8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 10, 2009

GENERAL STEEL HOLDINGS, INC.

(Exact Name of Registrant as Specified in Charter)

STATE OF NEVADA	001-33717	412079252
(State or Other Jurisdiction	(Commission File Number)	(I.R.S. Employer
of Incorporation)		Identification No.)

100020

(Zip Code)

Room 2315, Kun Tai International Mansion Building, Yi No 12, Chaoyangmenwai Ave.,

Chaoyang District, Beijing

(Address of Principal Executive Offices)

+ 86 (10) 58797346

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to

simultaneously satisfy the filing obligation of the registrant under any of the

following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On August 10, 2009, the Registrant issued a press release relating to its financial results for the second quarter ended June 30, 2009. The press release contains statements intended as “forward-looking statements,” all of which are subject to the cautionary statement about forward-looking statements set forth therein.  A copy of that press release is attached as Exhibit 99.1 hereto and incorporated into this Item 2.02 by reference.

In accordance with General Instruction B.2 of Form 8-K, the information included or incorporated in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall such information and exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.   Financial Statements and Exhibits

(d)  The following exhibits are filed with this report:

Exhibit	Description
Number
99.1	Press Release dated August 10, 2009

SIGNATURES

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

Date: August 10,  2009	GENERAL STEEL HOLDINGS, INC.
	(Registrant)
	By:	/s/ John Chen
	Name: John Chen
	Title: Chief Financial Officer

EX-99.1

General Steel Announces Second Quarter 2009 Results

— Company achieves record shipment volume and total revenues -- Income from operations was $12.9 million

BEIJING, Aug. 10 /PRNewswire-Asia-FirstCall/ — General Steel Holdings, Inc. ("General Steel" or "the Company") (NYSE: GSI), one of China's leading non-state-owned producers of steel products and aggregators of domestic steel companies, today announced its financial results for the second quarter ended June 30, 2009.

    Second Quarter of 2009 Highlights

    — Aggregate shipment volume reached a record high of 956,321 metric tons, an increase of 62.7% year-over-year

    — Total revenues increased 5.7% to a record $408.9 million from $387.0 million in the year-ago period

    — Gross margin was 5.5%, compared to 4.0% in the previous quarter and 5.9% in the second quarter of 2008

    — Income from operations was $12.9 million

    — Adjusted non-GAAP net income grew to $1.4 million, or earnings per basic and diluted share of $0.04 (adjusted non-GAAP net income is defined as GAAP net income less non-operating, non-cash expenses associated with the Company's December 2007 convertible bond issuance)

    — Relocated an 800,000 metric ton capacity rebar processing line from the Company's Maoming facility to its Longmen Joint Venture ("Longmen JV") in order to meet strong demand and take advantage of higher selling prices

    — Logged utilization rates in excess of 85% at the Company's two new 1,280 cubic meter blast furnaces brought on-line in late 2008 and January of 2009

    First Half of 2009 Highlights

    — Aggregate shipment volume reached a record high of 1.67 million metric tons, an increase of 50.4% year-over-year

    — Total revenues increased 7.8% to a record $731.7 million from $678.6 million in the year-ago period

    — Gross margin was 4.8%, compared to 5.3% in the year-ago period

    — Income from operations was $16.7 million

    — Adjusted non-GAAP net income grew to $4.6 million, or earnings per basic and diluted share of $0.12 (adjusted non-GAAP net income is defined as GAAP net income less non-operating, non-cash expenses associated with the Company's December 2007 convertible bond issuance)

"Building off of the momentum we established in the first quarter, we were able to achieve record shipment volume and total revenues during second quarter," said Mr. Henry Yu, General Steel's chairman and chief executive officer. "Government growth initiatives such as 'Go West' development, aggressive stimulus spending on infrastructure in rural China and the newly announced Guanzhong-Tianshui Special Economic Zone helped to insulate us from the economic slowdown. In addition, our centrally located, Shaanxi-based Longmen facility enables us to cost-effectively supply construction-related steel throughout central and western areas of China which continues to shield us from the glut of overcapacity along the eastern seaboard."

