UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   ----------
                                   FORM 10-QSB

(X)      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934.

                 For the quarterly period ended March 31, 2005.

(X)      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934


            For the transition period from __________ to __________


                          GENERAL STEEL HOLDINGS, INC.
                 (Name of Small Business Issuer in Its Charter)

              NEVADA                                     412079252
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

        10th Floor, Building A, Haitong Plaza, No.3 Nanlishi Ave. 100037
                                Xicheng District
                                 Beijing, China
               (Address of Principal Executive Offices) (Zip Code)

                              Incorp Services Inc.
                             6075 S. Eastern Avenue
                     Suite 1, Las Vegas, Nevada, 89119-3146
                               Tel: (702) 866-2500
           (Name, address and telephone number for Agent for Service)

                               + 86 (10) 68000346
                           (Issuer's telephone number)

Securities registered under Section 12(b) of the Exchange Act:  none
Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                                (Title of Class)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days.
Yes [X] No [ ]

The number of shares of Common Stock outstanding on May 16, 2005 was 32,250,000.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]



<PAGE>

         Certain financial  information  included in this annual report has been
derived from data originally  prepared in Renminbi ("RMB"),  the currency of the
People's  Republic  of China  ("China"  or "PRC").  For  purposes of this annual
report,  a  conversion  rate of  US$1.00 to RMB 8.26 was  utilized.  There is no
assurance that RMB amounts could have been or could be converted into US dollars
at that rate.





















                                       2
<PAGE>
<TABLE>
<CAPTION>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

                           CONSOLIDATED BALANCE SHEETS
                   AS OF MARCH 31, 2005 AND DECEMBER 31, 2004

                                     ASSETS

                                                                           March 31,    December 31,
                                                                             2005           2004
                                                                         ------------   ------------
                                                                          (Unaudited)     (Audited)
                                                                         ------------   ------------
<S>                                                                      <C>            <C>
CURRENT ASSETS:
   Cash                                                                  $  9,448,120   $  5,547,810
   Restricted cash                                                          2,996,059      3,597,480
   Accounts receivable, net of allowance for doubtful accounts of $0
       and $1,371 as of March 31, 2005 and December 31, 2004                  383,719        523,398
   Notes receivables                                                        5,835,725        374,955
   Other receivables                                                          143,063        214,905
   Inventories                                                             13,407,615     12,826,561
   Advances on inventory purchases                                         11,047,457     13,469,984
   Short-term investment                                                       36,300         36,300
                                                                         ------------   ------------
       Total current assets                                                43,298,058     36,591,393
                                                                         ------------   ------------

PLANT AND EQUIPMENT, net                                                   13,825,685     14,100,324
                                                                         ------------   ------------

OTHER ASSETS:
   Intangible assets - land use right, net of accumulated amortization      2,205,506      2,277,279
                                                                         ------------   ------------

       Total assets                                                      $ 59,329,249   $ 52,968,996
                                                                         ============   ============

                      LIABILITIESAND SHARE HOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                      $     82,454   $    293,348
   Short term loans - bank                                                 27,442,800     25,748,800
   Short term notes payable                                                 6,171,000      6,776,000
   Other payables                                                             716,700        400,110
   Other payable - related party                                              191,646      1,011,012
   Accrued liabilities                                                        265,553        393,532
   Customer deposits                                                        7,861,245      2,009,313
   Deposits due to sales representatives                                    1,291,070      1,231,780
   Taxes payable                                                            1,575,031      1,879,615
                                                                         ------------   ------------
       Total current liabilities                                           45,597,499     39,743,510
                                                                         ------------   ------------

MINORITY INTEREST                                                           4,214,928      4,015,108
                                                                         ------------   ------------

SHAREHOLDERS' EQUITY:
   Common Stock, $0.01 par value, 75,000,000 shares authorized,
       31,250,000 shares issued and outstanding                                31,250         31,250
   Paid-in-capital                                                          6,871,358      6,871,358
   Retained earnings                                                        2,459,420      2,152,976
   Statutory reserves                                                         154,794        154,794
                                                                         ------------   ------------
       Total shareholders' equity                                           9,516,822      9,210,378
                                                                         ------------   ------------
            Total liabilities and shareholders' equity                   $ 59,329,249   $ 52,968,996
                                                                         ============   ============
</TABLE>



The accompanying notes are an integral part of these statements.


                                       3
<PAGE>

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004





                                                       2005            2004
                                                   ------------    ------------
                                                    (Unaudited)     (Unaudited)
                                                   ------------    ------------
REVENUES                                           $ 20,698,733    $ 14,263,117

COST OF SALES                                        18,828,552      13,169,982
                                                   ------------    ------------

GROSS PROFIT                                          1,870,181       1,093,135

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES           653,471         415,072
                                                   ------------    ------------

INCOME FROM OPERATIONS                                1,216,710         678,063

OTHER INCOME (EXPENSE), NET                            (415,746)       (304,057)
                                                   ------------    ------------

INCOME BEFORE PROVISION FOR INCOME TAXES                800,964         374,006
    AND MINORITY INTEREST

PROVISION FOR INCOME TAXES                              294,701         153,674
                                                   ------------    ------------

NET INCOME BEFORE MINORITY INTEREST                     506,263         220,332

LESS MINORITY INTEREST                                  199,819          66,100
                                                   ------------    ------------

NET INCOME                                              306,444         154,232

OTHER COMPREHENSIVE INCOME (LOSS):
    Foreign currency translation adjustment                --              --
                                                   ------------    ------------

COMPREHENSIVE INCOME                               $    306,444    $    154,232
                                                   ============    ============

WEIGHTED AVERAGE NUMBER OF SHARES                    31,250,000      31,215,000
                                                   ============    ============

EARNING PER SHARE, BASIC AND DILUTED               $      0.010    $      0.005
                                                   ============    ============



The accompanying notes are an integral part of these statements.


