UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September 30,~~March ~~2018~~31, 2019

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

For the transition period from __________ to __________

Commission File Number 001-33717

General Steel Holdings, Inc.

(Exact name of registrant as specified in its charter)

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

Suite 106, Tower H,

Phoenix Place, Shuguangxili

Chaoyang District, Beijing, China 100028

(Address of Principal Executive Office, Including Zip Code)

+86 (10) 8572 3073

(Registrant's Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for ~~such~~ shorter period that the registrant was required to submit such files). Yes ¨ x No x¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company x

Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

AsSecurities ofregistered ~~February~~pursuant 5,to ~~2019, 41,838,864~~Section 12(~~excluding 494,462 shares of treasury stock~~b) ~~shares~~ of ~~common~~the ~~stock, par value $0.001 per share, were outstanding.~~Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
NONE		N/A		N/A

As of May 13, 2019, 46,013,959 (excluding 494,462 shares of treasury stock) shares of common stock, par value $0.001 per share, were outstanding.

Table of Contents

		Page
Part I. FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements.
	Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	3
	Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018.	3
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2018 and 2017	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2019 and 2018.	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017	5
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018.	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
	Notes to Condensed Consolidated Financial Statements.	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	1920
Item 4.	Controls and Procedures	26
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	25
Part II. OTHER INFORMATION		28
Item 4.	Controls and Procedures.	25
Item 1.	Legal Proceedings	28
Part II. OTHER INFORMATION		26
Item 1A.	Risk Factors	28
Item 1.	Legal Proceedings.	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 1A.	Risk Factors.	26
Item 6.	Exhibits	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	26
Signatures		30
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits.	27
Signatures		28

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	March 31,			December 31,
	2018			2017
	2019			2018
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	4,946		$	5,260
Cash and cash equivalents	$	4,760,549		$	4,820,832
Other receivables, net		2,500			2,500
Accounts receivables		-			55,246
TOTAL CURRENT ASSETS		7,446			7,760
Prepaid expense and other current assets		53,796			19,791
EQUIPMENT, NET		217			217
TOTAL CURRENT ASSETS		4,814,345			4,895,869
INVESTMENT IN UNCONSOLIDATED ENTITIES		16,086,549			14,708,681
EQUIPMENT, NET		1,965			217
TOTAL ASSETS	$	16,094,212		$	14,716,658
RENT DEPOSIT		10,308			10,058
RIGHT-OF-USE ASSETS		94,162			-
INVESTMENT IN UNCONSOLIDATED ENTITIES		12,837,819			12,972,148
TOTAL ASSETS	$	17,758,599		$	17,878,292
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Other payables and accrued liabilities	$	~~422~~453,~~459~~041		$	2542,~~129,754~~692
Other payables - related parties		89,~~981~~813,~~230~~177			89,~~445~~187,~~288~~882
TOTAL CURRENT LIABILITIES		9,403,689			10,575,042
Taxes payable		-			277
Lease liabilities - current		53,489			-
TOTAL CURRENT LIABILITIES		10,319,707			9,730,851
LEASE LIABILITIES - NON-CURRENT		35,519			-
TOTAL LIABILITIES		10,355,226			9,730,851
COMMITMENTS AND CONTINGENCIES
EQUITY:
Series A - Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899 shares issued and outstanding as of September 30, 2018 and December 31, 2017		3,093			3,093
Series A - Preferred stock, $0.001 par value, 50,000,000 shares authorized, 3,092,889 shares issued and outstanding as of March 31, 2019 and December 31, 2018		3,093			3,093
Series B - Preferred stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2018 and December 31, 2017		-			-
Series B - Preferred stock, $0.001 par value, 50,000,000 shares authorized, 0 shares issued and outstanding as of March 31, 2019 and December 31, 2018		-			-
Common stock, $0.001 par value, 200,000,000 shares authorized, 28,047,611 and 20,694,670 shares issued, 27,553,149 and 20,200,208 shares outstanding as of September 30, 2018 and December 31, 2017, respectively		28,048			20,695
Common stock, $0.001 par value, 200,000,000 shares authorized, 46,508,421 and 46,508,421 shares issued, 46,013,959 and 46,013,959 shares outstanding as of March 31, 2019 and December 31, 2018, respectively		46,509			46,509
Treasury stock, at cost, 494,462 shares as of September 30, 2018 and December 31, 2017		(839,686	)		(839,686	)
Treasury stock, at cost, 494,462 shares as of March 31, 2019 and December 31, 2018		(839,686	)		(839,686	)
Additional paid-in-capital		1,~~257~~261,~~198~~915,~~042~~192			1,~~256~~261,~~955~~869,~~395~~238
Statutory reserves		1,107,010			1,107,010
Accumulated deficit		(1,~~253~~258,~~949~~012,~~529~~419	)		(1,~~256~~257,~~044~~246,~~414~~837	)
Accumulated other comprehensive income		3,~~143~~183,~~545~~674			23,~~939~~208,~~523~~114
TOTAL EQUITY		67,~~690~~403,~~523~~373			48,~~141~~147,~~616~~441
TOTAL LIABILITIES AND EQUITY	$	1617,~~094~~758,~~212~~599		$	1417,~~716~~878,~~658~~292

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

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED ~~STATEMENTS~~ STATEMENTS OF OPERATIONS AND COMPREHENSIVE ~~INCOME~~ (LOSS)INCOME

	FOR THE THREE MONTHS ENDED SEPTEMBER 30						FOR THE NINE MONTHS ENDED SEPTEMBER 30
	2018			2017			2018			2017
GENERAL AND ADMINISTRATIVE EXPENSES	$	24,926		$	52,404		$	78,373		$	165,961
LOSS FROM OPERATIONS		(24,926	)		(52,404	)		(78,373	)		(165,961	)
OTHER INCOME (EXPENSE)
Income(Loss) from equity investment		(735,477	)		(729,314	)		2,173,405			(2,188,509	)
Finance/interest expense		10			(520	)		(147	)		(1,387	)
Other income(expense), net		(735,467	)		(729,834	)		2,173,258			(2,189,896	)
INCOME(LOSS) BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST		(760,393	)		(782,238	)		2,094,885			(2,355,857	)
PROVISION FOR INCOME TAXES		-			-			-			-
NET INCOME(LOSS) FROM CONTINUING OPERATIONS		(760,393	)		(782,238	)		2,094,885			(2,355,857	)
NET LOSS FROM OPERATIONS DISPOSED, net of applicable income taxes		-			(58,695	)		-			(6,484,109	)
NET INCOME(LOSS)	$	(760,393	)	$	(840,933	)	$	2,094,885		$	(8,839,966	)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments		240,768			93,993			204,022			1,542,932
COMPREHENSIVE INCOME (LOSS)	$	(519,625	)	$	(746,940	)	$	2,298,907		$	(7,297,034	)
WEIGHTED AVERAGE NUMBER OF SHARES		23,223,083			20,200,208			21,207,833			20,133,541
INCOME(LOSS) PER SHARE - BASIC AND DILUTED
Continuing operations	$	(0.03	)	$	(0.04	)	$	0.10		$	(0.12	)
Operations disposed	$	-		$	(0.00	)	$	-		$	(0.32	)
Net income(loss) per share	$	(0.03	)	$	(0.04	)	$	0.10		$	(0.44	)

FOR THE THREE MONTHS ENDED MARCH 31

	2019			2018

GENERAL AND ADMINISTRATIVE EXPENSES	$	280,885		$	26,573

LOSS FROM OPERATIONS		(280,885	)		(26,573	)

OTHER INCOME (EXPENSE)
(Loss)Income from equity investment		(500,007	)		3,467,056
Finance/interest income(expense)		15,310			(134	)
Other (expense)income, net		(484,697	)		3,466,922


(LOSS)INCOME BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST		(765,582	)		3,440,349

PROVISION FOR INCOME TAXES		-			-

NET (LOSS)INCOME	$	(765,582	)	$	3,440,349

OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments		(24,440	)		(115,166	)

COMPREHENSIVE (LOSS)INCOME	$	(790,022	)	$	3,325,183

WEIGHTED AVERAGE NUMBER OF SHARES		46,013,959			20,200,208

(LOSS)INCOME PER SHARE	$	(0.02	)	$	0.16

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

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

~~UNAUDITED~~ CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH~~CHANGES IN ~~FLOWS~~EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

	Preferred stock				Common stock				Treasury stock								Retained earnings / Accumulated deficits					Accumulated other
															Paid-in		Statutory					comprehensive
	Shares		Par value		Shares		Par value		Shares			At cost			capital		reserves		Unrestricted			income			Total
BALANCE, December 31, 2017		3,092,889		3,093		20,694,670		20,695		(494,462	)		(839,686	)		1,256,955,395		1,107,010		(1,256,044,414	)		2,939,523			4,141,616
Net income																				3,440,349						3,440,349
Foreign currency translation adjustments																							(115,166	)		(115,166	)
BALANCE, March 31, 2018 (Unaudited)		3,092,889	$	3,093		20,694,670	$	20,695		(494,462	)	$	(839,686	)	$	1,256,955,395	$	1,107,010	$	(1,252,604,065	)	$	2,824,357		$	7,466,799

	2018			2017
	Preferred stock						Common stock				Treasury stock								Retained earnings / Accumulated deficits					Accumulated other
CASH FLOWS FROM OPERATING ACTIVITIES:
																	Paid-in		Statutory					comprehensive
Net income(loss)	$	2,094,885		$	(8,839,966	)
	Shares			Par value			Shares		Par value		Shares			At cost			capital		reserves		Unrestricted			income			Total
Net loss from operations disposed		-			(6,484,109	)
BALANCE, December 31, 2018		3,092,889		$	3,093			46,508,421	$	46,509		(494,462	)	$	(839,686	)	$	1,261,869,238	$	1,107,010	$	(1,257,246,837	)	$	3,208,114		$	8,147,441
Net income(loss) from continuing operations		2,094,885			(2,355,857	)
Net loss																						(765,582	)					(765,582	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities from continuing operations:
Foreign currency translation adjustments																									(24,440	)		(24,440	)
Income(loss) from equity investment		(2,173,405	)		2,188,509
Contribution from equity investee																		45,954										45,954
Other receivables		-			11,523
BALANCE, March 31, 2019 (Unaudited)		3,092,889		$	3,093			46,508,421	$	46,509		(494,462	)	$	(839,686	)	$	1,261,915,192	$	1,107,010	$	(1,258,012,419	)	$	3,183,674		$	7,403,373
Other payables and accrued liabilities		(1,642,070	)		91,141
Net cash used in operating activities from operations disposed		-			(22,292,043	)
Net cash used in operating activities		(1,720,590	)		(22,356,727	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from related parties		1,470,005			81,455
Proceed from private placement		250,000			-
Net cash provided by financing activities from operations disposed		-			22,286,292
Net cash provided by financing activities		1,720,005			22,367,747
EFFECTS OF EXCHANGE RATE CHANGE IN CASH		271			10,299
INCREASE (DECREASE) IN CASH		(314	)		21,319
CASH, beginning of period		5,260			3,797
CASH, end of period		4,946			25,116
Less: cash from operations disposed/to be disposed, end of period		-			(20,338	)
CASH FROM CONTINUING OPERATIONS, end of period	$	4,946		$	4,778

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

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31

	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)income	$	(765,582	)	$	3,440,349
Adjustments to reconcile net loss to cash provided by (used in) operating activities from continuing operations:
Depreciation		20			-
Loss(income) from equity investment		500,007			(3,467,056	)
Amortization of right-of-use asset		14,577			-
Changes in operating assets and liabilities
Accounts receivable		56,297			-
Other receivables		(20,409	)		-
Other receivables, related party		2,912			-
Prepaid expense and other current assets		(4,412	)		-
Accounts payables		(8,563	)		-
Other payables and accrued liabilities		(93,107	)		(1,545,566	)
Taxes payable		(282	)		-
Lease liabilities		(19,702	)		-
Net cash used in operating activities		(338,244	)		(1,572,273	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(1,758	)		-
Net cash used in investing activities		(1,758	)		-

