></TD>
<TD vAlign=top width=76>
<P>&nbsp;</P></TD>
<TD vAlign=top width=6>
<P>&nbsp;</P></TD>
<TD vAlign=top width=9>
<P>&nbsp;</P></TD>
<TD vAlign=top width=85>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=186>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Balance at June 30, 2008</P></TD>
<TD vAlign=bottom width=64>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>76,205,000</P></TD>
<TD vAlign=bottom width=7>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=60>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>7,008,712</P></TD>
<TD vAlign=bottom width=10>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>1,528,180</P></TD>
<TD vAlign=bottom width=13>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=67>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>68,742,653</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=8>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=76>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>11,261,930</P></TD>
<TD vAlign=bottom width=6>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=85>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>88,541,475</P></TD></TR>
<TR>
<TD vAlign=bottom width=186>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Recapitalization</P></TD>
<TD vAlign=bottom width=64>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=60>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=13>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=67>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=8>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=76>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=6>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=85>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD></TR>
<TR>
<TD vAlign=bottom width=186>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Warrants issued with
convertible debt</P></TD>
<TD vAlign=bottom width=64>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=60>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=13>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=67>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=8>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=76>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=6>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=85>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD></TR>
<TR>
<TD vAlign=bottom width=186>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Net income for the
period</P></TD>
<TD vAlign=bottom width=64>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=60>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=13>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=67>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;20,912,066 </P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=8>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=76>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=6>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=85>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;20,912,066 </P></TD></TR>
<TR>
<TD vAlign=bottom width=186>
<P style="PADDING-RIGHT: 26px; MARGIN: 0px">Foreign currency translation
adjustment</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=64>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=60>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=13>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=67>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>-</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=8>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=76>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;484,346 </P></TD>
<TD vAlign=bottom width=6>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=85>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;484,346 </P></TD></TR>
<TR>
<TD vAlign=bottom width=186>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Balance at March 31,
2009</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=64>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76,205,000 </P></TD>
<TD vAlign=bottom width=7>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=60>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,008,712
</P></TD>
<TD vAlign=bottom width=10>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,528,180 </P></TD>
<TD vAlign=bottom width=13>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=67>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;89,654,719
</P></TD>
<TD vAlign=bottom width=7>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=8>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; FONT-FAMILY: Arial">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=76>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>11,746,276</P></TD>
<TD vAlign=bottom width=6>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=9>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=85>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;109,937,887
</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center>&nbsp;</P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>See accompanying notes
to the unaudited financial statements.</P>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 5 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED</B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>&nbsp;<A name=_Toc180382997></A>STATEMENTS OF CASH FLOWS
(Unaudited)</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px" align=center><BR></P><A name=eolPage77></A><A
name=FIS_UNIDENTIFIED_TABLE_25></A>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=11></TD>
<TD width=339></TD>
<TD width=12></TD>
<TD width=17></TD>
<TD width=11></TD>
<TD width=23></TD>
<TD width=10></TD>
<TD width=1></TD>
<TD width=9></TD>
<TD width=0.867></TD>
<TD width=11></TD>
<TD width=4></TD>
<TD width=5></TD>
<TD width=6></TD>
<TD width=5></TD>
<TD width=12></TD>
<TD width=75></TD>
<TD width=5></TD>
<TD width=6></TD>
<TD width=5></TD>
<TD width=1></TD>
<TD width=12></TD>
<TD width=0.733></TD>
<TD width=68></TD>
<TD width=6></TD>
<TD width=12></TD></TR>
<TR>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=73 colSpan=8>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=217
colSpan=13>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=center><B>Nine months ended March 31,</B></P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>2009</B></P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=13
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>2008</B></P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Operating
activities</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Net
income</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>$</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>20,912,066 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>$</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>18,133,728 &nbsp;&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Adjustments
to reconcile net income from operations to net cash used in operating
activities:</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P style="MARGIN: 0px" align=right><BR></P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>289,411 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>269,563 </P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warrant
expense</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>636,742 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>1,528,180 </P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
interest</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>170,992 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(995,026)</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=416 colSpan=7>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Changes
in non-cash operating working capital items:</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
receivable</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>&nbsp;(14,508,584)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(10,560,551)</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; TEXT-INDENT: 20px; LINE-HEIGHT: 11pt">Other
receivable</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>12,731,210</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>-</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>14,790,786 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(5,696,312)</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance
to suppliers</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>&nbsp;(8,649,719)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(14,306,316)</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid
taxes</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>-</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>1,475,158 </P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
payable</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>&nbsp;(588,269)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>240,502 </P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance
from customers</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>-</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(323,715)</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes
payable</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>949,609 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>2,995,347 &nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
current liabilities</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>21,476 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=13
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>120,274 </P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Net
cash provided by (used in) operating activities</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>26,755,720 &nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(7,119,168)</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Investing
activities</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase
of equipment</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(25,843,611)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=13
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(17,353)</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Net
cash used in investing activities</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(25,843,611)</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>(17,353)</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Financing
activities</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 16px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Proceeds
from the issuance of the convertible notes</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>- &nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>2,100,000</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 16px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Payment
for share issuance cost</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>- &nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>-</P></TD></TR>
<TR>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Net
cash used in financing &nbsp;activities</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom width=12
colSpan=2><P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>- &nbsp;&nbsp;</P></TD>
<TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom width=13
colSpan=3><P>&nbsp;</P></TD>
<TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom width=99
colSpan=5><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>2,100,000</P></TD></TR>
<TR>
<TD style="BORDER-TOP: #000000 1px solid" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Effect
of exchange rate changes in cash</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>73,001 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=13
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>5,731,187 </P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Net
increase (decrease) in cash and cash equivalents</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>985,110 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>694,666</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>&#12288;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Cash
and cash equivalents, beginning of the period</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>8,632,879 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=13
colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=87
colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>6,060,428 </P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>&#12288;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Cash
and cash equivalents, end of the period</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=12>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=87
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>9,617,989 </P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=13
colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=87
colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>6,755,094 </P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Supplemental
disclosure of cash flow information</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Cash
paid during the period:</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=13 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=87 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=351 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Income
taxes paid</P></TD>
<TD vAlign=bottom width=29 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=35 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=10 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=16 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=12>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=87
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: normal"
align=right>6,752,167<FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Arial">
</FONT></P></TD>
<TD vAlign=bottom width=5>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=13
colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=87
colSpan=4>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>6,005,048 </P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center>See accompanying notes to the financial
statements.</P><A name=eolPage76></A><A name=FIS_CASH_FLOW></A><A
name=eolPage78></A><A name=FIS_NOTES_TO_FINANCIAL_STATEMENT></A><A
name=_Toc180382998></A>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 6 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px" align=center><BR></P><A name=eolPage79></A>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;&nbsp;&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; LINE-HEIGHT: 15pt"><B>1.
</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"><B>MANAGEMENT'S
REPRESENTATION OF INTERIM FINANCIAL INFORMATION</B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
accompanying financial statements have been prepared by Longwei Petroleum
Investment Holding Limited, Inc. without audit pursuant to the rules and
regulations of the Securities and Exchange Commission. &nbsp;Certain information
and disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
&nbsp;These financial statements include all of the adjustments, which in the
opinion of management are necessary to a fair presentation of financial position
and results of operations. &nbsp;All such adjustments are of a normal and
recurring nature. Interim results are not necessarily indicative of results for
a full year.&nbsp;&nbsp;</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 96px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -21px; LINE-HEIGHT: 16pt"><B>2.
</B></P>
<P
style="PADDING-RIGHT: 96px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 14pt"><B>SIGNIFICANT
ACCOUNTING POLICIES </B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>This summary of significant accounting policies of the Company is
presented to assist in understanding the Company&#146;s financial statements.
&nbsp;The financial statements and notes are representations of the Company&#146;s
management, which is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 96px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 14pt"><B>Description
of Business </B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Longwei Petroleum Investment Holding Limited (&#147;we,&#148; &#147;us,&#148; &#147;our,&#148;
&#147;Longwei&#148;) was incorporated under the laws of the State of Colorado on March 17,
2000, under the name of Tabatha II, Inc. We changed our name to Longwei
Petroleum Investment Holding Limited on October 12, 2007. We were formed as a
&#147;blind pool&#148; or &#147;blank check&#148; company whose business plan was to seek to acquire
a business opportunity through completion of a merger, exchange of stock, or
other similar type of transaction. In furtherance of our business plan, we
voluntarily elected to become subject to the periodic reporting obligations of
the Securities Exchange Act of 1934 by filing a registration statement on Form
10-SB.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Prior to October 16, 2007, our only business activities were the
organizational activities described above, including registration under the
Securities Exchange Act of 1934, and efforts to locate a suitable business
opportunity for acquisition. On October 16, 2007, the date of the closing of the
Share Exchange, we acquired all of the issued and outstanding common stock of
Longwei Petroleum Investment Holding Limited (&#147;Longwei BVI&#148;), a British Virgin
Islands corporation incorporated on April 3, 2006. &nbsp;Longwei BVI owns all of
the issued and outstanding stock of Taiyuan Yahua Energy Conversion Co., Ltd.
(&#147;Taiyuan Yahua&#148;), a Chinese limited liability company, which in turn is the
sole shareholder of <A name=_DV_M165></A>Taiyuan Longwei Economy &amp; Trading
Co., Ltd. (&#147;Taiyuan Longwei&#148;), a Chinese limited liability company.
&nbsp;&nbsp;We issued 69,000,000 shares of common stock in the share exchange
transaction for 100% of the ownership of Longwei BVI. As a result of the share
exchange transaction, Longwei BVI and its subsidiaries became our wholly owned
subsidiaries.</P>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 7 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 107px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The former stockholders of Longwei BVI acquired 92% of our issued
and outstanding common stock as a result of closing the share exchange
transaction. &nbsp;Therefore, although Longwei BVI became our wholly-owned
subsidiary, the transaction was accounted for as a recapitalization of Longwei
BVI, whereby Longwei BVI is deemed to be the accounting acquirer and is deemed
to have adopted our capital structure.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>All operating activities are carried out through our wholly-owned
Chinese subsidiary, Taiyuan Longwei Economy &amp; Trading Co., Ltd. (&#147;Taiyuan
Longwei&#148;), which was incorporated in 1995. &nbsp;The operating company is
located in Taiyuan City, China. &nbsp;We purchase diesel, gasoline, fuel oil and
kerosene from various suppliers. As an intermediary, we seek to earn profits by
buying diesel, gasoline, fuel oil and kerosene at competitive prices and selling
them to other wholesalers. In addition, we also earn revenues by acting as a
purchase agent where we charge an agency fee, a fee which is charged to
wholesalers who do not have a license to purchase directly from refineries.
Further, the company owns a gas station located on its property where it
generates additional profit and revenue. The cost of our products is largely
dependent on the price of crude oil. The price of crude oil is subject to
fluctuation due to a variety of factors, all of which are beyond our control.
When sudden and significant increases occur in the cost of fuel and lubricant
products, we may not be able to pass on these increases through timely price
increases to our customers. The timing of passing these costs to our customers
can significantly affect our margins. The affect of lower crude oil prices,
after the sale for a short time of higher priced inventory on hand at the time
of the price decrease, reduces the cost of the products which, in turn, improves
profit margins. Fuel oil is a liquid petroleum product that is burned in a
furnace or boiler for the generation of heat or used in an engine for the
generation of power. Solvents are unrefined petroleum products used in paint,
dry-cleaning solvents, solvents for cutback asphalts and solvents for the rubber
industry. We transport and market these products to other wholesale buyers. Our
primary customers are large-scale gas stations, which represent 60% of our
sales. These gas stations, which purchase diesel and gasoline from us, are
located in Taiyuan City in the Shanxi Province of China. Our second largest
group of customers is the coal plants and power supply companies that use our
fuel oil for heat and power, along with our solvents, which comprise 30% of our
business. Our third largest customers are the small independent gas stations.
These represent 10% of our total sales, and purchase gasoline and diesel. Our
operating company is located at No. 30 Guanghua Avenue, Xiaojingyu Xiang,Wan
Bailin District, Taiyuan City, P.C. 030024, Shanxi Province, China, and our
phone number is (86) 351-6527-366.</P><A name=FIS_THE_OFFERING></A>
<P style="PADDING-RIGHT: 0px; PADDING-LEFT: 6px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 1px; PADDING-LEFT: 60px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Basis
of Preparation</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
financial statements of the Company are prepared in accordance with accounting
principles generally accepted in the United States of America and include the
accounts of the Company. This basis of accounting differs in certain material
respects from that used for the preparation of the books and records of the
Company, which are prepared in accordance with the accounting principles and the
relevant financial regulations applicable to enterprises with limited
liabilities, established in the PRC (&#147;PRC GAAP&#148;) the accounting standards used
in the place of their domicile.</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 8 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 1px; PADDING-LEFT: 60px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED</B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 107px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">(b)&nbsp;&nbsp;&nbsp;&nbsp;Economic
and Political Risks</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company's operations are conducted in the PRC. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state
of the PRC economy.</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company's operations in the PRC are subject to special considerations and
significant risks not typically associated with companies in North America and
Western Europe. These include risks associated with, among others, the
political, economic and legal environment and foreign currency exchange. The
Company's results may be adversely affected by changes in the political and
social conditions in the PRC, and by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures, currency
conversion, remittances abroad, and rates and methods of taxation.</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">(c)&nbsp;&nbsp;&nbsp;&nbsp;Principles
of Consolidation</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
accompanying financial statements include Longwei Petroleum Investment Holding
Limited, Inc., its wholly owned subsidiary, Longwei Petroleum Investment Holding
Limited, a British Virgin Island corporation, its wholly owned subsidiary,
Taiyuan Yahua Energy Conversion Co., Ltd., a Chinese Limited Liability Company,
which owns 100% of the operating subsidiary, Taiyuan Longwei Economy &amp;
Trading Company, Ltd., a Chinese Limited Liability Company. &nbsp;Intercompany
transactions have been eliminated in consolidation. </P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 1px; PADDING-LEFT: 60px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Property,
Plant and Equipment</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Property,
plant and equipment are carried at cost less accumulated depreciation.
Depreciation is provided over the assets' estimated useful lives, using the
straight-line method. Estimated useful lives of the property, plant and
equipment are as follows:</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=324></TD>
<TD width=17></TD>
<TD width=14></TD>
<TD width=90></TD>
<TD width=14></TD></TR>
<TR>
<TD vAlign=bottom width=324>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Buildings</P></TD>
<TD width=17>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=90>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">20
years</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=324>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Heavy
machinery and production equipment</P></TD>
<TD width=17>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=90>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">8-
20 years</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=324>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Railway</P></TD>
<TD width=17>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=90>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">20
years</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=324>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Motor
vehicles</P></TD>
<TD width=17>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=90>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">5
years</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
cost and related accumulated depreciation of assets sold or otherwise retired
are eliminated from the accounts and any gain or loss is included in the
statement of income. The cost of maintenance and repairs is charged to the
statement of income as incurred, whereas significant renewals and betterments
are capitalized.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="MARGIN: 0px" align=center>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 9 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(e)&nbsp;&nbsp;&nbsp;&nbsp;Accounting
for the Impairment of Long-Lived Assets</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
long-lived assets held and used by the Company are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
assets may not be recoverable. It is reasonably possible that these assets could
become impaired as a result of technology or other industry changes.
Determination of recoverability of assets to be held and used is by comparing
the carrying amount of an asset to future net undiscounted cash flows to be
generated by the assets. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">There
was no impairment of long-lived assets as of March 31, 2009.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(f)&nbsp;&nbsp;&nbsp;&nbsp;Inventories</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Inventories
are stated at the lower of cost, determined on a weighted average basis, or net
realizable value. Net realizable value is the estimated selling price in the
ordinary course of business less the estimated cost of completion and the
estimated costs necessary to make the sale.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">When
inventories are sold, their carrying amount is charged to expense in the year in
which the revenue is recognized. Write-downs for declines in net realizable
value or for losses of inventories are recognized as an expense in the year the
impairment or loss occurs. There were no declines in net realizable value of
inventory for nine months ended March 31, 2009.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;(g)
&nbsp;&nbsp;&nbsp;Accounts Receivable</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Trade
receivables are recognized and carried at the original invoice amount less
allowance for any uncollectible amounts. An estimate for doubtful accounts is
made when collection of the full amount is no longer probable. Bad debts are
written off as incurred.<B> </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(h)&nbsp;&nbsp;&nbsp;&nbsp;Cash
and Cash Equivalents</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. Cash deposit in PRC
banks are not insured by any government agency or entity.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(i)&nbsp;&nbsp;&nbsp;&nbsp;Advances
to Suppliers</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Advances
to suppliers represent the cash paid in advance for purchasing of inventory
items from suppliers.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(j)&nbsp;&nbsp;&nbsp;&nbsp;Fair
Value of Financial Instruments</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company's financial instruments include cash and cash equivalents, accounts
receivable, prepaid taxes, advances to suppliers, other current assets, taxes
payable, accounts payable and advances from customers. &nbsp;</P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 10 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P style="MARGIN: 0px" align=center><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)</B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Management
estimates that the carrying amounts of the non related party financial
instruments approximate their fair values due to their short-term nature.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;(k)&nbsp;&nbsp;&nbsp;&nbsp;Revenue
Recognition</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company derives the bulk of its revenue from sales of gasoline, diesel, solvent
oil and fuel oil. These product sales revenues are recognized when customers
take possession of goods in accordance with the terms of purchase order
agreements that evidence agreed upon pricing and when collectability is
reasonably assured. Cost of revenues for product sales include costs to purchase
and transport the product to the Company, costs to deliver the goods to the
customer and depreciation on product storage and delivery equipment.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Agency
service revenue consists of fees charged to small fuel distributors who lack the
required licenses to purchase directly from large refineries. The Company
allocates a portion of its purchasing quota to these customers for a fee similar
to a sales commission. Agency service revenue is recognized when there is
evidence of an arrangement that specifies pricing and irrevocable allocation of
a portion of the Company&#146;s purchase quota and collection has occurred. Cost of
agency service revenues consists primarily of selling commissions.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;Foreign
Currency Translation</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
functional currency of the Company is Renminbi (&#147;RMB&#148;) and the RMB is not freely
convertible into foreign currencies. The Company maintains its financial
statements in the functional currency. Monetary assets and liabilities
denominated in currencies other than the functional currency are converted into
the functional currency at rates of exchange prevailing at the balance sheet
date. Transactions denominated in currencies other than the functional currency
are converted into the functional currency at the exchange rates prevailing at
the dates of the transactions. Exchange gains or losses arising from foreign
currency transactions, which are not material, are included in the determination
of net income for the respective periods.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">For
financial reporting purposes, the financial statements of the Company which are
prepared using the functional currency have been translated into United States
dollars. Assets and liabilities are translated at exchange rates at the balance
sheet dates and revenue and expenses are translated at the average exchange
rates for each period and stockholders' equity is translated at historical
exchange rates. Any translation adjustments resulting are not included in
determining net income but are included in foreign currency translation
adjustment to other comprehensive income, a component of stockholders' equity.
