China Shandong (PINK:CSNH)

We are offering shares of our common stock.  We intend to apply for listing of our common stock on the NASDAQ Capital Market. If the application is not approved, we will not complete this offering

We intend to use the net proceeds from this offering to construct a new production facility. This production facility will include modern equipment and components that we believe will allow us to produce our products more quickly and in greater quantity, without sacrificing quality, which we believe will enable us to satisfy a greater percentage of oversea requests for our products received by us that we are currently unable to fulfill. The total cost of such production facility we believe is approximately $20 million, including but not limited to (i) $5.3 million to build a 40,000 square meter work shop, (ii) $6.7 million to purchase the necessary equipment for the production line, and (iii) $8.0 million to purchase raw materials and other materials used in the manufacturing of products the new production line will produce. We intend to obtain the balance of such funds from our working capital, and/or retained earnings.