----

----

| ·   | Production                  method for fusion cast tungsten carbide steel (Invention Patent                  ZL95-1-12012.3. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | Smelting                  process for paste cladding type alloy steel (Invention Patent                  ZL95-1-11885.4) |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | Special                  stainless steel for cookware (Invention Patent                  ZL00-1-23087.5) |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | Electronic                  smelting of compound dies (Use Patent                  ZL01-2-41258.9) |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | Electronic                  smelting of steel structure tungsten carbide bimetal machine tool                  cutter                  (Use Patent ZL94-2-30512.4) |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM                  5. | MARKET                  FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS                  ISSUER                  PURCHASES OF EQUITY SECURITIES. |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                   | B                  |
|--------|--------------------------------------------------------|--------------------|
|   | Period:                                                | High               | Low |
|   |                                                   |               |   |
|   | Mar.23,                    2006 – Mar. 31, 2006  | $  70.64 | $   53.09 |
|   | Apr.                    1, 2006 – June 30, 2006  | $  71.99 | $   13.50 |
|   | July                    1, 2006 – Sept. 30, 2006 | $  55.34 | $   11.70 |
|   |                                                   |               |   |
|   | Oct.                    1, 2006 – Dec. 31, 2006  | $  85.49 | $   11.25 |
|   | Jan.                    1, 2007 – Mar. 31, 2007  | $  26.10 | $     6.75 |
|   | Apr.                    1, 2007 – June 30, 2007  | $  11.25 | $     3.60 |
|   | July                    1, 2007 – Sept. 30, 2007 | $  14.85 | $     3.15 |

----

| ·   | increased                  sales volume, which will lead to more efficient use of our                  facilities; |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | introduction                  of tungsten carbide steel into our sales, which we will be able                  to market                  at a higher mark-up over cost than our other steel products;                  and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | acquisition                  of sources of iron ore, which will lower our cost of raw                  materials. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | a                30 ton arc furnace - $2.5 million |
|--------------------|----------------------------------------------------|

| ·   | a                30 ton heavy duty electric dregs furnace - $1.3                million |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | a                5                ton free-going hammer - $0.7                million |
|--------------------|---------------------------------------------------------------------------------------|

----

| ·   | Our                  decision, described in Note 2 to the Consolidated Financial Statements,                  to                  record a total of $130,854 in provisions for uncollectible                  accounts.  This decision was based on our knowledge of the                  accounts and the difficulty we may face in                  collecting. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our                  decision, described in Notes 2 and 5 to the Consolidated Financial                  Statements, to record a $353,039 provision for obsolete                  inventories.  This decision was based on fact that we have                  developed improvements in our manufacturing processes, which rendered                  inventory that we manufactured early in our operations as technologically                  obsolete. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   |                                                                                                                                                                                                                                                                                              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Director   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|   | Name                                                                                                                                                                                                                                                                                              | Age      | Position              with the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Since      |
|   |                                                                                                                                                                                                                                                                                              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |
|   |  Yang              Kuidong                                                                                                                                                                                                                                                                   |  39 |  Chairman,              Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                            |  2007 |
|   |                                                                                                                                                                                                                                                                                              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |
|   |  Zhang              Liwei                                             |  33 |  Chief              Financial Officer,              Director                                                                     |  2007 |
|   |                                                                                                                                                                                                                                                                                              |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       |
|   |  Xiao              Zhiquan                                            |  42 |  Vice              President              – Marketing, Director                                                                                                                                                                                                                                                                                                                                                                                                                |  2007 |

----

|                                                                                                                                                             | FiscalYear |  Salary |  Bonus | StockAwards | OptionAwards | OtherCompensation |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------|-------------|-------------|--------------|-------------------|
|                                       Yang Kuidong | 2007       | $10,000      | 0           | 0           | 0            | 0                 |
|                                                                                                                                                             | 2006       | $10,000      | 0           | 0           | 0            | 0                 |
|                                                                                                                                                             | 2005       | $10,000      | 0           | 0           | 0            | 0                 |