The exchange rates adopted are as follows:</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=235></TD>
<TD width=24></TD>
<TD width=11></TD>
<TD width=71></TD></TR>
<TR>
<TD vAlign=bottom width=235>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD width=24>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=83 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B><FONT style="FONT-SIZE: 10pt"
>2009</FONT></B></P></TD></TR>
<TR>
<TD vAlign=bottom width=235>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Period
end&nbsp;RMB exchange rate</P></TD>
<TD width=24>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=71>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>6.8336</P></TD></TR>
<TR>
<TD vAlign=bottom width=235>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Average
period&nbsp;RMB exchange rate</P></TD>
<TD width=24>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=11>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=71>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right>6.8464 </P></TD></TR></TABLE>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">No
representation is made that the RMB amounts could have been, or could be,
converted into U.S. dollars at the rates used in translation.</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 11 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(m)&nbsp;&nbsp;&nbsp;&nbsp;Use
of Estimates</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
preparation of the financial statements in conformity with generally accepted
accounting principles in the United States of America 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 periods. Management makes these estimates using the best
information available at the time the estimates are made; however actual results
could differ materially from those estimates.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;(n)&nbsp;&nbsp;&nbsp;&nbsp;Income
Taxes</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
company has implemented SFAS No. 109, "Accounting for Income Taxes," which
provides for a liability approach to accounting for income taxes. Deferred
income taxes result from the effect of transactions that are recognized in
different periods for financial and tax reporting purposes. The company has
recorded no deferred tax assets or liabilities as of March 31, 2009, since
nearly all differences in tax bases and financial statement carrying values are
permanent differences.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;(o)&nbsp;&nbsp;&nbsp;&nbsp;Recent
Accounting Pronouncements</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 6px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 6px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
December&nbsp;2007, the<A name=keyword></A> FASB issued SFAS No.&nbsp;141R,
"Business Combinations" ("SFAS No.&nbsp;141R"). SFAS No.&nbsp;141R amends
SFAS&nbsp;141 and provides revised guidance for recognizing and measuring
identifiable assets and goodwill acquired, liabilities assumed, and any
noncontrolling interest in the acquiree. It also provides disclosure
requirements to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. It is effective for fiscal
years beginning on or after December&nbsp;15, 2008 and will be applied
prospectively. We are currently evaluating the impact of adopting SFAS
No.&nbsp;141R on our consolidated financial statements. </P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 6px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 6px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
December&nbsp;2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements&nbsp;&#151; an amendment of ARB No.&nbsp;51" ("SFAS
No. 160&#148;). SFAS No. 160 requires that ownership interests in subsidiaries held
by parties other than the parent, and the amount of consolidated net income, be
clearly identified, labeled, and presented in the consolidated financial
statements. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. It is effective for fiscal years beginning on or after
December&nbsp;15, 2008 and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests. All other requirements
shall be applied prospectively. We are currently evaluating the impact of
adopting SFAS No. 160 on our consolidated financial statements. </P>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 12 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)</B></P>
<P style="MARGIN: 6px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
March 2008, FASB issued Financial Accounting Standards No. 161, &#147;<I>Disclosure
about Derivative Instruments and Hedging Activities - an amendment to FASB
Statement No. 133.&#148;</I> The use and complexity of derivative instruments and
hedging activities have increased significantly over the past several years.
Constituents have expressed concerns that the existing disclosure requirements
in FASB Statement No. 133, &#147;<I>Accounting for Derivative Instruments and Hedging
Activities,&#148;</I> do not provide adequate information about how derivative and
hedging activities affect an entity&#146;s financial position, financial performance,
and cash flows. Accordingly, this Statement requires enhanced disclosures about
an entity&#146;s derivative and hedging activities and thereby improves the
transparency of financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008.</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 7px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
May 2008, the FASB issued Statement No. 162, &#147;<I>The Hierarchy of Generally
Accepted Accounting Principles</I>.&#148; &nbsp;This statement identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (GAAP)
in the United States (the GAAP hierarchy). &nbsp;This statement is effective 60
days following the SEC&#146;s approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, &#147;<I>the Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles</I>.&#148;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>In May 2008, the FASB issued Statement No. 163<I> &#147;Accounting for
Financial Guarantee Insurance Contracts&#151;an interpretation of FASB Statement No.
60.&#148; &nbsp;</I>The premium revenue recognition approach for a financial
guarantee insurance contract links premium revenue recognition to the amount of
insurance protection and the period in which it is provided. For purposes of
this statement, the amount of insurance protection provided is assumed to be a
function of the insured principal amount outstanding, since the premium received
requires the insurance enterprise to stand ready to protect holders of an
insured financial obligation from loss due to default over the period of the
insured financial obligation. &nbsp;This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2008.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
April 2008, the FASB issued FSP 142-3, &#147;Determination of the Useful Life of
Intangible Assets&#148;, (FSP 142-3). FSP 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142, &#147;Goodwill and
Other Intangible Assets&#148;. FSP 142-3 is effective for fiscal years beginning
after December 15, 2008. The Company does not expect the adoption of FSP 142-3
will have a material impact on the Company&#146;s consolidated financial position,
results of operations and cash flows.</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
June 2008, the FASB ratified EITF Issue No. 08-3, &#147;Accounting for Lessees for
Maintenance Deposits Under Lease Arrangements&#148; (EITF 08-3). EITF 08-3 provides
guidance for accounting for nonrefundable maintenance deposits. It also provides
revenue recognition accounting guidance for the lessor. EITF 08-3 is effective
for fiscal years beginning after December 15, 2008. The Company does not expect
the adoption of EITF Issue No. 08-3 will have a material impact on the Company&#146;s
consolidated financial position, results of operations and cash flows.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 13 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P style="PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>3.&nbsp;&nbsp;&nbsp;&nbsp;ACCOUNTS
RECEIVABLE</B></P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The receivables and allowance balances at March 31, 2009 and June
30, 2008are as follows:</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=230></TD>
<TD width=16></TD>
<TD width=14></TD>
<TD width=77></TD>
<TD width=16></TD>
<TD width=14></TD>
<TD width=93></TD></TR>
<TR>
<TD vAlign=bottom width=230>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=bottom width=91 colSpan=2>
<P
style="PADDING-RIGHT: 2px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>March 31, <BR>2009</B></P></TD>
<TD vAlign=bottom width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px"
align=right><B>&nbsp;</B></P></TD>
<TD vAlign=bottom width=107 colSpan=2>
<P
style="PADDING-RIGHT: 2px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>&nbsp;June 30,<BR>2008</B></P></TD></TR>
<TR>
<TD vAlign=bottom width=230>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Accounts
receivable</P></TD>
<TD width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD vAlign=bottom width=77>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;26,688,372</P></TD>
<TD vAlign=bottom width=16>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P></TD>
<TD vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD vAlign=bottom width=93>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>12,134,507</P></TD></TR>
<TR>
<TD vAlign=bottom width=230>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Less:
allowance for doubtful accounts</P></TD>
<TD width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=14>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=77>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD>
<TD vAlign=bottom width=16>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=14>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=93>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD></TR>
<TR>
<TD vAlign=bottom width=230>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Accounts
receivable, net</P></TD>
<TD width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=77>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;26,688,372</P></TD>
<TD vAlign=bottom width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=14>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=93>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>12,134,507</P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>4.&nbsp;&nbsp;&nbsp;&nbsp;INVENTORIES</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Inventories
are the unsold petroleum products purchased from various suppliers, and consist
of the following as of March 31, 2009 and June 30, 2008:</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=248></TD>
<TD width=13></TD>
<TD width=106></TD>
<TD width=12></TD>
<TD width=112></TD></TR>
<TR>
<TD width=248>
<P>&nbsp;</P></TD>
<TD width=13>
<P>&nbsp;</P></TD>
<TD width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>March
31,</B></P></TD>
<TD width=12>
<P>&nbsp;</P></TD>
<TD width=112>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>June
30,</B></P></TD></TR>
<TR>
<TD width=248>
<P>&nbsp;</P></TD>
<TD width=13>
<P>&nbsp;</P></TD>
<TD width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>2009</B></P></TD>
<TD width=12>
<P>&nbsp;</P></TD>
<TD width=112>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right><B>2008</B></P></TD></TR>
<TR>
<TD width=248>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Diesel Oil</P></TD>
<TD width=13>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">$</P></TD>
<TD vAlign=bottom width=106>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,178,035
</P></TD>
<TD width=12>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=top width=112>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,433,154
</P></TD></TR>
<TR>
<TD width=248>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Gasoline</P></TD>
<TD width=13>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,010,878
</P></TD>
<TD width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=112>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,619,687
</P></TD></TR>
<TR>
<TD width=248>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Solvent Oil</P></TD>
<TD width=13>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,561,690
</P></TD>
<TD width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=112>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD></TR>
<TR>
<TD width=248>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Fuel Oil</P></TD>
<TD width=13>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;619,864
</P></TD>
<TD width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=112>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD></TR>
<TR>
<TD width=248>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Less: allowances for slowing
moving items</P></TD>
<TD width=13>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
&nbsp;&nbsp;</P></TD>
<TD width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=112>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD></TR>
<TR>
<TD width=248>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total</P></TD>
<TD width=13>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">$</P></TD>
<TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
vAlign=bottom width=106>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,370,467 </P></TD>
<TD width=12>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
vAlign=top width=112>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29,052,841
</P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>5.&nbsp;&nbsp;&nbsp;&nbsp;ADVANCE
TO SUPPLIERS</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company has made payments to unrelated suppliers in advance of receiving
products and services. The advance payments are meant to ensure preferential
pricing and delivery. The amounts advanced under such arrangements totaled $
37,307,230 and $ 28,327,067 as of March 31, 2009 and June 30, 2008.</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="MARGIN-TOP: 0px; PADDING-LEFT: 26px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; TEXT-INDENT: -26px; LINE-HEIGHT: 13pt"><B>6.</B></P>
<P
style="PADDING-LEFT: 26px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>CONSTRUCTION
IN PROGRESS</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company is currently building a new storage facility in Gujiao City which will
add 70,000 metric tons of storage capacity to serve Gujiao city and the
surrounding area. The cost is recorded to Construction in progress, and
transferred to property, plant and equipment when the improvement is completed
and the equipment is purchased.</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=10></TD>
<TD width=102></TD>
<TD width=16></TD>
<TD width=1></TD>
<TD width=16></TD>
<TD width=61></TD>
<TD width=16></TD>
<TD width=1></TD>
<TD width=16></TD>
<TD width=61></TD>
<TD width=16></TD>
<TD width=1></TD>
<TD width=22></TD>
<TD width=73></TD>
<TD width=18></TD>
<TD width=120></TD>
<TD width=18></TD>
<TD width=78></TD>
<TD width=18></TD></TR>
<TR>
<TD vAlign=bottom width=112 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=18 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=78 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>30-Jun-08</B></P></TD>
<TD vAlign=bottom width=18 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=78 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>Addition</B></P></TD>
<TD vAlign=bottom width=18 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>Transferred to property, </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>plant and </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>equipment</B></P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=120>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>Impact of foreign </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>currency exchange </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>rate</B></P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=96 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt"
align=right><B>31-Mar-09</B></P></TD></TR>
<TR>
<TD vAlign=bottom width=10>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=119 colSpan=2>
<P style="FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">Construction in
progress</P></TD>
<TD vAlign=bottom width=18 colSpan=2>
<P style="FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 11pt">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=78
colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
&nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=18 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=78
colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,852,728
</P></TD>
<TD vAlign=bottom width=24 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=73>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</P></TD>
<TD vAlign=bottom width=18>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=120>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>0 &nbsp;&nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=18>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=96
colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 9pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,852,728
&nbsp;&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 14 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="PADDING-RIGHT: 0px; PADDING-LEFT: 72px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify><B>&nbsp;</B></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>7.&nbsp;&nbsp;&nbsp;&nbsp;PROPERTY,
PLANT AND EQUIPMENT</B></P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">At
March 31, 2009 and June 30, 2008, property, plant and equipment, at cost,
consist of</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=215></TD>
<TD width=18></TD>
<TD width=104></TD>
<TD width=18></TD>
<TD width=122></TD>
<TD width=18></TD>
<TD width=88></TD>
<TD width=18></TD>
<TD width=92></TD></TR>
<TR>
<TD vAlign=top width=215>
<P>&nbsp;</P></TD>
<TD vAlign=top width=18>
<P>&nbsp;</P></TD>
<TD vAlign=top width=104>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>June 30,
2008</B></P></TD>
<TD vAlign=top width=18>
<P>&nbsp;</P></TD>
<TD vAlign=top width=122>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>Impact of
foreign currency exchange rate</B></P></TD>
<TD vAlign=top width=18>
<P>&nbsp;</P></TD>
<TD vAlign=top width=88>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right><B>Additions</B></P></TD>
<TD vAlign=top width=18>
<P>&nbsp;</P></TD>
<TD vAlign=top width=92>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right><B>March 31,
2009</B></P></TD></TR>
<TR>
<TD vAlign=bottom width=215>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Land and buildings</P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=104>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;2,052,874 </P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=122>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;7,632</P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=88>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;102,435 </P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD vAlign=bottom width=92>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;2,162,941 </P></TD></TR>
<TR>
<TD vAlign=bottom width=215>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Machinery and production
equipment</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=104>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;4,454,536 </P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=122>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;16,595</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=88>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;1,888,448 </P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=92>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;6,359,579 </P></TD></TR>
<TR>
<TD vAlign=bottom width=215>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total property, plant and
equipment</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=104>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;6,507,410 </P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=122>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;24,227</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=88>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;1,990,883 </P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=92>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;8,522,520 </P></TD></TR>
<TR>
<TD vAlign=bottom width=215>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Less: accumulated
depreciation</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=104>
<P style="MARGIN: 0px" align=right>&nbsp;&nbsp;(3,870,084)</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=122>
<P style="PADDING-RIGHT: 8px; MARGIN: 0px"
align=right>&nbsp;(14,385)</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=88>
<P style="MARGIN: 0px" align=right>(289,411)</P></TD>
<TD vAlign=bottom width=18>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=92>
<P style="MARGIN: 0px" align=right>&nbsp;(4,173,880)</P></TD></TR>
<TR>
<TD vAlign=bottom width=215>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Property, plant and equipment,
net</P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=104>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;2,637,326 </P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=122>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;9,842</P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=88>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,701,472 &nbsp;</P></TD>
<TD vAlign=bottom width=18>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=92>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;4,348,640 </P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 60px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Depreciation
expense for the nine months ended March 31, 2009 was $289,411.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B>8. &nbsp;TAXES PAYABLE</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 13pt">Taxes
payable consist of the following:</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=275></TD>
<TD width=14></TD>
<TD width=125></TD>
<TD width=32></TD>
<TD width=132></TD></TR>
<TR>
<TD vAlign=bottom width=275>
<P>&nbsp;</P></TD>
<TD vAlign=top width=14>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=125>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>March 31, 2009</B></P></TD>
<TD vAlign=top width=32>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=132>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>June 30, 2008</B></P></TD></TR>
<TR>
<TD vAlign=top width=275>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Income tax
payable</P></TD>
<TD vAlign=top width=14>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD vAlign=bottom width=125>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,729,289
</P></TD>
<TD vAlign=top width=32>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,190,002 &nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=275>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Value Added Tax
payable</P></TD>
<TD vAlign=top width=14>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=125>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,335,198
</P></TD>
<TD vAlign=bottom width=32>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>963,178</P></TD></TR>
<TR>
<TD vAlign=top width=275>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Business taxes
payable and others</P></TD>
<TD vAlign=top width=14>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=125>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;349,507
</P></TD>
<TD vAlign=bottom width=32>
<P>&nbsp;</P></TD>
<TD vAlign=top width=132>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>302,043</P></TD></TR>
<TR>
<TD vAlign=bottom width=275>
<P>&nbsp;</P></TD>
<TD vAlign=top width=14>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=125>
<P>&nbsp;</P></TD>
<TD vAlign=top width=32>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=132>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=275>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Total</P></TD>
<TD vAlign=top width=14>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=125>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,413,994
</P></TD>
<TD vAlign=top width=32>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=132>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2,455,223</P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>9. &nbsp;ACCRUED
PAYABLES</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: normal">Other
current liabilities consist of the f<FONT
style="FONT-SIZE: 10pt">ollowing:</FONT></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=283></TD>
<TD width=18></TD>
<TD width=131></TD>
<TD width=11></TD>
<TD width=92></TD></TR>
<TR>
<TD vAlign=bottom width=283>
<P>&nbsp;</P></TD>
<TD vAlign=top width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=131>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>March 31, 2009</B></P></TD>
<TD vAlign=top width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=92>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>June 30, 2008</B></P></TD></TR>
<TR>
<TD width=283>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Accrued
salaries</P></TD>
<TD vAlign=top width=18>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD vAlign=bottom width=131>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,277 </P></TD>
<TD vAlign=top width=11>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=bottom width=92>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>15,221</P></TD></TR>
<TR>
<TD width=283>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Accrued
staff welfare</P></TD>
<TD vAlign=top width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=131>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;252,855 </P></TD>
<TD vAlign=top width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=92>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>230,518</P></TD></TR>
<TR>
<TD vAlign=top width=283>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Accrued expenses and miscellaneous</P></TD>
<TD vAlign=top width=18>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=131>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;417,545 </P></TD>
<TD vAlign=bottom width=11>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=92>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>552,697</P></TD></TR>
<TR>
<TD vAlign=bottom width=283>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Total</P></TD>
<TD vAlign=top width=18>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
vAlign=bottom width=131>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;685,677 </P></TD>
<TD vAlign=top width=11>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
vAlign=bottom width=92>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>798,436</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 15 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>10.&nbsp;&nbsp;&nbsp;&nbsp;INCOME
TAXES</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(a)&nbsp;&nbsp;&nbsp;&nbsp;
<U>Corporation Income Tax (&#147;CIT&#148;)</U></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Company is governed by the Income Tax Laws of the PRC. The PRC federal statutory
tax rate is 30% since January 1, 2008.</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
provision for income taxes for nine months ended March 31, 2009 is summarized as
follows:</P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=190></TD>
<TD width=15></TD>
<TD width=12></TD>
<TD width=74></TD>
<TD width=15></TD>
<TD width=12></TD>
<TD width=3></TD>
<TD width=12></TD>
<TD width=12></TD>
<TD width=60></TD>
<TD width=2></TD>
<TD width=10></TD>
<TD width=2></TD></TR>
<TR>
<TD vAlign=bottom width=190>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD width=15>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=bottom width=86 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P style="FONT-SIZE: 11pt; MARGIN: 0px"><B>&nbsp;</B></P></TD>
<TD vAlign=bottom width=86 colSpan=3>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>&nbsp;&nbsp;2009</B></P></TD>
<TD vAlign=bottom width=15 colSpan=3>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=190>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Current</P></TD>
<TD width=15>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=74>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=bottom width=73 colSpan=3>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>7,258,748</P></TD>
<TD vAlign=bottom width=2>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=190>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Deferred</P></TD>
<TD width=15>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=74>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=12>
<P style="FONT-SIZE: 11pt; MARGIN: 0px" align=right>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=73
colSpan=3>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD>
<TD vAlign=bottom width=2>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=190>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD width=15>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=74>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=12>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=2>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=bottom width=12>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=73
colSpan=3>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>7,258,748</P></TD>
<TD vAlign=bottom width=2>
<P style="FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">(b)&nbsp;&nbsp;&nbsp;&nbsp;
<U>Value Added Tax (&#147;VAT&#148;)</U></P>
<P style="MARGIN: 0px"><BR></P>
<P style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
accordance with the relevant taxation laws in the PRC, the normal VAT rate for
domestic sales is 5% to 17%, which is levied on the invoiced value of sales and
is payable by the purchaser. The Company is required to remit the VAT it
collects to the tax authority.</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
value added tax refundable presents the VAT that the Company paid for the
purchasing products and can be used to deduct the VAT related to the sale of
products.</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 16 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED</B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>11.
