UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 2005

                                       OR

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

           For the transition period from ____________ to ____________

                       Commission file number: 333-105903

                          GENERAL STEEL HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

                 NEVADA                                           412079252
    (State or other jurisdiction of                            (I.R.S. Employer
     incorporation or organization)                          Identification No.)

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

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

                                +86 (10) 68000346

              (Registrant's telephone number, including area code)

                                     [None]
              (Former name, former address and former fiscal year,
                         if changed since last report)



<PAGE>

        Securities registered pursuant to Section 12(b) of the Act: none


           Securities registered pursuant to Section 12(g) of the Act:

                                                        Name of each exchange on
          Title of each class                              which registered
----------------------------------------                ------------------------
Common Stock, $ .001 par value per share                     Not applicable




     Indicate by check mark if the registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act. Yes [ ] No [x]

     Indicate by check mark if the  registrant  is not  required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X]

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the  Exchange  Act.  Large
accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ x]

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

     As of March 29, 2006, the aggregate market value of the registrant's common
stock held by  non-affiliates  of the  registrant was  $58,367,997  based on the
$1.80 as reported on the OTC Bulletin Board.

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

                 Class                             Outstanding at March 29, 2006
----------------------------------------           -----------------------------
Common Stock, $ .001 par value per share                  32,426,665 shares


                       DOCUMENTS INCORPORATED BY REFERENCE

Document                                           Parts Into Which Incorporated
--------                                           -----------------------------
None                                               Not applicable


<PAGE>

                                     PART I

ITEM 1. Business.

ABOUT OUR COMPANY

         Our  Company  was  initially  incorporated  as  "American  Construction
Company", on August 5, 2002 in the State of Nevada for the purpose of commencing
a business of general construction contracting.

         It was the Company's  objective to provide to its customers  timely and
durable  construction of their  residential and commercial  needs. To accomplish
the  above  objective,  the now  retired  founder  of our  company,  Jeff  Mabry
established American  Construction  Company.  American Construction Company then
established its subsidiary,  West Dee Construction Ltd. (a Saskatchewan,  Canada
Company)  on August 8, 2002 by  purchasing  100  shares  from its  treasury.  We
established  our  subsidiary  for the  purpose  of  achieving  our above  stated
objectives  in  Saskatchewan,  Canada,  that is,  to enter the  residential  and
commercial construction industry.

         On October 14, 2004,  American  Construction  Company and General Steel
Investment Co., Ltd. ("General Steel Investment") and Northwest Steel Company, a
Nevada corporation  ("Merger Sub"), entered into an Agreement and Plan of Merger
(the  "Agreement")  pursuant to which  American  Construction  Company  acquired
General Steel  Investment,  and its 70% ownership in its subsidiary  Daqiuzhuang
Metal  Sheet  Co.,  Ltd.  ("Daqiuzhuang  Metal") in  exchange  for shares of the
Company's  common stock,  of which  22,040,000  shares are a new issuance by the
Company.  Under the terms of the Agreement,  General Steel Investment remained a
wholly-owned  subsidiary of the Company.  The  transaction  contemplated  by the
Agreement  was  intended  to be a  "tax-free"  reorganization  pursuant  to  the
provisions of Section 351 and 368(a)(1)(A) of the Internal Revenue Code of 1986,
as amended.  The stockholders of General Steel,  after completion of the Merger,
now own  approximately  96% of the  Company's  common  stock  outstanding  as of
October 15, 2004  (excluding any  additional  shares  issuable upon  outstanding
options, warrants and other securities convertible into common stock).

         Daqiuzhuang Metal was established on August 18, 2000 in Jinghai county,
Tianjin city, Hebei province, the People's Republic of China (PRC). The Articles
of  Incorporation  of  Daqiuzhuang  Metal provide for a 10-year  operating  term
beginning  on August 18, 2000 with a  registered  share  capital of  $9,583,200.
Daqiuzhuang Metal is a Chinese registered limited liability company with a legal
structure  similar to a limited  liability company organized under state laws in
the United  States of America.  Tianjin  Long Yu Trading  Material  Co.,  Ltd, a
Chinese limited liability company,  was the majority owner with 71% of ownership
interest.  Tianjin Long Yu Trading Material Co., Ltd was incorporated in 2000 in
Tianjin  Municipality,  Daqiuzhuang county;  People's Republic of China. Mr. Yu,
Zuo Sheng has a 90% ownership  interest in Tianjin Long Yu Trading Material Co.,
Ltd.


<PAGE>

         During January 2004, upon the Company's  Board of Directors'  approval,
Tianjin Long Yu Trading Material Co., Ltd and other minority  shareholders  sold
their  ownership  interests in Daqiuzhuang  Metal  amounting to 70% of the share
capital of Yang Pu Capital Automotive Investment Limited ("Yang Pu"). Yang Pu is
a Chinese registered limited liability company which is 100% indirectly owned by
Mr. Yu, Zuo Sheng.

         On May 16, 2004,  the Company  agreed to purchase  Yang Pu's 70% equity
interest  in  Daqiuzhuang   Metal  for  the  amount  of  55.45  million  RMB  or
approximately  $6,709,450.  Daqiuzhuang  Metal  received a new business  license
certifying  the new  ownership  structure as a Chinese  Foreign Joint Venture on
June 25, 2004.

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

         On October 14, 2004, based on the Company's Plan of Merger with General
Steel, the Board of Directors  determined to change the Registrant's fiscal year
end from January 31 to December 31.

         Effective  March 7, 2005,  American  Construction  Company  amended its
Articles of Incorporation  to change its name to "General Steel Holdings,  Inc."
The name change to General Steel Holdings, Inc. was an important milestone as it
helped our  current  and  future  investors  more  readily  understand  our core
business in China.

         Since 1998,  DQ has expanded its  operations  to six  production  lines
processing  250,000 tons of 0.75-2.0 mm hot-rolled carbon steel sheets per year,
maintaining  a 40% market  share of all steel sheets used in the  production  of
agricultural  vehicles in China. The Company is building a new plant next to the
existing  facility  with four new  production  lines to increase its  hot-rolled
steel  sheet  production  capacity  by 150,000  tons.  The new plant has already
started full operation since the middle of March 2006.

         Having  negotiated  with  Baotou  Iron  and  Steel  (Group)  Co.,  Ltd.
("Baotou")  for nearly a year,  we finally  announced on September  28, 2005 the
firm  agreement  with Baotou to set up the Baotou  Steel-General  Steel  Special
Steel Joint Venture Company Limited (the "Joint Venture Company"), which will be
incorporated in Baotou City, Inner Mongolia Autonomous Region.

         The Joint Venture Company will be located at Kundulun District,  Baotou
City,  Inner Mongolia,  China.  The stated purposes of the Joint Venture Company
are, among others,  to produce and sell special steel and to improve the product
quality and the production  capacity and  competitiveness  by adopting  advanced
technology in the production of steel products.  The Joint Venture Company shall
have a capacity of producing 600,000 tons of specialty steel products a year.



<PAGE>

         The  registered  capital  of the joint  venture  will be  approximately
$24,000,000.  The  products  of the joint  venture  will be sold in the  Chinese
market and abroad. The ownership structure will be as follows:

                                                                     % Ownership
                                                                     -----------

Baotou Iron and Steel (Group) Co., Ltd.                                  49%
General Steel Investment Co., Ltd.                                       31%
Da Qiu Zhuang Metal Sheet Co., Ltd.                                      20%


         Baotou Iron and Steel (Group) Co., Ltd. shall contribute land, existing
equipment and materials at an estimated value of approximately $12,000,000 which
will be  contributed  to the joint  venture at the date of the approval of Joint
Venture or issuance of the business license.  General Steel Investment Co., Ltd.
will contribute  approximately  $7,500,000 of cash and Da Qiu Zhuang Metal Sheet
Co., Ltd. will contribute  approximately $5,000,000 in cash. These contributions
will be  required  to be made on the  following  payment  schedule  30% of their
capital  contribution  within  30 days  of the  date of  approval  of the  Joint
Venture;  30% of their  capital  contribution  within  3  months  of the date of
approval of the Joint Venture;  and 40% of their capital  contribution  within 6
months of the date of approval of the Joint Venture.

         The Company also completed a private placement in 2005 and sold a total
of 1,176,665  shares of common stock at $1.50 per unit.  Each unit comprises one
share of common  stock of the  Company and two  warrants.  The  warrants  can be
exercised on the first  anniversary  date of their  issuance at a price of $2.50
per share and on the second  anniversary  date of their  issuance  at a price of
$5.00 per share. At the option of the investors,  the Company may be required to
repurchase the 1,176,665 shares of common stock 18 months after the closing date
at a per share price of $1.95.

         Under this private offering,  the Company raised a total of $1,765,000,
net of $158,850 paid for commissions for net proceeds of $1,606,150,  which will
be used to pay for the above mentioned joint venture.

Marketing and Customers

         Hot rolled carbon and silicon steel sheets are semi-finished  products.
The Company sells its products  primarily to distributors,  service centers,  or
manufacturers  who may further  process  these  products or resell them  without
further processing.

         The Company's products are primarily used by domestic  manufacturers of
economy agricultural vehicles: small, motorized, 3-wheel vehicles with a payload
from 1,650 to 4,400 lbs. (750 to 2,000 kgs),  retailing  between 1,200 and 1,800
USD (10,000 - 15,000 RMB).

         The production of inexpensive agriculture vehicles targets the needs of
low  income  farming  populations  in the rural  areas of  China.  International
non-government  organizations  estimate  that 80% of China's  population  of 1.3
billion is comprised of low-income rural farmers.



<PAGE>

         From production and sales figures  supplied by its customers  producing
economy  agricultural  vehicles,  the Company  estimates it supplies 40% of this
industry's nationwide demand for hot rolled steel products.

         The  Company's  marketing  efforts  are mainly  directed  toward  those
customers who have exacting requirements for on-time delivery,  customer support
and product quality.  The Company believes that its enhanced product quality and
delivery  capabilities,  and  its  emphasis  on  customer  support  and  product
planning,  are  critical  factors in its  ability  to serve this  segment of the
market.

         The Company currently sells its products through the following nineteen
distributors:

Shandong  Liaocheng  Xinda  Steel         Henan Yuanyang Jinxin Metal Sheet Co.,
Products Co., Ltd.                        Ltd.

Jiangsu Xuzhou Hengye Metal Sheet         Zhejiang Wenzhou Jianlong Steel Co.,
Co., Ltd.                                 Ltd.

Shandong Zibo Zhoucun Jinzhou             Jiangsu Wuxi Dazhuang Supply
Supply Materials Co., Ltd.                Materials Co., Ltd.

Qinghai Xining Zhenning Supply            Shandong Jining Tonghui Commercial
Materials Co., Ltd.                       Trading Co., Ltd.

Shandong GaomiXinfeng Supply              Jiangsu Nantong Zhongtie Economic
Materials Co., Ltd.                       Trading and Development Co., Ltd.

Jiangsu Zongshen Motorcycle               Tianjin Beihua Industrial Trading Co.,
Manufacturing Co., Ltd.                   Ltd.

Shandong Boxing County Boyuan             Jiangsu Yancheng Dinghua Supply
Supply Materials Co., Ltd.                Materials Co., Ltd.

Shandong Qufu Erqing Industrial           Henan Changge Stone Supply Materials
Supply and Sales Co., Ltd.                Co., Ltd.

Tianjin Yufeng Supply Materials .         LiFengJiang
Co., Ltd

Tianjin Beichen District Zhiyuan
Metal Materials Co., Ltd.

         Upon inception of business, each distributor pays 500,000 RMB, that is,
approximately $60,500 deposit to the Company. Distributors must submit a monthly
sales plan for each calendar year.  Distributors  are required to have a minimum
annual order requirement of 5,000 tons.  Distributors who do not meet this quota
are  penalized  based on a certain  percentage  of the  difference  between  the
minimum  requirement  and their  actual  sales.  Thus far,  the  Company has not
experienced  such a problem with any of its  distributors and hence did not have

<PAGE>

to enforce any penalty.  All of the orders by the  distributors are paid in full
by cash payment. Distributors place orders thirty days prior to delivery and pay
in full upon or before delivery.

         Our revenue is dependent,  in large part, on significant contracts from
a limited  number of customers.  During the fiscal year ended  December 31, 2005
approximately  37% of sales were to five customers and approximately 9% of sales
were to one  customer.  We believe that revenue  derived from current and future
large  customers  will continue to represent a significant  portion of our total
revenue.

ABOUT OUR PRODUCTS

Principal Products

         The Company  produces hot rolled carbon and silicon  steel sheets.  The
sizes of sheets are  roughly  2,000 mm (width) x 1,000 mm (length) x 0.75 to 2.0
mm  (thickness).  Limited size  adjustments  are possible to meet specific order
requirements.

         "Qiu Steel" is the registered  trademark  under which our Company sells
its products.  The Company's  logo has been  registered  with the China National
Trademark Bureau under No. 586433. "Qiu Steel" is registered under the GB 912-89
national quality  standard,  and certified under the National Quality  Assurance
program.

         The Company was awarded the  "Excellent  Quality  Product" award by the
Tianjin  Products  Technical  Quality  Assurance Bureau in 2001, and the "Famous
Trade Mark Award" by the Tianjin Commerce Bureau in 2002.

         From 2004 to 2005,  overall Company's sales volume increased by 7% from
190,936 tons in 2004 to 203,422 tons in 2004.

OUR RECENT STRATEGIC ALLIANCE

         The Company has recently signed an agreement with Baotou Iron and Steel
Group.  The purpose of the Agreement  was to form a new joint  venture  company,
Baotou Steel - General  Steel Special Steel Joint  Venture  Company  Limited,  a
limited  liability  company  formed under the laws of the  People's  Republic of
China (the "Joint Venture  Company").  The Joint Venture Company will be located
at Kundulun District, Baotou City, Inner Mongolia, China. The stated purposes of
the Joint Venture  Company are, among others,  to produce and sell special steel
and  to  improve  the  product   quality  and  the   production   capacity   and
competitiveness  by adopting  advanced  technology  in the  production  of steel
products.  The Joint Venture Company shall have a capacity of producing  600,000
tons of specialty steel products a year.

Capital Contributions

         The Agreement  states that the investment  capital of the Joint Venture
Company will be US$30,000,000,  and the registered capital will be approximately
US$24,000,000.

         The Agreement sets forth the initial contributions of each party to the

<PAGE>

Joint Venture Company. Baotou Steel will contribute land, existing equipment and
materials. General Steel and DQ will each contribute cash.

Ownership

         The Article of  Incorporation  states that Baotou Steel will have a 49%
ownership interest, General Steel will have a 31% ownership interest and General
Steel's subsidiary,  DQ Metal will have a 20% ownership interest,  respectively,
in the Joint Venture Company.

Directors and Management

         The  Articles  of  Incorporation  states  that  there will be seven (7)
directors of which three (3) will be appointed by Baotou Steel,  two (2) will be
appointed by General Steel and two (2) will be appointed by DQ. The chairman and
the vice  chairman  will be elected by the board of  directors.  The  Article of
Incorporation  states  that  certain  major  issues will  require the  unanimous
approval  of the all  directors  and all  other  issues  will be  discussed  and
approved by a majority of all the board members.

         The Joint Venture Company will have a management  office  consisting of
one general manager, five vice general managers and one chief financial officer.
Baotou Steel will  recommend the general  manager and one vice general  manager,
General Steel will recommend one vice general  manager and DQ will recommend one
vice  general  manager and the chief  financial  officer.  Two  additional  vice
general  managers  will be hired by  recommendation  of  Baotou  Steel.  All the
managers position have to be approved by majority of all directors.

Duration of the Joint Venture Company

         The duration of the Joint  Venture  Company will be 30 years and can be
extended  upon  suggestion  of one party to the  Agreement six months before the
expiration  date  of the  Agreement  and  upon  the  approval  by the  Board  of
Directors.

Miscellaneous Provisions

         In addition, the Agreement sets out various  administrative  provisions
relating to the  Agreement,  including,  but not limited to,  labor  management,
taxes, foreign exchange control, disposal of assets upon liquidation, insurance,
force majeure and amendment and termination of the Agreement.