|                                                                   |                                                                  |                                                                                                |                   |           | Potential                  realizablevalue                  at assumedannual                  rates ofappreciationfor                  option term |                                             |
|------------------------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|------------------------|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|
|                                                                   |   Number                ofsecuritiesunderlyingoptiongranted | Percentof                totaloptionsgranted                toemployeesin                fiscalyear | ExercisePrice($/share) | ExpirationDate |                                                                                                                                          |
| 5%                                                                     | 10%                                                                   |                                                                                                |
|                        Yang Kuidong | --                                                                    | --                                                                                                  | --                     | --             | --                                                                                                                                                 |                      -- |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Number                ofShares                ThatHave                NotVested | Market                Valueof                Shares ThatHave                NotVested |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                                                                                         Yang Kuidong | 0                                                                               | --                                                                                    |

| ·   | each                shareholder known by us to own beneficially more than 5% of our common                stock; |
|--------------------|------------------------------------------------------------------------------------------------------------------|

| ·   | Yang                Kuidong, our Chief Executive                Officer |
|--------------------|-------------------------------------------------------------------------|

| ·   | each                of our directors; and |
|--------------------|-------------------------------------------|

| ·   | all                directors and executive officers as a                group. |
|--------------------|--------------------------------------------------------------------------------|

| Name                and Address ofBeneficial                Owner                                                                                                        | Amount                and Nature ofBeneficial                Ownership |  Percentage                of                Class |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------|---------------------------------------------------------|
| Yang                Kuidong                                                                                                                                              | 3,670,000(1)                                                           | 17.9%                                                   |
| Zhang                Liwei                                                                                                                                               | 1,000,000(2)                                                           | 4.9%                                                    |
| Xiao                Zhiquan                                                                                                                                         | 0                                                                      | --                                                      |
| All                officers and directors    (3                persons)                                                                              | 4,670,000                                                              | 22.8%                                                   |
|                                                                                                                                                                     |                                                                   |                                                    |
| Warner                Technology &     Investment                Corp.18                Kimberly CourtEast                Hanover, NJ 07936 | 1,198,999                                                              | 5.9%                                                    |

| (1)   | Does                not include shares owned by Zhang Liwei, his                spouse. |
|-----------------|-----------------------------------------------------------------------------------------|

| (2)   | Does                not include shares owned by Yang Kuidong, her                spouse. |
|-----------------|------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                    | Number                of securities to be issued upon exercise of outstanding options,                warrants                and rights | Weighted                average exercise price of outstanding options, warrants and                rights | Number                of securities remaining available for future issuance under equity                compensation plans |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|
| Equity                compensation plans approved by security holders.......                                                                                                                            | 0                                                                                                                                        |                                                                                                      | 0                                                                                                                          |
| Equity                compensation plans not approved by security holders......                                                                                                                         | 0                                                                                                                                        |                                                                                                      | 0                                                                                                                          |
|                               Total.............. | 0                                                                                                                                        |                                                                                                      | 0                                                                                                                          |

| ITEM                12. | CERTAIN                RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
|-------------------------|-----------------------------------------------------------------------------------------|

| 3-a | Certificate                of Incorporation - filed as an exhibit to the Company’s Registration                Statement on Form S-4, filed on September 1, 2006, and incorporated                herein                by reference. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3-a(1) | Certificate                of Amendment of Certificate of Incorporation – filed as an exhibit to the                Company’s Current Report on Form 8-K filed on October 11, 2007, and                incorporated herein by reference. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3-b |   | By-laws                - filed as an exhibit to the Company’s Registration Statement on Form S-4,                filed on September 1, 2006, and incorporated herein by reference. |
|-----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3-b(1) | Amendment                to Bylaws – filed as an exhibit to the Company’s Current Report on Form                8-K filed on October 11, 2007. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10-a | Assignment                and Assumption and Management Agreement, dated June 29, 2007, by                and among                China Software Technology Group Co., Ltd., HXT Holdings, Inc. and                Yuan                Qing Li – filed as an exhibit to the Current Report on Form 8-K filed on                July 6, 2007 and incorporated herein by reference. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10-b | Labour                Contract made on July 10, 2007 between Yang Kuidong and Chaoyang                Liaogang                Special Steel Co., Ltd. - filed as an exhibit to the Current Report                on                Form 8-K filed on August 6, 2007 and incorporated herein by reference. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10-c | Labour                Contract made on July 10, 2007 between Zhang Liwei and Chaoyang Liaogang                Special Steel Co., Ltd. - filed as an exhibit to the Current Report                on                Form 8-K filed on August 6, 2007 and incorporated herein by reference. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10-d | Labour                Contract made on July 10, 2007 between Xiao Zhiquan and Chaoyang                Liaogang                Special Steel Co., Ltd. - filed as an exhibit to the Current Report                on                Form 8-K filed on August 6, 2007 and incorporated herein by reference. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.1 |   | Rule                13a-14(a) Certification – CEO |
|------|--------|---------------------------------------------------------|