&nbsp;&nbsp;&nbsp;SEGMENT INFORMATION</B></P>
<P style="MARGIN: 0px"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=47></TD>
<TD width=27></TD>
<TD width=15></TD>
<TD width=107></TD>
<TD width=75></TD>
<TD width=106></TD>
<TD width=15></TD>
<TD width=100></TD>
<TD width=100></TD>
<TD width=15></TD>
<TD width=10></TD>
<TD width=15></TD>
<TD width=24></TD>
<TD width=52></TD>
<TD width=24></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=150 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=424 colSpan=7>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>For the three
months ended March 31, 2009</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Agency</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Product
sales</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Service</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102
colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Total</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;46,622,276 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,097,818 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;49,720,094 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Cost of revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;40,049,434 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;40,049,434 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Gross profit</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,572,842 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,097,818 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,670,660 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Income from operations</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,863,916 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,097,818 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,961,734 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total assets</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$ &nbsp;116,185,426
</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;116,185,426 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Depreciation </P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 7px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;72,030</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 7px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;72,030</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=150 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=424 colSpan=7>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;For the
three months ended March 31, 2008</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Agency
</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Product
sales </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Service
</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102
colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Total
</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;30,213,210</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,265,492</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32,478,702</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Cost of revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;22,180,278</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;473,088</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;22,653,366</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Gross profit</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;8,032,932</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,792,404</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,825,336</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Income from operations</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;4,974,904</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,792,404</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,767,308</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total assets</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;90,272,687</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; PADDING-LEFT: 0px; MARGIN: 0px"
align=right>$ &nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90,272,687</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Depreciation </P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;89,964</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;89,964
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=center><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=47></TD>
<TD width=27></TD>
<TD width=15></TD>
<TD width=107></TD>
<TD width=75></TD>
<TD width=106></TD>
<TD width=15></TD>
<TD width=100></TD>
<TD width=100></TD>
<TD width=15></TD>
<TD width=10></TD>
<TD width=15></TD>
<TD width=24></TD>
<TD width=52></TD>
<TD width=24></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=150 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=424 colSpan=7>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>For the nine
months ended March 31, 2009</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Agency</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Product
sales</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Service</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102
colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>Total</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$ &nbsp;139,308,969
</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,529,598 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;147,838,567 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Cost of revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$ &nbsp;116,588,344
</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;116,588,344 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Gross profit</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;22,720,625 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,529,598 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;31,250,223 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Income from operations</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;19,801,553 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,529,598 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;28,331,151 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total assets</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$ &nbsp;116,185,426
</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;116,185,426 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Depreciation </P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;289,411 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;289,411 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=150 colSpan=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=424 colSpan=7>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;For the nine
months ended March 31, 2008</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Agency
</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Product
sales </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Service
</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom width=102
colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>&nbsp;Total
</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;98,581,486 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;10,115,682 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;108,697,168 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Cost of revenues</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;75,917,662 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;1,269,204 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;77,186,866 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Gross profit</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;22,663,824 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;8,846,478 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;31,510,302 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=106>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&#12288;</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Income from operations</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;17,645,559 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,846,478 </P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;26,492,037 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Total assets</P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;90,272,687</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp; &nbsp;$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90,272,687</P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=47>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=27>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=182 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px">Depreciation </P></TD>
<TD vAlign=bottom width=106>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;269,563 </P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=100>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>&nbsp;$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-
</P></TD>
<TD vAlign=bottom width=100>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=102 colSpan=4>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=right>$
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;269,563 </P></TD>
<TD vAlign=bottom width=24>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 17 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED </B></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; LINE-HEIGHT: 13pt"
align=center><B>NOTES TO UNAUDITED FINANCIAL STATEMENTS</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>12.
&nbsp;&nbsp;&nbsp;GEOGRAPHICAL INFORMATION</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; PADDING-LEFT: 56px; MARGIN: 0px"
align=justify>&nbsp;The Company's revenues by geographic destination are
analyzed as follows:</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=270></TD>
<TD width=12></TD>
<TD width=118></TD>
<TD width=19></TD>
<TD width=123></TD></TR>
<TR>
<TD vAlign=top width=270>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=261 colSpan=3>
<P
style="PADDING-RIGHT: 13px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>For the Three Months Ended March 31,</B></P></TD></TR>
<TR>
<TD vAlign=top width=270>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2009</B></P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=123>
<P
style="PADDING-RIGHT: 13px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2008</B></P></TD></TR>
<TR>
<TD vAlign=top width=270>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P>&nbsp;</P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=123>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=270>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>PRC</P></TD>
<TD vAlign=top width=12>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Arial"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
style="FONT-FAMILY: Times New Roman">&nbsp;&nbsp;49,720,094</FONT> </P></TD>
<TD vAlign=top width=19>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=top width=123>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;32,478,702 </P></TD></TR>
<TR>
<TD vAlign=top width=270>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Outside PRC</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Arial"
align=right>-</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=123>
<P
style="PADDING-RIGHT: 10px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD></TR>
<TR>
<TD vAlign=top width=270>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P>&nbsp;</P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=123>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=270>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Total
net revenues</P></TD>
<TD vAlign=top width=12>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Arial"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
style="FONT-FAMILY: Times New Roman">&nbsp;49,720,094</FONT> </P></TD>
<TD vAlign=top width=19>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=123>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;32,478,702 </P></TD></TR>
<TR>
<TD vAlign=top width=270>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P>&nbsp;</P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=123>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=justify><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=1></TD>
<TD width=275></TD>
<TD width=12></TD>
<TD width=118></TD>
<TD width=19></TD>
<TD width=104></TD>
<TD width=16></TD>
<TD width=3></TD></TR>
<TR>
<TD style="BORDER-TOP: #000000 3px double" vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=275>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=261 colSpan=5>
<P
style="PADDING-RIGHT: 13px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>For the nine Months Ended March 31,</B></P></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=275>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2009</B></P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=123 colSpan=3>
<P
style="PADDING-RIGHT: 13px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2008</B></P></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=275>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P>&nbsp;</P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=123 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=275>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>PRC</P></TD>
<TD vAlign=top width=12>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Arial"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
style="FONT-FAMILY: Times New Roman">147,838,567</FONT> </P></TD>
<TD vAlign=top width=19>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=top width=123 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>108,697,168</P></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=275>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Outside PRC</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Arial"
align=right>-</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=123
colSpan=3><P
style="PADDING-RIGHT: 10px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=275>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P>&nbsp;</P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=123 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=275>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Total
net revenues</P></TD>
<TD vAlign=top width=12>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=118>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Arial"
align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT
style="FONT-FAMILY: Times New Roman">&nbsp;147,838,567</FONT> </P></TD>
<TD vAlign=top width=19>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=123
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>108,697,168</P></TD></TR>
<TR>
<TD vAlign=top width=276 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=12>
<P>&nbsp;</P></TD>
<TD vAlign=top width=118>
<P>&nbsp;</P></TD>
<TD vAlign=top width=19>
<P>&nbsp;</P></TD>
<TD vAlign=top width=104>
<P>&nbsp;</P></TD>
<TD vAlign=top width=19 colSpan=2>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>13.
&nbsp;&nbsp;&nbsp;WARRANTS</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>On February 2, 2009 the company entered into an Amendment and
Settlement Agreement whereby the maturity date of the notes dated December 18,
2007 in the amount of $2,100,000 were extended to September 18, 2009. &nbsp;In
consideration of extending the note the interest rate was changed from 4% to 8%
on an annual basis. Further, the exercise price of the Class A warrants was
changed from $.80 to an exercise price of $.70. These Class A warrants totaling
1,500,030 expire on December 18, 2012. In addition as part of the Settlement
agreement a Class B warrant in the amount of 1,200,000 was also granted to the
investors with an exercise price of $.70 The Class B warrants expire on February
2, 2014. &nbsp;In using the Black-Scholes Calculation the company will have a
total expense of $1,528,180 for the life of the warrants. &nbsp;The note was for
a period of 12 months expiring December 17, 2008. Each month expense would be
$127,348. &nbsp;</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px" align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 18 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 1px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 13pt"><B>ITEM
&nbsp;2.</B></P>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>MANAGEMENT&#146;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">DISCLAIMER
REGARDING FORWARD LOOKING STATEMENTS</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Certain
statements in this Form 10-Q, which are not statements of historical fact, are
what are known as "forward-looking statements," which are basically statements
about the future. For that reason, these statements involve risk and uncertainty
since no one can accurately predict the future. Words such as "plans,"
"intends," "hopes," "seeks," "anticipates," "expects," and the like, often
identify such forward looking statements, but are not the only indication that a
statement is a forward-looking statement. Such forward-looking statements
include statements concerning our plans and objectives with respect to our
present and future operations, and statements which express or imply that such
present and future operations will or may produce revenues, income or profits.
These and other factors may cause our actual results to differ materially from
any forward-looking statement. &nbsp;We caution you not to place undue reliance
on these forward-looking statements. &nbsp;Although we base these
forward-looking statements on our expectations, assumptions, and projections
about future events, actual events and results may differ materially, and our
expectations, assumptions, and projections may prove to be inaccurate. The
forward-looking statements speak only as of the date hereof, and we expressly
disclaim any obligation to publicly release the results of any revisions to
these forward-looking statements to reflect events or circumstances after the
date of this filing. </P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>Overview</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Longwei Petroleum Investment Holding Limited (&#147;we,&#148; &#147;us,&#148; &#147;our,&#148;
&#147;Longwei&#148;) was incorporated under the laws of the State of Colorado on March 17,
2000, under the name of Tabatha II, Inc. We changed our name to Longwei
Petroleum Investment Holding Limited on October 12, 2007. We were formed as a
&#147;blind pool&#148; or &#147;blank check&#148; company whose business plan was to seek to acquire
a business opportunity through completion of a merger, exchange of stock, or
other similar type of transaction. In furtherance of our business plan, we
voluntarily elected to become subject to the periodic reporting obligations of
the Securities Exchange Act of 1934 by filing a registration statement on Form
10-SB.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Prior to October 16, 2007, our only business activities were the
organizational activities described above, including registration under the
Securities Exchange Act of 1934, and efforts to locate a suitable business
opportunity for acquisition. On October 16, 2007, the date of the closing of the
Share Exchange, we acquired all of the issued and outstanding common stock of
Longwei Petroleum Investment Holding Limited (&#147;Longwei BVI&#148;), a British Virgin
Islands corporation incorporated on April 3, 2006. &nbsp;Longwei BVI owns all of
the issued and outstanding stock of Taiyuan Yahua Energy Conversion Co., Ltd.
(&#147;Taiyuan Yahua&#148;), a Chinese limited liability company, which is in turn the
sole shareholder of Taiyuan Longwei Economy &amp; Trading Co., Ltd. (&#147;Taiyuan
Longwei&#148;), a Chinese limited liability company. &nbsp;&nbsp;We issued 69,000,000
shares in the share exchange transaction for 100% of the ownership of Longwei
BVI. As a result of the share exchange transaction, Longwei BVI and its
subsidiaries became our wholly owned subsidiaries.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>&nbsp;Taiyuan Yahua was incorporated on August 11, 2006. &nbsp;The
operating subsidiary, Taiyuan Longwei, is located in Taiyuan City, China, and
was established in 1995 as a Chinese limited liability company. &nbsp;We
purchase diesel, gasoline, fuel oil and kerosene from various suppliers. As a
licensed intermediary, we seek to earn profits by buying diesel gasoline fuel
oil and kerosene at competitive prices and selling them to other wholesalers. In
addition, we also earn revenue by acting as a purchase agent where we charge an
agency fee, a fee which is charged to other wholesalers who do not have a
license to purchase directly from refineries. &nbsp;&nbsp;The cost of our
products is largely dependent on the price of crude oil. The price of crude oil
is subject to fluctuation due to a variety of factors, all of which are beyond
our control. When sudden and significant increases occur in the cost of fuel and
lubricant products, we may not be able to pass on these increases through timely
price increases to our customers. The timing of passing these costs through to
our customers can significantly affect our margins. The affect of lower crude
oil prices, after the sale for a short time of higher priced inventory on hand
at the time of the price decrease, reduces the cost of the products which in
turn improves profit margins. Fuel oil is a liquid petroleum product that is
burned in a furnace or boiler for the generation of heat or used in an engine
for the </P>
<P style="MARGIN: 0px" align=justify><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 19 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>generation of power. &nbsp;Solvents are unrefined petroleum
products used in paint, dry-cleaning solvents, solvents for cutback asphalts and
solvents for the rubber industry. We transport and market these products to
other wholesale buyers. &nbsp;Our primary customers are large-scale gas
stations, which represent 60% of our sales and which are located in Taiyuan City
in the Shanxi Province of China. &nbsp;They primarily buy diesel and gasoline.
&nbsp;Our second largest group of customers is coal plants and power supply
companies which use our fuel oil for heat and power along with our solvents;
these comprise 30% of our business. &nbsp;Our third largest customer is the
small, independent gas station which represents 10% of our total sales.
&nbsp;These stations buy gasoline and diesel from us.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>We currently have 14 storage tanks that allow us to store 50,000
metric tons of our products. In addition, we own our own rail system to
transport our products to our customers. &nbsp;Further the company is expanding
its operations to Gujiao City. The company is adding 70,000 metric tons of
storage capacity. This facility will be used to service customers in Gujiao city
and the surrounding areas, thus expanding the company's market. Management hopes
to complete the project in one year as long as financial resources are
available.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>We have been granted a Finish Oil Wholesale license which allows
our company to engage in the wholesale business of gasoline, fuel oil and diesel
oil. &nbsp;This license is granted by the People&#146;s Republic of China. &nbsp;In
addition, we also have a special license for Dangerous Chemical Products
Businesses that allows us to handle gasoline and diesel oil. &nbsp;The Finish
Oil Wholesale License allows us to engage in the business of these products.
There is no expiration date on this license<B>.</B> &nbsp;The Dangerous Chemical
Products Businesses license is renewed every three years. &nbsp;The People&#146;s
Republic of China&#146;s constitution states that all mineral and oil resources
belong to the State. &nbsp;Without these licenses, we would not be allowed to
sell our products. &nbsp;</P>
<P style="MARGIN: 0px" align=justify><BR></P><A name=eolPage28></A>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Results of Operations</I></B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Revenue</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The following table shows the different components comprising our
total revenue for the three months ending March 31, 2009 and March 31, 2008.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>All amounts in thousands of U.S. dollars</I></B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=0.4></TD>
<TD width=161></TD>
<TD width=0.4></TD>
<TD width=71></TD>
<TD width=0.4></TD>
<TD width=72></TD>
<TD width=84></TD>
<TD width=70></TD>
<TD width=0.4></TD>
<TD width=84></TD>
<TD width=90></TD></TR>
<TR>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>Sales by Products</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2009</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total revenues</B></P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>Volume of sales in thousands</B></P></TD>
<TD vAlign=top width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2008</B></P></TD>
<TD vAlign=top width=85 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total revenues</B></P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>Volume of sales in thousands</B></P></TD></TR>
<TR>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>(gallons)</P></TD>
<TD vAlign=top width=70>
<P>&nbsp;</P></TD>
<TD vAlign=top width=85 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>(gallons)</P></TD></TR>
<TR>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Diesel
Oil</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>23,056</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>46.4%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>10,986</P></TD>
<TD vAlign=top width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>18,138</P></TD>
<TD vAlign=top width=85 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>55.8%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>7,003</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Gasoline</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>21,736</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>43.7%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>8,739</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>8,607</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>26.5%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>3,470</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Fuel
Oil</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,100</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1.5%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>617</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2,307</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>7.1%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,093</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Kerosene</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>730</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2.2%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>343</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,162</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>3.6%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>540</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTALS
Petroleum Products</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>46,622</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>93.8%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>20,685</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>30,214</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>93.0%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>12,106</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Agency
Fee</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=72
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>3,098</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>6.2%</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=71
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2,265</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>7.0%</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTAL
REVENUE</B></P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=72
colSpan=2><P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>49,720</B></P></TD>
<TD vAlign=top width=72>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=71
colSpan=2><P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>32,479</B></P></TD>
<TD vAlign=top width=84>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR><BR>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 20 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The following table shows the different components comprising our
total revenue for the nine months ending March 31, 2009 and March 31, 2008.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>All amounts in thousands of U.S. dollars</I></B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=0.4></TD>
<TD width=161></TD>
<TD width=0.4></TD>
<TD width=71></TD>
<TD width=0.4></TD>
<TD width=72></TD>
<TD width=84></TD>
<TD width=70></TD>
<TD width=0.4></TD>
<TD width=84></TD>
<TD width=90></TD></TR>
<TR>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>Sales by Products</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2009</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total revenues</B></P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>Volume of sales in thousands</B></P></TD>
<TD vAlign=top width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2008</B></P></TD>
<TD vAlign=top width=85 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total revenues</B></P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>Volume of sales in thousands</B></P></TD></TR>
<TR>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>(gallons)</P></TD>
<TD vAlign=top width=70>
<P>&nbsp;</P></TD>
<TD vAlign=top width=85 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>(gallons)</P></TD></TR>
<TR>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Diesel
Oil</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>75,608</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>51.1%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>29,098</P></TD>
<TD vAlign=top width=70>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>57,320</P></TD>
<TD vAlign=top width=85 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>52.7%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>24,157</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Gasoline</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>59,972</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>40.6%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>22,006</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>31,041</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>28.6%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>13,599</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Fuel
Oil</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,750</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1.2%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,221</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>5,695</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>5.2%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2,803</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Kerosene</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,979</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1.3%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>645</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>4,525</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>4.2%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2,222</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTALS
Petroleum Products</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>139,309</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>94.2%</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>52,970</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>98,581</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>90.7%</P></TD>
<TD vAlign=top width=90>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>42,781</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Agency
Fee</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=72
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>8,530</P></TD>
<TD vAlign=top width=72>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>5.8%</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=71
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>10,116</P></TD>
<TD vAlign=top width=84>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>9.3%</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=72>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=71 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=0.4>
<P>&nbsp;</P></TD>
<TD vAlign=top width=162 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTAL
REVENUE</B></P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=72
colSpan=2><P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>147,839</B></P></TD>
<TD vAlign=top width=72>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=84>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=71
colSpan=2><P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>108,697</B></P></TD>
<TD vAlign=top width=84>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=90>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>For the three months ended March 31, 2009, revenues were $49.720
million, an increase of $17.241 million or approximately 53.1% as compared to
$32.479 million for the same period in March 31, 2008. This increase was the
result of stronger overall demand for petroleum products. &nbsp;Diesel sales
were $23.056 million or </P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>approximately 10.986 million gallons, an increase of $4.918
million and a increase of approximately 3.983 million gallons, in the three
months period year ending March 31, 2009, compared to $18.138 million or
approximately 7.003 million gallons for the three months ending March 31, 2008.
Gasoline sales were $21.736 million or approximately 8.739 million gallons, an
increase of $13.129 million or approximately 152.5% increase and an increase of
5.269 million gallons, compared to gasoline sales of $8.607 million or
approximately 3.470 million gallons for the three months ending March 31, 2008.
&nbsp;&nbsp;This increase was mainly the result of greater purchases by our
existing customers, primarily power supply companies due to the continued growth
of Shanxi Province. </P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>For the nine months ended March 31, 2009, revenues were $147.839
million, an increase of $39.142 million or approximately 36.0% as compared to
$108.697 million for the same period in March 31, 2008. This increase was the
result of stronger overall demand for petroleum products. &nbsp;Diesel sales
were $75.608 million or </P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>approximately 29.098 million gallons, an increase of $18.288
million and an increase of &nbsp;approximately 4.941 million gallons, in the
nine months period year ending March 31, 2009, compared to $57.320 million or
approximately 24.157 million gallons for the nine months ending March 31, 2008.
Gasoline sales were $59.972 million or approximately 22.006 million gallons, an
increase of $28.931 million or approximately 131.5% increase and an increase of
8.407 million gallons, compared to gasoline sales of $31.041 million or
approximately 13.599 million gallons for the nine months ending March 31, 2008.
&nbsp;&nbsp;This increase was mainly the result of greater purchases by our
existing customers, primarily power supply companies due to the continued growth
of Shanxi Province. In addition, the increase of petroleum products for the nine
months ending March 31, 2009 was mainly due to the following factors: the
population in China in general has become wealthier; as a result, the demand for
petroleum has increased and the economy in Shanxi Province where the Company's
major customers are continued to experience growth. Management expects growth
for the fiscal year 2009 to remain strong due to (i) continued strong growth in
the China economy, (ii) a continued improvement in the wealth of its citizens,
and (iii) business strategy of increasing storage for our products. &nbsp;For
the nine months ended March 31, 2009, 45 % of our customers were large-scale gas
stations located in Taiyuan City in the Shanxi Province, compared to 60% for the
nine months ended March 31, 2008. &nbsp;&nbsp;Our second largest group of
customers is coal plants and power supply </P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 21 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>companies which use our diesel, gasoline and fuel oil to generate
heat and power; this group provided 45% of our business in 2009 compared to 30%
in 2008. This group of customers will continue to remain strong as our local
economy continues to grow and new power plants are built. We anticipate that in
the fiscal year 2009 this group will represent 55% to 60% of our sales, as the
company will focus on this particular customer segment due to larger bulk sales.
Our third largest customer is the small, independent gas station which
represents 10% of our total sales. &nbsp;These stations buy gasoline and diesel
from us. &nbsp;This group will continue to remain strong as more cars are being
used for transportation in Shanxi Province. &nbsp;&nbsp;Further the company is
expanding its operations to Gujiao City. The Company plans to add 70,000 metric
tons of storage capacity. This facility will be used to &nbsp;service customers
in Gujiao City and the surrounding areas, thus expanding the Company's market.