CASH FLOWS FINANCING ACTIVITIES:
Borrowings from related parties		170,966			1,572,599
Net cash provided by financing activities		170,966			1,572,599

EFFECTS OF EXCHANGE RATE CHANGE IN CASH AND CASH EQUIVALENTS		108,753			192

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(60,283	)		518

CASH AND CASH EQUIVALENTS, beginning of period		4,820,832			5,260

CASH AND CASH EQUIVALENTS, end of period	$	4,760,549		$	5,778

NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Initial recognition of right-of-use assets and lease labilities	$	108,202		$	-
Additional paid in capital contribute from equity investee	$	45,954		$	-

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

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 – Organization and Operations

General Steel Holdings, Inc. (the “Company”) was incorporated on August 5, 2002 in the state of Nevada. The Company through its 100% owned subsidiary, General Steel Investment Co., Ltd, has been operating steel companies serving various industries in the People’s Republic of China (“PRC”). The Company’s main operation, since ~~its~~ disposal of its significant steel producing operating assets and trading business at at December 31, 2017 has been the 32% equity holding in Tianwu General Steel Material Trading Co., Ltd (“Tianwu”). Beijing ~~The~~Ouruixi ~~Company,~~is ~~together~~in ~~with~~the ~~its~~business ~~subsidiaries~~of ~~and~~cell ~~majority~~research, ~~owned~~development, ~~subsidiary~~ and ~~variable~~storage ~~interest~~and ~~entity,~~cell isculture ~~referred~~service toin as the ~~“Group”~~People’s Republic of China.

~~Note~~On 2December –31, ~~Summary~~2018, the Company entered into a Share Exchange Agreement (the “Agreement”) with Fresh Human Global Ltd., a Cayman Islands corporation (“Fresh Human”) and Hummingbird Holdings Limited, the sole shareholder of ~~significant~~Fresh Human (“Hummingbird”) holding one share ~~accounting~~of ~~policies~~Fresh Human. Pursuant to the terms of the Agreement, Hummingbird exchanged its equity interest in Fresh Human for 4,175,095 shares of restricted stock of the Company. As a result of the Exchange, Fresh Human is now a wholly-owned subsidiary of the Company.

The ~~accompanying~~transactions ~~unaudited~~contemplated ~~condensed~~by ~~consolidated financial statements have been prepared in accordance with accounting principles generally accepted in~~ the ~~United~~Agreement are ~~States~~related ofparty ~~America (“U~~transactions.S. ~~GAAP”)~~Hummingbird ~~for~~is ~~interim~~a ~~financial~~shareholder ~~information~~of ~~pursuant to~~ the ~~rules~~Company, ~~and~~holding ~~regulations~~51.1% of the ~~Securities~~Company’s ~~and~~outstanding ~~Exchange~~common ~~Commission~~stock ~~(“SEC”).~~and ~~The~~through ~~financial~~ownership ~~statements~~of ~~include~~ the ~~accounts~~Company’s ofSeries ~~all~~A ~~directly~~Preferred ~~and~~Stock ~~owned~~has ~~subsidiaries~~voting ~~listed~~power ~~below. All~~of ~~material~~30% ~~intercompany~~of ~~transactions and balances have been eliminated in consolidation. In~~ the ~~opinion~~combined voting power of ~~management,~~our ~~all~~common ~~adjustments, consisting~~stock ofand ~~normal~~preferred ~~recurring adjustments~~stock, ~~considered~~and ~~necessary~~as ~~for~~ a ~~fair~~result ~~presentation~~ of the ~~financial~~Exchange, ~~statements~~Hummingbird ~~have~~now ~~been included~~holds 55.5 ~~Interim~~% ~~results are not necessarily indicative~~ of ~~results to be expected for~~ the ~~full~~common ~~year.~~stock ~~The~~of ~~information included in this Form 10-Q should be read in conjunction with information included in~~ the ~~2017 annual report on Form 10-K filed on December~~ ~~17, 2018~~Company.

(Fresh Human is a holding company incorporated on May 25, 2018, under the laws of Cayman Islands. Fresh Human has no substantive operations other than holding the outstanding share of Tuotuo River HK Limited (“Tuotuo River”). ~~Basis~~Tuotuo River, a Hong Kong Limited Liability Company, is a holding company incorporated on June 6, 2018. Tuotuo River holds all of ~~presentation~~the outstanding equity of Beijing Qianhaitong Technology Development Co., Ltd (“Tuotuo River WFOE”).

~~The~~Fresh ~~consolidated~~Human ~~financial~~and ~~statements~~Tuotuo River were established as the holding companies of Tuotuo River WFOE. Tuotuo River WFOE is the primary beneficiary of Beijing Ouruixi Medical Technology Co., Ltd. (“Beijing Ouruixi”). Beijing Ouruixi is in the ~~Company~~business ~~reflect~~of cell research, development, and storage and cell culture service in the ~~activities~~PRC. All of these entities included in Fresh Human are under common control, which results in the ~~following~~consolidation of ~~directly~~Beijing ~~owned~~Ouruixi ~~subsidiaries~~which have been accounted for as a reorganization of ~~September~~entities 30under common control at carrying value. The Company issued 4,175,095 ~~2018:~~ shares of common stock at $.001 par value, the excess of $4,189,657 carrying value of assets acquired over fair value of shares issued is recorded as additional paid in capital.

Subsidiary		Percentage of Ownership
General Steel Investment Co., Ltd.	British Virgin Islands		100.0	%
Tongyong Shengyuan (Tianjin) Technology Development Co., Ltd. (“Tongyong Shengyuan”)	PRC		100.0	%
Tianjin Shuangsi Trading Co. Ltd. (“Tianjin Shuangsi”)*	PRC		-

Contractual Arrangements

*TianjinBeijing ~~Shuangsi~~Ouruixi’s ~~was~~PRC ~~disposed~~business license onincludes ~~December~~business 31activities of cell research, ~~2017~~development, and ~~its~~storage ~~results~~and ofcell ~~operations~~culture ~~were~~service ~~presented~~and it is being included as ~~operations~~social survey ~~disposed~~category, ~~for~~which is within the ~~nine~~business ~~months~~category ~~ended~~in ~~September~~which 30foreign investment is restricted pursuant to the current PRC regulations. As such, Beijing Ouruixi is controlled through contractual agreements in lieu of direct equity ownership by the Company or any ~~2017~~of its subsidiaries. Such contractual arrangements consist of a series of four agreements (collectively the “Contractual Arrangements”). The significant terms of the Contractual Agreements are as follows:

~~(b)~~Technical ~~Principles~~Consultation ofand ~~consolidation~~Services ~~– subsidiaries~~Agreement

~~The~~Pursuant ~~accompanying~~to ~~consolidated financial statements include~~ the ~~financial~~Technical ~~statements~~Consultation ofand Services ~~the~~Agreement ~~Company~~dated ~~and~~December ~~its~~19, ~~subsidiaries.~~2018 ~~Subsidiaries~~between ~~are~~Tuotuo ~~those~~River ~~entities~~WFOE inand ~~which~~Beijing ~~the Company~~Ouruixi, ~~directly~~ orTuotuo ~~indirectly,~~River ~~controls~~WFOE ~~more~~is ~~than~~engaged ~~one~~as ~~half~~exclusive provider of ~~the~~management ~~voting~~consulting ~~power;~~services orto ~~has~~Beijing ~~the~~Ouruixi. ~~power~~For tosuch ~~govern~~services, the ~~financial~~Beijing ~~and~~Ouruixi ~~operating policies,~~agrees to ~~appoint~~pay orservice ~~remove~~fees determined ~~the~~based ~~majority~~on all of ~~the~~their ~~members~~net ofincome ~~the~~to ~~board~~Tuotuo ofRiver ~~directors,~~WFOE or toTuotuo ~~cast~~River aWFOE ~~majority~~has ofobligation ~~votes~~to atabsorb all of the ~~meeting~~losses ofBeijing ~~directors~~Ouruixi.

~~All~~The ~~significant~~technical ~~inter-company~~consultation ~~transactions~~and services agreement, remains in effect for 20 years until December 19, 2038. The agreement can be extended only if Tuotuo River WFOE gives its written consent of extension of the agreement before the expiration of the agreement and ~~balances~~Beijing ~~have~~Ouruixi ~~been~~shall ~~eliminated~~agree ~~upon~~to ~~consolidation~~the extension without reserve.

~~(c) Going concern~~7

Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these consolidated financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company currently has an accumulated deficit, working capital deficit, and incurred negative cash flows from operating activities. These conditions raise substantial doubt as to its ability to continue as a going concern. These consolidated financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Management~~Equity ~~anticipates~~Option that the Company will be dependent, for the near future, on its ability to obtain financial support and credit guarantee from the Company’s shareholders or other available resources from the PRC banks and other financial institutions given the Company’s credit history. However, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern.Agreements

Pursuant to the equity option agreements dated December 19, 2018 among the shareholders who collectively owned all of Beijing Ouruixi and Tuotuo River WFOE, these shareholders jointly and severally granted Tuotuo River WFOE an option to purchase their equity interests in Beijing Ouruixi. The purchase price shall be the lowest price permitted under applicable PRC laws. If the purchase price is greater than the registered capital of Beijing Ouruixi, these shareholders of Beijing Ouruixi are required to immediately return any amount in excess of the registered capital to Tuotuo Ricer WFOE or its designee of Tuotuo River WFOE. Tuotuo River WOFE may exercise such option at any time until it has acquired all equity interests of Beijing Ouruixi. The agreements will terminate at the date on which all of these shareholders’ equity interests of Beijing Ouruixi has been transferred to Tuotuo River WFOE or its designee.

Equity Pledge Agreements

Pursuant to the equity pledge agreements dated December 19, 2018, the shareholders who collectively owned all of Beijing Ouruixi, pledge all of the equity interests in Beijing Ouruixi to Tuotuo River WFOE as collateral to secure the obligations of Beijing Ouruixi under the exclusive consulting services and operating agreement. These shareholders may not transfer or assign transfer or assign the pledged equity interests, or incur or allow any encumbrance that would jeopardize Tuotuo River WFOE’s interests, without Tuotuo River WFOE’s prior approval. In the event of default, Tuotuo River WFOE as the pledgee will be entitled to certain rights and entitlements, including the priority in receiving payments by the evaluation or proceeds from the auction or sale of whole or part of the pledged equity interests of Beijing Ouruixi. The agreement shall be continuously valid until these shareholders are no longer shareholders of Beijing Ouruixi or the satisfaction of all its obligations by the Beijing Ouruixi under the Technical Consultation and Services Agreement.

Voting Rights Proxy and Financial Supporting Agreements

Pursuant to the voting rights proxy and financial supporting agreements dated December 19, 2018, the shareholders of Beijing Ouruixi give Tuotuo River WFOE an irrevocable proxy to act on their behalf on all matters pertaining to Beijing Ouruixi and to exercise all of their rights as shareholders of Beijing Ouruixi, including the right to attend shareholders meeting, to exercise voting rights and to transfer all or a part of their equity interests in Beijing Ouruixi. In consideration of such granted rights, Tuotuo River WFOE agrees to provide the necessary financial support to Beijing Ouruixi whether or not Beijing Ouruixi incurs loss, and agrees not to request repayment if Beijing Ouruixi is unable to do so. The agreements shall remain in effect for 20 years until December 19, 2038.