| 31.2 |   | Rule                13a-14(a) Certification – CFO |
|------|--------|---------------------------------------------------------|

| 32 |   | Rule                13a-14(b) Certification |
|----|--------|---------------------------------------------|

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Page                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|
| Report                of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  F-1             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                  |
|  Financial                Statements :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                  |
|  Consolidated                Balance Sheet as of September 30, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | F-2                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                  |
|  Consolidated                Statements  of  Operations for the years ended                September 30, 2007 and 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | F-3                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                  |
|  Consolidated                Statement of Stockholders' Equity for the years ended September 30,                2007 and 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | F-4                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                  |
|  Consolidated                Statement of Cash Flows for the years ended September 30, 2007 and                2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | F-5                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                  |
|  Notes                to the Consolidated Financial                Statements                                                                                                                                          | F6              - F17 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                  |

----

----

|   | AMERICAN                WENSHEN STEEL GROUP, INC.                AND SUBSIDIARIES(FORMERLY                KNOWN AS CHINA SOFTWARE TECHNOLOGY GROUP CO., LTD)CONSOLIDATED                  BALANCE SHEETAS                    OF SEPTEMBER 30,                    2007 |                                                                                      |                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   | 2007 |
|   |                                                                                                                                                                                                                                                                  |                  ASSETS                                                    |                                                                                                |   |   |   |   |
|   | Current                Assets                                                                                                                                                                                                                                         |                                                                                      |                                                                                                |   |   |   |
|   |                                                                                                                                                                                                                                                                  | Cash                and cash                equivalents                                   |                                                                                                |   |   | $ |                        15,664 |
|   |                                                                                                                                                                                                                                                                  | Accounts                receivable,                net                                    |                                                                                                |   |   |   |                      172,688 |
|   |                                                                                                                                                                                                                                                                  | Other                receivable,                net                                       |                                                                                                |   |   |   |                      225,367 |
|   |                                                                                                                                                                                                                                                                  | Inventory,                net of reserve for                obsolescence                  |                                                                                                |   |   |   |                      130,663 |
|   |                                                                                                                                                                                                                                                                  | Loan                to related                parties                                     |                                                                                                |   |   |   |                      388,136 |
|   |                                                                                                                                                                                                                                                                  | Other                current                assets                                        |                                                                                                |   |   |   |                        47,086 |
|   |                                                                                                                                                                                                                                                                  |         Total                Current Assets       |                                                                                                |   |   |   |                      979,605 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   | Property,                Plant & Equipment,                net                                                                                                                                                                                                    |                                                                                      |                                                                                                |   |   |                      564,308 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   | Intangible                Assets,                net                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |                      580,557 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   | Goodwill                                                                                                                                                                                                                                                              |                                                                                      |                                                                                                |   |   |   |                   1,176,591 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   | Assets                of the entity held for                disposal                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |                   1,970,743 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  | Total                Assets                                                               |                                                                                                |   |   | $ |                   5,271,804 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   | LIABILITIES                AND STOCKHOLDERS'                EQUITY                                                                                                                                                                                                    |                                                                                      |                                                                                                |   |   |   |
|   | Current                Liabilities                                                                                                                                                                                                                                    |                                                                                      |                                                                                                |   |   |   |
|   |                                                                                                                                                                                                                                                                  | Accounts                payable and accrued                expense                        |                                                                                                |   |   | $ |                        42,352 |
|   |                                                                                                                                                                                                                                                                  | Other                payable                                                              |                                                                                                |   |   |   |                        80,390 |
|   |                                                                                                                                                                                                                                                                  | Tax                payable                                                                |                                                                                                |   |   |   |                        87,219 |
|   |                                                                                                                                                                                                                                                                  | Due                to related                party                                        |                                                                                                |   |   |   |                      323,035 |
|   |                                                                                                                                                                                                                                                                  |         Total                Current Liabilities  |                                                                                                |   |   |   |                      532,997 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   | Stockholders'                Equity                                                                                                                                                                                                                                   |                                                                                      |                                                                                                |   |   |   |
|   |                                                                                                                                                                                                                                                                  | Preferred                stock                                                            |                                                                                                |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  |                                                                                      | Class                A, authorized shares                1,000,000 $0.001 par value,                |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  |                                                                                      | 434,377                shares issued and                outstanding;                                |   |   |   |   |                            434 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      | Class                B, authorized shares                20,000,000, no par value; none outstanding |   |                              - |
|   |                                                                                                                                                                                                                                                                  | Capital                stock                                                              |                                                                                                |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  |                                                                                      | (no                par value, unlimited                authorized                                   |   |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  |                                                                                      | 477,835                (post-split) shares issued                and outstanding)                   |   |   |   |   |                   8,915,403 |
|   |                                                                                                                                                                                                                                                                  | Other                comprehensive                income                                  |                                                                                                |   |   |   |                634,893 |
|   |                                                                                                                                                                                                                                                                  | Accumulated                deficit                                                        |                                                                                                |   |   |   |                   (4,811,923) |
|   |                                                                                                                                                                                                                                                                  |         Total                Stockholders' Equity |                                                                                                |   |   |   |                   4,738,807 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   |                                                                                                                                                                                                                                                                  | Total                Liabilities &                Stockholders' Equity                |                                                                                                |   |   | $ |                   5,271,804 |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |   |
|   |  The                accompanying notes are                an integral part of these consolidated financial                statements                                                                                                                             |
|   |                                                                                                                                                                                                                                                                  |                                                                                      |                                                                                                |   |   |   |   |                            |