Management hopes to complete the project in one year as long as financial
resources are available.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Agency fees were $3.098 million for the three months period ending
March 31, 2009 compared to $2.265 million for the three months ending March 31,
2008 a slight increase of .83 million. &nbsp;Agency fee revenues were $8.530
million for the nine months ended March 31, 2009, compared to $10.116 million in
the same period of 2008. &nbsp;The decrease of $1.586 million or approximately
15.7% was due to the expected decline in agency fees. Agency fees are fees from
companies not possessing the required license to buy direct from refineries.
&nbsp;&nbsp;We purchase petroleum on their behalf and arrange delivery for them.
&nbsp;The China government continues to grant licenses to other wholesalers to
buy direct. Thus, we anticipate that agency fees will be reduced further in the
future unless we are able to obtain new customers that want to go direct but do
not have the required license. </P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Cost of Goods Sold</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Cost of goods sold for the three months ended March 31, 2009
increased by $17.396 million or 76.8 %, to $40.049 million as compared to
$22.653 million for the same quarter of 2008. This increase was mainly
attributable to the increase of sales revenue and a decrease in gross margins on
its petroleum products in the three month period. </P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Cost of goods sold for the nine months ended March 31, 2009
increased by $77.070 million or 99.8 %, to $116.588 million as compared to
$77.187 million for the nine months period March 31, 2008. This increase was
mainly attributable to the increase of sales revenue</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The following table illustrates the items constituting our cost of
goods sold for the three months ending March 31, 2009 and March 31, 2008.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>(All amounts, other than percentages, in thousands of U.S.
dollars)</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=1></TD>
<TD width=230></TD>
<TD width=2></TD>
<TD width=64></TD>
<TD width=2></TD>
<TD width=71></TD>
<TD width=1></TD>
<TD width=80></TD>
<TD width=2></TD>
<TD width=62></TD>
<TD width=2></TD>
<TD width=67></TD>
<TD width=1></TD>
<TD width=73></TD>
<TD width=3></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=232 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>Cost of
Goods</B></P></TD>
<TD vAlign=top width=66 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2009</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods sold</B></P></TD>
<TD vAlign=top width=82 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods vs its revenue</B></P></TD>
<TD vAlign=top width=65 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2008</B></P></TD>
<TD vAlign=top width=68 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods</B></P></TD>
<TD vAlign=top width=76 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods vs revenue</B></P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Diesel
Oil</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>20,269</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>50.6%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>87.9%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>13,739</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>60.6%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>75.7%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Gasoline</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>18,256</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>45.6%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>84.0%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>6,679</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>29.5%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>77.6%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Fuel
Oil</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,039</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2.6%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>94.4%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>818</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>3.6%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>35.4%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Kerosene</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>485</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1.2%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>66.4%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>944</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>4.2%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>81.2%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTAL
COST </B></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>Petroleum
Products</B></P></TD>
<TD vAlign=top width=66 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>40,049</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>100%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>85.9%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>22,180</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>97.9%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>73.4%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt">Agency
Fee</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=66
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>0</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>0%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>0%</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=65
colSpan=2><P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>473</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2.1%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>20.9%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTAL
COST OF GOODS</B></P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=66
colSpan=2><P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>40,049</B></P></TD>
<TD vAlign=top width=73 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=65
colSpan=2><P
style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>22,653</B></P></TD>
<TD vAlign=top width=69 colSpan=2>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 22 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The following table illustrates the items constituting our cost of
goods sold for the nine months ending March 31, 2009 and March 31, 2008.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>(All amounts, other than percentages, in thousands of U.S.
dollars)</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=1></TD>
<TD width=230></TD>
<TD width=2></TD>
<TD width=64></TD>
<TD width=2></TD>
<TD width=71></TD>
<TD width=1></TD>
<TD width=80></TD>
<TD width=2></TD>
<TD width=62></TD>
<TD width=2></TD>
<TD width=67></TD>
<TD width=1></TD>
<TD width=73></TD>
<TD width=3></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=232 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>Cost
of Goods</B></P></TD>
<TD vAlign=top width=66 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2009</B></P></TD>
<TD vAlign=top width=72 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods sold</B></P></TD>
<TD vAlign=top width=82 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods vs its revenue</B></P></TD>
<TD vAlign=top width=65 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2008</B></P></TD>
<TD vAlign=top width=68 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods</B></P></TD>
<TD vAlign=top width=76 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>% of total cost of goods vs revenue</B></P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Diesel
Oil</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>64,970</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>55.7%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>85.9%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>43,220</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>56.0%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>75.4%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Gasoline</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>48,395</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>41.5%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>80.7%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>25,149</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>32.6%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>81.0%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Fuel
Oil</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,614</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1.4%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>92.2%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>3,626</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>4.7%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>63.7%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Kerosene</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,609</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1.4%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>81.3%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>3,923</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>5.1%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>86.7%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTAL
COST </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>Petroleum
Products</B></P></TD>
<TD vAlign=top width=66 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>116,588</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>100%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>83.7%</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>75,918</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>98.4%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>77.0%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Agency
Fee</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=66
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>0</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>0%</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>0%</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=65
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1,269</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>1.6%</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>12.5%</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=66 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=65 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=69 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=231 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>TOTAL
COST OF GOODS</B></P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=66
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>116,588</P></TD>
<TD vAlign=top width=73 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=81 colSpan=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=65
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt; FONT-FAMILY: Times New Roman Bold"
align=right><B>77,187</B></P></TD>
<TD vAlign=top width=69 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>100%</B></P></TD>
<TD vAlign=top width=77 colSpan=3>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>Gross
Profit Margin</B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Our
gross profit margin was 19.5% for the three months ended March 31, 2009,
compared to 30.3% for the three months ended March 31, 2008. The decrease was
the result of the gross margins on diesel &nbsp;were approximately 12.1% for the
quarter ending March 31, 2009 compared to 24.3% in quarter ending March 31,
2008. &nbsp;The gross margins on gasoline were approximately 16.0% in the
quarter ending March 31, 2009 compared to 22.4% for the same quarter in 2008,
improving by approximately 6.4%. The decrease of diesel and gasoline margins was
the result of the company locking in fuel prices where diesel prices decreased.
It is expected that gross margins will improve in the near future. The National
Development and Reform Commission of China announced on March 24, 2009 that the
retail prices of gasoline and diesel oil would be increased 290 RMB (US$42.43)
per ton, or 5.3 percent; and 180 RMB (US$26.34) per ton, or 3.7 percent,
respectively, as of March 25, 2009. </P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Longwei&#146;s current fuel inventory is 25,980 metric tons. With the
estimated 4 to 5 percent increase on the prices of diesel and gasoline made by
the Chinese government, we expect our gross profits will be 5 percent higher for
the fourth quarter of fiscal 2009. </P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Our gross profit margin was 21.1% for the nine months ended March
31, 2009, compared to 29.0% for the nine months ended March 31, 2008. The
decrease was the result of the gross margins on diesel were approximately 14.1%
for the nine months ending March 31, 2009 compared to 24.6% in nine months
ending March 31, 2008. &nbsp;The gross margins on gasoline were approximately
19.3% in the nine months period ending March 31, 2009 compared to 19.0% for the
same quarter in 2008, improving slightly. The decrease of diesel margins was the
result of the Company locking in fuel prices where diesel prices decreased.
&nbsp;As mentioned above due to the recent increase in petroleum products we
expect are gross margins to improve in the fourth quarter.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The Company made advance to suppliers of approximately $37.307
million in the nine months ending March 31, 2009 compared to $28.327 million in
March 31, 2008. The risk associated with maintaining huge quantities of
inventory and amounts of advances to suppliers has the effect of locking in
prices. &nbsp;We pay for fuel well in advance of the time we deliver commodities
and establish customer prices. &nbsp;Therefore, our gross margins will vary
considerably from period to period, based on short-term prices of petroleum
products. Management does </P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 23 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>not provide any type of hedging activity in order to reduce this
risk; however management monitors petroleum prices in an effort to maintain
profitability.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Selling General and Administrative Expenses</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Selling, general and administrative expenses were $708,926 for the
three months ending March 31, 2009, as compared to $3,058,028 in the 2008 period
as a result of the expenditures and costs in 2008 associated with the transition
to becoming a public company including audits, legal and &nbsp;various fees.
</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Selling, general and administrative expenses were $2.919 million
for the nine months ending March 31, 2009, a $2.099 million decrease, compared
to $5.018 for the same period in 2008. &nbsp;The decrease for the nine month
period was due to the large upfront expenditures of becoming a public company in
March of 2008. </P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Depreciation and Amortization</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Depreciation and amortization expenses were $92,735 for the
quarter ending March 31, 2009, an increase of $2,771 over the depreciation
expense of $89,964 for the quarter ending March 31, 2008. </P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Depreciation and amortization expenses were $289,411 for the nine
months ending March 31, 2009, a decrease of $19,848 over the depreciation
expense of $269,563 for the nine months ending March 31, 2008. </P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Income Tax Expense</I></B><I>s</I></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>We incurred income tax expenses of $2,255,355 for the quarter
ending March 31, 2009, an increase of $567,319 or approximately 33.6%, versus
$1,688,036 for the quarter ending March 31, 2008 reflecting the increase in
profit. We incurred income tax expenses of $7,258,748 for the nine months ending
March 31, 2009, a decrease of $1,104,490 or approximately 13.2%, versus
$8,363,238 for the nine months ending March 31, 2008. The Company is governed by
the income tax laws of China. The China statutory tax rate is 30% and the local
tax rate is 3%.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Net Income</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>We earned a net income of $6.662 million for the quarter ended
March 31, 2009, an increase of $1.598 million or approximately 31.6% as compared
to $5064 million for the quarter ending March 31, 2008. This was primarily due
to the increase in sales of petroleum products especially to power supply
companies in the Shanxi Province during the quarter. </P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>In the nine-month period ending March 31, 2009 net income was
$20.912 million, an increase of $2.778 million or approximately 15.3% as
compared to $18.134 million for nine month period ending March 31, 2008. This
was primarily due to the increase in sales of petroleum products especially to
power supply companies in the Shanxi Province during the period.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Net Income Margin</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">Net
income margin for the quarter ending March 31, 2009 was approximately 13.4%
compared to approximately 15.6% for the quarter ending March 31, 2008. This
decrease as described above was largely the result of lower profit margins on
gasoline products. &nbsp;The National Development and Reform Commission of China
announced on March 24, 2009 that the retail prices of gasoline and diesel oil
would be increased 290 RMB (US$42.43) per ton, or 5.3 percent; and 180 RMB
(US$26.34) per ton, or 3.7 percent, respectively, as of March 25, 2009.
&nbsp;With the estimated 4 to 5 percent increase on the prices of diesel and
gasoline made by the Chinese government, we expect our gross profits will be 5
percent higher for the fourth quarter of fiscal 2009 or approximately 18%. </P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 24 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Net income margin for the nine months ending March 31, 2009 was
approximately 14.1% compared to approximately 16.7% for the nine months ending
March 31, 2008. This decrease was the result of a decline in diesel profit
margins due to the company locking in prices well in advance prior to selling to
their customers. In addition, agency fee profit decreased by $1.586. As
mentioned above with the recent price increase management anticipates that net
income margin will be approximately 18% in the fourth quarter offsetting costs
associated with being a public company and the possible future declines in
agency fees.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Inflation</I></B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Inflationary factors such as increases in the cost of our product
and overhead costs may adversely affect our operating results. Although we do
not believe that inflation has had a material impact on our financial position
or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin
and selling, general and administrative expenses as a percentage of net revenues
if the selling prices of our products do not increase with these increased
costs.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Foreign Currency Translation Adjustment</I></B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Our operating subsidiaries are located in China. &nbsp;The
operating subsidiaries purchase all products and render services in China, and
receive payment from customers in China using RMB as the functional currency.
&nbsp;We do not engage in currency hedging.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>We incurred a foreign currency translation adjustment loss of
$149,874 for the quarter ending March 31, 2009 as compared with the foreign
currency translation adjustment gain of $3,076,127 for the quarter ending March
31, 2008. On July 21, 2005, China reformed its foreign currency exchange policy,
revalued RMB by 2.1 percent and allowed the RMB to appreciate as much as 0.3
percent per day against the U.S. dollar. We implemented different exchange rates
in translating RMB into U.S. dollars in our financial statements for the quarter
ending March 31, 2009. We used an exchange rate of 6.83 for assets and
liabilities and used the average exchange rate of 6.84 for revenues and
expenses, compared to the exchange rate of 7.02 in 2008 for assets and
liabilities and 7.16 as the average rate used in calculating revenue and
expenses. Historical exchange rates for shareholders&#146; equity were used. </P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Assets and liabilities are translated at exchange rates at the
balance sheet dates and revenue and expenses are translated at the average
exchange rates and shareholders&#146; equity is translated at historical exchange
rates. Any translation adjustments resulting are not included in determining net
income but are included in foreign exchange adjustment to other comprehensive
income, a component of stockholders&#146; equity. &nbsp;If the RMB appreciates
against the U.S. dollar, revenue and expenses would be higher than they would
have been if there were no fluctuations in the currencies. &nbsp;Conversely, if
the RMB depreciates against the U.S. dollar, revenue and expenses would be lower
than they would have been if there were no fluctuations in the currencies. The
exchange rates adopted are as follows for quarter ending March 31, 2009 and
March 31, 2008:</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=3></TD>
<TD width=232></TD>
<TD width=16></TD>
<TD width=39></TD>
<TD width=74></TD>
<TD width=12></TD>
<TD width=4></TD>
<TD width=22></TD>
<TD width=72></TD>
<TD width=14></TD>
<TD width=2></TD>
<TD width=15></TD>
<TD width=2></TD>
<TD width=7></TD>
<TD width=12></TD></TR>
<TR>
<TD vAlign=top width=3>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=232>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=top width=125 colSpan=3>
<P
style="PADDING-RIGHT: 2px; PADDING-LEFT: 12px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 24px; LINE-HEIGHT: 13pt"
align=right><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2009
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P></TD>
<TD vAlign=bottom width=114 colSpan=4>
<P
style="PADDING-RIGHT: 2px; PADDING-LEFT: 34px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: -97px; LINE-HEIGHT: 13pt"
align=right><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2008</B></P></TD>
<TD vAlign=bottom width=18 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=20 colSpan=2>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=236 colSpan=2>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Period
end RMB: exchange rate</P></TD>
<TD width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=top width=39>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=74>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>6.83</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=22>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=72>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>7.02</P></TD>
<TD vAlign=bottom width=17 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=38 colSpan=4>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=236 colSpan=2>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Average
period&nbsp;RMB: exchange rate</P></TD>
<TD width=16>
<P style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px">&nbsp;</P></TD>
<TD vAlign=top width=39>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=74>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>6.84</P></TD>
<TD vAlign=bottom width=16 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=22>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=72>
<P
style="PADDING-RIGHT: 1px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>7.16</P></TD>
<TD vAlign=bottom width=17 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=38 colSpan=4>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Liquidity and Capital Resources</I></B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; COLOR: #0000ff; TEXT-INDENT: 48px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>As of March 31, 2009, we had cash and cash equivalents of
$9,617,989 compared to cash and cash equivalents in the beginning of the period
of $8,632,879. This was primarily the result of a decrease in inventories. The
following table provides detailed information about our net cash flow for the
nine month periods ending March 31, 2009 and 2008, respectively.</P>
<P style="MARGIN: 0px" align=justify><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 25 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P style="PAGE-BREAK-BEFORE: always; MARGIN: 0px" align=justify><BR></P>
<TABLE style="FONT-SIZE: 10pt" cellSpacing=0 align=center>
<TR style="FONT-SIZE: 0px" height=0>
<TD width=1></TD>
<TD width=1></TD>
<TD width=342></TD>
<TD width=2></TD>
<TD width=2></TD>
<TD width=2></TD>
<TD width=29></TD>
<TD width=86></TD>
<TD width=2></TD>
<TD width=2></TD>
<TD width=22></TD>
<TD width=88></TD>
<TD width=1></TD>
<TD width=1></TD>
<TD width=1></TD>
<TD width=2></TD>
<TD width=11></TD>
<TD width=1></TD>
<TD width=2></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #ffffff 4px solid" vAlign=bottom width=345
colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>&nbsp;&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #ffffff 4px solid" width=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width=258
colSpan=15>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=center><B>For the Nine months ended March &nbsp;31,</B></P></TD></TR>
<TR>
<TD style="BORDER-BOTTOM: #000000 2px solid" vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=346 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>&nbsp;</P></TD>
<TD width=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>&nbsp;</P></TD>
<TD vAlign=bottom width=118 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2009</B></P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=113 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right><B>2008</B></P></TD>
<TD vAlign=bottom width=3 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=19 colSpan=5>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=347 colSpan=3>
<P>&nbsp;</P></TD>
<TD width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=88 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=22>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=90 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=347 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Cash and cash equivalents, beginning of period</P></TD>
<TD width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=29>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=bottom width=88 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>8,632,879</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=22>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=bottom width=90 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>6,060,428</P></TD>
<TD vAlign=bottom width=2 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=347 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Net cash provided (used in) operating activities</P></TD>
<TD width=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;</P></TD>
<TD vAlign=bottom width=29>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=bottom width=88 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>26,755,720</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=22>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD vAlign=bottom width=90 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>(7,119,168)</P></TD>
<TD vAlign=bottom width=2 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=347 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Net cash (used in) investing activities</P></TD>
<TD width=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;</P></TD>
<TD vAlign=bottom width=29>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=88 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>(25,843,611)</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=22>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=90 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>(17,353)</P></TD>
<TD vAlign=bottom width=2 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=347 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Net cash provided by financing activities</P></TD>
<TD width=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;</P></TD>
<TD vAlign=bottom width=29>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>&nbsp;</P></TD>
<TD vAlign=bottom width=88 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>-</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=22>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=90 colSpan=2>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>2,100,000</P></TD>
<TD vAlign=bottom width=2 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=2>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=15 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=bottom width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=347 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Effect of exchange rate, changes in cash </P></TD>
<TD vAlign=top width=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=29>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=88
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>73,001</P></TD>
<TD vAlign=top width=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=22>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=top width=90
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>5,731,187</P></TD>
<TD vAlign=top width=2 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=15 colSpan=3>
<P>&nbsp;</P></TD></TR>
<TR>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=1>
<P>&nbsp;</P></TD>
<TD vAlign=top width=347 colSpan=3>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Cash and cash equivalents, end of the period</P></TD>
<TD vAlign=top width=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=29>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=88
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>9,617,989</P></TD>
<TD vAlign=top width=2>
<P>&nbsp;</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=22>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>$</P></TD>
<TD style="BORDER-BOTTOM: #000000 3px double" vAlign=top width=90
colSpan=2><P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=right>6,755,094</P></TD>
<TD vAlign=top width=2 colSpan=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=2>
<P>&nbsp;</P></TD>
<TD vAlign=top width=15 colSpan=3>
<P>&nbsp;</P></TD></TR></TABLE>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Operating Activities:</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Net cash provided in operating activities was
$26,755,720<B>&nbsp;</B>for the nine month period ending March 31, 2009,
compared in the net cash used of $7,119,168 for the nine months period ending
March 31, 2008. This was largely the result of decreases in inventory as a
result of strong demand for petroleum products. This was partially offset by
increases to advances to suppliers to increase inventory levels to meet demands
of our customers.</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Investing Activities</I></B><I>:</I></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Net cash used in investing activities was $25,843,611 in the nine
months ending March 31, 2009 to build a new storage facility in Gujiao City.