ABOUT OUR RECENT PRIVATE PLACEMENT

         The Company  has offered an  aggregate  of  3,333,333  shares of Common
Stock par value $0.001 in a private  placement to investors at a purchase  price
of  $1.50  per  share.  On  September  18,  2005  the  Company  entered  into  a
subscription  agreement  with  certain  investors  to sell a total of  1,176,665
shares of common  stock at $1.50 per  share.  In  addition  each share of common
stock  included  two  warrants  which  give the right of the  warrant  holder to
purchase an additional 2,353,330 of common stock in the future. The warrants can
be exercised on the first  anniversary  date,  that is,  September 18, 2006 at a
price of $2.50 per share and on the second  anniversary date, that is, September

<PAGE>

18, 2007,  at a price of $5.00 per share.  The number of shares  attached to the
warrants  will be adjusted  due to  dividends  and changes in the capital  stock
structure of the Company.

         At  the  option  of the  investors  the  Company  may  be  required  to
repurchase the 1,176,665 shares of common stock 18 months after the closing date
at a per share price of $1.95.

         Under this private  placement,  the Company  raised  $1,765,000  in the
aggregate, net of $158,850 paid for commissions for net proceeds of $1,606,150.

                                  THE OFFERING

Common stock outstanding prior to this offering                       31,250,000
(at March 31, 2005)
Common stock being offered for resale to the public               (1)  3,529,995
Common stock outstanding after this offering                          34,779,995

Percentage of common stock outstanding following this offering            11.29%
that shares being offered for resale represent


(1)  Assumes  that all of the  shares  issued  or to be issued  pursuant  to the
subscription agreement will be registered.

Total proceeds raised in the offering:

We will not receive any proceeds from the resale of our common stock pursuant to
this offering.  We have received $1,765,000 in gross proceeds from the investors
under the  Subscription  Agreement.  We may also receive some proceeds if any of
the selling shareholders exercise their warrants through cash exercise.

Use of proceeds:  Any proceeds we may receive  will be used for  acquisition  of
businesses,  general corporate  purposes and to finance the recent joint venture
with Baotou Steel described above.

Code of Ethics and Business Conduct

General  Steel's  Code of Ethics and  Business  Conduct is  available on General
Steel's         website         at        the         following         address:
http://www.gshi-steel.com/gshi-steel/codeofethics.pdf.  General  Steel's Code of
Ethics and Business Conduct provides information:

         o        To  guide   employees  so  that  their  business   conduct  is
                  consistent with the Company's ethical standards;

         o        To  improve  the   understanding  of  the  Company's   ethical
                  standards  among  customers,  suppliers and others outside the
                  Company.

<PAGE>

General Steel's Code of Ethics and Business Conduct may also be obtained free of
charge   by   contacting   our   Chief   Financial   Officer,   John   Chen   at
john@gshi-steel.com or by phone: 86-10-68000346

ITEM 1A. Risk Factors.

         Competition  within the steel industry is intense.  In the sale of flat
rolled carbon steel and silicon steel,  the Company competes with competitors on
the basis of product quality,  responsiveness to customer needs and price. There
are two types of steel and iron  companies  in China:  State  Owned  Enterprises
(SOEs) and privately owned companies.

         The Company  competes with both state owned and  privately  owned steel
manufacturers. While we believe that our price and quality are superior to other
manufacturers, many of our competitors are better capitalized, more experienced,
and have deeper ties in the Chinese  marketplace.  We may be unsuccessful in our
attempts to compete,  which would have a material adverse impact on our business
and  financial  condition.  The  Company  considers  there  to  be  three  major
competitors  of similar  size,  production  capability  and product  line in the
market place: Tianjin No. 1 Rolling Steel Plant, Tianjin Yinze Metal Sheet Plant
and  Tangshan  Fengrun  Metal Sheet  Plant.  With the PRC's entry into the World
Trade  Organization  and the PRC's  agreements  to lift many of the  barriers to
foreign competition,  the Company believes that competition will increase in the
PRC agricultural equipment market as a whole with the entry of foreign companies
to the market.

Our limited  operating  history may not serve as an adequate  basis to judge our
future prospects and results of operations.

         We began our operations in 2000. Our limited  operating history may not
provide a  meaningful  basis on which to evaluate  our  business.  Although  our
revenues have grown rapidly since  inception,  we cannot assure you that we will
maintain our  profitability  or that we will not incur net losses in the future.
We  expect  that  our  operating  expenses  will  increase  as  we  expand.  Any
significant  failure to  realize  anticipated  revenue  growth  could  result in
significant   operating   losses.  We  will  continue  to  encounter  risks  and
difficulties   frequently  experienced  by  companies  at  a  similar  stage  of
development, including our potential failure to:

         o        Implement our business model and strategy and adapt and modify
                  them as needed;

         o        Increase  awareness of our brands,  protect our reputation and
                  develop customer loyalty;

         o        Manage  our  expanding   operations  and  service   offerings,
                  including the integration of any future acquisitions;

         o        Maintain adequate control of our expenses;

<PAGE>

         o        Anticipate and adapt to changing  conditions in the auto parts
                  markets  in  which we  operate  as well as the  impact  of any
                  changes in government regulation;

         o        Mergers   and   acquisitions    involving   our   competitors,
                  technological  developments and other significant  competitive
                  and market dynamics.

         If we are not successful in addressing  any or all of these risks,  our
business may be materially and adversely affected.

Our inability to fund our capital expenditure  requirements may adversely affect
our growth and profitability.

         Our  continued  growth is dependent  upon our ability to raise  capital
from outside sources.  We believe that in order to grow our company further,  we
will seize the opportunity in Chinese state owned enterprise's privatization and
set up strategic  joint ventures with these SOE companies.  That will require us
to finance through the capital market.  In the future we may be unable to obtain
the  necessary  financing on a timely  basis and on  acceptable  terms,  and our
failure  to do so may  adversely  affect  our  financial  position,  competitive
position,  growth and profitability.  Our ability to obtain acceptable financing
at any time may depend on a number of factors, including:

         o        Our financial condition and results of operations,
         o        The  condition  of  the  PRC  economy  and  the   agricultural
                  equipment industry in the PRC, and
         o        Conditions in relevant  financial markets in the U.S., the PRC
                  and elsewhere in the world.

We may not be able to effectively control and manage our growth.

         If our business and markets grow and develop,  it will be necessary for
us to finance and manage expansion in an orderly fashion.  This growth will lead
to an increase in the  responsibilities  of  existing  personnel,  the hiring of
additional  personnel and expansion of our scope of operations.  There can be no
assurance  that we will be able to raise the  required  financing or control and
manage this future growth.

We depend on large contracts and a concentration of customers.

         Our revenue is dependent,  in large part, on significant contracts from
a  limited   number  of  customers.   For  the  year  ended  December  31,  2005
approximately  37% of sales  were to five  customers.  We believe  that  revenue
derived  from current and future large  customers  will  continue to represent a
significant  portion of our total  revenue.  Our inability to continue to secure
and  maintain  a  sufficient  number of large  contracts  would  have a material
adverse  effect on our  business,  operating  results and  financial  condition.

<PAGE>

Moreover, our success will depend in part upon our ability to obtain orders from
new customers,  as well as the financial  condition and success of our customers
and general economic conditions.

We may not be able to pass on to  customers  increases  in the  costs of our raw
materials, particularly iron and steel.

         The major raw materials that we purchase for production are steel slabs
and strip steel.  The price and  availability of these raw materials are subject
to market  conditions  affecting supply and demand.  Our financial  condition or
results of operations may be impaired by further increases in raw material costs
to the extent we are  unable to pass those  higher  costs to our  customers.  In
addition,  if these  materials are not available on a timely basis or at all, we
may not be able to produce our products and our sales may decline.

Risks Related to Operating Our Business in China

We face the risk that  changes in the policies of the Chinese  government  could
have significant impact upon the business we may be able to conduct in China and
the profitability of such business.

         The  economy of China is at a  transition  from a planned  economy to a
market  oriented  economy  subject to five-year  and annual plans adopted by the
government that set down national economic  development  goals.  Policies of the
Chinese  government can have significant  effects on the economic  conditions of
China.  The Chinese  government  has confirmed  that economic  development  will
follow a model of market  economy  under  socialism.  Under this  direction,  we
believe  that the PRC will  continue  to  strengthen  its  economic  and trading
relationships  with foreign  countries  and business  development  in China will
follow market forces. While we believe that this trend will continue,  there can
be no assurance  that such will be the case. A change in policies by the Chinese
government  could  adversely  affect our  interests in by, among other  factors:
changes  in  laws,  regulations  or  the  interpretation  thereof;  confiscatory
taxation;  restrictions on currency conversion,  imports or sources of supplies;
or the expropriation or  nationalization  of private  enterprises.  Although the
Chinese  government has been pursuing economic reform policies for approximately
two decades,  there is no assurance that the government  will continue to pursue
such policies or that such policies may not be significantly altered, especially
in the event of a change in leadership, social or political disruption, or other
circumstances affecting China's political, economic and social life.

The PRC laws and  regulations  governing  our current  business  operations  and
contractual  arrangements are uncertain, and if we are found to be in violation,
we could be subject to sanctions.  In addition, any changes in such PRC laws and
regulations may have a material and adverse effect on our business.

         There are substantial  uncertainties  regarding the  interpretation and
application of PRC laws and  regulations,  including but not limited to the laws
and  regulations  governing our business,  or the enforcement and performance of

<PAGE>

our  arrangements  with  customers in the event of the  imposition  of statutory
liens, death,  bankruptcy and criminal proceedings.  Our subsidiaries and we are
considered  foreign persons or foreign funded enterprises under PRC laws, and as
a result,  we are required to comply with PRC laws and  regulations.  These laws
and  regulations  are relatively new and may be subject to future  changes,  and
their  official   interpretation   and  enforcement   may  involve   substantial
uncertainty.  The effectiveness of newly enacted laws, regulations or amendments
may be delayed, resulting in detrimental reliance by foreign investors. New laws
and regulations that affect existing and proposed future  businesses may also be
applied retroactively.  In addition, the PRC authorities retain broad discretion
in dealing with  violations of laws and  regulations,  including  levying fines,
revoking business  licenses and requiring  actions necessary for compliance.  In
particular,  licenses, permits and beneficial treatments issued or granted to us
by relevant  governmental  bodies may be revoked at a later time under  contrary
findings  of  higher  regulatory  bodies.  We cannot  predict  what  effect  the
interpretation  of  existing  or new PRC  laws or  regulations  may  have on our
businesses.  We cannot assure you that any such restructuring would be effective
or would not  result in  similar  or other  difficulties.  We may be  subject to
sanctions, including fines, and could be required to restructure our operations.
As a result of these  substantial  uncertainties,  we cannot  assure you that we
will not be found in violation of any current or future PRC laws or regulations.

A slowdown or other adverse  developments  in the PRC economy may materially and
adversely affect our customers, demand for our services and our business.

         All of our  operations are conducted in the PRC and all of our revenues
are generated  from sales to businesses  operating in the PRC.  Although the PRC
economy has grown  significantly in recent years, we cannot assure you that such
growth will continue.  The automotive  industry in the PRC is relatively new and
growing,  but we do not know how  sensitive  we are to a  slowdown  in  economic
growth or other  adverse  changes in the PRC economy which may affect demand for
cars and  trucks,  and  therefore,  auto parts.  A slowdown in overall  economic
growth, an economic downturn or recession or other adverse economic developments
in the PRC may materially  reduce the demand for our products and materially and
adversely affect our business.

Inflation in China could negatively affect our profitability and growth.

         While the Chinese economy has experienced rapid growth, such growth has
been uneven among various  sectors of the economy and in different  geographical
areas of the  country.  Rapid  economic  growth  can lead to growth in the money
supply and rising  inflation.  If prices for our products rise at a rate that is
insufficient to compensate for the rise in the costs of supplies, it may have an
adverse effect on profitability.  In order to control inflation in the past, the
Chinese  government  has imposed  controls on bank credits,  limits on loans for
fixed assets and  restrictions on state bank lending.  Such an austerity  policy
can lead to a slowing of economic growth.  In October 2004, the People's Bank of
China,  China's central bank, raised interest rates for the first time in nearly
a  decade  and  indicated  in a  statement  that the  measure  was  prompted  by
inflationary  concerns in the Chinese  economy.  Repeated  increases in interest

<PAGE>

rates by the  central  bank will likely  slow  economic  activity in China which
could,  in turn,  materially  increase our costs and also reduce  demand for our
products.

Governmental  control  of  currency  conversion  may  affect  the  value of your
investment.

         The PRC government  imposes controls on the  convertibility of Renminbi
into foreign currencies and, in certain cases, the remittance of currency out of
the PRC. We receive  substantially  all of our  revenues in  Renminbi,  which is
currently not a freely  convertible  currency.  Shortages in the availability of
foreign currency may restrict our ability to remit  sufficient  foreign currency
to pay dividends, or otherwise satisfy foreign currency denominated obligations.
Under existing PRC foreign  exchange  regulations,  payments of current  account
items,  including profit distributions,  interest payments and expenditures from
the transaction,  can be made in foreign  currencies without prior approval from
the PRC State  Administration  of Foreign  Exchange by  complying  with  certain
procedural  requirements.   However,   approval  from  appropriate  governmental
authorities is required where Renminbi is to be converted into foreign  currency
and remitted out of China to pay capital  expenses such as the repayment of bank
loans denominated in foreign currencies.

         The PRC government may also at its  discretion  restrict  access in the
future to foreign  currencies for current account  transactions.  If the foreign
exchange control system prevents us from obtaining  sufficient  foreign currency
to  satisfy  our  currency  demands,  we may not be able to pay  certain  of our
expenses as they come due.

The  fluctuation  of the  Renminbi  may  materially  and  adversely  affect your
investment.

         The value of the Renminbi  against the U.S. dollar and other currencies
may  fluctuate  and is affected  by,  among other  things,  changes in the PRC's
political and economic conditions. As we rely entirely on revenues earned in the
PRC, any  significant  revaluation  of the Renminbi may materially and adversely
affect our cash flows,  revenues and financial  condition.  For example,  to the
extent that we need to convert  U.S.  dollars we receive from an offering of our
securities  into  Renminbi  for our  operations,  appreciation  of the  Renminbi
against the U.S.  dollar could have a material  adverse  effect on our business,
financial condition and results of operations.

         Conversely,  if we decide to convert our Renminbi into U.S. dollars for
the purpose of making  payments for  dividends on our common shares or for other
business purposes and the U.S. dollar appreciates against the Renminbi, the U.S.
dollar equivalent of the Renminbi we convert would be reduced. To date, however,
we  have  not  engaged  in  transactions  of  either  type.  In  addition,   the
depreciation  of significant  U.S. dollar  denominated  assets could result in a
charge to our income statement and a reduction in the value of these assets.

         Since  1994 the PRC has pegged  the value of the  Renminbi  to the U.S.
dollar.  We do not  believe  that this  policy has had a material  effect on our
business.  However,  there have been  indications that the PRC government may be
reconsidering  its monetary  policy in light of the overall  devaluation  of the

<PAGE>

U.S. dollar against the Euro and other currencies  during the last two years. In
July 2005,  the PRC  government  revalued  the Renminbi by 2.1% against the U.S.
dollar,  moving from Renminbi  8.28 to Renminbi 8.11 per dollar.  Because of the
pegging of the Renminbi to the U.S.  dollar is loosened,  we anticipate that the
value of the  Renminbi  appreciate  against  the  dollar  with the  consequences
discussed above.

The PRC legal  system  has  inherent  uncertainties  that could  materially  and
adversely affect us.

         The PRC legal  system  is based  upon  written  statutes.  Prior  court
decisions may be cited for reference but are not binding on subsequent cases and
have limited value as precedents.  Since 1979, the PRC  legislative  bodies have
promulgated  laws and regulations  dealing with economic matters such as foreign
investment, corporate organization and governance, commerce, taxation and trade.
However, the PRC has not developed a fully integrated legal system and the array
of new laws and  regulations  may not be  sufficient  to cover  all  aspects  of
economic  activities  in  the  PRC.  In  particular,   because  these  laws  and
regulations  are relatively  new, and because of the limited volume of published
decisions and their non-binding  nature,  the  interpretation and enforcement of
these  laws  and  regulations  involve  uncertainties.  In  addition,  published
government policies and internal rules may have retroactive effects and, in some
cases,  the policies and rules are not published at all. As a result,  we may be
unaware of our violation of these policies and rules until some time later.  The
laws  of the  PRC  govern  our  contractual  arrangements  with  our  affiliated
entities.  The enforcement of these contracts and the interpretation of the laws
governing these relationships are subject to uncertainty.