Based on the foregoing contractual arrangements, which grant Tuotuo River WFOE effective control of Beijing Ouruixi, obligate Tuotuo River WFOE to absorb all of the risk of loss from their activities, and enable Tuotuo River WFOE to receive all of their expected residual returns, the Company accounts for Beijing Ouruixi as a variable interest entity (“VIE”).

The Company consolidates the accounts of its subsidiaries and VIE, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810-10, Consolidation.

The accompanying consolidated financial statements reflect the activities of the Company’s subsidiaries and VIEs:

Subsidiary/VIE	Place of incorporation	Percentage of Ownership
General Steel Investment Co., Ltd.	British Virgin Islands		100.0	%
Tongyong Shengyuan (Tianjin) Technology Development Co., Ltd. (“Tongyong Shengyuan”)	PRC		100.0	%
Fresh Human Global Ltd. (“Fresh Human”)	Cayman		100.0	%
Tuotuo River HK Limited (“Tuotuo River”)	Hong Kong		100.0	%
Beijing Qianhaitong Technology Development Co., Ltd. (“Tuotuo River WFOE”)	PRC		100.0	%
Beijing Ouruixi Medical Technology Co., Ltd. (“Beijing Ouruixi”)	PRC		VIE

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 2 – Summary of significant accounting policies

(a)

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).

(b)

Principles of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries, which include the wholly-foreign owned enterprise ("WFOE") and variable interest entities ("VIEs") over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All inter-company transactions and balances have been eliminated upon consolidation.

(c)

Liquidity

Historically, the Company finances its operations through internally generated cash and payable from related parties. As of March 31, 2019, the Company had approximately $4.8 million in cash and primarily consists of cash on hand and bank deposits, among which $0.3 million are unrestricted as to withdrawal and use and are deposited with banks in China. Although the Company’s working capital deficit was $5.5 million, $9.8 million of which was payable to related parties. The related parties agreed temporally not to collect the amounts due as long as the Company is currently experiencing working capital deficits, so the Company believes working capital is sufficient to support its operations for the next twelve months.

(d)

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and footnotes. Actual results could differ from these estimates.

(e)

Concentration of risks and other uncertainties

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

~~None~~The ofCompany ~~the~~maintains ~~Company’s~~cash ~~customers~~with ~~individually accounted~~banks ~~for~~in ~~more~~the PRC. ~~than~~In ~~10%~~China, ofa ~~total~~depositor ~~sales~~has ~~from~~up ~~operation~~to ~~disposed~~RMB500,000 ~~for~~insured by the ~~nine~~People’s ~~and~~Bank ~~three~~of ~~months~~China ~~ended~~Financial ~~September~~Stability ~~30,~~Bureau ~~2018~~(“FSD”). ~~One~~ ofIn ~~the Company’s customers~~US, a ~~related~~depositor ~~party~~has ~~individually~~up ~~accounted~~to ~~for~~$250,000 ~~97.6%~~insured ofby ~~total~~the ~~sales~~Federal ~~from~~Deposit ~~operation~~Insurance ~~disposed~~Corporation ~~for~~(“FDIC”). ~~the~~As of March 31, ~~nine~~2019 ~~months~~and ~~ended~~December ~~September~~31, 302018, ~~2017~~approximately $152,000 and ~~none~~$145,000 of the Company’s ~~customers~~cash ~~individually~~held ~~accounted~~by ~~for~~financial ~~more~~institutions ~~than 10% of total~~were ~~sales~~insured, ~~from~~and ~~operation~~the ~~disposed~~remaining ~~for~~balances ~~the~~of ~~three~~approximately ~~months~~$4,608,000 ~~ended~~and ~~September 30~~$4,670,000 ~~2017~~were not insured.

None of the Company’s suppliers individually accounted for more than 10% of the total purchases for the nine and three months ended September 30, 2018. Three of the Company’s suppliers accounted for 98.9% of the total purchases for the nine months ended September 30, 2017. None of the Company’s suppliers, all related parties accounted for more than 10% of the total purchases for the three months ended September 30, 2017.

(f)

Foreign currency translation and other comprehensive income

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

Translation adjustments included in accumulated other comprehensive income amounted to $3.1419 million and $23.9421 million as of ~~September~~March 3031, ~~2018~~2019 and December 31, ~~2017~~2018, respectively. The balance sheet amounts, with the exception of equity at ~~September~~March 3031, ~~2018~~2019 and December 31, ~~2017~~2018 were translated at 6.8771 RMB ~~and~~ and 6.5188 RMB to $1.00, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of operations accounts for the ~~three~~years ~~months~~ ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018 were 6.8075 RMB and 6.8136 RMB, respectively. ~~Cash~~ Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash ~~flows~~ flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions.9

(g) Financial instruments

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, other receivables, other payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(g)

Financial instruments

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

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

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

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

The Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value.

(h) Cash and cash equivalents

Cash ~~includes~~and cash equivalents include cash on hand, demand deposits and ~~demand deposits~~time deposit in banks with original maturities of three months or less than three months.

(i) ~~Equipment,~~Accounts ~~net~~receivable and allowance for doubtful accounts

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

(j)

Prepaid Expenses

Prepaid expenses represent advance payments made to vendors for services such as rent, consulting and certification.

(k)

Equipment, net

Equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 3%-5% residual value. The depreciation expense on assets acquired under capital leases is included with depreciation expense on owned assets. The estimated useful lives are as follows:

Office equipment

5 Years

The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations.

(j) Investments in unconsolidated entities

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

On December 28, 2015 General Steel (China) Co., Ltd sold its 32% equity interest in Tianwu General Steel Material Trading Co., Ltd. to Tongyong Shengyuan, one of the Company’s wholly owned subsidiaries, for $14.9 million (RMB 96.6 million). As of September 30, 2018, Tongyong Shengyuan’s net investment in the unconsolidated entity was $15.0 million.

Total investment loss in unconsolidated subsidiaries which was included in “Income (Loss) from equity investment” in the consolidated statements of operations and comprehensive income (loss), amounted to $(0.7) million and $(0.7) million for the three months ended September 30, 2018 and 2017, respectively and amounted to $2.2 million and $(2.2) million for the nine months ended September 30, 2018 and 2017, respectively.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company performed significance test in accordance with SEC Rule 1-02(w) of Regulation S-X and determined Tianwu qualify as significant equity investee, the condensed income statement of Tianwu is presented as follows:

CONDENSED STATEMENT OF OPERATIONS

(In thousands)	For the three months ended
	September 30, 2018			September 30, 2017
NET SALES	$	53		$	1,411
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		40			51
FINANCE EXPENSES		1,007			2,370
OTHER INCOME		-			78
TOTAL EXPENSES		1,047			2,499
LOSS BEFORE PROVISION FOR INCOME TAXES		(994	)		(1,088	)
PROVISION FOR INCOME TAXES		-			-
NET LOSS FOR CONTINUING OPERATIONS		(994	)		(1,088	)
NET INCOME(LOSS) FROM OPERATIONS HELD FOR SALE		(1,304	)		(1,190	)
NET INCOME(LOSS)	$	(2,298	)		(2,278	)

CONDENSED STATEMENT OF OPERATIONS

(In thousands)	For the nine months ended
	September 30, 2018			September 30, 2017
NET SALES	$	107		$	2,343
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		227			136
FINANCE EXPENSES		3,621			5,864
OTHER INCOME		-			10
TOTAL EXPENSES		3,848			6,010
LOSS BEFORE PROVISION FOR INCOME TAXES		(3,741	)		(3,667	)
PROVISION FOR INCOME TAXES		-			1
NET LOSS FOR CONTINUING OPERATIONS		(3,741	)		(3,668	)
NET INCOME(LOSS) FROM OPERATIONS HELD FOR SALE		10,533			(3,171	)
NET INCOME(LOSS)	$	6,792			(6,839	)

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(k) Revenue recognition

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

Gross versus Net Revenue Reporting

In the normal course of the Company’s trading business, the Company orders directly the iron ore, nickel-iron-manganese alloys, and other steel-related products from its suppliers and drop ships the products directly to its customers. In these situations, the Company generally collects the sales proceeds directly from its customers and pays for the inventory purchases to its suppliers separately. The determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it is the principal or an agent in the transaction. In determining whether the Company is the principal or an agent, the Company follows the accounting guidance for principal-agent considerations. Because the Company is not the primary obligor and is not responsible for (i) fulfilling the steel-related products delivery, (ii) establishing the selling prices for delivery of the steel-related products, (iii) performing all billing and collection activities including retaining credit risk and (iv) baring the back-end risk of inventory loss with respect to any product return from its customer, the Company has concluded that it is the agent in these arrangements, and therefore report revenues and cost of revenues on a net basis.

For the three and nine months ended September 30, 2017, the Company reported gross sales of $0 million and $13.5 million, of which 0% and 97.9% were related party sales and the Company had $0 million and $19.9 million in purchases, of which 0% and 98.9% were related party purchases resulting in net cost of sales of $0.1 million and $6.5 million in operations held for sale. See details of related party sales and purchases in Note 7.

(l) Operations disposed

In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations (which we presented as operations to be disposed and operations disposed), less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On(l) ~~December 31, 2017, the Company sold Shuangsi to Wendler Investment & Management Group Co., Ltd, a related party, no consideration was received. The result~~ Right-of-use ~~operations was~~Asset ~~presented~~and asLease ~~operations disposed in December 31, 2017 in the consolidated financial statements. The net deficiency of Shuangsi as of December 31, 2017 is as follows:~~Liabilities

(In thousands)	December 31, 2017
CURRENT ASSETS:
Cash	$	6
Prepaid taxes		1,048
Receivables		147
Total current assets		1,201
CURRENT LIABILITIES:
Other payable and accrued liabilities		2,654
Other payables - related parties		2,008
Total current liabilities		4,662
Accumulated other comprehensive income		130
Total net deficiency		(3,331	)
Net consideration		-
Gain in disposal of subsidiary	$	(3,331	)

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” The new standard requires lessees to recognize lease assets (right of use) and lease obligations (lease liability) for leases previously classified as operating leases under generally accepted accounting principles on the balance sheet for leases with terms in excess of 12 months. The standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted ASC 2016-02 since January 1, 2019. See note 11 for details.

~~Reconciliation~~(m) ofInvestments ~~the amounts of major classes of income and losses from operations disposed~~ in ~~the~~unconsolidated ~~unaudited condensed consolidated statements of operations and comprehensive loss which include Shuangsi’s operations for the three and nine months ended September 30, 2018 and 2017.~~entities

	For the three months ended September 30,
Operations Disposed – Tianjin Shuangsi:	2018		2017
(In thousands)
NET PROFIT	$	-	$	(55	)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		-		3
INCOME FROM OPERATIONS		-		(58	)
OTHER EXPENSE
Finance/interest expense		-		-
Other expense, net		-		-
LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST		-		(58	)
PROVISION FOR INCOME TAXES		-		-
NET LOSS FROM OPERATIONS DISPOSED		-		(58	)
Less: Net loss attributable to noncontrolling interest from operations disposed		-		-
NET LOSS FROM OPERATIONS DISPOSED	$	-	$	(58	)

On December 28, 2015 General Steel (China) Co., Ltd sold its 32% equity interest in Tianwu General Steel Material Trading Co., Ltd. to Tongyong Shengyuan, one of the Company’s wholly owned subsidiaries, for $14.9 million (RMB 96.6 million). As of March 31, 2019 and December 31, 2018, Tongyong Shengyuan’s net investment in the unconsolidated entity was $12.8 million and $13.0 million, respectively.

Total investment income (loss) in unconsolidated subsidiaries which was included in “Income (Loss) from equity investment” in the consolidated statements of operations and comprehensive income, amounted to $(0.5) million and $3.5 million for the three months ended March 31, 2019 and 2018, respectively.