                                       4
<PAGE>
<TABLE>
<CAPTION>

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
               FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004



                                                 Number           Common         Paid-in         Statutory
                                               of shares          stock          capital         reserves
                                             -------------    -------------    -------------   -------------
<S>                                          <C>              <C>              <C>             <C>
BALANCE, January 1, 2004 restated in            31,215,000    $      31,215    $   6,871,218   $        --
  in accordance with acquisition agreement
  Net income                                          --               --               --              --
                                             -------------    -------------    -------------   -------------
BALANCE, March 31, 2004                         31,215,000           31,215        6,871,218            --

   Net income                                         --               --               --              --
   Adjustment to statutory reserve                    --               --               --           154,794
   Cash received                                      --               --               --              --
   Stock issued for services                        35,000               35              140            --
                                             -------------    -------------    -------------   -------------
BALANCE, December 31, 2004                      31,250,000    $      31,250    $   6,871,358   $     154,794

  Net income                                          --               --               --              --
                                             -------------    -------------    -------------   -------------
BALANCE, March 31, 2005                         31,250,000    $      31,250    $   6,871,358   $     154,794
                                             =============    =============    =============   =============

                                                                                Accumulated
                                                                                   other
                                               Retained          Stock         comprehensive
                                               earnings         receivable     income (loss)      Totals
                                             -------------    -------------    -------------   -------------

BALANCE, January 1, 2004 restated in         $   1,392,772    $     (10,000)   $        --     $   8,285,205
  in accordance with acquisition agreement
  Net income                                       154,232             --               --           154,232
                                             -------------    -------------    -------------   -------------
BALANCE, March 31, 2004                          1,547,004          (10,000)            --         8,439,437

   Net income                                      760,766             --               --           760,766
   Adjustment to statutory reserve                (154,794)            --               --              --
   Cash received                                      --             10,000             --            10,000
   Stock issued for services                          --               --               --               175
                                             -------------    -------------    -------------   -------------
BALANCE, December 31, 2004                   $   2,152,976    $        --      $        --     $   9,210,378

  Net income                                       306,444             --               --           306,444
                                             -------------    -------------    -------------   -------------
BALANCE, March 31, 2005                      $   2,459,420    $        --      $        --     $   9,516,822
                                             =============    =============    =============   =============
</TABLE>


The accompanying notes are an integral part of these statements.



                                       5
<PAGE>
<TABLE>
<CAPTION>

                  GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS AMERICAN CONSTRUCTION COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004

                                                                    2005            2004
                                                                ------------    ------------
                                                                 (Unaudited)     (Unaudited)
                                                                ------------    ------------
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                  $    306,444    $    154,232
    Adjustments to reconcile net income to cash
      provided by (used in) operating activities:
        Minority Interest                                            199,819          66,100
        Depreciation                                                 308,289         232,522
        Amortization                                                  71,773          24,200
        Loss on disposal of equipment                                (21,186)        (50,818)
      (Increase) decrease in assets:
        Accounts receivable                                          139,679      (1,821,477)
        Other receivables                                             71,842        (801,059)
        Other receivables - related parties                             --           459,800
        Inventories                                                 (581,054)     (2,433,945)
        Advances on inventory purchases                            2,422,527      (4,935,806)
        Advances on inventory purchases - related party                 --         1,021,824
      Increase (decrease) in liabilities:
        Accounts payable                                            (210,894)      1,711,246
        Other payables                                               316,590       1,427,721
        Other payable - related party                               (819,366)           --
        Accrued liabilities                                         (127,979)       (108,753)
        Customer deposit                                           5,851,932       2,188,417
        Deposits due to sales representatives                         59,290         (56,870)
        Taxes payable                                               (304,584)         25,712
                                                                ------------    ------------
          Net cash (used in) provided by operating activities      7,683,122      (2,896,954)
                                                                ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    (Increase) decrease in notes receivable                       (5,460,770)       (933,757)
    Increase in short term investment                                   --            24,200
    Purchase of equipment                                            (12,463)        (30,587)
                                                                ------------    ------------
          Net cash used in investing activities                   (5,473,233)       (940,144)
                                                                ------------    ------------

CASH FLOWS FINANCING ACTIVITIES:
    Borrowings, net of payments on short term loans - bank         1,694,000       2,420,000
    Payments, net of borrowings on short term notes payable         (605,000)      8,923,750
                                                                ------------    ------------
          Net cash provided by financing activities                1,089,000      11,343,750
                                                                ------------    ------------

INCREASE IN CASH                                                   3,298,889       7,506,652

CASH, beginning of period                                          9,145,290       3,703,074
                                                                ------------    ------------

CASH, end of period                                             $ 12,444,179    $ 11,209,726
                                                                ============    ============
</TABLE>


The accompanying notes are an integral part of these statements.

                                       6
<PAGE>

Note 1 - Background

On March 7, 2005,  General Steel Holdings,  Inc. (the Company)  formally changed
its name from American Construction Company to General Steel Holdings, Inc.

The Company was  established on August 5, 2002 for the purpose of commencing the
business of general construction  contracting.  It is the Company's objective to
provide to its customers  timely and durable  construction of their  residential
and commercial needs. We established our subsidiary for the purpose of achieving
our  above  stated  objectives  in  Saskatchewan,  Canada.  We  established  our
subsidiary to enter the residential and commercial construction industry in this
market.

To  accomplish  the above  objective  the  founder  of our  company,  Jeff Mabry
established American  Construction Company (a Nevada company) on August 5, 2002.
American  Construction  Company  then  established  its  subsidiary,   West  Dee
Construction  Ltd.  (a  Saskatchewan,  Canada  Company)  on  August  8,  2002 by
purchasing 100 shares from its treasury.