----

| AMERIAN                WENSHEN STEEL GROUP, INC.                AND SUBSIDIARIES(FORMERLY                  KNOWN AS CHINA SOFTWARE                  TECHNOLOGY GROUP CO.,LTD)CONSOLIDATED                  STATEMENTS OF                  OPERATIONSFOR                  THE YEARS ENDED SEPTEMBER 30,                  2007 AND 2006  |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            | 2007                                                                                                   |    | 2006 |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
| Net                sales                                                                                                                                                                                                                                                                                                                    |  $                                                                                                                                                                                  |           1,162,555           |  $                                                                                                | 93,707  |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
| Cost                of                sales                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                     |             868,755 |                                                                                                   | 92,327  |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Gross                profit                                                                                                                                                              |                                                                            |             293,800                        |    | 1,379 |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
| Operating                expenses                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |
|                                                                                                                                                                                                                                                                                                                                        | General                and                administrative                                                                                                                                 |                                                                            |             664,592                        |    | 116,802 |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Loss                from                operations                                                                                                                                       |                                                                            |            (370,792)                            |    | (115,422) |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
| Non-operating                expenses                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Other                expenses                                                                                                                                                            |                                                                            |                 9,553  |    | 2,121 |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Net                Loss before income                tax                                                                                                                                 |                                                                            | (380,344)                                                                                              |    | (117,544) |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Income                tax                                                                                                                                                                |                                                                            | 34,821                                                                                                 |    |                  - |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Net                loss from continuing                operations                                                                                                                        |                                                                            | (415,166)                                                                                              |    | (117,544) |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Income                from entity held for                disposal                                                                                                                       |                                                                            | (180,124)                                                                                              |    |                  - |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Net                Loss                                                                                                                                                                  |                                                                            | (595,290)                                                                                              |    | (117,544) |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
| Other                Comprehensive                Income                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Foreign                currency translation                gain                                                                                                                          |                                                                            | 505,189                                                                                                |    | 93,202 |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Net                comprehensive                loss                                                                                                                                     |  $                                                                         | (90,101)                                                                                               |  $ | (24,342) |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Net                loss per share from continuing                operations                                                                                                              |  $                                                                         |                 (0.87) |  $ |              (0.25) |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Net                income per share from entity                held for disposal                                                                                                         |  $                                                                         |                 (0.38) |  $ |                  - |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Basic&Diluted                Loss per                share                                                                                                                           |  $                                                                         |                 (1.25) |  $ |              (0.25) |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | Basic                and dilutive weighted                average shares outstanding*                                                                                                    |                                                                            |             477,835                        |    |          477,835 |   |   |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                        | *                Basic and diluted weighted                average number of shares considered equivalent as the effect of dilution                is anti-dilutive.                     |                                                                            |
|                                                                                                                                                                                                                                                                                                                                        | The                basic and diluted net loss per                share has been stated to retroactively effect a 45:1 reverse stock                split                in October 2007. |
|                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |   |   |   |
| The                accompanying notes are an                integral part of these consolidated financial                statements                                                                                                                                                                                                         |                                                                                                                                                                                     |                                                                            |                                                                                                   |    |

