UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  Form 10-QSB   X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended December 31, 2007  _ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to _____   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED (Name of small business issuer in its charter)  Colorado0-3175184-1536518(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  Check whether the issuer (1) 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 ____  Applicable only to issuers involved in bankruptcy proceedings during the past five years:  Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes _ No  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes X   No  Applicable only to corporate issuers:  State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 75,000,000 as of January 16, 2008.  Transitional Small Business Disclosure Format (Check one): Yes __ No X              - 1 -    PART 1 - FINANCIAL INFORMATION    ITEM 1. FINANCIAL STATEMENTS  (a) The unaudited financial statements of registrant for six months ended December 31, 2007, 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.              - 2 -     INDEX   PART 1 - FINANCIAL INFORMATION 2 ITEM 1. FINANCIAL STATEMENTS 2 BALANCE SHEETS AS OF DECEMBER 31, 2007 AND JUNE 30, 2007 4 STATEMENTS OF INCOME AND COMPREHENSIVE INCOME 5 STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 6 STATEMENTS OF CASH FLOWS 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8 ITEM  2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 19 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 26 CORPORATE STRUCTURE 27 ITEM 3. CONTROLS AND PROCEDURES 28 PART II.  OTHER INFORMATION 29 SIGNATURES 30           - 3 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED  BALANCE SHEETS AS OF DECEMBER 31, 2007 AND JUNE 30, 2007   December 31, 2007June 30, 2007ASSETSCurrent assets:Cash and cash equivalents$8,836,396$6,060,428Accounts receivable12,918,0934,908,673Inventories22,676,28517,920,559Advance to suppliers34,814,73927,684,387Prepaid taxes-1,475,158Total current assets79,245,51358,049,205Property, plant and equipment, net2,529,0292,693,006Total assets$81,774,542$60,742,211LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable$6,555$460Notes payable2,102,762-Advance from customers1,360,1021,739,159Taxes payable4,284,4571,111,332Other current liabilities424,835147,455Total current liabilities8,178,7112,998,406Total liabilities8,178,7112,998,406STOCKHOLDERS EQUITYCommon Stock; no par value, 100,000,000 shares authorized, 75,000,000 and 69,000,000 shares issued and outstanding as of 12/31/07 and 06/30/07, respectively6,151,2946,053,269Additional paid-in capital127,348-Retained earnings61,111,64648,138,759Accumulated other comprehensive income6,205,5433,551,777Total stockholders equity73,595,83157,743,805Total liabilities and stockholders equity$81,774,542$60,742,211   See accompanying notes to the financial statements    - 4 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THREE MONTHS AND SIX MONTHSENDED DECEMBER 31, 2007 AND 2006   Three months ended December 31,Six months ended December 31,2007200620072006Net revenues:Product sales$36,257,575$28,951,729$68,368,276$51,783,503Agency service3,472,2192,226,8317,850,1904,427,49439,729,79431,178,56076,218,46656,210,997Cost of revenuesProduct sales28,302,89122,711,47153,737,38441,883,339Agency service536,719279,239796,116780,28328,839,61022,990,71054,533,50042,663,622Gross profit10,890,1848,187,85021,684,96613,547,375Operating ExpensesSalaries73,65323,210109,66248,390Other selling, general and administrative expenses1,529,150400,2291,850,575552,4151,602,803423,4391,960,237600,805Operating profit9,287,3817,764,41119,724,72912,946,570Other income and (expenses)Interest income3,85478,99022,85478,990Interest expense(2,762)-(2,762)-Financial cost(300,000)---Other income/(expense)(298,908)78,99020,09278,990Income before income taxes8,988,4737,843,40119,744,82113,025,560Income taxes(3,237,624)(2,588,322)(6,675,202)(4,276,192)Net income5,750,8495,255,07913,069,6198,749,368Other comprehensive incomeForeign currency translation adjustment1,871,808647,2322,653,7661,082,242Comprehensive income$7,622,657$5,902,311$15,723,385$9,831,610Basic net income per share$0.08$0.08$0.18$0.13Weighted average number of shares outstanding73,956,52269,000,00071,478,26169,000,000Diluted net income per share$0.08$0.08$0.18$0.13Diluted weighted average number of shares outstanding74,592,39169,000,00071,796,19669,000,000  See accompanying notes to the financial statements.    - 5 -       LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED DECEMBER 31, 2007   Common stock
sharesCommon stock amountAdditional paid-in capitalRetained earningsAccumulated other