Risks Related to Our Common Stock

Our officers,  directors and affiliates  control us through their  positions and
stock ownership and their interests may differ from other stockholders.

         Our officers,  directors and affiliates  beneficially own approximately
96% of our common stock. Mr. Yu, Zuo Sheng our major  shareholder,  beneficially
owns  approximately  76.5% of our common  stock and is the  selling  stockholder
herein.  Mr. Yu can  effectively  control us and his  interests  may differ from
other stockholders

Because our principal  assets are located  outside of the United States and most
of our directors and officers  reside  outside of the United  States,  it may be
difficult for you to enforce your rights based on U.S.  federal  securities laws
against us and our  officers and  directors  in the U.S. or enforce  U.S.  court
judgments against us or them in the PRC.

         Among all of our  directors  only one  director  resides  in the United
States. In addition,  Daqiuzhuang, our operating subsidiary, is located in China
substantially all of its assets are located outside of the United States. It may
therefore be difficult for investors in the United States to enforce their legal
rights based on the civil liability  provisions of the U.S.  federal  securities
laws against us in the courts of either the U.S. and the PRC and,  even if civil

<PAGE>

judgments are obtained in U.S. courts,  to enforce such judgments in PRC courts.
Further, it is unclear if extradition  treaties now in effect between the United
States and the PRC would permit effective enforcement against us or our officers
and directors of criminal  penalties under the U.S.  federal  securities laws or
otherwise.

We have never paid cash dividends and are not likely to do so in the foreseeable
future.

         We currently intend to retain any future earnings for use in the
operation and expansion of our business. We do not expect to pay any cash
         dividends  in the  foreseeable  future but will  review  this policy as
circumstances
dictate.

There is only a limited trading market for our common stock.

         Our common stock is now listed on the over-the-counter  Bulletin Board.
There is  currently  limited  trading  market for our common stock and we do not
know if any  trading  market will ever  develop.  You may be unable to sell your
shares due to the absence of a trading market.

         In addition,  broker-dealers  who  recommend our common stock to people
who are not  established  customers or qualifying  investors must follow special
sales procedures, including getting the purchaser's written consent prior to the
sale. Our common stock is also subject to the "penny stock" rules, which require
delivery  of a schedule  explaining  the penny stock  market and the  associated
risks before any sale.  See "MARKET PRICE OF AND  DIVIDENDS ON THE  REGISTRANT'S
COMMON EQUITY AND RELATED  STOCKHOLDER  MATTERS." These requirements may further
limit your ability to sell your shares.

Our common stock is subject to price volatility unrelated to our operations.

         The market price of our common stock could fluctuate  substantially due
to a variety of factors,  including market  perception of our ability to achieve
our planned  growth,  quarterly  operating  results of other auto parts  makers,
trading volume in our common stock, changes in general conditions in the economy
and the financial markets or other developments affecting our competitors or us.

         In addition,  the stock  market is subject to extreme  price and volume
fluctuations.  This volatility has had a significant  effect on the market price
of securities  issued by many companies for reasons unrelated to their operating
performance and could have the same effect on our common stock.


ITEM 1B. Unresolved Staff Comments.

         None

<PAGE>

ITEM 2. Properties.

         The  Company's  sole  manufacturing  site and the office  buildings are
located in the Hebei province,  Jinghai  county,  about 20 miles (45 kilometers)
southwest  of the Tianjin  city  center.  The Company is situated on 17.81 acres
(7.21  hectares) of land and resides  within  320,390 sq. ft. (29,667 sq. m.) of
building space. All property is fully owned and has been paid in full. There are
no outstanding liens or mortgages on the property owned by the Company.


         The Company's production equipment includes the following:

------------------------------------------------------ -------------------------
Equipment                                              Quantity
------------------------------------------------------ -------------------------
1,200 mm Rolling machine                               6
------------------------------------------------------ -------------------------
Gas-fired reheat furnace                               6
------------------------------------------------------ -------------------------
16mm thick cut to size shearer                         5
------------------------------------------------------ -------------------------
6mmx 2,500mm cut to size shearer                       10
------------------------------------------------------ -------------------------
2,200 m3 gas producer                                  6
------------------------------------------------------ -------------------------
Annealing furnace                                      2
------------------------------------------------------ -------------------------
Roller grinder                                         2
------------------------------------------------------ -------------------------
Gas producer                                           9
------------------------------------------------------ -------------------------
Air compressor                                         6
------------------------------------------------------ -------------------------
Flattening machine                                     2
------------------------------------------------------ -------------------------
Straightening machine                                  2
------------------------------------------------------ -------------------------
Overhead cranes                                        24
------------------------------------------------------ -------------------------
Transportation vehicles (10 - 15 tons)                 3
------------------------------------------------------ -------------------------
All equipment is owned by the Company and has been paid in full.

ITEM 3. Legal Proceedings.

         None

ITEM 4. Submission of Matters to a Vote of Security Holders.

         No matter was  submitted  to a vote of General  Steel  Holdings  Inc.'s
security holders during the fourth quarter of 2005.



                                     PART II

ITEM 5.  Market  for  General  Steel  Holdings  Inc.'s  Common  Equity,  Related
Stockholder Matters and Issuer Purchases of Equity Securities.

         The common stock of General  Steel  Holdings  Inc. is listed on the OTC
Bulletin Board with the ticker symbol "GSHO." Information regarding the high and

<PAGE>
<TABLE>
<CAPTION>

low sales  prices for the common stock for each quarter of the last two years is
as follows:

--------------------------- ------------- ------------- ------------- ----------
HIGH AND LOW STOCK PRICES   1ST QTR       2ND QTR       3RD QTR       4TH QTR
--------------------------- ------------- ------------- ------------- ----------
2005   High                 $2.25         $1.85         $1.75         $1.73
--------------------------- ------------- ------------- ------------- ----------
       Low                  $0.98         $1.00         $1.21         $1.19
--------------------------- ------------- ------------- ------------- ----------
2004   High                 N/A           N/A           N/A           $2.50
--------------------------- ------------- ------------- ------------- ----------
       Low                  N/A           N/A           N/A           $1.25
--------------------------- ------------- ------------- ------------- ----------

         Prior to March 4, 2005,  the Company  common stock was traded under the
name of American Construction Company with the symbol "ACNS."

         As of  September  15,  2005,  there were  approximately  221 holders of
record of our common stock.

         Unregistered securities

         The Company  has offered an  aggregate  of  3,333,333  shares of Common
Stock par value $0.001 in a private  placement to investors at a purchase  price
of  $1.50  per  share.  On  September  18,  2005  the  Company  entered  into  a
subscription  agreement  with  certain  investors  to sell a total of  1,176,665
shares of common  stock at $1.50 per  share.  In  addition  each share of common
stock  included  two  warrants  which  give the right of the  warrant  holder to
purchase an additional 2,353,330 of common stock in the future. The warrants can
be exercised on the first  anniversary  date,  that is,  September 18, 2006 at a
price of $2.50 per share and on the second  anniversary date, that is, September
18, 2007,  at a price of $5.00 per share.  The number of shares  attached to the
warrants  will be adjusted  due to  dividends  and changes in the capital  stock
structure of the Company.

         At  the  option  of the  investors  the  Company  may  be  required  to
repurchase the 1,176,665 shares of common stock 18 months after the closing date
at a per share price of $1.95.

         Under this private  placement,  the Company  raised  $1,765,000  in the
aggregate, net of $158,850 paid for commissions for net proceeds of $1,606,150.

ITEM 6. Selected Financial Data.

(Dollars in Thousands)

--------------------------- ----------------- ------------ -------------- -------------- ----------------
<S>                         <C>               <C>          <C>            <C>            <C>
SUMMARY OF OPERATIONS       2005              2004         2003           2002           2001
                                                                                         (Unaudited)
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Total sales                 89,740            87,832       57,306         44,468         38,191
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Sales Growth %              2.2%              53.3%        28.9%          16.4%          11.5%
--------------------------- ----------------- ------------ -------------- -------------- ----------------

<PAGE>

--------------------------- ----------------- ------------ -------------- -------------- ----------------
Cost of sales               81,166            81,613       52,804         41,328         36,012
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Selling, general, and       2,781             2,317        1,532          1,539          2,468
administrative
expenses
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Interest expense            1,824             1,572        638            788            770
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Net income                  3,220             915          1,091          457            294
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Net income per              0.09              0.07         0.12           0.05           0.03
common share
--------------------------- ----------------- ------------ -------------- -------------- ----------------
FINANCIAL DATA
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Total assets                58,993            52,969       37,432         33,357         41,091
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Depreciation and            1,344             1,255        1,013          959            1,560
amortization
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Current Ratio               0.96              0.92         0.77           0.84           0.88
--------------------------- ----------------- ------------ -------------- -------------- ----------------
Basic weighted              31,250            13,595       9,175          9,175          9,175
average shares
outstanding (in
thousands)
--------------------------- ----------------- ------------ -------------- -------------- ----------------
</TABLE>


ITEM 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operation.


Overview

         Following the acquisition of ownership in General Steel Investment Co.,
Ltd. in October 2004, the Company has shifted its main business focus to general
steel  products  and  steel  manufacturing.  As the  core-operating  unit of the
Company,  Tianjin Daqiuzhuang Metal Sheet Co., Ltd. (herein referred to as "DQ")
started its operation in 1988. DQ's core business is the  manufacturing  of high
quality  hot-rolled carbon and silicon steel sheets which are mainly used in the
production of tractors,  agricultural vehicles, shipping containers and in other
specialty markets.

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

<PAGE>

         Since 1998,  DQ has expanded its  operations  to six  production  lines
processing  250,000 tons of 0.75-2.0 mm hot-rolled carbon steel sheets per year,
maintaining  a 40% market  share of all steel sheets used in the  production  of
agricultural  vehicles in China. The Company is building a new plant next to the
existing  facility  with four new  production  lines to increase its  hot-rolled
steel sheet production capacity by 150,000 tons. This new plant has already been
put into full production since mid-March 2006. The Company now operates 10 steel
production lines for the production of hot-rolled steel sheets.

                  Having negotiated with Baotou Iron and Steel (Group) Co., Ltd.
         for nearly a year, we finally  announced on September 28, 2005 the firm
         agreement  with them to set up the Baotou  Steel-General  Steel Special
         Steel Joint Venture Company Limited.



                  The  Joint  Venture   Company  will  be  located  at  Kundulun
         District,  Baotou City,  Inner Mongolia,  China. The stated purposes of
         the Joint  Venture  Company  are,  among  others,  to produce  and sell
         special  steel and to improve  the product  quality and the  production
         capacity and  competitiveness  by adopting  advanced  technology in the
         production of steel  products.  The Joint Venture  Company shall have a
         capacity of producing 600,000 tons of specialty steel products a year.



                  The   registered   capital  of  the  joint   venture  will  be
         approximately  $24,000,000.  The products of the joint  venture will be
         sold in the Chinese market and abroad.  The ownership will be comprised
         of the following:


                                                                  % Ownership
                                                                  -----------
         Baotou Iron and Steel (Group) Co., Ltd.                       49%
         General Steel Investment Co., Ltd.                            31%
         Da Qiu Zhuang Metal Sheet Co., Ltd                            20%


         Baotou Iron and Steel (Group) Co., Ltd. shall contribute land, existing
equipment and materials at an estimated value of approximately $12,000,000 which
will be  contributed  to the joint  venture at the date of the approval of Joint
Venture or issuance of the business license.  General Steel Investment Co., Ltd.
will contribute  approximately  $7,500,000 of cash and Da Qiu Zhuang Metal Sheet
Co., Ltd. will contribute  approximately  $5,000,000 cash.  These  contributions
will be required to be made on the following  payment schedule that 30% of their
capital  contribution  within  30 days  of the  date of  approval  of the  Joint
Venture;  30% of their  capital  contribution  within  3  months  of the date of
approval of the Joint Venture;  and 40% of their capital  contribution  within 6
months of the date of approval of the Joint Venture.

         The Company also completed a private  placement round in 2005 to sell a
total of 1,176,665 shares of common stocks at $1.50 per unit. Each unit contains
one share of its common stock and two warrants. The warrants can be exercised on

<PAGE>

the first anniversary date at $2.50 per share and on the second anniversary date
at $5.00 per share. At the option of the investors the Company maybe required to
repurchase the 1,176,665 shares of common stock 18 months after the closing date
at a per share price of $1.95.

         Under this private  offering,  the Company  raised total of  $1,765,000
which will be used to pay for the above mentioned joint venture.


Results of Operations

         The results of operations  of the Company are largely  dependent on the
level of  general  economic  activity  in  China.  Economic  forecasts  indicate
continued fast pace growth in China in 2006. As a result, the consumption of our
steel  products is expected to remain at a high level.  We believe  that we have
successfully  positioned  ourselves  within  the  Chinese  agricultural  vehicle
market.  As this market continues to demonstrate  increased demand for steel, we
remain focused on building our  leadership  position by enhancing the quality of
our products and expanding our production capacity.

         The price of steel products in China reached its peak in April 2005 and
took a slide throughout the rest of the year. The drop in steel price was mainly
attributable to the  overproduction by the Chinese steel companies.  Our Company
has its own  advantages as we operate in a special niche market which serves the
agricultural businesses.  We haven't been seriously affected by the same problem
of  overproduction  as the rest of the Chinese  steel market has.  However,  the
Company does believe that the highly  competitive  market will exist  throughout
2006,  with  pressures  for shipment  volumes and prices.  In view of that,  the
Company will continue to focus on cost control and new market development.

         The Company's  sales revenue mainly comes from the sale of metal sheets
in different  specifications  and steel scrap generated in the cutting  process.
The  Company's  cost of sales  includes  the cost of its primary raw  materials,
rollers,  energy cost, labor cost, the cost of warehousing and handling finished
steel products and freight costs.

Net sales and gross profit

2005 compared to 2004

         Net sales for the year  ended  December  31,  2005 were  $89.7  million
compared to $87.8  million in 2004,  representing  a 2% increase.  Shipments for
year ended December 31, 2005 climbed 7% to 203,422 tons from 190,936 tons due to
overall increase in productivity and market  development.  Average selling price
per ton including  sale of scrap for the years ended  December 30, 2005 and 2004
has increased to $479 from $460. The price of our finished  products  climbed to
its peak around $730 in April 2005 and slowly dropped throughout the rest of the
year. The overall  average selling price in 2005 was still higher than 2004 as a
result of good  market  demand  for our steel  products.  In  summary,  the main
reasons  for the  increase  in sales  revenue  are due to an increase in selling
price and an increase in shipment volume of steel products.

<PAGE>

         Gross profit for the years ended December 31, 2005 was $8.6 million, an
increase of 38% or $2.4 million from $6.2 million for the same period last year.
Gross profit margin increased to 9.6% from 7.1% for the years ended December 31,
2005 and 2004.  This  increase  in gross  profit  margin  is  mainly  due to the
increase in both sales volume and selling  price  outpacing  the increase in raw
materials  price.  Since  April  2005,  the  price  of steel  products  has been
decreasing globally due to the overall increase in steel supply. The Company has
to adjust its products' prices in order to stay competitive in this market.  The
management  thinks that the  pressure on the selling  price will be mitigated in
2006 as a result of steel industry consolidation and overall increase in demand.

2004 compared to 2003

         Net sales for the year 2004 was $87.8  million,  exceeding the previous
high of $57.3 million by 35%. Shipments in 2004 climbed 41% to 190,936 tons, due
to overall  increase in market demand.  Average  selling price per ton including
sale of scrap  has  increased  to $460 from  $418 as a  combined  result of good
market  demand  and change in the mix of  products  sold with  increasing  sales
volume of silicon steel. In summary,  the main reasons for the increase in sales
revenue in 2004 was due to an  increase  in  selling  price and an  increase  in
demand for steel products due to the good market conditions.

         Gross profit for the year ended December 31, 2004 was $6.2 million,  an
increase of 28% or $1.7  million  from $4.5  million  for the prior  year.  This
increase in gross profit was mainly due to the increase in both sales volume and
selling price outpacing the increase in raw materials price.

