New Penny Order - N.P.O.

[Zardiw]

LGHS: 60% Production Increase. Complete DD:



Home Page http://www.longhaisteelinc.com/

Business: Longhai Steel Inc., is a leading producer of high-quality steel wire in diameters from 6.5 to 10.0 millimeters. Downstream manufacturers process Longhai Steel's wire into screws, nails, and wire mesh used to reinforce concrete and for fencing.Longhai Steel competes using advanced production equipment and process technology, high product quality, fast order fill, and competitive prices. Its rolling and drawing facilities are among the most advanced in the world.

They are a part of Hebei Iron & Steel, the 2nd largest steel producer in the World:

http://www.xtlh.com/main.htm
http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=47771211
http://en.wikipedia.org/wiki/List_of_steel_producers

Compay is Fully Filing: OTCQB on OTCMarkets.

Company Information: Investor Presentation Package 2011:
http://a.eqcdn.com/longhaisteel/media/54c5da0a2b252796d734a1b13e77c744.pdf

Share Structure: (Verified with Transfer Agent on Nov 4, 2011).:

Authorized: 100M
Outstanding: 10,000,418
Float: 750,993. Per the TA/Company.

Ownership: CEO owns 80% of outstanding.

Transfer Agent:
Interwest Transfer Company, Inc.
1981 Murray Holladay Road, Suite 100
Salt Lake City, UT 84117

Phone: [phone]
Fax: [phone]

Financials (From Current 10Q):

Assets: $95M
Liabilitiess: $44M
Net Worth: $51M

Shareholders Equity: $51M = $5.07/share

Q3 Revenues: $119M
Q3 Net Income: $.98M = .098/share

Recent Events:

On August 1, 2011, Longhai entered into a lease agreement with Xingtai Longhai Steel Group Co. Ltd. (the “Landlord”), a related party, pursuant to which Longhai leased approximately 90,500 square meters of manufacturing space and all wire making equipment contained in the space (the “Lease”). Longhai commenced the Lease on August 1, 2011 and started operating the new production line (the “New Line”) on August 22, 2011. The New Line has the capacity to produce alloy steel, cold forging steel and welding rod. It is expected to increase Xingtai Longhai’s annual capacity and profit by approximately 60%.[/g]

NASDAQ Uplisting. The Story:

Longhai went public in 2010. Their immediate aim was to uplist to NASDAQ and have a public offering of stock.

They met all of the requirements, and their application was approved by NASDAQ.



In Feb 2011, for some reason, they decided not to proceed 'at this time'.

A month and a half later, they hired a new director (Joel D. Mayersohn) to facilitate NASDAQ uplisting

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68801529
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7798286

In July 2011 they dismissed their CFO/Director and hired a new one. Their new one has very impressive creds.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8051474

In August 2011, they also fired 2 directors

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8114243

Reading between the lines

We believe the NASDAQ uplisting is currently still in process. They've hired someone whose pay is dependent upon the uplisting. The date of their shareholder's info package is in April...2 months after their decision to delay uplisting.

The new CFO and the change in directors are assumed to have happened to satisfy NASDAQ requirements.

When the new directors are hired, they can file their annual list at NV SOS. (Currently past due).

The speculation on the unjustified decline in share price is that nobody was paying attention or knew about the company. The fired directors could also have dumped shares, and without much awareness and bid support, the price dropped on miniscule volume.

The recent increase in production of 60% should be reflected in Q4's filing

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