comprehensive incomeTotal stockholders equityBalance at June 30, 200769,000,000$6,053,269$-$48,138,759$3,551,777$57,743,805Recapitalization6,000,00098,025-(96,732)-1,293Warrants issued with convertible debt--127,348--127,348Net income for the period---13,069,619-13,069,619Foreign currency translation adjustment----2,653,7662,653,766Balance at December 31, 200775,000,000$6,151,294$127,348$61,111,646$6,205,543$73,595,831               See accompanying notes to the financial statements.   - 6 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 2007 AND 2006    Six months ended December 31,20072006Operating activitiesNet income$13,069,619$8,749,368Adjustments to reconcile net income from operations to net cash used in operating activities:--Depreciation179,599169,790Warrant expense127,348-Accrued interest2,762-Accounts receivable(8,009,420)2,559,568Inventory(4,755,726)4,489,033Advance to suppliers(7,130,352)(9,275,408)Prepaid taxes1,475,158161,696Other current assets--Accounts payable240,234(2,685,013)Advance from customers(379,057)(3,754,693)Taxes payable3,173,1251,255,642Other current liabilities43,24040,129Net cash provided by (used in) operating activities(1,963,470)1,710,112Investing activitiesPurchase of equipment(15,621)-Net cash used in investing activities(15,621)-Financing activitiesProceeds from the issuance of the convertible notes2,100,000-Payment for share issuance cost--Net cash used in financing  activities2,100,000-Effect of exchange rate changes in cash2,655,0591,082,242Net increase (decrease) in cash and cash equivalents2,775,9682,792,354Cash and cash equivalents, beginning of the period6,060,42823,543,747Cash and cash equivalents, end of the period$8,836,396$26,336,101Supplemental disclosure of cash flow informationCash paid during the period:Income taxes paid$2,919,949$4,871,510         See accompanying notes to the financial statements.     - 7 -      LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2007 AND 2006 (UNAUDITED)   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. These financial statements should be read in conjunction with the audited financial statements at June 30, 2007 as filed in the Company Form S-1 filed with the Commission on December 22, 2007.  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 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.   - 8 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   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. 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 then 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.    2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (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.   - 9 -     LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  (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:  Buildings20 yearsHeavy machinery and production equipment8- 20 yearsRailway20 yearsMotor vehicles5 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.   - 10 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   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 December 31, 2007.  (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 three months ended December 31, 2007.  (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. Management estimates that the carrying amounts of the non related party financial instruments approximate their fair values due to their short-term nature.  - 11 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)  2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  (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 collectibility 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:  2007Period end RMB exchange rate7.30Average period RMB exchange rate7.41  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.    - 12 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   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 December 30, 2007, since nearly all differences in tax bases and financial statement carrying values are permanent differences.  (o)    Recent Accounting Pronouncements  In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and will become effective for the Company beginning with the first quarter of 2008. The Company has not yet determined the impact of the adoption of SFAS No. 159 on its financial statements and footnote disclosures.  In February 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments." SFAS No. 155 amends SFAS No. 133 and 140. The statement applies to certain hybrid financial instruments, which are instruments that contain embedded derivatives. The new standard establishes a requirement to evaluate beneficial interests in securitized financial assets to determine if the interests represent freestanding derivatives or are hybrid financial instruments containing embedded derivatives requiring bifurcation. This new standard also permits an election for fair value re-measurement of any hybrid financial instrument containing an embedded derivative that otherwise would require bifurcation under SFAS No. 133. The fair value election can be applied on an instrument-by-instrument basis to existing instruments at the date of adoption and can be applied to new instruments on a prospective basis. SFAS No. 155 shall be effective for all financial instruments acquired, issued, or subject to a remeasurement (new basis) event occurring after the beginning of first fiscal year that begins after September 15, 2006. It is not expected that SFAS No. 155 will have a material effect on the Company's financial position or results of operations.    - 13 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   In June 2006, the Financial Accounting Standards Board (FASB) issued interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes.  FIN 48 prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes.  Tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of FIN 48 and in subsequent periods.  FIN 48 will be effective for fiscal years beginning after December 15, 2006 and the provisions of FIN 48 will be applied to all tax positions under Statement No. 109 upon initial adoption.  The cumulative effect of applying the provisions of this interpretation will be reported as an adjustment to the opening balance of retained earnings for that fiscal year.  The Company will adopt FIN 48 effective from July 1, 2007  In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of SFAS No. 157 relate to the definition of fair value, the methods used to measure fair value and the expanded disclosures about fair value measurement. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company does not believe that the adoption of the provisions of SFAS No. 157 will materially impact its financial position or results of operations  3.    ACCOUNTS RECEIVABLE  The receivables and allowance balances at December 31 and June 30, 2007are as follows:  December 31, 2007June 30,  2007Accounts receivable$12,918,093$4,908,673Less: allowance for doubtful accounts-Accounts receivable, net$12,918,093$4,908,673   4.    INVENTORIES  Inventories are the unsold petroleum products purchased from various suppliers, and consist of the following as of December 31 and June 30, 2007:  December 31,June 30,20072007Diesel Oil$9,121,427$10,982,628Gasoline11,848,3083,998,679Fuel Oil817,8992,516,115White Spirit888,651423,137Less: allowances for slowing moving items--Total$22,676,285$17,920,559   - 14 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   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 $ 34,814,739 as of December 31, 2007  6.    PREPPAID TAXES  Prepaid taxes consist of the following:  December 31,June 30,20072007Value added tax$-$1,346,883Other tax refundable-128,275Total$-$1,475,158   7.    PROPERTY, PLANT AND EQUIPMENT  At December 31 and June 30, 2007, property, plant and equipment, at cost, consist of  December 31, 2007June 30, 2007Land and buildings$1,850,284$1,850,284Machinery and production equipment2,520,0622,518,800Railway1,312,6521,298,292Motor vehicles170,828170,828Total property, plant and equipment5,853,8265,838,204Less: accumulated depreciation(3,324,797)(3,145,198)Property, plant and equipment, net$2,529,029$2,693,006  Depreciation expense for the three months ended December 31, 2007 was $179,599.   8.  TAXES PAYABLE  Taxes payable consist of the following:  December 31,June 30,20072007Income tax payable$3,375,722$987,666Business taxes payable and others908,735123,666Total$4,284,457$1,111,332    - 15 -     LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   9.  OTHER CURRENT LIABILITIES  Other current liabilities consist of the following:  December 31,June 30,20072007Accrued salaries$174,465$18,187Accrued staff welfare250,368129,268Total$424,833$147,455   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% and the local tax rate is 3%.  The provision for income taxes for each of the three months ended December 31, 2007 is summarized as follows:  2007Current$6,675,202Deferred-$6,675,202  (b)     Value Added Tax (VAT)  In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 5% to 17%, which is levied on the invoiced value of sales and is payable by the purchaser. The Company is required to remit the VAT it collects to the tax authority.  The value added tax refundable presents the VAT that the Company paid for the purchasing products and can be used to deduct the VAT related to the sale of products.   - 16 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   11.    SEGMENT INFORMATION  For the three months ended December 31, 2007AgencyProduct salesServiceTotalRevenues$   36,257,577$    3,472,219$     39,729,796Cost of revenues28,302,891536,71928,839,610Gross profit$     7,954,686$    2,935,500$     10,890,186Income from operations$     7,451,631$     2,935,500$     10,387,131Total assets$   82,354,542$                   -$     82,354,542Depreciation$          89,964$                   -$            89,964For the three months ended December 31, 2006AgencyProduct salesServiceTotalRevenues$     28,951,729$      2,226,831$      31,178,560Cost of revenues22,711,471279,23922,990,710Gross profit$       6,240,258$      1,947,592$        8,187,850Income from operations$       5,816,819$      1,947,592$        7,764,411Total assets$     58,015,639$                    -$      58,015,639Depreciation$            