This cash has been provided largely by the profitable operations of the company
and the raise of $2.1 million in December of 2008. This compares to net cash
used in investing activities of $17,353 in March 31, 2008.</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Financing Activities:</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 0.05pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; LINE-HEIGHT: 13pt"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The Company had no cash used in financing activities in the nine
month period ending March 31, 2009 compared to net cash used in financing
activities of $2,100,000 in the same period of March 2008.&nbsp;</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Critical Accounting Policies</I></B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The preparation of financial statements, in conformity with
accounting principles generally accepted in the United States, requires our
management to make assumptions, estimates and judgments that affect the amounts
reported in the financial statements, including the notes thereto, and related
disclosures of commitments and contingencies, if any. We consider our critical
accounting policies to be those that require the more significant judgments and
estimates in the preparation of financial statements, including the following:<A
name=eolPage37></A></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify><I>Basis of Consolidation</I> - The consolidated financial
statements of the Company and its subsidiaries are prepared in accordance with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and its subsidiaries. All material
inter-company accounts and transactions have been eliminated in the
consolidation.&nbsp;</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify><I>Inventories</I> -<FONT style="COLOR: #0000ff">
</FONT>Inventories are stated at the lower of cost, determined on a weighted
average basis, or net realizable value. Net realizable value is the estimated
selling price in the ordinary course of business less the estimated costs
necessary to make the sale.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>When inventories are sold, their carrying amount is charged to
expense in the year in which the revenue is recognized. Write-downs for declines
in net realizable value or for losses of inventories are recognized as an
expense in the year the impairment or loss occurs. There were no declines in net
realizable value of inventory for the nine-month period ending March 31,
2009.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=center>- 26 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Revenue Recognition</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The Company derives the bulk of its revenue from the trading of
gasoline, diesel, kerosene and fuel oil, and also has revenues from agency
service and transportation service.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>In accordance with the Securities and Exchange Commission ("SEC")
Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"), the Company
recognizes revenue when the following fundamental criteria are met: (i)
persuasive evidence of an arrangement exists, (ii) delivery has occurred or
services have been rendered, (iii) the price to the customer is fixed or
determinable and (iv) collection of the resulting receivable is reasonably
assured.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify><I>Foreign Currency Translation</I> - The functional currency of
the Company is RMB and RMB is not freely convertible into foreign currencies.
The Company maintains its financial statements in the functional currency.
Monetary assets and liabilities denominated in currencies other than the
functional currency are translated into the functional currency at rates of
exchange prevailing at the balance sheet date. Transactions denominated in
currencies other than the functional currency are translated into the functional
currency at the exchange rates prevailing at the dates of the transactions.
Exchange gains or losses arising from foreign currency transactions are included
in the determination of net income for the respective periods.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify><I>Use of Estimates- </I>The preparation of the financial
statements in conformity with generally accepted accounting principles in the
United States of America 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 periods.
Management makes these estimates using the best information available at the
time the estimates are made; however actual results could differ materially from
those estimates.&nbsp;</P>
<P style="MARGIN: 0px" align=justify><BR></P><A name=eolPage39></A>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>Recent Accounting Pronouncements</P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 6px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 6px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
March 2007, the FASB issued SFAS No.&nbsp;141R, "Business Combinations" ("SFAS
No.&nbsp;141R"). SFAS No.&nbsp;141R amends SFAS&nbsp;141 and provides revised
guidance for recognizing and measuring identifiable assets and goodwill
acquired, liabilities assumed, and any noncontrolling interest in the acquiree.
It also provides disclosure requirements to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. It is effective for fiscal years beginning on or after March 15,
2008 and will be applied prospectively. We are currently evaluating the impact
of adopting SFAS No.&nbsp;141R on our consolidated financial statements. </P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 6px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 6px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
March 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements&nbsp;&#151; an amendment of ARB No.&nbsp;51" ("SFAS
No. 160&#148;). SFAS No. 160 requires that ownership interests in subsidiaries held
by parties other than the parent, and the amount of consolidated net income, be
clearly identified, labeled, and presented in the consolidated financial
statements. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. It is effective for fiscal years beginning on or after
March &nbsp;15, 2008 and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests. All other requirements
shall be applied prospectively. We are currently evaluating the impact of
adopting SFAS No. 160 on our consolidated financial statements. </P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
March 2008, FASB issued Financial Accounting Standards No. 161, &#147;<I>Disclosure
about Derivative Instruments and Hedging Activities - an amendment to FASB
Statement No. 133.&#148;</I> The use and complexity of derivative instruments and
hedging activities have increased significantly over the past several years.
Constituents have expressed concerns that the existing disclosure requirements
in FASB Statement No. 133, &#147;<I>Accounting for Derivative Instruments and Hedging
Activities,&#148;</I> do not provide adequate information about how derivative and
hedging activities affect an entity&#146;s financial position, financial performance,
and cash flows. Accordingly, this Statement requires enhanced disclosures about
an entity&#146;s derivative and hedging activities and thereby improves the
transparency of financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008.</P>
<P style="MARGIN: 0px"><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 27 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">In
May 2008, the FASB issued Statement No. 162, &#147;<I>The Hierarchy of Generally
Accepted Accounting Principles</I>.&#148; &nbsp;This statement identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (GAAP)
in the United States (the GAAP hierarchy). &nbsp;This statement is effective 60
days following the SEC&#146;s approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, &#147;<I>the Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles</I>.&#148;</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>In May 2008, the FASB issued Statement No. 163<I> &#147;Accounting for
Financial Guarantee Insurance Contracts&#151;an interpretation of FASB Statement No.
60.&#148; &nbsp;</I>The premium revenue recognition approach for a financial
guarantee insurance contract links premium revenue recognition to the amount of
insurance protection and the period in which it is provided. For purposes of
this statement, the amount of insurance protection provided is assumed to be a
function of the insured principal amount outstanding, since the premium received
requires the insurance enterprise to stand ready to protect holders of an
insured financial obligation from loss due to default over the period of the
insured financial obligation. &nbsp;This Statement is effective for financial
statements issued for fiscal years beginning after March 15, 2008.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B>Seasonality</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Our operating results and operating cash flows historically have
been subject to seasonal variations. Our revenues are usually higher in the
first half of the year than in the second half of the year because of the
increased demand for gasoline and diesel during and around the Chinese spring
festival.</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B>Off-Balance Sheet Arrangements</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>We do not have any off-balance sheet arrangements.</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;<A name=FIS_MARKET_RISK></A></P><A name=_Toc180903898></A><A
name=_Toc183245756></A>
<P style="MARGIN-TOP: 10px; MARGIN-BOTTOM: 0px" align=center><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 28 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 13pt"
align=center><B>ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Interest Rate Risk</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The Company deposits surplus funds with Chinese banks earning
daily interest. The Company does not invest in any instruments for trading
purposes. The Company&#146;s operations are not sensitive to fluctuations in interest
rates.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Foreign Exchange Risk</I></B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>While our reporting currency is the U.S. Dollar, all of our
consolidated revenues and consolidated costs and expenses are denominated in
RMB. All of our assets are denominated in RMB. As a result, we are exposed to
foreign exchange risk as our revenues and results of operations may be affected
by fluctuations in the exchange rate between U.S. Dollars and RMB. If the RMB
depreciates against the U.S. Dollar, the value of our RMB revenues, earnings and
assets as expressed in our U.S. Dollar financial statements will decline. We
have not entered into any hedging transactions in an effort to reduce our
exposure to foreign exchange risk.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B><I>Inflation</I></B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px"
align=justify>&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>Inflationary factors such as increases in the cost of our product
and overhead costs may adversely affect our operating results. Although we do
not believe that inflation has had a material impact on our financial position
or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin
and selling, general and administrative expenses as a percentage of net revenues
if the selling prices of our products do not increase with these increased
costs.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B>Commodity Risk</B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>There is uncertainty related to the Chinese government's ability
and/or willingness to subsidize Company operations in a declining market.
&nbsp;Additionally, the risk associated with maintaining large quantities of
inventory and amounts of advances to suppliers has the effect of locking in
prices the Company pays for fuel well in advance of the time we deliver the
commodities and establish customer pricing. &nbsp;A dip in short-term prices in
fuel costs will result in declining profits for the Company, which will affect
the Company's ability to purchase future petroleum products and make advances to
suppliers, since the Company uses its cash to purchase inventory and increase
advances to suppliers. We manage our exposure in the following ways: if the
price of petroleum declines significantly, the Company will buy additional
petroleum inventory to provide a lower average cost. &nbsp;Purchase of petroleum
products from refineries has a fixed price based on volume. The price will be
properly adjusted by the refinery in light of the market if there should be
significant changes in the price of oil. &nbsp;The refineries in China are under
the control of the Chinese government. Therefore, our market risk is limited as
a result of the control by the Chinese government<FONT style="FONT-SIZE: 12pt">.
</FONT>At the present time, the Chinese government is not concerned with gross
margins on services such as agency fees. &nbsp;The Chinese government allows the
market to determine prices. In the event that the company exceeds the unofficial
guideline of 40% consolidated gross margins the impact of agency fees would be
taken into account and deducted from total gross margins in determining if this
limit has been exceeded. There is no indication that these policies will change
in the future regarding any type of guidelines for agency fees gross
profits.</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 29 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 13pt"
align=center><B>CORPORATE STRUCTURE</B></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify>The chart below depicts our corporate structure. <A
name=_DV_M166></A>As depicted below, we own 100% of the capital stock of Longwei
BVI. &nbsp;Longwei BVI, incorporated in the British Virgin Islands in April
2006, owns 100% of the capital stock of Taiyuan Yahua, and Taiyuan Yahua owns
100% of the capital stock of Taiyuan Longwei, the operating subsidiary<A
name=_DV_M168></A>. &nbsp;Taiyuan Yahua was established in August 2006 as a
Chinese limited liability company. &nbsp;Taiyuan Longwei was established as a
Chinese limited liability company in July 1995. &nbsp;As of October 16, 2007,
the date of the closing of the Share Exchange Agreement, all of our operations
are conducted by and through Taiyuan Longwei. &nbsp;</P>
<P style="margin:0px" align=justify><BR></P>

<P style="margin:0px; text-indent:48px" align=center><img src="corpstructures1.gif"  alt="[corpstructures1.gif]"
<P style="margin:0px" align=justify></P>

<P style="margin:0px" align=justify></P>

<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 30 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 13pt"><B>ITEM
4T.</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>CONTROLS
AND PROCEDURES</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 6px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 6px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">The
Securities and Exchange Commission defines the term &#147;disclosure controls and
procedures&#148; to mean a company's controls and other procedures of an issuer that
are designed to ensure that information required to be disclosed in the reports
that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission&#146;s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Securities Exchange Act of 1934 is
accumulated and communicated to the issuer&#146;s management, including its principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure. &nbsp;The Company maintains such a system of controls and procedures
in an effort to ensure that all information which it is required to disclose in
the reports it files under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified under the
SEC's rules and forms and that information required to be disclosed is
accumulated and communicated to principal executive and principal financial
officers to allow timely decisions regarding disclosure. </P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">As
of the end of the period covered by this report, we carried out an evaluation,
under the supervision and with the participation of our chief executive officer
and principal accounting officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. &nbsp;Based on this
evaluation, our chief executive officer and principal accounting officer
concluded that our disclosure controls and procedures are designed to provide
reasonable assurance of achieving the objectives of timely alerting them to
material information required to be included in our periodic SEC reports and of
ensuring that such information is recorded, processed, summarized and reported
with the time periods specified. &nbsp;Our chief executive officer and principal
accounting officer also concluded that our disclosure controls and procedures
were effective as of March 31, 2009 to provide reasonable assurance of the
achievement of these objectives.</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">There
was no change in the Company's internal control over financial reporting during
the nine-month period ended March 31, 2009, that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P><A name=_Toc183245759></A>
<P style="MARGIN-TOP: 10px; MARGIN-BOTTOM: 0px"><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 31 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 10px; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 13pt"><B>PART
II. &nbsp;OTHER INFORMATION</B></P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; LINE-HEIGHT: 15pt"><B>Item
1.</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>Legal
Proceedings</B></P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">None</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P><A name=_Toc207354966></A>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; MARGIN-BOTTOM: -20px; LINE-HEIGHT: 15pt"
align=justify><B>Item 1A.</B></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt"
align=justify><B>Risk Factors</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify><B>&nbsp;</B></P>
<P style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"
align=justify>We face risks in operating our business, including risks that may
prevent us from achieving our business objectives or that may adversely affect
our business, financial condition and operating results. Risks relating to our
business and industry include, among others: our ability to attract new
customers; our ability to maintain our gross margin of petroleum products and
petroleum product purchases, and competition and competitive factors in the
markets in which we compete. &nbsp;There are no material changes to the risk
factors previously disclosed in the Company's last annual report on Form
10-K.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; LINE-HEIGHT: 15pt"><B>Item
2.</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>Unregistered
Sales of Equity Securities and Use of Proceeds</B></P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">None
</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; LINE-HEIGHT: 15pt"><B>Item
3.</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>Defaults
upon Senior Securities</B></P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">None
</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; LINE-HEIGHT: 15pt"><B>Item
4.</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>Submission
of Matters to a Vote of Security Holders</B></P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">None</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; LINE-HEIGHT: 15pt"><B>Item
5.</B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>Other
Information</B></P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 48px; LINE-HEIGHT: 13pt">None</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="MARGIN: 0px"><BR><BR>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 32 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -17px; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 13pt"><B>Item
6. </B></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: 96px; LINE-HEIGHT: 13pt"><B>Exhibits</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">The
following exhibits are filed herewith:</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; TEXT-INDENT: -48px; LINE-HEIGHT: 15pt">3(i)</P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Articles
of Incorporation (incorporated by reference from Registration Statement on Form
3(i) Articles of Incorporation (incorporated by reference from Registration
Statement on Form 10-SB filed with the Securities and Exchange Commission on
October 11, 2000).</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; TEXT-INDENT: -48px; LINE-HEIGHT: 15pt">3(ii)</P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Bylaws
(incorporated by reference from Registration Statement on Form 10-SB filed with
the Securities and Exchange Commission on October 11, 2000).</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; TEXT-INDENT: -48px; LINE-HEIGHT: 15pt">31.1
</P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of
1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; TEXT-INDENT: -48px; LINE-HEIGHT: 15pt">31.2
</P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of
1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; TEXT-INDENT: -48px; LINE-HEIGHT: 15pt">32.1
</P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.</P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; TEXT-INDENT: -48px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P
style="PADDING-RIGHT: 0px; MARGIN-TOP: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN-BOTTOM: -20px; TEXT-INDENT: -48px; LINE-HEIGHT: 15pt">32.2
</P>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 13pt"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">&nbsp;</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 11pt" align=center>&nbsp;</P>
<P style="MARGIN: 0px; LINE-HEIGHT: 11pt" align=center><BR><BR>&nbsp;</P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 33 -</P>
<P style="MARGIN: 0px"><BR></P>
<HR style="MARGIN-TOP: 9px; MARGIN-BOTTOM: 9px" noShade SIZE=1>
<P
style="PADDING-RIGHT: 0px; PADDING-LEFT: 48px; FONT-SIZE: 11pt; PAGE-BREAK-BEFORE: always; MARGIN: 0px; TEXT-INDENT: -48px; LINE-HEIGHT: 11pt"
align=center><B>SIGNATURES</B></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be singed on its behalf by the undersigned thereunto
duly authorized.</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt"><B>LONGWEI
PETROLEUM INVESTMENT HOLDING LIMITED</B></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">By:
/s/ Cai Yongjun, Chief Executive Officer (duly authorized officer)</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: normal">Date:
&nbsp;May 14, 2009<FONT style="FONT-SIZE: 12pt; FONT-FAMILY: CG Times">
</FONT></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: 13pt">By:
/s/ Wang Junping, Chief Financial Officer (principal accounting and financial
officer)</P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 11pt; MARGIN: 0px; LINE-HEIGHT: normal">Date:
&nbsp;May 14, 2009<FONT style="FONT-SIZE: 12pt; FONT-FAMILY: CG Times">
</FONT></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P style="MARGIN: 0px"><BR></P>
<P
style="PADDING-RIGHT: 0px; FONT-SIZE: 12pt; MARGIN: 0px; LINE-HEIGHT: 14pt">&nbsp;</P>
<P style="MARGIN: 0px" align=justify><BR></P>
<P style="MARGIN: 0px" align=justify><BR><BR></P>
<P style="PADDING-RIGHT: 0px; MARGIN: 0px" align=center>- 34 -</P>
<P style="MARGIN: 0px"><BR></P></DIV></BODY>
<!-- EDGAR Validation Code: D13F68E1 -->
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[{"type": "10-Q", "sequence": "1", "filename": "longweimar09.htm", "secsgml_size_bytes": 370796}]
{"company-data": {"conformed-name": "LONGWEI PETROLEUM INVESTMENT HOLDING LTD", "cik": "0001111817", "assigned-sic": "5171", "irs-number": "841536518", "state-of-incorporation": "CO", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-31751", "film-number": "09828503"}, "business-address": {"street1": "30 GUANGHAU AVENUE, WAN BAILIN DISTRICT", "street2": "TAIYUAN CITY, SHANXI PROVINCE", "city": "SHANXI", "state": "F4", "zip": "030024", "phone": "8635 1652 7366"}, "mail-address": {"street1": "30 GUANGHAU AVENUE, WAN BAILIN DISTRICT", "street2": "TAIYUAN CITY, SHANXI PROVINCE", "city": "SHANXI", "state": "F4", "zip": "030024"}, "former-company": {"former-conformed-name": "TABATHA II INC", "date-changed": "20000413"}}
longweimar09
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10
-
Q
X
QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended March 31, 2009
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
transition period from ____ to ____
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
(Exact name of registrant as specified in its charter)
Colorado
0-31751
84-1536518
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification Number)
No.30 Guanghua Street, Xiaojingyu Xiang, Wanbailin
District
Taiyuan City, Shanxi Province, China P.C. 030024
(Address of principal executive
offices)
Registrant's telephone number, including area code:  (303)
885-5501
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities 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 ___
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of
"large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
Accelerated
filer
Non-accelerated
filer (Do not check if a smaller reporting company)
Smaller
reporting company
X
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes   No
X
Indicate
the number of shares outstanding of each of the issuer's classes of stock, as of
the latest practicable date.
Class of Securities
Shares Outstanding at March 31, 2009
Common Stock, no par value
76,205,000
- 1 -
PART
1 - FINANCIAL INFORMATION
ITEM
1.
FINANCIAL
STATEMENTS
(a)
The unaudited financial statements of registrant for nine months ended March 31,
2009, follow.  The financial statements reflect all adjustments which are,
in the opinion of management, necessary to a fair statement of the results for
the interim period presented
.
TABLE OF CONTENTS
Balance
Sheets
3
Statements
of Operations and Comprehensive Income (Unaudited)
4
Statement
of Changes in Stockholders' Equity (Unaudited)
5
Statements
of Cash Flows (Unaudited)
6
Notes
to Unaudited Financial Statements
7
- 2 -
LONGWEI PETROLEUM
INVESTMENT HOLDING LIMITED
BALANCE SHEETS AS OF MARCH 31, 2009 AND JUNE 30, 2008
March 31,
2009
June 30,
2008
Unaudited
ASSETS
Current assets:
Cash and
cash equivalents
$
9,617,989
$
8,632,879
Accounts
receivable
26,688,372
12,134,507
Inventories
14,370,467
29,052,841
Advance to
suppliers
37,307,230
28,327,067
Deposits
-
12,683,880
Total current assets
87,984,058
90,831,174
Construction in progress
23,852,728
-
Property, plant and equipment,
net
4,348,640
2,637,326
Total assets
$
116,185,426
$
93,468,500
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts
payable
$
-
$
165,231
Convertible
notes payable, net of discount of $ 0 and $636,742, respectively
2,147,868
1,508,135
Accrued
payables
685,677
798,436
Taxes
payable
3,413,994
2,455,223
Total current
liabilities
6,247,539
4,927,025
Total liabilities
6,247,539
4,927,025
STOCKHOLDERS'
EQUITY
Common
Stock; no par value, 100,000,000 shares authorized, 76,205,000  and
76,205,000 shares issued and
outstanding as of 03/31/09 and 06/30/08, respectively
7,008,712
7,008,712
Additional paid-in
capital
1,528,180
1,528,180
Retained earnings
89,654,719
68,742,653
Accumulated other comprehensive
income
11,746,276
11,261,930
Total stockholders' equity
109,937,887
88,541,475
Total liabilities and
stockholders' equity
$
116,185,426
$
93,468,500
See accompanying notes
to the unaudited financial statements
- 3 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
STATEMENTS
OF INCOME AND
COMPREHENSIVE INCOME (Unaudited)
FOR THREE MONTHS AND
NINE MONTHS
ENDED MARCH 31, 2009
AND 2008
Three months
ended March 31,
Nine
months ended March 31,
2009
2008
2009
2008
Net revenues:
Product
sales
$
46,622,276
$
30,213,210
$
139,308,969
$
98,581,486
Agency service
3,097,818
2,265,492
8,529,598
10,115,682
49,720,094
32,478,702
147,838,567
108,697,168
Cost of
revenues
Product
sales
40,049,434
22,180,278
116,588,344
75,917,662
Agency service
-
473,088
-
1,269,204
40,049,434
22,653,366
116,588,344
77,186,866
Gross
profit
9,670,660
9,825,336
31,250,223
31,510,302
Operating
Expenses
Salaries
67,026
93,336
158,872
202,998
Other
selling, general and administrative expenses
641,900
2,964,692
2,760,200
4,815,267
708,926
3,058,028
2,919,072
5,018,265
Operating
profit
8,961,734
6,767,308
28,331,151
26,492,037
Other income and
(expenses)
Interest
income
4,253
6,303
12,223
29,157
Interest expense
and financial cost
(48,492)
(21,466)
(172,560)
(24,228)
Other
income/(expense)
(44,239)
(15,163)
(160,337)
4,929
Income before
income taxes
8,917,495
6,752,145
28,170,814
26,496,966
Income
taxes
(2,255,355)
(1,688,036)
(7,258,748)
(8,363,238)
Net income
6,662,140
5,064,109
20,912,066
18,133,728
Other
comprehensive income
Foreign
currency translation adjustment
(149,874)
3,076,127
484,346
5,729,892
Comprehensive income
$
6,512,266
$
8,140,236
$
21,396,412
$
23,863,620
Basic net income per
share
$
0.09
$
0.07
$
0.27
$
0.25
Weighted average number of
shares outstanding
76,205,000
75,000,000
76,205,000
72,643,636
See accompanying notes
to the unaudited financial statements.
