UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-Q/A

Amendment No.1



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended
March 31, 2011



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the transition period from
__________ to __________



Commission File Number 001-33717



General Steel Holdings, Inc.

(Exact name of registrant as specified in
its charter)



|Nevada                          |  | 41-2079252                          
|------------------------------- |  | ------------------------------------
|(State or other Jurisdiction of |  | (I.R.S. Employer Identification No.)
|Incorporation or Organization)  |  |                                     



Level 21, Tower B, Jia Ming Center

No. 27 Dong San Huan North Road

Chaoyang District, Beijing 100020

(Address of Principal Executive Office,
Including Zip Code)



+86(10)57757691

(Registrant's Telephone Number, Including
Area Code)



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 of 1934 during the preceding
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  ̈ No x



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter
period that the registrant was required to submit and post such files). Yes  ̈ No
x



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 definition 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
|------------------------- |  | ------------------- |  | ----------------------------------------------------------------------------- |  | ---------------------------



*Please note that while
the registrant qualified as an accelerated filer at the time of filing its Annual Report on Form 10-Q as filed with the Securities
and Exchange Commission on May 10, 2011, as of the date of filing this Amendment No. 1 to Annual Report on Form 10-Q, the registrant
has exited the accelerated filer status at the end of the fiscal year ended December 31, 2011 and now holds the status as a smaller
reporting company.



Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ̈ No x



As of August 28, 2012, 56,932,788 shares
of common stock, par value $0.001 per share, were issued and outstanding.













EXPLANATORY NOTE



This Quarterly
Report on Form 10-Q/A is being filed as Amendment No. 1 to our Quarterly Report on Form 10-Q (“Amendment No.1”),
which amends and restates our Quarterly Report for the quarter ended March 31, 2011 (the “Original 10-Q”),
originally filed on May 10, 2011 with the Securities and Exchange Commission (the “SEC”). This Amendment No. 1
restates the following items:



- Part I, Item 1- Financial Statements;



- Part I, Item 2- Management’s Discussion
and Analysis of Financial Condition and Results of Operations;



- Part I, Item 4- Controls and Procedures;



- Part II, Item IA – Risk
Factors; and



- Part II, Item 6- Exhibits.



While the Original 10-Q is being amended
and restated as a whole, except for the Items noted above, no other information included in the Original 10-Q is being amended
or updated by this Amendment No. 1. This Amendment No. 1 continues to describe the conditions as of the date of the Original 10-Q,
and except as contained therein, we have not updated or modified the disclosures contained in the Original 10-Q. Accordingly, this
Amendment No. 1 should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original 10-Q,
including any amendment to those filings.



This Amendment No. 1 is being filed in order
to restate:



• Our consolidated
balance sheets as of March 31, 2011 and December 31, 2010. As a result, our consolidated total assets decreased by $36.1 million
and $15.3 million at March 31, 2011 and December 31, 2010, respectively;



• Our consolidated
statements of operation and other comprehensive income (loss) for the three months ended March 31, 2011 and March 30, 2010. As
a result, our consolidated net loss attributable to controlling interest for the three months ended March 31, 2011 and March 31,
2010 decreased by $11.5 million and $0.1 million, respectively; and



• Our consolidated
statements of changes in equity for March 31, 2011 and December 31, 2010. As a result, our consolidated total shareholder’s
equity decreased by $41.1 million and $29.4 million at March 31, 2011 and December 31, 2010, respectively.



The restatement relates
to our accounting treatment for certain reimbursements received in relation to the collaboration with Shaanxi Iron and Steel Group,
Co. Ltd. ("Shaanxi Steel") on the construction of equipment by Shaanxi Steel during the period from June 2009 to March
2011. The Company believed that the original accounting treatment for the reimbursement was in accordance with U.S. GAAP, based
upon its understanding of the economic substance and the nature of reimbursement and its interpretation of U.S. GAAP.



However, in connection
with the preparation of its Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, the Company revisited the appropriate
treatment for these items. Given the complexity, and the unique structure of the transaction and the challenge with respect to
finding the appropriate accounting guidance, either by direct application or analogy in relation to various aspects of the transaction,
both the Company's current and former auditors agreed that a review by the Office of the Chief Accountant ("OCA") of
the SEC with respect to the appropriate accounting treatment for the compensation would be helpful. On April 20, 2012, after several
rounds of written and oral communications, the OCA provided the Company with its guidance with respect to the accounting treatment.
Upon receipt of the guidance from the OCA, the Company concluded amendment to the Original 10-Q was
necessary.



A summary of the effects
of this restatement to our financial statements included within this Amendment No. 1 is presented under Item 1. Financial Statements,
at Note 2, “Restatement”.



2







Table of Contents



|                                 |                                                                                                                                            | Page
|-------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ----
|Part I. FINANCIAL INFORMATION    |                                                                                                                                           
|                                 |                                                                                                                                            |     
|Item 1.                          | Financial Statements.                                                                                                                      | 4   
|                                 |                                                                                                                                            |     
|                                 | Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010.                                                        | 4   
|                                 |                                                                                                                                            |     
|                                 | Consolidated Statements of Operation and Other Comprehensive Income (Loss) for the Three Months Ended March 31, 2011 and 2010 (Unaudited). | 5   
|                                 |                                                                                                                                            |     
|                                 | Consolidated Statements of Changes In Equity (Unaudited).                                                                                  | 6   
|                                 |                                                                                                                                            |     
|                                 | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010 (Unaudited).                                      | 7   
|                                 |                                                                                                                                            |     
|                                 | Notes to Consolidate Financial Statements (Unaudited).                                                                                     | 8   
|                                 |                                                                                                                                            |     
|Item 2.                          | Management’s Discussion and Analysis of Financial Condition and Results of Operations.                                                     | 33  
|                                 |                                                                                                                                            |     
|Item 3.                          | Quantitative and Qualitative Disclosures About Market Risk.                                                                                | 49  
|                                 |                                                                                                                                            |     
|Item 4.                          | Controls and Procedures.                                                                                                                   | 50  
|                                 |                                                                                                                                            |     
|Part II.       OTHER INFORMATION |                                                                                                                                           
|                                 |                                                                                                                                            |     
|Item 1.                          | Legal Proceedings.                                                                                                                         | 51  
|                                 |                                                                                                                                            |     
|Item 1A.                         | Risk Factors.                                                                                                                              | 51  
|                                 |                                                                                                                                            |     
|Item 2.                          | Unregistered Sales of Equity Securities and Use of Proceeds.                                                                               | 51  
|                                 |                                                                                                                                            |     
|Item 6.                          | Exhibits.                                                                                                                                  | 51  
|                                 |                                                                                                                                            |     
|Signatures                       | 52                                                                                                                                        



3







PART I – FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS.



GENERAL STEEL HOLDINGS INC. AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2011 AND DECEMBER 31, 2010

(In thousands, except per share data)

(As restated)



ASSETS



|                                                                                                                                                                                                     |  | March 31,   |           |   | December 31, |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | --------- | - | ------------ | -
|                                                                                                                                                                                                     |  | 2011        |           |   | 2010         |  
|                                                                                                                                                                                                     |  | (Unaudited) |           |   |              |  
|CURRENT ASSETS:                                                                                                                                                                                      |  |             |           |   |              |  
|Cash                                                                                                                                                                                                 |  | $           | 89,310    |   |              | $
|Restricted cash                                                                                                                                                                                      |  |             | 202,976   |   |              |  
|Notes receivable                                                                                                                                                                                     |  |             | 117,804   |   |              |  
|Restricted notes receivable                                                                                                                                                                          |  |             | 322,814   |   |              |  
|Accounts receivable, net                                                                                                                                                                             |  |             | 25,856    |   |              |  
|Accounts receivable - related parties                                                                                                                                                                |  |             | 569       |   |              |  
|Other receivables, net                                                                                                                                                                               |  |             | 8,853     |   |              |  
|Other receivables - related parties                                                                                                                                                                  |  |             | 8,146     |   |              |  
|Inventories                                                                                                                                                                                          |  |             | 498,823   |   |              |  
|Advances on inventory purchase                                                                                                                                                                       |  |             | 32,129    |   |              |  
|Advances on inventory purchase - related parties                                                                                                                                                     |  |             | 9,353     |   |              |  
|Prepaid expense                                                                                                                                                                                      |  |             | 3,237     |   |              |  
|Prepaid value added tax                                                                                                                                                                              |  |             | 21,214    |   |              |  
|Deferred tax assets                                                                                                                                                                                  |  |             | 18,103    |   |              |  
|TOTAL CURRENT ASSETS                                                                                                                                                                                 |  |             | 1,359,187 |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|PLANT AND EQUIPMENT, net                                                                                                                                                                             |  |             | 607,195   |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|OTHER ASSETS:                                                                                                                                                                                        |  |             |           |   |              |  
|Advances on equipment purchase                                                                                                                                                                       |  |             | 15,137    |   |              |  
|Investment in unconsolidated subsidiaries                                                                                                                                                            |  |             | 19,172    |   |              |  
|Long-term deferred expense                                                                                                                                                                           |  |             | 1,377     |   |              |  
|Intangible assets, net of accumulated amortization                                                                                                                                                   |  |             | 23,729    |   |              |  
|TOTAL OTHER ASSETS                                                                                                                                                                                   |  |             | 59,415    |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|TOTAL ASSETS                                                                                                                                                                                         |  | $           | 2,025,797 |   |              | $
|                                                                                                                                                                                                     |  |             |           |   |              |  
|LIABILITIES AND EQUITY                                                                                                                                                                               |  |             |           |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|CURRENT LIABILITIES:                                                                                                                                                                                 |  |             |           |   |              |  
|Short term notes payable                                                                                                                                                                             |  | $           | 556,812   |   |              | $
|Accounts payable                                                                                                                                                                                     |  |             | 269,719   |   |              |  
|Accounts payable - related parties                                                                                                                                                                   |  |             | 115,010   |   |              |  
|Short term loans - bank                                                                                                                                                                              |  |             | 311,020   |   |              |  
|Short term loans - others                                                                                                                                                                            |  |             | 140,581   |   |              |  
|Short term loans - related parties                                                                                                                                                                   |  |             | 13,385    |   |              |  
|Other payables and accrued liabilities                                                                                                                                                               |  |             | 38,451    |   |              |  
|Other payables - related parties                                                                                                                                                                     |  |             | 3,502     |   |              |  
|Customer deposits                                                                                                                                                                                    |  |             | 216,318   |   |              |  
|Customer deposits - related parties                                                                                                                                                                  |  |             | 43,580    |   |              |  
|Deposit due to sales representatives                                                                                                                                                                 |  |             | 28,416    |   |              |  
|Taxes payable                                                                                                                                                                                        |  |             | 8,854     |   |              |  
|Deferred lease income                                                                                                                                                                                |  |             | 77,604    |   |              |  
|TOTAL CURRENT LIABILITIES                                                                                                                                                                            |  |             | 1,823,252 |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|NONCURRENT LIABILITIES:                                                                                                                                                                              |  |             |           |   |              |  
|Long term loans - related parties                                                                                                                                                                    |  | $           | 91,320    |   |              | $
|TOTAL NONCURRENT LIABILITIES                                                                                                                                                                         |  |             | 91,320    |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|DERIVATIVE LIABILITIES                                                                                                                                                                               |  |             | 2,022     |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|TOTAL LIABILITIES                                                                                                                                                                                    |  |             | 1,916,594 |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|COMMITMENT AND CONTINGENCIES                                                                                                                                                                         |  |             |           |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|EQUITY:                                                                                                                                                                                              |  |             |           |   |              |  
|Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares  issued and outstanding as of March 31, 2011 and December 31, 2010                                                 |  |             | 3         |   |              |  
|Common Stock, $0.001 par value, 200,000,000 shares authorized, 55,080,467 and
    54,839,733 issued, 54,366,807 and  54,522,973 outstanding as of March 31, 2011 and December 31, 2010, respectively |  |             | 55        |   |              |  
|Treasury stock, $0.001 par value, 713,660 and 316,760 shares as of March 31, 2011
    and  December 31, 2010, respectively.                                                                          |  |             | (1,998    | ) |              |  
|Paid-in-capital                                                                                                                                                                                      |  |             | 105,618   |   |              |  
|Statutory reserves                                                                                                                                                                                   |  |             | 6,246     |   |              |  
|Accumulated deficits                                                                                                                                                                                 |  |             | (60,710   | ) |              |  
|Accumulated other comprehensive income                                                                                                                                                               |  |             | 12,432    |   |              |  
|TOTAL SHAREHOLDER'S EQUITY                                                                                                                                                                           |  |             | 61,646    |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|NONCONTROLLING INTERESTS                                                                                                                                                                             |  |             | 47,557    |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|TOTAL EQUITY                                                                                                                                                                                         |  |             | 109,203   |   |              |  
|                                                                                                                                                                                                     |  |             |           |   |              |  
|TOTAL LIABILITIES AND EQUITY                                                                                                                                                                         |  | $           | 2,025,797 |   |              | $





The accompanying notes are an integral part of these unaudited
consolidated financial statements.





4







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF OPERATION AND
OTHER COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 2011
AND 2010

(UNAUDITED)

(As restated)

(In thousands, except per share data)



|                                                                       |  | 2011 |            |   | 2010 |  
|---------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|SALES                                                                  |  | $    | 501,479    |   |      | $
|                                                                       |  |      |            |   |      |  
|SALES - RELATED PARTIES                                                |  |      | 208,985    |   |      |  
|TOTAL SALES                                                            |  |      | 710,464    |   |      |  
|                                                                       |  |      |            |   |      |  
|COST OF GOODS SOLD                                                     |  |      | 497,915    |   |      |  
|                                                                       |  |      |            |   |      |  
|COST OF GOODS SOLD - RELATED PARTIES                                   |  |      | 207,500    |   |      |  
|TOTAL COST OF GOODS SOLD                                               |  |      | 705,415    |   |      |  
|                                                                       |  |      |            |   |      |  
|GROSS PROFIT                                                           |  |      | 5,049      |   |      |  
|                                                                       |  |      | 0.7        | % |      |  
|SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                           |  |      | 14,501     |   |      |  
|                                                                       |  |      |            |   |      |  
|LOSS FROM OPERATIONS                                                   |  |      | (9,452     | ) |      |  
|                                                                       |  |      |            |   |      |  
|OTHER INCOME (EXPENSE)                                                 |  |      |            |   |      |  
|Interest income                                                        |  |      | 1,063      |   |      |  
|Finance/interest expense                                               |  |      | (14,119    | ) |      |  
|Change in fair value of derivative liabilities                         |  |      | 3,552      |   |      |  
|Loss on disposal of fixed assets                                       |  |      | (397       | ) |      |  
|Income from equity investments                                         |  |      | 1,655      |   |      |  
|Foreign currency transaction gain                                      |  |      | 619        |   |      |  
|Lease income                                                           |  |      | 452        |   |      |  
|Other non-operating income, net                                        |  |      | 305        |   |      |  
|Total other expense, net                                               |  |      | (6,870     | ) |      |  
|                                                                       |  |      |            |   |      |  
|LOSS BEFORE PROVISION FOR INCOME TAXES AND
    NONCONTROLLING INTEREST |  |      | (16,322    | ) |      |  
|                                                                       |  |      |            |   |      |  
|PROVISION FOR INCOME TAXES                                             |  |      |            |   |      |  
|Current                                                                |  |      | 750        |   |      |  
|Deferred                                                               |  |      | (3,501     | ) |      |  
|Total benefit for income taxes                                         |  |      | (2,751     | ) |      |  
|                                                                       |  |      |            |   |      |  
|NET LOSS BEFORE NONCONTROLLING INTEREST                                |  |      | (13,571    | ) |      |  
|                                                                       |  |      |            |   |      |  
|Less: Net loss attributable to noncontrolling interest                 |  |      | (4,654     | ) |      |  
|                                                                       |  |      |            |   |      |  
|NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST                          |  |      | (8,917     | ) |      |  
|                                                                       |  |      |            |   |      |  
|OTHER COMPREHENSIVE INCOME (LOSS)                                      |  |      |            |   |      |  
|Foreign currency translation adjustments                               |  |      | 1,445      |   |      |  
|Comprehensive income attributable to noncontrolling interest           |  |      | 242        |   |      |  
|                                                                       |  |      |            |   |      |  
|COMPREHENSIVE LOSS                                                     |  | $    | (7,230     | ) |      | $
|                                                                       |  |      |            |   |      |  
|WEIGHTED AVERAGE NUMBER OF SHARES                                      |  |      |            |   |      |  
|Basic & Diluted                                                        |  |      | 54,839,733 |   |      |  
|                                                                       |  |      |            |   |      |  
|LOSS PER SHARE                                                         |  |      |            |   |      |  
|Basic & Diluted                                                        |  | $    | (0.16      | ) |      | $





The accompanying notes are an integral part of these unaudited
consolidated financial statements.





5









GENERAL STEEL HOLDINGS, INC. AND
SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CHANGES
IN EQUITY

(In thousands, except per share
data)









|                                                                    |  | Preferred stock |           |  | Common stock |   |   | Treasury stock |  |  |            |   |  | Retained earnings
    / Accumulated deficits |       |   | Accumulated other |  |         |         |  |   |           |  
|------------------------------------------------------------------- |  | --------------- | --------- |  | ------------ | - | - | -------------- |  |  | ---------- | - |  | -------------------------------------------- | ----- | - | ----------------- |  | ------- | ------- |  | - | --------- | -
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         | Paid-in |  |   | Statutory |  
|                                                                    |  | Shares          |           |  | Par value    |   |   | Shares         |  |  | Par value  |   |  | Shares                                       |       |   | Value             |  |         | capital |  |   | reserves  |  
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|BALANCE, December 31, 2009, as restated                             |  |                 | 3,092,899 |  |              | $ | 3 |                |  |  | 51,618,595 |   |  | $                                            | 52    |   |                   |  | -       |         |  |   | -         |  
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Net income attributable to controlling interest,
    as restated    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Net income attributable to noncontrolling interest,
    as restated |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Distribution of dividend to noncontrolling shareholders             |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Noncontrolling interest acquired                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Common stock issued for compensation                                |  |                 |           |  |              |   |   |                |  |  | 237,100    |   |  |                                              | 0.24  |   |                   |  |         |         |  |   |           |  
|Common stock transferred by CEO for compensation,
    $6.91         |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Foreign currency translation adjustments, as
    restated           |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|BALANCE, March 31, 2010, unaudited, as restated                     |  |                 | 3,092,899 |  |              |   | 3 |                |  |  | 51,855,695 |   |  |                                              | 52    |   |                   |  | -       |         |  |   | -         |  
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Net income attributable to controlling interest,
    as restated    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Net income attributable to noncontrolling interest,
    as restated |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Distribution of dividend to noncontrolling shareholders             |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Registered capital received from noncontrolling
    shareholders    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Adjustment to special reserve                                       |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Common stock issued for compensation                                |  |                 |           |  |              |   |   |                |  |  | 496,200    |   |  |                                              | 0.50  |   |                   |  |         |         |  |   |           |  
|Common stock issued for repayment of debt                           |  |                 |           |  |              |   |   |                |  |  | 928,163    |   |  |                                              | 0.93  |   |                   |  |         |         |  |   |           |  
|Common stock transferred by CEO for compensation                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Notes converted to common stock                                     |  |                 |           |  |              |   |   |                |  |  | 1,208,791  |   |  |                                              | 1.21  |   |                   |  |         |         |  |   |           |  
|Make whole shares issued on notes conversion                        |  |                 |           |  |              |   |   |                |  |  | 271,507    |   |  |                                              | 0.27  |   |                   |  |         |         |  |   |           |  
|Common stock issued for accrued interest on notes                   |  |                 |           |  |              |   |   |                |  |  | 79,377     |   |  |                                              | 0.08  |   |                   |  |         |         |  |   |           |  
|Treasury stock purchased                                            |  |                 |           |  |              |   |   |                |  |  | (316,760   | ) |  |                                              | (0.32 | ) |                   |  | 316,760 |         |  |   | (871      | )
|Foreign currency translation adjustments, as
    restated           |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|BALANCE, December 31, 2010, as restated                             |  |                 | 3,092,899 |  |              | $ | 3 |                |  |  | 54,522,973 |   |  | $                                            | 55    |   |                   |  | 316,760 |         |  | $ | (871      | )
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Net income attributable to controlling interest,
    as restated    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Net income attributable to noncontrolling interest,
    as restated |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Common stock issued for compensation                                |  |                 |           |  |              |   |   |                |  |  | 240,734    |   |  |                                              | 0.24  |   |                   |  |         |         |  |   |           |  
|Common stock transferred by CEO for compensation                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Treasury stock purchased                                            |  |                 |           |  |              |   |   |                |  |  | (396,900   | ) |  |                                              | (0.40 | ) |                   |  | 396,900 |         |  |   | (1,127    | )
|Adjustment to special reserve                                       |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|Foreign currency translation adjustments, as
    restated           |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|                                                                    |  |                 |           |  |              |   |   |                |  |  |            |   |  |                                              |       |   |                   |  |         |         |  |   |           |  
|BALANCE, March 31, 2011, unaudited, as restated                     |  |                 | 3,092,899 |  |              | $ | 3 |                |  |  | 54,366,807 |   |  | $                                            | 55    |   |                   |  | 713,660 |         |  | $ | (1,998    | )





The accompanying notes are an integral part of these unaudited
consolidated financial statements.