Cost of sales

2005 compared to 2004

         Overall cost of sales slightly decreased to $81.2 million for the years
ended  December  31, 2005 from $81.6 for 2004.  Cost of sales as  percentage  of
sales  decreased  from 92.9% to 90.4%.  Average  cost per ton was $434 and $438,
respectively  for the years ended  December  31, 2005 and 2004.  Even though the
sales  volume went up by 7% in 2005  compared to 2004,  the  decrease in cost of
sales was due primarily to the cheaper raw materials  price and increase in work
efficiency for the years ended December 31, 2005 compared to 2004.

2004 compared to 2003

         Overall  cost of sales  went up to  $81.6  million  for the year  ended
December  31, 2004 from $52.8  million for 2003.  The  increase was the combined
effect of both increases in production volume and raw materials price.

<PAGE>

         However, cost of sales as a percentage of sales increased from 92.1% to
92.9% due primarily to an increase in selling price and conversion costs for the
year ended December 31, 2004 compared to 2003.

Selling, General and Administrative Expenses

2005 compared to 2004

         Selling,   general  and  administrative  expenses,  such  as  executive
compensation, office expenses, legal and accounting charges, travel charges, and
various  taxes  were $2.8  million  for the year ended  December  31,  2005.  It
represented  a 20%  increase  from $2.3 for the year ended  December 31, 2004. A
large component of the increase came from the legal and accounting  expenses and
investor and public relations charges for the public listed company.

2004 compared to 2003

         Selling,   general  and  administrative  expenses,  such  as  executive
compensation, office expenses, legal and accounting charges, travel charges, and
various taxes were $2.3 million, it represented a 34% increase from $1.5 million
for the year ended  December 31, 2003.  A large  component of the increase  came
from the  legal and  accounting  charges  due to the  Company's  reverse  merger
between American Construction Company and General Steel Investment Co., Ltd. and
our attempt to acquire the rolling mill  equipment  from a  bankrupted  Canadian
steel maker, the Stelco Plate Company Ltd.

Other income (expense)

2005 compared to 2004

         Other income  (expense) for the year ended  December 31, 2005 consisted
mainly of finance charges and interest income. Interest expense was $1.8 million
for the year ended December 31, 2005  representing a $0.2 million year over year
increase.  Outstanding  bank loans increased to $27.1 million from $25.7 million
as of December 31, 2005 and 2004, respectively.  This increase in debt borrowing
is mainly driven by  management's  decision to increase the working  capital for
the current operation.

2004 compared to 2003

         Other income  (expense) for the year ended  December 31, 2004 consisted
mainly of finance and interest charges of $1.6 million,  a $0.9 million increase
from 2003.  Outstanding bank loans increased to $25.7 million from $13.8 million
as of December 31, 2004 and 2003,  respectively.  The increase in debt borrowing
is mainly driven by the  management's  decision to pay more in advance  payments
and deposits to suppliers to ensure stable raw  materials  supply and to lock in
discounted prices.

<PAGE>

Income taxes

         The Company did not carry on any business and did not maintain a branch
office in the United States during the years ended  December 31, 2005,  2004 and
2003.  Therefore,  no provision for withholding or U.S.  federal income taxes or
tax benefits on the undistributed earnings and/or losses of the Company has been
made.

         Pursuant to the relevant laws and regulations in the People's  Republic
of China,  Daqiuzhuang  Metal,  as a foreign  owned  enterprise  in the People's
Republic of China,  is entitled to an exemption from the PRC  enterprise  income
tax for two years  commencing  from its first  profitable  year. The Company has
applied for this tax benefit since the  beginning of 2005.  The Company has been
accruing   the  income  tax  every   quarter  as   required  by  the  local  tax
administrative  agencies.  Having  obtained the  approval  notice from local tax
administrative  agency by the end of March  2006,  the  Company  has  decided to
reverse the accruals for 2005 income taxes and add them back to the net income.

         The Company's effective state and local income tax rate was 33% for the
years ended December 31, 2004 and 2003.  Income tax expense was $906,277 for the
year ended  December 31,  2004,  up from  $767,431 in 2003 due to higher  pretax
income.

Liquidity and capital resources

         Due to the good market demand for our steel products, the Company plans
to maintain  higher-than-average  debt to equity ratio to better position itself
in this fast growing  market.  The bank loans are considered  short-term for the
purpose  of the  preparation  of  the  financial  statements  because  they  are
renewable with the banks every year.  Due to the recent joint venture  agreement
with Baotou Iron and Steel (Group) Co.,  Ltd., the Company is reserving cash for
the first 30% of its capital  contribution,  approximately  $3.7 million,  which
needs to be paid when the business license for the joint venture is issued. Cash
balance  including  restricted cash amounted to $11.4 million,  $9.1 million and
$3.7 million for the years ended December 31, 2005, 2004 and 2003.

Operating activities

2005 compared to 2004

         Net cash provided by operating  activities for the years ended December
31,  2005  was  $8.5  million  compared  with  $7.3  million  used in  operating
activities for 2004. The Company's net income before minority  interest was $4.2
million for the years ended  December 31, 2005, a $3.0 million or 204%  increase
compared  with last  year.  More  customer  deposits,  less  inventory  and less
advances on inventory  purchases  became the major  factors of this  increase in
cash generated by operating activities.

<PAGE>

2004 compared to 2003

         Net cash used in operating  activities  for the year ended December 31,
2004 was $7.3 million  compared with $0.79 million for 2003 primarily due to the
increase in  inventories  and purchase  deposits to suppliers.  Concerned by the
steady increase in raw material price,  the management  decided to pay suppliers
more in advance  payments and deposits to obtain the raw materials at discounted
prices.

Investing activities

2005 compared to 2004

         Net cash used in  investing  activities  was $7.3 million for the years
ended  December  31, 2005  compared  with $0.76  million  provided by  investing
activities  for the years ended December 31, 2004.  This change mainly  resulted
from the increase in notes  receivable  and equipment  purchases.  Our customers
usually pay for our products with promissory  notes issued by the banks which in
turn can be used like cash by the Company to pay for its purchases.  The Company
was also building four more production lines next to the existing facility. This
construction has been completed as of the statement date. The Company spent $4.2
million on construction in progress.

2004 compared to 2003

         Net cash  provided by  investing  activities  was $762,431 for the year
ended December 31, 2004 compared with  $5,772,859  used in investing  activities
for the year ended December 31, 2003.  This change  resulted from an increase in
collections on notes receivable and a decrease in equipment purchases due to the
completion of our plant facility construction.

Financing activities

2005 compared to 2004

         The Company issued  1,176,665  shares of redeemable  stock in a private
placement  round on September 18, 2005.  The stock was issued at $1.50 per share
with  options  for the Company to  purchase  the shares back at $1.95,  eighteen
month after the closing date.  Under this private  offering,  the Company raised
total  of  $1,765,000  which  will be used to pay for the  special  steel  joint
venture with Baotou Iron and Steel Group.  This is the main reason  attributable
to the net cash provided by financing activities.

2004 compared to 2003

         The Company signed two new agreements with Shanghai Pufa Bank and China
Merchants Bank to borrow $6,050,000 from each. The proceeds were used to pay for
inventory purchases due to the reason noted under "OTHER INCOME (EXPENSE)."

<PAGE>

Certain Relationships and Related Transactions.

The Company issued a note to Yang Pu Automotive  Investment  Limited,  a related
party,  for business  purpose on November 15, 2005. The note is in the amount of
RMB 24,000,000,  translated to $2,976,000, for one year with an interest rate at
7% and due at maturity.

The Company has a short term loan from Golden Glister Holdings  Limited.  Golden
Glister  Holdings Limited is incorporated in the territory of the British Virgin
Islands which our president Yu Zuo Sheng is the majority shareholder. The amount
was loaned to General Steel  Investment  Co., Ltd for business  operations.  The
Company had $980,000 and  $990,000  outstanding  on this loan as of December 31,
2005 and 2004,  respectively.  This  amount is  short-term  and is non  interest
bearing.

Compliance with environmental laws and regulations

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

         In 2005,  the  Daqiuzhuang  County  ordered an  environmental  clean-up
campaign and required  harmless  waste water  discharge.  In order to meet these
requirements,  we invested  $94,190 to remodel our  industrial  water  recycling
system to reduce new water  consumption and industrial water  discharge.  As for
the remodeling of gas furnace and  desulphurization of discharged gas, the local
government has not posted any control measures currently and we have no plans to
proceed with this remodeling until such time regulations have been implemented.

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

Impact of inflation

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

Off-balance sheet arrangements

         There are currently no off-balance sheet arrangements.

<PAGE>

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk.

Commodity Price Risk and Related Risks

         In the  normal  course of its  business,  General  Steel is  exposed to
market risk or price fluctuations related to the purchase, production or sale of
steel  products over which we have little or no control.  General Steel does not
use any  derivative  commodity  instruments  to manage the price  risk.  General
Steel's market risk strategy has generally been to obtain competitive prices for
its  products and allow  operating  results to reflect  market  price  movements
dictated by supply and demand.  Based upon an assumed annual production capacity
of 200,000  tons, a $1 change in the annual  average  price would change  annual
pre-tax profits by approximately $200,000.

Interest Rate Risk

         At December 31, 2005,  General Steel's  outstanding debt are short-term
and bear interest at fixed interest rates and  accordingly  are not sensitive to
changes in interest rates. We do not use swaps or other interest rate protection
agreements to hedge this risk.

Foreign Currency Exchange Rate Risk

         General Steel's operating unit, Daqiuzhuang Metal, is located in China.
The operation purchase, produce and sell all of the steel products domestically.
It is subject to the foreign  currency  exchange rate risk due to the effects of
fluctuations in the Chinese Renminbi on revenues and operating cost and existing
assets  or  liabilities.   General  Steel  has  not  generally  used  derivative
instruments  to manage  this risk.  A 10 percent  decrease  in the 2005  average
Reminbi exchange rate would result in a $457,300 charge to income.

ITEM 8. Financial Statements and Supplementary Data.

<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
General Steel Holdings, Inc.
(Formerly known as American Construction Company)

We have audited the  accompanying  consolidated  balance sheets of General Steel
Holdings,   Inc.   (Formerly  known  as  American   Construction   Company)  and
subsidiaries  as of  December  31, 2005 and 2004,  and the related  consolidated
statements of income,  stockholders'  equity and comprehensive  income, and cash
flows for each of three  years in the period  ended  December  31,  2005.  These
financial  statements are the  responsibility of the company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position of General  Steel
Holdings,  Inc.  and  subsidiaries  as of December  31,  2005 and 2004,  and the
results of its  operations  and its cash flows for each of the three years ended
December 31, 2005, in conformity with accounting  principles  generally accepted
in the United States of America.


/s/ Moore Stephens Wurth Frazer and Torbet, LLP


Walnut, California
March 24, 2006


                                      F-1
<PAGE>
<TABLE>
<CAPTION>

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

                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2005 AND 2004

                                     ASSETS

                                                                                2005          2004
                                                                            -----------   -----------
<S>                                                                         <C>           <C>
CURRENT ASSETS:
    Cash                                                                    $ 8,648,373   $ 5,547,810
    Restricted cash                                                           2,735,583     3,597,480
    Accounts receivable, net of allowance for doubtful accounts of $1,371
      as of December 31, 2005 and December 31, 2004                             993,417       523,398
    Notes receivable                                                              4,960       374,955
    Note receivable - related party                                           2,976,000          --
    Other receivables                                                           109,769       214,905
    Inventories                                                              10,730,941    12,826,561
    Advances on inventory purchases                                          10,716,293    13,469,984
    Advances on equipment purchases                                           1,053,169          --
    Short-term investment                                                        37,200        36,300
    Prepaid expenses - current                                                   64,647          --
                                                                            -----------   -----------
      Total current assets                                                   38,070,352    36,591,393
                                                                            -----------   -----------

PLANT AND EQUIPMENT, net                                                     18,213,872    14,100,324
                                                                            -----------   -----------

OTHER ASSETS:
    Prepaid expenses - non current                                              669,460          --
    Intangible assets - land use right, net of accumulated amortization       2,039,532     2,277,279
                                                                            -----------   -----------
      Total other assets                                                      2,708,992     2,277,279
                                                                            -----------   -----------

        Total assets                                                        $58,993,216   $52,968,996
                                                                            ===========   ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                        $   823,760   $   293,348
    Short term loans - bank                                                  27,118,800    25,748,800
    Short term notes payable                                                  5,406,400     6,776,000
    Other payables                                                               69,667       400,110
    Other payable - related party                                               980,000     1,011,012
    Accrued liabilities                                                         916,957       393,532
    Customer deposits                                                         1,276,536     2,009,313
    Deposits due to sales representatives                                     1,261,080     1,231,780
    Taxes payable                                                             1,682,330     1,879,615
                                                                            -----------   -----------
      Total current liabilities                                              39,535,530    39,743,510
                                                                            -----------   -----------

SHARES SUBJECT TO MANDATORY REDEMPTION                                        2,115,906          --
                                                                            -----------   -----------

      Total liabilities                                                      41,651,436    39,743,510
                                                                            -----------   -----------

MINORITY INTEREST                                                             5,387,026     4,015,108
                                                                            -----------   -----------

SHAREHOLDERS' EQUITY:
    Common Stock, $.001 par value, 75,000,000 shares authorized,
      31,250,000 shares issued and outstanding                                   31,250        31,250
    Paid-in-capital                                                           6,395,617     6,871,358
    Retained earnings                                                         4,287,946     2,152,976
    Statutory reserves                                                          840,753       154,794
    Accumulated other comprehensive income                                      399,188          --
                                                                            -----------   -----------
      Total shareholders' equity                                             11,954,754     9,210,378
                                                                            -----------   -----------

        Total liabilities and shareholders' equity                          $58,993,216   $52,968,996
                                                                            ===========   ===========
</TABLE>

See report of independent registered public accounting firm.
The accompanying notes are an integral part of this statement.