On October 14, 2004, American  Construction Company and General Steel Investment
Co., Ltd (referred to as General Steel) and Northwest  Steel  Company,  a Nevada
corporation,  entered  into an  Agreement  and Plan of Merger (the  "Agreement")
pursuant to which American Construction Company acquired General Steel, and it's
70% ownership in its subsidiary Daqiuzhuang Metal Sheet Co., Ltd in exchange for
shares of the  Company's  common  stock,  of which  22,040,000  shares are a new
issuance by the Company,  and 7,960,000 shares are from certain  shareholders of
the  Company,  which  in  aggregate,  constitute  96% of the  total  issued  and
outstanding shares of the Company.

Under  the  terms of the  Agreement,  General  Steel  will  remain a 100%  owned
subsidiary of the Company.  The  transaction  contemplated  by the Agreement was
intended to be a" tax-free" reorganization pursuant to the provisions of Section
351 and  368(a)(1)(A)  of the  Internal  Revenue Code of 1986,  as amended.  The
stockholders  of  General  Steel,  as of the  closing  date  of the  merger  own
approximately  96% of the Company's  common stock  outstanding as of October 15,
2004  (excluding  any  additional  shares to be issued on  outstanding  options,
warrants and other securities convertible into common stock).

The  accounting  for these  transactions  is identical to that  resulting from a
reverse-acquisition,  except  that no  goodwill  or other  intangible  assets is
recorded. Accordingly, the financial statements of General Steel Investment Co.,
Limited are the  historical  financial  statements of the Company,  formerly the
operations of Daqiuzhuang Metal Sheet Co., Ltd.

Daqiuzhuang  Metal  Sheet  Co.,  Ltd.  (referred  to as  Daqiuzhuang  Metal) was
established on August 18, 2000 in Jinghai county,  Tianjin city, Hebei province,
the People's Republic of China (PRC). The Articles of Corporation provides for a
10 year operating term beginning on August 18, 2000 with registered capital of $
9,583,200.  The Company is a Chinese registered limited liability company with a
legal structure  similar to a limited  liability  company  organized under state
laws in the United States of America.





                                       7
<PAGE>

Note 1 - Background, (continued)

Tianjin Long Yu Trading  Material  Co.,  Ltd was the majority  owner with 71% of
ownership  interest.  Tianjin Long Yu Trading Material Co., Ltd was incorporated
in 2000 in Tianjin Municipality, Daqiuzhuang County; P.R.C. Mr. Yu Zuo Sheng has
90% of ownership interest in Tianjin Long Yu Trading Material Co., Ltd.

During January 2004, upon the board directors' approval, Tianjin Long Yu Trading
Material Co., Ltd and other minority shareholders sold their interests amounting
to 70% to  Yang Pu  Capital  Automotive  Investment  Limited.  Yang  Pu  Capital
Automotive  Investment Limited is a Chinese registered limited liability company
which is 100% indirectly owned by Mr. Yu Zuo Sheng.

On May 16, 2004,  Company  agreed to purchase  Yang Pu's 70% equity  interest in
Daqiuzhuang   Metal  for  the  amount  of  RMB55.45   million  or  approximately
$6,709,450.  The entire  purchase price is to be paid within one year of the new
business  license  being  issued  which  is June  25,  2004.  Due to the  common
ownership by Mr. Yu Zuo Sheng in both General Steel Investment Co., Ltd and Yang
Pu Capital Automotive  Investment  Limited,  the Company's board of directors by
board resolution dated May 16, 2004 has instructed Mr. Yu Zuo Sheng as the 99.9%
shareholder  of  General  Steel on  behalf  of the  Company  to remit  the total
purchase price to Yang Pu from his personal funds. Mr. Yu Zuo Sheng will receive
no compensation for completing this transaction nor will General Steel reimburse
Mr. Yu Zuo Sheng for the  $6,709,450.  As of December 31, 2004, Mr. Yu Zuo Sheng
has paid  the  entire  purchase  price to Yang Pu.  Because  the  entities  have
essentially  the same owner,  Mr. Yu Zuo Sheng and the entities are under common
control,  the transfer of ownership is accounted for at  historical  costs under
guidance of SFAS No. 141. The Company received a new business license certifying
the new ownership structure as a Chinese Foreign Joint Venture on June 25, 2004.

The purchase of Yang Pu's 70% equity  interest and the issuance of the Company's
common stock have been  accounted  for as a reverse  acquisition  presented as a
recapitalization, except no goodwill or the intangible assets are recorded.

Based on the Company's Plan of Merger with General Steel, the Board of Directors
determined  to  change  the  Registrant's  fiscal  year end from  January  31 to
December 31.

The Company through its subsidiary  Daqiuzhuang Metal principally engages in the
manufacturing  of hot rolled  carbon and silicon  steel  sheets which are mainly
used on tractors,  agricultural  vehicles and in other  specialty  markets.  The
Company sells its products through both retailers and wholesalers.




                                       8
<PAGE>

Note 2 - Summary of significant accounting policies

Basis of presentation
---------------------

The consolidated  financial  statements of General Steel Holdings,  Inc. reflect
the activities of the following subsidiaries:

                                                                     Pecentage
                         Subsidiary                                 Of Ownership
------------------------------------------------------------------  ------------
General Steel Investment Co., Ltd.          British Virgin Islands     100.0%
Tianjin Daqiuzhuang Metal Sheet Co., Ltd    P.R.C.                      70.0%


The  consolidated  financial  statements have been presented as if the Agreement
and Plan of Merger of the  subsidiary  occurred  during  the year of 2003 due to
common management and ownership.

The consolidated  financial  statements generally reflect only the activities of
Tianjin  Daqiuzhuang  Metal Sheet Co., Ltd at its historical cost since American
Construction  Company  and General  Steel  Investment  Co.,  Ltd had no material
activities for the three months ended March 2004.

Revenue recognition
-------------------

The  Company  recognizes  revenue  when the  goods are  delivered  and title has
passed.  Sales  revenue  represents  the  invoiced  value  of  goods,  net  of a
value-added  tax (VAT).  All of the Company's  products that are sold in the PRC
are  subject to a Chinese  value-added  tax at a rate of 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 their finished product.