6









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2011
AND 2010

(UNAUDITED)

(As restated)

(In thousands, except per share data)



|                                                                                               |  | Three months ended March 31, |         
|---------------------------------------------------------------------------------------------- |  | ---------------------------- | --------
|                                                                                               |  | 2011                         |         
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                          |  |                              |         
|Consolidated net loss                                                                          |  | $                            | (13,571 
|Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: |  |                              |         
|Depreciation and amortization                                                                  |  |                              | 8,922   
|Bad debt recovery (allowance)                                                                  |  |                              | 5       
|Inventory written-off                                                                          |  |                              | 1,947   
|Loss on disposal of equipment                                                                  |  |                              | 397     
|Stock issued for services and compensation                                                     |  |                              | 647     
|Amortization of deferred note issuance cost and discount on convertible notes                  |  |                              | -       
|Change in fair value of derivative instrument                                                  |  |                              | (3,552  
|Income from investment                                                                         |  |                              | (1,655  
|Deferred tax assets                                                                            |  |                              | (2,730  
|Changes in operating assets and liabilities                                                    |  |                              |         
|Notes receivable                                                                               |  |                              | (68,315 
|Accounts receivable                                                                            |  |                              | (7,269  
|Accounts receivable - related parties                                                          |  |                              | 3,591   
|Other receivables                                                                              |  |                              | 3,686   
|Other receivables - related parties                                                            |  |                              | 3,643   
|Inventories                                                                                    |  |                              | (43,694 
|Advances on inventory purchase                                                                 |  |                              | (7,451  
|Advances on inventory purchase - related parties                                               |  |                              | (3,137  
|Accounts payable                                                                               |  |                              | 27,484  
|Accounts payable - related parties                                                             |  |                              | 34,958  
|Other payables and accrued liabilities                                                         |  |                              | 8,246   
|Other payables - related parties                                                               |  |                              | (14,732 
|Customer deposits                                                                              |  |                              | 103,096 
|Customer deposits - related parties                                                            |  |                              | (14,583 
|Taxes payable                                                                                  |  |                              | 18,791  
|Deferred lease income                                                                          |  |                              | 20,013  
|Net cash provided by (used in) operating activities                                            |  |                              | 54,737  
|                                                                                               |  |                              |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                          |  |                              |         
|Restricted cash                                                                                |  |                              | (4,516  
|Dividend receivable                                                                            |  |                              | -       
|Cash proceeds from sales of equipment                                                          |  |                              | 328     
|Advance on equipment purchases                                                                 |  |                              | (190    
|Equipments purchase and intangible assets                                                      |  |                              | (10,912 
|Net cash used in investing activities                                                          |  |                              | (15,290 
|                                                                                               |  |                              |         
|CASH FLOWS FINANCING ACTIVITIES:                                                               |  |                              |         
|Payments made for treasury stock acquired                                                      |  |                              | (1,128  
|Notes receivable - restricted                                                                  |  |                              | (81,509 
|Borrowings on short term loans - bank                                                          |  |                              | 85,312  
|Payments on short term loans - bank                                                            |  |                              | (60,495 
|Borrowings on short term loan - others                                                         |  |                              | 36,128  
|Payments on short term loans - others                                                          |  |                              | (44,664 
|Payments on short term loans - related parties                                                 |  |                              | -       
|Borrowings on short term notes payable                                                         |  |                              | 243,985 
|Payments on short term notes payable                                                           |  |                              | (169,105
|Deposits due to sales representatives                                                          |  |                              | (23,771 
|Net cash (used in) provided by financing activities                                            |  |                              | (15,247 
|                                                                                               |  |                              |         
|EFFECTS OF EXCHANGE RATE CHANGE IN CASH                                                        |  |                              | (161    
|                                                                                               |  |                              |         
|INCREASE IN CASH                                                                               |  |                              | 24,039  
|                                                                                               |  |                              |         
|CASH, beginning of period                                                                      |  |                              | 65,271  
|                                                                                               |  |                              |         
|CASH, end of period                                                                            |  | $                            | 89,310  
|                                                                                               |  |                              |         
|Non-cash transactions of investing and financing activities:                                   |  |                              |         
|Share issuance for debt settlement                                                             |  | $                            | -       
|Other receivable - related parties offset with short-term loans of the same related party      |  | $                            | 59,268  





The accompanying notes are an integral part of these unaudited
consolidated financial statements.





7













GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Note 1 – Background



General Steel Holdings, Inc. (the “Company”)
was incorporated on August 5, 2002 in the state of Nevada. The Company through its 100% owned subsidiary, General Steel Investment,
operates a portfolio of steel companies serving various industries in the People’s Republic of China (“PRC”).
The Company’s main operation is manufacturing and sales of steel products such as steel rebar, hot-rolled carbon and silicon
sheets and spiral-weld pipes.



Recent developments



On April 29, 2011, the Company and its
subsidiary – Shaanxi Longmen Iron and Steel Co. Ltd. (“Longmen Joint Venture”) have signed a 20-year unified
management agreement with Shaanxi Coal and Chemical Industry Group Co., Ltd. ("Shaanxi Coal") and Shaanxi Iron and Steel
Group Co., Ltd (“Shaanxi Steel”). Under terms of the agreement, Longmen Joint Venture will provide daily management
of operations and operate production equipment constructed by Shaanxi Steel at a facility owned by Longmen Joint Venture in Hancheng
Shaanxi province, China. For the first two years under the agreement Longmen Joint Venture will receive 60% of the pre-tax profit
on the sale of products manufactured at the Longmen Joint Venture facility, with the remaining 40% distributed to Shaanxi Steel.
Profit distributed to Shaanxi Steel will be classified as an operating expense on the Company's consolidated statements of operations.
See Note 21 for details.



Note 2 – Restatements



This financial statements contain restatements
related to the certain reimbursements received related to its collaboration with Shaanxi Iron and Steel Group, Co. Ltd. ("Shaanxi
Steel") on the construction of equipment by Shaanxi Steel during the period from June 2009 to March 2011.



During June 2009 to March 2011, General
Steel worked with Shaanxi Steel to build new state-of-the-art equipment at the site of General Steel's principal subsidiary, Shaanxi
Longmen Iron and Steel Co., Ltd. ("Longmen JV"). As a result, the Company's Longmen JV incurred certain costs of construction
as well as economic losses on suspended production of certain small furnaces and other equipment to accommodate the construction
of the new equipment, on behalf of Shaanxi Steel.



Dismantling began in June 2009. From that
point forward through construction and testing until completion of the project in March 2011, Longmen JV recorded these certain
costs as they were incurred according to the nature of these costs. At the beginning of the construction in June 2009, Longmen
JV reached an oral agreement with Shaanxi Steel that these costs would be reimbursed by Shaanxi Steel. In December 2010, Shaanxi
Steel and Longmen JV were able to finalize the amount of costs incurred by the Longmen JV and executed two signed agreements between
the two parties on December 20, 2010. Therefore, to compensate the Company, in the fourth quarter of 2010, Shaanxi Steel reimbursed
Longmen JV USD 16.4 million (RMB 108 million) related to the value of assets dismantled, various site preparation costs incurred
by Longmen JV and rent under a 40-year property sub-lease that was entered into by the parties in June 2009 (the "Longmen
Sub-lease"), and USD 27.8 million (RMB 183 million) for the reduced production efficiency caused by the construction. These
reimbursements were reported as other income and a reduction of cost of goods sold in the fourth quarter of 2010. In addition,
in 2010 and 2011, Shaanxi Steel reimbursed Longmen JV USD 13.5 million (RMB 89 million) each year for trial production costs related
to the two new blast furnaces, two new converters and one new sintering machine constructed and owned by Shaanxi Steel, which were
recorded as reductions to cost of goods sold in the fourth quarter of 2010 and in the first quarter of 2011. All of these reimbursements
were settled by offsetting other payables due from Longmen JV to Shaanxi Steel.



The Company believed that the original
accounting treatment for the reimbursement was in accordance with U.S. GAAP, based upon its understanding of the economic substance
and the nature of reimbursement and its interpretation of U.S. GAAP. Specifically, the reimbursement to Longmen JV of the costs
incurred was recognized and treated as income as the reimbursements were received, based on an oral agreement reached with Shaanxi
Steel at the onset of the construction in June 2009. Subsequently, the parties entered into a written agreement in December 2010,
which was effectively the implementation of the prior oral agreement and the confirmation that such costs would be reimbursed subject
to an independent audit firm's verification. The reimbursements were legally and contractually unrelated to any future agreements
between the parties, which may have changed the accounting treatment.





However, in connection with the preparation
of its quarterly report on Form 10-Q for the quarter ended June 30, 2011, the Company revisited the appropriate treatment for these
items. Given the complexity, and the unique structure of the transaction and the challenge with respect to finding the appropriate
accounting guidance, either by direct application or analogy in relation to various aspects of the transaction, both the Company's
current and former auditors agreed that a review by the Office of the Chief Accountant ("OCA") of the SEC with respect
to the appropriate accounting treatment for the compensation would be helpful.



8









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



On April 20, 2012, after several rounds
of written and oral communications, the OCA provided the Company with its guidance with respect to the accounting treatment. Following
receipt of the guidance from the OCA, the Company centered the accounting treatment on the Longmen Sub-lease, under which Longmen
JV sub-leased the land to Shaanxi Steel on which the new furnaces were constructed. Under this approach, the reimbursement for
the net book value of the fixed assets that were demolished and for the inefficiency costs caused by the construction and loss
incurred in the beginning stages of the system production are considered a part of the sub-lease. Applying the leasing guidance,
these reimbursements are effectively additional rent under the sub-lease and are incorporated into the accounting treatment for
the sub-lease and amortized to income over the remaining sub-lease term. In other words, the Company has concluded that, except
for the reimbursement for site preparation costs, for which the income statement treatment will remain unchanged, the amount of
reimbursement and previously recorded income should be deferred and recognized as a component of the property that was sub-leased
during the construction, to be amortized to income over the remaining terms of the 40-year sub-lease.



As a result of the restatement, the deferred
lease income on the land used right was $77.6 million and $57.6 million as of March 31, 2011 and December 31, 2010, respectively.
For the three month period ended March 31, 2011 and 2010, the Company recognized deferred lease income of $451,800 and $136,538,
respectively. The net loss attributable to controlling interest increased by $11.5 million and $0.1 million for the three month
period ended March 31 2011 and 2010, respectively.



The impact of these restatements on the
financial statements is reflected in the following table:



|(In thousands except earnings per
share) |  | March 31, 2011 |           |   | December 31, 2010 |  
|---------------------------------------- |  | -------------- | --------- | - | ----------------- | -
|                                         |  |                | Original  |   |                   |  
|Consolidated Balance Sheets              |  |                |           |   |                   |  
|Current Assets                           |  | $              | 1,395,262 |   |                   | $
|Plant and Equipments, net                |  |                | 607,195   |   |                   |  
|Total Assets                             |  |                | 2,061,872 |   |                   |  
|Total Liabilities                        |  |                | 1,884,749 |   |                   |  
|Accumulated Deficits                     |  |                | (21,482   | ) |                   |  
|Total Shareholders' Equity               |  |                | 102,738   |   |                   |  





|                                                       |  | Three month ended March 31, |          |   | Three month ended March 31, |  
|------------------------------------------------------ |  | --------------------------- | -------- | - | --------------------------- | -
|                                                       |  | 2011                        |          |   | 2010                        |  
|                                                       |  |                             | Original |   |                             |  
|Consolidated Statements of Operation                   |  |                             |          |   |                             |  
|Gross Profit                                           |  | $                           | 28,324   |   |                             | $
|Other income (expense), net                            |  |                             | (7,321   | ) |                             |  
|Net Income (loss) attributable to controlling interest |  |                             | 2,604    |   |                             |  
|                                                       |  |                             |          |   |                             |  
|Earnings (Loss) Per Share                              |  |                             |          |   |                             |  
|Basic & Diluted                                        |  |                             | 0.05     |   |                             |  
|                                                       |  |                             |          |   |                             |  
|                                                       |  |                             | Original |   |                             |  
|Consolidated Statements of Cash Flow                   |  |                             |          |   |                             |  
|Consolidated net loss                                  |  |                             | 5,829    |   |                             |  
|Net cash (used in) provided by operating activities    |  |                             | 54,632   |   |                             |  
|Net cash used in investing activities                  |  |                             | (35,673  | ) |                             |  
|Net cash (used in) provided by financing activities    |  |                             | 5,136    |   |                             |  





9









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Note 3 – Summary of significant
accounting policies



Basis of presentation



The consolidated financial statements of
the Company reflect the activities of the following directly and indirectly owned subsidiaries:



|Subsidiary                                                              |  |  | Percentage of Ownership | 
|----------------------------------------------------------------------- |  |  | ----------------------- | 
|General Steel Investment Co., Ltd.                                      |  |  | British Virgin Islands  | 
|General Steel (China) Co., Ltd. (“General Steel (China)”)               |  |  | PRC                     | 
|Baotou Steel – General Steel Special Steel Pipe Joint Venture Co., Ltd. |  |  | PRC                     | 
|Yangpu Shengtong Investment Co., Ltd.                                   |  |  | PRC                     | 
|Qiu Steel Investment Co., Ltd. (“Qiu Steel”)                            |  |  | PRC                     | 
|Longmen Joint Venture (1)                                               |  |  | PRC                     | 
|Maoming Hengda Steel Company, Ltd. (“Maoming Hengda”)                   |  |  | PRC                     | 
|Tianwu General Steel Material Trading Co., Ltd (“Tianwu Joint Venture”) |  |  | PRC                     | 



The accompanying
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America and include the accounts of all directly and indirectly owned subsidiaries listed above. All material intercompany
transactions and balances have been eliminated in consolidation.



Management has included all adjustments,
consisting only of normal recurring adjustments, considered necessary to give a fair presentation of operating results for the
periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this
Form 10-Q should be read in conjunction with information included in the 2010 annual report filed on Form 10-K/A.



| | (1) | Longmen Joint Venture has three consolidated subsidiaries, Hualong Fire Retardant Material Co.,
Ltd. (“Hualong”), Hancheng Tongxing Metallurgy Co., Ltd. (“Tongxing”) and Beijing Huatianyulong International
Steel Trading Co., Ltd. (“Huatianyulong”), in which Longmen Joint Venture does not hold a controlling equity interest.
Hualong, Tongxing and Huatianyulong are separate legal entities established in the PRC as limited liability companies and subsequently
acquired by Longmen Joint Venture in June 2007, January 2008 and July 2008, respectively. Prior to and subsequent to their acquisition
by Longmen Joint Venture, these three entities have been operating as self-sustaining integrated sets of activities and assets
conducted and managed for the purpose of providing a return to shareholders consisting of all the inputs, processes and outputs,
which has indicated their business nature as defined in ASC 805-10-20. A step by step examination approach then has been undertaken
to determine whether the aforementioned entities are eligible for a scope exception under ASC 810-10-15-17(d). After a comprehensive
analysis, the Company has concluded that none of the conditions of ASC 810-10-15 and, in particular 810-10-15-14 were met upon
acquisition. Therefore, Hualong, Tongxing and Huatianyulong are not VIEs. Further consideration was given to whether consolidation
was appropriate under the voting interest model, specifically, ASC 810-10-15-8 which states that the power of control may exist
also with a lesser percentage of ownership (i.e. less than 50%).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



10









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Hualong



Longmen Joint Venture, the single
largest shareholder, holds a 36.0% equity interest in Hualong. The other two shareholders, who own 34.67% and 29.33% respectively,
have assigned their voting rights to Longmen Joint Venture in writing at the time of the acquisition of Hualong. The voting rights
have been assigned through the date Hualong ceases its business operation or the other two shareholders sell their interest in
Hualong. Hualong’s main business is to supply refractory.



Tongxing



Longmen Joint Venture holds a
22.76% equity interest in Tongxing and hundreds of employees of Longmen Joint Venture own the remaining 77.24%. Each individual
employee shareholder comprising the remaining 77.24% has assigned its voting rights to Longmen Joint Venture in writing at the
time of the acquisition of Tongxing. The voting rights have been assigned through the date Tongxing ceases its business operation
or the employees sell their interest in Tongxing. Tongxing’s business highly relies on Longmen Joint Venture. Tongxing’s
rebar processing is fully and solely engaged by Longmen Joint Venture. The metallurgical coke produced has been primarily sold
to Longmen Joint Venture until August 2010 when the coke ovens were dismantled.



Huatianyulong



Longmen Joint Venture holds a
50.0% equity interest in Huatianyulong and the other unrelated shareholder holds the remaining 50.0%. The other shareholder has
assigned its voting rights to Longmen Joint Venture in writing at the time of acquisition of Huatianyulong. The voting rights have
been assigned through the date Huatianyulong ceases its business operation or the other unrelated shareholder sells its interest
in Huatianyulong. Huatianyulong mainly sells imported iron ore.



The Company has determined that
it is appropriate for Longmen Joint Venture to consolidate these three entities with appropriate recognition in the Company’s
financial statements of the non-controlling interests in each entity, beginning on the acquisition dates as these were also the
effective dates of the agreements with other stockholders granting a majority voting rights in each entity, and thereby, the power
of control, to Longmen Joint Venture.



Principles of consolidation – subsidiaries



The Company follows ASC 810-10-15 “Consolidation –
Scope and Scope Exceptions” when determining whether to consolidate an entity in our financial statements. All legal entities
which the Company owns directly or indirectly more than 50 percent of the outstanding voting shares are required to be consolidated
given that control rests with the majority owner. Entities in which the Company owns less than 50 percent voting shares are evaluated
in accordance with generally accepted account principles to determine whether the Company may hold the power of control. If we
hold established power of control in such entities, the Company consolidates the entities with recognition of the non-controlling
interest in them accordingly.



Use of estimates



The preparation of financial statements
in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying notes. Significant accounting estimates reflected
in the Company’s financial statements include the fair value of financial instruments, the useful lives of and impairment
for property, plant and equipment, trial production cost for two blast furnaces owned by Shaanxi Steel and potential losses on
uncollectible receivables. Actual results could differ from these estimates.



Concentration of risks



The Company’s operations are carried
out 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’s economy. The Company’s
operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North
America and Western Europe. The Company’s results may be adversely affected by changes in governmental policies with respect
to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation,
among other things.



Cash includes demand deposits in accounts
maintained with banks within the PRC, Hong Kong and the United States. Total cash (including restricted cash balances) in these
banks on March 31, 2011 and December 31, 2010 amounted to $292.3 million and $263.1 million, respectively. As of March 31,
2011, $0.1 million cash in the bank was covered by insurance. The Company has not experienced any losses in other bank accounts
and believes it is not exposed to any risks on its cash in bank accounts.



11







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)





The Company’s five major customers
are all distributors and collectively represented approximately 32.3% and 31.0% of the Company’s total sales for the three
months ended March 31, 2011 and 2010 respectively, including one customer accounted for 16.9% and 9.0% of total sales for the three
months ended March 31, 2011 and 2010. These five major customers accounted for 7.5% and 0% of total accounts receivable as of March
31, 2011 and 2010, respectively.



For the three months
ended March 31, 2011 and 2010, the Company purchased approximately 60.3% and 47.5% of its raw materials from five major suppliers,
respectively. Three out of the five major suppliers individually accounted for more than 10% of the total purchase for the three-month
ended March 31, 2011, comparatively, two of the five major suppliers accounted for more than 10% of the total purchase for the
three-month ended March 31, 2010.  These five vendors accounted for 39.2% and 9.0% of total accounts payable as of March
31, 2011 and 2010, respectively.



Revenue recognition



Sales revenue is recognized at the date
of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, the Company
has no other significant obligations and collectability is reasonably assured. Payments received before all of the relevant criteria
for revenue recognition are recorded as customer deposits. Sales revenue represents the invoiced value of goods, net of value-added
tax (VAT). All of the Company’s products sold in the PRC are subject to a Chinese value-added tax at a rate of 13% or 17%
of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the
cost of producing the finished product.



Foreign currency translation and other
comprehensive income (as restated)



The reporting currency of the Company is
the US dollar. The Company’s subsidiaries in China use the local currency, Renminbi (RMB), as their functional currency.
Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of
the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement
of equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other
than the functional currency are included in the results of operations as incurred.



Translation adjustments included in accumulated
other comprehensive income amounted to $12.4 million and $11.0 million as of March 31, 2011 and December 31, 2010, respectively.
The balance sheet amounts, with the exception of equity at March 31, 2011 and December 31, 2010 were translated at 6.57 RMB and
6.59 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied
to statement of operations accounts for the three months ended March 31, 2011 and 2010 were 6.59 RMB and 6.82 RMB, respectively.
Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash
flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.



The PRC government imposes significant exchange restrictions
on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact
on the Company because it has not engaged in any significant transactions that are subject to the restrictions.



Financial
instruments



The accounting standards regarding fair
value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the
fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, accounts receivable,
other receivables, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time
between the origination of such instruments and their expected realization. For short term loans and notes payable, the Company
concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination
and repayment and their stated interest rate approximates current rates available.



The Company analyzes all financial instruments
with features of both liabilities and equity, pursuant to which the Company’s warrants were required to be recorded as a
liability at fair value and marked to market each reporting period.



The accounting standards define fair value,
establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair
value measures. The three levels are defined as follow:



12







GENERAL STEEL HOLDINGS, INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)





| | · | Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                 
| | · | Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
| |   |                                                                                                                                                                                                                                                                                 
| | · | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.                                                                                                                                                                                 



In December 2007, the Company issued convertible
notes totaling $40 million (“Notes”) and 1,154,958 warrants. In December 2009, the Company issued 2,777,778 warrants
in connection with a registered direct offering. The aforementioned warrants and the conversion option embedded in the Notes meet
the definition of a derivative instrument in the accounting standards. Therefore these instruments are accounted for as derivative
liabilities and recorded at fair value on each reporting period. The change in the value of the derivative liabilities is charged
against or credited to income.  The fair value was determined using the Cox Rubenstein Binomial Model, defined in the
accounting standard as level 2 inputs, and recorded the change in earnings. As a result, the derivative liabilities are carried
on the consolidated balance sheet at their fair value.





|(in thousands)                     |  | Carrying Value as of March 31, 2011 |       |  | Fair Value Measurements at March 31, 2011 Using Fair Value Hierarchy | 
|---------------------------------- |  | ----------------------------------- | ----- |  | -------------------------------------------------------------------- | 
|                                   |  |                                     |       |  |                                                                      | 
|Derivative liabilities (Unaudited) |  | $                                   | 2,022 |  |                                                                      | 





Except for the derivative
liabilities, the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet
at fair value in accordance with the accounting standard.