(In thousands)	For the three months ended March 31,
	2019			2018
Balance – beginning of period	$	12,972		$	14,709
Investment (loss)gain		(500	)		3,467
Contribute from equity investee		46			-
Effect of exchange rate		319			587
Balance – end of period	$	12,837		$	18,763

The Company performed significance tests in accordance with SEC Rule 1-02(w) of Regulation S-X and determined Tianwu qualify as significant equity investee, the condensed financial statements of Tianwu is presented as follows:

CONDENSED STATEMENT OF OPERATIONS

(In thousands)	For the three months ended March 31,
	2019			2018
NET SALES	$	7		$	53

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		77			103
FINANCE EXPENSES		1,255			1,305
TOTAL EXPENSES		1,332			1,408

LOSS BEFORE PROVISION FOR INCOME TAXES		(1,325	)		(1,355	)

PROVISION FOR INCOME TAXES		-			-

NET LOSS FOR CONTINUING OPERATIONS		(1,325	)		(1,355	)

NET (LOSS) INCOME FROM OPERATIONS HELD FOR SALE		(239	)		12,190

NET (LOSS) INCOME	$	(1,564	)		10,835

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	For the nine months ended September 30,
Operations Disposed – Tianjin Shuangsi:	2018		2017
(In thousands)
NET LOSS	$	-	$	(6,468	)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		-		15
LOSS FROM OPERATIONS		-		(6,483	)
OTHER EXPENSE
Finance/interest expense		-		1
Other expense, net		-		1
LOSS BEFORE PROVISION FOR INCOME TAXES AND NONCONTROLLING INTEREST		-		(6,484	)
PROVISION FOR INCOME TAXES		-		-
NET LOSS FROM OPERATIONS DISPOSED		-		(6,484	)
Less: Net loss attributable to noncontrolling interest from operations disposed		-		-
NET LOSS FROM OPERATIONS DISPOSED	$	-	$	(6,484	)

(n)

Revenue recognition

On January 1, 2018, the Company adopted Accounting Standards Update (m“ASU”) ~~Reclassifications~~2014-09 Revenue from Contracts with Customers (FASB ASC Topic 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to the retained earnings upon adoption of this new guidance as the Company’s revenue was recognized based on the amount of consideration expected to receive in exchange for satisfying the performance obligations.

~~Certain~~The ~~prior~~core ~~period~~principle ~~amounts~~underlying ~~have~~the ~~been~~revenue recognition ~~reclassified~~ASU is that the Company will recognize revenue to ~~conform~~represent the transfer of goods and services to customers in an amount that reflects the ~~current~~consideration ~~period~~to ~~presentation.~~which ~~These~~the ~~reclassifications~~Company ~~have~~expects noto ~~effect~~be onentitled in such exchange. This will require the ~~accompanying~~Company ~~consolidated~~to identify contractual ~~statements~~performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of ~~operations~~goods and ~~cash~~services ~~flows~~transfers to a customer. The Company’s revenue streams are recognized over time.

The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (ni) ~~Earnings~~identify the contract with the customer, (~~loss~~ii) ~~per~~identify ~~share~~the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no difference in the pattern of revenue recognition.

(o)

Earnings (loss) per share

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

Basic earnings (loss) per share are computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings (loss) 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.

(op) Treasury Stock

Treasury stock consists of shares repurchased by the Company that are no longer outstanding and are held by the Company. Treasury stock is accounted for under the cost method.

The Company has repurchased 494,462 total shares of its common stock, given retroactive effect to the 1-for-5 reverse stock split effective on October 29, 2015, under the share repurchase plan approved by the Board of Directors in December 2010.

(pq) Income taxes

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

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

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

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

An uncertain tax position is recognized as as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. As of ~~September~~March 3031, ~~2018~~2019, the Company’s income tax returns for December 31, 2017, 2016, 2015 and 2014 remain ~~subject~~ subject to examination by the taxing authorities.

(qr) Share-based compensation

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

(rs) Recently issued accounting pronouncements

In ~~January~~June 2016, the ~~Financial Accounting Standards Board (“~~FASB”) issued ASU No. 2016-0113, (Topic 326), Financial Instruments – ~~Overall~~Credit ~~(Subtopic 825-10)~~Losses: ~~Recognition and~~ Measurement of ~~Financial~~Credit ~~Assets~~Losses ~~and~~on Financial ~~Liabilities,~~Instruments towhich ~~enhance~~ amends the ~~reporting~~current ~~model~~accounting ~~for~~guidance ~~financial~~and ~~instruments~~requires tothe ~~provide users~~use of ~~financial~~the ~~statements~~new ~~with more decision~~forward-~~useful~~looking ~~information.~~“expected ~~The~~loss” ~~update~~model, ~~requires~~rather ~~equity investments (except those accounted~~than ~~for under~~ the ~~equity~~“incurred ~~method~~loss” ormodel, ~~those~~which ~~that~~requires ~~result~~all inexpected ~~consolidation~~losses ~~of the investee)~~ to be ~~measured~~determined atbased ~~fair~~on ~~value~~historical ~~with~~experience, ~~changes in~~current ~~fair~~conditions ~~value~~and ~~recognized~~reasonable inand ~~net~~supportable ~~income~~forecasts. ItThis ~~eliminated~~guidance amends the ~~requirement~~accounting for ~~public~~credit ~~entities~~losses tofor ~~disclose~~most ~~the~~financial ~~method(s)~~assets and certain other instruments including trade and ~~significant assumptions~~other ~~used~~receivables, held-to-maturity ~~estimate~~debt ~~the~~securities, ~~fair~~loans ~~value~~and ~~that~~other instruments. ASU 2016-13 is ~~require~~effective tofor bepublic ~~disclosed~~entities for ~~financial~~annual ~~instruments~~periods ~~measured~~beginning atafter ~~amortized~~December ~~cost on~~15, ~~the~~2019, ~~balance~~and ~~sheet.~~interim ~~For~~periods ~~public~~within ~~entities,~~those annual ~~the~~periods. ~~ASU~~Early adoption is ~~effective~~permitted for ~~the~~annual ~~fiscal~~periods ~~years~~ beginning after December 15, ~~2017~~2018, ~~including~~ and interim periods ~~within those fiscal years~~therein. The Company ~~has~~does ~~evaluated~~not ~~and~~believe ~~determined that~~ the adoption ~~would~~of ~~not~~ASU 2016-13 will have a material effect on the Company’s unaudited consolidated financial statements.

In ~~February~~June ~~2016~~2018, the FASB issued ASU ~~2016~~No. 2018-0207, ~~Amendments~~Compensation to– ~~the~~Stock ~~ASC~~Compensation ~~842~~(Topic ~~Leases.~~718): ~~This~~Improvements ~~update requires lessee~~ to ~~recognize~~Employee ~~the~~Share-Based ~~assets~~Payment ~~and~~Accounting, ~~liability~~or ~~(the~~ASU ~~lease liability) arising~~2018-07. ~~from~~ASU ~~operating~~2018-07 ~~leases~~simplifies on the ~~balance~~accounting ~~sheet~~ for ~~the~~share-based ~~lease~~payments ~~term.~~made ~~When~~to ~~measuring~~nonemployees ~~assets~~so ~~and~~the ~~liabilities~~accounting ~~arising~~for ~~from~~such apayments ~~lease,~~is ~~a lessee~~substantially ~~(and~~the asame ~~lessor)~~as ~~should~~those ~~include~~made ~~payments~~ to beemployees. ~~made~~Under inthis ~~optional~~ASU, ~~periods~~share ~~only~~based ifawards ~~the~~to ~~lessee~~nonemployees iswill ~~reasonably~~be ~~certain~~measured toat ~~exercise~~fair anvalue ~~option to~~on ~~extend~~ the ~~lease~~grant date orof ~~not~~the toawards, ~~exercise~~entities anwill ~~option~~need to ~~terminate~~assess the ~~lease.~~probability ~~Within~~of asatisfying ~~twelve~~performance ~~months~~conditions orif ~~less~~any ~~lease~~are ~~term~~present, aand ~~lessee is~~awards ~~permitted~~will continue to ~~make~~be anclassified ~~accounting~~according ~~policy election not~~ to ~~recognize~~Accounting ~~lease~~Standards ~~assets~~Codification ~~and~~(“ASC”) ~~liabilities.~~718 Ifupon avesting ~~lessee~~which ~~makes this election,~~eliminates itthe ~~should~~need ~~recognize~~to ~~lease~~reassess ~~expense~~classification onupon avesting, ~~straight-line~~consistent ~~basis~~with ~~over~~awards ~~the~~granted ~~lease~~to ~~term~~employees. InThis ~~transition,~~ASU ~~this~~is ~~update will be~~ effective for ~~public~~ ~~entities for~~ fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company ~~has~~ ~~evaluated~~does ~~and~~not ~~determined~~believe ~~that~~ the adoption ~~would~~of ~~not~~this ASU will have a material effect on the Company’s unaudited condensed consolidated financial statements.

InNote ~~April~~3 ~~2016,~~– ~~the~~Variable ~~FASB~~interest ~~issued ASU 2016-10,~~entity ~~Revenue from Contracts with Customers~~ (~~Topic 606~~“VIE”): Identifying Performance Obligations and Licensing. The objective is to clarify the two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for these areas. The ASU affects the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for this ASU are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of ASU 2014-09 by one year. The Company has evaluated and determined that the adoption would not have a material effect on the Company’s financial statements.

On December 19, 2018, Tuotuo River WFOE entered into Contractual Arrangements with Beijing Ouruixi and its shareholders who collectively owns 100% of Beijing Ouruixi. The significant terms of these Contractual Arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classifies Beijing Ouruixi as a VIE.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

InA ~~August~~VIE ~~2016,~~is ~~the~~an ~~FASB~~entity that has ~~issued~~either ~~Accounting~~a total ~~Standards~~equity ~~Update~~investment ~~(ASU)~~that ~~No.~~is ~~2016-15,~~insufficient ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,~~ to ~~address~~permit ~~diversity in how certain cash receipts and cash payments are presented and classified in~~ the ~~statement~~entity ofto ~~cash~~finance ~~flows. The~~its ~~amendments~~activities ~~provide~~without ~~guidance~~additional onsubordinated ~~the following eight specific cash flow issues: (1) Debt Prepayment or Debt Extinguishment Costs;~~financial ~~(2)~~support, ~~Settlement of Zero-Coupon Debt Instruments~~ or ~~Other~~whose ~~Debt~~equity ~~Instruments~~investors ~~with~~lack ~~Coupon Interest Rates That Are Insignificant in Relation to~~ the ~~Effective~~characteristics ~~Interest Rate~~ of ~~the Borrowing; (3) Contingent Consideration Payments Made after~~ a ~~Business~~controlling ~~Combination;~~financial ~~(4)Proceeds from~~interest, ~~the~~such ~~Settlement~~as ofthrough ~~Insurance~~voting ~~Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies~~rights, ~~including~~ ~~Bank-Owned;~~right ~~(6)~~to ~~Life~~receive ~~Insurance~~the ~~Policies;~~expected ~~(7)~~residual ~~Distributions~~returns ~~Received~~of ~~from~~the ~~Equity~~entity ~~Method~~or ~~Investees;~~obligation ~~(8)~~to ~~Beneficial~~absorb ~~Interests~~the inexpected ~~Securitization Transactions;~~losses ~~and Separately Identifiable Cash Flows and Application~~ of the ~~Predominance Principle~~entity. The ~~amendments are effective~~variable ~~for~~interest ~~public business entities for fiscal years beginning after December 15~~holder, ~~2017,~~if ~~and interim periods within those fiscal years. For all other entities~~any, ~~the~~that ~~amendments~~has ~~are~~a ~~effective~~controlling ~~for~~financial ~~fiscal~~interest ~~years~~in ~~beginning~~a ~~after~~VIE ~~December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption~~ is ~~permitted,~~deemed ~~including~~to ~~adoption~~be inthe anprimary ~~interim~~beneficiary ~~period.~~and ~~The~~must ~~amendments~~consolidate ~~should~~the ~~be applied using a retrospective transition method to each period presented~~VIE. IfTuotuo itRiver WFOE is ~~impracticable~~deemed to ~~apply~~have ~~the~~a ~~amendments retrospectively~~controlling ~~for~~financial ~~some~~interest ofand ~~the~~be ~~issues,~~ the ~~amendments~~primary ~~for~~beneficiary ~~those issues would be applied prospectively as~~ of ~~the~~Beijing ~~earliest date~~Ouruixi ~~practicable.~~because ~~The~~it ~~Company~~ has ~~evaluated~~both ~~and~~of ~~determined that~~ the ~~adoption~~following ~~would not have a material effect on the Company’s financial statements.~~characteristics:

In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting, which amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. For all entities, this ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company does not believe the adoption of this ASU would have a material effect on the Company’s financial statements.