Mr. Yu continued, "During the quarter, we saw gross margin at our largest subsidiary, Longmen JV, expand to nearly seven percent. This is a significant accomplishment as it validates that our strategy of improving the profitability of acquired assets is working. As the impetus for consolidation strengthens, our deep market understanding, established track record and distinctive ability to align interests at the provincial and local levels of government as well as among management teams, creates numerous opportunities for consolidation."

Selected Financial Results for the Second Quarter and First Half of 2009

Total revenues for the second quarter of 2009 increased 5.7% year-over-year to $408.9 million from $387.0 million in the year-ago period. Total revenues for the first half of 2009 increased 7.8% year-over-year to $731.7 million from $678.6 million in the year-ago period.

The increase in total revenues was predominantly due to increased shipment volume at the Company's Longmen JV, which in the first half of 2009 increased 51.3% year-over-year, and Baotou Steel Pipe JV, which in the first half of 2009 increased 41.7% year-over-year. The Company noted that these increases in shipment volume helped to offset lower selling prices and declines at its Daqiuzhuang Metal subsidiary. The increase in total revenues was also attributable to the Company's Maoming acquisition, which took place on June 25, 2008. Total revenues for the first half of 2009 reflect a full six months of operations, whereas the subsidiary did not exist in the same period last year.

Cost of Sales

Total cost of sales for the second quarter of 2009 increased 6.1% year-over-year to $386.4 million from $364.2 million in the year-ago period. Total cost of sales for the first half of 2009 increased 8.3% year-over-year to $696.3 million from $642.7 million in the year-ago period. Cost of sales principally consists of the cost of raw materials, labor, utilities, manufacturing costs, manufacturing-related depreciation and other fixed costs. The increase in cost of sales was mostly attributable to an increase in shipment volumes at the Company's Longmen JV in response to demand created by earthquake reconstruction and stimulus measures, and at Baotou Steel Pipe JV, which saw increased activity due to China's investment in infrastructure-related stimulus projects.

Gross Profit

Gross profit for the second quarter of 2009 decreased 1.6% year-over-year to $22.5 million from $22.9 million in the year-ago period. Gross profit for the first half of 2009 decreased 1.2% year-over-year to $35.4 million from $35.9 million in the year-ago period. Gross margin for the second quarter of 2009 was 5.5%, compared to 5.9% in the year-ago period. Gross margin for the first half of 2009 was 4.8%, compared to 5.3% in the year-ago period.

Operating Expenses

Selling, general and administrative expenses for the second quarter of 2009 increased 0.6% to $9.6 million, compared to $9.5 million in the year-ago period. Selling, general and administrative expenses for the first half of 2009 increased 16.8% to $18.7 million from $16.0 million in the year-ago period. Selling, general and administrative expenses were 2.3% and 2.5% of total revenues in the second quarter of 2009 and 2008, respectively, versus 2.6% and 2.4% in the first half of 2009 and 2008, respectively. The Company noted that the year-over-year increase in selling, general and administrative expenses in the first of half of 2009 was attributable to the addition of the Company's Maoming facility, which did not exist in the year-ago period as well as the 51.3% increase in shipment volume at the Company's Longmen JV.

Finance and interest expenses for the second quarter of 2009 were $4.9 million, compared to $6.3 million in the year-ago period. Finance and interest expenses for the first half of 2009 were $7.8 million, compared to $12.3 million in the year-ago period. The reductions in finance and interest expenses were primarily due to make-whole interest on the conversion of the convertible debt, interest paid on bank loans and on early redemption of notes receivables and various bank fees.

Net Income

Net loss for the second quarter of 2009 was $23.4 million, compared to net loss of $20.3 million in the year-ago period. Net loss for the first half of 2009 was $12.1 million, compared to net loss of $16.6 million in the year-ago period.

Basic and diluted losses per share were $0.80 for second quarter of 2009 and $0.69 in the year-ago period. Basic and diluted losses per share were $0.65 in the first half of 2009, compared to $0.63 in the year-ago period.

The Company believes that the GAAP net earnings before the impact of a derivative gain or loss and make whole expense, which was $1.4 million or $0.04 per basic and diluted share, based on 39.5 million basic and diluted shares, is a better measurement of its performance.