----

|   |  AMERICAN                WENSHEN STEEL GROUP, INC.                AND SUBSIDIARIES(FORMERLY                  KNOWN AS CHINA SOFTWARE                  TECHNOLOGY GROUP CO., LTD) CONSOLIDATED                    STATEMENTS OF                    SHAREHOLDERS' EQUITYFOR                      THE YEARS ENDED SEPTEMBER 30,                      2007 AND 2006 |   |   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|

|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-------------------------|-----------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   | Accumulated                                                                                                                          |   |                                                                |   |   |   | Total |   |
|   |                                                                                                                                               |   | Preferred  Stock | Common  Stock |                                                                        | Capital                                                                                                                             |   | Capital                                                                                                                        |   | comprehensive                                                                        |   | Statutory                                                                                                                            |   | Retained                                                            |   | stockholders' |   |
|   |                                                                                                                                               |   | Shares                     |                    | Amount                                                                      | Shares                                                                                                                              |   | stock                                                                                                                          |   | surplus                                                                              |   | Income                                                                                                                               |   | Reserve                                                             |   | earnings |   | equity |   |
|   | Balance                September 30,                2005                                                                                           |   |  434,377              |  $                 |             434 | -                                                                                                                                   |   | 1,654,745                                                                                                                      |   |                                                                                 | $      | 36,502                                                                                                                               | $      |    -         | $      | (95,246) | $ | 1,596,435 |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Contributed                capital                                                                                                                 |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   | 4,145,593                                                                            |   | -                                                                                                                                    |   |                                                                |   | - |   | 4,145,593 |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Capital                transferred to Capital                Surplus                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   | (808,177)                                                                                                                      |   | 808,177                                                                              |   |                                                                                                                                 |   |                                                                |   |   |   |                  - |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Foreign                currency translation                gain                                                                                    |   |                       |                    |                                                                        |                                                                                                                                |   | -                                                                                                                              |   |                                                                                 |   | 93,202                                                                                                                               |   |                                                                |   | - |   | 93,202 |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Net                loss                                                                                                                            |   |                       |                    |                                                                        |                                                                                                                                |   | -                                                                                                                              |   |                                                                                 |   | -                                                                                                                                    |   |                                                                |   | (117,544) |   | (117,544) |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Balance                September 30,                2006                                                                                           |   |    434,377  |                    |             434 |                     -                |   | 847,002                                                                                                                        |   | 4,953,770                                                                            |   | 129,704                                                                                                                              |   | -                                |   | (212,790) |   | 5,717,686 |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Deemed                Dividend (before reverse                acquisition)                                                                         |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   | (4,003,844) |   | (4,003,844) |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Recapitalization                on Reverse                Acquisition                                                                              |   |                       |                    |                                                                        |              477,835                                               |   |            8,068,401                                                    |   | (4,953,770)                                                                          |   |                                                                                                                                 |   |                                                                |   |   |   |        3,114,631 |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Foreign                currency translation                gain                                                                                    |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   | 505,189                                                                                                                              |   |                                                                |   |   |   | 505,189 |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Net                loss for continuing                operations                                                                                   |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   | (415,166) |   | (415,166) |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Income                from entity held for                disposal                                                                                 |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   | (180,124) |   | (180,124) |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | Balance                September 30,                2007                                                                                           |   |  434,377              |  $                 |             434 |             477,835                                                     | $      |         8,915,403                                                                      |   |   -                      | $      | 634,893                                                                                                                              | $      |   -          | $      | (4,811,923) | $ | 4,738,807 |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | The                common shares has been stated                to retroactively effect a 45:1 reverse stock split in October                2007. |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   | The                accompanying notes are an                integral part of these consolidated financial                statements                |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   |                                                                                                                                               |   |                       |                    |                                                                        |                                                                                                                                |   |                                                                                                                           |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   |                                                                                                                                               |   |                       |                    |                      |                                                                                                                                |   |                                                                                                                                |   |                                                                                 |   |                                                                                                                                 |   |                                                                |   |   |   |   |   |
|   |                                                                                                                                               |   |                       |                    |                      |                                                                                                                                |   |                       |   |                |   |                        |   |                   |   |                  |   |   |   |

