Longwei Petroleum Announces Revised Fiscal 2010 and 2011 Guidance

TAIYUAN CITY, China, April 5 /PRNewswire-Asia-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH; "Longwei" or the "Company") a company that transports, markets and sells finished petroleum products in the People's Republic of China ("PRC") today announced its revised financial guidance for the fiscal years ending June 30, 2010 and June 30, 2011.

Key Assumptions

Management has made several significant assumptions and estimates with regard to its financial forecasts provided herein. Management wishes to explain certain assumptions made within these financial forecasts. These certain assumptions, such as predictions of future price quotations of Longwei's common stock and the timing and size of conversions of Longwei's preferred stock and stock warrants, are inherently difficult to predict. As a result, management has used its best efforts to provide what it believes are appropriate and conservative assumptions with regard to these certain assumptions. Management believes the following assumptions are important to note when reviewing the revised guidance:

1. Management has estimated conversions of its current outstanding preferred stock to common stock will result in an additional 3.5 million shares of common stock being issued between March 8, 2010 and June 30, 2010.
2. Management has estimated conversions of its current outstanding preferred stock to common stock will result in an additional 5.4 million shares of common stock being issued between July 1, 2010 and June 30, 2011.
3. Management has estimated exercises of its current outstanding stock warrants to common stock will result in an additional 1.3 million shares of common stock being issued between March 8, 2010 and June 30, 2010.
4. Management has estimated exercises of its current outstanding stock warrants to common stock will result in an additional 6.7 million shares of common stock being issued between July 1, 2010 and June 30, 2011.
5. Management has made the assumption that other than those stock issuances identified herein, no other significant issuances of its common stock will occur between March 8, 2010 and June 30, 2011.
6. Management has made the assumption that Longwei's stock price as quoted on a U.S. Stock Exchange on June 30, 2010, will be $3.25 per share of common stock.
7. Management has made the assumption that Longwei's stock price as quoted on a U.S. Stock Exchange on June 30, 2011, will be $4.25 per share of common stock.
8. All other assumptions made by management during the preparation of its revised financial forecast were made utilizing current financial data, knowledge of pending customer orders, without applying discounts to assumptions regarding fair market valuations where discounts might be appropriate but Longwei chose to use a conservative approach and did not utilize discounts, with an understanding of historical trends with regard to Longwei's business, with a basic understanding of the current currency exchange rate policies of China, and a basic understanding of the likelihood that current government and independent estimates of continued economic growth within China and specifically within Shanxi Province, China, will be reasonably correct in the years ending June 30, 2010 and June 30, 2011, respectively.

About Longwei Petroleum Investment Holding Limited

Longwei Petroleum Investment Holding, Limited (the "Company") is an energy company that, through its subsidiaries, engages in oil and gas operations in the People's Republic of China ("PRC"). Oil and gas operations consist of transporting, marketing and selling finished petroleum products. The Company's headquarters and primary facilities are located in Taiyuan City, Shanxi Province ("Shanxi"). The Company's second facility is located in Gujiao, Shanxi. The Company purchases diesel, gasoline, fuel oil and kerosene (the "Products") from various petroleum refineries in the PRC. The Company is 1 of 3 licensed intermediaries in Taiyuan City and the sole licensed intermediary in Gujiao that operates its own large scale storage tanks. The Company has the necessary licenses to operate and sell Products not only in Shanxi but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi. The Company seeks to earn profits by selling its Products at competitive prices to large-scale gas stations, coal plants, other power-supply customers and small, independent gas stations. The Company also earns revenue by acting as a purchasing agent for other intermediaries in Shanxi and through the sale of diesel and gasoline at gas stations located at each of the Company's facilities. The sales price and the cost basis of the Company's products are 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 the Company's control. For further information on Longwei Petroleum Investment Holding Limited, please visit http://www.longweipetroleum.com. You may register to receive Longwei Petroleum Investment Holding Limited's future press releases or request to be added to the Company's distribution list by contacting Dave Gentry at [email protected] or 1-800-733-2447, Ext. 104.

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures for the accounting for the change in the fair value of the Company's warrants under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") Topic 815-40 and the accounting for a deemed dividend associated with the October 29, 2009 financing under ASC Topic 470, subtopic 20-30-6. The Company believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that our management excludes when evaluating the Company's business and makes operating decisions, prepares and revises financial forecasts, measures business performance, and because providing these Non-GAAP financial measures allows for comparison to historical periods. Accordingly, management excludes the change in the fair value of the Company's warrants under ASC 815-40 and the deemed dividend under ASC Topic 470, subtopic 20-30-6, when making operational decisions. The Company believes its investors can utilize these non-GAAP measures for a number of reasons. These non-GAAP measures provide a consistent basis for investors to understand the Company's financial performance in comparison to historical periods. In addition, it allows investors to potentially understand and evaluate the Company's performance using the same methodology and information our management utilizes. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses or adjustments included under GAAP and because they involve the exercise of judgment of which expenses or adjustments are excluded from the non- GAAP financial measures we make available to investors. However, we believe we are compensating for these limitations by providing the relevant disclosure of the items excluded.

The following tables provide certain non-GAAP financial measures and the related GAAP measures. We also provide reconciliations of these non-GAAP measures to the equivalent GAAP measures.

Forward-Looking Statements

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, 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. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.

SOURCE Longwei Petroleum Investment Holding Ltd.

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