                                      F-2
<PAGE>
<TABLE>
<CAPTION>

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

        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003



                                                    2005            2004            2003
                                                ------------    ------------    ------------
<S>                                             <C>             <C>             <C>

SALES REVENUE                                   $ 89,739,899    $ 87,831,919    $ 57,305,601

COST OF SALES                                     81,165,850      81,613,187      52,804,197
                                                ------------    ------------    ------------

GROSS PROFIT                                       8,574,049       6,218,732       4,501,404

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES      2,781,070       2,316,699       1,532,033
                                                ------------    ------------    ------------

INCOME FROM OPERATIONS                             5,792,979       3,902,033       2,969,371

OTHER (EXPENSES) INCOME , NET                     (1,600,132)     (1,616,377)       (643,807)
                                                ------------    ------------    ------------

INCOME BEFORE PROVISION FOR INCOME TAXES
     AND MINORITY INTEREST                         4,192,847       2,285,656       2,325,564

PROVISION FOR INCOME TAXES                              --           906,277         767,431
                                                ------------    ------------    ------------

NET INCOME BEFORE MINORITY INTEREST                4,192,847       1,379,379       1,558,133

MINORITY INTEREST                                  1,371,918         464,381         467,440
                                                ------------    ------------    ------------

NET INCOME                                         2,820,929         914,998       1,090,693

OTHER COMPREHENSIVE INCOME:
    Foreign currency translation adjustment          399,188            --              --
                                                ------------    ------------    ------------

COMPREHENSIVE INCOME                            $  3,220,117    $    914,998    $  1,090,693
                                                ============    ============    ============

EARNINGS PER SHARE, BASIC AND DILUTED           $       0.09    $       0.07    $       0.12
                                                ============    ============    ============

WEIGHTED AVERAGE NUMBER OF SHARES                 31,250,000      13,594,890       9,175,000
                                                ============    ============    ============

</TABLE>


See report of independent registered public accounting firm.
The accompanying notes are an integral part of this statement.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>

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

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003


                                                    Number        Common         Paid-in       Statutory
                                                  of shares        stock         capital        reserves
                                                 -----------    -----------    -----------    -----------
<S>                                              <C>          <C>            <C>            <C>
BALANCE, January 1, 2003                           9,175,000    $    10,000    $ 6,892,433    $      --

     Net income
                                                 -----------    -----------    -----------    -----------
BALANCE, December 31, 2003                         9,175,000    $    10,000    $ 6,892,433    $      --

     Net income
     Adjustment to statutory reserve                                                              154,794
     Cash received
     Stock issued for services                        35,000             35            140
     Issuance of common stock to General Steel
        Investment Co., Ltd shareholders
        due to reorganization                     22,040,000         21,215        (21,215)
                                                 -----------    -----------    -----------    -----------
BALANCE, December 31, 2004                        31,250,000    $    31,250    $ 6,871,358    $   154,794

     Net income
     Adjustment to statutory reserve                                                              685,959
     Issuance of redeemable stock                                                 (475,741)
     Foreign currency translation gain
                                                 -----------    -----------    -----------    -----------
BALANCE, December 31, 2005                        31,250,000    $    31,250    $ 6,395,617    $   840,753
                                                 ===========    ===========    ===========    ===========

                                                                                Accumulated
                                                                                  other
                                                   Retained       Stock       comprehensive
                                                   earnings    receivable         income        Totals
                                                 -----------   -----------    -------------   -----------

BALANCE, January 1, 2003                         $   302,079   $   (10,000)   $        --     $ 7,194,512

     Net income                                    1,090,693                                    1,090,693
                                                 -----------   -----------    -------------   -----------
BALANCE, December 31, 2003                       $ 1,392,772   $   (10,000)   $        --     $ 8,285,205

     Net income                                      914,998                                      914,998
     Adjustment to statutory reserve                (154,794)                                        --
     Cash received                                                  10,000                         10,000
     Stock issued for services                                                                        175
     Issuance of common stock to General Steel
        Investment Co., Ltd shareholders
        due to reorganization                                                                        --
                                                 -----------   -----------    -------------   -----------
BALANCE, December 31, 2004                       $ 2,152,976   $      --      $        --     $ 9,210,378

     Net income                                    2,820,929                                    2,820,929
     Adjustment to statutory reserve                (685,959)                                        --
     Issuance of redeemable stock                                                                (475,741)
     Foreign currency translation gain                                              399,188       399,188
                                                 -----------   -----------    -------------   -----------
BALANCE, December 31, 2005                       $ 4,287,946   $      --      $     399,188   $11,954,754
                                                 ===========   ===========    =============   ===========
</TABLE>


See report of independent registered public accounting firm.
The accompanying notes are an integral part of this statement.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

                                                                             2005            2004            2003
                                                                         ------------    ------------    ------------
<S>                                                                      <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                           $  2,820,929    $    914,998    $  1,090,693
    Adjustments to reconcile net income to cash
     provided by (used in) operating activities:
       Minority Interest                                                    1,371,918         464,380         467,440
       Depreciation                                                         1,053,976         968,332         916,003
       Amortization                                                           289,938         287,090          96,800
       Loss on disposal of equipment                                           25,992          22,947            --
       Stock issued for services                                                 --               175            --
     (Increase) decrease in assets:
       Accounts receivable                                                   (451,095)        (67,757)      1,100,324
       Other receivables                                                      108,860         113,366       2,190,150
       Other receivables - related parties                                       --           459,800            --
       Inventories                                                          2,378,597      (8,024,646)       (709,723)
       Advances on inventory purchases - related party                           --         1,021,824       3,237,005
       Advances on inventory purchases                                      3,042,837      (5,638,504)     (6,321,289)
       Advances on equipments purchases                                    (1,037,881)           --              --
       Prepaid expense - current                                              (63,709)           --              --
       Prepaid expense - non-current                                         (659,742)           --              --
     Increase (decrease) in liabilities:
       Accounts payable                                                       523,624      (1,085,136)        943,579
       Other payables                                                        (364,090)        191,802            --
       Other payables - related party                                         (10,000)      1,011,012      (1,414,526)
       Accrued liabilities                                                    506,214         332,876      (1,086,810)
       Customer deposits                                                     (771,235)      1,095,153      (1,700,867)
       Deposits due to sales representatives                                   (1,222)        369,050        (364,210)
       Taxes payable                                                         (240,347)        223,773         765,098
                                                                         ------------    ------------    ------------
         Net cash provided by (used in) operating activities                8,523,564      (7,339,465)       (790,333)
                                                                         ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    (Increase) decrease in notes receivable                                   373,785         813,899      (1,188,854)
    Increase in note receivable - related party                            (2,932,800)           --              --
    Increase in short term investment                                            --           (24,200)           --
    Additions to equipment                                                   (627,941)       (253,426)     (2,681,103)
    Additions to construction in progress                                  (4,169,895)           --              --
    Cash proceeds from sale of equipment                                        8,552         226,158            --
    Increase in land use right                                                   --              --        (1,902,902)
                                                                         ------------    ------------    ------------
         Net cash provided by (used in) investing activities               (7,348,299)        762,431      (5,772,859)
                                                                         ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowings, net of payments on short term loans - bank                    720,980      11,942,700       3,182,300
    (Payments) Borrowings, net of payments on short term notes payable     (1,515,280)         66,550       2,191,310
    Cash received on stock issuance                                              --            10,000            --
    Cash received on issuance of mandatory redeemable stock                 1,606,151            --              --
    Interest expense accrued on mandatory redeemable stock                     34,014            --              --
                                                                         ------------    ------------    ------------
         Net cash provided by financing activities                            845,865      12,019,250       5,373,610
                                                                         ------------    ------------    ------------

EFFECTS OF EXCHANGE RATE CHANGE IN CASH                                       217,536            --              --
                                                                         ------------    ------------    ------------

INCREASE (DECREASE) IN CASH                                                 2,238,666       5,442,216      (1,189,582)

CASH, beginning of year                                                     9,145,290       3,703,074       4,892,656
                                                                         ------------    ------------    ------------

CASH, end of year                                                        $ 11,383,956    $  9,145,290    $  3,703,074
                                                                         ============    ============    ============
</TABLE>


See report of independent registered public accounting firm.
The accompanying notes are an integral part of this statement.


                                      F-5
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Background

On March 7, 2005,  General Steel Holdings,  Inc. (the Company)  formally changed
its name from American Construction Company to General Steel Holdings,  Inc. The
Company through its subsidiary in China principally engages in the manufacturing
of hot rolled carbon and silicon steel sheets which are mainly used on tractors,
agricultural vehicles and in other specialty markets.

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

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

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

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

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



          See report of independent registered public accounting firm.

                                      F-6
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Background, continued

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

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

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

On May 16, 2004,  Company  agreed to purchase  Yang Pu's 70% equity  interest in
Daqiuzhuang  Metal  for  the  amount  of  RMB  55.45  million  or  approximately
$6,709,450.  The entire  purchase price is to be paid within one year of the new
business  license  being  issued  which  is June  25,  2004.  Due to the  common
ownership by Mr. Yu Zuo Sheng in both General Steel Investment Co., Ltd and Yang
Pu Capital Automotive  Investment  Limited,  the Company's board of directors by
board resolution dated May 16, 2004 has instructed Mr. Yu Zuo Sheng as the 99.9%
shareholder  of  General  Steel on  behalf  of the  Company  to remit  the total
purchase price to Yang Pu from his personal funds. Mr. Yu Zuo Sheng will receive
no compensation for completing this transaction nor will General Steel reimburse
Mr. Yu Zuo Sheng for the  $6,709,450.  As of December 31, 2004, Mr. Yu Zuo Sheng
has paid  the  entire  purchase  price to Yang Pu.  Because  the  entities  have
essentially  the same owner,  Mr. Yu Zuo Sheng and the entities are under common
control,  the transfer of ownership is accounted for at  historical  costs under
guidance of SFAS No. 141. The Company received a new business license certifying
the new ownership structure as a Chinese Foreign Joint Venture on June 25, 2004.

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

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

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

          See report of independent registered public accounting firm.

                                      F-7
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 - Summary of significant accounting policies

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

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

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


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

The  accompanying  financial  statements  have been prepared in accordance  with
accounting  principles  generally accepted in the United States of America.  The
accompanying  consolidated  financial statements include the accounts of General
Steel  Investment  Co.,  Ltd  and  Tianjin  Daqiuzhuang  Metal  Sheet  Co.,  Ltd
(collectively  the  "Company").   All  material  intercompany  transactions  and
balances have been eliminated in the consolidation.

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

The  Company  recognizes  revenue  when the  goods are  delivered  and title has
passed.  Sales  revenue  represents  the  invoiced  value  of  goods,  net  of a
value-added  tax (VAT).  All of the Company's  products that are sold in the PRC
are  subject to a Chinese  value-added  tax at a rate of 17% of the gross  sales
price.  This VAT may be offset by VAT paid by the Company on raw  materials  and
other materials included in the cost of producing their finished product.

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

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



          See report of independent registered public accounting firm.

                                      F-8
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 2 - Summary of significant accounting policies, continued

Foreign currency translation, continued

Translation  adjustments resulting from this process are included in accumulated
other comprehensive income in the consolidated statement of shareholders' equity
and  amounted to $399,188,  $0 and $0 as of December  31,  2005,  2004 and 2003,
respectively. The balance sheet amounts with the exception of equity at December
31,  2005 were  translated  at 8.06 RMB to $1.00 USD as  compared to 8.26 RMB at
December 31, 2004. The equity accounts were stated at their historical rate. The
average  translation  rates applied to income  statement  accounts for the years
ended  December  31, 2005,  2004 and 2003 were 8.18 RMB,  8.26 RMB and 8.26 RMB,
respectively.

Plant and equipment, net

Plant  and  equipment  are  stated  at  cost  less   accumulated   depreciation.
Depreciation  is computed  using the  straight-line  method  over the  estimated
useful lives of the assets with 3% residual value. The depreciation  expense for
the years  ended  December  31,  2005,  2004 and 2003  amounted  to  $1,053,976,
$968,332 and $916,003, respectively.

Estimated useful lives of the assets are as follows:
                                                                      Estimated
                                                                     Useful Life
                                                                     -----------
Buildings                                                            10-30 years
Machinery and equipment                                              8-15 years
Other equipment                                                      5-8 years
Transportation equipment                                             10-15 years

Construction  in progress  represents the costs incurred in connection  with the
construction of buildings or new additions to the Company's plant facilities. No
depreciation  is provided for  construction  in progress  until such time as the
assets are completed and are placed into service.

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

Long-term  assets of the  Company  are  reviewed  annually  as to whether  their
carrying value has become impaired.  The Company considers assets to be impaired
if the  carrying  value  exceeds the future  projected  cash flows from  related
operations.  The  Company  also  re-evaluates  the  periods of  amortization  to
determine whether subsequent events and circumstances  warrant revised estimates
of useful lives. As of December 31, 2005, the Company expects these assets to be
fully recoverable.

          See report of independent registered public accounting firm.

                                      F-9
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, continued

Plant and equipment, net, continued
-----------------------------------

Plant and equipment consist of the following at December 31:

                                                          2005          2004
                                                       -----------   -----------
Buildings and improvements                             $ 5,391,378   $ 5,089,350
Transportation equipment                                   485,699       240,847
Machinery                                               12,752,995    12,294,697
Construction in progress                                 4,231,318          --
                                                       -----------   -----------
              Totals                                    22,861,390    17,624,894
Less accumulated depreciation                            4,647,518     3,524,570
                                                       -----------   -----------
              Totals                                   $18,213,872   $14,100,324
                                                       ===========   ===========

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

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

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

Cash includes cash on hand and demand deposits in accounts maintained with state
owned banks  within the  People's  Republic  of China and Hong Kong.  Total cash
(including  restricted  cash  balances)  in these banks at December 31, 2005 and
2004, amounted to $11,446,120 and $9,256,618,  respectively of which no deposits
are covered by  insurance.  The Company has not  experienced  any losses in such
accounts  and  believes  it is not  exposed  to any  risks  on its  cash in bank
accounts.

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

The Company  through its bank  agreements is required to keep certain amounts on
deposit  that are  subject to  withdrawal  restrictions  and these  amounts  are
$2,735,583 and $3,597,480 as of December 31, 2005 and 2004, respectively.

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

Inventories  are stated at the lower of cost or market  using  weighted  average
method. Inventories consisted of the followings at December 31,




          See report of independent registered public accounting firm.

                                      F-10
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, continued

Inventories, continued
----------------------

                                                          2005          2004
                                                       -----------   -----------
Supplies                                               $ 1,524,332   $   706,737
Raw materials                                            1,195,022     8,416,473
Finished goods                                           8,011,587     3,703,351
                                                       -----------   -----------
Totals                                                 $10,730,941   $12,826,561
                                                       ===========   ===========


Inventories consist of supplies, raw materials and finished goods. Raw materials
consist  primarily  of iron and steel used in  production.  The cost of finished
goods  included  direct  costs of raw  materials as well as direct labor used in
production.  Indirect  production  costs such as utilities  and  indirect  labor
related to production  such as assembling,  shipping and handling costs are also
included  in the cost of  inventory.  No work in  process  inventory  existed at
December  31,  2005 and 2004,  as all  inventory  in process was  completed  and
transferred to finished goods prior to the physical inventory count. The Company
reviews its inventory  annually for possible  obsolete  goods or to determine if
any reserves are necessary for potential  obsolescence.  As of December 31, 2005
and 2004, the Company has determined that no reserves are necessary.

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

Statement of Financial  Accounting  Standards  No. 107 (SFAS 107),  "Disclosures
about Fair Value of Financial Instruments" requires disclosure of the fair value
of financial instruments held by the Company. SFAS 107 defines the fair value of
financial  instruments as the amount at which the instrument  could be exchanged
in a current  transaction  between willing  parties.  The Company  considers the
carrying  amount  of cash,  accounts  receivable,  other  receivables,  accounts
payable, accrued liabilities and other payables to approximate their fair values
because of the short period of time between the origination of such  instruments
and their expected realization and their current market rate of interest.

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

All land in the People's Republic of China is owned by the government and cannot
be sold to any individual or company.  However, the government grants the user a
"land use right" (the Right) to use the land.  The Company has acquired land use
rights  during  the  years  ending  in  2000  and  2003  for a total  amount  of
$2,870,902.  The  Company  has the right to use this  land for 50  years.  As of
December 31, 2005, 2004 and 2003, accumulated amortization amounted to $902,550,
$593,623 and  $306,533.  The cost of these rights are being  amortized  over ten
years using the straight-line method.



          See report of independent registered public accounting firm.

                                      F-11
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, continued

Intangible Assets, continued
----------------------------

Intangible  assets of the Company  are  reviewed  annually  as to whether  their
carrying value has become impaired.  The Company considers assets to be impaired
if the  carrying  value  exceeds the future  projected  cash flows from  related
operations.  The  Company  also  re-evaluates  the  periods of  amortization  to
determine whether subsequent events and circumstances  warrant revised estimates
of useful lives. As of December 31, 2005, the Company expects these assets to be
fully recoverable.

Total amortization expense for the years ended December 31, 2005, 2004 and 2003,
amounted to $289,938, $287,090 and $96,800 respectively.

Shares subject to mandatory redemption
--------------------------------------

The Company has adopted  Statement of Financial  Accounting  Standards  No. 150,
"Accounting  for Certain  Financial  Instruments  with  Characteristics  of both
Liabilities  and  Equity".  FAS 150  establish  classification  and  measurement
standards  for  three  types of  freestanding  financial  instruments  that have
characteristics of both liabilities and equity.  Instruments within the scope of
FAS 150 must be classified  as  liabilities  within the  Company's  Consolidated
Financial Statements and be reported at settlement date value. The provisions of
FAS 150 are effective for (1) instruments entered into or modified after May 31,
2003,  and (2)  pre-existing  instruments  as of July 1, 2003. In November 2003,
through the issuance of FSP 150-3, the FASB indefinitely  deferred the effective
date  of  certain  provisions  of  FAS  150,  including   mandatory   redeemable
instruments as they relate to minority  interests in  consolidated  finite-lived
entities.

The Company issued new redeemable  stock during the quarter ended  September 30,
2005.  The net present value of the  settlement  date value is as a liability in
the accompanying financial statements.

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

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

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



          See report of independent registered public accounting firm.

                                      F-12
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, continued

Income taxes, continued
-----------------------

Deferred  tax is  accounted  for using the  balance  sheet  liability  method in
respect of temporary  differences  arising from differences between the carrying
amount  of  assets  and   liabilities  in  the  financial   statements  and  the
corresponding tax basis used in the computation of assessable tax profit.