According to the conversion feature and warrants associated with the $40.0 million Convertible Bond ("CB') the Company obtained in December of 2007, generally accepted accounting principles (GAAP) requires the Company to value a portion of the CB and the warrants on its balance sheet as financial derivative instruments that are "marked-to-market" each quarter. This part of the CB and the warrants appear on the Company's balance sheet as derivative liabilities. According to accounting rules, the derivative instrument value and associated gain or loss is linked to the Company's stock price. The gain or loss of this instrument has no impact on cash-flaw.

The Company's CB has a 5-year term to maturity. At the end of 5 years, if the holders of the CB have not converted the bond to equity, the Company must pay back the principal of the bond in cash. The terms of the Company's CB include a make whole incentive as an incentive for the holders of the Company's CB to convert before maturity and the Company accounts for this as an expense.

Both the derivative instrument gain or loss and the make whole expense are non-operating, non-cash gain or loss related to the convertible bond and warrants issued in December of 2007.

Balance Sheet

As of June 30, 2009, General Steel had cash and restricted cash of $264.1 million, compared to $145.6 million as of December 31, 2008. Accounts receivable was $16.0 million as of June 30, 2009, compared to $8.3 million as of December 31, 2008. Convertible notes payable decreased to $3.0 million as of June 30, 2009, compared to $7.2 million as of December 31, 2008. Because $21.7 million notes were converted to 5,104,596 shares of common stock from May 7, 2009 to June 30, 2009, total outstanding shares increased to 43.3 million shares as of June 30, 2009.

Conference Call

General Steel management will hold an earnings conference call at 8:00 a.m. U.S. Eastern Time on August 10, 2009 (8:00 p.m. Beijing/Hong Kong Time on August 10, 2009). Management will discuss results and highlights from the quarter and answer questions. The dial-in number and passcode for the conference call are as follows:

U.S. Toll-free: +1-800-860-2442

Passcode: General Steel Holdings

The conference call will be broadcast live over the Internet and can be accessed by clicking the following link: http://www.visualwebcaster.com/event.asp?id=61133

Additionally, an archived Web cast of this call will be available on General Steel's website at http://www.gshi-steel.com ..

About General Steel Holdings, Inc.

General Steel Holdings, Inc., (NYSE: GSI), headquartered in Beijing, China, operates a diverse portfolio of Chinese steel companies. With 6.3 million metric tons aggregate production capacity, its companies serve various industries and produce a variety of steel products including rebar, hot-rolled carbon and silicon sheet, high-speed wire and spiral-weld pipe. General Steel Holdings, Inc. has steel operations in Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality. For more information, please visit http://www.gshi-steel.com ..

Information Regarding Forward-Looking Statements

This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs about future events and financial, political and social trends and assumptions it has made based on information currently available to it. The Company cannot assure that any expectations, forecasts or assumptions made by management in preparing these forward-looking statements will prove accurate, or that any projections will be realized. Such forward-looking statements may be affected by inaccurate assumptions or by known or unknown risks or uncertainties. Actual results may vary materially from those expressed or implied by the statements herein. For factors that could cause actual results to vary, perhaps materially, from these forward-looking statements, please refer to the Company's Form 10-K, filed with the Securities and Exchange Commission, and other subsequent filings. Forward-looking statements contained herein speak only as of the date of this release. The Company does not undertake any obligation to update or revise publicly any forward-looking statements, whether to reflect new information, future events or otherwise.

GENERAL STEEL HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2009 AND DECEMBER 31, 2008