84,895$                    -$             84,895  For the six months ended December 31, 2007AgencyProduct salesServiceTotalRevenues$       68,368,276$     7,850,190$     76,218,466Cost of revenues53,737,850796,11654,533,966Gross profit$       14,630,892$      7,054,074$     21,684,966Income from operations$       13,190,644$      7,054,074$     20,244,718Total assets$       79,974,542$                    -$     79,974,542Depreciation$           179,599$                    -$          179,599For the three months ended December 31, 2006AgencyProduct salesServiceTotalRevenues$     52,284,547$  3,926,450$      56,210,997Cost of revenues41,883,339780,28342,663,622Gross profit$     10,401,208$  3,146,167$      13,547,375Income from operations$        9,304,369$   3,642,201$      12,946,570Total assets$      58,015,639$                -$      58,015,639Depreciation$           306,654$                -$           306,654   - 17 -    LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)   12.    GEOGRAPHICAL INFORMATION  The Company's revenues by geographic destination are analyzed as follows:  For the Three Months Ended December 31,20072006PRC$39,729,796$31,178,560Outside PRC--Total net revenues$39,729,796$31,178,560  For the six Months Ended December 31,20072006PRC$76,218,466$56,210,997Outside PRC--Total net revenues$76,218,466$56,210,997  13.    WARRANTS  We completed a convertible note on December 18, 2007, in the amount of $2,100,000 at an interest rate of 4% per annum, with a conversion feature of $0.70 per share (the conversion price) at the option of the investor.  Additionally, warrants were granted at an exercise price of $0.80.  The period for the conversion of the warrants is three years from the date of effectiveness of this registration statement. The convertible note will give the Company $2,100,000. After disbursement of fees and expenses, the Company netted $1,800,000.  Additionally, if all of the warrants are exercised, the Company will receive $1,200,000.  In using the Black- Scholes Calculation the company will have a total expense of $1,528,180 for the life of the warrants. Each month expense would be $127,378.    - 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-QSB, 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  - 19 -    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 then 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.  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  Revenue for the quarter ending December 31, 2007 was $39,729,794, an increase of $8,551,234 or approximately 27.4% as compared to $31,178,560 million for the quarter ending December 31, 2006. This increase was due to the addition of several new gas station accounts along with an increase of agency fees of $1,245,388 or an increase of 55.9%. Agency fees for the quarter ending December 31, 2007 were $3,472,219  as compared to agency fees of $2,226,831 in the quarter of 2006. For six months ending December 31, 2007  revenues were $76,218,466 an increase of  $20,007,469 or approximately 35.6% as compared to $56,210,997 for the same period in December 31, 2006. This increase was the result of agency fees increase of $3,422,696 or an increase of  approximately 77.3% or $7,850,190  in  December, 2007 compared to agency revenues of $4,427,494 for the six month period in December of 2006. Agency fees increased due to the addition of several new gas companies not possessing the required license to buy direct from refineries.   We purchase petroleum on their behalf and arranged 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 in the future unless we are able to obtain new customers that want to go direct but do not have the required license .The increase of petroleum products for the six month period 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 in 2008 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.  Cost of Goods Sold  Cost of goods sold for the quarter ending December 31, 2007 increased by $5,848,900 or 25.4 % to $28,839,610 as compared to $22,990,710 million for the three month period in December of 2006. This increase was the result of greater sales. For the six month period ending December 31, 2007 costs of goods sold was $54,533,500 or an increase of approximately $11,869,878 or  approximately 27.8% as compared  - 20 -    to costs of goods for December 31, 2006 of $42,663,622. This increase was mainly attributable to the increase of sales revenue.  Gross Profit Margin  Our gross profit margin was 27.4% compared to 26.2% for the three months ending December 31, 2007. The increase of profit margin of 1.2% was the result of an increase in agency fees in the quarter. Agency fees  are commission for providing a service and offer the greatest profit margins to the company. Our gross profit margin for the six month period was 28.4% compared to approximately 24.1% due to the increase in agency fees profits of $7,054,074 for the six months ending December 31, 2007, compared to gross profit on agency fees of $3,647,211 for six months ending December 31, 2006.   