Foreign currency translation
----------------------------

The reporting  currency of the Company is the US dollar.  The Company uses their
local currency, Renminbi (RMB), as their functional currency.

Results of operations  and cash flow are  translated at average  exchange  rates
during the period,  and 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 shareholders' 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.  These  amounts  are not  material  to the
financial statements.



                                       9
<PAGE>

Note 2 - Summary of significant accounting policies, (continued)

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 3% residual value. The depreciation  expense for
the three  months  ended  March  31,  2005 and 2004  amounted  to  $308,289  and
$232,522, respectively. Estimated useful lives of the assets are as follows:

                                                     Estimated
                                                    Useful Life
                                                    -----------
Buildings                                           10-30 years
Machinery and equipment                              8-15 years
Other equipment                                      5-8 years
Transportation equipment                            10-15 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.

The cost and  related  accumulated  depreciation  of  assets  sold or  otherwise
retired are eliminated from the accounts and any gain or loss is included in the
statements of  operations.  Maintenance,  repairs and minor renewals are charged
directly to expenses as incurred.  Major  additions and  betterment to buildings
and equipment are capitalized.

Long-term  assets of the  Company  are  reviewed  annually  as to 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, 2005,  the Company  expects these assets to be
fully recoverable.

Plant and equipment consist of the following:


                                  March 31,    December 31,
                                    2005           2004
                                ------------   ------------
                                  Unaudited      Audited
                                ------------   ------------
Buildings and improvements      $  5,089,350   $  5,089,350
Transportation equipment             235,995        240,847
Machinery                         12,307,160     12,294,697
                                ------------   ------------
              Totals              17,632,505     17,624,894
Less accumulated depreciation      3,806,821      3,524,570
                                ------------   ------------
              Totals            $ 13,825,684   $ 14,100,324
                                ============   ============



                                       10
<PAGE>

Note 2 - Summary of significant accounting policies, (continued)

Use of estimates
----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  of the United States of America  requires  management to
make estimates and assumptions  that affect the amounts reported in the combined
financial  statements  and  accompanying  notes.  Management  believes  that the
estimates  utilized in preparing its financial  statements  are  reasonable  and
prudent. Actual results could differ from these estimates.

Cash and concentration of risk
------------------------------

Cash includes cash on hand and demand deposits in accounts maintained with state
owned banks  within the  People's  Republic  of China and Hong Kong.  Total cash
(including  restricted  cash  balances)  in these  banks at March  31,  2005 and
December 31, 2004, amounted to $12,506,729 and $9,256,618, respectively of which
no deposits are covered by insurance. The Company has not experienced any losses
in such accounts and believes it is not exposed to any risks on its cash in bank
accounts.

Restricted Cash
---------------

The Company  through its bank  agreements is required to keep certain amounts on
deposit  that are  subject to  withdrawal  restrictions  and these  amounts  are
$2,996,059  and  $3,597,480  as  of  March  31,  2005  and  December  31,  2004,
respectively.

Inventories
-----------

Inventories  are  stated  at the  lower of cost or  market  using  the  first-in
first-out basis and consist of the following:


                           March 31,    December 31,
                             2005           2004
                         ------------   ------------
                           Unaudited      Audited
                         ------------   ------------
Raw materials            $  8,466,708   $  9,123,814
Finished goods              4,940,907      3,702,747
                         ------------   ------------
Totals                   $ 13,407,615   $ 12,826,561
                         ============   ============

Inventories  consist of raw materials and finished goods. Raw materials  consist
primarily  of iron and steel  used in  production.  The cost of  finished  goods
included  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 assembly and  delivery are also  included in the
cost of inventory.  No work in process  inventory existed at March 31, 2005, and
December 31, 2004, as all inventory in process was completed and  transferred to
finished goods prior to the physical inventory count.



                                       11
<PAGE>

Note 2 - Summary of significant accounting policies, (continued)

Inventories (continued)
-----------------------

The Company  reviews its inventory  annually for possible  obsolete  goods or to
determine if any reserves are necessary for potential obsolescence.  As of March
31, 2005 and December 31, 2004, the Company has determined  that no reserves are
necessary.

Financial instruments
---------------------

Statement of Financial  Accounting  Standards  No. 107 (SFAS 107),  "Disclosures
about Fair Value of Financial Instruments" requires disclosure of the fair value
of financial instruments held by the Company.

SFAS 107 defines the fair value of financial  instruments as the amount at which
the  instrument  could be exchanged  in a current  transaction  between  willing
parties. The Company considers the carrying amount of cash, accounts receivable,
other receivables,  accounts payable,  accrued liabilities and other payables to
approximate  their fair values  because of the short  period of time between the
origination of such instruments and their expected realization and their current
market rate of interest.

Intangible assets
-----------------

All land in the People's Republic of China is owned by the government and cannot
be sold to any individual or company.  However, the government grants the user a
"land use right" (the Right) to use the land.  The Company has acquired land use
rights  during  the  years  ending  in  2000  and  2003  for a total  amount  of
$2,870,902. The Company has the right to use this land for 50 years. As of March
31, 2005 and December 31, 2004,  accumulated  amortization  amounted to $665,396
and $593,623. The cost of the rights is being amortized over ten years using the
straight-line method.

Intangible  assets of the Company  are  reviewed  annually  as to 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, 2005,  the Company  expects these assets to be
fully recoverable.

Total  amortization  expense for the three months ended March 31, 2005 and 2004,
amounted to $71,773 and $24,200 respectively.









                                       12
<PAGE>

Note 2 - Summary of significant accounting policies, (continued)

Income taxes
------------

The Company has adopted  Statement of Financial  Accounting  Standards  No. 109,
"Accounting  for Income Taxes" (SFAS 109).  SFAS 109 requires the recognition of
deferred  income  tax  liabilities  and  assets  for  the  expected  future  tax
consequences  of temporary  differences  between  income tax basis and financial
reporting basis of assets and liabilities. Provision for income taxes consist of
taxes  currently due plus deferred  taxes.  There are no deferred tax amounts at
March 31, 2005 and December 31, 2004.