- 4 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
FOR THE NINE MONTHS
ENDED MARCH 31, 2009
Common stock
shares
Common stock
amount
Additional paid-in
capital
Retained
earnings
Accumulated other
comprehen- sive income
Total
stockholders' equity
Balance at June 30, 2008
76,205,000
$
7,008,712
$
1,528,180
$
68,742,653
$
11,261,930
$
88,541,475
Recapitalization
-
-
-
-
-
-
Warrants issued with
convertible debt
-
-
-
-
-
-
Net income for the
period
-
-
-
20,912,066
-
20,912,066
Foreign currency translation
adjustment
-
-
-
-
484,346
484,346
Balance at March 31,
2009
76,205,000
$
7,008,712
$
1,528,180
$
89,654,719
$
11,746,276
$
109,937,887
See accompanying notes
to the unaudited financial statements.
- 5 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
Nine months ended March 31,
2009
2008
Operating
activities
Net
income
$
20,912,066
$
18,133,728
Adjustments
to reconcile net income from operations to net cash used in operating
activities:
Depreciation
289,411
269,563
Warrant
expense
636,742
1,528,180
Accrued
interest
170,992
(995,026)
Changes
in non-cash operating working capital items:
Accounts
receivable
(14,508,584)
(10,560,551)
Other
receivable
12,731,210
-
Inventory
14,790,786
(5,696,312)
Advance
to suppliers
(8,649,719)
(14,306,316)
Prepaid
taxes
-
1,475,158
Accounts
payable
(588,269)
240,502
Advance
from customers
-
(323,715)
Taxes
payable
949,609
2,995,347
Other
current liabilities
21,476
120,274
Net
cash provided by (used in) operating activities
26,755,720
(7,119,168)
Investing
activities
Purchase
of equipment
(25,843,611)
(17,353)
Net
cash used in investing activities
(25,843,611)
(17,353)
Financing
activities
Proceeds
from the issuance of the convertible notes
-
2,100,000
Payment
for share issuance cost
-
-
Net
cash used in financing  activities
-
2,100,000
Effect
of exchange rate changes in cash
73,001
5,731,187
Net
increase (decrease) in cash and cash equivalents
985,110
694,666
Cash
and cash equivalents, beginning of the period
8,632,879
6,060,428
Cash
and cash equivalents, end of the period
$
9,617,989
$
6,755,094
Supplemental
disclosure of cash flow information
Cash
paid during the period:
Income
taxes paid
$
6,752,167
$
6,005,048
See accompanying notes to the financial
statements.
- 6 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
1.
MANAGEMENT'S
REPRESENTATION OF INTERIM FINANCIAL INFORMATION
The
accompanying financial statements have been prepared by Longwei Petroleum
Investment Holding Limited, Inc. without audit pursuant to the rules and
regulations of the Securities and Exchange Commission.  Certain information
and disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
 These financial statements include all of the adjustments, which in the
opinion of management are necessary to a fair presentation of financial position
and results of operations.  All such adjustments are of a normal and
recurring nature. Interim results are not necessarily indicative of results for
a full year.
2.
SIGNIFICANT
ACCOUNTING POLICIES
This summary of significant accounting policies of the Company is
presented to assist in understanding the Company's financial statements.
 The financial statements and notes are representations of the Company's
management, which is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Description
of Business
Longwei Petroleum Investment Holding Limited ("we," "us," "our,"
"Longwei") was incorporated under the laws of the State of Colorado on March 17,
2000, under the name of Tabatha II, Inc. We changed our name to Longwei
Petroleum Investment Holding Limited on October 12, 2007. We were formed as a
"blind pool" or "blank check" company whose business plan was to seek to acquire
a business opportunity through completion of a merger, exchange of stock, or
other similar type of transaction. In furtherance of our business plan, we
voluntarily elected to become subject to the periodic reporting obligations of
the Securities Exchange Act of 1934 by filing a registration statement on Form
10-SB.
Prior to October 16, 2007, our only business activities were the
organizational activities described above, including registration under the
Securities Exchange Act of 1934, and efforts to locate a suitable business
opportunity for acquisition. On October 16, 2007, the date of the closing of the
Share Exchange, we acquired all of the issued and outstanding common stock of
Longwei Petroleum Investment Holding Limited ("Longwei BVI"), a British Virgin
Islands corporation incorporated on April 3, 2006.  Longwei BVI owns all of
the issued and outstanding stock of Taiyuan Yahua Energy Conversion Co., Ltd.
("Taiyuan Yahua"), a Chinese limited liability company, which in turn is the
sole shareholder of
Taiyuan Longwei Economy & Trading
Co., Ltd. ("Taiyuan Longwei"), a Chinese limited liability company.
  We issued 69,000,000 shares of common stock in the share exchange
transaction for 100% of the ownership of Longwei BVI. As a result of the share
exchange transaction, Longwei BVI and its subsidiaries became our wholly owned
subsidiaries.
- 7 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The former stockholders of Longwei BVI acquired 92% of our issued
and outstanding common stock as a result of closing the share exchange
transaction.  Therefore, although Longwei BVI became our wholly-owned
subsidiary, the transaction was accounted for as a recapitalization of Longwei
BVI, whereby Longwei BVI is deemed to be the accounting acquirer and is deemed
to have adopted our capital structure.
All operating activities are carried out through our wholly-owned
Chinese subsidiary, Taiyuan Longwei Economy & Trading Co., Ltd. ("Taiyuan
Longwei"), which was incorporated in 1995.  The operating company is
located in Taiyuan City, China.  We purchase diesel, gasoline, fuel oil and
kerosene from various suppliers. As an intermediary, we seek to earn profits by
buying diesel, gasoline, fuel oil and kerosene at competitive prices and selling
them to other wholesalers. In addition, we also earn revenues by acting as a
purchase agent where we charge an agency fee, a fee which is charged to
wholesalers who do not have a license to purchase directly from refineries.
Further, the company owns a gas station located on its property where it
generates additional profit and revenue. The cost of our products is largely
dependent on the price of crude oil. The price of crude oil is subject to
fluctuation due to a variety of factors, all of which are beyond our control.
When sudden and significant increases occur in the cost of fuel and lubricant
products, we may not be able to pass on these increases through timely price
increases to our customers. The timing of passing these costs to our customers
can significantly affect our margins. The affect of lower crude oil prices,
after the sale for a short time of higher priced inventory on hand at the time
of the price decrease, reduces the cost of the products which, in turn, improves
profit margins. Fuel oil is a liquid petroleum product that is burned in a
furnace or boiler for the generation of heat or used in an engine for the
generation of power. Solvents are unrefined petroleum products used in paint,
dry-cleaning solvents, solvents for cutback asphalts and solvents for the rubber
industry. We transport and market these products to other wholesale buyers. Our
primary customers are large-scale gas stations, which represent 60% of our
sales. These gas stations, which purchase diesel and gasoline from us, are
located in Taiyuan City in the Shanxi Province of China. Our second largest
group of customers is the coal plants and power supply companies that use our
fuel oil for heat and power, along with our solvents, which comprise 30% of our
business. Our third largest customers are the small independent gas stations.
These represent 10% of our total sales, and purchase gasoline and diesel. Our
operating company is located at No. 30 Guanghua Avenue, Xiaojingyu Xiang,Wan
Bailin District, Taiyuan City, P.C. 030024, Shanxi Province, China, and our
phone number is (86) 351-6527-366.
(a)    Basis
of Preparation
The
financial statements of the Company are prepared in accordance with accounting
principles generally accepted in the United States of America and include the
accounts of the Company. This basis of accounting differs in certain material
respects from that used for the preparation of the books and records of the
Company, which are prepared in accordance with the accounting principles and the
relevant financial regulations applicable to enterprises with limited
liabilities, established in the PRC ("PRC GAAP") the accounting standards used
in the place of their domicile.
- 8 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b)    Economic
and Political Risks
The
Company's operations are conducted in the PRC. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state
of the PRC economy.
The
Company's operations in the PRC are subject to special considerations and
significant risks not typically associated with companies in North America and
Western Europe. These include risks associated with, among others, the
political, economic and legal environment and foreign currency exchange. The
Company's results may be adversely affected by changes in the political and
social conditions in the PRC, and by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures, currency
conversion, remittances abroad, and rates and methods of taxation.
(c)    Principles
of Consolidation
The
accompanying financial statements include Longwei Petroleum Investment Holding
Limited, Inc., its wholly owned subsidiary, Longwei Petroleum Investment Holding
Limited, a British Virgin Island corporation, its wholly owned subsidiary,
Taiyuan Yahua Energy Conversion Co., Ltd., a Chinese Limited Liability Company,
which owns 100% of the operating subsidiary, Taiyuan Longwei Economy &
Trading Company, Ltd., a Chinese Limited Liability Company.  Intercompany
transactions have been eliminated in consolidation.
(d)    Property,
Plant and Equipment
Property,
plant and equipment are carried at cost less accumulated depreciation.
Depreciation is provided over the assets' estimated useful lives, using the
straight-line method. Estimated useful lives of the property, plant and
equipment are as follows:
Buildings
20
years
Heavy
machinery and production equipment
8-
20 years
Railway
20
years
Motor
vehicles
5
years
The
cost and related accumulated depreciation of assets sold or otherwise retired
are eliminated from the accounts and any gain or loss is included in the
statement of income. The cost of maintenance and repairs is charged to the
statement of income as incurred, whereas significant renewals and betterments
are capitalized.
- 9 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e)    Accounting
for the Impairment of Long-Lived Assets
The
long-lived assets held and used by the Company are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
assets may not be recoverable. It is reasonably possible that these assets could
become impaired as a result of technology or other industry changes.
Determination of recoverability of assets to be held and used is by comparing
the carrying amount of an asset to future net undiscounted cash flows to be
generated by the assets. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell.
There
was no impairment of long-lived assets as of March 31, 2009.
(f)    Inventories
Inventories
are stated at the lower of cost, determined on a weighted average basis, or net
realizable value. Net realizable value is the estimated selling price in the
ordinary course of business less the estimated cost of completion and the
estimated costs necessary to make the sale.
When
inventories are sold, their carrying amount is charged to expense in the year in
which the revenue is recognized. Write-downs for declines in net realizable
value or for losses of inventories are recognized as an expense in the year the
impairment or loss occurs. There were no declines in net realizable value of
inventory for nine months ended March 31, 2009.
(g)
   Accounts Receivable
Trade
receivables are recognized and carried at the original invoice amount less
allowance for any uncollectible amounts. An estimate for doubtful accounts is
made when collection of the full amount is no longer probable. Bad debts are
written off as incurred.
(h)    Cash
and Cash Equivalents
The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. Cash deposit in PRC
banks are not insured by any government agency or entity.
(i)    Advances
to Suppliers
Advances
to suppliers represent the cash paid in advance for purchasing of inventory
items from suppliers.
(j)    Fair
Value of Financial Instruments
The
Company's financial instruments include cash and cash equivalents, accounts
receivable, prepaid taxes, advances to suppliers, other current assets, taxes
payable, accounts payable and advances from customers.
- 10 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Management
estimates that the carrying amounts of the non related party financial
instruments approximate their fair values due to their short-term nature.
(k)    Revenue
Recognition
The
Company derives the bulk of its revenue from sales of gasoline, diesel, solvent
oil and fuel oil. These product sales revenues are recognized when customers
take possession of goods in accordance with the terms of purchase order
agreements that evidence agreed upon pricing and when collectability is
reasonably assured. Cost of revenues for product sales include costs to purchase
and transport the product to the Company, costs to deliver the goods to the
customer and depreciation on product storage and delivery equipment.
Agency
service revenue consists of fees charged to small fuel distributors who lack the
required licenses to purchase directly from large refineries. The Company
allocates a portion of its purchasing quota to these customers for a fee similar
to a sales commission. Agency service revenue is recognized when there is
evidence of an arrangement that specifies pricing and irrevocable allocation of
a portion of the Company's purchase quota and collection has occurred. Cost of
agency service revenues consists primarily of selling commissions.
(l)    Foreign
Currency Translation
The
functional currency of the Company is Renminbi ("RMB") and the RMB is not freely
convertible into foreign currencies. The Company maintains its financial
statements in the functional currency. Monetary assets and liabilities
denominated in currencies other than the functional currency are converted into
the functional currency at rates of exchange prevailing at the balance sheet
date. Transactions denominated in currencies other than the functional currency
are converted into the functional currency at the exchange rates prevailing at
the dates of the transactions. Exchange gains or losses arising from foreign
currency transactions, which are not material, are included in the determination
of net income for the respective periods.
For
financial reporting purposes, the financial statements of the Company which are
prepared using the functional currency have been translated into United States
dollars. Assets and liabilities are translated at exchange rates at the balance
sheet dates and revenue and expenses are translated at the average exchange
rates for each period and stockholders' equity is translated at historical
exchange rates. Any translation adjustments resulting are not included in
determining net income but are included in foreign currency translation
adjustment to other comprehensive income, a component of stockholders' equity.
The exchange rates adopted are as follows:
2009
Period
end RMB exchange rate
6.8336
Average
period RMB exchange rate
6.8464
No
representation is made that the RMB amounts could have been, or could be,
converted into U.S. dollars at the rates used in translation.
- 11 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(m)    Use
of Estimates
The
preparation of the financial statements in conformity with generally accepted
accounting principles in the United States of America 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 periods. Management makes these estimates using the best
information available at the time the estimates are made; however actual results
could differ materially from those estimates.
(n)    Income
Taxes
The
company has implemented SFAS No. 109, "Accounting for Income Taxes," which
provides for a liability approach to accounting for income taxes. Deferred
income taxes result from the effect of transactions that are recognized in
different periods for financial and tax reporting purposes. The company has
recorded no deferred tax assets or liabilities as of March 31, 2009, since
nearly all differences in tax bases and financial statement carrying values are
permanent differences.
(o)    Recent
Accounting Pronouncements
In
December 2007, the
FASB issued SFAS No. 141R,
"Business Combinations" ("SFAS No. 141R"). SFAS No. 141R amends
SFAS 141 and provides revised guidance for recognizing and measuring
identifiable assets and goodwill acquired, liabilities assumed, and any
noncontrolling interest in the acquiree. It also provides disclosure
requirements to enable users of the financial statements to evaluate the nature
and financial effects of the business combination. It is effective for fiscal
years beginning on or after December 15, 2008 and will be applied
prospectively. We are currently evaluating the impact of adopting SFAS
No. 141R on our consolidated financial statements.
In
December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements — an amendment of ARB No. 51" ("SFAS
No. 160"). SFAS No. 160 requires that ownership interests in subsidiaries held
by parties other than the parent, and the amount of consolidated net income, be
clearly identified, labeled, and presented in the consolidated financial
statements. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. It is effective for fiscal years beginning on or after
December 15, 2008 and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests. All other requirements
shall be applied prospectively. We are currently evaluating the impact of
adopting SFAS No. 160 on our consolidated financial statements.
- 12 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
2.    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In
March 2008, FASB issued Financial Accounting Standards No. 161, "
Disclosure
about Derivative Instruments and Hedging Activities - an amendment to FASB
Statement No. 133."
The use and complexity of derivative instruments and
hedging activities have increased significantly over the past several years.
Constituents have expressed concerns that the existing disclosure requirements
in FASB Statement No. 133, "
Accounting for Derivative Instruments and Hedging
Activities,"
do not provide adequate information about how derivative and
hedging activities affect an entity's financial position, financial performance,
and cash flows. Accordingly, this Statement requires enhanced disclosures about
an entity's derivative and hedging activities and thereby improves the
transparency of financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008.
In
May 2008, the FASB issued Statement No. 162, "
The Hierarchy of Generally
Accepted Accounting Principles
."  This statement identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (GAAP)
in the United States (the GAAP hierarchy).  This statement is effective 60
days following the SEC's approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, "
the Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles
."
In May 2008, the FASB issued Statement No. 163
"Accounting for
Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No.
60."
The premium revenue recognition approach for a financial
guarantee insurance contract links premium revenue recognition to the amount of
insurance protection and the period in which it is provided. For purposes of
this statement, the amount of insurance protection provided is assumed to be a
function of the insured principal amount outstanding, since the premium received
requires the insurance enterprise to stand ready to protect holders of an
insured financial obligation from loss due to default over the period of the
insured financial obligation.  This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2008.
In
April 2008, the FASB issued FSP 142-3, "Determination of the Useful Life of
Intangible Assets", (FSP 142-3). FSP 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and
Other Intangible Assets". FSP 142-3 is effective for fiscal years beginning
after December 15, 2008. The Company does not expect the adoption of FSP 142-3
will have a material impact on the Company's consolidated financial position,
results of operations and cash flows.
In
June 2008, the FASB ratified EITF Issue No. 08-3, "Accounting for Lessees for
Maintenance Deposits Under Lease Arrangements" (EITF 08-3). EITF 08-3 provides
guidance for accounting for nonrefundable maintenance deposits. It also provides
revenue recognition accounting guidance for the lessor. EITF 08-3 is effective
for fiscal years beginning after December 15, 2008. The Company does not expect
the adoption of EITF Issue No. 08-3 will have a material impact on the Company's
consolidated financial position, results of operations and cash flows.
- 13 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
3.    ACCOUNTS
RECEIVABLE
The receivables and allowance balances at March 31, 2009 and June
30, 2008are as follows:
March 31,
2009
June 30,
2008
Accounts
receivable
$
26,688,372
$
12,134,507
Less:
allowance for doubtful accounts
-
-
Accounts
receivable, net
$
26,688,372
$
12,134,507
4.    INVENTORIES
Inventories
are the unsold petroleum products purchased from various suppliers, and consist
of the following as of March 31, 2009 and June 30, 2008:
March
31,
June
30,
2009
2008
Diesel Oil
$
6,178,035
$
16,433,154
Gasoline
5,010,878
12,619,687
Solvent Oil
2,561,690
-
Fuel Oil
619,864
-
Less: allowances for slowing
moving items
-
-
Total
$
14,370,467
$
29,052,841
5.    ADVANCE
TO SUPPLIERS
The
Company has made payments to unrelated suppliers in advance of receiving
products and services. The advance payments are meant to ensure preferential
pricing and delivery. The amounts advanced under such arrangements totaled $
37,307,230 and $ 28,327,067 as of March 31, 2009 and June 30, 2008.
6.