Selling General and Administrative Expenses  Selling and marketing expenses were $1,602,803 for the quarter ending December 31, 2007, an $1,179,364 increase, or approximately 278.5%, compared to $423,439 for the same period in 2006.  For the six month period ending December 31, 2007 selling and marketing expenses were $1,960,237 or an increase of $1,359,432 or approximately 226.3%, compared to $600,805 for the same period in 2006.  The increases for both the three month and six month period was due to the increased public costs associated with the recapitalization of the company between Longwei Petroleum Investment Holding and Tabatha II, the expense associated with the convertible note on December 18, 2007 and the addition of 15 new sales personnel.  .  Depreciation and Amortization  Depreciation and amortization expenses were $89,634 for the quarter ending December 31, 2007, an increase of $4,739 over the depreciation expense of $84,895 in December 31, 2006. For the six month period ending December 31, 2007 depreciation was $179,599 compared to $169,790 in December 31, 2006. This is an increase of $9,809 or approximately 5.8% for the six month period.  Income Tax Expenses  We incurred income tax expenses of $3,237,624 for the quarter ending December 31, 2007, an increase of $649,302 or approximately 25.1%, versus $2,588,322 for the quarter ending December 31, 2006. For the six month period income taxes were $6,675,202 or an increase of $2,399,010 or approximately 56.1% compared to $4,276,192 in the same period of 2006. 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%.  The increase  of taxes in both the three and six month period was attributable to the increase in profit of the company.  On March 16, 2007, in its fifth plenary session, the National Peoples Congress of the PRC determined to adopt a new corporate income tax law. The new corporate income tax law unifies the application scope, tax rate, tax deduction and preferential policy for both domestic and foreign-invested enterprises.  The new corporate income tax law will be effective on January 1, 2008.   As the implementation detail has not yet been announced, we cannot be sure of the potential impact of such new corporate income tax law on our financial position and operating results.  Net Income  We earned a net income of $5,750,890 million for the quarter ended December 31, 2007, an increase of $495,770 or approximately 9.4% as compared to $5,255,079 for the quarter ending December 31, 2006. This increase was due to the greater profitability of agency fees which increased $1,245,388 or an increase of 55.9% as compared to agency fees of $2,226,831 in the quarter of 2006. This profit on agency fees was partially offset by the increase in selling and administrative expenses discussed above. For the six month period We earned a net income of $13,069,619 million, an increase of $4,320,251 or approximately  - 21 -    49.4% as compared to $8,749,368  This increase was the result of agency fees increase of $3,422,696 or an increase of  approximately 77.3% or $7,850,190  in  December, 2007 compared to agency revenues of $4,427,494 for the six month period in December of 2006 along with increase in prices of petroleum products and the profit that was realized by purchasing some of our inventory 30 to 60 days in advance of petroleum price increases. The price increase was passed to our customers as the result of greater demand.  Net Income Margin  Net income margin for the quarter ending December 31, 2007 was approximately 14.5% compared to approximately 16.8% for the quarter ending December 31, 2006. The decline was the result of an increase in selling general and administrative expenses mainly due to the increase in being a public.  For the six month period net income margin was 17.1% compared to approximately 15.6%, an increase of 1.5%. The main reason for the increase was due to the increase in agency fees described above. Management believes that our future net income margin may decrease between 2 to 3 percent due to the increase of costs associated with being a public company and a possible decline 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 of $1,871,808 million for the quarter ending December 31, 2007 as compared with the foreign currency translation adjustment of $647,232 for the quarter ending December 31, 2006. For the six month period ending December 31, 2007 we incurred a foreign currency translation adjustment of $2,653,766 compared with the foreign currency translation adjustment of $1,082,242 for the same period in December of 2006.  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. As a result, we implemented different exchange rates in translating RMB into U.S. dollars in our financial statements for quarter ending 2007 using an average exchange rates of 7.41 compared to an exchange rate of 8.07 in 2006 were used in calculating the assets and liabilities, revenue and expenses, and shareholders equity.  