	(1)	The power to direct activities at Beijing Ouruixi that most significantly impact such entity’s economic performance, and

	(2)	The obligation to absorb losses of, and the right to receive benefits from Beijing Ouruixi that could potentially be significant to such entity.

InPursuant ~~July~~to ~~2017,~~ the ~~FASB~~Contractual ~~issued ASU 2017-11~~Arrangements, ~~Earnings~~ ~~Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The~~Beijing ~~amendments~~Ouruixi inpays ~~Part~~service Ifees ofequal ~~the~~to ~~Update~~all ~~change the reclassification analysis~~ of ~~certain~~its ~~equity-lined~~net ~~financial~~income instruments (or embedded features) with down round features. The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to aTuotuo ~~scope~~River ~~exception~~WFOE. ~~For~~At ~~public business entities,~~ the ~~amendments~~same ~~in Part I of this Update are effective for fiscal years~~time, ~~and~~Tuotuo ~~interim~~River ~~periods~~WFOE ~~within~~is ~~those fiscal years,~~obligated ~~beginning~~to ~~after~~absorb ~~December 15, 2018. Early adoption is permitted for~~ all ~~entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as~~ of ~~the~~Beijing ~~beginning~~Ouruixi’s ~~of the fiscal year that includes that interim period~~losses. The ~~amendments~~Contractual inArrangements ~~Part~~are IIdesigned ofso ~~this~~that ~~Update~~Beijing doOuruixi ~~not~~operate ~~require any transition guidance because~~for ~~those amendments do not have an accounting effect. Management plans to adopt this ASU during~~ the ~~year~~benefit ~~ending December 2019. The Company does not believe the adoption~~ of ~~this~~Tuotuo ~~ASU~~River ~~would~~WFOE ~~have~~and aultimately, ~~material effect on~~ the Company~~’s financial statements~~.

~~In February 2018~~Accordingly, the ~~FASB~~accounts ~~issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification~~ of ~~Certain~~Beijing ~~Tax Effects from Accumulated Other Comprehensive~~Ouruixi ~~Income.~~is ~~The~~consolidated ~~amendments~~ in ~~this~~the ~~Update~~accompanying ~~affect~~financial ~~any~~statements ~~entity~~pursuant ~~that is required~~ to ~~apply~~ASC ~~the provisions of Topic 220~~810-10, ~~Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP~~Consolidation. ~~The~~In ~~amendments in this Update are effective for all entities for fiscal years beginning after December 15~~addition, ~~2018,~~its and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period for public business entities for reporting periods for which financial ~~statements~~positions ~~have~~and ~~not~~results ~~yet been issued. The amendments in this Update should be applied either in the period~~ of ~~adoption~~operations orare ~~retrospectively~~included ~~to each period (or periods)~~ in ~~which~~ the ~~effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The~~ Company ~~does not believe the adoption of this ASU would have a material effect on the Company~~’s financial statements.

The ~~Company~~carrying ~~does~~amount ~~not~~of ~~believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on~~ the ~~consolidated~~VIE’s ~~financial~~consolidated ~~position,~~assets ~~statements~~and ofliabilities ~~operations~~are ~~and~~as ~~cash flows.~~follows:

	March 31, 2019

Current assets	$	4,559,551
Total assets		4,665,769
Total liabilities		(524,594	)
Net assets	$	4,141,175

	March 31, 2019

Current liabilities:
Other payables and accrued liabilities	$	24,463
Other payable – related party		411,123
Lease liabilities - current		53,489
Total current liabilities		489,075
Lease liabilities – non-current		35,519
Total liabilities	$	524,594

The summarized operating results of the VIE’s are as follows:

	For the three months ended March 31, 2019

Operating revenues	$	-
Operating expenses	$	167,901
Loss from operations	$	(167,901	)
Net loss	$	(151,800	)

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Note~~Under 3–the ~~Other~~VIE ~~receivables~~Arrangements, ~~net~~the Company has the power to direct activities of Beijing Ouruixi and can have assets transferred out of Beijing Ouruixi. Therefore, the Company considers that there is no asset in Beijing Ouruixi that can be used only to settle obligations of Beijing Ouruixi, except for registered capital and PRC statutory reserves, if any. As Beijing Ouruixi is incorporated as limited liability company under the Company Law of the PRC, creditors of the Beijing Ouruixi do not have recourse to the general credit of the Company for any of the liabilities of Beijing Ouruixi.

~~Other~~Note ~~receivables,~~4 ~~net~~– ofCash ~~allowance~~and ~~for doubtful~~cash ~~accounts consists of the following:~~equivalents

	September 30, 2018			December 31, 2017
	(in thousands)			(in thousands)
Other receivables	$	124		$	124
Less: allowance for doubtful accounts		(121	)		(121	)
Net other receivables	$	3		$	3

Cash and cash equivalents consisted of the following as of March 31, 2019 and December 31, 2018:

Movement of allowance for doubtful accounts, including related parties, is as follows:

	March 31, 2019		December 31, 2018
	(in thousands)		(in thousands)
Cash and cash equivalents:
Cash in bank and on hand	$	291	$	459
Time deposit – with original maturities less than three months		4,470		4,362
Total Cash and cash equivalents:	$	4,761	$	4,821

	September 30, 2018			December 31, 2017
	(in thousands)			(in thousands)
Beginning balance	$	169		$	169
Write off		(48	)		(48	)
Ending balance		121			121

As of December 31, 2018, the Company had time deposits of approximately $4.4 million (RMB 30 million), pledged as collateral for Tianjin Guangtai Changxin International Trading Co to its bank. The loan was maturated on March 18 and March 25, 2019.

~~Note~~As of March 31, 2019, the Company had time deposits of approximately $4.5 -million ~~Other~~(RMB ~~payable~~30 million), pledged as collateral for Langge (Tianjin) Trading Co to its bank. The maturity date of the loan was June 18 and ~~accrued~~June ~~liabilities~~25, 2019.See Note 10.

As of March 31, 2019, one of the Company’s bank account amounted totaling $249 thousands was under the third party trust account.

Note 5– Accounts receivable, net

Accounts receivables, net of allowance for doubtful accounts consists of the following:

	March 31, 2019		December 31, 2018
	(in thousands)		(in thousands)
Accounts receivable	$	-	$	55
Less: allowance for doubtful accounts		-		-
Net accounts receivable	$	-	$	55

Note 6 - Other payable and accrued liabilities

Other payable and accrued liabilities consist of the following:

	September 30, 2018		December 31, 2017
	March 31, 2019		December 31, 2018
	(in thousands)		(in thousands)
Salary payable	$	142	$	142
Short term payable, no interest due on demand		-41		~~1,480~~37
Professional fees		~~280~~270		~~508~~364
Other payable and accrued liabilities, net – continuing operations	$	422	$	2,130
Other payable and accrued liabilities, net	$	453	$	543

Note 5 - Supplemental disclosure of cash flow information

During the nine months ended September 30, 2017, the board approved to issue 200,000 restricted shares to a consultant pursuant to consulting services performed in 2016.

Note 6– Taxes

Deferred taxes assets – China

According to Chinese tax regulations, net operating losses can be carried forward to offset operating income for the next five years. Management took into consideration its operating forecast for the next five years and concluded that the beginning-of-the-year balance of deferred tax assets mainly relating to the net operating loss carry forward may not be fully realizable due to the reduction in the projection of income to be available in the next 5 years. Management therefore decided to provide 100% valuation allowance for the deferred tax assets.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 7– Taxes

Income tax

Cayman Islands

Under the current laws of the Cayman Islands, Fresh Human is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.

Hong Kong

Tuotuo River HK is incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Tuotuo River HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

PRC

The subsidiaries and VIEs incorporated in the PRC are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate.

Beijing Ouruixi’s operations have incurred a cumulative net operating loss (“NOL”) of approximately RMB 2,254,000 (USD 337,000) as of March 31, 2019 which may reduce future taxable income. The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Since Beijing Ouruixi had continuing losses so the Company made a full allowance of related deferred tax assets.

Deferred taxes assets – China

Deferred taxes assets – U.S.

General Steel Holdings, Inc. was incorporated in the United States and has incurred net operating losses for income tax purposes for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019. ~~The~~ The net operating loss carry forwards for United States income taxes amounted to $6.78 million, which may be available to reduce ~~future~~ future years’ taxable income. These carry forwards will expire, if not utilized, starting from 2027 through 2037. Management ~~believes~~ believes that the realization of the benefits from these losses appears uncertain due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset benefit to reduce the asset to zero. The valuation allowance as of ~~September 30~~March 31, ~~2018~~2019 was $2.69 million. ~~The~~ ~~net change in the valuation allowance for the nine months ended September 30, 2018 was $0.08 million.~~ Management will review this valuation allowance periodically and make adjustments as warranted.

The Company has no cumulative proportionate retained earnings from profitable subsidiaries as of ~~September~~March 3031, ~~2018~~2019. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would have to be provided if we concluded that such earnings will be remitted in the future.

On December 22, 2017, the “Tax Cuts ~~and~~ and Jobs Act” (the “Act”) was enacted. Under the provisions of the Act, the U.S. corporate tax rate decreased ~~from~~ from 35% to 21%. Additionally, the Tax Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The enactment of the ACT did not have a material effect on on the Company’s financials as the Company has accumulated deficits and has provided full valuation allowance to its deferred tax assets.

Note 7 – Related party transactions and balances

Related party transactions

a. The following chart summarized revenue from related parties for the three and nine months ended September 30, 2018 and 2017.

Name of related parties	Relationship	For the three months ended September 30, 2018		For the three months ended September 30, 2017
		(in thousands)		(in thousands)
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding*		-		131
Tianjin Qiu Steel Investment Co., Ltd	Partially owned by CEO through indirect shareholding		-		1
Total		$	-	$	132
Less: Sales to related parties from operations disposed			-		(132	)
Sales–related parties – continuing operations		$	-	$	-

*The CEO is referred to herein as the chief executive officer of General Steel Holdings, Inc. Mr. Zuosheng Yu.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Sales~~Note to8 ~~related~~– ~~parties~~Related inparty trading transactions from disposed operations, which were netted against the corresponding cost of goods sold, amounted to $0 million and $6.4 million net cost of sales for the nine months ended September 30, 2018 and 2017, respectively.balances

Name of related parties	Relationship	For the nine months ended September 30, 2018		For the nine months ended September 30, 2017
		(in thousands)		(in thousands)
Tianjin Dazhen Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		(44	)
Wendlar Tianjin Industry Co., Ltd.	Partially owned by CEO through indirect shareholding		-		15
Tianjin Hengying Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		13,124
Tianjin Qiu Steel Investment Co., Ltd	Partially owned by CEO through indirect shareholding		-		76
Total		$	-	$	13,171
Less: Sales to related parties from operations disposed			-		(13,171	)
Sales–related parties – continuing operations		$	-	$	-

Related party balances

ba. ~~The~~ ~~following~~Other ~~charts~~payables ~~summarize purchases~~– ~~from~~ related parties ~~for the three and nine months ended September 30, 2018 and 2017.~~:

Name of related parties	Relationship	For the three months ended September 30, 2018		For the three months ended September 30, 2017
		(in thousands)		(in thousands)
Wendlar Tianjin Industry Co., Ltd	Partially owned by CEO through indirect shareholding		-		30
Tianjin Dazhen Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		71
General Steel (China) Co., Ltd	Partially owned by CEO through indirect shareholding		-		95
Total		$	-	$	196
Less Purchases from related parties from operations disposed			-		(196	)
Purchases–related parties–continuing operations		$	-	$	-

Other payables – related parties are those nontrade payables arising from transactions between the Company and its related parties, such as advances or payments from these related parties on behalf of the Company.