Cash



Cash includes cash on hand and demand deposits
in banks with original maturities of less than three months.



Restricted cash



The Company has notes payable outstanding
with various banks and is required to keep certain amounts on deposit that are subject to withdrawal restrictions. The notes payable
are generally short term in nature due to its maturity period of six months or less, thus restricted cash is classified as a current
asset.



Accounts receivable and allowance
for doubtful accounts



Accounts receivable include trade accounts
due from customers and other receivables from cash advances to employees, related parties or third parties. An allowance for doubtful
accounts is established and recorded based on managements’ assessment of potential losses based on the credit history and
relationships with the customers. Management reviews its receivable on a regular basis to determine if the bad debt allowance is
adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful
accounts after management has determined that the likelihood of collection is not probable.



Notes receivable



Notes receivable represents trade accounts
receivable due from various customers where the customers’ banks have guaranteed the payment. The notes are non-interest
bearing and normally paid within three to six months. The Company has the ability to submit requests for payment to the customer’s
bank earlier than the scheduled payment date, but will incur an interest charge and a processing fee. The Company had $440.6 million
and $289.4 million notes receivable outstanding as of March 31, 2011 and December 31, 2010, respectively.



Restricted notes receivable represents
notes receivable pledged as collateral for short-term loans and short-term notes payable issued by banks. As of March 31, 2011
and December 31, 2010, restricted notes receivable amounted to $322.8 million and $240.3 million, respectively.



13









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Advances on inventory purchase



Advances on inventory purchases are monies
deposited or advanced to outside vendors or related parties on future inventory purchases. Due to the high shortage of steel in
China, most of the Company’s vendors require a certain amount of money to be deposited as a guarantee that the Company will
complete its purchases on a timely basis.



This amount is refundable
and bears no interest. The Company has legally binding contracts with its vendors, which required the deposit to be returned to
the Company when the contract ends. The inventory is normally delivered within one month after the monies have been advanced. The
total outstanding amount, including advances to related parties, was $41.5 million and $30.8 million as of March 31, 2011 and December
31, 2010, respectively.



Inventories



Inventories are comprised of raw materials,
work in progress and finished goods and are stated at the lower of cost or market using the weighted average cost method. Management
reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against
the inventory and additional cost of goods sold when the carrying value exceeds net realizable value. The Company had written-off
$1.9 million inventory cost for the three months ended March 31, 2011.



Shipping and handling



Shipping and handling for raw materials
purchased are included in cost of goods sold. Shipping and handling cost incurred to ship finished products to customers are included
in selling expenses. Shipping and handling expenses for the three months ended March 31, 2011 and 2010 amounted to $3.6 million
and $2.1 million, respectively.



Plant and equipment, net



Plant and equipment are stated at cost
less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets
with a 3%-5% residual value.



The estimated useful lives are as follows:



|Buildings and Improvements |  | 10-40 Years
|-------------------------- |  | -----------
|Machinery                  |  | 10-30 Years
|Other equipment            |  | 5 Years    
|Transportation Equipment   |  | 5 Years    



Construction in progress represents the costs incurred in connection
with the construction of buildings or new additions to the Company’s plant facilities. No depreciation is provided for construction
in progress until such time as the assets are completed and are placed into service, maintenance, repairs and minor renewals are
charged directly to expense as incurred. Major additions and betterment to buildings and equipment are capitalized. Interest incurred
during construction is capitalized into construction in progress. All other interest is expensed as incurred.



Long lived assets,
including buildings and improvements, equipment and intangible assets are reviewed if events and changes in circumstances indicate
that its carrying amount may not be recoverable, to determine whether their carrying value has become impaired. The Company considers
assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates
the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates
of useful lives.



Intangible assets



All land in the PRC is owned by the government.
However, the government grants “land use rights.”  General Steel (China) acquired land use rights in 2001
for a total of $3.6 million. These land use rights are for 50 years and expire in 2050 and 2053. Management elected to amortize
the land use rights over the ten-year business term because its initial business license had a ten-year term. Although General
Steel (China) became a Sino-Foreign Joint Venture in 2004, and obtained a new business license for twenty years, the Company decided
to continue amortizing the land use rights over the original ten-year business term.



Long Steel Group contributed land use rights
for a total amount of $22.5 million to the Longmen Joint Venture. The contributed land use rights are for 50 years and expire in
2048 to 2052.



14









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Maoming Hengda has land use rights amounting
to $2.3 million for 50 years that expire in 2054.



|Entity                |  | Original Cost  |        |  | Expires on |            
|--------------------- |  | -------------- | ------ |  | ---------- | -----------
|                      |  | (in thousands) |        |  |            |            
|General Steel (China) |  | $              | 3,599  |  |            | 2050 & 2053
|Longmen Joint Venture |  | $              | 22,546 |  |            | 2048 & 2052
|Maoming Hengda        |  | $              | 2,317  |  |            | 2054       
|                      |  |                |        |  |            |            

Intangible assets of the Company are reviewed at least
annually, more often when circumstances require, determining whether their carrying value has become impaired. The Company considers
assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also
re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of
useful lives.  As of March 31, 2011, the Company expects these assets to be fully recoverable.



Investments in unconsolidated subsidiaries



Subsidiaries in which the Company has the
ability to exercise significant influence, but does not have a controlling interest, are accounted for using the equity method.
Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20%
and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements,
are considered in determining whether the equity method of accounting is appropriate. The Company accounts for investments with
ownership less than 20% using the cost method.



Longmen Joint Venture
and its subsidiary - Hancheng Tongxing Metallurgy Co., Ltd. (“Tongxing Metallurgy”) invested in several companies from
2004 to 2009.



|Unconsolidated subsidiary                          |  | Year acquired |             |  | Amount invested (In thousands) |   |        | % owned | 
|-------------------------------------------------- |  | ------------- | ----------- |  | ------------------------------ | - | ------ | ------- | 
|Shaanxi Daxigou Mining Co., Ltd                    |  |               | 2004        |  |                                | $ | 5,510  |         | 
|Shaanxi Xinglong Thermoelectric Co., Ltd           |  |               | 2004 - 2007 |  |                                |   | 9,487  |         | 
|Huashan Metallurgical Equipment Co.,  Ltd.         |  |               | 2003        |  |                                |   | 2,935  |         | 
|Shaanxi Longgang Group Xian Steel Co., Ltd         |  |               | 2005        |  |                                |   | -      |         | 
|Xian Delong Powder Engineering Materials Co., Ltd. |  |               | 2006        |  |                                |   | 1,240  |         | 
|Total (Unaudited)                                  |  |               |             |  |                                | $ | 19,172 |         | 



Short-term notes payable



Short-term notes payable are lines of credit
extended by banks. The banks in-turn issue the Company a bankers acceptance note, which can be endorsed and assigned to vendors
as payments for purchases. The notes payable are generally payable at a determinable period, generally three to six months. This
short-term note payable bears no interest and is guaranteed by the bank for its complete face value and usually matures within
three to six-month period. The banks usually require the Company to deposit a certain amount of cash at the bank as a guarantee
deposit, which is classified on the balance sheet as restricted cash.



Customer deposits (as restated)



Customer deposits represent amounts advanced
by customers on product orders. The product normally is shipped within one month after receipt of the advance payment, and the
related sale is recognized in accordance with the Company’s revenue recognition policy. As of March 31, 2011 and December
31, 2010, customer deposits amounted to $259.9 million and $188.4 million, including deposits paid to relate parties amounted to
$43.6 million and $54.9 million, respectively.



15









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Deferred lease income (as restated)



During June 2009 to March 2011, General
Steel worked with Shaanxi Steel to build new state-of-the-art equipment at the site of General Steel's principal subsidiary, Shaanxi
Longmen Iron and Steel Co., Ltd. ("Longmen JV"). As a result, the Company's Longmen JV incurred certain costs of construction
as well as economic losses on suspended production of certain small furnaces and other equipment to accommodate the construction
of the new equipment, on behalf of Shaanxi Steel. To compensate the Company, in the fourth quarter of 2010, Shaanxi Steel reimbursed
Longmen JV USD 16.4 million (RMB 108 million) related to the value of assets dismantled, various site preparation costs incurred
by Longmen JV and rent under a 40-year property sub-lease that was entered into by the parties in June 2009 (the "Longmen
Sub-lease"), and USD 27.8 million (RMB 183 million) for the reduced production efficiency caused by the construction. Applying
the lease accounting guidance (ASC 840-20-25-1), the Company has concluded that, except for the reimbursement for site preparation
costs, the amount of reimbursement should be deferred and recognized as a component of the property that was sub-leased during
the construction, to be amortized to income over the remaining terms of the 40-year sub-lease.



Deferred lease income represents the remaining
balance of compensation being deferred. As of March 31, 2011 and December 31, 2010, the balance of $77.6 million and $57.6 million
represented the balance of remaining deferred lease income respectively.



Earnings per share



The Company has adopted the accounting
principles generally accepted in the United States regarding earnings per share (“EPS”), which requires presentation
of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per
share.



Basic earnings per share are computed by
dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings
per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were
exercised and converted into common stock.



Income taxes



The Company accounts for income taxes in
accordance with the accounting principles generally accepted in the United States for income taxes. Under the asset and liability
method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected
future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities.
Provision for income taxes consists of taxes currently due plus deferred taxes. The accounting principles generally accepted in
the United States for accounting for uncertainty in income taxes clarify the accounting and disclosure for uncertain tax positions.  A
tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained
in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit
that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not”
test, no tax benefit is recorded.



The charge for taxation is based on the results for the year
as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.



Deferred tax is accounted for using the
balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets
and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable
tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are
recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences
can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized
or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited
or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities
are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current
tax assets and liabilities on a net basis.



Deferred income taxes are recognized
for temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements,
net operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the
relevant taxing authorities.

16









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Share-based compensation



The Company accounts for equity instruments
issued in exchange for the receipt of goods or services from other than employees in accordance with the accounting standards regarding
accounting for stock-based compensation and accounting for equity instruments that are issued to other than employees for acquiring
or in conjunction with selling goods or services. Costs are measured at the estimated fair market value of the consideration received
or the estimated fair value of the equity instruments issued, whichever is more reliably determinable. The value of equity instruments
issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of
performance by the provider of goods or services as defined by these accounting standards. In the case of equity instruments issued
to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.



Recently issued accounting pronouncements



In April 2010, the FASB issued ASU 2010-13,
“Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award
in the Currency of the Market in Which the Underlying Equity Security Trades,” or ASU 2010-13. ASU 2010-13 provides amendments
to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in currency of a market in
which a substantial porting of the entity’s equity securities trades should not be considered to contain a condition that
is not a market, performance, or service condition. Therefore, an entity would not classify such an award as a liability if it
otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2010.  The Company does not expect the adoption of ASU 2010-13 to have a significant
impact on its consolidated financial statements.



In December 2010, the FASB issued ASU 2010-28
which amend “Intangibles- Goodwill and Other” (Topic 350). The ASU modifies Step 1 of the goodwill impairment test
for reporting units with zero or negative carrying amounts. For those reporting entities, they are required to perform Step 2 of
the goodwill impairment test if it is more likely than not that a goodwill impairment exists. An entity should consider whether
there are any adverse qualitative factors indicating that impairment may exist. The qualitative factors are consistent with the
existing guidance in Topic 350, which requires that goodwill of a reporting unit be tested for impairment between annual tests
if an event occurs or circumstances changes that would more likely than not reduce the faire value of a reporting unit below its
carrying amount. ASU 2010-28 is effective for fiscal years, and interim periods within those years beginning after December 15,
2010. Early adoption is not permitted. The Company does not expect the adoption of ASU 2010-13 to have a significant impact on
its consolidated financial statements.



In December 2010, the FASB issued ASU 2010-29
which address diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for
business combinations (Topic 805). This ASU specifies that if a public entity presents comparative financial statements, the entity
should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current
year had occurred as of the beginning of the comparable prior annual reporting period only. This ASU also expands the supplemental
pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments
directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective
prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2010. Early adoption is permitted. The Company does not expect the adoption of ASU 2010-13
to have a significant impact on its consolidated financial statements.



Reclassifications



Certain prior period amounts have been
reclassified to conform to the current period presentation. These classifications have no effect on net income.



Note 4 – Accounts receivable,
net (as restated)



Accounts receivable, excluding related
party receivables, net of allowance for doubtful accounts consists of the following:



|                                      |  | March 31, 2011                           |        |   | December 31, 2010              |  
|------------------------------------- |  | ---------------------------------------- | ------ | - | ------------------------------ | -
|                                      |  | (in thousands) (Unaudited) (As restated) |        |   | (in thousands)   (As restated) |  
|Accounts receivable                   |  | $                                        | 26,115 |   |                                | $
|Less: allowance for doubtful accounts |  |                                          | (259   | ) |                                |  
|Net accounts receivable               |  | $                                        | 25,856 |   |                                | $



17









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Movement of allowance for doubtful accounts is as follows:



|                     |  | March 31, 2011             |     |   | December 31, 2010 |  
|-------------------- |  | -------------------------- | --- | - | ----------------- | -
|                     |  | (in thousands) (Unaudited) |     |   | (in thousands)    |  
|Beginning balance    |  | $                          | 296 |   |                   | $
|Charge to expense    |  |                            | 12  |   |                   |  
|Less Write-off       |  |                            | (49 | ) |                   |  
|Exchange rate effect |  |                            | -   |   |                   |  
|Ending balance       |  | $                          | 259 |   |                   | $



Note 5 – Inventories (as restated)



Inventories consist of the following:



|                  |  | March 31, 2011                           |         |  | December 31, 2010              |  
|----------------- |  | ---------------------------------------- | ------- |  | ------------------------------ | -
|                  |  | (in thousands) (Unaudited) (As restated) |         |  | (in thousands)   (As restated) |  
|Supplies          |  | $                                        | 17,181  |  |                                | $
|Raw materials     |  |                                          | 294,232 |  |                                |  
|Finished goods    |  |                                          | 187,410 |  |                                |  
|Total inventories |  | $                                        | 498,823 |  |                                | $



Raw materials consist primarily of iron
ore and coke at Longmen Joint Venture. The cost of finished goods includes direct costs of raw materials as well as direct labor
used in production. Indirect production costs such as utilities and indirect labor related to production such as assembling, shipping
and handling costs for purchasing are also included in the cost of inventory.



Note 6 – Plant and equipment,
net (as restated)



Plant and equipment consist of the following:



|                                   |  | March 31, 2011                           |          |   | December 31, 2010              |  
|---------------------------------- |  | ---------------------------------------- | -------- | - | ------------------------------ | -
|                                   |  | (in thousands) (Unaudited) (As restated) |          |   | (in thousands)   (As restated) |  
|Buildings and improvements         |  | $                                        | 118,166  |   |                                | $
|Machinery                          |  |                                          | 504,602  |   |                                |  
|Transportation and other equipment |  |                                          | 14,478   |   |                                |  
|Construction in progress           |  |                                          | 74,623   |   |                                |  
|Subtotal                           |  |                                          | 711,869  |   |                                |  
|Less accumulated depreciation      |  |                                          | (104,674 | ) |                                |  
|Total                              |  | $                                        | 607,195  |   |                                | $



18









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Construction in progress
consisted of the following as of March 31, 2011:



|Construction in progress           |  | Value        |        |  | Estimated completion |                    | Estimated additional cost | 
|---------------------------------- |  | ------------ | ------ |  | -------------------- | ------------------ | ------------------------- | 
|description                        |  | In thousands |        |  | date                 |                    | In thousands              | 
|Employee cafeteria                 |  | $            | 4,412  |  |                      | July 2011          |                           | 
|Steel rebar & wire production line |  |              | 53,041 |  |                      | June 2011          |                           | 
|Transformation of slag processing  |  |              | 1,282  |  |                      | September, 2011    |                           | 
|3# Tailings                        |  |              | 1,629  |  |                      | August 2012        |                           | 
|Sintering machine transformation   |  |              | 583    |  |                      | By the end of 2011 |                           | 
|Others                             |  |              | 13,676 |  |                      | By the end of 2012 |                           | 
|Total (Unaudited)                  |  |              | 74,623 |  |                      |                    |                           | 



Long lived assets, including construction
in progress are reviewed if events and changes in circumstances indicate that its carrying amount may not be recoverable, to determine
whether their carrying value has become impaired. The Company determined that the construction in progress in Maoming Hengda was
impaired as of June 30, 2010. For the year ended December 31, 2010, $1.7 million construction-in-progress has been written off
and included in operating expense.



Depreciation, including amounts in cost
of goods sold, for the three months ended March 31, 2011 and 2010 amounted to $8.7 million and $9.3 million, respectively.



Note 7 – Intangible assets,
net



Intangible assets consist of the following:



|                         |  | March 31, 2011             |        |   | December 31, 2010 |  
|------------------------ |  | -------------------------- | ------ | - | ----------------- | -
|                         |  | (in thousands) (Unaudited) |        |   | (in thousands)    |  
|Land use rights          |  | $                          | 28,817 |   |                   | $
|Software                 |  |                            | 609    |   |                   |  
|Subtotal                 |  |                            | 29,426 |   |                   |  
|                         |  |                            |        |   |                   |  
|Accumulated amortization |  |                            | (5,697 | ) |                   |  
|Intangible assets, net   |  | $                          | 23,729 |   |                   | $



The gross amount of the intangible assets
amounted to $29.4 million and $29.1 million as of March 31, 2011 and December 31, 2010, respectively. The remaining weighted average
amortization period is 31.5 years.



Total amortization
expense for the three months ended March 31, 2011 and 2010 amounted to $0.2 million and $0.3 million, respectively.



The estimated aggregate amortization expense
for each of the five succeeding years is as follows:



|Years ended    |  | Estimated  Amortization Expense |        |  | Gross carrying Amount |  
|-------------- |  | ------------------------------- | ------ |  | --------------------- | -
|               |  | (in thousands) (Unaudited)      |        |  | (in thousands)        |  
|March 31, 2012 |  | $                               | 912    |  |                       | $
|March 31, 2013 |  |                                 | 912    |  |                       |  
|March 31, 2014 |  |                                 | 912    |  |                       |  
|March 31, 2015 |  |                                 | 912    |  |                       |  
|March 31, 2016 |  |                                 | 912    |  |                       |  
|Thereafter     |  |                                 | 19,169 |  |                       |  
|Total          |  | $                               | 23,729 |  |                       |  



19









GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Note 8 – Debt (as restated)



Short-term notes payable



Short-term notes payable are lines of credit
extended by the banks. The banks in turn issue the Company a bank acceptance note, which can be endorsed and assigned to vendors
as payments for purchases. The notes payable are generally payable at a determinable period, generally three to six months. This
short-term note payable is guaranteed by the bank for its complete face value. The banks usually do not charge interest on these
notes but require the Company to deposit a certain amount of cash at the bank as a guarantee deposit, which is classified on the
balance sheet as restricted cash. Restricted cash as a guarantee for the notes payable amounted to $175.9 million and $167.7 million
as of March 31, 2011 and December 31, 2010, respectively. Restricted notes receivable as a guarantee for the notes payable amounted
to $219.0 million and $159.3 million as of March 31, 2011 and December 31, 2010, respectively.



The Company had the following short-term notes payable:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | March 31, 2011 |         |  | December 31, 2010 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- |  | ----------------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | (in thousands) |         |  | (in thousands)    |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | (Unaudited)    |         |  |                   |  
|General Steel (China): Notes payable from banks in China, due various dates from April to August 2011. Restricted cash required of $17.8 million and $11.7 million as of March 31, 2011 and December 31, 2010, respectively; guaranteed by third parties.                                                                                                                                                                                                                                                |  | $              | 29,874  |  |                   | $
|Longmen Joint Venture: Notes payable from banks in China, due various dates from April to November 2011. $152.7 million restricted cash and $219.0 million notes receivable are secured for notes payable as of March 31, 2011, and comparatively $150.7 million restricted cash and $159.3 million notes receivable are secured for notes payable as of December 31, 2010, respectively; some notes are further guaranteed by third parties while others are secured by equipments and land use rights. |  |                | 516,284 |  |                   |  
|Bao Tou: Notes payable from banks in China, due date in April 2011, restricted cash of $5.3 million and $5.3 million as of March 31, 2011 and December 31, 2010, respectively; pledged by buildings.                                                                                                                                                                                                                                                                                                     |  |                | 10,654  |  |                   |  
|Total short-term notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | $              | 556,812 |  |                   | $



Short-term loans



Short-term loans represent amounts due
to various banks, other companies and individuals, and related parties, normally due within one year. The principles of loans are
due at maturity. However, the loans can be renewed.