|   |
|--------|

----

|                                  |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          | 2007                                                                                              |                                                                                                          | 2006                                                                                                          |   |   |   |   |   |
| CASH                  FLOWS FROM OPERATING                  ACTIVITIES                                                                                                                           |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             | Net                  loss                                                                       |  $                                                                                                       |        (595,290)                                                   |  $                                                                                                       |        (117,544)                                               |                                                                                                          |                                                                                                          |   |   |   |
|                                                                                                                                                                                             | Adjustments                  to reconcile net loss                  from operations to net cash |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |
|                                                                                                                                                                                             | provided                  by (used in) operating                  activities:                   |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |
|                                                                                                                                                                                             |                                                                                            | Depreciation                  and                  amortization                                               |                                                                                                  |         151,463                                                       |                                                                                              |         116,785                                                       |                                                                                                          |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            | Bad                  debt                                                                                     |                                                                                                  |         127,113                                                       |                                                                                              |                   - |                                                                                                          |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            | Reserve                  for                  inventory                                                       |                                                                                                  |         342,943                                                       |                                                                                              |                   - |                                                                                                          |   |   |   |   |
|                                                                                                                                                                                             | Changes                  in assets and                  liabilities:                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |
|                                                                                                                                                                                             |                                                                                            | (Increase)                  / decrease in                  assets:                                            |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Accounts                  receivable                                                                  |                                                                                                          |        (140,012)                                               |                                                                                                          |         (40,599)                                                      |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Other                  receivable                                                                     |                                                                                                          |          (90,264)                                    |                                                                                                          |         180,420                                                       |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Inventories                                                                                           |                                                                                                          |          (64,601)                                    |                                                                                                          |           21,168                                            |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Other                  current                  assets                                                |                                                                                                          |           86,697                                |                                                                                                          |         (21,177)                                                      |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            | Increase                  / (decrease) in current                  liabilities:                               |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Accounts                  payable and accrued                  expenses                               |                                                                                                          |          (43,012)                                    |                                                                                                          |           16,267                                            |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Other                  payable                                                                        |                                                                                                          |               746           |                                                                                                          |           34,077                                            |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Tax                  payable                                                                          |                                                                                                          |           84,627                                |                                                                                                          |                   - |   |   |   |   |   |
| Net                  cash provided by (used in)                  operating activities from continuing operations                                                                                 |                                                                                            |        (139,589)                                                           |                                                                                                  |         189,397                                                       |                                                                                              |                                                                                                          |                                                                                                          |   |   |
| Net                  cash provided by operating                  activities of entity held for disposal                                                                                          |                                                                                            |         249,980                                                       |                                                                                                  |                   - |                                                                                              |                                                                                                          |                                                                                                          |   |   |
| Net                  cash provided by operating                  activities                                                                                                                      |                                                                                            |         110,391                                                       |                                                                                                  |         189,397                                                       |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
| CASH                  FLOWS FROM INVESTING                  ACTIVITIES                                                                                                                           |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            | Purchase                  of property, plant and                  equipment                                   |                                                                                                  |          (35,044)                                                |                                                                                              |        (116,684)                                                           |                                                                                                          |   |   |   |   |
| Net                  cash used in investing                  activities from continuing operations                                                                                               |                                                                                            |          (35,044)                                                |                                                                                                  |        (116,684)                                                           |                                                                                              |                                                                                                          |                                                                                                          |   |   |
| Net                  cash used in investing                  activities of entity held for disposal                                                                                              |                                                                                            |          (69,856)                                                |                                                                                                  |                   - |                                                                                              |                                                                                                          |                                                                                                          |   |   |