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

Deferred  tax is  calculated  at the tax rates that are expected to apply to the
period when the asset is realized or the  liability is settled.  Deferred tax is
charged or  credited  in the income  statement,  except when it related to items
credited or charged  directly to equity,  in which case the deferred tax is also
dealt with in equity.

Deferred tax assets and  liabilities are offset when they relate to income taxes
levied by the same  taxation  authority  and the  Company  intends to settle its
current tax assets and liabilities on a net basis.

Under the Income Tax Laws of PRC, the Company is generally  subject to an income
tax at an  effective  rate of 33% (30% state  income  taxes plus 3% local income
taxes)  on  income  reported  in  the  statutory   financial   statements  after
appropriate  tax  adjustments,  unless the  enterprise is located in a specially
designated  region where it allows  foreign  enterprises  a two-year  income tax
exemption and a 50% income tax reduction for the following three years.

The Company's  subsidiary,  Daqiuzhuang  Metal Sheet Co., Ltd., became a Chinese
Sino-foreign  equity joint venture at the time of the merger on October 14, 2004
and it became  eligible  to receive  tax  benefit.  The  company  has income tax
exemption  for the  years  ended  December  2005  and 2006  and 50%  income  tax
reduction for the years ended December 31, 2007, 2008 and 2009.

The provision for income taxes for the period ended December 31 consisted of the
following:


                                               2005         2004         2003
                                            ----------   ----------   ----------
Provision for China Income Tax              $     --     $  823,888   $  661,914
Provision for China Local Tax                     --         82,389      105,517
                                            ----------   ----------   ----------
      Total provision for income taxes      $     --     $  906,277   $  767,431
                                            ==========   ==========   ==========



          See report of independent registered public accounting firm.

                                      F-13
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 2 - Summary of significant accounting policies, continued

Income taxes, continued

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

                                              2005         2004          2003
                                           ---------    ---------     ---------
U.S. Statutory rates                            34.0%        34.0%         34.0%
Foreign income not recoginized in USA          (34.0)       (34.0)        (34.0)
China income taxes                             --            33.0          33.0
                                           ---------    ---------     ---------
      Total provision for income taxes         --            33.0%         33.0%
                                           =========    =========     =========


The  estimated  tax savings  for the year ended  December  31, 2005  amounted to
$1,056,377. The net effect on earnings per share had the income tax been applied
would decrease earnings per share from $0.09 to $0.06.

Value Added Tax
---------------

Enterprises  or  individuals  who  sell   commodities,   engage  in  repair  and
maintenance  or import and export  goods in the PRC are subject to a value added
tax in accordance with Chinese laws. The value added tax standard rate is 17% of
the gross sales price.  A credit is available  whereby VAT paid on the purchases
of  semi-finished  products  or raw  materials  used  in the  production  of the
Company's  finished  products  can be used to offset the VAT due on sales of the
finished product.

Taxes payable consisted of the followings:


                                                            2005         2004
                                                         ----------   ----------
VAT taxes payable                                        $1,290,982   $1,000,259
Income taxes payable                                        385,510      861,798
Misc taxes                                                    5,838       17,558
                                                         ----------   ----------
Total                                                    $1,682,330   $1,879,615
                                                         ==========   ==========




          See report of independent registered public accounting firm.

                                      F-14
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, continued

Recently issued accounting pronouncements
-----------------------------------------

In  March  2004,   the  FASB  issued  EITF  Issue  No.  03-1,   The  Meaning  of
Other-Than-Temporary Impairment and Its Application to Certain Investments. EITF
03-1 includes new guidance for  evaluating  and recording  impairment  losses on
debt  and  equity  investments,  as  well  as new  disclosure  requirements  for
investments that are deemed to be temporarily  impaired.  In September 2004, the
FASB issued Staff  Position EITF 03-1-1,  which delays the effective  date until
additional  guidance  is  issued  for the  application  of the  recognition  and
measurement  provisions  of EITF  03-1 to  investments  in  securities  that are
impaired;  however, the disclosure requirements are effective for annual periods
ending after June 15, 2004.  Management does not currently believe adoption will
have a  material  impact on the  Company's  financial  position  or  results  of
operations.

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of
ARB No. 43, Chapter 4. This statement amends the guidance in ARB No. 43, Chapter
4, Inventory  Pricing,  to clarify the  accounting for abnormal  amounts of idle
facility  expense,  freight,  handling costs,  and wasted  material  (spoilage).
Paragraph 5 of ARB No. 43,  Chapter 4,  previously  stated that  "...under  some
circumstances,  items such as idle facility expense,  excessive spoilage, double
freight,  and  rehandling  costs may be so abnormal as to require  treatment  as
current period  charges..." SFAS No. 151 requires that those items be recognized
as current-period  charges  regardless of whether they meet the criterion of "so
abnormal."  In addition,  this  requires  that  allocation  of fixed  production
overhead  to the costs of  conversion  be based on the  normal  capacity  of the
production facilities.

The provisions of SFAS 151 shall be applied  prospectively and are effective for
inventory costs incurred during fiscal years beginning after June 15, 2005, with
earlier  application  permitted for inventory costs incurred during fiscal years
beginning  after the date this Statement was issued.  The Company's  adoption of
SFAS  No.  151 is not  currently  expected  to  have a  material  impact  on the
Company's financial position or results of operations.

In December 2004, the FASB issued SFAS No. 123(R) (revised  2004),  "Share-Based
Payment",  which amends FASB  Statement No. 123 and will be effective for public
companies  for interim or annual  periods  beginning  after June 15,  2005.  The
revised  standard  requires,  among  other  things  that  compensation  cost for
employee  stock  options be measured at fair value on the grant date and charged
to expense over the employee's  requisite service period for the option.  Due to
the absence of observable market prices for employee stock options, the standard
indicates that the fair value of most stock options will be determined  using an
option-pricing model. The Company's adoption of SFAS No. 123(R) is not currently
expected  to have a  material  impact on the  Company's  financial  position  or
results of operations.



          See report of independent registered public accounting firm.

                                      F-15
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2 - Summary of significant accounting policies, continued

Recently issued accounting pronouncements, continued

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets,
an  amendment  of APB  Opinion  No.  29. The  guidance  in APB  Opinion  No. 29,
Accounting  for  Nonmonetary  Transactions,  is  based  on  the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
assets  exchanged.  The  guidance in that  Opinion,  however,  included  certain
exceptions to that principle.

This  Statement  amends  Opinion 29 to eliminate the  exception for  nonmonetary
exchanges of similar productive assets that do not have commercial substance.  A
nonmonetary  exchange has  commercial  substance if the future cash flows of the
entity are expected to change  significantly  as a result of the exchange.  SFAS
No. 153 is effective  for  nonmonetary  exchanges  occurring  in fiscal  periods
beginning  after June 15, 2005.  The  Company's  adoption of SFAS No. 153 is not
expected  to have a  material  impact on the  Company's  financial  position  or
results of operations.

In March 2005, the FASB published FASB  Interpretation  No. 47,  "Accounting for
Conditional  Asset  Retirement  Obligations,"  which  clarifies  that the  term,
conditional asset retirement  obligations,  as used in SFAS No. 143, "Accounting
for Asset  Retirement  Obligations,"  refers to a legal obligation to perform an
asset retirement  activity in which the timing and (or) method of settlement are
conditional  on a future  event that may or may not be within the control of the
entity.  The  uncertainty  about the timing and (or) method of  settlement  of a
conditional asset retirement  obligation should be factored into the measurement
of the liability when sufficient  information  exists. The  interpretation  also
clarifies  when an  entity  would  have  sufficient  information  to  reasonably
estimate the fair value of an asset retirement  obligation.  This interpretation
is effective no later than the end of the Company's fiscal 2006. The adoption of
this  Interpretation  is not expected to have a material effect on the Company's
consolidated financial position or results of operations.

In June 2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections"  ("SFAS No. 154").  SFAS No. 154 replaces APB No. 20 ("APB 20") and
SFAS No. 3, "Reporting Accounting Changes in Interim Financial  Statements," and
applies to all  voluntary  changes in  accounting  principle,  and  changes  the
requirements  for  accounting  for  and  reporting  of a  change  in  accounting
principle.  APB 20 previously required that most voluntary changes in accounting
principle  be  recognized  by  including in net income of the period of change a
cumulative  effect of changing to the new accounting  principle whereas SFAS No.
154 requires retrospective application to prior periods' financial statements of
a voluntary change in accounting principle, unless it is impracticable. SFAS No.
154 enhances the consistency of financial  information between periods. SFAS No.
154 will be effective  beginning with the Company's first quarter of fiscal year
2006.  The Company does not expect that the adoption of SFAS No. 154 will have a
material impact on its results of operations, financial position or cash flows.

          See report of independent registered public accounting firm.

                                      F-16
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 2 - Summary of significant accounting policies, continued

Recently issued accounting pronouncements, continued
----------------------------------------------------

In June 2005, the EITF reached a consensus on Issue No. 05-06,  "Determining the
Amortization  Period  for  Leasehold  Improvements"  (EITF  05-06).  EITF  05-06
provides  guidance for  determining the  amortization  period used for leasehold
improvements acquired in a business combination or purchased after the inception
of  a  lease,  collectively  referred  to  as  subsequently  acquired  leasehold
improvements).  EITF 05-06  provides that the  amortization  period used for the
subsequently  acquired  leasehold  improvements  to be the  lesser  of  (a)  the
subsequently acquired leasehold improvements' useful lives, or (b) a period that
reflects  renewals  that are  reasonably  assured  upon the  acquisition  or the
purchase.  EITF  05-06 is  effective  on a  prospective  basis for  subsequently
acquired leasehold improvements purchased or acquired in periods beginning after
the date of the FASB's  ratification,  which was on June 29,  2005.  The Company
does  not  anticipate  that  EITF  05-06  will  have a  material  impact  on its
consolidated results of operations.

In July 2005, the Financial Accounting Standards Board (FASB) issued an Exposure
Draft of a proposed  Interpretation  "Accounting for Uncertain Tax Positions--an
interpretation of FASB Statement No. 109." Under the proposed Interpretation,  a
company  would  recognize in its financial  statements  its best estimate of the
benefit of a tax position,  only if the tax position is  considered  probable of
being  sustained  on audit  based  solely  on the  technical  merits  of the tax
position. In evaluating whether the probable recognition threshold has been met,
the proposed  Interpretation would require the presumption that the tax position
will  be  evaluated  during  an  audit  by  taxing  authorities.   The  proposed
Interpretation  would be effective as of the end of the first fiscal year ending
after  December 15, 2005,  with a  cumulative  effect of a change in  accounting
principle to be recorded upon the initial adoption. The proposed  Interpretation
would apply to all tax positions and only benefits from tax positions  that meet
the  probable  recognition  threshold  at or after the  effective  date would be
recognized.  The Company is currently analyzing the proposed  Interpretation and
has  not  determined  its  potential  impact  on  our   Consolidated   Financial
Statements.  While we  cannot  predict  with  certainty  the  rules in the final
Interpretation,  there is risk that the final  Interpretation  could result in a
cumulative  effect  charge  to  earnings  upon  adoption,  increases  in  future
effective tax rates,  and/or increases in future interperiod  effective tax rate
volatility.

In October 2005,  FASB Staff  Position  (FSB) FAS 13-1,  "Accounting  for Rental
Costs Incurred during a Construction Period" was issued. This FSP concluded that
rental  costs  associated  with  ground or  building  operating  leases that are
incurred  during a construction  period be expensed.  The guidance in the FSP is
required to be applied to the first  reporting  period  beginning after December
15, 2005. The adoption of this  pronouncement is not expected to have a material
impact on the Company's financial position or results of operations.


          See report of independent registered public accounting firm.

                                      F-17
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 3 - Earnings Per Share

The Company reports earnings per share in accordance with the provisions of SFAS
No. 128,  "Earnings Per Share." SFAS No. 128 requires  presentation of basic and
diluted earnings per share in conjunction with the disclosure of the methodology
used in computing  such earnings per share.  Basic  earnings per share  excludes
dilution and is computed by dividing income available to common  stockholders by
the  weighted  average  common  shares  outstanding  during the period.  Diluted
earnings per share takes into account the potential dilution that could occur if
securities or other contracts to issue common stock were exercised and converted
into common stock.

Under   SFAS  150   "Accounting   for   Certain   Financial   Instruments   with
Characteristics  of both  Liabilities  and  Equity",  entities  that have issued
mandatory  redeemable  shares of common stock or entered into forward  contracts
that require physical settlement by repurchase of a fixed number of the issuer's
equity  shares of common  stock in  exchange  for cash shall  exclude the common
shares that are to be redeemed or repurchased  in calculating  basic and diluted
earnings per share.  Thus the  1,176,665  shares  described in note 17 have been
excluded from the earnings per share calculation.

The weighted  average number of shares used to calculate EPS for the years ended
December 31, 2005 (31,250,000),  2004 (13,594,890) and 2003 (9,175,000)  reflect
only the shares outstanding for those periods.

Note 4 - Supplemental disclosure of cash flow information

Interest paid amounted to $1,785,558, $1,463,385 and $748,829 for the years
ended December 31, 2005, 2004 and 2003, respectively.

Income tax payments amounted to $490,431, $489,800 and $428,117 for the years
ended December 31, 2005, 2004 and 2003, respectively.

Note 5 - Notes receivable and note receivable - related party

Notes receivable represents trade accounts receivable due from various customers
where the customers'  bank has guaranteed  the payment of the  receivable.  This
amount is non-interest  bearing and is normally paid within three to six months.
The  Company  has the  ability  to  submit  their  request  for  payment  to the
customer's bank earlier than the scheduled  payment date.  However,  the Company
will incur an interest  charge and a processing fee when they submit the payment
request  early.  The Company had $4,960 and $374,955  outstanding as of December
31, 2005 and 2004, respectively.

The note receivable  from related party  represents a note issued by the Company
to a related party, Yang Pu Automotive  Investment Limited, for business purpose
on November 15, 2005. The note is in the amount of RMB 24,000,000, translated to
$2,976,000, for one year with an interest rate at 7% and due at maturity.

          See report of independent registered public accounting firm.

                                      F-18
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 6 - Prepaid Expenses

Prepaid expenses at December 31, 2005 consisted of the followings:

                                           Current      Long-term       Total
                                         -----------   -----------   -----------
Rent                                     $    44,640   $   262,136   $   306,776
Land Use Right                                20,007       407,324       427,331
                                         -----------   -----------   -----------
      Total                              $    64,647   $   669,460   $   734,107
                                         ===========   ===========   ===========


The Company rented a dormitory for its employees during 2005. The rent is for
ten years starting on January 1, 2006 at RMB 90,000 per quarter or RMB 360,000
per year. The Company's prepayment at December 31, 2005 amounted to RMB
2,474,000 or $306,776.

The Company also entered into another rental  agreement on July 21, 2005 to rent
the land use right for its manufacture expansion. The total amount of the rental
is RMB  8,067,400  for a period of 50 years  starting on September 1, 2005.  The
Company  made a  prepayment  of RMB  3,500,000  during 2005 and prepaid  balance
remained at December 31, 2005 amounted to RMB 3,446,217 or $427,331.

Note 7 - Advances on inventory purchases

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

This amount is refundable and bears no interest. The Company has a legal binding
contract with their vendors for the guarantee  deposit,  which is to be returned
to the Company at the end of the contract.  The inventory is normally  delivered
within  one month  after the  monies has been  advanced.  The total  outstanding
amount  was  $10,716,293  and  $13,469,984  as of  December  31,  2005 and 2004,
respectively.

Note 8 - Other payable - related party

The Company has a short term loan from Golden Glister Holdings  Limited.  Golden
Glister  Holdings Limited is incorporated in the territory of the British Virgin
Islands which our president Yu Zuo Sheng is the majority shareholder. The amount
was loaned to General Steel  Investment  Co., Ltd for business  operations.  The
Company had $980,000 and  $990,000  outstanding  on this loan as of December 31,
2005 and 2004,  respectively.  This  amount is  short-term  and is non  interest
bearing.



          See report of independent registered public accounting firm.