Short term loans due to banks, related
parties and other parties consisted of the following:



|                                                                                                                                                                                                                                                                                                             |  | March 31, 2011             |         |  | December 31, 2010 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------- | ------- |  | ----------------- | -
|                                                                                                                                                                                                                                                                                                             |  | (in thousands) (Unaudited) |         |  | (in thousands)    |  
|General Steel (China): Loans from banks in China, due various dates from April 2011 to March 2012. Weighted average interest rate 6.1% per annum; some are guaranteed by third parties while others are secured by equipment and inventory.                                                                  |  | $                          | 24,300  |  |                   | $
|Longmen Joint Venture: Loans from banks in China, due various dates from April 2011 to March 2012. Weighted average interest rate 5.4% per annum; some are guaranteed by third parties, restricted cash or notes receivables while others are secured by equipment, buildings, land use right and inventory. |  |                            | 286,720 |  |                   |  
|Total short-term loans - bank                                                                                                                                                                                                                                                                                |  | $                          | 311,020 |  |                   | $



20







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



|                                                                                                                                                                                       |  | March 31, 2011 |         |  | December 31, 2010 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- |  | ----------------- | -
|                                                                                                                                                                                       |  | (in thousands) |         |  | (in thousands)    |  
|                                                                                                                                                                                       |  | (Unaudited)    |         |  |                   |  
|                                                                                                                                                                                       |  | (As restated)  |         |  | (As restated)     |  
|Longmen Joint Venture: Loans from various unrelated companies and individuals, due various dates from April 2011 to November 2012, and weighted average interest rates 6.2% per annum. |  | $              | 70,910  |  |                   | $
|Longmen Joint Venture: Loans from others, due on demand, average interest rates ranging between 0.6% and 3.2% per annum.                                                               |  |                | 59,079  |  |                   |  
|Maoming Hengda: Loans from one unrelated parties, due on demand, none interest bearing.                                                                                                |  |                | 10,592  |  |                   |  
|Total short-term loans – others                                                                                                                                                        |  | $              | 140,581 |  |                   | $



|                                                                                                  |  | March 31, 2011 |        |  | December 31, 2010 |  
|------------------------------------------------------------------------------------------------- |  | -------------- | ------ |  | ----------------- | -
|                                                                                                  |  | (in thousands) |        |  | (in thousands)    |  
|                                                                                                  |  | (Unaudited)    |        |  |                   |  
|                                                                                                  |  | (As restated)  |        |  | (As restated)     |  
|Longmen Joint Venture: Loans from Shaanxi Steel, due on demand and interest rates 5.3% per annum. |  | $              | 13,385 |  |                   | $
|Total short-term loans - related parties                                                          |  | $              | 13,385 |  |                   | $



|                                                                                                       |  | March 31, 2011               |        |  | December 31, 2010            |  
|------------------------------------------------------------------------------------------------------ |  | ---------------------------- | ------ |  | ---------------------------- | -
|                                                                                                       |  | (in thousands) (As restated) |        |  | (in thousands) (As restated) |  
|Longmen Joint Venture: Loans from Shaanxi Steel, due November 2015, and interest rates 5.6% per annum. |  | $                            | 91,320 |  |                              | $
|Total long-term loans - related parties                                                                |  | $                            | 91,320 |  |                              | $



The Company had various loans from unrelated
companies amounted to $140.6 million and $127.7 million as of March 31, 2011 and December 31, 2010, respectively. Of the $140.6
million, $10.6 million loans carry no interest and the remaining $130.0 million are subject to interest rates ranging from 0.6%
to 9.0%. All short term loans from unrelated companies are due on demand and unsecured.



Total interest expenses, excluding capitalized
interest, amounted to $14.1 million and $11.0 million for the three months ended March 31, 2011 and 2010, respectively.



Capitalized interest amounted to $0.7 million
and $0.4 million for the three months ended March 31, 2011 and 2010, respectively.



Note 9 – Deposit due to sales
representatives



Longmen Joint Venture entered into agreements
with various entities to act as the Company’s exclusive sales agent in a specified geographic area.  These exclusive
sales agents must meet certain criteria and are required to deposit a certain amount of money with the Company. In return the sales
agents receive exclusive sales rights in a specified area and discounted prices on products they order. These deposits bear no
interest and are required to be returned to the sales agent once the agreement has been terminated. The Company had $28.4 million
and $52.1 million in deposits due to sales representatives as of March 31, 2011 and December 31, 2010, respectively.



Note 10 – Derivative liabilities



The Company has 3,900,871 warrants outstanding
as result of $40 million notes issued in 2007 and 2,777,778 warrants outstanding in connection with a registered direct offering
in 2009. The aforementioned warrants met the definition of a derivative instrument in the accounting standards and are recorded
at fair value on each reporting period. The change in the value of the derivative liabilities is charged against or credited to
income.



As of March 31, 2011 and December 31, 2010,
derivative liabilities amounted to $2.0 million and 5.6 million, respectively.



21







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



The Company has the following warrants
outstanding:



|Outstanding As of December 31, 2010          |  |  | 6,678,649 | 
|-------------------------------------------- |  |  | --------- | 
|Granted                                      |  |  | -         | 
|Forfeited                                    |  |  | -         | 
|Exercised                                    |  |  | -         | 
|Outstanding As of March 31, 2011 (Unaudited) |  |  | 6,678,649 | 



|Outstanding Warrants |      |  | Exercisable Warrants | 
|-------------------- | ---- |  | -------------------- | 
|Exercise Price       |      |  | Number               | 
|$                    | 5.00 |  |                      | 



Note 11 – Supplemental disclosure
of cash flow information (as restated)



Interest paid amounted to $4.7 million
and $2.4 million for the three months ended March 31, 2011 and 2010, respectively.



The Company paid income tax amounted to $0.4 million
and $0.8 million for the three months ended March 31, 2011 and 2010, respectively.



Effective interest charge on the Notes
of $0.2 million was capitalized into construction in progress for the three months ended March 31, 2010.



Other receivables – related parties
from Shaanxi Steel of $59.3 was offset with short-term loans due to the same related party as of March 31, 2011.



Note 12 –
Deferred lease income (as restated)



As discussed in Note 2, in connection to
construction of two new blast furnaces systems, to compensate the Company, in the fourth quarter of 2010, Shaanxi Steel reimbursed
Longmen JV USD 16.4 million (RMB 108 million) related to the value of assets dismantled, various site preparation costs incurred
by Longmen JV and rent under a 40-year property sub-lease that was entered into by the parties in June 2009 (the "Longmen
Sub-lease"), and USD 27.8 million (RMB 183 million) for the reduced production efficiency caused by the construction. In addition,
in 2010 and 2011, Shaanxi Steel reimbursed Longmen JV USD 13.5 million (RMB 89 million) each year for trial production costs related
to the two new blast furnaces, two new converters and one new sintering machine constructed and owned by Shaanxi Steel. The compensations
totaled USD 57.7 million (RMB 380 million), among which USD 52.0 million (RMB 343 million) were recorded as a deferred sub-lease
income from the land which was sub-leased by Longmen Joint Venture to Shaanxi Steel on the new furnaces constructed as of December
31, 2010. The deferred lease income is amortized to income over the remaining term of the 40-year sub-lease. For the three month
ended March 31, 2011 and 2010, the Company recognized deferred lease income of $451,800 and $136,538, respectively. As of
March 31, 2011 and December 31, 2010, the balance of deferred lease income amounted to $77.6 million and $57.6 million.



|                                                        |  | March 31, 2011               |        |   | December 31, 2010            |  
|------------------------------------------------------- |  | ---------------------------- | ------ | - | ---------------------------- | -
|                                                        |  | (Unaudited)                  |        |   |                              |  
|                                                        |  | (in thousands) (As restated) |        |   | (in thousands) (As restated) |  
|Beginning balance                                       |  | $                            | 57,591 |   |                              | $
|Add: Compensation for dismantled assets                 |  |                              | -      |   |                              |  
|Add: Compensation for loss of efficiency                |  |                              | -      |   |                              |  
|Add: Compensation for trial production Cost             |  |                              | 13,604 |   |                              |  
|Add: Deferred depreciation cost during trial production |  |                              | 6,689  |   |                              |  
|Less: Lease income recognized                           |  |                              | (452   | ) |                              |  
|Exchange rate effect                                    |  |                              | 172    |   |                              |  
|Ending balance                                          |  | $                            | 77,604 |   |                              | $



22







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Note 13 – Taxes (as restated)



Income tax



Significant components of the provision
for income taxes on earnings and deferred taxes on net operating losses from operation for the three months ended March 31, 2011
and 2010 are as follows:



|                               |  | March 31, 2011            |        |   | March 31, 2010 |  
|------------------------------ |  | ------------------------- | ------ | - | -------------- | -
|(In thousands)                 |  | (Unaudited) (As restated) |        |   | (As restated)  |  
|Current                        |  | $                         | 750    |   |                | $
|Deferred                       |  |                           | (3,501 | ) |                |  
|Total benefit for income taxes |  | $                         | (2,751 | ) |                | $



According to Chinese tax regulations, the
net operating loss can be carried forward to offset with operating income for the next five years. Management believes the deferred
tax asset is fully realizable.



The principal component of the deferred income tax assets is
as follows:



|                                                                                                   |  | March 31, 2011                           |        |   | December 31, 2010            |  
|-------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | ------ | - | ---------------------------- | -
|                                                                                                   |  | (in thousands) (Unaudited) (As restated) |        |   | (in thousands) (As restated) |  
|Beginning balance                                                                                  |  | $                                        | 15,301 |   |                              | $
|(Tax assets realized) net operating loss carry forward for other subsidiaries                      |  |                                          | (1,128 | ) |                              |  
|Effective tax rate                                                                                 |  |                                          | 25     | % |                              |  
|Deferred tax asset                                                                                 |  | $                                        | (282   | ) |                              | $
|Longmen Joint Venture and some subsidiaries, (tax asset realized) net operating loss carry-forward |  |                                          | 20,409 |   |                              |  
|Effective tax rate                                                                                 |  |                                          | 15     | % |                              |  
|Deferred tax asset                                                                                 |  | $                                        | 3,061  |   |                              | $
|Exchange difference                                                                                |  |                                          | 23     |   |                              |  
|Totals                                                                                             |  | $                                        | 18,103 |   |                              | $



The estimated tax savings due to the reduced tax rate for the
three months ended March 31, 2011 and 2010 are $(2.0) million and $(1.5) million, respectively. The net effect on income per share
if the income tax had been applied would increase loss per share by $(0.04) and $(0.04) for the three months ended March 31, 2011
and 2010, respectively.



Under the Income Tax Laws of the PRC, General Steel (China),
is subject to an income tax at an effective rate of 25%. Baotou Steel Pipe Joint Venture is located in Inner Mongolia province,
Maoming Hengda is located in Guangdong province and Tianwu Joint Venture is located in Tianjin Port Free Trade Zone. The three
subsidiaries are subject to an effective income tax rate at 25%.



Longmen Joint Venture is located in the Mid-West region of China.
It qualifies for the “Go-West” tax rate of 15% promulgated by the government. In 2010, the Chinese government announced
that the “Go-West” tax initiative will extended for 10 years, and thus, the preferential tax rate of 15% will be in
effect until 2020. This special tax treatment for Longmen Joint Venture will be evaluated on a year-to-year basis by the local
tax bureau.



23







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



The following table reconciles the U.S. statutory rates to the
Company’s effective tax rate for the years ended March 31, 2011 and 2010 are as follows:



|                                                                              |  | March 31, 2011 |       |    | March 31, 2010 | 
|----------------------------------------------------------------------------- |  | -------------- | ----- | -- | -------------- | 
|                                                                              |  | (Unaudited)    |       |    | (Unaudited)    | 
|                                                                              |  | (As restated)  |       |    | (As restated)  | 
|U.S. Statutory rates                                                          |  |                | 34.0  | %  |                | 
|Foreign income not recognized in the US                                       |  |                | (34.0 | )% |                | 
|China income taxes                                                            |  |                | 25.0  | %  |                | 
|Tax effect of income not taxable for tax purposes (1)                         |  |                | 1.8   | %  |                | 
|Effect of different tax rate of subsidiaries operating in other jurisdictions |  |                | (11.5 | )% |                | 
|Total provision for income taxes                                              |  |                | 15.3  | %  |                | 



|(1) | This represents derivative expenses (income) and stock compensation expenses incurred by the Company that are not deductible/taxable in the PRC for the three months ended March 31, 2011 and 2010.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company has cumulative undistributed deficit of foreign
subsidiaries of approximately $32.6 million as of March 31, 2011. Accordingly, no provision has been made for U.S. deferred taxes
related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would have
to be provided if we concluded that such earnings will be remitted in the future.



General Steel Holdings,
Inc. was incorporated in the United States and has incurred net operating losses for income tax purposes for the three months ended
March 31, 2011. The net operating loss carry forwards for United States income taxes amounted to $1.9 million, which may be available
to reduce future years’ taxable income. These carry forwards will expire, if not utilized, through 2031. Management believes
that the realization of the benefits from these losses appears uncertain due to the Company’s limited operating history and
continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the
deferred tax asset benefit to reduce the asset to zero. The valuation allowance as of March 31, 2011 was $0.6 million. The net
change in the valuation allowance for the three months ended March 31, 2011 was $0.1 million. Management will review this valuation
allowance periodically and make adjustments as warranted.



Value added tax



Enterprises or individuals who sell commodities,
engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC
laws. The value added tax standard rates are 13% to 17% of the gross sales price. A credit is available whereby VAT paid on the
purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used
to offset the VAT due on sales of the finished product. As of March 31, 2011 and December 31, 2010, the Company had $21.2 million
and $37.3 million value added tax credit which were available to offset the future VAT payable, respectively.



VAT on sales and VAT on purchases amounted
to $214.5 million and $176.9 million, respectively, for the three months ended March 31, 2011, $117.5 million and $87.8 million,
respectively, for the three months ended March 31, 2010. Sales and purchases are recorded net of VAT collected and paid as the
Company acts as an agent for the government. VAT taxes are not impacted by the income tax holiday.



Taxes payable consisted of the following:



|                     |  | March 31, 2011 |       |  | December 31, 2010 |  
|-------------------- |  | -------------- | ----- |  | ----------------- | -
|                     |  | (in thousands) |       |  | (in thousands)    |  
|                     |  | (Unaudited)    |       |  |                   |  
|                     |  | (As restated)  |       |  | (As restated)     |  
|VAT taxes payable    |  | $              | 6,345 |  |                   | $
|Income taxes payable |  |                | 475   |  |                   |  
|Misc taxes           |  |                | 2,034 |  |                   |  
|Totals               |  | $              | 8,854 |  |                   | $



24







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Note 14 – Earnings per share (as
restated)



The calculation of earnings per share is
as follows:



|(in thousands except per share data)                                   |  | March 31, 2011            |            |   | March 31, 2010            |  
|---------------------------------------------------------------------- |  | ------------------------- | ---------- | - | ------------------------- | -
|                                                                       |  | (Unaudited) (As restated) |            |   | (Unaudited) (As restated) |  
|Loss attributable to holders of common shares                          |  | $                         | (8,917     | ) |                           | $
|Basic and diluted weighted average number of common shares outstanding |  |                           | 54,839,733 |   |                           |  
|Loss per share                                                         |  |                           |            |   |                           |  
|Basic & diluted                                                        |  | $                         | (0.16      | ) |                           | $



There is no dilutive
effect for its earnings per share as the exercise price of warrants were higher than the stock market price during the period.
There is no dilutive effect for its earnings per share for the three months ended March 31, 2011 and 2010.



Note 15 – Related party transactions
and balances (as restated)



Related party transactions



On March 31, 2010, General Steel (China),
a subsidiary in which the Company holds a controlling interest, entered into a lease agreement with Tianjin Daqiuzhuang Steel Plates
Co., Ltd. (the “Lessee”), whereby General Steel (China) will lease its facility located at No. 1, Tonga Street, Daqizhuang
Town, Junghai County, Tianjin City to the Lessee (the “Lease Agreement”). The Lease Agreement provides approximately
776,078 square feet of workshops, lands, equipments and other facilities to the Lessee and allows the Company to reduce overhead
costs while providing a recurring monthly revenue stream resulting from payments due thereunder. The term of the Lease Agreement
is from January 1, 2010 to December 31, 2011 and the monthly base rental rate due to General Steel (China) is approximately $0.2
million (RMB1.68 million). The lessee partially owned by a related party Beijing Wendlar Co., Ltd, and is managed by the former
general manager of General Steel (China). For the three months ended March 31, 2011 and 2010, General Steel (China) realized rental
income in the amount of $0.8 million and $0.7 million from the Lessee, respectively.



The future rental payments to be received
associated with the Lease Agreement are as follow:



|Year ended March 31, |  | Amount         |      
|-------------------- |  | -------------- | -----
|                     |  | (in thousands) |      
|2012                 |  | $              | 2,301
|Thereafter           |  |                | -    
|Total                |  | $              | 2,301



The following chart summarized sales to
the related party transactions for the three months ended March 31, 2011 and 2010.





|Name of related parties                                                   |  | Relationship                                                     |  |  | March 31,2011  |         |         | March 31,2010  |  
|------------------------------------------------------------------------- |  | ---------------------------------------------------------------- |  |  | -------------- | ------- | ------- | -------------- | -
|                                                                          |  |                                                                  |  |  | (in thousands) |         |         | (in thousands) |  
|                                                                          |  |                                                                  |  |  | (Unaudited)    |         |         |                |  
|Shaanxi Longmen (Group) Co, Ltd and its subsidiaries (“Long Steel Group”) |  | Noncontrolling shareholder of Longmen Joint Venture              |  |  | $              | 144,173 |         |                | $
|Tianjin Hengying Trading Co., Ltd                                         |  | Common control under CEO                                         |  |  |                | 25,486  |         |                |  
|Tianjin Dazhan Industry Co, Ltd                                           |  | Common control under CEO                                         |  |  |                | 20,261  |         |                |  
|Hancheng Haiyan Coking                                                    |  | Investee of Long Steel Group                                     |  |  |                | 11,393  |         |                |  
|General Qiugang steel tube  Co, Ltd                                       |  | Common control under CEO                                         |  |  |                | 7,150   |         |                |  
|Shaanxi Steel                                                             |  | Majority shareholder of Long Steel Group                         |  |  |                | 521     |         |                |  
|Beijing Daishang Trade Co., Ltd.                                          |  | Noncontrolling shareholder of Longmen Joint Venture’s subsidiary |  |  |                |         |         |                |  
|Tianjin Daqiuzhuang Steel Plates Co., Ltd.                                |  | Common control under CEO                                         |  |  |                | -       |         |                |  
|Others                                                                    |  |                                                                  |  |  |                | 1       |         |                |  
|Total                                                                     |  |                                                                  |  |  |                | $       | 208,985 |                |  



25







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



The following charts summarize purchases from the related party
transactions for the three months ended March 31, 2011 and 2010.



|Name of related parties          |  | Relationship                                                     |  |  | March 31, 2011             |         |         | March 31, 2010 |  
|-------------------------------- |  | ---------------------------------------------------------------- |  |  | -------------------------- | ------- | ------- | -------------- | -
|                                 |  |                                                                  |  |  | (in thousands) (Unaudited) |         |         | (in thousands) |  
|Long Steel Group                 |  | Noncontrolling shareholder of Longmen Joint Venture              |  |  | $                          | 194,361 |         |                | $
|Hengying and Dazhan              |  | Common control under CEO                                         |  |  |                            | -       |         |                |  
|Jingma Jiaohua                   |  | Investee of Longmen Joint Venture’s subsidiary (unconsolidated)  |  |  |                            | 4,689   |         |                |  
|Hancheng Haiyan Coking           |  | Investee of Long Steel Group                                     |  |  |                            | 100,036 |         |                |  
|Beijing Daishang Trade Co., Ltd. |  | Noncontrolling shareholder of Longmen Joint Venture’s subsidiary |  |  |                            | -       |         |                |  
|Others                           |  |                                                                  |  |  |                            | 23      |         |                |  
|Total                            |  |                                                                  |  |  |                            | $       | 299,109 |                |  



Related
party balances



| | a. | Accounts receivables – related parties:
| | -- | ---------------------------------------



|Name of related parties            |  | Relationship                                        |  |  | March 31, 2011 |     |     | December 31, 2010 |  
|---------------------------------- |  | --------------------------------------------------- |  |  | -------------- | --- | --- | ----------------- | -
|                                   |  |                                                     |  |  | (in thousands) |     |     | (in thousands)    |  
|                                   |  |                                                     |  |  | (Unaudited)    |     |     |                   |  
|                                   |  |                                                     |  |  | (As restated)  |     |     | (As restated)     |  
|Tianjing Hengying Trading Co, Ltd. |  | Common control under CEO                            |  |  | $              | -   |     |                   | $
|Hancheng Haiyan Coking             |  | Investee of Long Steel Group                        |  |  |                | 487 |     |                   |  
|Long Steel Group                   |  | Noncontrolling shareholder of Longmen Joint Venture |  |  |                | -   |     |                   |  
|Shaanxi Steel                      |  | Majority shareholder of Long Steel Group            |  |  |                | 82  |     |                   |  
|Total                              |  |                                                     |  |  |                | $   | 569 |                   |  



| | b. | Other receivables - related parties:
| | -- | ------------------------------------



|Name of related parties                    |  | Relationship                                        |  |  | March 31, 2011                           |       |       | December 31, 2010            |  
|------------------------------------------ |  | --------------------------------------------------- |  |  | ---------------------------------------- | ----- | ----- | ---------------------------- | -
|                                           |  |                                                     |  |  | (in thousands) (Unaudited) (As restated) |       |       | (in thousands) (As restated) |  
|Long Steel Group                           |  | Noncontrolling shareholder of Longmen Joint Venture |  |  | $                                        | -     |       |                              | $
|Mao Ming Sheng Zhe                         |  | Common control under CEO                            |  |  |                                          | 5,874 |       |                              |  
|Tianjin Daqiuzhuang Steel Plates Co., Ltd. |  | Common control under CEO                            |  |  |                                          | 1,848 |       |                              |  
|Tianjin Dazhan Industry Co, Ltd            |  | Common control under CEO                            |  |  |                                          | -     |       |                              |  
|Others                                     |  |                                                     |  |  |                                          | 424   |       |                              |  
|Total                                      |  |                                                     |  |  |                                          | $     | 8,146 |                              |  