| Net                  cash used in investing                  activities                                                                                                                          |                                                                                            |        (104,901)                                                           |                                                                                                  |        (116,684)                                                           |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
| CASH                  FLOWS FROM FINANCING                  ACTIVITIES                                                                                                                           |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            | Proceeds                  from contributed                  capital                                           |                                                                                                  |                   - |                                                                                              |         399,021                                                       |                                                                                                          |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            | Loan                  advanced                                                                                |                                                                                                  |        (345,597)                                                           |                                                                                              |        (135,936)                                                           |                                                                                                          |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            | Payment                  to return loans from                  related parties                                |                                                                                                  |        (122,763)                                                           |                                                                                              |         112,987                                                       |                                                                                                          |   |   |   |   |
| Net                  cash provided by/(used in)                  financing activities from continuing operations                                                                                 |                                                                                            |        (468,361)                                                           |                                                                                                  |         376,072                                                       |                                                                                              |                                                                                                          |                                                                                                          |   |   |
| Net                  cash provided by (used in)                  financing activities of entity held for disposal                                                                                |                                                                                            |                   - |                                                                                                  |                   - |                                                                                              |                                                                                                          |                                                                                                          |   |   |
| Net                  cash provided by (used in)                  financing activities                                                                                                            |                                                                                            |        (468,361)                                                           |                                                                                                  |         376,072                                                       |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
| Effect                  of exchange rate on cash                  & cash equivalent                                                                                                          |                                                                                            |           11,836                                            |                                                                                                  |             7,227                                 |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
| Net                  increase in cash & cash                  equivalents                                                                                                                    |                                                                                            |        (451,035)                                                           |                                                                                                  |         456,012                                                       |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
| Cash&cash                  equivalents -                  beginning of year                                                                                                                  |                                                                                            |         466,699                                                       |                                                                                                  |           10,687                                            |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
| Cash&cash                  equivalents - end                  of year                                                                                                                        |  $                                                                                         |           15,664                                            |  $                                                                                               |         466,699                                                       |                                                                                              |                                                                                                          |                                                                                                          |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
|                                                                                                                                                                                             | SUPPLEMENTAL                  DISCLOSURES:                                                      |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Cash                  paid during the year                  for:                                      |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |      Interest                                                                |  $                                                                                                       |                 - |  $                                                                                                       |                 -             |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |      Income                  taxes                                           |  $                                                                                                       |                 - |  $                                                                                                       |                 -             |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
|                                                                                                                                                                                             | NON-CASH                  INVESTING AND FINANCING                  ACTIVITIES:                  |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Issuance                  of preferred stock for                  reverse merger                      | $                                                                                                             |   130,313,100                                                                           | $                                                                                                             |                 -             |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          | Deemed                  dividend on distribution of                  assets before reverse acquistion | $                                                                                                             |       4,003,844                                                     | $                                                                                                             |                                                                                                          |   |   |   |   |   |
|                                                                                                                                                                                             |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |   |   |   |
| The                  accompanying notes are an                  integral part of these consolidated financial                  statements                                                        |                                                                                            |                                                                                                          |                                                                                                  |                                                                                                          |                                                                                              |                                                                                                          |                                                                                                          |   |   |

|   |
|--------|

----

----

----

Use          of          estimates

----

----

| a.   | A                  brief description of the                  provisions of this Statement |
|----------------|-------------------------------------------------------------------------------------------|

| b.   | The                  date that adoption is                  required |
|----------------|----------------------------------------------------------------------|

| c.   | The                  date the employer plans to                  adopt the recognition provisions of this Statement, if                  earlier. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                           |   | 2007     |
|--------------------------------------------------------------------------------|--------|----------|
| Loans                  receivable (interest free, unsecured and due on demand) | $      | 218,877  |
| Deposits                                                                       |   | 15,361   |
| Others                                                                         |   | 28,645   |
|                                                                           |   | 262,883  |
| Less                  : Allowance for Doubtful Debts                           |   | (37,516) |
| Total                                                                          | $      | 225,367  |
|                                                                           |   |     |

|                                            |   | 2007    |
|-------------------------------------------------|--------|---------|
| Raw                  Material                   | $      | 436,688 |
| Finish                  Goods                   |   | 24,228  |
| Work                  in progress               |   | 22,786  |
|                                            |   | 483,702 |
| Less:                  Reserve for obsolescence |   | 353,039 |
| Total                                           | $      | 130,663 |