Liquidity and Capital Resources  As of December 31, 2007, we had cash and cash equivalents of $8,836,396. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report.   - 22 -    Cash Flow   For the six months Ending December 31,20072006Net cash provided (Used in) by operating activities$(1,963,470)$   1,710,112Net cash (used in) investing activities$-Net cash provided by (used in) financing activities2,100,000-Effect of exchange rate, changes in cash$2,655,0591,082,242Net increase (decrease) in cash and equivalents$2,775,968$   2,792,354  Operating Activities:  Net cash used in operating activities was $1,963,470for the six month period ending December 31, 2007, compared in the net cash provided of $1,710,112 for the six month period ending December 31, 2006. This was largely the result of increases in accounts receivables as we provided better terms in appreciation to our long term customers.  Investing Activities:  Net cash used in investing activities was $15,621 compared to zero for the six month period ending December 31, 2007. This was the result of the purchase of equipment in the period.  Financing Activities:  Net cash used in investing activities was $2,100,000 for the six month period ending December 31, 2007. There was no cash used for investing activities for the period ending December 31, 2006. This was the result of a fixed convertible note. We completed a convertible note on December 18, 2007, in the amount of $2,100,000 at an interest rate of 4% per annum, with a conversion feature of $0.70 per share (the conversion price) at the option of the investor.  Additionally, warrants were granted at an exercise price of $0.80.  The period for the conversion of the warrants is three years from the date of effectiveness of this registration statement. The convertible note will give the Company $2,100,000. After disbursement of fees and expenses, the Company netted $1,800,000.  Additionally, if all of the warrants are exercised, the Company will receive $1,200,000.    We have no material commitments for capital expenditures as of December 31, 2007.  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.   - 23 -    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 quarter ending September 30, 2007.  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 September 2006, the FASB issued SFAS No. 157 Fair Value Measurements which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset. The provisions are effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of the statement.  In February 2007, the FASB issued Statement No. 159, TheFair Value Option for Financial Assets and Financial Liabilities - Including an amendment to FASB Statement No. 115. This statement permits companies to choose to measure many financial instruments and other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement of accounting for financial instruments. This statement applies to all entities, including not for profit.   - 24 -    The fair value option established by this statement permits all entities to measure eligible items at fair value at specified election dates. This statement is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007.  The Company is currently assessing the impact adoption of SFAS No. 159 will have on its consolidated financial statements.  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.   Subsequent Events  We completed a convertible note on December 18, 2007, in the amount of $2,100,000 at an interest rate of 4% per annum, with a conversion feature of $0.70 per share (the conversion price) at the option of the investor.  Additionally, warrants were granted at an exercise price of $0.80.  The period for the conversion of the warrants is three years from the date of effectiveness of this registration statement. The convertible note will give the Company $2,100,000. After disbursement of fees and expenses, the Company netted $1,800,000.  Additionally, if all of the warrants are exercised, the Company will receive $1,200,000.  Off-Balance Sheet Arrangements  We do not have any off-balance sheet arrangements.     - 25 -   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.      - 26 -   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.  [corpstructures1.gif]  - 27 -    ITEM 3. 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 September 30, 2007 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 quarter ended December 31, 2007, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.     - 28 -    PART II.  OTHER INFORMATION  Item 1. Legal Proceedings None  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  Item 6. Exhibits  The following exhibits are filed herewith:  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.    - 29 -    SIGNATURES  In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   LONGWEI PETROLEUM INVESTMENT HOLDING LIMITED    By: /s/ Cai Yongjun, Chief Executive Officer   By: /s/ Wang Junping, Chief Financial Officer    Date:  February 14, 2008       - 30 -