Name of related parties	Relationship	~~For~~March ~~the nine months ended September 30~~31, ~~2018~~2019		~~For~~December ~~the nine months ended September 30~~31, ~~2017~~2018
		(in thousands)		(in thousands)
Wendlar Tianjin Industry Co., Ltd	Partially owned by CEO through indirect shareholding		-		3,042
Yangpu Capital Automobile	Partially owned by CEO indirectly		95		95
Tianjin Dazhen Trading Co., Ltd	Partially owned by CEO through indirect shareholding		-		7,119
General Steel (China) Co., Ltd	Partially owned by CEO indirectly		7,836		7,388
General Steel (China) Co., Ltd	Partially owned by CEO through indirect shareholding		-		9,540
Zuosheng Yu	CEO		1,471		1,471
Total		$	-	$	19,701
Baoning Shi	Major shareholder		348		173
Less Purchases from related parties from operations disposed			-		(19,701	)
Beijing Ronghuida Investment Consulting Co., Ltd.	Common control by major shareholder		62		60
Purchases–related parties–continuing operations		$	-	$	-
Beijing Hanjiang International Investment Consulting Co., Ltd.	Common control by major shareholder		1		1
Total		$	9,813	$	9,188

Note 9 – Equity

On August 24, 2018, the Company entered into a subscription agreement with Hummingbird. Pursuant to the Subscription Agreement, the Investor purchased 7,352,941 shares of the Company’s common stock, par value $0.001 per share, at a purchase price of $0.034 per share for aggregate gross proceeds of $250,000.

On November 30, 2018, the Company entered into another subscription agreement with Hummingbird. Pursuant to the Subscription Agreement, the Investor purchased 14,285,715 shares of the Company’s common stock, par value $0.001 per share, at a purchase price of $0.035 per share for aggregate gross proceeds of $500,000.

On December 31, 2018, the Company entered into a Share Exchange Agreement (the “Agreement”) with Fresh Human and Hummingbird. Pursuant to the terms of the Agreement, Hummingbird exchanged its equity interest in Fresh Human for 4,175,095 shares of restricted stock (the “Shares”) of the Company (the “Exchange”). As a result of the Exchange, Fresh Human is now a wholly owned subsidiary of the Company. Fresh Human was valued at $4,175,095. The transactions contemplated by the Agreement are related party transactions. Hummingbird is a shareholder of the Company, holding 51.1% of the Company’s outstanding common stock and through ownership of the Company’s Series A Preferred Stock has voting power of 30% of the combined voting power of our common stock and preferred stock, and as a result of the Exchange, Hummingbird now holds 55.5 % of the common stock of the Company.

Restricted net assets

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary and VIE. Relevant PRC statutory laws and regulations permit payments of dividends only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries and VIE.

The Company’s subsidiaries and VIE are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the Company’s subsidiaries and VIE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. The Company’s subsidiaries and VIE may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

~~Related~~As ~~party~~of ~~balances~~March 31, 2019 and December 31, 2018, the Company’s subsidiaries and VIE collectively attributed none of retained earnings for their statutory reserves, respectively due to operation losses for both years.

a.Note ~~Other~~10 ~~payables~~ – ~~related parties:~~Contingencies

Name of related parties	Relationship	September 30, 2018		December 31, 2017
		(in thousands)		(in thousands)
Yangpu Capital Automobile	Partially owned by CEO through indirect shareholding		95		95
General Steel (China) Co., Ltd	Partially owned by CEO through indirect shareholding		8,788		6,881
Zuosheng Yu	CEO		98		1,469
Total		$	8,981	$	8,445

From time to time, the Company’s VIE Ouruixi maybe a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows.

~~Note~~In 8December –2018, ~~Equity~~Beijing Ouruixi signed a bank acceptance pledge contract with Tianjin Branch, Shengjing Bank in China and pledged its 30 million RMB time deposits in Shengjing Bank as collateral for the bank loan Tianjin Guangtai Changxin International Trading Co. borrowed. The maturity date of the loan was March 18 and March 25, 2019. After the maturity date, the time deposits was automatically released as well as the collateral obligation.

In March ~~2017~~2019, Beijing Ouruixi signed a ~~the~~bank ~~board~~acceptance ~~approved~~pledge tocontract ~~issue~~with ~~200~~Tianjin Branch,~~000~~ ~~restricted~~Shengjing ~~shares~~Bank toin aChina ~~consultant~~and ~~pursuant~~pledged toits ~~consulting~~30 ~~services~~million ~~performed~~RMB time deposits in ~~2016~~Shengjing Bank as collateral for the bank loan Langge (Tianjin) Trading Co. borrowed. The maturity date of the loan is June 18 and June 25, 2019. After the maturity date, the time deposits will be automatically released as well as the collateral obligation.

OnThe ~~August~~Company 24did not, ~~2018~~however, ~~the~~accrue ~~Company~~any liability ~~entered~~in ~~into~~connection awith ~~subscription~~such ~~agreement~~guarantee ~~with~~because ~~Hummingbird~~the ~~Holdings~~borrowers ~~Limited,~~have abeen ~~BVI~~current ~~entity.~~in ~~Pursuant~~its torepayment ~~the~~obligation ~~Subscription Agreement,~~and the ~~Investor~~Company ~~purchased~~has ~~7,352,941~~not ~~shares~~experienced any oflosses ~~the~~from ~~Company’s~~providing ~~common~~such ~~stock,~~guarantee. ~~par~~As ~~value~~of ~~$0.001~~the ~~per~~date ~~share~~of this report, atthe ~~a purchase~~Company ~~price~~has ofevaluated ~~$0.034~~the ~~per~~guarantee ~~share~~and ~~for~~has ~~aggregate~~concluded that ~~gross~~the ~~proceeds~~likelihood of ~~$250,000.~~having ~~The~~to ~~Company~~make ~~received~~any ~~the~~payments ~~proceeds~~under inthe ~~August~~guarantee ~~2018 and~~agreement ~~transaction~~is ~~costs was not significant~~remote.

~~Note~~Variable 9interest –entity ~~Subsequent events~~structure

OnIn ~~November~~the ~~30,~~opinion ~~2018~~of management, (i) the ~~Company entered~~corporate ~~into~~structure ~~another~~of ~~subscription~~the ~~agreement~~Company ~~with~~is ~~Hummingbird~~in ~~Holdings~~compliance ~~Limited,~~with aexisting ~~BVI~~PRC ~~entity.~~laws ~~Pursuant~~and toregulations; (ii) the ~~Subscription~~Contractual ~~Agreement,~~Arrangements ~~the Investor~~are ~~purchased~~valid 14and binding,~~285,715~~ ~~shares~~and ofdo ~~the~~not ~~Company’s~~result ~~common~~in ~~stock,~~any ~~par~~violation ~~value~~of ~~$0.001~~PRC ~~per~~laws ~~share,~~or atregulations acurrently ~~purchase~~in ~~price~~effect; ofand ~~$0.035~~(iii) the business operations of ~~per~~the ~~share~~Company’s ~~for~~subsidiaries ~~aggregate~~and ~~gross~~VIE ~~proceeds~~are ofin ~~$500,000~~compliance with existing PRC laws and regulations in all material respects.

OnHowever, ~~December~~there ~~31,~~are ~~2018~~substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company ~~entered~~cannot be ~~into~~assured that PRC regulatory authorities will not ultimately take a ~~Share~~contrary ~~Exchange~~view ~~Agreement~~to (the ~~“Agreement”)~~foregoing ~~with~~opinion ~~Fresh~~of ~~Human~~its ~~Global Ltd~~management., aIf the ~~Cayman~~current ~~Islands~~corporate ~~corporation~~structure ~~(“FH”) and~~of ~~Hummingbird~~the ~~Holdings~~Company ~~Limited,~~or the ~~sole~~Contractual ~~shareholder~~Arrangements ofis FHfound ~~(“Hummingbird”)~~to ~~holding~~be ~~one~~in ~~share~~violation of ~~FH.~~any ~~Pursuant~~existing toor ~~the~~future ~~terms~~PRC oflaws ~~the~~and ~~Agreement~~regulations, ~~Hummingbird~~the ~~exchanged~~Company ~~its~~may ~~equity~~be ~~interest~~required into FHrestructure ~~for~~its ~~4,175,095 shares~~corporate ofstructure ~~restricted~~and ~~stock~~operations (in the ~~“Shares”)~~PRC to comply ofwith ~~the~~changing ~~Company~~and ~~(the~~new ~~“Exchange”).~~PRC Aslaws aand ~~result~~regulations. ofIn the ~~Exchange~~opinion of management, FHthe islikelihood ~~now~~of aloss ~~wholly-owned~~in ~~subsidiary~~respect of the ~~Registrant.~~Company’s FHcurrent ~~was~~corporate ~~valued~~structure ator ~~$4,175,095~~the Contractual Arrangements is remote based on current facts and circumstances.

~~The~~Note ~~transactions~~11 ~~contemplated by~~– the Agreement are related party transactions. Hummingbird is a shareholder of the Company, holding 51.1% of the Company’s outstanding common stock and through ownership of the Company’s Series A Preferred Stock has voting power of 30% of the combined voting power of our common stock and preferred stock, and as a result of the Exchange, Hummingbird now holds 55.5 % of the common stock of the Company.Lease

FHEffective isJanuary 1, 2019, the ~~sole~~Company ~~shareholder~~adopted ASU of2016-02, ~~Tuotuo~~“Leases” ~~River HK~~(Topic ~~Limited~~842), aand ~~Hong~~elected ~~Kong~~the ~~limited~~package ~~liability~~of ~~company,~~practical ~~which~~expedients ~~through~~that ~~various~~does ~~contractual~~not ~~arrangements~~require ~~between~~us ~~Tuotuo’s~~to ~~wholly-owned~~reassess: ~~subsidiary~~(1) ~~Beijing~~whether ~~Qianhaitong~~any ~~Technology~~expired ~~Development~~or ~~Co.~~existing contracts are, ~~Ltd.~~or contain, leases, (2) lease classification for any expired or existing leases and ~~Beijing~~(3) ~~Ouruixi~~initial ~~Medical~~direct ~~Technology~~costs ~~Co.,~~for ~~Ltd~~any expired or existing leases., aThe ~~PRC~~Company ~~entity~~adopted the practical expedient that allows lessees to treat the lease and ~~its~~non-lease ~~shareholders~~components isof ina lease as a single lease component. The impact of the ~~business~~adoption of ~~cell~~ASC ~~research~~842, ~~development~~as of January 1, ~~storage~~2019, ~~and~~was ~~cell~~approximately ~~culture~~$109,000 ~~service~~to inour ~~the~~assets, ~~People’s~~approximately ~~Republic~~$73,000 to our current liability and approximately $36,000 ofto ~~China~~our long-term liability.