CONSTRUCTION
IN PROGRESS
The
Company is currently building a new storage facility in Gujiao City which will
add 70,000 metric tons of storage capacity to serve Gujiao city and the
surrounding area. The cost is recorded to Construction in progress, and
transferred to property, plant and equipment when the improvement is completed
and the equipment is purchased.
30-Jun-08
Addition
Transferred to property,
plant and
equipment
Impact of foreign
currency exchange
rate
31-Mar-09
Construction in
progress
$
-
$
23,852,728
$
0
$
0
$
23,852,728
- 14 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
7.    PROPERTY,
PLANT AND EQUIPMENT
At
March 31, 2009 and June 30, 2008, property, plant and equipment, at cost,
consist of
June 30,
2008
Impact of
foreign currency exchange rate
Additions
March 31,
2009
Land and buildings
$
2,052,874
$
7,632
$
102,435
$
2,162,941
Machinery and production
equipment
4,454,536
16,595
1,888,448
6,359,579
Total property, plant and
equipment
6,507,410
24,227
1,990,883
8,522,520
Less: accumulated
depreciation
(3,870,084)
(14,385)
(289,411)
(4,173,880)
Property, plant and equipment,
net
$
2,637,326
$
9,842
$
1,701,472
$
4,348,640
Depreciation
expense for the nine months ended March 31, 2009 was $289,411.
8.  TAXES PAYABLE
Taxes
payable consist of the following:
March 31, 2009
June 30, 2008
Income tax
payable
$
1,729,289
$
1,190,002
Value Added Tax
payable
1,335,198
963,178
Business taxes
payable and others
349,507
302,043
Total
$
3,413,994
$
2,455,223
9.  ACCRUED
PAYABLES
Other
current liabilities consist of the f
ollowing:
March 31, 2009
June 30, 2008
Accrued
salaries
$
15,277
$
15,221
Accrued
staff welfare
252,855
230,518
Accrued expenses and miscellaneous
417,545
552,697
Total
$
685,677
$
798,436
- 15 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
10.    INCOME
TAXES
(a)
Corporation Income Tax ("CIT")
The
Company is governed by the Income Tax Laws of the PRC. The PRC federal statutory
tax rate is 30% since January 1, 2008.
The
provision for income taxes for nine months ended March 31, 2009 is summarized as
follows:
2009
Current
$
7,258,748
Deferred
-
$
7,258,748
(b)
Value Added Tax ("VAT")
In
accordance with the relevant taxation laws in the PRC, the normal VAT rate for
domestic sales is 5% to 17%, which is levied on the invoiced value of sales and
is payable by the purchaser. The Company is required to remit the VAT it
collects to the tax authority.
The
value added tax refundable presents the VAT that the Company paid for the
purchasing products and can be used to deduct the VAT related to the sale of
products.
- 16 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
11.
   SEGMENT INFORMATION
For the three
months ended March 31, 2009
Agency
Product
sales
Service
Total
Revenues
$
   46,622,276
$
     3,097,818
$
    49,720,094
Cost of revenues
$
   40,049,434
$
                    -
$
    40,049,434
Gross profit
$
     6,572,842
$
     3,097,818
$
      9,670,660
Income from operations
$
     5,863,916
$
     3,097,818
$
      8,961,734
Total assets
$  116,185,426
$
                    -
$
  116,185,426
Depreciation
$
          72,030
$
                    -
$
          72,030
For the
three months ended March 31, 2008
Agency
Product
sales
Service
Total
Revenues
$
  30,213,210
$
      2,265,492
$
     32,478,702
Cost of revenues
$
  22,180,278
$
         473,088
22,653,366
Gross profit
$
    8,032,932
$
      1,792,404
$
      9,825,336
Income from operations
$
    4,974,904
$
      1,792,404
$
       6,767,308
Total assets
$
  90,272,687
$  
                   -
$
     90,272,687
Depreciation
$
         89,964
$
                    -
$
            89,964
For the nine
months ended March 31, 2009
Agency
Product
sales
Service
Total
Revenues
$  139,308,969
$
      8,529,598
$
  147,838,567
Cost of revenues
$  116,588,344
$
                     -
$
  116,588,344
Gross profit
$
   22,720,625
$
      8,529,598
$
    31,250,223
Income from operations
$
   19,801,553
$
      8,529,598
$
    28,331,151
Total assets
$  116,185,426
$
                     -
$
  116,185,426
Depreciation
$
         289,411
$
                     -
$
         289,411
For the nine
months ended March 31, 2008
Agency
Product
sales
Service
Total
Revenues
$
   98,581,486
$
  10,115,682
$
  108,697,168
Cost of revenues
$
   75,917,662
$
    1,269,204
$
     77,186,866
Gross profit
$
   22,663,824
$
    8,846,478
$
    31,510,302
Income from operations
$
   17,645,559
$
     8,846,478
$
    26,492,037
Total assets
$
    90,272,687
$
                    -
$
      90,272,687
Depreciation
$
        269,563
$
                   -
$
         269,563
- 17 -
LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 2009 AND 2008
12.
   GEOGRAPHICAL INFORMATION
The Company's revenues by geographic destination are
analyzed as follows:
For the Three Months Ended March 31,
2009
2008
PRC
$
49,720,094
$
32,478,702
Outside PRC
-
-
Total
net revenues
$
49,720,094
$
32,478,702
For the nine Months Ended March 31,
2009
2008
PRC
$
147,838,567
$
108,697,168
Outside PRC
-
-
Total
net revenues
$
147,838,567
$
108,697,168
13.
   WARRANTS
On February 2, 2009 the company entered into an Amendment and
Settlement Agreement whereby the maturity date of the notes dated December 18,
2007 in the amount of $2,100,000 were extended to September 18, 2009.  In
consideration of extending the note the interest rate was changed from 4% to 8%
on an annual basis. Further, the exercise price of the Class A warrants was
changed from $.80 to an exercise price of $.70. These Class A warrants totaling
1,500,030 expire on December 18, 2012. In addition as part of the Settlement
agreement a Class B warrant in the amount of 1,200,000 was also granted to the
investors with an exercise price of $.70 The Class B warrants expire on February
2, 2014.  In using the Black-Scholes Calculation the company will have a
total expense of $1,528,180 for the life of the warrants.  The note was for
a period of 12 months expiring December 17, 2008. Each month expense would be
$127,348.
- 18 -
ITEM
 2.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DISCLAIMER
REGARDING FORWARD LOOKING STATEMENTS
Certain
statements in this Form 10-Q, which are not statements of historical fact, are
what are known as "forward-looking statements," which are basically statements
about the future. For that reason, these statements involve risk and uncertainty
since no one can accurately predict the future. Words such as "plans,"
"intends," "hopes," "seeks," "anticipates," "expects," and the like, often
identify such forward looking statements, but are not the only indication that a
statement is a forward-looking statement. Such forward-looking statements
include statements concerning our plans and objectives with respect to our
present and future operations, and statements which express or imply that such
present and future operations will or may produce revenues, income or profits.
These and other factors may cause our actual results to differ materially from
any forward-looking statement.  We caution you not to place undue reliance
on these forward-looking statements.  Although we base these
forward-looking statements on our expectations, assumptions, and projections
about future events, actual events and results may differ materially, and our
expectations, assumptions, and projections may prove to be inaccurate. The
forward-looking statements speak only as of the date hereof, and we expressly
disclaim any obligation to publicly release the results of any revisions to
these forward-looking statements to reflect events or circumstances after the
date of this filing.
Overview
Longwei Petroleum Investment Holding Limited ("we," "us," "our,"
"Longwei") was incorporated under the laws of the State of Colorado on March 17,
2000, under the name of Tabatha II, Inc. We changed our name to Longwei
Petroleum Investment Holding Limited on October 12, 2007. We were formed as a
"blind pool" or "blank check" company whose business plan was to seek to acquire
a business opportunity through completion of a merger, exchange of stock, or
other similar type of transaction. In furtherance of our business plan, we
voluntarily elected to become subject to the periodic reporting obligations of
the Securities Exchange Act of 1934 by filing a registration statement on Form
10-SB.
Prior to October 16, 2007, our only business activities were the
organizational activities described above, including registration under the
Securities Exchange Act of 1934, and efforts to locate a suitable business
opportunity for acquisition. On October 16, 2007, the date of the closing of the
Share Exchange, we acquired all of the issued and outstanding common stock of
Longwei Petroleum Investment Holding Limited ("Longwei BVI"), a British Virgin
Islands corporation incorporated on April 3, 2006.  Longwei BVI owns all of
the issued and outstanding stock of Taiyuan Yahua Energy Conversion Co., Ltd.
("Taiyuan Yahua"), a Chinese limited liability company, which is in turn the
sole shareholder of Taiyuan Longwei Economy & Trading Co., Ltd. ("Taiyuan
Longwei"), a Chinese limited liability company.   We issued 69,000,000
shares in the share exchange transaction for 100% of the ownership of Longwei
BVI. As a result of the share exchange transaction, Longwei BVI and its
subsidiaries became our wholly owned subsidiaries.
Taiyuan Yahua was incorporated on August 11, 2006.  The
operating subsidiary, Taiyuan Longwei, is located in Taiyuan City, China, and
was established in 1995 as a Chinese limited liability company.  We
purchase diesel, gasoline, fuel oil and kerosene from various suppliers. As a
licensed intermediary, we seek to earn profits by buying diesel gasoline fuel
oil and kerosene at competitive prices and selling them to other wholesalers. In
addition, we also earn revenue by acting as a purchase agent where we charge an
agency fee, a fee which is charged to other wholesalers who do not have a
license to purchase directly from refineries.   The cost of our
products is largely dependent on the price of crude oil. The price of crude oil
is subject to fluctuation due to a variety of factors, all of which are beyond
our control. When sudden and significant increases occur in the cost of fuel and
lubricant products, we may not be able to pass on these increases through timely
price increases to our customers. The timing of passing these costs through to
our customers can significantly affect our margins. The affect of lower crude
oil prices, after the sale for a short time of higher priced inventory on hand
at the time of the price decrease, reduces the cost of the products which in
turn improves profit margins. Fuel oil is a liquid petroleum product that is
burned in a furnace or boiler for the generation of heat or used in an engine
for the
- 19 -
generation of power.  Solvents are unrefined petroleum
products used in paint, dry-cleaning solvents, solvents for cutback asphalts and
solvents for the rubber industry. We transport and market these products to
other wholesale buyers.  Our primary customers are large-scale gas
stations, which represent 60% of our sales and which are located in Taiyuan City
in the Shanxi Province of China.  They primarily buy diesel and gasoline.
 Our second largest group of customers is coal plants and power supply
companies which use our fuel oil for heat and power along with our solvents;
these comprise 30% of our business.  Our third largest customer is the
small, independent gas station which represents 10% of our total sales.
 These stations buy gasoline and diesel from us.
We currently have 14 storage tanks that allow us to store 50,000
metric tons of our products. In addition, we own our own rail system to
transport our products to our customers.  Further the company is expanding
its operations to Gujiao City. The company is adding 70,000 metric tons of
storage capacity. This facility will be used to service customers in Gujiao city
and the surrounding areas, thus expanding the company's market. Management hopes
to complete the project in one year as long as financial resources are
available.
We have been granted a Finish Oil Wholesale license which allows
our company to engage in the wholesale business of gasoline, fuel oil and diesel
oil.  This license is granted by the People's Republic of China.  In
addition, we also have a special license for Dangerous Chemical Products
Businesses that allows us to handle gasoline and diesel oil.  The Finish
Oil Wholesale License allows us to engage in the business of these products.
There is no expiration date on this license
.
The Dangerous Chemical
Products Businesses license is renewed every three years.  The People's
Republic of China's constitution states that all mineral and oil resources
belong to the State.  Without these licenses, we would not be allowed to
sell our products.
Results of Operations
Revenue
The following table shows the different components comprising our
total revenue for the three months ending March 31, 2009 and March 31, 2008.
All amounts in thousands of U.S. dollars
Sales by Products
2009
% of total revenues
Volume of sales in thousands
2008
% of total revenues
Volume of sales in thousands
(gallons)
(gallons)
Diesel
Oil
23,056
46.4%
10,986
18,138
55.8%
7,003
Gasoline
21,736
43.7%
8,739
8,607
26.5%
3,470
Fuel
Oil
1,100
1.5%
617
2,307
7.1%
1,093
Kerosene
730
2.2%
343
1,162
3.6%
540
TOTALS
Petroleum Products
46,622
93.8%
20,685
30,214
93.0%
12,106
Agency
Fee
3,098
6.2%
2,265
7.0%
TOTAL
REVENUE
49,720
100%
32,479
100%
- 20 -
The following table shows the different components comprising our
total revenue for the nine months ending March 31, 2009 and March 31, 2008.
All amounts in thousands of U.S. dollars
Sales by Products
2009
% of total revenues
Volume of sales in thousands
2008
% of total revenues
Volume of sales in thousands
(gallons)
(gallons)
Diesel
Oil
75,608
51.1%
29,098
57,320
52.7%
24,157
Gasoline
59,972
40.6%
22,006
31,041
28.6%
13,599
Fuel
Oil
1,750
1.2%
1,221
5,695
5.2%
2,803
Kerosene
1,979
1.3%
645
4,525
4.2%
2,222
TOTALS
Petroleum Products
139,309
94.2%
52,970
98,581
90.7%
42,781
Agency
Fee
8,530
5.8%
10,116
9.3%
TOTAL
REVENUE
147,839
100%
108,697
100%
For the three months ended March 31, 2009, revenues were $49.720
million, an increase of $17.241 million or approximately 53.1% as compared to
$32.479 million for the same period in March 31, 2008. This increase was the
result of stronger overall demand for petroleum products.  Diesel sales
were $23.056 million or
approximately 10.986 million gallons, an increase of $4.918
million and a increase of approximately 3.983 million gallons, in the three
months period year ending March 31, 2009, compared to $18.138 million or
approximately 7.003 million gallons for the three months ending March 31, 2008.
Gasoline sales were $21.736 million or approximately 8.739 million gallons, an
increase of $13.129 million or approximately 152.5% increase and an increase of
5.269 million gallons, compared to gasoline sales of $8.607 million or
approximately 3.470 million gallons for the three months ending March 31, 2008.
  This increase was mainly the result of greater purchases by our
existing customers, primarily power supply companies due to the continued growth
of Shanxi Province.
For the nine months ended March 31, 2009, revenues were $147.839
million, an increase of $39.142 million or approximately 36.0% as compared to
$108.697 million for the same period in March 31, 2008. This increase was the
result of stronger overall demand for petroleum products.  Diesel sales
were $75.608 million or
approximately 29.098 million gallons, an increase of $18.288
million and an increase of  approximately 4.941 million gallons, in the
nine months period year ending March 31, 2009, compared to $57.320 million or
approximately 24.157 million gallons for the nine months ending March 31, 2008.
Gasoline sales were $59.972 million or approximately 22.006 million gallons, an
increase of $28.931 million or approximately 131.5% increase and an increase of
8.407 million gallons, compared to gasoline sales of $31.041 million or
approximately 13.599 million gallons for the nine months ending March 31, 2008.
  This increase was mainly the result of greater purchases by our
existing customers, primarily power supply companies due to the continued growth
of Shanxi Province. In addition, the increase of petroleum products for the nine
months ending March 31, 2009 was mainly due to the following factors: the
population in China in general has become wealthier; as a result, the demand for
petroleum has increased and the economy in Shanxi Province where the Company's
major customers are continued to experience growth. Management expects growth
for the fiscal year 2009 to remain strong due to (i) continued strong growth in
the China economy, (ii) a continued improvement in the wealth of its citizens,
and (iii) business strategy of increasing storage for our products.  For
the nine months ended March 31, 2009, 45 % of our customers were large-scale gas
stations located in Taiyuan City in the Shanxi Province, compared to 60% for the
nine months ended March 31, 2008.   Our second largest group of
customers is coal plants and power supply
- 21 -
companies which use our diesel, gasoline and fuel oil to generate
heat and power; this group provided 45% of our business in 2009 compared to 30%
in 2008. This group of customers will continue to remain strong as our local
economy continues to grow and new power plants are built. We anticipate that in
the fiscal year 2009 this group will represent 55% to 60% of our sales, as the
company will focus on this particular customer segment due to larger bulk sales.
Our third largest customer is the small, independent gas station which
represents 10% of our total sales.  These stations buy gasoline and diesel
from us.  This group will continue to remain strong as more cars are being
used for transportation in Shanxi Province.   Further the company is
expanding its operations to Gujiao City. The Company plans to add 70,000 metric
tons of storage capacity. This facility will be used to  service customers
in Gujiao City and the surrounding areas, thus expanding the Company's market.
Management hopes to complete the project in one year as long as financial
resources are available.
Agency fees were $3.098 million for the three months period ending
March 31, 2009 compared to $2.265 million for the three months ending March 31,
2008 a slight increase of .83 million.  Agency fee revenues were $8.530
million for the nine months ended March 31, 2009, compared to $10.116 million in
the same period of 2008.  The decrease of $1.586 million or approximately
15.7% was due to the expected decline in agency fees. Agency fees are fees from
companies not possessing the required license to buy direct from refineries.
  We purchase petroleum on their behalf and arrange delivery for them.
 The China government continues to grant licenses to other wholesalers to
buy direct. Thus, we anticipate that agency fees will be reduced further in the
future unless we are able to obtain new customers that want to go direct but do
not have the required license.
Cost of Goods Sold
Cost of goods sold for the three months ended March 31, 2009
increased by $17.396 million or 76.8 %, to $40.049 million as compared to
$22.653 million for the same quarter of 2008. This increase was mainly
attributable to the increase of sales revenue and a decrease in gross margins on
its petroleum products in the three month period.
Cost of goods sold for the nine months ended March 31, 2009
increased by $77.070 million or 99.8 %, to $116.588 million as compared to
$77.187 million for the nine months period March 31, 2008. This increase was
mainly attributable to the increase of sales revenue
The following table illustrates the items constituting our cost of
goods sold for the three months ending March 31, 2009 and March 31, 2008.
(All amounts, other than percentages, in thousands of U.S.
dollars)
Cost of
Goods
2009
% of total cost of goods sold
% of total cost of goods vs its revenue
2008
% of total cost of goods
% of total cost of goods vs revenue
Diesel
Oil
20,269
50.6%
87.9%
13,739
60.6%
75.7%
Gasoline
18,256
45.6%
84.0%
6,679
29.5%
77.6%
Fuel
Oil
1,039
2.6%
94.4%
818
3.6%
35.4%
Kerosene
485
1.2%
66.4%
944
4.2%
81.2%
TOTAL
COST
Petroleum
Products
40,049
100%
85.9%
22,180
97.9%
73.4%
Agency
Fee
0
0%
0%
473
2.1%
20.9%
TOTAL
COST OF GOODS
40,049
100%
22,653
100%
- 22 -
The following table illustrates the items constituting our cost of
goods sold for the nine months ending March 31, 2009 and March 31, 2008.
(All amounts, other than percentages, in thousands of U.S.
dollars)
Cost
of Goods
2009
% of total cost of goods sold
% of total cost of goods vs its revenue
2008
% of total cost of goods
% of total cost of goods vs revenue
Diesel
Oil
64,970
55.7%
85.9%
43,220
56.0%
75.4%
Gasoline
48,395
41.5%
80.7%
25,149
32.6%
81.0%
Fuel
Oil
1,614
1.4%
92.2%
3,626
4.7%
63.7%
Kerosene
1,609
1.4%
81.3%
3,923
5.1%
86.7%
TOTAL
COST
Petroleum
Products
116,588
100%
83.7%
75,918
98.4%
77.0%
Agency
Fee
0
0%
0%
1,269
1.6%
12.5%
TOTAL
COST OF GOODS
116,588
100%
77,187
100%
Gross
Profit Margin
Our
gross profit margin was 19.5% for the three months ended March 31, 2009,
compared to 30.3% for the three months ended March 31, 2008. The decrease was
the result of the gross margins on diesel  were approximately 12.1% for the
quarter ending March 31, 2009 compared to 24.3% in quarter ending March 31,
2008.  The gross margins on gasoline were approximately 16.0% in the
quarter ending March 31, 2009 compared to 22.4% for the same quarter in 2008,
improving by approximately 6.4%. The decrease of diesel and gasoline margins was
the result of the company locking in fuel prices where diesel prices decreased.