	June 30,		December 31,
	2009		2008
	Unaudited
ASSETS
CURRENT ASSETS:
Cash	$	63,930,960	$	14,895,442
Restricted cash		200,216,250		130,700,335
Notes receivable		33,243,064		38,207,312
Accounts receivable, net of allowance for doubtful accounts of $601,754 and $401,109 as of June 30, 2009 and December 31, 2008, respectively		16,037,008		8,329,040
Other receivables, net of allowance for doubtful accounts of $563,963 and $563,616 as of June 30, 2009 and December 31, 2008, respectively		5,551,193		5,099,469
Other receivables - related parties		15,467,140		523,024
Dividend receivable		4,950,550		630,481
Inventories		143,713,281		59,548,915
Advances on inventory purchases		35,823,700		47,153,869
Advances on inventory purchases - related parties		15,699,234		2,374,637
Prepaid expenses – current		356,728		494,370
Deferred tax assets		5,312,504		7,487,380
		540,301,612		315,444,274
PLANT AND EQUIPMENT, net		538,475,953		491,705,028
OTHER ASSETS:
Advances on equipment purchases		5,889,360		8,965,382
Investment in unconsolidated subsidiaries		18,909,182		13,959,432
Prepaid expenses - non current		1,099,045		1,195,073
Prepaid expenses related party - non current		184,590		211,248
Long term other receivables		3,651,182		4,872,584
Intangible assets, net of accumulated amortization		24,216,780		24,555,655
Note issuance cost		1,449,664		4,217,974
Plant and equipment to be disposed		1,244,461		586,508
Total other assets		56,644,264		58,563,856
Total assets	$	1,135,421,829	$	865,713,158

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term notes payable	$	274,013,600		$	206,040,150
Accounts payable		208,631,197			149,239,317
Accounts payable - related parties		30,583,551			15,326,524
Short term loans – bank		97,196,890			67,840,256
Short term loans – others		101,360,240			87,833,706
Short term loans - related parties		7,339,650			7,349,670
Other payables		19,715,682			3,182,661
Other payables - related parties		16,419,308			677,013
Accrued liabilities		10,854,900			7,779,488
Customer deposits		157,061,121			141,101,584
Customer deposits - related parties		3,946,437			7,216,319
Deposits due to sales representatives		40,056,218			8,149,279
Taxes payable		1,149,824			13,916,636
Distribution payable to former shareholders		19,193,149			18,765,209
Total current liabilities		987,521,767			734,417,812
CONVERTIBLE NOTES PAYABLE, net of debt discount of $8,500,381 and $26,094,942 as of June 30, 2009 and December 31, 2008, respectively		3,049,619			7,155,058
DERIVATIVE LIABILITIES		11,053,276			9,903,010
COMMITMENT AND CONTINGENCIES
Total liabilities		1,001,624,662			751,475,880
EQUITY:
Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued and outstanding		3,093			3,093
Common Stock, $0.001 par value, 200,000,000 shares authorized, 43,301,428 and 36,128,833 shares issued and outstanding as of June 30, 2009 and December 31, 2008, respectively		43,301			36,129
Paid-in-capital		69,812,604			37,128,641
Retained earnings (deficits)		(14,622,511	)		10,091,829
Statutory reserves		5,162,401			4,902,641
Contribution receivable		—			(959,700	)
Accumulated other comprehensive income		8,393,270			8,407,359
Total equity		68,792,158			59,609,992
NONCONTROLLING INTERESTS		65,005,009			54,627,286
Total equity		133,797,167			114,237,278
Total liabilities and equity	$	1,135,421,829		$	865,713,158

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

(UNAUDITED)