26







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



| | c. | Advances on inventory purchase – related parties:
| | -- | -------------------------------------------------



|Name of related parties      |  | Relationship             |  |  | March 31, 2011             |       |       | December 31, 2010 |  
|---------------------------- |  | ------------------------ |  |  | -------------------------- | ----- | ----- | ----------------- | -
|                             |  |                          |  |  | (in thousands) (Unaudited) |       |       | (in thousands)    |  
|Tianjin General Qiugang Pipe |  | Common control under CEO |  |  | $                          | 9,353 |       |                   | $
|Total                        |  |                          |  |  |                            | $     | 9,353 |                   |  



|d. | Accounts payable - related parties:
|-- | -----------------------------------



|Name of related parties           |  | Relationship                                                     |  |  | March 31, 2011             |        |         | December 31, 2010 |  
|--------------------------------- |  | ---------------------------------------------------------------- |  |  | -------------------------- | ------ | ------- | ----------------- | -
|                                  |  |                                                                  |  |  | (in thousands) (Unaudited) |        |         | (in thousands)    |  
|Tianjin Hengying Trading Co., Ltd |  | Common control under CEO                                         |  |  | $                          | 13,332 |         |                   | $
|Tianjin Dazhan Industry Co., Ltd  |  | Common control under CEO                                         |  |  |                            | 11,790 |         |                   |  
|Mao Ming Sheng Zhe                |  | Common control under CEO                                         |  |  |                            | -      |         |                   |  
|Hancheng Haiyan Coking            |  | Noncontrolling shareholder of Long Steel Group                   |  |  |                            | 45,916 |         |                   |  
|Henan Xinmi Kanghua               |  | Noncontrolling shareholder of Longmen Joint Venture’s subsidiary |  |  |                            | -      |         |                   |  
|Jingma Jiaohua                    |  | Investee of Longmen Joint Venture’s subsidiary (unconsolidated)  |  |  |                            | -      |         |                   |  
|Long Steel Group                  |  | Noncontrolling shareholder of Longmen Joint Venture              |  |  |                            | 40,520 |         |                   |  
|Beijing Daishang Trading Co., Ltd |  | Noncontrolling shareholder of Longmen Joint Venture’s subsidiary |  |  |                            | 2,385  |         |                   |  
|Others                            |  |                                                                  |  |  |                            | 1,067  |         |                   |  
|Total                             |  |                                                                  |  |  |                            | $      | 115,010 |                   |  



| | e. | Short-term loans - related parties:
| | -- | -----------------------------------



|Name of related parties |  | Relationship                             |  |  | March 31, 2011                           |        |        | December 31, 2010            |  
|----------------------- |  | ---------------------------------------- |  |  | ---------------------------------------- | ------ | ------ | ---------------------------- | -
|                        |  |                                          |  |  | (in thousands) (Unaudited) (As restated) |        |        | (in thousands) (As restated) |  
|Shaanxi Steel           |  | Majority shareholder of Long Steel Group |  |  | $                                        | 13,385 |        |                              | $
|Total                   |  |                                          |  |  |                                          | $      | 13,385 |                              |  



|f. | Other payables – related parties
|-- | --------------------------------



|Name of related parties          |  | Relationship                      |  |  | March 31, 2011 |       |       | December 31, 2010 |  
|-------------------------------- |  | --------------------------------- |  |  | -------------- | ----- | ----- | ----------------- | -
|                                 |  |                                   |  |  | (in thousands) |       |       | (in thousands)    |  
|                                 |  |                                   |  |  | (Unaudited)    |       |       |                   |  
|Tianjin Hengying Trading Co, Ltd |  | Common control under CEO          |  |  | $              | -     |       |                   | $
|Yangpu Capital Automobile        |  | Common control under CEO          |  |  |                | 1,355 |       |                   |  
|Tianjin General Qiugang Pipe     |  | Common control under CEO          |  |  |                | -     |       |                   |  
|Wenchun Han                      |  | Director of General Steel (China) |  |  |                | 2,131 |       |                   |  
|Others                           |  |                                   |  |  |                | 16    |       |                   |  
|Total                            |  |                                   |  |  |                | $     | 3,502 |                   |  



27







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



| | g. | Customer deposits – related parties:
| | -- | ------------------------------------



|Name of related parties          |  | Relationship                                        |  |  | March 31, 2011                           |        |        | December 31, 2010            |  
|-------------------------------- |  | --------------------------------------------------- |  |  | ---------------------------------------- | ------ | ------ | ---------------------------- | -
|                                 |  |                                                     |  |  | (in thousands) (Unaudited) (As restated) |        |        | (in thousands) (As restated) |  
|Tianjin Hengying Trading Co, Ltd |  | Common control under CEO                            |  |  | $                                        | 150    |        |                              | $
|Hancheng Haiyan Coking           |  | Investee of Long Steel Group                        |  |  |                                          | -      |        |                              |  
|Long Steel Group                 |  | Noncontrolling shareholder of Longmen Joint Venture |  |  |                                          | 42,127 |        |                              |  
|Beijing Shenhua Xinyuan          |  | Common control under CEO                            |  |  |                                          | 1,303  |        |                              |  
|Others                           |  |                                                     |  |  |                                          | -      |        |                              |  
|Total                            |  |                                                     |  |  |                                          | $      | 43,580 |                              |  



| | h. | Long-term loans – related parties:
| | -- | ----------------------------------



|Name of related parties |  | Relationship                             |  |  | March 31, 2011               |        |        | December 31, 2010            |  
|----------------------- |  | ---------------------------------------- |  |  | ---------------------------- | ------ | ------ | ---------------------------- | -
|                        |  |                                          |  |  | (in thousands) (As restated) |        |        | (in thousands) (As restated) |  
|Shaanxi Steel           |  | Majority shareholder of Long Steel Group |  |  | $                            | 91,320 |        |                              | $
|Total                   |  |                                          |  |  |                              | $      | 91,320 |                              |  



The Company also guaranteed bank loans
of related parties amounting to $23.0 million and $3.0 million as of March 31, 2011 and as of December 31, 2010, respectively.



| | i. | Deferred lease income
| | -- | ---------------------





|                                                        |  | March 31, 2011            |        |   | December 31, 2010 |  
|------------------------------------------------------- |  | ------------------------- | ------ | - | ----------------- | -
|                                                        |  | (in thousands)            |        |   | (in thousands)    |  
|                                                        |  | (unaudited) (As restated) |        |   | (As restated)     |  
|Beginning balance                                       |  | $                         | 57,591 |   |                   | $
|Add: Compensation for dismantled assets                 |  |                           | -      |   |                   |  
|Add: Compensation for loss of efficiency                |  |                           | -      |   |                   |  
|Add: Compensation for trial production Cost             |  |                           | 13,604 |   |                   |  
|Add: Deferred depreciation cost during trial production |  |                           | 6,689  |   |                   |  
|Less: Lease income realized                             |  |                           | (452   | ) |                   |  
|Exchange rate effect                                    |  |                           | 172    |   |                   |  
|Ending balance                                          |  | $                         | 77,604 |   |                   | $



For the three month ended March 31, 2011
and 2010, the Company recognized deferred rent from Shaanxi Steel, a related party, amounting $451,800 and $136,538, respectively.



Note 16 - Equity



2010 Equity Transactions



The Company granted senior management and
directors 733,300 shares of common stock as compensation in 2010. The shares were valued at the quoted market price on the
date granted. The Company recorded compensation expense of $2.2 million for the year ended December 31, 2010.



28







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



On June 7, 2010, the Company issued 928,163
shares of common stock to one of Maoming Hengda’s creditor to settle the other short-term loans.



On August 4, 2010, $3.3 million of the
Notes was converted to 1,208,791 shares of common stock. According to the Notes agreement, the Company incurred the make whole
interest expense of $0.7 million and accrued interest expense of $0.2 million, 350,885 shares of common stock were issued.



On December 21, 2010, the Company’s
Board of Directors has authorized to repurchase up to an aggregate of one million (1,000,000) shares of its common stock as part
of a share repurchase program (the “Share Repurchase Program”).  The Share Repurchase Program does not have
an expiration date and these repurchases may be made from time to time in the open market or in privately negotiated transactions
in accordance with applicable laws. As of December 31, 2010, the Company has repurchased 316,760 shares with $ 0.9 million
cost.



2011 Equity Transactions



On March 31, 2011, the Company granted
senior management and directors 240,734 shares of common stock at $2.4 per share, as compensation. The shares were valued at the
quoted market price on the date granted. The Company recorded compensation expense of $0.6 million.



During the three months ended March 31,
2011, the Company has repurchased 396,900 shares with $1.1 million pursuant to the Share Repurchase Program. The Company had total
713,660 shares of treasury stock as of March 31, 2011.



Note 17 – Retirement plan



Regulations in the PRC require the Company
to contribute to a defined contribution retirement plan for all employees. All Joint Venture employees are entitled to a retirement
pension amount calculated based upon their salary at their date of retirement and their length of service in accordance with a
government managed pension plan. The PRC government is responsible for the pension liability to the retired staff. The Company
is required to contribute 20% of the employees’ monthly base salary or 12% of the minimum social average salary of the city
where the factory located, which is higher. Employees are required to contribute 8% of their base salary to the plan. The minimum
social average salary is announced by local Social Security bureau and renewed annually. Total pension expense incurred by the
Company amounted to $1.5 million and $1.1 million for the three months ended March 31, 2011 and 2010, respectively.



Note 18 – Statutory reserves



The laws and regulations of the People’s
Republic of China require that before an enterprise distributes profits to its partners, it must first satisfy all tax liabilities,
provide for losses in previous years, and make allocations, in proportions determined at the discretion of the board of directors,
to the statutory reserves. The statutory reserves include the surplus reserve funds and the enterprise fund and these statutory
reserves represent restricted retained earnings.



Surplus reserve fund



The Company is required to transfer 10%
of its net income, as determined in accordance with the PRC accounting rules and regulations, to a statutory surplus reserve fund
until such reserve balance reaches 50% of the Company’s registered capital.



The transfer to this reserve must be made
before distribution of any dividend to shareholders. The surplus reserve fund is non-distributable other than during liquidation
and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share
capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the
shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered
capital.



29







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



Note 19 –
Commitment and contingencies



Commitments



Baotou Steel Pipe Joint Venture has a 5
years rental agreement with Bao Gang Jianan for buildings. The agreement began on June 2007 for $0.3 million (or RMB1.8 million)
per year.



As of March 31, 2011, total future minimum
lease payments for the unpaid portion under an operating lease were as follows:



|Year ended,    |  | Amount         |    
|-------------- |  | -------------- | ---
|               |  | (in thousands) |    
|March 31, 2012 |  | $              | 274
|March 31, 2013 |  |                | 68 
|Total          |  | $              | 342



Total rental expense amounted to $0.1 million
and $0.1 million for the three months ended March 31, 2011 and 2010, respectively,



Longmen Joint Venture has $6.1 million
contractual obligations in its construction project as of March 31 2011.



The Company entered an agreement to build
a TRT Electricity Generator (“TRT”) inside Longmen Joint Venture’s production plant. The Company makes payments
for the cost via scheduled payments after the TRT was put into use in April 2009. The future payment schedule associated with the
arrangement is as follow:



|Years ended March 31, |  | Amount         |    
|--------------------- |  | -------------- | ---
|                      |  | (in thousands) |    
|2012                  |  | $              | 573
|Thereafter            |  |                | -  
|Total                 |  | $              | 573



Contingencies



As of March 31, 2011, Longmen Joint Venture
guaranteed bank loans for related parties and third parties bank loans, including line of credit and others, amounting to $118.2
million.



|Nature of guarantee                                 |  | Guarantee amount |         |  | Guaranty period |                                         
|--------------------------------------------------- |  | ---------------- | ------- |  | --------------- | ----------------------------------------
|(In thousands)                                      |  | (Unaudited)      |         |  |                 |                                         
|                                                    |  |                  |         |  |                 |                                         
|Line of credit                                      |  |                  | 62,435  |  |                 | Various from May 2011 to September 2012 
|Bank loans                                          |  |                  | 15,755  |  |                 | Various from May 2011 to August 2012    
|Notes payable                                       |  |                  | 4,566   |  |                 | Various from May 2011 to August 2012    
|Confirming storage                                  |  |                  | 34,568  |  |                 | Various from April 2011 to December 2011
|Financing by the rights of goods delivery in future |  |                  | 913     |  |                 | April 2011                              
|Total                                               |  | $                | 118,237 |  |                 |                                         



The Company has evaluated the debt guarantees
and concluded that the likelihood of having to make payments under the guarantees is remote.



Note 20 – Segments (as restated)



The Company’s chief operating decision
maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income
from operations pursuant to ASC 280, Segment Report. The company has determined that it has four reportable segments according
to its region divisions in PRC: Longmen Joint Venture in Shaanxi province, Maoming Hengda in Guangdong province, Baotou Steel Pipe
Joint Venture in Inner Mongolia province and General Steel (China) & Tianwu Joint Venture in Tianjin City.



The segments are consistent with the way
the company manages its business, each segment operating under separate management groups and producing discrete financial information.
The accounting principles applied at the operating segment level in determining income from operations is generally the same as
those applied at the consolidated financial statement level.



30







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



The following represents results of segment
operations for the three months ended March 31, 2011 and 2010:



|                                             |  | For the three months ended March 31, |        
|-------------------------------------------- |  | ------------------------------------ | -------
|Sales:                                       |  | 2011                                 |        
|                                             |  | (As restated)                        |        
|Longmen Joint Venture                        |  | $                                    | 709,306
|Maoming Hengda                               |  |                                      | 544    
|Baotou Steel Pipe Joint Venture              |  |                                      | 614    
|General Steel (China) & Tianwu Joint Venture |  |                                      | -      
|Consolidated sales (Unaudited)               |  | $                                    | 710,464



|Gross profit                                 |  | 2011          |       |   | 2010          |  
|-------------------------------------------- |  | ------------- | ----- | - | ------------- | -
|                                             |  | (As restated) |       |   | (As restated) |  
|Longmen Joint Venture                        |  | $             | 5,598 |   |               | $
|Maoming Hengda                               |  |               | (422  | ) |               |  
|Baotou Steel                                 |  |               | (127  | ) |               |  
|General Steel (China) & Tianwu Joint Venture |  |               | -     |   |               |  
|Consolidated gross profit (Unaudited)        |  | $             | 5,049 |   |               | $



|Income from operations:                       |  | 2011          |        |   | 2010          |  
|--------------------------------------------- |  | ------------- | ------ | - | ------------- | -
|                                              |  | (As restated) |        |   | (As restated) |  
|Longmen Joint Venture                         |  | $             | (8,886 | ) |               | $
|Maoming Hengda                                |  |               | (892   | ) |               |  
|Baotou Steel                                  |  |               | (421   | ) |               |  
|General Steel (China) & Tianwu Joint Venture  |  |               | (458   | ) |               |  
|Reconciling item (1)                          |  |               | 1,205  |   |               |  
|Consolidated loss from operations (Unaudited) |  | $             | (9,452 | ) |               | $



|Net income attributable to controlling interest                        |  | 2011          |        |   | 2010          |  
|---------------------------------------------------------------------- |  | ------------- | ------ | - | ------------- | -
|                                                                       |  | (As restated) |        |   | (As restated) |  
|Longmen Joint Venture                                                  |  | $             | (9,072 | ) |               | $
|Maoming Hengda                                                         |  |               | (1,121 | ) |               |  
|Baotou Steel                                                           |  |               | (239   | ) |               |  
|General Steel (China) & Tianwu Joint Venture                           |  |               | (828   | ) |               |  
|Reconciling item (1)                                                   |  |               | 2,343  |   |               |  
|Consolidated net loss attributable to controlling interest (Unaudited) |  | $             | (8,917 | ) |               | $



|Depreciation and amortization:                         |  | 2011 |       |  | 2010 |  
|------------------------------------------------------ |  | ---- | ----- |  | ---- | -
|Longmen Joint Venture                                  |  | $    | 7,503 |  |      | $
|Maoming Hengda                                         |  |      | 590   |  |      |  
|Baotou Steel                                           |  |      | 60    |  |      |  
|General Steel (China) & Tianwu Joint Venture           |  |      | 769   |  |      |  
|Consolidated depreciation and amortization (Unaudited) |  | $    | 8,922 |  |      | $



|Interest expenses:                           |  | 2011          |        |  | 2010          |  
|-------------------------------------------- |  | ------------- | ------ |  | ------------- | -
|                                             |  | (As restated) |        |  | (As restated) |  
|Longmen Joint Venture                        |  | $             | 13,798 |  |               | $
|General Steel (China) & Tianwu Joint Venture |  |               | 321    |  |               |  
|Consolidated interest expenses (Unaudited)   |  | $             | 14,119 |  |               | $



31







GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2011

(Unaudited)



|Capital expenditures:                         |  | 2011 |        |  | 2010 |  
|--------------------------------------------- |  | ---- | ------ |  | ---- | -
|Longmen Joint Venture                         |  | $    | 10,662 |  |      | $
|Maoming Hengda                                |  |      | 216    |  |      |  
|Baotou Steel                                  |  |      | 23     |  |      |  
|General Steel (China) & Tianwu Joint Venture  |  |      | 8      |  |      |  
|Reconciling item (1)                          |  |      | 3      |  |      |  
|Consolidated captial expenditures (Unaudited) |  | $    | 10,912 |  |      | $



| | (1) | Reconciling amounts refer to the unallocated expenses of the Company, General Steel Investment Co., Ltd, Yangpu Shengtong Investment Co., Ltd and Qiu Steel for the three months ended March 31, 2011 and 2010, respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Note 21 –
Subsequent events



On April 29, 2011, the Company and its
subsidiary, Longmen Joint Venture entered a 20-year unified management agreement with Shaanxi Coal and Shaanxi Steel. Pursuant
to the agreement, Longmen Joint Venture will provide daily management of operations and operate production equipment constructed
by Shaanxi Steel at a facility owned by Longmen Joint Venture in Hancheng Shaanxi province, China.



At its designed efficiency levels, the
new equipment, including two new 1,280 cubic meter blast furnaces constructed by Shaanxi Steel, is expected to add three million
tons crude steel production capacity per year. Up to now, General Steel has 4 million tons of crude steel annual production capacity,
plus 3 million tons of crude steel annual production capacity jointly managed with Shaanxi Steel.



This agreement follows the completion of
a two-year construction and installation process and four months of testing of Shaanxi Steel’s equipment at the Longmen Joint
Venture. The testing of the equipment was completed in April 2011, and the Company launched full-scale production in May 2011.
On an initial basis, the equipment is expected to run at 85% of its capacity, with total output at the facility expected to be
approximately six million metric tons of crude steel annual production per year. In addition, this agreement states that Shaanxi
Steel has the responsibilities to make compensation for the losses of Longmen Joint Venture's assets, production caused by the
construction of two new blast furnaces and the trial production cost incurred in the test run period.



For the first two years under the agreement
Longmen Joint Venture will receive 60% of the pre-tax profit on the sale of products manufactured at the Longmen Joint Venture
facility, with the remaining 40% distributed to Shaanxi Steel. Profit distributed to Shaanxi Steel will be classified as an operating
expense on the Company's consolidated statements of operations.



32









ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.



Note Regarding Forward-Looking Statements



The following discussion of the financial condition and results
of operations should be read in conjunction with the consolidated financial statements and related notes thereto. The following
discussion contains forward-looking statements. General Steel Holdings, Inc. is referred to herein as “we,” “our,"
"us" and "the Company.” The words or phrases “would be,” “will allow,” “expect
to,” “intends to,” “will likely result,” “are expected to,” “will continue,”
“is anticipated,” “estimate,” or similar expressions are intended to identify forward-looking statements.
Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual
results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties,
including: (a) those risks and uncertainties related to general economic conditions in the PRC, including regulatory factors that
may affect such economic conditions; (b) whether we are able to manage our planned growth efficiently and operate profitable operations,
including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that
management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether we are able
to generate sufficient revenues or obtain financing to sustain and grow our operations; and (d) whether we are able to successfully
fulfill our primary requirements for cash which are explained below under “Liquidity and Capital Resources.” Unless
otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking
statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Additional
information regarding certain factors which could cause actual results to differ from such forward-looking statements include,
but are not limited to, those described in Item 1A, “Risk Factors”, to our Annual Report in Form 10-K for the fiscal
year ended December 31, 2010.