                                      F-19
<PAGE>
<TABLE>
<CAPTION>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 9 - Short term loans - bank

Short term loans - bank represent  amounts due to various banks which are due on
demand or normally  within one year.  These loans can be renewed with the banks.
The Company had a total of  $27,118,800  and  $25,748,800  short term bank loans
with various banks as of December 31, 2005 and 2004,  respectively and consisted
of the following:

                                                                 2005          2004
                                                             -----------   -----------
<S>                                                          <C>           <C>
Loan from China Bank, JingHai Branch, due
  November 2006.  Monthly interest only payment at
  6.138% per annum, secured by equipment
  and property                                               $ 1,116,000   $ 1,185,800


Loans from Agriculture Bank, DaQiuZhuang Branch, due
  various dates from March to October 2006
  Monthly interest only payments ranging from
  from 6.975% to 7.533% per annum, guaranteed by an
  unrelated third party and secured by property and
  equipment                                                   10,068,800    10,648,000

Loan from Construction Bank of China, JinHai Branch, due
  August 15, 2006.  Monthly interst only payment at
  7.4604% per annum, secured by properties                     1,004,400     1,089,000

Loans from ShangHai PuFa Bank, due various dates from
  March to November 2006. Monthly interest only
  payments ranging from 6.417% to 6.696% per annum,
  guaranteed by an unrelated third party                       6,200,000     6,050,000

Loans from China Merchants Bank, due various dates from
  June 2006 to September 2006. Quarterly interest only
  payments, annual interest rate of 5.859% to 5.86%,
  guaranteed by an unrelated third party                       8,060,000     6,050,000

Loan from Construction Bank of China, due August 21, 2006
  Monthly interest only payment at 7.4604% per annum,
  guaranteed by an unrelated third party                         669,600       726,000
                                                             -----------   -----------
                 Totals                                      $27,118,800   $25,748,800
                                                             ===========   ===========
</TABLE>

          See report of independent registered public accounting firm.

                                      F-20
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 10 - Short term notes payable

The  Company  has the  following  short term notes  payable  outstanding  as for
December 31, 2005 and 2004:
                                                            2005         2004
                                                         ----------   ----------
China Bank, Jing Hai Branch, various amounts, due
  May 2006, restricted cash required of 50% of loan
  amount, guaranteed by the Company                      $1,438,400   $1,694,000

Agricultural Bank of China, various amounts, due dates
  ranging between January and June 2006,
  restricted cash required of 50% of loan amount,
  guaranteed by the Company and an unrelated
  third party                                             1,488,000    2,057,000

Daqiuzhuang Industrial and Commercial Bank,
  restricted cash required of 30% of loan amount,
  guaranteed by the Company                                    --        605,000

ShangHai PuFa Bank, due May 2006, restricted
  cash required of 50% of loan balance, guaranteed
  by an unrelated third party                             2,480,000    2,420,000
                                                         ----------   ----------
          Totals                                         $5,406,400   $6,776,000
                                                         ==========   ==========


Total interest  expense for the years ended December 31, 2005,  2004 and 2003 on
all debt amounted to $1,719,351, $1,463,385 and $632,957, respectively.

Note 11 - Customer deposits

Customer deposits represent amounts advanced by customers on product orders. The
product  normally  is shipped  within six months  after  receipt of the  advance
payment and the related sale is  recognized  in  accordance  with the  Company's
revenue  recognition policy. As of December 31, 2005 and 2004, customer deposits
amounted to $1,276,536 and $2,009,313, respectively.

Note 12 - Deposits due to sales representatives

The Company has entered  into  agreements  with  various  entities to act as the
Company's  exclusive  sales agent in a specified  area.  These  exclusive  sales
agents must meet certain  criteria and are required to deposit a certain  amount
of money with the Company.  In return the sales agents receive  exclusive  sales
rights to a specified area and discounted  prices on products they order.  These
deposits  bear no  interest  and are  required to be returned to the sales agent
once  the  agreement  has  been  terminated.  The  Company  had  $1,261,080  and
$1,231,780 in deposits due to sales  representatives  outstanding as of December
31, 2005 and 2004, respectively.

          See report of independent registered public accounting firm.

                                      F-21
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 13 - Major customers and suppliers

The Company has 5 major customers which represent  approximately  37% and 47% of
the  Company's  total  sales  for the years  ended  December  31,  2005 and 2004
respectively.

For  the  years  ended  December  31,  2005  and  2004,  the  Company  purchases
approximately 85% and 86%, respectively,  of their raw materials from four major
suppliers.

Note 14 - Minority interest

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

Note 15 - Other expenses and income, net

Other  income  and  expense  for the years  ended  December  31  consist  of the
following:

                                          2005           2004           2003
                                      -----------    -----------    -----------
Finance/interest expense              $(1,824,394)   $(1,572,189)   $  (638,493)
Interest income                           230,103
Other nonoperating income                  12,494        137,169
Other nonoperating expense                (18,335)      (181,357)        (5,314)
                                      -----------    -----------    -----------
Total other expense                   $(1,600,132)   $(1,616,377)   $  (643,807)
                                      ===========    ===========    ===========


Note 16 - Reclassifications

Certain  amounts  for  the  years  ended  December  31,  2004  and  2003  in the
accompanying  financial statements have been reclassified to conform to the 2005
presentation.  These  reclassifications  have no  effect  on net  income or cash
flows.

Note 17 - Private offering of redeemable stock

The Company has offered an  aggregate  of  3,333,333  shares of Common Stock par
value $0.001 in a private  placement  to investors at a purchase  price of $1.50
per share.  On September  18,  2005,  the Company  entered  into a  subscription
agreement with certain  investors to sell a total of 1,176,665  shares of common
stock at $1.50 per share.  In addition,  two warrants are attached to each share
of common stock and each warrant gives the warrant  holder the right to purchase
an  additional  share of common stock or a total of 2,353,330 of common stock in
the future. The warrants can be exercised on the first anniversary date at $2.50
per share and on the second  anniversary  date at $5.00 per share. The number of
shares attached to the warrants will be adjusted due to dividends and changes in
the capital stock structure changes.

          See report of independent registered public accounting firm.

                                      F-22
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 17 - Private offering of redeemable stock, continued

At the option of the  investors the Company  maybe  required to  repurchase  the
1,176,665 shares of common stock 18 months after the closing date at a per share
price of $1.95.

In accordance with SFAS no. 150, the Company has recorded this stock issuance as
a  liability  in  the  financial  statements  due to  the  mandatory  redemption
provision.  The shares have been  recorded at the net present value of the stock
using a discount  interest rate of 6.5%. The following  table shows the carrying
value of the shares subject to mandatory redemption:


Total liability of mandatory redeemable common stock
  1,176,665 shares at $1.95 per share                               $ 2,294,497

Interest expense to accrue over the next 18 months                     (212,606)
                                                                    -----------
Net present value at Sept 30, 2005                                    2,081,891

Interest accrued between Oct - Dec 2005                                  34,015
                                                                    -----------
Carry value at Dec 31, 2005                                         $ 2,115,906
                                                                    ===========



Interest  expense will be accrued  over the next 15 months and interest  expense
accrued for the year ended December TTED] 2005 amounted to $34,015.

Under this  private  offering,  the  Company  raised a total of  $1,765,000  and
received net proceeds of $1,606,150  net of $158,850 of  commissions  paid.  The
difference  between the net present value of  redeemable  stock on September 30,
2005 and the net  proceeds,  which is  $475,741,  was  recorded  as  decrease in
paid-in capital.

Note 18 - Retirement plan

Regulations in the People's  Republic of China require the Company to contribute
to a defined contribution  retirement plan for all employees.  All Joint Venture
employees  are entitled to a retirement  pension  amount  calculated  based upon
their  salary at their  date of  retirement  and  their  length  of  service  in
accordance  with a  government  managed  pension  plan.  The PRC  government  is
responsible for the pension liability to the retired staff.

The Joint Venture is required to make contributions to the state retirement plan
at 20% of the employees' monthly salary. Employees are required to contribute 7%
of their  salary to the plan.  Total  pension  expense  incurred  by the Company
amounted to  $236,730  and $0 for the years  ended  December  31, 2005 and 2004,
respectively.






          See report of independent registered public accounting firm.

                                      F-23
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 19- Statutory reserves

The laws and regulations of the People's Republic of China require that before a
Sino-foreign  cooperative joint venture  enterprise  distributes  profits to its
partners,  it must first  satisfy  all tax  liabilities,  provide  for losses in
previous  years,  and  make  allocations,   in  proportions  determined  at  the
discretion of the board of directors, after the statutory reserve. The statutory
reserves  include surplus reserve fund,  common welfare fund, and the enterprise
fund.

Surplus reserve fund
--------------------

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

The transfer to this reserve must be made before distribution of any dividend to
shareholders.  For the year ended  December  31, 2005,  the Company  transferred
$457,306,  representing  10% of the year's net income  determined  in accordance
with PRC accounting rules and regulations,  to this reserve. The surplus reserve
fund is non-distributable  other than during liquidation and can be used to fund
previous  years' losses,  if any, and may be utilized for business  expansion or
converted into share capital by issuing new shares to existing  shareholders  in
proportion to their  shareholding  or by increasing  the par value of the shares
currently held by them,  provided that the remaining  reserve balance after such
issue is not less than 25% of the registered capital.

Common welfare fund
-------------------

The Company is required to transfer 5% to 10% of its net income,  as  determined
in accordance with the PRC accounting  rules and  regulations,  to the statutory
common  welfare  fund.  For the  year  ended  December  31,  2005,  the  Company
transferred  $228,653,  representing  5% of the year's net income  determined in
accordance with PRC accounting rules and regulations, to this reserve. This fund
can  only be  utilized  on  capital  items  for the  collective  benefit  of the
Company's employees, such as construction of dormitories,  cafeteria facilities,
and other staff welfare facilities.  This fund is  non-distributable  other than
upon liquidation.  The transfer to this fund must be made before distribution of
any dividend to shareholders.

Enterprise fund
---------------

The  enterprise  fund may be used to acquire  fixed  assets or to  increase  the
working  capital to expend on  production  and  operation  of the  business.  No
minimum  contribution is required and the company did not make any  contribution
to this fund during 2005.

          See report of independent registered public accounting firm.

                                      F-24
<PAGE>

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

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 20 - Joint venture agreement with Baotou Steel

On September  28,  2005,  General  Steel  Investment  Co.,  Ltd., a wholly owned
subsidiary of General Steel Holdings,  Inc., entered into a certain  Baotou-GSHI
Special Steel Joint Venture Agreement (the "Agreement") with Da Qiu Zhuang Metal
Sheet  Co.,  Ltd.,  and  Baotou  Iron and Steel  (Group)  Co.,  Ltd.,  a limited
liability  company formed under the laws of the People's  Republic of China (the
"Baotou  Steel").  The name of the joint  venture  will be Baotou  Steel-General
Steel Special Steel Joint Venture Company Limited.

The Joint  Venture  Company will be located at Kundulun  District,  Baotou City,
Inner  Mongolia,  China.  The stated  purposes of the Joint Venture Company are,
among  others,  to produce  and sell  special  steel and to improve  the product
quality and the production  capacity and  competitiveness  by adopting  advanced
technology in the production of steel products.  The Joint Venture Company shall
have a capacity of producing 600,000 of specialty steel products a year.

The registered  capital of the joint venture will be approximately  $24,000,000.
The products of the joint venture will be sold in the Chinese market and abroad.
The ownership will be comprised of the following:

                                                                     % Ownership
                                                                     -----------
Baotou Iron and Steel (Group) Co.,Ltd.                                   49%
General Steel Investment Co., Ltd.                                       31%
Da Qiu Zhuang Metal Sheet Co., Ltd                                       20%

Baotao Steel shall  contribute  land,  existing  equipment  and  materials at an
estimated value of  approximately  $12,000,000  which will be contributed to the
joint  venture at the date of the  approval of Joint  Venture or issuance of the
business   license.   General  Steel   Investment   Co.,  Ltd.  will  contribute
approximately  $7,500,000  of cash and Da Qiu Zhuang Metal Sheet Co.,  Ltd. will
contribute  approximately  $5,000,000 cash. These contributions will be required
to be made on the following  payment schedule 30% of their capital  contribution
within  30 days of the  date of  approval  of the  Joint  Venture;  30% of their
capital  contribution  within 3  months  of the date of  approval  of the  Joint
Venture;  and 40% of their capital  contribution  within 6 months of the date of
approval of the Joint  Venture.  As of December  31,  2005,  the Company has not
received the approval from the Local Chinese authority.


          See report of independent registered public accounting firm.

                                      F-25
<PAGE>

ITEM  9.  Changes  in and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosures.

         None

ITEM 9A. Controls and Procedures.

Under the supervision and with the  participation  of our management,  including
the Chief Executive Officer and Chief Financial  Officer,  we have evaluated the
effectiveness of our disclosure controls and procedures pursuant to Exchange Act
Rule 13a-15(b) as of the end of the period covered by this report. Based on that
evaluation,  the Chief  Executive  Officer  and  Chief  Financial  Officer  have
concluded that these  disclosure  controls and  procedures are effective.  There
were no changes in our internal  control  over  financial  reporting  during the
quarter ended December 31, 2005 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal
control  over  financial  reporting  for  the  company.  Internal  control  over
financial  reporting is a process to provide reasonable  assurance regarding the
reliability of our financial  reporting for external purposes in accordance with
accounting  principles  generally  accepted  in the  United  States of  America.
Internal control over financial  reporting includes  maintaining records that in
reasonable  detail  accurately  and fairly reflect our  transactions;  providing
reasonable assurance that transactions are recorded as necessary for preparation
of our financial  statements;  providing  reasonable assurance that receipts and
expenditures   of  company  assets  are  made  in  accordance   with  management
authorization; and providing reasonable assurance that unauthorized acquisition,
use or disposition  of company  assets that could have a material  effect on our
financial  statements would be prevented or detected on a timely basis.  Because
of its inherent  limitations,  internal control over financial  reporting is not
intended to provide  absolute  assurance  that a  misstatement  of our financial
statements would be prevented or detected.

However based upon our evaluation of internal  control over financial  reporting
we have  concluded that the  disclosure  controls over  financial  reporting are
effective.

ITEM 9B. Other Information.

None

                                    PART III

ITEM 10. Directors and Executive Officers of the Registrant.

         The  following  table  sets  forth the  names  and ages of our  current
directors and executive officers,  their principal offices and positions and the
date each such person  became our director or executive  officer.  Our executive
officers are elected  annually by the board of directors.  Our  directors  serve
one-year terms until their successors are elected.  The executive officers serve
terms of one year or until their death,  resignation  or removal by the board of
directors.  There are no family  relationships  between any of the directors and

<PAGE>
<TABLE>
<CAPTION>

executive  officers.  In addition,  there was no  arrangement  or  understanding
between any executive  officer and any other person pursuant to which any person
was selected as an executive  officer.

The executive  officers are all full time  employees of General Steel  Holdings,
Inc.

         The directors and executive officers of General Steel Holdings, Inc. are as follows:

---------------------------- ------- ------------------------------------------------------ ------------------
<S>                          <C>     <C>                                                    <C>
Name                         Age     Position                                               Date of
                                                                                            Appointment
---------------------------- ------- ------------------------------------------------------ ------------------
Yu, Zuo Sheng                40      Director / President and Chief Executive               10/14/04
                                     Officer, Chairman of the Board of Directors
---------------------------- ------- ------------------------------------------------------ ------------------
Warner, Ross                 41      Independent Director                                   8/24/05
---------------------------- ------- ------------------------------------------------------ ------------------
Wong, John                   38      Independent Director                                   8/24/05
---------------------------- ------- ------------------------------------------------------ ------------------
Tian, Lian Hui               64      Independent Director                                   12/20/05
---------------------------- ------- ------------------------------------------------------ ------------------
Chen, John                   33      Director / Chief Financial Officer                     3/7/05
---------------------------- ------- ------------------------------------------------------ ------------------
Wang, Guo Dong               64      Director / Chief Technical Officer                     3/7/05
---------------------------- ------- ------------------------------------------------------ ------------------
Zhao, Sheng Guo              45      Director / Chief Engineer                              3/7/05
---------------------------- ------- ------------------------------------------------------ ------------------
Han, Wen Chun                40      Plant Controller                                       10/14/04
---------------------------- ------- ------------------------------------------------------ ------------------
Liu, Yu Wen                  32      Manager of Sales and Purchase Department               10/14/04
---------------------------- ------- ------------------------------------------------------ ------------------
Yu, Zuo Yan                  38      Manager of Production Department                       10/14/04
---------------------------- ------- ------------------------------------------------------ ------------------
Su, Xiao Gang                40      Manager of the Human Resources Department              01/03/05
---------------------------- ------- ------------------------------------------------------ ------------------
</TABLE>

         Our directors are  generally  elected until the next annual  meeting of
shareholders  and until their  successors  are elected and  qualified,  or until
their earlier  resignation  or removal.  Each  director's  term of office is one
year.