	Three months ended June 30,						Six months ended June 30,
	2009			2008			2009			2008
REVENUES	$	324,460,829		$	277,514,917		$	586,875,245		$	456,007,084
REVENUES - RELATED PARTIES		84,486,318			109,514,019			144,865,798			222,587,851
TOTAL REVENUES		408,947,147			387,028,936			731,741,043			678,594,935
COST OF SALES		301,849,136			259,734,698			553,851,240			426,449,361
COST OF SALES - RELATED PARTIES		84,599,318			104,425,433			142,468,991			216,294,654
TOTAL COST OF SALES		386,448,454			364,160,131			696,320,231			642,744,015
GROSS PROFIT		22,498,693			22,868,805			35,420,812			35,850,920
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		9,564,057			9,503,221			18,732,318			16,036,042
INCOME FROM OPERATIONS		12,934,636			13,365,584			16,688,494			19,814,878
OTHER EXPENSE, NET
Interest income		763,764			877,099			1,642,397			1,457,417
Finance/interest expense		(4,854,138	)		(6,289,868	)		(7,792,916	)		(12,276,375	)
Convertible note make whole interest		(6,454,683	)		—			(6,454,683	)		—
Change in fair value of derivative liabilities		(26,726,167	)		(27,786,632	)		(22,611,599	)		(25,115,869	)
Gain from debt Extinguishment		—			—			2,930,200			—
Government grant		—			—			3,519,890			—
Income from equity investments		2,752,664			—			2,698,032			—
Other non-operating income, net		142,348			649,871			652,564			1,019,142
Total other expense, net		(34,376,212	)		(32,549,530	)		(25,416,115	)		(34,915,685	)
LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST		(21,441,576	)		(19,183,946	)		(8,727,621	)		(15,100,807	)
PROVISION FOR INCOME TAXES
Current		3,229,810			1,292,890			3,394,031			1,959,246
Deferred		(1,221,850	)		(206,100	)		—			(422,633	)
Total provision for income taxes		2,007,960			1,086,790			3,394,031			1,536,613
NET LOSS BEFORE NONCONTROLLING INTEREST		(23,449,536	)		(20,270,736	)		(12,121,652	)		(16,637,420	)
Less: Net income attributable to noncontrolling interest		8,339,676			4,000,490			12,332,928			5,445,346
NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST		(31,789,212	)		(24,271,226	)		(24,454,580	)		(22,082,766	)
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments		162,842			4,841,277			(14,089	)		6,457,227
Comprehensive (loss) income attributable to noncontrolling interest		(1,031,639	)		1,498,426			(1,106,385	)		4,205,415
COMPREHENSIVE LOSS	$	(32,658,009	)	$	(17,931,523	)	$	(25,575,054	)	$	(11,420,124	)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic		39,533,099			34,928,576			37,918,177			34,883,740
Diluted		39,533,099			34,928,576			37,918,177			34,883,740
LOSS PER SHARE
Basic	$	(0.804	)	$	(0.69	)	$	(0.645	)	$	(0.63	)
Diluted	$	(0.804	)	$	(0.69	)	$	(0.645	)	$	(0.63	)

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Preferred stock				Common stock
	Shares		Par value		Shares		Par value
BALANCE, January 1, 2008		3,092,899	$	3,093		34,634,765	$	34,635
Net loss
Acquired noncontrolling interest
Adjustment to statutory reserve
Common stock issued for compensation, $7.16						76,600		77
Common stock issued for compensation, $10.43						150,000		150
Common stock issued for compensation, $6.66						87,400		87
Common stock transferred by CEO for compensation, $6.91
Foreign currency translation adjustments
BALANCE, June 30, 2008, Unaudited		3,092,899	$	3,093		34,948,765	$	34,949
Net income
Acquired noncontrolling interest
Adjustment to statutory reserve
Common stock issued for compensation, $10.29						90,254		90
Common stock issued for consulting fee, $3.6						100,000		100
Common stock issued for public relations, $3.6						25,000		25
Common stock issued for compensation, $3.5						87,550		88
Common stock transferred by CEO for compensation, $6.91
Common stock issued at $5/share						140,000		140
Notes converted to common stock						541,299		541
Make whole shares issued on notes conversion						195,965		196
Foreign currency translation adjustments
BALANCE, December 31, 2008		3,092,899	$	3,093		36,128,833	$	36,129
Net Loss
Disposal of subsidiaries
Distribution of dividend to noncontrolling shareholders
Adjustment to statutory reserve
Common stock issued for compensation, $1.85						109,250		109
Common stock issued for compensation, $2.77						106,750		107
Common stock issued for interest payment, $3.66						152,240		152
Common stock issued for repayment of debt, $6.00						300,000		300
Notes converted to common stock						5,104,596		5,105
Make whole shares issued on notes conversion						1,399,759		1,399
Common stock transferred by CEO for compensation, $6.91
Reduction of Registered Capital
Foreign currency translation adjustments
BALANCE, June 30, 2009,unaudited		3,092,899	$	3,093		43,301,428	$	43,301