Recent Developments and First Quarter Highlights



The first quarter of 2011 was highlighted by record sales revenue
and continued production costs increase:



| | · | Sales revenue increased by 56.8% to $710.5 million, up from $453.0 million in first quarter of 2010.
| | - | ----------------------------------------------------------------------------------------------------

| | · | Sales volume totaled 1.2 million metric tons, an increase of 14.8% compared to 1.0 million metric tons in first quarter of
2010.
| | - | --------------------------------------------------------------------------------------------------------------------------------

| | · | On April 29, 2011, we, along with our subsidiary Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”),
entered into a 20-year Cooperation Agreement with Shaanxi Iron and Steel Group Co., Ltd (“Shaanxi Steel”) and its parent
company Shaanxi Coal and Chemical Industry Group Co., Ltd. (“Shaanxi Coal”). Under the terms of the agreement, Longmen
Joint Venture will provide daily management of operations of new equipment constructed by Shaanxi Steel.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In the above mentioned Cooperation Agreement, we also formed a strategic partnership with Shaanxi Coal, whereby Shaanxi Coal
will provide raw materials at favorable pricing and financial support to our operation.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | As of May 9, 2011, the company had repurchased 979,481 shares of common stock in open market transactions at an average price
of $2.65 per share pursuant to the repurchase program launched in December 2010.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our continuing growth demonstrates
the following strengths:



| | · | Our two-pronged growth strategy of upgrading our existing operations and growing through merger and acquisition activities
has continued to be successful; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We are a direct beneficiary of the PRC economic stimulus infrastructure spending program and “Go-West” Initiative.
| | - | ------------------------------------------------------------------------------------------------------------------



OVERVIEW



We were incorporated on August 5, 2002,
in the State of Nevada. We are headquartered in Beijing, China and operate a diverse portfolio of Chinese steel companies. We serve
various industries and produce a variety of steel products including, but not limited to: reinforced bars (“rebar”),
hot-rolled carbon and silicon sheets, spiral-weld pipes and high-speed wire. Our current aggregate annual production capacity of
steel products is 7 million metric tons of crude steel. Individual industry segments have unique demand drivers, such as rural
income, infrastructure construction and energy consumption. Domestic economic conditions are also an overall demand driver for
all our products.



33







Our vision is to become one of the largest
and most profitable non-government owned steel companies in the PRC. Our mission is to grow our business organically and through
the acquisition of Chinese steel companies to increase their profitability and efficiencies by utilizing western management practices
and advanced production technologies, and the infusion of capital resources.



Our two-pronged growth strategy includes
organic growth and mergers and acquisitions (“M&A”). On the organic growth side, we aim to grow through operation
optimization, capacity expansion and margin expansion by improving operational efficiency and cost structure. On the M&A side,
we aim to expand through mergers, joint ventures and acquisitions targeting state-owned enterprise steel companies and selected
entities with outstanding potential. We have executed this strategy to date by acquiring a controlling interest positions in three
joint ventures. Our business currently operates through four steel-related subsidiaries and one raw material trading subsidiary
and we are actively attempting to acquire additional assets.



Unless the context indicates otherwise,
as used herein the terms “General Steel”, the “company”, “Registrant”, “we”, “our”
and “us” refer to General Steel Holdings, Inc. and its subsidiaries.



Steel-Related Subsidiaries and Raw Material Trading Company



We presently have controlling interests in
four steel-related subsidiaries and one raw material trading subsidiary:



| | · | General Steel (China) Co., Ltd. (“General Steel (China)”);
| | - | ----------------------------------------------------------

| | · | Baotou Steel - General Steel Special Steel Pipe Joint Venture Company Limited (“Baotou Steel Pipe Joint Venture”);
| | - | ------------------------------------------------------------------------------------------------------------------

| | · | Shaanxi Longmen Iron and Steel Co., Ltd. (“Longmen Joint Venture”);
| | - | -------------------------------------------------------------------

| | · | Maoming Hengda Steel Co., Ltd. (“Maoming Hengda”); and
| | - | ------------------------------------------------------

| | · | Tianwu General Steel Material Trading Co., Ltd.(“Tianwu Joint Venture”).
| | - | ------------------------------------------------------------------------



General Steel (China) Co., Ltd.



General Steel (China), formerly known as
“Tianjin Daqiuzhuang Metal Sheet Co., Ltd.”, started operations in 1988. General Steel (China)’s core business
is manufacturing high quality hot-rolled carbon and silicon steel sheets mainly used in the production of small agricultural vehicles
and other specialty markets.



General Steel (China) has ten steel sheet
production lines capable of processing approximately 400,000 metric tons of 0.75mm to 2.0mm hot-rolled steel sheets per year. Products
were sold through a domestic network of 35 distributors and three regional sales offices.



General Steel (China) uses a traditional
rolling mill production sequence, including heating, rolling, cutting, annealing, and flattening to process and cut coil segments
into steel sheets which have a length of approximately 2,000mm, a width of approximately 1,000mm, and a thickness ranging from
0.75mm to 2.0mm. Limited size adjustments can be made to meet order requirements. Products sold under the registered “Qiu
Steel” brand name.



On May 14, 2009, General Steel (China) changed
its official name from “Tianjin Daqiuzhuang Metal Sheet Co., Ltd.” to better reflect its role as a merger and acquisition
platform for steel company investments in China. In some instances, General Steel (China) retains the use of the name “Daqiuzhuang
Metal” for brand recognition purposes within the industry.



On March 31, 2010, General Steel (China)
entered into a lease agreement whereby General Steel (China) leased its facility to Tianjin Daqiuzhuang Steel Plates Co., Ltd.
(“Lessee”). The lease provides approximately 776,078 square feet of workshops, land, equipment and other facilities
to the Lessee and reduces overhead costs while providing a recurring monthly revenue stream resulting from payments due thereunder.
The term of the lease is from January 1, 2010 to December 31, 2011 and the monthly base rental rate due to General Steel (China)
is approximately $246,096 (RMB1.68 million). The former General Manager of General Steel (China) currently manages Tianjin Daqiuzhuang
Steel Plates Co., Ltd. Changing the business model of this facility from a direct operations model to a leased operations model
reduces overhead costs and provides a steady revenue stream in the form of fixed monthly lease revenue.



34







Baotou Steel - General Steel Special Steel Pipe Joint
Venture Company Limited.



On April 27, 2007, General Steel (China)
and Baotou Iron and Steel Group Co., Ltd. (“Baotou Steel”) entered into an Amended and Restated Joint Venture Agreement,
amending the Joint Venture Agreement entered into on September 28, 2005, to increase General Steel (China)'s ownership interest
in the related joint venture to 80%. The joint venture company’s name is Baotou Steel - General Steel Special Steel Pipe
Joint Venture Company Limited, a Chinese limited liability company (“Baotou Steel Pipe Joint Venture”). Baotou Steel
Pipe Joint Venture obtained its business license from government authorities in the PRC on May 25, 2007, and started its operations
in July 2007. Baotou Steel Pipe Joint Venture has four production lines capable of producing 100,000 metric tons of double spiral-weld
pipes primarily used in the energy sector to transport oil and steam. These pipes have a diameter ranging from 219mm to 1240mm,
a wall thickness ranging from 6mm to 13mm, and a length ranging from 6m to 12m. Presently, Baotou Steel Pipe Joint Venture sells
its products using an internal sales force to customers in the Inner Mongolia Autonomous Region and the northwest region of the
PRC.



Shaanxi Longmen Iron and Steel Co., Ltd.



Effective June 1, 2007, through two subsidiaries,
General Steel (China) and Tianjin Qiu Steel Investment Co., Ltd., we entered into a Joint Venture Agreement with Shaanxi Longmen
Iron & Steel Group Co., Ltd. (“Long Steel Group”) to form Longmen Joint Venture. Through our two subsidiaries,
we invested approximately $39 million cash and collectively hold approximately 60% of Longmen Joint Venture.



Long Steel Group, located in Hancheng city,
Shaanxi province, in China’s central region, was founded in 1958 and incorporated in 2002. Long Steel Group operates as a
fully-integrated steel production facility. Fewer than 10% of steel companies in China have fully-integrated steel production capabilities.



Currently, Longmen Joint Venture has five
branch offices, five subsidiaries under direct control and six entities in which it has a noncontrolling interest. It employs approximately
7,984 full-time workers. In addition to steel production, Longmen Joint Venture operates transportation services through its Changlong
Branch, located at Hancheng city, Shaanxi province. Changlong Branch owns 154 vehicles and provides transportation services exclusively
to Longmen Joint Venture.



Longmen Joint Venture’s rebar products
are categorized within the steel industry as “longs” (referencing their shape). Rebar is generally considered a regional
product because its weight and dimension make it ill-suited for cost-effective long-haul ground transportation. By our estimates,
the market demand for rebar in Shaanxi province is six to eight million metric tons per year. Slightly more than half of this demand
comes from Xi’an, the capital of Shaanxi province, located 180km from Longmen Joint Venture’s main steel production
site. Currently, we estimate that we have an approximate 72% share in the Xi’an market for rebar.



An established regional network of approximately
100 distributors and four sales offices sell Longmen Joint Venture’s products. All products sell under the registered brand
name of “Yulong,” which has strong regional recognition and awareness. Rebar and billet products carry ISO 9001 and
9002 certification and other of Longmen Joint Venture’s products have won national quality awards. Products produced at the
facility have been used in the construction of the Yangtze River Three Gorges Dam, the Xi’an International Airport, the Xi’an
city subway system and the Xi Luo Du and the Xiang Jia Ba hydropower projects.



In September 24, 2007, Longmen Joint Venture
acquired a 74.92% ownership interest in Longmen Iron and Steel Group Co., Ltd. Environmental Protection Industry Development Co.,
Ltd. (“Longmen EPID”). At the same time, Longmen Joint Venture entered into a equity transfer agreement with Long Steel
Group to acquire a 36% ownership interest in its subsidiary, Longmen Iron and Steel Group Co., Ltd. Hualong Fire Retardant Materials
Co., Ltd. (“Hualong”). Longmen Joint Venture paid $430,000 (RMB3.3 million) in exchange for the ownership interest
and is the largest shareholder in Hualong. Hualong’s facility produces fire-retardant materials used in various steel making
processes.



In January 2010, Longmen Joint Venture completed
its acquisition of a controlling interest in Longmen EPID pursuant to an equity transfer agreement with Shaanxi Fangxin Industrial
Co., Ltd. (“Shaanxi Fangxin”), the parent company of Longmen EPID. Longmen Joint Venture paid RMB8,678,383 to Shaanxi
Fangxin to acquire a 25.08% ownership interest in Longmen EPID. Longmen EPID became a branch of Longmen Joint Venture.



On January 11, 2008, Longmen Joint Venture
completed the acquisition of a controlling interest in Hancheng Tongxing Metallurgy Co., Ltd. (“Tongxing”). Longmen
Joint Venture contributed its land use right of 21.45 hectares (approximately 53 acres) with an appraised value of approximately
$4.1 million (RMB30 million). Pursuant to an agreement with Tongxing, the land use right was exchanged for shares of Tongxing valued
at approximately $3.1 million (RMB22.7 million), giving Longmen Joint Venture a 22.76% ownership stake in Tongxing and making it
Tongxing’s largest shareholder. Tongxing has a rebar processing facility with an annualized rolling capacity of 300,000 metric
tons.



In November 2010, we brought online a 800,000
metric ton capacity rebar production line relocated from the Maoming Hengda facility.



35













From 2009 to 2010, we worked with Shaanxi
Steel to build new state-of-the-art equipment, including two 1,280 cubic meter blast furnaces, two 120 metric ton converters and
one 400 square meter sintering machine. During the period of construction, we provided assistance, such as labor and technology,
while we dismantled the operations of certain small furnaces to accommodate the new production systems. We paid certain costs and
economic losses on behalf of Shaanxi Steel during the construction. On December 22, 2010, we were reimbursed by Shaanxi Steel in
the amount of approximately $25.0 million (RMB169.0 million) for the costs that we paid on behalf of Shaanxi Steel, and were compensated
by Shaanxi Steel in the amount of approximately $27.1 million (RMB183.1 million) for the economic losses incurred through September
30, 2010.



On April 29, 2011, we entered into a 20-year
cooperation agreement with Shaanxi Coal and Shaanxi Steel. Under the terms of this agreement, Longmen Joint Venture will provide
daily management of operations and will operate the production equipment constructed by Shaanxi Steel at the Longmen Joint Venture
facility.



Under the terms of the cooperation agreement,
Shaanxi Coal has committed to provide Longmen Joint Venture with raw materials, including coke and coal, at favorable pricing,
as well as providing access to its nationwide transportation system to reduce our overall transportation costs. In addition, this
agreement includes provisions pursuant to which both Shaanxi Coal and Shaanxi Steel are expected to provide financial support,
including credit guarantees, as needed for operations.



In the first two years of the collaboration,
profits will be divided between Longmen Joint Venture and Shaanxi Steel with Longmen Joint Venture receiving 60% and Shaanxi Steel
receiving 40% of the pre-tax profits, respectively. The distribution of profits will be subject to adjustment after the first two
years based upon each entity’s actual investment of time and resources into the unified management system.



Maoming Hengda Steel Co., Ltd.



On June 25, 2008, through our subsidiary
Qiu Steel Investment Co., Ltd., we paid approximately $7.1 million (RMB50 million) in cash to purchase 99% of Maoming Hengda Steel
Group, Ltd. (“Maoming Hengda”). The total registered capital of Maoming Hengda is approximately $77.8 million (RMB544.6
million).



Maoming Hengda’s core business is the
production of high-speed wire and rebar products used in the construction industry. Located on 140 hectares (approximately 346
acres) in Maoming city, Guangdong province, the Maoming Hengda facility previously had two production lines capable of producing
1.8 million metric tons of 5.5mm to 16mm diameter high-speed wire and 12mm to 38mm diameter rebar annually. The products were sold
through nine distributors targeting customers in Guangxi province and the western region of Guangdong province.



To take advantage of stronger market demand
in Shaanxi, in the second quarter of 2009, we relocated the 800,000 metric ton capacity rebar production line from Maoming Hengda’s
facility to Longmen Joint Venture. Thereafter, in December 2010, we relocated the 1,000,000 metric ton capacity high-speed wire
production line from Maoming Hengda’s facility to Longmen Joint Venture to meet the increasing demand in Shaanxi province.



In December 2010, we brought online a new
400,000 ton capacity rebar production line. The new rebar line was constructed as a result of a strategic alliance agreement between
Maoming and Zhuhai Yueyufeng Iron and Steel Co., Ltd. (“Yueyufeng”) on February 3, 2010. According to this agreement,
Yueyufeng paid the processing fee in advance in three installments to support the construction of the rebar production line at
the Maoming facility.



Tianwu General Steel Material Trading Co., Ltd.



We formed Tianwu General Steel Material Trading
Co., Ltd. (“Tianwu Joint Venture”) with Tianjin Material and Equipment Group Corporation (“TME Group”).
The contributed capital of Tianwu Joint Venture is approximately $2.9 million (or RMB20 million), of which we hold a 60% controlling
interest. TME Group is one of the largest and most diversified commodity trading groups in China.



Tianwu Joint Venture will source raw materials,
mainly overseas iron ore, and is expected to supply approximately 20% to 50% of our iron-ore needs, amounting to approximately
two to three million metric tons on an annual basis.



36







Production Capacity Information Summary by Subsidiary



|                                         |  | General Steel (China) |                             |  | Baotou Steel Pipe Joint Venture |  |                  | Longmen Joint Venture |  | Maoming Hengda                  | 
|---------------------------------------- |  | --------------------- | --------------------------- |  | ------------------------------- |  | ---------------- | --------------------- |  | ------------------------------- | 
|Annual Production Capacity (metric tons) |  |                       |                             |  |                                 |  |                  |                       |  |                                 | 
|Crude Steel                              |  |                       | -                           |  |                                 |  | -                |                       |  | 7 million                       | 
|Processing                               |  |                       | 400,000                     |  |                                 |  | 100,000          |                       |  | 2.5 million                     | 
|                                         |  |                       |                             |  |                                 |  |                  |                       |  |                                 | 
|Main Products                            |  |                       | Hot-rolled sheet            |  |                                 |  | Spiral-weld pipe |                       |  | Rebar/High-speed wire           | 
|                                         |  |                       |                             |  |                                 |  |                  |                       |  |                                 | 
|Main Application                         |  |                       | Light Agricultural vehicles |  |                                 |  | Energy transport |                       |  | Infrastructure and construction | 



Marketing and Customers



We sell our products primarily to distributors,
and we typically collect payment from these distributors in advance. Our marketing efforts are mainly directed toward those customers
who have exacting requirements for on-time delivery, customer support and product quality. We believe that these requirements as
well as product planning are critical factors in our ability to serve this segment of the market.



Demand for our Products



Overall, domestic economic growth is an important
demand driver of our products, especially construction and infrastructure projects, rural income growth and energy demand.



At Longmen Joint Venture, growth in regional
construction and infrastructure projects drives demand for our products. According to the 12th Five Year National Economic and
Social Development Plan (“NESDP”) (2011-2015), development of China’s western region is one of the top-five economic
priorities of the nation. Shaanxi province, where Longmen Joint Venture is located, has been designated as a focal point for development
in the western region, and Xi’an, the provincial capital, has been designated as a focal point for this development. Longmen
Joint Venture is 180 km from Xi’an and it does not have a major competitor within a 250 km radius.



Recently, the Chinese government passed the
Cheng-Yu Economic Zone Plancentered on Chongqi City and Sichuan Province, covering 206,000 square kilometers, to further
accelerate the development of western region. We anticipate that the demand will increase in those areas in the future, and we
expect that our expanded production capacity will be able to successfully meet the increase in demand.



According to the Shaanxi provincial government,
the total fixed asset investment for Shaanxi province was approximately RMB850 billion (approximately $129 billion) for the year
ended December 31, 2010, an increase of 30% over the same period in 2009.



In January 2011, Shaanxi provincial government
announced that it will invest RMB80 billion (approximately $12.2 billion) in the construction of hydroprojects, which is triple
the amount invested during 11th Five Year National Economic and Social Development Plan. In addition to hydroprojects, according
to the central government, 5,000 miles of high-speed railway will be built in 2011, with 16,000 total miles to be built by 2020.



In January 2011, the central government announced
a low-income housing policy. Under this policy, 10 million low-income houses will be built in 2011, with 36 million low-income
houses to be built over a five-year period. To ensure the construction of the low-income housing, the central government has announced
that it will increase its investment in the project by 34.7% over its 2010 investment to approximately RMB103 billion, and the
local governments are expected to increase their investment as well.



We anticipate strong demand for our products
driven by these and many other construction and infrastructure projects. We believe there will be sustained regional demand for
several years as the government continues to drive western region development efforts.



At Baotou Steel Pipe Joint Venture, energy
sector growth, which spurs the need to transport oil, natural gas and steam, drives demand for spiral-weld steel pipe. Presently,
demand is fueled by smaller pipeline projects and municipal energy infrastructure projects within the Inner Mongolia Autonomous
Region.



37







At Maoming Hengda, infrastructure growth
and business development in Maoming city, the surrounding Guangxi cities and the western region of Guangdong province, drive demand
for our construction steel products. As a second tier city, the industrialization and urbanization of Maoming city is one of the
focal points of economic development in the west Guangdong province.



Supply of Raw Materials



The primary raw materials we use for steel
production are iron ore, coke, hot-rolled steel coil and steel billets. Baotou Steel Pipe Joint Venture uses hot-rolled steel coil
as its main raw material. Longmen Joint Venture uses iron ore and coke as its main raw materials. Maoming Hengda uses steel billets
as its main raw material. Iron ore is the main raw material used to produce hot-rolled steel coil and steel billets. As a result,
the prices of iron ore and coke are the primary raw material cost drivers for our products.



Longmen Joint Venture has 7 million tons
of annual crude steel capacity. At Longmen Joint Venture, approximately 85% of production costs are associated with raw materials,
with iron ore being the largest component.



According to the China Iron and Steel Association,
approximately 60% of the China domestic steel industry demand for iron ore must be filled by imports. At Longmen Joint Venture,
we purchase iron ore from four primary sources: Mulonggou mine (owned by Longmen Joint Venture), Daxigou mine (owned by Long Steel
Group, our partner in Longmen Joint Venture), from surrounding local mines and from abroad. According to the terms of our Longmen
Joint Venture Agreement with the Long Steel Group, we have a first right of refusal for sales from the Daxigou mine and for its
development. We presently purchase all of the production from this mine.



Coke



Coke, produced from metallurgical coal (also
known as coking coal), is our second most consumed raw material, after iron ore. It requires approximately 550kg to 600kg of coke
to make one metric ton of crude steel.



Our Longmen Joint Venture facility is located
in the center of China’s coal belt. We source all coke used at Longmen Joint Venture from the town in which Longmen Joint
Venture is located. This ensures a dependable, local supply and minimum transportation costs.



The sources and/or major suppliers of our raw materials are
as follows (1):

Longmen Joint Venture



|Name of Major Supplier                          |  | Raw Material Purchased |          |  | % of Total Raw Material Purchased |  |      | Relationship with Company | 
|----------------------------------------------- |  | ---------------------- | -------- |  | --------------------------------- |  | ---- | ------------------------- | 
|Long Steel Group                                |  |                        | Iron Ore |  |                                   |  | 21.6 | %                         | 
|Shaanxi Haiyan Coal Chemical Industry Co., Ltd. |  |                        | Coke     |  |                                   |  | 19.2 | %                         | 
|Shaanxi Huanghe Material Co., Ltd.              |  |                        | Coke     |  |                                   |  | 10.5 | %                         | 
|Shaanxi Hancheng Longhui Trading Co., Ltd.      |  |                        | Coke     |  |                                   |  | 6.3  | %                         | 
|Shaanxi Yingde Gas Co, Ltd.                     |  |                        | Gas      |  |                                   |  | 3.7  | %                         | 
|                                                |  |                        | Total    |  |                                   |  | 61.3 | %                         | 



Baotou Steel Pipe Joint Venture



|Name of Major Supplier             |  | Raw Material Purchased |            |  | % of Total Raw Material Purchased |  |      | Relationship with Company | 
|---------------------------------- |  | ---------------------- | ---------- |  | --------------------------------- |  | ---- | ------------------------- | 
|Baotou Gangshang Trading Co., Ltd. |  |                        | Steel coil |  |                                   |  | 80.7 | %                         | 
|Baotou Weifengda Trading Co., Ltd. |  |                        | Steel coil |  |                                   |  | 17.6 | %                         | 
|                                   |  |                        | Total      |  |                                   |  | 98.3 | %                         | 



38







Maoming Hengda



|Name of Major Supplier                              |  | Raw Material Purchased |           |  | % of Total Raw Material Purchased |  |      | Relationship with Company | 
|--------------------------------------------------- |  | ---------------------- | --------- |  | --------------------------------- |  | ---- | ------------------------- | 
|Hunan Xiangtan Guoshun Electricity & Coal Co., Ltd. |  |                        | Coal      |  |                                   |  | 43.5 | %                         | 
|Maoming Zhengmao Develop Co., Ltd.                  |  |                        | Heavy oil |  |                                   |  | 36.9 | %                         | 
|                                                    |  |                        | Total     |  |                                   |  | 80.4 | %                         | 



Industry consolidation



The central government has had a long-stated
goal to consolidate 50% of domestic steel production among the top ten producers by 2010 and 70% by 2020. In September 2009, the
central government published an industry target to eliminate 80 million metric tons of inefficient capacity from the steel industry
by the end of 2011.