Under the transition method selected by the Company, leases expiring at, or entered into after, January 1, 2019 were required to be recognized and measured. Prior period amounts have not been adjusted and continue to be reflected in accordance with the Company's historical accounting under ASC 840. The adoption of this standard resulted in the recording of operating lease assets and operating lease liabilities as of January 1, 2019, with no related impact on the Company's Consolidated Statement of Stockholders' Equity or Consolidated Statement of Income (Loss).

The Company also leases a space on a month-to-month basis which classify as operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Short-term leases for the three months ended March 31, 2019 amounted to $3,449.

GENERAL STEEL HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For the three months ended March 31, 2019, lease expenses under operating leases amounted to $15,374 under ASC 842 and recorded in the general and administrative expenses in the accompanying unaudited condensed statements of operations.

The two year and beyond maturity of the Company’s lease obligations is presented below:

Twelve months ended March 31,	Operating lease amount
2020	$	61,850
2021		30,925
Total lease payments		92,775
Less: Interest		(3,767	)
Present value of lease liabilities	$	89,008

Note 12 – Subsequent events

The Company has evaluated subsequent events through the date these consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements.

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

Forward-Looking Statements

The following discussion of the financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto. The following discussion contains forward-looking statements. General Steel Holdings, Inc. and its subsidiaries is referred to herein as “we,” “our,” “us” and “the Company.” The words or phrases “would be,” “will allow,” “expect to,” “intends to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” or similar expressions are intended to identify forward-looking statements. Such statements include those concerning our expected financial performance, our corporate strategy and operational plans. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties, including: (a) those risks and uncertainties related to general economic conditions in the People’s Republic of China, including regulatory factors that may affect such economic conditions; (b) whether we are able to manage our planned growth efficiently and operate profitable operations, including whether our management will be able to identify, hire, train, retain, motivate and manage required personnel or that management will be able to successfully manage and exploit existing and potential market opportunities; (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations; and (d) whether we are able to successfully fulfill our primary requirements for cash which are explained below under “Liquidity and Capital Resources.” Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Additional information regarding certain factors which could cause actual results to differ from such forward-looking statements include, but are not limited to, those described in Item 1A, “Risk Factors”, to our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2017~~2018 filed with the SEC on ~~December~~April 171, ~~2018~~2019.

OVERVIEW

We were incorporated on August 5, 2002, in the State of Nevada. We are headquartered in Beijing, China and through our 100% owned subsidiary, General Steel Investment Co., Ltd., we have been operating steel companies serving various industries in the People’s Republic of China (“PRC”). Our main operation through December 31, 2015 had been the manufacturing and sales of steel products such as steel rebar, hot-rolled carbon and silicon sheets and spiral-weld pipes while we commenced trading in 2016.

Our ~~steel~~main ~~business~~operation, ~~after~~since ~~December~~disposal ~~31, 2015 was primarily comprised~~ of ~~Tianjin~~its ~~Shuangsi~~significant ~~Trading~~steel ~~Co.,~~producing ~~Ltd.,~~operating ~~(“Tianjin~~assets ~~Shuangsi”),~~and a trading ~~company that~~business ~~mainly~~at ~~sources overseas iron ore for steel mills. We acquired a 100% equity interest in Tianjin Shuangsi on February 16, 2016. On~~ December 31, ~~2017,~~2018 ~~the~~has ~~Company~~been ~~sold Tianjin Shuangsi for RMB 20,000,000 (approximately $2.88 million) so~~ the ~~result~~32% ~~of operations~~equity ~~was~~holding ~~presented~~in asTianwu ~~operations~~General toSteel beMaterial ~~disposed~~Trading ~~in the consolidated financial statements~~Co., ~~See~~Ltd ~~Note 2~~(l“Tianwu”) ~~– Operations disposed~~.

~~Tianjin~~On ~~Shuangsi~~December is31, ~~presented~~2018, the asCompany ~~discontinued~~entered ~~operations~~into ina ~~our~~Share ~~Consolidated~~Exchange ~~Balance~~Agreement ~~Sheets~~(the “Agreement”) with Fresh Human Global Ltd., a Cayman Islands corporation (“Fresh Human”) and ~~Consolidated~~Hummingbird ~~Statements~~Holdings Limited, the sole shareholder of ~~Operations~~Fresh Human (“Hummingbird”) holding one share of Fresh Human. Pursuant to the terms of the Agreement, Hummingbird exchanged its equity interest in Fresh Human for 4,175,095 shares of restricted stock (the “Shares”) of the Company (the “Exchange”). As a result of the Exchange, Fresh Human is now a wholly-owned subsidiary of the Company. Fresh Human was valued at $4,175,095.

On December 31, 2018, the Company entered into a Share Exchange Agreement (the “Agreement”) with Fresh Human Global Ltd., a Cayman Islands corporation (“FH”) and Hummingbird Holdings Limited, the sole shareholder of FH (“Hummingbird”) holding one share of FH. Pursuant to the terms of the Agreement, Hummingbird exchanged its equity interest in FH for 4,175,095 shares of restricted stock (the “Shares”) of the Company (the “Exchange”). As a result of the Exchange, FH is now a wholly-owned subsidiary of the Company. FH was valued at $4,175,095.

The transactions contemplated by the Agreement are related party transactions. Hummingbird is a shareholder of the Company, holding 51.1% of the Company’s outstanding common stock and through ownership of the Company’s Series A Preferred Stock has voting power of 30% of the combined voting power of our common stock and preferred stock, and as a result of the Exchange, Hummingbird now holds 55.5 % of the common stock of the Company.

FHFresh Human is the sole ~~shareholder~~ shareholder of Tuotuo River HK Limited, a Hong Kong limited liability company, which through various contractual arrangements between Tuotuo’s wholly-owned subsidiary Beijing Qianhaitong Technology Development Co., Ltd. and Beijing Ouruixi Medical Technology Co., Ltd., a PRC entity and its shareholders is in the business of cell research, development, storage and cell culture service in the People’s Republic of China.

RESULTS OF OPERATIONS

The Company’s remaining business for the year ended March 31, 2019 consists mainly of ~~its~~our 32% equity holding in Tianwu Tongyong (Tianjin) International Trade Co., Ltd, ("TianwuTongyong").

Statements of Operations for the three months ended ~~September 30~~March 31, 2019 ~~2018~~ and ~~2017~~2018:

(In thousands except share data)	~~2018~~2019			~~2017~~2018			Change			Percentage Change
Selling, General and Administrative Expenses	$	(25281	)	$	(5227	)	$	27(254	)		~~(51~~940.97	)%
Loss from Operations		(25281	)		(5227	)	$	27(254	)		~~(51~~940.97	)%
Other Expense, net		(735	)		(730	)	$	(5	)		0.7	%
Other (Expense)Income		(485	)		3,467		$	(3,952	)		(114.0	)%
Income (Loss) Before Provision for Income Taxes and Noncontrolling Interest		(760	)		(782	)	$	22			(2.8	)%
(Loss)Income Before Provision for Income Taxes and Noncontrolling Interest		(766	)		3,440		$	(4,206	)		(122.3	)%
Provision for Income Taxes		-			-		$	-			-	%
Income (Loss) from Continuing Operations		(760	)		(782	)	$	22			(2.8	)%
Net (Loss)Income	$	(766	)	$	3,440		$	(4,206	)		(122.3	)%
Net Income (Loss) from Operations Disposed, Net of Income Taxes		-			(59	)	$	59			(100.0	)%
Foreign Currency Translation Adjustments		(24	)		(115	)	$	91			(79.1	)%
Net Income (Loss)		(760	)		(841	)	$	81			(9.6	)%
Comprehensive (Loss)Income		(790	)		3,325		$	(4,115	)		(123.8	)%
Foreign Currency Translation Adjustments		241			94		$	147			156.4	%
Weighted Average Number of Shares		46,0140			20,200			25,814			127.8	%
Comprehensive Income (Loss)		(519	)		(747	)	$	228			(30.4	)%
Net (Loss)Income	$	(0.02	)	$	0.16		$	(0.18	)		(112.5	)%
Weighted Average Number of Shares		23,223			20,200			3,023			15.0	%
Loss Per Share – Basic and Diluted
Continuing Operations	$	(0.03	)	$	(0.04	)	$	(0.01	)		(25.0	)%
Operations disposed		-			-			-			-	%
Net Loss per share	$	(0.03	)	$	(0.04	)	$	(0.01	)		(25.0	)%

Statements of Operations for the nine months ended September 30, 2018 and 2017:

(In thousands except share data)	2018			2017			Change			Percentage Change
Selling, General and Administrative Expenses		(78	)		(166	)		88			(53.0	)%
Loss from Operations		(78	)		(166	)		88			(53.0	)%
Other Income (Expense), net		2,173			(2,190	)		4,363			(199.2	)%
Income (Loss) Before Provision for Income Taxes and Noncontrolling Interest		2,095			(2,356	)		4,451			(188.9	)%
Provision for Income Taxes		-			-			-			-	%
Income (Loss) from Continuing Operations		2,095			(2,356	)		4,451			(188.9	)%
Net Income (Loss) from Operations Disposed, Net of Income Taxes		-			(6,484	)		6,484			(100.0	)%
Net Income (Loss)		2,095			(8,840	)		10,935			(123.7	)%
Foreign Currency Translation Adjustments		204			1,543			(1,339	)		(86.8	)%
Comprehensive Income (Loss)		2,299			(7,297	)		9,596			(131.5	)%
Weighted Average Number of Shares		21,208			20,134			1,074			5.3	%
Income (Loss) Per Share – Basic and Diluted
Continuing Operations	$	0.10		$	(0.12	)	$	0.22			(184.4	)%
Operations disposed		-			(0.32	)		0.32			(100.0	)%
Net Income (Loss) per share	$	0.10		$	(0.44	)	$	0.54			(122.7	)%

General and Administrative Expenses (“G&A”)

Three months ended ~~September~~March 3031, ~~2018 compared~~2019 compared with three months ended ~~September~~March 3031, ~~2017~~2018

(in thousands)

(in thousands)
	2019			2018			Change %

General and administrative expenses	$	(281	)	$	(27	)		940.7	%

		September 30, 2018				September 30, 2017				Change %
General and administrative expenses		$	(25	)		$	(52	)			(51.9	)%

G&A expenses increased by 940.7% to $(0.3) million for the three months ended March 31, 2019, compared to $(0.03) million for the same period in 2018. The increase was mainly due to the increase in professional expenses.

G&A expenses decrease by 51.9% to $(0.02) million for the three months ended September 30, 2018, compared to $(0.05) million for the same period in 2017. The decrease was mainly due to the disposed major operations and decrease in professional expenses.

Nine months ended September 30, 2018 compared with nine months ended September 30, 2017

(in thousands)

		September 30, 2018				September 30, 2017				Change %
General and administrative expenses		$	(78	)		$	(166	)			(53.0	)%

G&A expenses decrease by 53.0 % to $(0.08) million for the nine months ended September 30, 2018, compared to $(0.2) million for the same period in 2017. The decrease was mainly due to the disposed major operations and decrease in professional expenses.

Loss from Operations

Three months ended ~~September~~March 3031, ~~2018 compared~~2019 compared with three months ended ~~September~~March 3031, ~~2017~~ 2018

(in thousands)

(in thousands)
	2019			2018			Change %

Loss from operations	$	(281	)	$	(27	)		940.7	%

		2018				2017				Change %
Loss from operations		$	(25	)		$	(52	)			(51.9	)%

Loss from operations for the three months ended March 31, 2019 was $(0. 3) million as compared to a loss of $(0.03) million for the same period in 2018. The increase was mainly due to increase in professional expenses.