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  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,  and  deferred tax assets are  recognized  to the extent that it is
probably  that  taxable  profit  will  be  available  against  which  deductible
temporary differences can be utilized.

Deferred  tax is  calculated  at the 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 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.

Under the Income Tax Laws, the Company is generally  subject to an income tax at
an effective  rate of 33% (30% state income taxes plus 3% local income taxes) on
incomes reported in the statutory  financial  statements  after  appropriate tax
adjustments,  unless the enterprise is located in a specially  designated region
for which more favorable effective tax rates are applicable.

The provision for income taxes at March 31 consisted of the following:


                                                  2005         2004
                                               Unaudited     Unaudited
                                              -----------   -----------
Provision for China Income Tax                $   265,231   $   138,307
Provision for China Local Tax                      29,470        15,367
                                              -----------   -----------
      Total provision for income taxes        $   294,701   $   153,674
                                              ===========   ===========



                                       13
<PAGE>

Note 2 - Summary of significant accounting policies, (continued)

Income taxes (continued)

The  following  table  reconciles  the U.S.  statutory  rates  to the  Company's
effective tax rate for the three months ended March 31:

                                                 2005         2004
                                              ----------   ----------
U.S. Statutory rates                                34.0%        34.0%
Foreign income not recoginized in USA              (34.0)       (34.0)
China income taxes                                  33.0         33.0
                                              ----------   ----------
      Total provision for income taxes              33.0%        33.0%
                                              ==========   ==========


The  Company's  subsidiary,  Daqiuzhuang  Metal Sheet Co.,  Ltd became a Chinese
Sino-foreign equity joint venture at the time of the merger on October 14, 2004.
Daqiuzhuang Metal Sheet Co., Ltd should be now taxed under the Income Tax Law of
the People's Republic of China (PRC) concerning Foreign  Investment  Enterprises
and Foreign Enterprises and various local income tax laws (the Income Tax Laws).
The  Income  Tax  Law for  Enterprises  with  Foreign  Investments  and  Foreign
Enterprises  states.  "Any enterprise  with foreign  investments of a production
nature scheduled to operate for a period of not less than ten years shall,  upon
examination  and  verification  by the tax  authorities  in the year the company
begins to make a profit,  will be exempted  from  income  taxes in the first and
second years and allowed a fifty percent  reduction in the standard tax rates in
the  third to fifth  years."  Accordingly,  the  Company  is in the  process  of
applying for this tax benefit from the local Chinese tax authority.

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 Chinese laws. The value added tax standard rate is 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.

Note 3 - Consolidated financial statements and condensed footnotes

The  interim  consolidated  financial  statements  presented  herein  have  been
prepared by the Company  and include the  unaudited  accounts of the Company and
its subsidiaries.  All significant  inter-company accounts and transactions have
been eliminated in the consolidation.

These  consolidated  financial  statements have been prepared in accordance with
generally  accepted  accounting  principles  in the United  States  for  interim
financial  information  and the  instructions  for Form 10-QSB and Article 10 of
Regulation S-X.



                                       14
<PAGE>

Note 3 - Consolidated financial statements and condensed footnotes, (continued)

Certain  information  and footnote  disclosures  that are  normally  included in
financial  statements presented in accordance with generally accepted accounting
principles  have been condensed or omitted.  Management of the Company  believes
the  disclosures  made  are  adequate  to make  the  information  presented  not
misleading.  The condensed  consolidated  financial statements should be read in
conjunction  with the Company's  audited  financial  statements  included in its
Annual Report on Form 10-KSB dated March 30, 2005.

In the opinion of management,  the unaudited  consolidated  financial statements
reflect  all  adjustments  (which  include  only normal  recurring  adjustments)
necessary to present  fairly the  financial  position of the Company as of March
31,  2005 and  December  31,  2004,  and the results of  operations,  changes in
shareholders' equity and cash flows for the three months ended March 31,2005 and
2004.  Interim results are not necessarily  indicative of full year  performance
because of the impact of seasonal and short-term variations.

Note 4 - Earnings Per Share

The Company reports earnings per share in accordance with the provisions of SFAS
No. 128,  "Earnings Per Share." SFAS No. 128 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  excludes
dilution and is 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.  The weighted  average number of shares used to calculate EPS
for the three months  ended March 31, 2005  (31,250,000)  and 2004  (31,215,000)
reflect only the additional shares issue from the merger  acquisition on October
14,2004 retroactively starting January 1, 2003.

Note 5 - Supplemental disclosure of cash flow information

Interest paid amounted to $440,221 and $298,996 for the three months ended March
31, 2005 and 2004, respectively.

Income tax payments  amounted to $485,615 and $36,866 for the three months ended
March 31, 2005 and 2004, respectively.


Note 6 - Notes receivable

This amount  represents  trade accounts  receivable  due from various  customers
where the customers'  bank has guaranteed  the payment of the  receivable.  This
amount is non-interest  bearing and is normally paid within three to six months.
The  Company  has the  ability  to  submit  their  request  for  payment  to the
customer's  bank earlier than the scheduled  payment  date.  However the Company
will incur an interest  charge and a  processing  fee when they submit a payment
request early.  The Company had $5,835,725 and $374,955  outstanding as of March
31, 2005 and December 31, 2004, respectively.



                                       15
<PAGE>

Note 7 - Other payable - related party

The Company has a short term loan from Golden Glister Holdings  Limited.  Golden
Glister  Holdings Limited is incorporated in the territory of the British Virgin
Islands which our president Yu Zuo Sheng is the majority shareholder. The amount
was loaned to General Steel  Investment  Co., Ltd for business  operations.  The
company had $180,000 and $990,000  outstanding on this loan as of March 31, 2005
and  December  31,  2004,  respectively.  This amount is  short-term  and is non
interest bearing.

Note 8 - Advances on inventory purchases

Advances on inventory purchases including the related party 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  with  them as a
guarantee that the Company will receive their purchases on a timely basis.