It is expected that gross margins will improve in the near future. The National
Development and Reform Commission of China announced on March 24, 2009 that the
retail prices of gasoline and diesel oil would be increased 290 RMB (US$42.43)
per ton, or 5.3 percent; and 180 RMB (US$26.34) per ton, or 3.7 percent,
respectively, as of March 25, 2009.
Longwei's current fuel inventory is 25,980 metric tons. With the
estimated 4 to 5 percent increase on the prices of diesel and gasoline made by
the Chinese government, we expect our gross profits will be 5 percent higher for
the fourth quarter of fiscal 2009.
Our gross profit margin was 21.1% for the nine months ended March
31, 2009, compared to 29.0% for the nine months ended March 31, 2008. The
decrease was the result of the gross margins on diesel were approximately 14.1%
for the nine months ending March 31, 2009 compared to 24.6% in nine months
ending March 31, 2008.  The gross margins on gasoline were approximately
19.3% in the nine months period ending March 31, 2009 compared to 19.0% for the
same quarter in 2008, improving slightly. The decrease of diesel margins was the
result of the Company locking in fuel prices where diesel prices decreased.
 As mentioned above due to the recent increase in petroleum products we
expect are gross margins to improve in the fourth quarter.
The Company made advance to suppliers of approximately $37.307
million in the nine months ending March 31, 2009 compared to $28.327 million in
March 31, 2008. The risk associated with maintaining huge quantities of
inventory and amounts of advances to suppliers has the effect of locking in
prices.  We pay for fuel well in advance of the time we deliver commodities
and establish customer prices.  Therefore, our gross margins will vary
considerably from period to period, based on short-term prices of petroleum
products. Management does
- 23 -
not provide any type of hedging activity in order to reduce this
risk; however management monitors petroleum prices in an effort to maintain
profitability.
Selling General and Administrative Expenses
Selling, general and administrative expenses were $708,926 for the
three months ending March 31, 2009, as compared to $3,058,028 in the 2008 period
as a result of the expenditures and costs in 2008 associated with the transition
to becoming a public company including audits, legal and  various fees.
Selling, general and administrative expenses were $2.919 million
for the nine months ending March 31, 2009, a $2.099 million decrease, compared
to $5.018 for the same period in 2008.  The decrease for the nine month
period was due to the large upfront expenditures of becoming a public company in
March of 2008.
Depreciation and Amortization
Depreciation and amortization expenses were $92,735 for the
quarter ending March 31, 2009, an increase of $2,771 over the depreciation
expense of $89,964 for the quarter ending March 31, 2008.
Depreciation and amortization expenses were $289,411 for the nine
months ending March 31, 2009, a decrease of $19,848 over the depreciation
expense of $269,563 for the nine months ending March 31, 2008.
Income Tax Expense
s
We incurred income tax expenses of $2,255,355 for the quarter
ending March 31, 2009, an increase of $567,319 or approximately 33.6%, versus
$1,688,036 for the quarter ending March 31, 2008 reflecting the increase in
profit. We incurred income tax expenses of $7,258,748 for the nine months ending
March 31, 2009, a decrease of $1,104,490 or approximately 13.2%, versus
$8,363,238 for the nine months ending March 31, 2008. The Company is governed by
the income tax laws of China. The China statutory tax rate is 30% and the local
tax rate is 3%.
Net Income
We earned a net income of $6.662 million for the quarter ended
March 31, 2009, an increase of $1.598 million or approximately 31.6% as compared
to $5064 million for the quarter ending March 31, 2008. This was primarily due
to the increase in sales of petroleum products especially to power supply
companies in the Shanxi Province during the quarter.
In the nine-month period ending March 31, 2009 net income was
$20.912 million, an increase of $2.778 million or approximately 15.3% as
compared to $18.134 million for nine month period ending March 31, 2008. This
was primarily due to the increase in sales of petroleum products especially to
power supply companies in the Shanxi Province during the period.
Net Income Margin
Net
income margin for the quarter ending March 31, 2009 was approximately 13.4%
compared to approximately 15.6% for the quarter ending March 31, 2008. This
decrease as described above was largely the result of lower profit margins on
gasoline products.  The National Development and Reform Commission of China
announced on March 24, 2009 that the retail prices of gasoline and diesel oil
would be increased 290 RMB (US$42.43) per ton, or 5.3 percent; and 180 RMB
(US$26.34) per ton, or 3.7 percent, respectively, as of March 25, 2009.
 With the estimated 4 to 5 percent increase on the prices of diesel and
gasoline made by the Chinese government, we expect our gross profits will be 5
percent higher for the fourth quarter of fiscal 2009 or approximately 18%.
- 24 -
Net income margin for the nine months ending March 31, 2009 was
approximately 14.1% compared to approximately 16.7% for the nine months ending
March 31, 2008. This decrease was the result of a decline in diesel profit
margins due to the company locking in prices well in advance prior to selling to
their customers. In addition, agency fee profit decreased by $1.586. As
mentioned above with the recent price increase management anticipates that net
income margin will be approximately 18% in the fourth quarter offsetting costs
associated with being a public company and the possible future declines in
agency fees.
Inflation
Inflationary factors such as increases in the cost of our product
and overhead costs may adversely affect our operating results. Although we do
not believe that inflation has had a material impact on our financial position
or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin
and selling, general and administrative expenses as a percentage of net revenues
if the selling prices of our products do not increase with these increased
costs.
Foreign Currency Translation Adjustment
Our operating subsidiaries are located in China.  The
operating subsidiaries purchase all products and render services in China, and
receive payment from customers in China using RMB as the functional currency.
 We do not engage in currency hedging.
We incurred a foreign currency translation adjustment loss of
$149,874 for the quarter ending March 31, 2009 as compared with the foreign
currency translation adjustment gain of $3,076,127 for the quarter ending March
31, 2008. On July 21, 2005, China reformed its foreign currency exchange policy,
revalued RMB by 2.1 percent and allowed the RMB to appreciate as much as 0.3
percent per day against the U.S. dollar. We implemented different exchange rates
in translating RMB into U.S. dollars in our financial statements for the quarter
ending March 31, 2009. We used an exchange rate of 6.83 for assets and
liabilities and used the average exchange rate of 6.84 for revenues and
expenses, compared to the exchange rate of 7.02 in 2008 for assets and
liabilities and 7.16 as the average rate used in calculating revenue and
expenses. Historical exchange rates for shareholders' equity were used.
Assets and liabilities are translated at exchange rates at the
balance sheet dates and revenue and expenses are translated at the average
exchange rates and shareholders' equity is translated at historical exchange
rates. Any translation adjustments resulting are not included in determining net
income but are included in foreign exchange adjustment to other comprehensive
income, a component of stockholders' equity.  If the RMB appreciates
against the U.S. dollar, revenue and expenses would be higher than they would
have been if there were no fluctuations in the currencies.  Conversely, if
the RMB depreciates against the U.S. dollar, revenue and expenses would be lower
than they would have been if there were no fluctuations in the currencies. The
exchange rates adopted are as follows for quarter ending March 31, 2009 and
March 31, 2008:
2009
2008
Period
end RMB: exchange rate
6.83
7.02
Average
period RMB: exchange rate
6.84
7.16
Liquidity and Capital Resources
As of March 31, 2009, we had cash and cash equivalents of
$9,617,989 compared to cash and cash equivalents in the beginning of the period
of $8,632,879. This was primarily the result of a decrease in inventories. The
following table provides detailed information about our net cash flow for the
nine month periods ending March 31, 2009 and 2008, respectively.
- 25 -
For the Nine months ended March  31,
2009
2008
Cash and cash equivalents, beginning of period
$
8,632,879
$
6,060,428
Net cash provided (used in) operating activities
$
26,755,720
$
(7,119,168)
Net cash (used in) investing activities
(25,843,611)
(17,353)
Net cash provided by financing activities
-
2,100,000
Effect of exchange rate, changes in cash
73,001
5,731,187
Cash and cash equivalents, end of the period
$
9,617,989
$
6,755,094
Operating Activities:
Net cash provided in operating activities was
$26,755,720
for the nine month period ending March 31, 2009,
compared in the net cash used of $7,119,168 for the nine months period ending
March 31, 2008. This was largely the result of decreases in inventory as a
result of strong demand for petroleum products. This was partially offset by
increases to advances to suppliers to increase inventory levels to meet demands
of our customers.
Investing Activities
:
Net cash used in investing activities was $25,843,611 in the nine
months ending March 31, 2009 to build a new storage facility in Gujiao City.
This cash has been provided largely by the profitable operations of the company
and the raise of $2.1 million in December of 2008. This compares to net cash
used in investing activities of $17,353 in March 31, 2008.
Financing Activities:
The Company had no cash used in financing activities in the nine
month period ending March 31, 2009 compared to net cash used in financing
activities of $2,100,000 in the same period of March 2008.
Critical Accounting Policies
The preparation of financial statements, in conformity with
accounting principles generally accepted in the United States, requires our
management to make assumptions, estimates and judgments that affect the amounts
reported in the financial statements, including the notes thereto, and related
disclosures of commitments and contingencies, if any. We consider our critical
accounting policies to be those that require the more significant judgments and
estimates in the preparation of financial statements, including the following:
Basis of Consolidation
- The consolidated financial
statements of the Company and its subsidiaries are prepared in accordance with
accounting principles generally accepted in the United States of America and
include the accounts of the Company and its subsidiaries. All material
inter-company accounts and transactions have been eliminated in the
consolidation.
Inventories
-
Inventories are stated at the lower of cost, determined on a weighted
average basis, or net realizable value. Net realizable value is the estimated
selling price in the ordinary course of business less the estimated costs
necessary to make the sale.
When inventories are sold, their carrying amount is charged to
expense in the year in which the revenue is recognized. Write-downs for declines
in net realizable value or for losses of inventories are recognized as an
expense in the year the impairment or loss occurs. There were no declines in net
realizable value of inventory for the nine-month period ending March 31,
2009.
- 26 -
Revenue Recognition
The Company derives the bulk of its revenue from the trading of
gasoline, diesel, kerosene and fuel oil, and also has revenues from agency
service and transportation service.
In accordance with the Securities and Exchange Commission ("SEC")
Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB 104"), the Company
recognizes revenue when the following fundamental criteria are met: (i)
persuasive evidence of an arrangement exists, (ii) delivery has occurred or
services have been rendered, (iii) the price to the customer is fixed or
determinable and (iv) collection of the resulting receivable is reasonably
assured.
Foreign Currency Translation
- The functional currency of
the Company is RMB and RMB is not freely convertible into foreign currencies.
The Company maintains its financial statements in the functional currency.
Monetary assets and liabilities denominated in currencies other than the
functional currency are translated into the functional currency at rates of
exchange prevailing at the balance sheet date. Transactions denominated in
currencies other than the functional currency are translated into the functional
currency at the exchange rates prevailing at the dates of the transactions.
Exchange gains or losses arising from foreign currency transactions are included
in the determination of net income for the respective periods.
Use of Estimates-
The preparation of the financial
statements in conformity with generally accepted accounting principles in the
United States of America 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 periods.
Management makes these estimates using the best information available at the
time the estimates are made; however actual results could differ materially from
those estimates.
Recent Accounting Pronouncements
In
March 2007, the FASB issued SFAS No. 141R, "Business Combinations" ("SFAS
No. 141R"). SFAS No. 141R amends SFAS 141 and provides revised
guidance for recognizing and measuring identifiable assets and goodwill
acquired, liabilities assumed, and any noncontrolling interest in the acquiree.
It also provides disclosure requirements to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. It is effective for fiscal years beginning on or after March 15,
2008 and will be applied prospectively. We are currently evaluating the impact
of adopting SFAS No. 141R on our consolidated financial statements.
In
March 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements — an amendment of ARB No. 51" ("SFAS
No. 160"). SFAS No. 160 requires that ownership interests in subsidiaries held
by parties other than the parent, and the amount of consolidated net income, be
clearly identified, labeled, and presented in the consolidated financial
statements. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. It is effective for fiscal years beginning on or after
March  15, 2008 and requires retroactive adoption of the presentation and
disclosure requirements for existing minority interests. All other requirements
shall be applied prospectively. We are currently evaluating the impact of
adopting SFAS No. 160 on our consolidated financial statements.
In
March 2008, FASB issued Financial Accounting Standards No. 161, "
Disclosure
about Derivative Instruments and Hedging Activities - an amendment to FASB
Statement No. 133."
The use and complexity of derivative instruments and
hedging activities have increased significantly over the past several years.
Constituents have expressed concerns that the existing disclosure requirements
in FASB Statement No. 133, "
Accounting for Derivative Instruments and Hedging
Activities,"
do not provide adequate information about how derivative and
hedging activities affect an entity's financial position, financial performance,
and cash flows. Accordingly, this Statement requires enhanced disclosures about
an entity's derivative and hedging activities and thereby improves the
transparency of financial reporting. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008.
- 27 -
In
May 2008, the FASB issued Statement No. 162, "
The Hierarchy of Generally
Accepted Accounting Principles
."  This statement identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (GAAP)
in the United States (the GAAP hierarchy).  This statement is effective 60
days following the SEC's approval of the Public Company Accounting Oversight
Board amendments to AU Section 411, "
the Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles
."
In May 2008, the FASB issued Statement No. 163
"Accounting for
Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No.
60."
The premium revenue recognition approach for a financial
guarantee insurance contract links premium revenue recognition to the amount of
insurance protection and the period in which it is provided. For purposes of
this statement, the amount of insurance protection provided is assumed to be a
function of the insured principal amount outstanding, since the premium received
requires the insurance enterprise to stand ready to protect holders of an
insured financial obligation from loss due to default over the period of the
insured financial obligation.  This Statement is effective for financial
statements issued for fiscal years beginning after March 15, 2008.
Seasonality
Our operating results and operating cash flows historically have
been subject to seasonal variations. Our revenues are usually higher in the
first half of the year than in the second half of the year because of the
increased demand for gasoline and diesel during and around the Chinese spring
festival.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
- 28 -
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
Interest Rate Risk
The Company deposits surplus funds with Chinese banks earning
daily interest. The Company does not invest in any instruments for trading
purposes. The Company's operations are not sensitive to fluctuations in interest
rates.
Foreign Exchange Risk
While our reporting currency is the U.S. Dollar, all of our
consolidated revenues and consolidated costs and expenses are denominated in
RMB. All of our assets are denominated in RMB. As a result, we are exposed to
foreign exchange risk as our revenues and results of operations may be affected
by fluctuations in the exchange rate between U.S. Dollars and RMB. If the RMB
depreciates against the U.S. Dollar, the value of our RMB revenues, earnings and
assets as expressed in our U.S. Dollar financial statements will decline. We
have not entered into any hedging transactions in an effort to reduce our
exposure to foreign exchange risk.
Inflation
Inflationary factors such as increases in the cost of our product
and overhead costs may adversely affect our operating results. Although we do
not believe that inflation has had a material impact on our financial position
or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin
and selling, general and administrative expenses as a percentage of net revenues
if the selling prices of our products do not increase with these increased
costs.
Commodity Risk
There is uncertainty related to the Chinese government's ability
and/or willingness to subsidize Company operations in a declining market.
 Additionally, the risk associated with maintaining large quantities of
inventory and amounts of advances to suppliers has the effect of locking in
prices the Company pays for fuel well in advance of the time we deliver the
commodities and establish customer pricing.  A dip in short-term prices in
fuel costs will result in declining profits for the Company, which will affect
the Company's ability to purchase future petroleum products and make advances to
suppliers, since the Company uses its cash to purchase inventory and increase
advances to suppliers. We manage our exposure in the following ways: if the
price of petroleum declines significantly, the Company will buy additional
petroleum inventory to provide a lower average cost.  Purchase of petroleum
products from refineries has a fixed price based on volume. The price will be
properly adjusted by the refinery in light of the market if there should be
significant changes in the price of oil.  The refineries in China are under
the control of the Chinese government. Therefore, our market risk is limited as
a result of the control by the Chinese government
.
At the present time, the Chinese government is not concerned with gross
margins on services such as agency fees.  The Chinese government allows the
market to determine prices. In the event that the company exceeds the unofficial
guideline of 40% consolidated gross margins the impact of agency fees would be
taken into account and deducted from total gross margins in determining if this
limit has been exceeded. There is no indication that these policies will change
in the future regarding any type of guidelines for agency fees gross
profits.
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CORPORATE STRUCTURE
The chart below depicts our corporate structure.
As depicted below, we own 100% of the capital stock of Longwei
BVI.  Longwei BVI, incorporated in the British Virgin Islands in April
2006, owns 100% of the capital stock of Taiyuan Yahua, and Taiyuan Yahua owns
100% of the capital stock of Taiyuan Longwei, the operating subsidiary
.  Taiyuan Yahua was established in August 2006 as a
Chinese limited liability company.  Taiyuan Longwei was established as a
Chinese limited liability company in July 1995.  As of October 16, 2007,
the date of the closing of the Share Exchange Agreement, all of our operations
are conducted by and through Taiyuan Longwei.
- 30 -
ITEM
4T.
CONTROLS
AND PROCEDURES
The
Securities and Exchange Commission defines the term "disclosure controls and
procedures" to mean a company's controls and other procedures of an issuer that
are designed to ensure that information required to be disclosed in the reports
that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports
that it files or submits under the Securities Exchange Act of 1934 is
accumulated and communicated to the issuer's management, including its principal
executive and principal financial officers, or persons performing similar
functions, as appropriate to allow timely decisions regarding required
disclosure.  The Company maintains such a system of controls and procedures
in an effort to ensure that all information which it is required to disclose in
the reports it files under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified under the
SEC's rules and forms and that information required to be disclosed is
accumulated and communicated to principal executive and principal financial
officers to allow timely decisions regarding disclosure.
As
of the end of the period covered by this report, we carried out an evaluation,
under the supervision and with the participation of our chief executive officer
and principal accounting officer, of the effectiveness of the design and
operation of our disclosure controls and procedures.  Based on this
evaluation, our chief executive officer and principal accounting officer
concluded that our disclosure controls and procedures are designed to provide
reasonable assurance of achieving the objectives of timely alerting them to
material information required to be included in our periodic SEC reports and of
ensuring that such information is recorded, processed, summarized and reported
with the time periods specified.  Our chief executive officer and principal
accounting officer also concluded that our disclosure controls and procedures
were effective as of March 31, 2009 to provide reasonable assurance of the
achievement of these objectives.
There
was no change in the Company's internal control over financial reporting during
the nine-month period ended March 31, 2009, that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
- 31 -
PART
II.  OTHER INFORMATION
Item
1.
Legal
Proceedings
None
Item 1A.
Risk Factors
We face risks in operating our business, including risks that may
prevent us from achieving our business objectives or that may adversely affect
our business, financial condition and operating results. Risks relating to our
business and industry include, among others: our ability to attract new
customers; our ability to maintain our gross margin of petroleum products and
petroleum product purchases, and competition and competitive factors in the
markets in which we compete.  There are no material changes to the risk
factors previously disclosed in the Company's last annual report on Form
10-K.
Item
2.
Unregistered
Sales of Equity Securities and Use of Proceeds
None
Item
3.
Defaults
upon Senior Securities
None
Item
4.
Submission
of Matters to a Vote of Security Holders
None
Item
5.
Other
Information
None
- 32 -
Item
6.
Exhibits
The
following exhibits are filed herewith:
3(i)
Articles
of Incorporation (incorporated by reference from Registration Statement on Form
3(i) Articles of Incorporation (incorporated by reference from Registration
Statement on Form 10-SB filed with the Securities and Exchange Commission on
October 11, 2000).
3(ii)
Bylaws
(incorporated by reference from Registration Statement on Form 10-SB filed with
the Securities and Exchange Commission on October 11, 2000).
31.1
Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of
1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2
Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of
1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
32.1
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
- 33 -
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be singed on its behalf by the undersigned thereunto
duly authorized.
LONGWEI
PETROLEUM INVESTMENT HOLDING LIMITED
By:
/s/ Cai Yongjun, Chief Executive Officer (duly authorized officer)
Date:
 May 14, 2009
By:
/s/ Wang Junping, Chief Financial Officer (principal accounting and financial
officer)
Date:
 May 14, 2009
- 34 -