Loss from operations for the three months ended September 30, 2018 was $(0.03) million as compared to a loss of $(0.05) million for the same period in 2017. The decrease was mainly due to the reasons above.21

~~Nine~~Other ~~months ended September 30, 2018 compared with nine months ended September 30, 2017~~ Income(Expense)

~~(in thousands)~~Three months ended March 31, 2019 compared with three months ended March 31, 2018

	2018			2017			Change %
(in thousands)
Loss from operations	$	(78	)	$	(166	)		(53.0	)%
	2019			2018			Change %
(Loss) Income from equity investment		(500	)		3,467			(114.4	)%
Finance/interest expense		15			-			100.0	%
Total other (expense)income, net	$	(485	)	$	3,467			(114.0	)%

~~Loss~~Total ~~from~~other ~~operations~~expenses for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 was $(0.085) million, as compared to ~~a loss of~~ $(03.2)5 million other income for the same period in ~~2017~~2018. The decrease in other income was mainly due to ~~the~~a ~~reasons~~loss ~~above~~from equity investment.

Net (Loss) Income

Three months ended March 31, 2019 compared with three months ended March 31, 2018

(in thousands)
	2019			2018		Change %

Net (loss)income	$	(766	)	$	3,440		(122.3	)%

Net loss for the three months ended March 31, 2019 was $(0.8) million as compared to an income of approximately $3.4 million for the same period in 2018. The decrease in net income from operations was predominantly due to the reasons stated above.

Other Income (Expense)

Three months ended September 30, 2018 compared with three months ended September 30, 2017

(in thousands)

	2018			2017			Change %
Loss from equity investment	$	(735	)	$	(729	)		0.8	%
Finance/interest expense		-			(1	)		(100.0	)%
Total other (expense) income, net	$	(735	)	$	(730	)		0.7	%

Total other income (expense), net, for the three months ended September 30, 2018 was $(0.7) million, a 0.7% increase compared to $(0.7) million for the same period in 2017. The increase in other income was mainly due to a gain from equity investment.

Nine months ended September 30, 2018 compared with nine months ended September 30, 2017

(in thousands)

	2018		2017			Change %
Income(Loss) from equity investment	$	2,173	$	(2,189	)		(199.3	)%
Finance/interest expense		-		(1	)		(100.0	)%
Total other (expense) income, net	$	2,173	$	(2,190	)		(199.2	)%

Total other (expense) income, net, for the nine months ended September 30, 2018 was $2.2 million, compared to $(2.2) million other income for the same period in 2017. The increase in other income was mainly due to a gain from equity investment.

Net Income (Loss) from Continuing Operations

Three months ended September 30, 2018 compared with three months ended September 30, 2017

(in thousands)

		2018				2017				Change %
Net loss from continuing operations		$	(760	)		$	(782	)			(2.8	)%

Net loss from continuing operations for the three months ended September 30, 2018 was $(0.8) million as compared to an income of approximately $(0.8) million for the same period in 2017. The increase in net income from operations was predominantly due to the reasons stated above.

Nine months ended September 30, 2018 compared with nine months ended September 30, 2017

(in thousands)

		2018				2017				Change %
Net income (loss) from continuing operations		$	2,095			$	(2,356	)			(188.9	)%

Net income (loss) from continuing operations for the nine months ended September 30, 2018 was $2.1 million as compared to an income of approximately $(2.4) million for the same period in 2017. The increase in net income from operations was predominantly due to the reasons stated above.

Net income from Operations Disposed

Three months ended September 30, 2018 compared with three months ended September 30, 2017

(in thousands)

		2018				2017				Change %
Net loss from operations disposed, net of applicable income taxes		$	-			$	(59	)			(100.0	)%

Net loss from operations disposed for the three months ended September 30, 2017 was approximately $0.06 million as a result of disposing its operations of Tianjin Shuangsi

Nine months ended September 30, 2018 compared with nine months ended September 30, 2017

(in thousands)

		2018				2017				Change %
Net loss from operations disposed, net of applicable income taxes		$	-			$	(6,484	)			(100.0	)%

Net loss from operations disposed for the three months ended September 30, 2017 was approximately $6.5 million as a result of disposing its operations of Tianjin Shuangsi

LIQUIDITY AND CAPITAL RESOURCES

As of ~~September~~March 3031, ~~2018~~2019, ~~our~~ our current liabilities exceeded the current assets by approximately $95.45 million. Given our expected expenditures in the foreseeable future together with our cash flow from the ~~trading~~financing ~~operations~~activities, we have comprehensively considered our available sources of funds as follows:

Financial support and credit guarantee from related parties; and

Additional equity or debt financing

Based on the above considerations, our ~~the~~Board ~~management~~of Directors is of the opinion that we are able to obtain sufficient funds to meet our working capital requirements ~~and~~ and debt obligations as they become due over the twelve months from the balance sheet date. ~~In addition, we have completed the divestiture of our steel manufacturing business as planned on terms favorable to the Company by reducing our net deficiency.~~

Substantially all our operations are conducted in China and all of our revenues are denominated in Renminbi (RMB). RMB is subject to the exchange control regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC exchange control regulations that restrict its ability to convert RMB into U.S. Dollars.

Under applicable PRC regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign-invested enterprise in China is required to set aside at least 10.0% of its after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reaches 50.0% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation. Under PRC law, RMB is currently convertible into U.S. Dollars under a company’s “current account,” which includes dividends, trade and service-related foreign exchange transactions, without prior approval of the State Administration of Foreign Exchange (SAFE), but is not from a company’s “capital account,” which includes foreign direct investments and loans, without the prior approval of the SAFE.

~~(c) Going concern~~23

These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to repay its debt obligations, to obtain necessary financing resources to continue operations, along with the market and general economic condition. Management anticipates that the Company will be dependent, for the near future, on debt financing in the form of short-term loans, loans from related parties, to finance the working capital requirements of the Company. However, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

The Company had working capital deficit of $9.4 million at September 30, 2018 and working capital deficit $10.6 million at December 31, 2017. In addition, the Company had an accumulated deficit of $1.3 billion at September 30, 2018 and incurred negative cash flows from operating activities totaling $(1.7) million as of September 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to obtain financial support and credit guarantee from the Company’s shareholders or other available resources from the PRC banks and other financial institutions given the Company’s credit history. The Company’s consolidated financial statements do not include any adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Cash-flow

Operating Activities

Net cash used in operating activities ~~was approximately $1.7 million~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 ~~compared~~and ~~to net~~2018 ~~cash~~was ~~used in operating activities of~~ $220.43 million ~~for~~and ~~the~~$1.6 ~~nine months ended September 30~~million, ~~2017~~respectively. This change was mainly due to the combination of the following factors:

The net ~~income(~~loss) ~~from continuing operations~~ of $20.18 million, mainly from non-cash loss from equity investment for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~ 2019 compared to net ~~loss~~income of $(23.4) million in the same period in ~~2017~~2018 which were mainly due to ~~gain~~income from ~~disposal~~equity ~~of Tianjin Shuangsi~~investment.

The cash outflow was mainly due to the change in other payables and accrued liabilities.

Investing activities

WeDuring the three months ended March 31, 2019, we purchased immaterial amount of equipment while we did not use any cash for investing activities for the three months ended ~~September~~March 3031, 2018 ~~or the nine months ended September 30, 2017~~.

Financing activities

Net cash provided by financing activities was $10.72 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 compared to $221.46 million provided by financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2018. The decrease of cash inflow from financing activities was because we had less borrowings from our related parties.

Restrictions on our ability to distribute dividends

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

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

We have never declared or paid any cash dividends to our shareholders. We do not plan to pay any dividends out of our retained earnings for the ~~nine months~~three months ended ~~September~~March 3031, ~~2018~~2019. With respect to retained earnings accrued after such date, our Board of Directors may declare dividends after taking into account our operations, earnings, financial condition, cash requirements and availability and other factors as it may deem relevant at such time. Any declaration and payment, as well as the amount, of dividends will be subject to our By-Laws, charter and applicable Chinese and U.S. state and federal laws and regulations, including the approval from the shareholders of each subsidiary which intends to declare such dividends, if applicable.

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

Impact of Inflation

We are subject to commodity price risks arising from price fluctuations in the market prices of the steel-related products. We have generally been able to pass on cost increases through price adjustments. However, the ability to pass on these increases depends on market conditions influenced by the overall economic conditions in China. We do 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 were no off-balance sheet arrangements for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 that have or that in the opinion of management are likely to to have, a current or future material effect on our financial condition or results of operations.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with US GAAP. These accounting principles require us to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable.

There have been no other material changes ~~for~~during the ~~three~~quarter ~~and nine months~~ ended ~~September~~March ~~30,~~31 ~~2018~~2019 in our significant accounting policies from those previously disclosed in the Company’s annual report for the fiscal year ended December 31, ~~2017~~2018. The discussion of our critical accounting policies contained in Note 2 to our unaudited condensed consolidated financial statements in this Report, “Summary of our Significant Accounting Policies”, is incorporated herein by reference.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Our Company, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the design and operation of our disclosure controls and procedures, as defined under Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of ~~September~~March 3031, ~~2018~~2019. Our Company’s disclosure controls and procedures are designed: (i) to ensure that ~~information~~ information required to be disclosed by us in the reports that we file or submits under the Exchange Act is recorded, processed, ~~summarized~~ summarized and reported within the time periods specified in the SEC’s rules and forms; and (ii) to ensure that information ~~required~~ required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, ~~including~~ including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluations, our Chief Executive Officer and Chief Financial Officer have concluded that our Company’s disclosure controls and procedures were not effective as of ~~September~~March 3031, ~~2018~~2019 due to the material weaknesses in our internal control over financial reporting previously identified in our December 31, ~~2017~~2018 Form 10K filing and described below:

Ineffective review process in our accounting department.

Lack of a qualified full-time accountant who possesses U.S. GAAP knowledge to oversee the recording of our daily transaction.

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Based on the above ~~material~~ material weakness, our Chief Executive Officer and Chief Financial Officer concluded that our Company’s disclosure controls and procedures were not effective as of ~~September~~March 3031, ~~2018~~2019.

Remediation

Our management has dedicated significant resources to correcting the control deficiencies and to ensuring that we take proper steps to improve our internal control over financial reporting after the completion of divesture of our steel business and current business model from our trading business.

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

· Implement an internal review process over financial reporting to review all recent accounting pronouncements and to verify that the accounting treatment identified in such report have been fully implemented ~~and confirmed by our internal control department~~. In the future, we will continue to improve our ongoing review and supervision of our internal control over financial reporting;

Revise our internal control over financial reporting procedure on potential acquisition and unusual transactions.

Management believes the foregoing efforts will effectively remediate the material weaknesses described above.

Despite the existence of the material weaknesses discussed above, our management, including our Chief Executive Officer and Chief Financial Officer, have concluded that the consolidated financials included in this Quarterly Report on Form 10-Q present, in all material aspects, our financial position, results of operations, comprehensive loss and cash flows for the periods presented, in conformity with U.S. GAAP.

Changes in Internal Controls over Financial Reporting

Except as otherwise noted above, there has not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

ToNot our knowledge and to the extent additional factual information disclosed in this Quarterly Report on Form 10-Q relates to such risk factors, there have been no other changes in the risk factors described in “ITEM 1A. RISK FACTORS” in our Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on December 17, 2018.Applicable

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

28ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

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

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

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

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

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

*Filed herewith.

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SIGNATURES

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

	General Steel Holdings, Inc.
Date: February 8, 2019	By:	/s/ Zuosheng Yu
Date: May 15, 2019	By: /s/ Zuosheng Yu
	Zuosheng Yu
	Chief Executive Officer
Date: February 8, 2019	By:	/s/ John Chen
Date: May 15, 2019	By: /s/ John Chen
	John Chen
	Director and Chief Financial Officer

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