This amount is refundable and bears no interest. The Company has a legal binding
contract with their vendors for the guarantee  deposit,  which is to be returned
to the Company at the end of the contract.  The inventory is normally  delivered
within  one month  after the  monies has been  advanced.  The total  outstanding
amount was  $11,047,457  and  $13,469,984  as of March 31, 2005 and December 31,
2004, respectively.


Note 9 - Short term loans - bank

Short term loans - bank represent  amounts due to various banks which are due on
demand or normally  within one year.  These loans can be renewed with the banks.
The Company had a total of  $27,442,800  and  $25,748,800  short term bank loans
with various banks as of March 31, 2005 and December 31 2004, respectively.














                                       16
<PAGE>
<TABLE>
<CAPTION>

                                                                    March 31,    December 31,
                                                                      2005           2004
                                                                  ------------   ------------
                                                                    Unaudited      Audited
                                                                  ------------   ------------
<S>                                                               <C>            <C>
Loans from China Bank, JingHai Branch, due August, 2005
   Monthly interest only at 6.372 per annum, secured by
   equipment and property                                         $  1,185,800   $  1,185,800

Loans from Agriculture Bank, DaQiuZhuang Branch, due
   various dates from May, 2005 to March, 2006
   Monthly interest only payments in 2005 ranging from
   from 6.648% to 7.56% per annum, guaranteed by an
   unrelated third party and secured by property and equipment      10,527,000     10,648,000

Loan from Construction Bank of China, JinHai Branch, due August
   22, 2005.  Monthly interst only payment at 6.225% per
   annum, secured by properties                                      1,089,000      1,089,000

Loans  from ShangHai PuFa Bank, due various dates from
   July, 2005 to March, 2006, Monthly interest only
   payments ranging from 5.31% to 6.696% per month,
   guaranteed by an unrelated third party                            6,050,000      6,050,000

Loans from China Merchant Bank, due various dates from
   June, 2005 to September, 2005, Quarterly interest only
   payments, annual interest rate of 5.0445% to 5.4810%,
   guaranteed by an unrelated third party                            7,865,000      6,050,000

Loan from Construction Bank of China, due August 22, 2005
   Monthly interest only payment at 8.1576 per annum,
   guaranteed by an unrelated third party                              726,000        726,000
                                                                  ------------   ------------
                    Totals                                        $ 27,442,800   $ 25,748,800
                                                                  ============   ============
</TABLE>


Note 10 - Short term notes payable

The Company has the following short term notes payable outstanding as for March
31, 2005 and December 31, 2004:


                                       17
<PAGE>
<TABLE>
<CAPTION>

                                                            March 31,    December 31,
                                                              2005           2004
                                                          ------------   ------------
                                                            Unaudited      Audited
                                                          ------------   ------------
<S>                                                       <C>            <C>
China Bank, Jing Hai Branch, various amounts, due dates
   ranging between April to September 2005, restricted
   cash required 50%, guaranteed by the company           $  1,694,000   $  1,694,000

Agricultural Bank of China, various amounts, due dates
   ranging between April and July 2005,
   restricted cash required of 50% of loan amount,
   guaranteed by the Company                                 1,452,000      2,057,000

Daqiuzhuang Industrial and Commercial Bank,
  various amounts, due dates ranging between May
   to June 2005, restricted cash required of 30%
   of loan amount, guaranteed by the Company                   605,000        605,000

ShangHai PuFa Bank, due May 2005, restricted
   cash required of 50% of loan balance, guaranteed
   by the Company                                            2,420,000      2,420,000
                                                          ------------   ------------
          Totals                                          $  6,171,000   $  6,776,000
                                                          ============   ============
</TABLE>


Total  interest  expense for the three months  ending March 31, 2005 and 2004 on
all debt amounted to $440,221 and $298,996, respectively.

Note 11 - Customer deposits

Customer deposits represent amounts advanced by customers on product orders. The
product  normally  is shipped  within six months  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, 2005 and December 31, 2004, customer
deposits amounted to $7,861,245 and $2,009,313, respectively.

Note 12 - Deposits due to sales representatives

The Company has entered  into  agreements  with  various  entities to act as the
Company's  exclusive  sales agent in a specified  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 to 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  $1,291,070  and
$1,231,780 in deposits due to sales representatives  outstanding as of March 31,
2005 and December 31, 2004, respectively.


Note 13 - Major customers and suppliers

The Company has 5 major customers which represent  approximately  43% and 51% of
the  Company's  total sales for the three  months ended March 31, 2005 and 2004,
respectively.

For the three  months  ended  March 31,  2005 and 2004,  the  Company  purchases
approximately 90% and 80%, respectively,  of their raw materials from four major
suppliers; each of these suppliers individually represents as follows:


                                       18
<PAGE>


                          2005                     2004
Suppliers         % to total purchase      % to total purchase
---------         -------------------      -------------------
   A                      37%                      40%
   B                      34%                      18%
   C                      12%                      16%
   D                       7%                       6%

Note 14 - Minority Interest

Minority interest  represents the outside  shareholders' 30% interest in Tianjin
Daqiuzhuang Metal Sheet Co., Ltd.

Note 15 - Other income (expense)

Other  income and  expense  for the three  months  ended March 31 consist of the
following:

                                            2005           2004
                                         Unaudited      Unaudited
                                        -----------    -----------
Finance/interest expense                $  (441,659)   $  (301,227)
Interest income                              17,427           --
Other nonoperating income                    11,551           --
Other nonoperating expense                   (3,065)        (2,830)
                                        -----------    -----------
Total other income (expense)            $  (415,746)   $  (304,057)
                                        ===========    ===========








                                       19
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION OR PLAN OF
OPERATIONS

Forward Looking Statements - Cautionary Factors

The following  discussion and analysis  should be read in  conjunction  with the
Company's financial statements and the notes hereto appearing else where in this
report.  This  report  on Form  10-QSB  and  documents  incorporated  herein  by
reference contain certain "forward-looking statements" as defined by the Private
Securities  Litigation  Reform Act of 1995, which involve  substantial risks and
uncertainties.  When  used in this  report  and in  other  reports  filed by the
Company, the forward-looking  statements are often identified by the use of such
terms and phrases as "anticipates,"  "believes,"  "intends," "plans," "expects,"
"seeks," "scheduled," "foreseeable future" and similar expressions. Although the
Company believes the understandings and assumptions on which the forward-looking
statements  in this  report  are  based are  reasonable,  the  Company's  actual
results,  performance and achievements  could differ materially from the results
in, or implied by, these forward-looking statements.  Certain factors that could
cause or contribute to such  differences  include those discussed in "Management
Discussion and Analysis" and elsewhere herein.