On July 12, 2010, the Ministry of Industry
& Information Technology Commission enacted the Steel Industry Admittance and Operation Qualifications. The new standards specified
requirements for all aspects of steel production in China, which include: size of blast furnaces, size of converters, emission
of waste water, and dust per ton from steel production, quantity of coal used for each process in steel production and output capacity
which commenced in 2009. This policy once again confirmed the central government’s determination to push forward the consolidation
of this fragmented industry of more than 800 companies. While the operational conditions become more stringent, more small and
medium size companies will likely to aggressively look for valued partners which could lead to opportunities for high quality acquisitions
for us. We believe the directives have indirectly strengthened our position as an industry consolidator by creating quantitative
measures we can use to better qualify potential acquisition targets.



Results of Operations for the Three Months Ended March 31,
2011

Sales



Three months ended March 31, 2011 compared with three
months ended March 31, 2010



|SALES                              |  | Three months ended |           |  |                |   |         |             | 
|---------------------------------- |  | ------------------ | --------- |  | -------------- | - | ------- | ----------- | 
|                                   |  | March 31, 2011     |           |  | March 31, 2010 |   |         | Change      | 
|(in thousands, except metric tons) |  | Volume             |           |  | Sales          |   |         | %           | 
|                                   |  | (Unaudited)        |           |  |                |   |         | (Unaudited) | 
|LoLongmen Joint Venture            |  |                    | 1,169,314 |  |                | $ | 709,306 |             | 
|Other                              |  |                    | 19,625    |  |                | $ | 1,158   |             | 
|ToTotal Sales of General Steel     |  |                    | 1,188,939 |  |                |   | 710,464 |             | 



Total sales revenue for the three months
ended March 31, 2011 increased 56.8% to $710.5 million from $453.0 million for the same period in 2010. The increase in sales revenue
compared to the same period in 2010 is predominantly due to the combined effect of the increase in sales volume and average selling
price of rebar. Sales volume increased 14.8% compared to the same period in 2010. The average selling price of rebar increased
22.2% to approximately $606 (RMB3,996) per ton in the first quarter of 2011 from approximately $496 (RMB3,270) per ton in the same
period of 2010.



Longmen Joint Venture comprised approximately
99.8% of total sales for the first quarter 2011. Compared to the same period in 2010, the increase of Longmen Joint Venture’s
production was mainly due to the additional capacity contributed from the new blast furnaces brought online in January 2011. Our
current total monthly production volume is approximately 450,000 to 500,000 tons of crude steel.



Cost of Goods Sold



Three months ended March 31, 2011 compared with three
months ended March 31, 2010



|                                          |  | Three months ended |           |  |                                                                                                                                                                        |  
|----------------------------------------- |  | ------------------ | --------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|                                          |  | March 31, 2011     |           |  | March 31, 2010                                                                                                                                                         |  
|                                          |  |                    |           |  |                                                                                                                                                                        |  
|(in thousands, except metric tons)        |  | Volume             |           |  | Cost As
                                                                                                                                                      restated |  
|                                          |  | (Unaudited)        |           |  |                                                                                                                                                                        |  
|Lo Longmen Joint Venture                  |  |                    | 1,169,314 |  |                                                                                                                                                                        | $
|Other                                     |  |                    | 19,625    |  |                                                                                                                                                                        | $
|Total Cost of Goods Sold of General Steel |  |                    | 1,188,939 |  |                                                                                                                                                                        |  



39







Our primary cost of goods sold is the cost
of raw materials such as iron ore, coke, alloy and scrap steel. The costs of iron ore and coke account for approximately 85% of
our total cost of sales. As a result, the cost of goods sold increased by 57.7% to $705.4 million in the first quarter 2011 from
$447.3 million in the same period of 2010. The increase is mainly due to increasing sales volume and unit costs of raw materials
as a result of the rise in iron ore and coke purchase prices.



Gross Profit



Three months ended March 31, 2011 compared with three
months ended March 31, 2010

|                                    |  | Three months ended |           |  |                                                                                                                                                                                                                         |  
|----------------------------------- |  | ------------------ | --------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -
|(in thousands, except metric tons)  |  | March 31, 2011     |           |  | March 31, 2010                                                                                                                                                                                                          |  
|                                    |  | Volume             |           |  | Gross
                                                                                      Profit As
                                                                                                         restated |  
|                                    |  | (Unaudited)        |           |  |                                                                                                                                                                                                                         |  
|LoLongmen Joint Venture             |  |                    | 1,169,314 |  |                                                                                                                                                                                                                         | $
|Other                               |  |                    | 19,625    |  |                                                                                                                                                                                                                         |  
|Total Gross Profit of General Steel |  |                    | 1,188,939 |  |                                                                                                                                                                                                                         |  



The gross margin has slightly decreased
in the first quarter 2011 to 0.7% compared to 1.3% in the same period in 2010. The decrease is primarily attributable to a drop
in gross profit at Longmen Joint Venture. The drop is predominantly attributable to the increase in the unit costs of raw materials
as a result of the rise in iron ore and coke purchase prices.



The following chart illustrates the trend
of company’s gross margin since first quarter 2010:







Selling, General and Administrative Expenses



Three months ended March 31, 2011 compared with three
months ended March 31, 2010



|(in thousands)                                 |  | Three months ended |        |   |                |  
|---------------------------------------------- |  | ------------------ | ------ | - | -------------- | -
|                                               |  | March 31, 2011     |        |   | March 31, 2010 |  
|                                               |  | (Unaudited)        |        |   | (Unaudited)    |  
|Selling, General And Administrative Expenses   |  | $                  | 14,501 |   |                | $
|SG&A Expenses As A Percentage Of Total Revenue |  |                    | 2.0    | % |                |  



Selling, general and administrative (“SG&A”)
expenses, such as executive compensation, office expenses, legal and accounting charges, travel charges, transportation fees and
various taxes increased 19.5% to $14.5 million for the three months ended March 31, 2011, compared to $12.1 million for the same
period in 2010. The increase was mainly due to the rise of transportation and sales agent charges at Longmen Joint Venture related
to the increase in shipment volume and long distance sales deliveries to markets in Henan, Hubei and Chongqing. SG&A expenses
as a percentage of revenue decreased slightly to 2.0% for the first quarter 2011 from 2.7% for the same period in 2010. The decrease
is due to the increase of sales revenue as a result of expanded production capacity.



40







Income (Loss) from Operations



Three months ended March 31, 2011 compared with three
months ended March 31, 2010

|(in thousands)       |  | Three months ended         |        |   |                            |  
|-------------------- |  | -------------------------- | ------ | - | -------------------------- | -
|                     |  | March 31, 2011 As restated |        |   | March 31, 2010 As restated |  
|                     |  | (Unaudited)                |        |   | (Unaudited)                |  
|Loss From Operations |  | $                          | (9,452 | ) |                            | $



Loss from operations for the three months
ended March 31, 2011 increased to $9.5 million from $6.4 million for the same period in 2010. The increase was predominantly due
to the drop in gross profit caused by higher purchase price of iron ore and coke in 2010.



Other Income (Expense)



Three months ended March 31, 2011 compared with three
months ended March 31, 2010



|(in thousands)                                 |  | Three months ended         |         |   |                            |  
|---------------------------------------------- |  | -------------------------- | ------- | - | -------------------------- | -
|                                               |  | March 31, 2011 As restated |         |   | March 31, 2010 As restated |  
|                                               |  | (Unaudited)                |         |   | (Unaudited)                |  
|                                               |  |                            |         |   |                            |  
|Interest income                                |  | $                          | 1,063   |   |                            | $
|Finance/Interest expense                       |  |                            | (14,119 | ) |                            |  
|Change in fair value of derivative liabilities |  |                            | 3,552   |   |                            |  
|Loss on disposal of fixed assets               |  |                            | (397    | ) |                            |  
|Income from equity investment                  |  |                            | 1,655   |   |                            |  
|Foreign currency transaction gain              |  |                            | 619     |   |                            |  
|Lease income                                   |  |                            | 452     |   |                            |  
|Other non-operating income (expense), net      |  |                            | 305     |   |                            |  
|Total other expenses, net                      |  | $                          | (6,870  | ) |                            | $



Total other expenses, net, for the three
months ended March 31, 2011 were $6.9 million, a 23.3% increase compared to $5.6 million for the same period in 2010. The increase
in total other expenses, net, was mainly a result of the combined effect of a $3.2 million increase in finance/interest expense
and a decrease of $0.4 million in the change in fair value of derivative liabilities.



Change in Fair Value of Derivative Liabilities



According to U.S. GAAP, our December 2007
notes, December 2007 warrants and the December 2009 warrants are considered derivatives and therefore must be valued at fair market
value at each financial reporting date. One of the drivers used to calculate the value of the derivative is our stock price. Changes
in our stock price cause gains or losses to the income statement item.



The change in fair value of derivative liabilities
for the three months ended March 31, 2011 was a gain of $3.6 million compared to a gain of $3.9 million for the same period in
2010. This gain was due to a change in the price of our common stock as of March 31, 2011 compared to fiscal year-ended December
31, 2010. According to accounting principles generally accepted in the United States regarding valuing derivatives, the drop in
our share price resulted in a $3.6 million gain for the three months ended March 31, 2011.



Net Income (Loss) before Noncontrolling Interest



Three months ended March 31, 2011 compared with three
months ended March 31, 2010





|(in thousands)                          |  | Three months ended          |         |   |                             |  
|--------------------------------------- |  | --------------------------- | ------- | - | --------------------------- | -
|                                        |  | March 31, 2011
 As restated |         |   | March 31, 2010 
As restated |  
|                                        |  | (Unaudited)                 |         |   | (Unaudited)                 |  
|Net Loss Before Noncontrolling Interest |  | $                           | (13,571 | ) |                             | $





41







Net Income (Loss) Attributable to General Steel Holdings,
Inc.



Three months ended March 31, 2011 compared with three
months ended March 31, 2010



|(in thousands)                                         |  | Three months ended         |         |   |                            |  
|------------------------------------------------------ |  | -------------------------- | ------- | - | -------------------------- | -
|                                                       |  | March 31, 2011 As restated |         |   | March 31, 2010 As restated |  
|                                                       |  | (Unaudited)                |         |   | (Unaudited)                |  
|Net loss before Noncontrolling                         |  | $                          | (13,571 | ) |                            | $
|Less: Net loss Attributable to Noncontrolling Interest |  |                            | (4,654  | ) |                            |  
|Net Loss Attributable to Controlling Interest          |  | $                          | (8,917  | ) |                            | $



The income or loss attributable to the non-controlling
interests are calculated by the income or loss after tax shared in percentage by the minority group in any subsidiaries which are
not 100% owned by us. Long Steel Group’s non-controlling interest is calculated by using Longmen Joint Venture’s consolidated
net income (loss) after tax, multiplied by the share percentage of Longmen Group in Longmen Joint Venture. Net income (loss) attributable
to Long Steel Group is then equal to the net income (loss) of Longmen Joint Venture multiplied by the 40% non-controlling interest
held by Long Steel Group.



At the consolidation level of Longmen Joint
Venture, there are subsidiaries where Longmen Joint Venture does not have 100% ownership. Income/loss allocation to these non-controlling
interests is based on their equity percentages and the actual results.



Earnings per Share



Three months ended March 31, 2011 compared with three
months ended March 31, 2010



|Loss per Share                                 |  | Three months ended |        |   |                |  
|---------------------------------------------- |  | ------------------ | ------ | - | -------------- | -
|(in thousands, except earnings per share data) |  | March 31, 2011     |        |   | March 31, 2010 |  
|                                               |  | As restated        |        |   | As restated    |  
|                                               |  | (Unaudited)        |        |   | (Unaudited)    |  
|Net Loss Attributable to Controlling Interest  |  | $                  | (8,917 | ) |                | $
|                                               |  |                    |        |   |                |  
|Weighted Average Number Of Shares              |  |                    |        |   |                |  
|Basic                                          |  |                    | 54,840 |   |                |  
|Diluted                                        |  |                    | 54,840 |   |                |  
|                                               |  |                    |        |   |                |  
|Loss Per Share                                 |  |                    |        |   |                |  
|Basic                                          |  | $                  | (0.16  | ) |                | $
|Diluted                                        |  | $                  | (0.16  | ) |                | $



Income Taxes



We did not conduct any business and did
not maintain any branch office in the United States during the three months ended March 31, 2011. Therefore, no provision for withholding
of U.S. federal or state income taxes or tax benefits on the undistributed earnings and/or losses of our company has been made.



General Steel (China) is located in Tianjin
Costal Economic Development Zone and is subject to an effective income tax rate of 25%.



Longmen Joint Venture is located in the
Mid-West Region of China. It qualifies for the “Go-West” tax rate of 15% promulgated by the government. In 2010, the
Chinese government announced that the “Go-West” tax initiative will extended for 10 years, and thus, the preferential
tax rate of 15% will be in effect until 2020. This special tax treatment will be evaluated on a year-to-year basis by the local
tax bureau.



Baotou Steel Pipe Joint Venture is located
in Inner Mongolia Autonomous Region and is subject to an effective income tax rate of 25%.



Maoming Hengda is located in Guangdong province
and subject to an effective income tax rate of 25%.



42







Tianwu Joint Venture is located in Tianjin
Coastal Economic Development Zone and is subject to an effective income tax rate at 25%.



For the three months ended March 31, 2011
and 2010, we had a total tax benefit of $2.8 million and a total tax benefit of $1.9 million, respectively.



We had cumulative undistributed deficit
of foreign subsidiaries of approximately $32.6 million as of March 31, 2011. Accordingly, no provision has been made for U.S. deferred
taxes related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would
have to be provided if we concluded that such earnings will be remitted in the future.



We were incorporated in the United States
and have incurred net operating losses for income tax purposes for the three months ended March 31, 2011 and for the year ended
December 31, 2010. The net operating loss carry forwards for United States income taxes amounted to $1.9 million, which may be
available to reduce future years’ taxable income. These carry forwards will expire, if not utilized at the end of 2031. Management
believes that the realization of the benefits from these losses appears uncertain due to our limited operating history and continuing
losses for United States income tax purposes. Accordingly, we have provided a 100% valuation allowance on the deferred tax asset
benefit to reduce the asset to zero. The valuation allowance as of March 31, 2011 was $0.6 million. Management will review this
valuation allowance periodically and make adjustments as warranted.



Noncontrolling Interest



Noncontrolling interest mainly consists
of Long Steel Group’s 40% interest in Longmen Joint Venture, Baotou Iron and Steel Group’s 20% interest in Baotou Steel
Pipe Joint Venture, a 1% interest in Maoming Hengda by an individual and TME Group’s 40% interest in Tianwu Joint Venture.



Accounts Receivable



Accounts receivable and accounts receivable-related
party were $26.4 million as of March 31, 2011 compared to $22.7 million as of December 31, 2010. This increase was mainly due to
Longmen Joint Venture’s deliveries made to a major government project for which we expect to collect payment in the coming
months.



Inventories



We had an inventory balance of $498.8 million
as of March 31, 2011 compared to $453.6 million as of December 31, 2010. Such balance is comprised of supplies, raw material and
finished products. We increased our stock of finished goods in the first quarter 2011 believing that the selling price of rebar
will increase in the upcoming months.



|Inventory         |  |                            |         |  |                               |  
|----------------- |  | -------------------------- | ------- |  | ----------------------------- | -
|(in thousands)    |  | March 31, 2011 As restated |         |  | December 31, 2010 As restated |  
|                  |  | (Unaudited)                |         |  |                               |  
|Supplies          |  | $                          | 17,181  |  |                               | $
|Raw materials     |  |                            | 294,232 |  |                               |  
|Finished goods    |  |                            | 187,410 |  |                               |  
|                  |  |                            |         |  |                               |  
|Total inventories |  | $                          | 498,823 |  |                               | $



Liquidity and capital resources



As of March 31, 2011, we had cash and restricted
cash totaling $292.3 million.



For the three months ended March 31, 2011,
we used cash flow from continuing operations, borrowings, cash and cash equivalents to fund working capital requirements, pay interest
payments and capital expenditures and to make investments.



We believe our cash flows from operations,
which include customer prepayments and vendor financing, existing cash balances, and credit facilities will be adequate to finance
our working capital requirements, fund capital expenditures, make required debt and interest payments, pay taxes, and support our
operating strategies.



43







The steel business is capital intensive
and we utilize leverage greater than our industry peers, which we believe enables us to generate revenue compared to our shareholder
equity at a rate higher than our industry peers. We utilize leverage in the form of credit from banks, vendor financing, customer
deposits and from other sources. This blended form of financing reduces our reliance on any single source.



Short-term Notes Payable



As of March 31, 2011, we had $556.8 million
in short-term notes payable liabilities, which are secured by restricted cash of $175.9 million and restricted notes receivable
of $219.0 million and other assets. These are lines of credit extended by banks for a maximum of six months and are used to finance
working capital. The short-term notes payable must be paid in full at maturity and credit availability is continued upon payment
at maturity. There are no additional significant financial covenants. We pay zero interest on this type of credit as this is a
monetary tool used by China’s central bank to inject liquidity into the Chinese monetary system.



Short-term Loans – Banks



As of March 31, 2011, we had $311.0 million
in short-term bank loans. These are bank loans with a one year maturity and must be paid in full upon maturity. There are no additional
significant financial covenants tied to these loans. Chinese banks have not been impacted as heavily by the financial crisis as
U.S. banks and we believe our current creditors will renew their lending to us after our loans mature as they have in the past.



We are able to repay our short-term notes
payables and short term bank loans upon maturity using available capital resources.



For more details about our debt, please
see Note 8 in our Notes to the financial statements included in this report.



Cash-flow



Operating Activities



Net cash provided by operating activities
for the three months ended March 31, 2011 was an inflow of $54.7 million compared to an outflow of $9.6 million in the same period
of 2010. This change was mainly due to the combination of the following factors:



| | · | Some non-cash items including net income, such as depreciation and amortization, bad debt recovery (allowance), inventory written-off, loss on disposal of equipment, stock issued for service and compensation, change in fair value of derivative instrument and income from investment and deferred tax assets, resulted in a cash outflow of $9.6 million.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Cash outflow resulting from the increase in notes receivable, accounts receivable, inventories, advances on inventory purchase and advances on inventory purchase – related parties, as well as a decrease in customer deposits-related parties and other payables-related parties, was $159.2 million, compared to an outflow of $116.7 million during the same period in 2010.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Cash inflow due to the decrease in accounts receivables – related parties, other receivables and other receivables-related party, as well as the increase in accounts payable, accounts payable-related parties, other payables and accrued liabilities, customer deposits, taxes payable and deferred lease income, totaled $223.5 million, compared to an inflow of $112.9 million during the same period in 2010.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Investing activities



Net cash used in investing activities was
$15.3 million for the three months ended March 31, 2011 compared to cash outflow of $47.7 million for the three months ended March
31, 2010. Net cash outflow was driven by a decrease in the restricted cash during this period.



44







Financing activities



Net cash used in financing activities was
$15.2 million for the three months ended March 31, 2011 compared to cash inflow of $66.6 million for the three months ended March
31, 2010. Net cash outflow was driven by a decrease in the receipts from deposits due to sales representatives during this period.



Substantially all of
our operations are conducted in China and substantially all of our assets are located within the PRC. In addition, substantially
all of our transactions are denominated in Renminbi (RMB). RMB is subject to the exchange control regulation in China, and, as
a result, China has strict rules for converting RMB to other currencies and the transfer of funds from PRC subsidiaries to the
offshore structure and the U.S. holding companies. Under the laws of the PRC governing foreign invested enterprises, dividend distribution
and other funds transfers are allowed but subject to special procedures under relevant rules and regulations. Foreign-invested
enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting
standards and regulations. In addition, a foreign-invested enterprise in China is required to set aside at least 10.0% of its after-tax
profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reaches
50.0% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested
enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be
distributed to equity owners except in the event of liquidation. Under PRC regulations, RMB is currently convertible into U.S.
Dollars under a company’s “current account” which includes dividends, trade and service-related foreign exchange
transactions, without prior approval of the State Administration of Foreign Exchange (SAFE). Transfers from a company’s “capital
account,” which includes foreign direct investments and loans, can’t be executed without the prior approval of the
SAFE.



There are no restrictions
to distribute or transfer other funds from General Steel Investment to us.



We have never declared
or paid any cash dividends to our shareholders. We do not plan to pay any dividends out of our retained earnings for the year ended
December 31, 2010. With respect to retained earnings accrued after such date, the Company’s Board of Directors may declare
dividends after taking into account our operations, earnings, financial condition, cash requirements and availability and other
factors as it may deem relevant at such time. Any declaration and payment, as well as the amount, of dividends will be subject
to our By-Laws, charter and applicable Chinese and U.S. state and federal laws, including the approval from the shareholders of
each subsidiary which intents to declare such dividends, if applicable.