Audit Committee
Our Board  has a  separately-designated  Audit  Committee.  Our Audit  Committee
consists of John Wong, Ross Warner and Tian, Lian. Mr. John Wong is the chairman
of the  committee.  Since the audit  committee  was still in the  process of its
formation  during  2005 and the first  quarter of 2006,  the Board of  Directors
performed the duties of the audit committee. The audit committee is scheduled to
hold four meetings during fiscal year 2006.

The primary responsibilities of the Audit Committee are to review the results of
the  annual  audit  and to  discuss  the  financial  statements,  including  the
independent auditors' judgment about the quality of accounting  principles,  the
reasonableness of significant  judgments,  the clarity of the disclosures in the
financial  statements.   Additionally,   the  Audit  Committee  meets  with  our
independent  auditors to review the interim  financial  statements  prior to the
filing  of our  Quarterly  Reports  on Form  10-Q,  recommends  to the Board the
independent  auditors to be retained by us,  oversees  the  independence  of the
independent auditors, evaluates the independent auditors' performance,  receives
and considers the  independent  auditors'  comments as to controls,  adequacy of
staff and management  performance  and  procedures in connection  with audit and
financial  controls,  including our system to monitor and manage  business risks
and legal and ethical compliance  programs audit and non-audit services provided
to us by our independent  auditors,  considers  conflicts of interest  involving
executive  officers or Board members.  Our Board has determined that Mr. Wong is
an "audit  committee  financial  expert" as  defined  by the SEC,  and that each
member  of the  Audit  Committee  is  independent.

<PAGE>

         Mr. Wang, Guo Dong is also considered to be an independent director.

         None  of the  following  ever  occurred  to any  of our  directors  and
officers.

         (1) Any  bankruptcy  petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

         (2) Any  conviction  in a  criminal  proceeding  or being  subject to a
pending  criminal  proceeding  (excluding  traffic  violations  and other  minor
offenses);

         (3) Being subject to any order,  judgment,  or decree, not subsequently
reversed,  suspended  or  vacated,  of  any  court  of  competent  jurisdiction,
permanently or temporarily enjoining,  barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or

         (4)  Being  found  by a court  of  competent  jurisdiction  (in a civil
action),  the SEC or the Commodity Futures Trading Commission to have violated a
federal or state  securities or  commodities  law, and the judgment has not been
reversed, suspended, or vacated.

Family relationships

         Mr. Liu, Yu Wen is Mr. Yu, Zuo Sheng's brother in-law,  Mr. Yu, Zuo Yan
is Mr. Yu, Zuo Sheng's brother.

Biographical information

         Mr. Yu, Zuo Sheng, President and Chief Executive Officer,  joined us in
August  2000 and became a Director in August  2000.  From April 1986 to February
1992, he was President of Daqiuzhuang Metal Sheets Factory, Tianjin, China. From
February 1992 to December  1999,  he was General  Manager of Sheng Da Industrial
Company,  Tianjin, China. From November 1999 to March 2001, he was President and
Chairman  of Board of  Directors  of Sheng Da  Machinery  Manufactory,  Tianjin,
China.  Since  February 2001, he is President and Chairman of Board of Directors
of Beijing Wendlar  Investment  Management Group,  Beijing,  China.  Since March
2001,  he is  President  and  Chairman of Board of  Directors of Baotou Sheng Da
Steel Pipe Limited, Inner Mongolia,  China and Chairman of Board of Directors of
Sheng Da Steel and Iron mill,  Hebei  province,  China.  Since April 2001, he is
President  and  Chairman of Sheng Da  Industrial  Park Real  Estate  Development
Limited.  Since  December 2001, Mr. Yu is President and Chairman of Beijing Shou
Lun Real Estate Development Company, Beijing, China.

         Mr. Yu  graduated  in 1985  graduated  from  Sciences  and  Engineering
Institute,  Tianjin,  China.  In July 1994,  he  received  Bachelor  degree from
Institute  of Business  Management  for  Officers.  Mr. Yu received the title of
"Senior  Economist" from the Committee of Science and Technology of Tianjin City
in 1994.  In July 1997,  he  received a MBA degree from the  Graduate  School of
Tianjin Party University.  In April 2003, Mr. Yu, Zuo Sheng held a position as a
member of China's APEC (Asia Pacific Economic Co-operation) Development Council.

<PAGE>

         Ms. Li, Huan Cheng,  director  since May 2002.  From  December  1968 to
November 1994, she was manager of Tianjin Trust Company,  Tianjin,  China.  From
January 1995 to May 2002,  she was manager and CPA of Tianjin Gao Xin  Valuation
and  Liquidation  Company;  Tianjin,  China.  In July 1982,  she graduated  from
Tianjin Financial and Economic Institute, Tianjin, China.

         Mr. John Chen joined us in May 2004. He is the Chief Financial  Officer
and a  Director.  From August  1997 to July 2003 , he was senior  accountant  at
Moore Stephens Wurth Frazer and Torbet,  LLP, Los Angeles,  California,  USA. He
graduated from Norman Bethune  University of Medical  Science,  Changchun  city,
Jilin  province,  China in September 1992. He received B.S. degree in accounting
from California State Polytechnic University,  Pomona,  California,  USA in July
1997.

         Mr.  Wang,  Guo Dong joined us in May 2003.  He is the Chief  Technical
Officer and a Director.  From  January  1982 to May 2003,  he was  professor  at
Northeast University, Shenyang City, Liaoning province, China. From October 1968
to October 1978, he was the engineer of Anshan Iron and Steel Company, in Anshan
City,  Liaoning  province,  China.  He received a Master's Degree in Engineering
from Beijing Iron and Steel Research  Institute,  Beijing,  China,  in September
1982.  He also  received  a  Bachelor's  Degree in  Engineering  from  Northeast
University, Shenyang, China in September 1966.

         Mr. Zhao,  Sheng Guo joined us in March 2003. He is the Chief  Engineer
and a Director.  From June 1995 to June 2003, he was the CTO of Beijing  Capital
Steel Plate Mill. From March 1988 to June 1995, he was chief engineer of Beijing
Capital  Steel Plate Mill.  From March 1983 to March  1988,  he was  engineer of
Beijing  Special Steel Metal sheet Mill.  He received MBA Degree from  Northeast
University,  Shenyang  city,  Liaoning  province,  China,  in  August  2001.  He
graduated from Beijing Steel Institute in Beijing, China in 1982.

         Mr.  Han,  Wen  Chun  joined  us  in  October  2000.  He is  the  plant
controller.  From June 1989 to October  2000,  he was the manager of  Accounting
Department of Sheng Da Industrial Company.

         Mr. Liu, Yu Wen joined us in August  2000.  He is the head of the Sales
and Purchase Department. From October 1991 to August 2000, he was office manager
of Daqiuzhuang Metal Sheet Company,  Daqiuzhuang,  Tianjin,  China. Since August
2000, he is office manager of Daqiuzhang  Metal Sheet Company  Limited.  In July
1991, he graduated from Jinghai Adult High School, Tianjin, China. He is brother
in-law of Mr. Yu, Zuo Sheng.

         Mr.  Yu,  Zuo Yan  joined us in May,  2000.  He is the  manager  of the
Production Department.  From July 1989 to May 2000, he was manager of steel pipe
workshop of Daqiuzhuang Steel Pipe Company. From August 1986 to May 1989, he was
the  technician of  Daqiuzhuang  Steel Pipe Company.  He graduated  from Tianjin
Polytechnic Institute in August 1986. He is brother of Mr. Yu, Zuo Sheng.

         Mr. John Wong was elected as the  independent  director in August 2005.
From June 2003 to present,  he is the managing  partner of Vantage & Associates.

<PAGE>

From  January  2000 to  March  2003,  he was the  director  at  Deloitte  Touche
Corporate Finance, Shanghai. From July 1998 to December 1999, he was director of
Amrex  Capitals.  From July 1996 to June 1998, he worked as senior audit manager
at Ernest & Young,  Hong Kong. Mr. Wong  graduated from Melbourne  University in
1989. He obtained Independent Directorship Certificate in 2002.

         Mr. Ross Warner was elected as the independent director in August 2005.
From July 2003 to present,  he was the Chief of  Operations  at OCDF.  From July
2002 to June 2003,  he was the country  manager  for English  First in charge of
China and  Vietnam.  From  April  2001 to July  2002,  he was the  non-technical
training manager at TTI-China. From July 1998 to December 2000, he worked as the
consultant  at Info  Technology  Group,  Inc.-Beijing  Office.  Mr.  Ross Warner
obtained the master degree from Thunderbird University.

         Mr. Tian Lian Hui was elected as the  independent  director in December
2005.  He has held the  position of  Chairman  of COCIM  since 1995.  COCIM is a
software company which designs and implements Office Automation  Software,  such
as ERP system for businesses.  He has been the head of the Research Institute of
Ministry of Electronic Industry. Mr. Tian has also led several national projects
including the design of computer information system for Baoshan Steel. Mr. Tian,
64,  graduated  from  Northeast  University  with a Masters Degree in Automation
Control.

         Mr. Su,  Xiao Gang  joined us in March  2005.  He is the manager of the
Human  Resources  Department.  From July 2002 to March  2005,  he was the deputy
general  manager of Beijing  Wendlar Group.  From July 1998 to June 2002, he was
the general  manager of Tianjin  Shengda  packaging  Co., Ltd. He graduated from
Tianjin Institute of Economic Management in 1996.

INDEMNIFICATION

         Our articles of  incorporation  limit the liability of directors to the
maximum extent  permitted by Nevada law. This limitation of liability is subject
to exceptions including intentional  misconduct,  obtaining an improper personal
benefit and abdication or reckless disregard of director duties. Our articles of
incorporation  and bylaws provide that we may indemnify our directors,  officer,
employees  and other agents to the fullest  extent  permitted by law. Our bylaws
also permit us to secure insurance on behalf of any officer, director,  employee
or other  agent for any  liability  arising  out of his or her  actions  in such
capacity,  regardless  of whether the bylaws  would permit  indemnification.  We
currently do not have such an insurance policy.

ITEM 11. Executive Compensation.

Executive Compensation

<PAGE>

         The  following  table sets forth  certain  information  concerning  the
compensation  paid to our chief executive  officer and our two other most highly
compensated executive officers:

---------------------------------- ---------------------------------------------

Name and position                  Annual Compensation
---------------------------------- ---------------------------------------------

Yu, Zuo Sheng                      RMB 600,000
Chief Executive officer            (approximately USD 72,289)
---------------------------------- ---------------------------------------------

John Chen                          RMB 120,000
Chief Financial Officer            (approximately USD 14,458)
---------------------------------- ---------------------------------------------

Han, Wen Chun                      RMB 96,000


Plant Controller                   (approximately USD 11,616)
---------------------------------- ---------------------------------------------

Su, Xiao Gang                      RMB 96,000


Manager of Human Resources         (approximately USD 11,616)
---------------------------------- ---------------------------------------------

Wang, Guo Dong                     RMB 120,000


Chief Technical Officer            (approximately USD 14,458)
---------------------------------- ---------------------------------------------

Zhao, Sheng Guo                    RMB 96,000


Chief Engineer                     (approximately USD 11,616)
---------------------------------- ---------------------------------------------

Liu, Yu Wen                        RMB 96,000


Manager of Sales Department        (approximately USD 11,616)
---------------------------------- ---------------------------------------------


DIRECTOR COMPENSATION

         None of our directors has received any  compensation for their services
rendered as directors to GSHO during fiscal years 2004 and 2005.



ITEM 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
Related Stockholder Matters.

         The following table sets forth certain information regarding beneficial
ownership of common stock as of December 31, 2005, by:

         Each  person  known to us to own  beneficially  more  than  5%,  in the
aggregate, of the outstanding shares of our common stock;

         o        Each director;

<PAGE>

         o        Each of our  chief  executive  officer  and our other two most
                  highly compensated executive officers; and

         o        All executive officers and directors as a group.

         The  number of shares  beneficially  owned  and the  percent  of shares
outstanding are based on 32,426,665 shares  outstanding as of December 31, 2005.
Beneficial  ownership is determined in accordance  with the rules of the SEC and
generally includes voting or investment power with respect to securities.

Name                Position Held                  Shares Owned     Percentage
Yu, Zuo Sheng       President and CEO              23,929,500       76.5%
John Chen           Chief Financial Officer        150,000          *
Zhao, Sheng Duo     Director and Chief Engineer    50,000           *


ITEM 13. Certain Relationships and Related Transactions.

The Company issued a note to Yang Pu Automotive  Investment  Limited,  a related
party,  for business  purpose on November 15, 2005. The note is in the amount of
RMB 24,000,000,  translated to $2,976,000, for one year with an interest rate at
7% and due at maturity.

The Company has a short term loan from Golden Glister Holdings  Limited.  Golden
Glister  Holdings Limited is incorporated in the territory of the British Virgin
Islands which our president Yu Zuo Sheng is the majority shareholder. The amount
was loaned to General Steel  Investment  Co., Ltd for business  operations.  The
Company had $980,000 and  $990,000  outstanding  on this loan as of December 31,
2005 and 2004,  respectively.  This  amount is  short-term  and is non  interest
bearing.

ITEM 14. Principal Accounting Fees and Services.

The Board has  reappointed  Moore Stephens  Wurth Frazer and Torbet,  LLP as the
Company's independent auditors for the year ended December 31, 2005.

Public Accountants' Fees

--------------------------- --- ----------------- --- -------------------
                                      2005                   2004
                                      ----                   ----
--------------------------- --- ----------------- --- -------------------
Audit fees                  $            180,000  $              203,000
--------------------------- --- ----------------- --- -------------------
Audit related fees          $                  -  $                    -
--------------------------- --- ----------------- --- -------------------
Tax fees                    $              7,000  $                7,000
--------------------------- --- ----------------- --- -------------------
All other fees              $                  -  $                    -
--------------------------- --- ----------------- --- -------------------

Audit fees were for professional  services rendered by Stephens Wurth Frazer and
Torbet,  LLP during  2005 and 2004  years for the audit of our annual  financial
statements and the review of our financial  statements included in our quarterly

<PAGE>

reports form 10-QSB and services  that are normally  provided by Stephens  Wurth
Frazer and Torbet,  LLP in the  connection  with the  statutory  and  regulatory
filings. Tax fees involved the preparation of our consolidated tax returns.

                                     PART IV



ITEM 15. Exhibits, Financial Statement Schedules.


21.01    Subsidiaries of the registrant

23.1     Consent of Moore  Stephens  Wurth Frazer and Torbet,  LLP,  independent
         registered public accounting firm.

31.1     Certification of Chief Executive Officer;

31.2     Certification of Chief Financial Officer;

32.1     Certification of Chief Executive Officer; and

32.2     Certification of Chief Financial Officer.











<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                                     GENERAL STEEL HOLDINGS, INC


                                              By:     /s/ Zuo Sheng Yu
                                                     ---------------------------
                                              Name:  ZUO Sheng Yu
                                              Title: Chief Executive Officer and
                                                     President
                                              Date:  March 31, 2006



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

SIGNATURE                              TITLE                          DATE

/s/ Zuo Sheng Yu           President and Chief Executive         March 31, 2006
-------------------        Officer
YU Zuo Sheng


/S/ Chen Jon               Director and Chief Financial          March 31, 2006
-------------------        Officer
CHEN John


/S/ ZHOA Sheng Guo         Director and Chief Engineer           March 31, 2006
-------------------
ZHAO Sheng Guo

/s/ Tian Lian Hui          Director                              March 31, 2006
-------------------
TIAN Lian Hui

/s/  Warner Ross           Director                              March 31, 2006
-------------------
WARNER, Ross

/s/  Wong John             Director                              March 31, 2006
-------------------
WONG, John