The following is  management's  discussion  and analysis of certain  significant
factors which have affected our financial  position and operating results during
the periods included in the accompanying  consolidated financial statements,  as
well as  information  relating  to the  plans  of our  current  management.  The
following  discussion and analysis  should be read in  conjunction  with and our
consolidated  financial  statements  and the  related  notes  thereto  and other
financial information contained elsewhere in this Form 10-QSB.

Overview

Following the acquisition of ownership in General Steel Investment Co.,Ltd., the
Company has shifted its main business  focus to general steel products and steel
manufacturing.  As the core-operating  unit of the Company,  Tianjin Daqiuzhuang
Metal Sheet Co.,  Ltd.  (herein  referred to as "DQ")  started its  operation in
1988. DQ's core business is the  manufacturing of high quality hot rolled carbon
and silicon  steel sheets which are mainly used in the  production  of tractors,
agricultural vehicles and in other specialty markets.

DQ uses a  traditional  rolling  mill  production  sequence,  such  as  heating,
rolling, cutting,  annealing, and flattening to process slabs into steel sheets.
The sheet sizes are approximately 2,000 mm (length) x 1,000 mm (width) x 0.75 to
2.0 mm  (thickness).  Limited  size  adjustments  are  possible  to  meet  order
requirements. "Qiu Steel" is the registered name for the Company's products.

Since 1998, DQ has expanded its  operations to six production  lines  processing
250,000 tons of 0.75-2.0 mm hot-rolled carbon steel sheets per year, maintaining
a 40% market share of all steel sheets used in the  production  of  agricultural
vehicles in China.  The Company plans to continue to expand its hot-rolled steel
sheet  production  capacity  and  to  enter  into  new  contracts  with  vehicle
manufacturers and other customers.

Economic  forecasts  indicate  continued fast pace growth in China in 2005. As a
result,  the  consumption  of our steel products is expected to remain at a high
level.  The  Company  believes  that the highly  competitive  market  will exist
throughout 2005, with pressures for shipment volumes and prices.  In view of the
above factor, the main focus of the Company in 2005 will be on:



                                       20
<PAGE>

         o        Stringent cost control and cash management;

         o        Continued operational improvement, with particular emphasis on
                  fully  realizing  the benefits of recently  completed  capital
                  projects, and

         o        Maximizing order load and optimizing product mix.

Results of Operations

The results of operations  of the Company are largely  dependent on the level of
general  economic  activity in China.  As  indicated  in the  overview  section,
economic  forecasts indicate a continued fast pace growth in China in 2005. As a
result,  the  consumption  of our steel products is expected to remain at a high
level. The Company's sales revenue mainly comes from the sale of metal sheets in
different  specifications and steel scrap generated in the cutting process.  The
Company's cost of sales includes the cost of its primary raw materials, rollers,
energy cost,  labor cost,  the cost of warehousing  and handling  finished steel
products and freight costs.

Net sales and gross profit

Net sales for the three months ended March 31, 2005 were $20,698,733 compared to
$14,263,117 for the same period in 2004, representing a 45% increase.  Shipments
in the first  three  months of 2005  climbed 33% to 41,421 tons from 31,140 tons
due to overall increase in productivity and market demand. Average selling price
per ton  including  sale of scrap has  increased to $491 from $458 as a combined
result  of good  market  demand  and  change  in the mix of  products  sold with
increasing  sales volume of silicon steel. In summary,  the main reasons for the
increase in sales revenue is due to an increase in selling price and an increase
in demand for steel products due to the good market conditions.

Gross  profit for the three  months  ended  March 31,  2005 was  $1,870,181,  an
increase of 71% or $777,046 from  $1,093,135 for the same period last year. This
increase in gross  profit is mainly due to the increase in both sales volume and
selling price outpacing the increase in raw materials price.  Acknowledging  the
71% price hike of the imported  iron ore, the buyers in the Chinese steel market
react by  stocking  up their  inventories  to  prevent  paying  even more in the
future.  As a result,  our profit  margin  enjoyed a big  increase  in the first
quarter of 2005.  However,  the  management  does not expect this increase to be
repeated in the second quarter of 2005.

Cost of sales

Overall  cost of sales went up to  $18,828,552  for the three months ended March
31,  2005 from  $13,169,982  for the same  period in 2004.  The  increase is the
combined effect of both increases in production volume and raw material price.

However, cost of sales as a percent of sales decreased from 92.33% to 91.00% due
primarily to the rising  selling price for the three months ended March 31, 2005
compared to the same period in 2004.

Selling, General and Administrative Expenses

Selling,  general and administrative  expenses,  such as executive compensation,
office expenses, legal and accounting charges, travel charges, and various taxes
were  $653,471 for the three months ended March 31, 2005.  It  represented a 57%
increase  from  $415,072 for the same period in 2004.  A large  component of the
increase came from the legal and accounting and public relations charges for the
public listed company.



                                       21
<PAGE>

Other income (expense)

Other income (expense) in the three months ended March 31, 2005 consisted mainly
of finance  charges and interest  income.  Interest  expense was $441,659for the
three months ended March 31, 2005, a $140,432  increase  from the same period in
2004.  Outstanding  bank loans increased to $27,442,800  from  $25,748,800 as of
March 31,  2005 and  December  31,  2004,  respectively.  The  increase  in debt
borrowing  is mainly  driven by  management's  decision to pay more  deposits in
advance to suppliers to lock in a discounted raw material price.