We have previously
raised money in the U.S. capital markets which has provided the capital needed for our operations and investments activities. Thus
the foreign currency restrictions and regulations in the PRC on the dividends distribution will not have a material impact on our
liquidity, financial condition, and results of operation.



Shelf Registration SEC Form S-3



On October 22, 2009, our shelf registration
statement on Form S-3, for an aggregate offering amount of $60 million, was declared effective by the SEC. From time to time, we
may sell common stock, preferred stock, warrants, debt securities, rights and units in one or more offerings. As discussed below,
in December 2009, we consummated a registered direct offering using the Form S-3 shelf registration statement to issue common stock
and warrants. We may sell the remaining securities registered on the Form S-3 shelf registration statement to or through underwriters,
directly to investors, through agents or any combination of the foregoing.



Each time we offer securities under our
Form S-3 shelf registration statement, we will file a prospectus supplement with the SEC containing more specific information about
the particular offering. The prospectus supplements may also add, update or change information contained in this prospectus. The
Form S-3 shelf registration statement may not be used to offer or sell securities without a prospectus supplement which includes
a description of the method of sale and terms of the offering.



Impact of Inflation



We are subject to commodity price risks
arising from price fluctuations in the market prices of the raw materials. We have generally been able to pass on cost increases
through price adjustments. However, the ability to pass on these increases depends on market conditions influenced by the overall
economic conditions in China. We manage our price risks through productivity improvements and cost-containment measures. We do
not believe that inflation risk is material to our business or our financial position, results of operations or cash flows.



45







Compliance with Environmental Laws and Regulations



Longmen Joint Venture:



Together with our joint venture partners
Long Steel Group and Shaanxi Steel, we have invested RMB580 million in a series of comprehensive projects to reduce our waste emissions
of coal gas, water, and solid waste. In 2005, we received ISO 14001 certification for our overall environmental management system.
We have received several awards from the Shaanxi provincial government as a result of our increased effort in environmental protection.



We have spent more than RMB57 million on
a comprehensive waste water recycling and water treatment system. The 2,000 cubic meter/h treatment capacity system was implemented
at the end of 2005. In 2010, 1.08 metric tons of new water was consumed per metric ton of steel produced.



We have one 10,000 cubic meter coke-oven
gas tank, one 50,000 cubic meter blast furnace coal gas tank and one 80,000 cubic meter converter furnace coal gas tank to collect
the residual coal gas produced from our facility and that of surrounding enterprises. We also have spent RMB230 million on a thermal
power plant with two 25 Kilowatt generators that use the residual coal gas from the blast furnaces and converters as fuel to generate
power.



We have several plants to further process
solid waste generated from the steel making process into useful products such as construction materials, building blocks, porcelain
tiles, curb tops, ornamental tiles, as well as other products.



In 2009, we treated and recycled about 6.8
million tons of waste water, 335,320 tons of slag, 130 million m3 of gas from the converters and 6.1 billion m3 of gas
from the blast furnaces. We also reused 855,714 tons of hot steam and generated 433 million KWH of electricity.



Recently, we spent more than RMB60 million
on the technical upgrade and renovation of the converters and RMB5.5 billion on the upgrade of the blast furnaces and sintering
machines.



Off-balance Sheet Arrangements



There were no off-balance sheet arrangements
in the fiscal quarter ended March 31, 2011 that have or we, in the opinion of management, likely to have current or future material
effect on our financial condition or results of operations.



Contractual Obligations and Commercial Commitments



We have certain fixed contractual obligations
and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest
rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the
timing and amounts of payments. Throughout our operating history, we have funded our contractual obligations and commercial commitments
through financing arrangements and operating cash flow, including but not limited to, the operating income, payments collected
from the customers in advance and stock issuances. Below, we have presented a summary of the most significant assumptions used
in our determination of amounts presented in the tables, in order to assist in the review of this information within the context
of our consolidated financial position, results of operations, and cash flows.



The following tables summarize our contractual
obligations as of March 31, 2011 and the effect these obligations are expected to have on our liquidity and cash flows in future
periods.



|                                                                          |  | Payment due by period                                                                                                                                                                                           |          
|------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------
|                                                                          |  |                                                                                                                                                                                                                 |          
|Contractual obligations                                                   |  | Total As
                                                                                                                                                                                              restated |          
|                                                                          |  | (in thousands)                                                                                                                                                                                                  |          
|Bank loans                                                                |  | $                                                                                                                                                                                                               | 311,020  
|Other loans                                                               |  |                                                                                                                                                                                                                 | 245,286  
|Notes payable                                                             |  |                                                                                                                                                                                                                 | 556,812  
|Deposits due to sales representatives                                     |  |                                                                                                                                                                                                                 | 28,416   
|Lease with Bao Gang Group                                                 |  |                                                                                                                                                                                                                 | 342      
|Construction obligations - Longmen Joint Venture and Maoming Hengda Steel |  |                                                                                                                                                                                                                 | 6,054    
|Total(Unaudited)                                                          |  | $                                                                                                                                                                                                               | 1,147,930



46







Bank loans in China are due either on demand
or, more typically, within one year. These loans can be renewed with the banks. This amount includes estimated interest payments
as well as debt maturities.



As of March 31, 2011, Longmen Joint Venture
guaranteed bank loans for related parties and third parties, including lines of credit, amounting to $118.2 million.



|                                                    |  | Guarantee    |         |  |                 | 
|--------------------------------------------------- |  | ------------ | ------- |  | --------------- | 
|Nature of                                           |  | amount       |         |  |                 | 
|guarantee                                           |  | In thousands |         |  | Guaranty period | 
|Line of credit                                      |  | $            | 62,435  |  |                 | 
|Bank Loans                                          |  |              | 15,755  |  |                 | 
|Notes payable                                       |  |              | 4,566   |  |                 | 
|Confirming Storage                                  |  |              | 34,568  |  |                 | 
|Financing by the rights of goods delivery in future |  |              | 913     |  |                 | 
|Total (unaudited)                                   |  | $            | 118,237 |  |                 | 



Critical Accounting Policies



Management’s discussion and analysis
of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States. Our financial statements reflect the selection
and application of accounting policies which require management to make significant estimates and judgments. See Note 3 to our
consolidated financial statements “Summary of Significant Accounting Policies.” Management bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ
from these estimates under different assumptions or conditions.



We believe that the following reflect the
more critical accounting policies that currently affect our financial condition and results of operations.



Principles of consolidation – subsidiaries



We follow ASC 810-10-15
“Consolidation – Scope and Scope Exceptions” when determining whether to consolidate an entity in our financial
statements. All legal entities which we own directly or indirectly more than 50 percent of the outstanding voting shares are required
to be consolidated given that control rests with the majority owner. Entities in which we own less than 50 percent voting shares
are evaluated in accordance with generally accepted account principles to determine whether we may hold the power of control. If
we hold established power of control in such entities, we consolidate the entities with recognition of the non-controlling interest
in them accordingly.



Revenue recognition



We follow the generally accepted accounting
principles in the United States regarding revenue recognition. Sales revenue is recognized at the date of shipment to customers
when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, we have no other significant obligations
and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are recorded
as customer deposits. Sales revenue represents the invoiced value of goods, net of value-added tax (VAT). All our products sold
in the PRC are subject to a Chinese VAT at a rate of 13% to 17% of the gross sales price. This VAT may be offset by VAT paid by
us on raw materials and other materials included in the cost of producing the finished product.



Use of estimates



The preparation of financial statements
in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying notes. Significant accounting estimates reflected
in our financial statements include fair value of financial instruments, the useful lives of and impairment for property, plant
and equipment, potential losses on uncollectible receivables and convertible notes. Actual results could differ from these estimates.



47







Financial instruments



The accounting standard regarding “disclosures
about fair value of financial instruments” defines financial instruments and requires disclosure of the fair value of financial
instruments held by us. We consider the carrying amount of cash, accounts receivable, other receivables, accounts payable and accrued
liabilities to approximate their fair values because of the short period of time between the origination of such instruments and
their expected realization. For short-term loans and notes payable, we concluded the carrying values are a reasonable estimate
of fair value because of the short period of time between the origination and repayment and their stated interest rate approximates
current rates available.



We also analyze all financial instruments
with features of both liabilities and equity under the accounting standard establishing, “Accounting for certain financial
instruments with characteristics of both liabilities and equity,” the accounting standard regarding “Accounting for
derivative instruments and hedging activities” and “Accounting for derivative financial instruments indexed to, and
potentially settled in, a company’s own stock.” Additionally, we analyze registration rights agreements associated
with any equity instruments issued to determine if penalties triggered for late filing should be accrued under accounting standard
establishing “Accounting for registration payment arrangements.”



Fair value measurements



The accounting standards regarding fair
value of financial instruments and related fair value measurement define fair value, establish a three-level valuation hierarchy
for disclosures of fair value measurement and enhance disclosures requirements for fair value measures. The three levels are defined
as follow:



Level 1: inputs to the valuation methodology
are quoted prices (unadjusted) for identical assets or liabilities in active markets.



Level 2: inputs to the valuation methodology
include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability,
either directly or indirectly, for substantially the full term of the financial instruments.



Level 3: inputs to the valuation methodology
are unobservable and significant to the fair value.



The December 2007 Warrants issued in conjunction
with the December 2007 Notes and December 2009 Warrants issued in connection with a registered direct offering, were carried at
fair value. The fair value was determined using the Cox Rubenstein Binomial Model. Because all inputs to the valuation methodology
include quoted prices are observable, fair value is carried as level 2 inputs, and the change in earnings was recorded. As a result,
the derivative liability is carried on the balance sheet at its fair value.



Noncontrolling interest



Effective January 1, 2009, we adopted generally
accepted accounting principles regarding noncontrolling interests in our consolidated financial statements. Certain provisions
of this statement are required to be adopted retrospectively for all periods presented. Such provisions include a requirement that
the carrying value of noncontrolling interests (previously referred to as minority interests) be removed from the mezzanine section
of the balance sheet and reclassified as equity.



Further, as a result of the adoption of
this accounting standard, net income attributable to noncontrolling interests is now excluded, from the determination of consolidated
net income. In addition, the foreign currency translation adjustment is allocated between controlling and non-controlling interests.



As a result, we reclassified non-controlling
interests in the amounts of $47.6 million and $52.0 million from the mezzanine section to equity on the March 31, 2011 and December
31, 2010 balance sheets, respectively.



Deferred lease income



From June 2009 to
March 2011, we worked with Shaanxi Steel to build new state-of-the-art equipment at the site of our principal subsidiary,
Longmen Joint Venture. As a result, Longmen Joint Venture incurred certain costs of construction as well as economic losses
on suspended production of certain small furnaces and other equipment to accommodate the construction of the new equipment,
on behalf of Shaanxi Steel. To compensate us, in the fourth quarter of 2010, Shaanxi Steel reimbursed Longmen Joint Venture
$16.4 million (RMB 108 million) related to the value of assets dismantled, various site preparation costs incurred by Longmen
Joint Venture and rent under a 40-year property sub-lease that was entered into by the parties in June 2009 (the
"Longmen Sub-lease"), and $27.8 million (RMB 183 million) for the reduced production efficiency caused by the
construction. Applying the lease accounting guidance (ASC 840-20-25-1),we concluded that,
except for the reimbursement for site preparation costs, the amount of reimbursement should be deferred and recognized as a
component of the property that was sub-leased during the construction, to be amortized to income over the remaining terms of
the 40-year sub-lease.



48







Deferred lease income
represents the remaining balance of compensation being deferred.  As of March 31, 2011 and December 31, 2010, the balance
of $77.6 million and $57.6 million represented the balance of remaining deferred lease income respectively.



New Accounting Pronouncements



In April 2010, the FASB issued Accounting
Standards Update 2010-13, “Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of
a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades,” or ASU 2010-13.
ASU 2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated
in currency of a market in which a substantial porting of the entity’s equity securities trades should not be considered
to contain a condition that is not a market, performance, or service condition. Therefore, an entity would not classify such an
award as a liability if it otherwise qualifies as equity. The amendments in this Update are effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2010. We do not expect the adoption of ASU 2010-17 to have
a significant impact on our consolidated financial statements.



In July 2010, the FASB issued Accounting
Standards Update 2010-20 which amend “Receivables” (Topic 310). ASU 2010-20 is intended to provide additional information
to assist financial statement users in assessing an entity’s risk exposures and evaluating the adequacy of its allowance
for credit losses. The disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending
on or after December 15, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and
annual reporting periods beginning on or after December 15, 2010. The amendments in ASU 2010-20 encourage, but do not require,
comparative disclosures for earlier reporting periods that ended before initial adoption. However, an entity should provide comparative
disclosures for those reporting periods ending after initial adoption. We do not expect the adoption of ASU 2010-20 to have a significant
impact on our consolidated financial statements.



In December 2010, the FASB issued ASU 2010-28
which amend “Intangibles- Goodwill and Other” (Topic 350). The ASU modifies Step 1 of the goodwill impairment test
for reporting units with zero or negative carrying amounts. For those reporting entities, they are required to perform Step 2 of
the goodwill impairment test if it is more likely than not that a goodwill impairment exists. An entity should consider whether
there are any adverse qualitative factors indicating that impairment may exist. The qualitative factors are consistent with the
existing guidance in Topic 350, which requires that goodwill of a reporting unit be tested for impairment between annual tests
if an event occurs or circumstances changes that would more likely than not reduce the faire value of a reporting unit below its
carrying amount. ASU 2010-28 is effective for fiscal years, and interim periods within those years beginning after December 15,
2010. Early adoption is not permitted. Our Company is currently evaluating the impact of this ASU; however, we do not expect the
adoption of this ASU will have a material impact on our consolidated financial statements.



In December 2010, the FASB issued ASU 2010-29
which address diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for
business combinations (Topic 805). This ASU specifies that if a public entity presents comparative financial statements, the entity
should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current
year had occurred as of the beginning of the comparable prior annual reporting period only. This ASU also expands the supplemental
pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments
directly attributable to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective
prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2010. Early adoption is permitted. Our Company is currently evaluating the impact of
this ASU and expected the adoption of this ASU will have an impact on our future business combinations.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.



Commodity Price Risk and Related Risks



In the normal course of our business, we
are exposed to market risk or price fluctuations related to the purchase, production or sale of steel products over which we have
little or no control. We do not use any derivative commodity instruments to manage the price risk. Our market risk strategy has
generally been to obtain competitive prices for our products and allow operating results to reflect market price movements dictated
by supply and demand. Based upon a 2010 annual production capacity of 7 million metric tons, a $1 change in the annual average
price of our steel products would change annual pre-tax profits by approximately $7 million.



49







Interest Rate Risk



We are subject to interest rate risk since
our outstanding debt is short-term and bears interest at variable interest rates. The future interest expense could fluctuate in
case of any change in the borrowing rates. We do not use swaps or other interest rate protection agreements to hedge this risk.
We believe our exposure to interest rate risk is not material.



Foreign Currency Exchange Rate Risk



Our operating units, General Steel (China),
Longmen Joint Venture, Baotou Steel Pipe Joint Venture, Maoming Hengda, and Tianwu Joint Venture are all located in the PRC. They
produce and sell all of their products domestically in the PRC. They are subject to the foreign currency exchange rate risks due
to the effects of fluctuations in the RMB on revenues and operating costs and existing assets or liabilities. We have not generally
used derivative instruments to manage this risk. A ten percent (10%) decrease in RMB exchange rate would have resulted in a $0.05
million decrease in net income for the three months ended March 31, 2011.



ITEM 4. CONTROLS AND PROCEDURES.



In the Original 10-Q,
with the participation of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the design and
operation of our disclosure controls and procedures, as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), as of March 31, 2011. Our disclosure controls and procedures are designed (i) to ensure
that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) to ensure that information
required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.



Subsequent
to the Original 10-Q, we have restated our financial statements as set forth in Item 1 of this Amendment No. 1 based on the specific
guidance of the OCA pertaining to the appropriate accounting treatment for certain reimbursements received related to our collaboration
with Shaanxi Steel for the construction of equipment by Shaanxi Steel since June 2009. Based upon the guidance received from the
OCA, which provided materially different accounting treatment for such reimbursements, management has concluded that the
restatements resulted from control deficiencies that represent material weaknesses in our disclosure controls and procedures.



Solely as a result
of the material weakness indentified with respect to our reporting of complex non-routine transactions, management has re-evaluated
our disclosure controls and procedures, and on June 8, 2012, concluded that our disclosure controls and procedures were not effective
as of March 31, 2011. Despite the existence of this material weakness, we believe that the consolidated financial statements included
in this Amendment No. 1 for the quarter ended March 31, 2011 present, in all material aspects, our financial position, results
of operations, comprehensive income (loss) and cash flows for the periods presented in conformity with U.S. GAAP.



Remediation



Our management has dedicated
significant resources to correcting the accounting items discussed with the OCA and to ensuring that we take proper steps to improve
our internal control over financial reporting in the areas of accounting for complex and non-routing transactions.



We have taken a number
of remediation actions that we believe will improve the effectiveness of our internal control over financial reporting including
the following:



| | · | We have engaged an outside professional consulting firm to supplement us with our internal control over
financial reporting;
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | · | We have engaged accounting experts to identify some complicated accounting transactions and apply
applicable accounting policies; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------

| | · | We have established and enhanced staff's training program to update our employees updated
on current accounting pronouncement.
| | - | ------------------------------------------------------------------------------------------------------------------------------



50







Subsequent to June 8, 2012, management
believes the foregoing efforts will effectively remediate the material weakness described above.



PART II – OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS.



From time to time, we are subject to certain
legal proceedings, claims and disputes that arise in the ordinary course of our business. Although we cannot predict the outcomes
of these legal proceedings, we do not believe these actions, in the aggregate, will have a material adverse impact on our financial
position, results of operations or liquidity.



ITEM 1A. RISK FACTORS



To our knowledge and except to the extent
additional factual information disclosed in this Amendment No. 1 relates to such risk factors, there have been no material changes
in the risk factors described in “ITEM 1A. RISK FACTORS” in our Amendment No. 1 to our Annual Report on Form 10-K/A
for the year ended December 31, 2010, which was filed with the SEC on August 29, 2012.



ITEM 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS



The following table provides information
relating to our purchases of our common stock during the three months ended March 31, 2011:



|Period                               |  | Total Number of Shares Purchased |         |  | Average Price Paid per Share |   |      | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  |  | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs | 
|------------------------------------ |  | -------------------------------- | ------- |  | ---------------------------- | - | ---- | -------------------------------------------------------------------------------- |  |  | ------------------------------------------------------------------------------ | 
|                                     |  |                                  |         |  |                              |   |      |                                                                                  |  |  |                                                                                | 
|January 1, 2011 - January 31, 2011   |  |                                  | 396,900 |  |                              | $ | 2.84 |                                                                                  |  |  | 396,900                                                                        | 
|February 1, 2011 - February 28, 2011 |  |                                  | -       |  |                              | $ | -    |                                                                                  |  |  | -                                                                              | 
|March 1, 2011 - March 31, 2011       |  |                                  | -       |  |                              | $ | -    |                                                                                  |  |  | -                                                                              | 
|                                     |  |                                  |         |  |                              |   |      |                                                                                  |  |  |                                                                                | 
|Total (unaudited)                    |  |                                  | 396,900 |  |                              | $ | 2.84 |                                                                                  |  |  | 396,900                                                                        | 



On December 21, 2010, we issued a press release
announcing that our Board of Directors had authorized the repurchase of up to an aggregate of one million (1,000,000) shares of
our common stock as part of a share repurchase program (the “Share Repurchase Program”). The Share Repurchase Program
does not have an expiration date and these repurchases may be made from time to time in the open market or in privately negotiated
transactions in accordance with applicable law. As of May 9, 2011, we have repurchased 979,481 total shares of common stock in
open market transactions at an average per share price of $2.65 under the Share Repurchase Program since its inception.



ITEM 6. EXHIBITS.



(a) Exhibits



|3.1 | Articles of Incorporation of General Steel Holdings, Inc. (included as Exhibit 3.1 to the Form SB-2 filed with the Commission on June 6, 2003 and incorporated herein by reference).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.2 | Amendment to the Articles of Incorporation dated February 22, 2005 (included as Exhibit 3.2 to the Form 10-K filed March 16, 2010 and incorporated herein by reference).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.3 | Amendment to the Articles of Incorporation dated November 14, 2007 (included as Exhibit 3.3 to the Form 10-K filed March 16, 2010 and incorporated herein by reference).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.4 | Certificate of Designation of Series A Preferred Stock
of the registrant (included as Exhibit 10.6 to the Form 10-K filed March 31, 2008 and incorporated herein by reference).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                
|3.5 | Bylaws of General Steel Holdings, Inc. (included as Exhibit
        3.5 to the Form 10-K filed March 16, 2010 and incorporated herein by reference).                           



|31.1 | Certification of the CEO (Principal Executive Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as filed herewith.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|31.2 | Certification of the CFO (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as filed herewith.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32.1 | Certification of the CEO (Principal Executive Officer) and CFO (Principal Financial Officer) pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



51







SIGNATURES



Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                      | General Steel Holdings, Inc.        
|--------------------- | ------------------------------------
|                      |                                     
|Date: August 29, 2012 | By: /s/ Zuosheng Yu                 
|                      | Zuosheng Yu                         
|                      | Chief Executive Officer and Chairman
|                      |                                     
|Date: August 29, 2012 | By: /s/ John Chen                   
|                      | John Chen                           
|                      | Director and Chief Financial Officer





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