----

|                                                          |   | 2007   |
|---------------------------------------------------------------|--------|--------|
| Advances                  to employees (non-interest bearing) | $      | 39,910 |
| Advances                  to suppliers (non-interest bearing) |   | 7,176  |
| Total                                                         | $      | 47,086 |
|                                                          |   |   |

|                                            |   | 2007      |
|-------------------------------------------------|--------|-----------|
|                                            |   |      |
| Office                  Equipment               | $      | 17,746    |
| Building                                        |   | 340,500   |
| Production                  Equipment           |   | 193,680   |
| Vehicles                                        |   | 148,286   |
|                                            |   |      |
|                                            |   | 700,212   |
|                                            |   |      |
| Less:                  Accumulated depreciation |   | (135,904) |
|                                            |   |      |
| Property                  and equipment, net    | $      | 564,308   |
|                                            |   |      |

|   |  Year                  ended                  September 30,             |  Amount                                           |   |
|--------|------------------------------------------------------------------------------|--------------------------------------------------------|--------|
|   |                            2008 |   $                  77,787                  |   |
|   |                            2009 |                        77,787 |   |
|   |                            2010 |                       77,787       |   |
|   |                            2011 |                       77,787       |   |
|   |                            2012 |                      77,787             |   |
|   |                                                                         |                                    |   |

----

----

|                                           |   | 2007   |
|------------------------------------------------|--------|--------|
|                                           |   |   |
| Accounts                  payable              | $      | 16,433 |
| Accrued                  payroll & welfare |   | 2,977  |
| Accrued                  Expenses              |   | 19,712 |
| Advances                  from customers       |   | 3,230  |
| Total                                          | $      | 42,352 |
|                                           |   |   |

|                                                                       |   | 2007   |
|----------------------------------------------------------------------------|--------|--------|
|                                                                       |   |   |
| Loan                  payable (unsecured, interest free and due on demand) | $      | 40,414 |
| Other                  payable                                             |   | 39,976 |
| Total                                                                      | $      | 80,390 |
|                                                                       |   |   |

----

|                                             | Options                  outstanding | Weighted                  Average Exercise Price | Aggregate                  Intrinsic Value |
|--------------------------------------------------|--------------------------------------|--------------------------------------------------|--------------------------------------------|
| Outstanding,                  December 31, 2006  | 240                                  | $43.20                                           | $-                                         |
| Granted                                          | -                                    | -                                                | -                                          |
| Forfeited                                        | -                                    | -                                                | -                                          |
| Exercised                                        | -                                    | -                                                | -                                          |
| Outstanding,                  September 30, 2007 | 240                                  | $43.20                                           | $-                                         |

| Outstanding                  Options | Exercisable                  Options |                                             |
|--------------------------------------|--------------------------------------|--------------------------------------------------|
| Exercise                  Price      | Options                              | Weighted                  Average Remaining Life | Weighted                  Average Exercise Price | Exercisable                  Options | Weighted                  Average Exercise Price |   |
| $43.20                               | 240                                  | 2.44                                             | $43.20 | 120 | $43.20 |   |

| 1.   | Making                  up cumulative prior years' losses, if                  any; |
|----------------|-------------------------------------------------------------------------------------|

| 2.   | Allocations                  to the "Statutory surplus reserve" of at least 10% of income after                  tax, as                  determined under PRC accounting rules and regulations, until the                  fund                  amounts to 50% of the Company's registered                  capital; |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Allocations                  to the discretionary surplus reserve, if approved in the shareholders'                  general meeting. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------|

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|   | (a)                    Change the name                  of the                  corporation to “American                  Wenshen Steel Group,                  Inc.”; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b)  Effect                  a 1-for-45                  reverse split                  with                  respect to the corporation’s                  common stock, and increase the                  number of authorized common shares to                  100,000,000; |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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