	Retained earnings
	Paid-in		Statutory
	capital		reserves		Unrestricted
BALANCE, January 1, 2008	$	23,429,153	$	3,632,325	$	22,686,590
Net loss						(22,082,766	)
Acquired noncontrolling interest
Adjustment to statutory reserve				648,363		(648,363	)
Common stock issued for compensation, $7.16		548,379
Common stock issued for compensation, $10.43		1,564,350
Common stock issued for compensation, $6.66		581,997
Common stock transferred by CEO for compensation, $6.91		69,100
Foreign currency translation adjustments
BALANCE, June 30, 2008, unaudited	$	26,192,979	$	4,280,688	$	(44,539	)
Net income						10,758,321
Acquired noncontrolling interest
Adjustment to statutory reserve				621,953		(621,953	)
Common stock issued for compensation, $10.29		928,582
Common stock issued for consulting fee, $3.6		359,900
Common stock issued for public relations, $3.6		89,975
Common stock issued for compensation, $3.5		306,337
Common stock transferred by CEO for compensation, $6.91		138,200
Common stock issued at $5/share		699,860
Notes converted to common stock		6,102,691
Make whole shares issued on notes conversion		2,310,117
Foreign currency translation adjustments
BALANCE, December 31, 2008	$	37,128,641	$	4,902,641	$	10,091,829
Net Loss						(24,454,580	)
Disposal of subsidiaries
Distribution of dividend to noncontrolling shareholders
Adjustment to statutory reserve				259,760		(259,760	)
Common stock issued for compensation, $1.85		202,003
Common stock issued for compensation, $2.77		295,591
Common stock issued for interest payment, $3.66		557,709
Common stock issued for repayment of debt, $6.00		1,799,700
Notes converted to common stock		24,125,324
Make whole shares issued on notes conversion		5,565,436
Common stock transferred by CEO for compensation, $6.91		138,200
Reduction of Registered Capital
Foreign currency translation adjustments
BALANCE, June 30, 2009, unaudited	$	69,812,604	$	5,162,401	$	(14,622,511	)

				Accumulated
				other			Non-
	Contribution			comprehensive			controlling
	receivable			income			interest			Totals
BALANCE, January 1, 2008	$	(959,700	)	$	3,285,278		$	43,322,066		$	95,433,440
Net loss								5,445,346			(16,637,420	)
Acquired noncontrolling interest								15,767,571			15,767,571
Adjustment to statutory reserve											—
Common stock issued for compensation, $7.16											548,456
Common stock issued for compensation, $10.43											1,564,500
Common stock issued for compensation, $6.66											582,084
Common stock transferred by CEO for compensation, $6.91											69,100
Foreign currency translation adjustments					6,457,227			4,205,415			10,662,642
BALANCE, June 30, 2008, unaudited	$	(959,700	)	$	9,742,505		$	68,740,398		$	107,990,373
Net income								(13,987,183	)		(3,228,862	)
Acquired noncontrolling interest								127,915			127,915
Adjustment to statutory reserve											—
Common stock issued for compensation, $10.29											928,672
Common stock issued for consulting fee, $3.6											360,000
Common stock issued for public relations, $3.6											90,000
Common stock issued for compensation, $3.5											306,425
Common stock transferred by CEO for compensation, $6.91											138,200
Common stock issued at $5/share											700,000
Notes converted to common stock											6,103,232
Make whole shares issued on notes conversion											2,310,313
Foreign currency translation adjustments					(1,335,146	)		(253,844	)		(1,588,990	)
BALANCE, December 31, 2008	$	(959,700	)	$	8,407,359		$	54,627,286		$	114,237,278
Net Loss								12,332,928			(12,121,652	)
Disposal of subsidiaries								(292,820	)		(292,820	)
Distribution of dividend to noncontrolling shareholders								(556,000	)		(556,000	)
Adjustment to statutory reserve											—
Common stock issued for compensation, $1.85											202,112
Common stock issued for compensation, $2.77											295,698
Common stock issued for interest payment, $3.66											557,861
Common stock issued for repayment of debt, $6.00											1,800,000
Notes converted to common stock											24,130,429
Make whole shares issued on notes conversion											5,566,835
Common stock transferred by CEO for compensation, $6.91											138,200
Reduction of Registered Capital		959,700									959,700
Foreign currency translation adjustments					(14,089	)		(1,106,385	)		(1,120,474	)
BALANCE, June 30, 2009, unaudited	$	—		$	8,393,270		$	65,005,009		$	133,797,167

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30

(UNAUDITED)