Income taxes

The Company did not carry on any business and did not maintain any branch office
in the United  States  during the three  months  ended  March 31, 2005 and 2004.
Therefore,  no provision for  withholding  or U.S.  federal  income taxes or tax
benefits on the  undistributed  earnings  and/or  losses of the Company has been
made.

Pursuant to the relevant laws and regulations in the People's Republic of China,
Daqiuzhuang  Metal,  as a foreign owned  enterprise in the People's  Republic of
China,  is entitled to an exemption from the PRC  enterprise  income tax for two
years  commencing from its first  profitable year. The Company is in the process
of applying for this tax benefit.

For the three months ended March 31, 2005 and 2004 the Company's effective state
and local income tax rate was 33%. Income tax expense was $294,701 for the three
months ended March 31, 2005,  up from $153,674 in the same period of 2004 due to
higher pretax income.

Liquidity and capital resources

Due to the good market  conditions of the steel  industry,  the Company plans to
maintain  higher-than-average  debt to equity ratio to better position itself in
this fast  growing  market.  The bank loans are  considered  short-term  for the
purpose  of the  preparation  of  the  financial  statements  because  they  are
renewable with the banks every year.

Operating activities

Net cash provided by operating  activities  for the three months ended March 31,
2005 was $7.68 million  compared with $2.9 million used in operating  activities
for the same period of 2004. Advance on inventory purchase including payments to
related  parties  decreased by $2.42  million as of March 31, 2005 compared with
December 31, 2004. On the other hand, the Company received $5.85 million more in
customer deposits as of March 31, 2005 compared with December 31, 2004.

Investing activities

Net cash used in  investing  activities  was $5.47  million for the three months
ended March 31, 2005  compared  with $0.94  million for the three  months  ended
March  31,  2004.  This  change  mainly  resulted  from  the  increase  in notes
receivable.  Our customers  usually pay for our products with  promissory  notes
issued by the banks with in turn can be used like cash by the Company to pay for
its purchases.



                                       22
<PAGE>

Financing activities

The  Company  signed  a new  agreement  with  China  Merchants  Bank  to  borrow
$1,815,000 in the first quarter ended March 31, 2005. Notes payable decreased by
$605,000 at March 31, 2005 compared with December 31, 2004.

Compliance with environmental laws and regulations

Based on the equipment,  technologies and measures  adopted,  the Company is not
considered a high-pollution  factory in China.  The production  process does not
need much water and produces only a minimal amount of chemical pollution. We use
gas-fired  reheat  furnaces  recommended by the State  Environmental  Protection
Agency to heat our raw materials and semi-finished products.

In 2005, the Daqiuzhuang  County will order an environmental  clean-up  campaign
and will  require  harmless  waste  water  discharge.  In  order  to meet  these
requirements,  we are going to invest  $50,000 to remodel our  industrial  water
recycling system to reduce new water consumption and industrial water discharge.
As for the remodeling of gas furnace and desulphurization of discharged gas, the
local  government has not posted any control  measures  currently and we have no
plans to proceed  with this  remodeling  until such time  regulations  have been
implemented.

The Company believes that future costs relating to environmental compliance will
not have a material adverse effect on the Company's financial position. There is
always the possibility,  however,  that unforeseen changes,  such as new laws or
enforcement policies, could result in material adverse costs.

Impact of inflation

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

Off-balance sheet arrangements

There are currently no off-balance sheet arrangements.


ITEM 3. Controls and Procedures

(a) As required by Rule 13a-15 under the Exchange Act,  within the 90 days prior
to the  filing  date  of  this  report,  we  carried  out an  evaluation  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures.  This  evaluation was carried out under the supervision and with the
participation  of our  management.  The Company is in the  process of  reviewing
their internal  control systems in order to be compliant with Section 404 of the
Sarbanes  Oxley Act.  The  Company  anticipates  that the review and any changes
required to implement to be in compliance  with Section 404 will be completed by
the required time. However at this time the Company makes no representation that
the  Company's  systems of  internal  control  comply  with  Section  404 of the
Sarbanes Oxley Act.

(b) Disclosure  controls and procedures are controls and other  procedures  that
are designed to ensure that information  required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and


                                       23
<PAGE>

reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required  to be  disclosed  in our  reports  filed  under  the  Exchange  Act is
accumulated and communicated to management,  to allow timely decisions regarding
required disclosure.























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<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

There has been no legal proceedings  issued against or commenced by the company.

ITEM 2.  CHANGES IN SECURITIES

None for the period covered by this report.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None for the period covered by this report.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None for the period covered by this report.

ITEM 5.  OTHER INFORMATION

None for the period covered by this report.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

31.1     Certification of Chief Executive Officer;
31.2     Certification of Chief Financial Officer;
32.1     Certification of Chief Executive Officer; and
32.2     Certification of Chief Financial Officer.

(b)      Reports on Form 8-K

Current report on Form 8-K filed with the Commission on March 4, 2005

         In this report we disclosed  that the Company  appointed  John Chen, as
Chief Financial Officer and Director,  Huancheng Li, as Director,  Guodong Wang,
as Chief Technical Officer and Director and Shengguo Zhao, as Chief Engineer and
Director. We also announced that Jeff Mabry resigned as director.







                                       25
<PAGE>

SIGNATURES

In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                           General Steel Holdings, Inc.
                                           (Registrant)

Date: May 16, 2005                          /s/ Zuo Sheng Yu
                                           -----------------------------
                                           Zuo Sheng Yu
                                           Chief Executive Officer and President



                                           General Steel Holdings, Inc.
                                           (Registrant)

Date: May 16, 2005                          /s/ John Chen
                                           -----------------------------
                                           John Chen
                                           Director and Chief Financial Officer















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