	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income attributable to controlling interest	$	(24,454,580	)	$	(22,082,766	)
Net income attributable to noncontrolling interest		12,332,928			5,445,346
Consolidated net income		(12,121,652	)		(16,637,420	)
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Depreciation		13,073,512			8,868,941
Amortization		404,564			444,670
Debt waiver		(2,930,200	)		—
(Gain) Loss on disposal of equipment		(3,431,337	)		—
Stock issued for services and compensation		636,010			1,199,640
Income from investment		(2,698,500	)		—
Amortization of deferred note issuance cost		43,282			20,429
Amortization of discount on convertible notes		—			1,626,184
Change in fair value of derivative instrument		22,611,599			25,115,869
Convertible note make whole interest		6,454,683			—
Deferred tax assets		2,165,702			(422,633	)
Changes in operating assets and liabilities
Accounts receivable		(7,924,301	)		(13,657,403	)
Accounts receivable - related parties		—			(21,068,625	)
Notes receivable		4,914,506			(13,961,703	)
Notes receivable - restricted		—			—
Other receivables		(618,596	)		(1,219,841	)
Other receivables - related parties		(14,992,788	)		1,471,397
Loan receivable		—			1,276,560
Inventories		(84,204,445	)		(44,931,442	)
Advances on inventory purchases		11,271,266			33,110,981
Advances on inventory purchases - related parties		(13,021,451	)		(8,517,117	)
Prepaid expense - current		126,940			(245,115	)
Prepaid expense - non current		91,871			11,443
Prepaid expense - non current - related parties		38,207			(82,388	)
Accounts payable		59,067,210			1,188,213
Accounts payable - related parties		15,283,470			1,440,412
Other payables		16,545,247			(2,250,089	)
Other payable - related parties		15,748,520			(1,208,217	)
Dividend payable		440,230			(391,165	)
Accrued liabilities		2,198,275			2,598,366
Customer deposits		16,159,621			90,831,063
Customer deposits - related parties		(3,574,353	)		(3,998,027	)
Taxes payable		(12,768,702	)		(4,147,173	)
Net cash provided by operating activities		28,988,390			36,465,810
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquired long term investment		(6,592,500	)		—
Cash acquired from subsidiary		—			1,256,385
Deposits due to sales representatives		31,933,299			(1,053,871	)
Proceeds from short term investment		—			2,340,360
Long term other receivables		1,215,339			—
Advance on equipment purchases		3,065,263			674,550
Cash proceeds from sale of equipment		4,413,964			—
Equipment purchases		(60,289,090	)		(93,010,998	)
Intangible assets purchases		(99,020	)		(186,623	)
Payment to original shareholders		—			(7,092,000	)
Net cash used in investing activities		(26,352,745	)		(97,072,197	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash		(69,727,403	)		(55,759,041	)
Notes receivable - restricted		—			12,947,333
Borrowings on short term loans - bank		72,815,976			27,141,084
Payments on short term loans - bank		(43,352,782	)		(41,610,454	)
Borrowings on short term loans - related parties		—			7,106,184
Payments on short term loans - related parties		2,931,400			—
Borrowings on short term loan - others		79,354,464			42,641,359
Payments on short term loans - others		(63,899,468	)		(33,772,944	)
Borrowings on short term notes payable		371,613,578			109,642,320
Payments on short term notes payable		(303,326,615	)		(26,325,504	)
Net cash provided by financing activities		46,409,150			42,010,337
EFFECTS OF EXCHANGE RATE CHANGE IN CASH		(9,277	)		1,792,862
INCREASE (DECREASE) IN CASH		49,035,518			(16,803,188	)
CASH, beginning of period		14,895,442			43,713,346
CASH, end of period	$	63,930,960		$	26,910,158

For investor and media inquiries, please contact:

In China:

 Ms. Jing Ou-Yang

 General Steel Holdings, Inc.

 Tel:   +86-10-5879-7346

 Email: jing.ouyang@gshi-steel.com

 Mr. Justin Knapp

 Ogilvy Financial, Beijing

 Tel:   +86-10-8520-6556

 Email: gsi@ogilvy.com

In the United States:

 Ms. Jessica Barist Cohen

 Ogilvy Financial, New York

 Tel:   +1-646-460-9989

 Email: gsi@ogilvy.com