UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

|X|   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE
      ACT OF 1934 For the fiscal year ended  December 31, 2004
                                       OR
| |   TRANSITION REPORT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934 For the transition period from __________ to __________

Commission file number 1-2394

                                 WHX CORPORATION
                                 ---------------
             (Exact Name of Registrant as Specified in its Charter)

              DELAWARE                                       13-3768097
              --------                                       ----------
   (State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization)                        Identification No.)

      555 Theodore Fremd Avenue                                 10580
            Rye, New York                                       -----
            -------------                                    (Zip code)
(Address of principal executive offices)

Registrant's telephone number, including area code: 914-925-4413

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

         Title of each class                            Name of each exchange on
         -------------------                               which registered
    Common Stock, $.01 par value                           ----------------

      Securities registered pursuant to Section 12 (g) of the Act: None

      Indicate by check mark if the Registrant is a well-known  seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes __  No |X|

      Indicate by check mark if the  Registrant  is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes __  No |X|

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

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

      Indicate  by check mark  whether  the  Registrant  is a large  accelerated
filer,  an accelerated  filer,  or a  non-accelerated  filer.  See definition of
"accelerated  filer and large  accelerated  filer" in Rule 12b-2 of the Exchange
Act.  (Check  one):   Large   accelerated   filer____   Accelerated   filer_____
Non-accelerated filer |X|

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

      The aggregate market value of the voting and non-voting common equity held
by  non-affiliates  of registrant as of December 31, 2006 totaled  approximately
$42.0 million based on the then-closing stock price.

      Indicate by check mark whether the  registrant has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes __  No |X|

      On December 31, 2006, there were approximately 10,000,485 shares of common
stock, par value $0.01 per share.


                                       1


                                TABLE OF CONTENTS

  Item                                                                      Page

PART I
------

Item 1.    Business                                                            3
Item 1A.   Risk Factors                                                        7
Item 1B.   Unresolved Staff Comments                                          10
Item 2.    Properties                                                         11
Item 3.    Legal Proceedings                                                  11
Item 4.    Submission of Matters to a Vote of Security Holders                14

PART II
-------

Item 5.    Market for Registrant's Common Equity and Related Matters          14
Item 6.    Selected Financial Data                                            16
Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                              20
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk         41
Item 8.    Financial Statements and Supplementary Data                        43
Item 9.    Changes in and Disagreements with Accountants on Accounting and
           Financial Disclosure                                               98
Item 9A.   Controls and Procedures                                            98

PART III
--------

Item 10.   Directors and Executive Officers of the Company                   102
Item 11.   Executive Compensation                                            106
Item 12.   Security Ownership of Certain Beneficial Owners and Management    110
Item 13.   Certain Relationships and Related Transactions                    112
Item 14.   Principal Accountant Fees and Services                            113

PART IV
-------

Item 15.   Exhibits and Financial Statement Schedules                        114


                                       2


ITEM 1. BUSINESS

LIQUIDITY AND RECENT DEVELOPMENTS

      On December 27, 2006, WHX Corporation filed its Annual Report on Form 10-K
for the year ended  December 31, 2005 (the "2005  10-K").  Prior to this filing,
the Company had not filed any financial  statements with the Securities Exchange
Commission  ("SEC")  since it filed  its  Quarterly  Report on Form 10-Q for the
quarter ended  September 30, 2004.  The 2005 10-K includes a restatement  of the
financial  statements for the year ended  December 31, 2003 and prior years,  as
well as  restated  financial  information  for each of the  quarters in the year
ended December 31, 2004.

      On March 7, 2005, the parent company ("WHX"),  filed a voluntary  petition
to  reorganize  under  Chapter  11 of the United  States  Bankruptcy  Code.  WHX
continued  to operate  its  businesses  and own and manage its  properties  as a
debtor-in-possession  under the  jurisdiction  of the bankruptcy  court until it
emerged from  protection  under  Chapter 11 of the  Bankruptcy  Code on July 29,
2005.

      Throughout  2005 and 2006,  the  Company has been  experiencing  liquidity
issues,  which are more fully  described  in Notes 1a and 2 to the  consolidated
financial  statements  included  in the Annual  Report on Form 10-K for the year
ended  Dec ember 31,  2004 (the  "2004  10-K"),  included  herein,  which  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going concern and do not include any  adjustments  to reflect
the possible future effects on the  recoverability  and classification of assets
or the  amounts  and  classification  of  liabilities  that may result  from the
outcome of this  uncertainty.  The Company  incurred  consolidated net losses of
$34.7  million,  $140.4  million and $159.9 million for the years ended December
31,  2005,  2004  and  2003,  respectively  and had  negative  cash  flows  from
operations  of $5.0 million and $39.6  million for the years ended  December 31,
2005  and 2004  respectively.  As of  December  31,  2005,  the  Company  had an
accumulated  deficit of $394.0 million and a working  capital  deficit of $122.1
million.  Additionally,  the Company has not been in compliance  with certain of
its bank covenants.

      WHX is a  holding  company  and  has as  its  sole  source  of  cash  flow
distributions from its operating  subsidiary,  Handy & Harman ("H&H"),  or other
discrete  transactions.  H&H's bank credit facilities and term loans effectively
do  not  permit  it to  transfer  any  cash  or  other  assets  to WHX  and  are
collateralized  by  substantially  all of H&H's  assets.  WHX has no bank credit
facility of its own. WHX's ongoing operating cash flow  requirements  consist of
funding  the minimum  requirements  for the WHX  Pension  Plan and paying  other
administrative costs.

      Since  emerging from  bankruptcy,  due to covenant  restrictions  in H&H's
credit  facilities,  there  have  been no  dividends  from H&H to WHX and  WHX's
sources  of cash flow have  consisted  of:

      o   the  issuance of $5.1 million in  preferred  stock by a newly  created
          subsidiary,  which  was  invested  in the  equity  of a  small  public
          company; and

      o   partial  payment  of the  H&H  subordinated  debt  to WHX of  $9.0
          million, which required the approval of the banks participating in the
          H&H  bank  facility.  Subsequent  to this  transaction  in  2006,  the
          remaining  intercompany loan balance of the subordinated debt of $44.2
          million was converted to equity.

Since the filing of its 2005 10-K, the following events have occurred:

PENSION PLAN

      On December 20, 2006, the Internal  Revenue  Service granted a conditional
waiver  (the "IRS  waiver")  of the  minimum  funding  requirements  for the WHX
Pension  Plan for the 2005 plan year in  accordance  with section 412 (d) of the
Internal  Revenue  Code and section 303 of the  Employee  Retirement  Income and
Security Act of 1974, as amended ("ERISA"),  and on December 28, 2006, WHX, H&H,
and the  Pension  Benefit  Guaranty  Corporation  (the  "PBGC")  entered  into a
settlement  agreement (the "PBGC  Settlement  Agreement") in connection with the
IRS  waiver  and  certain  other  matters.  The IRS waiver is subject to certain
conditions,  including a requirement  that the Company meet the minimum  funding
requirements  for the WHX Pension  Plan for the plan years  ending  December 31,
2006 through 2010, without applying for a waiver of such requirements.  The PBGC
Settlement  Agreement  and related  agreements  include the  following:  (i) the
amortization of the waived amount of $15.5 million (the "Waiver  Amount") over a
period of five years, (ii) the PBGC's consent to increase borrowings under H&H's
senior  credit  facility to $125  million in  connection  with the closing of an
acquisition  described below, (iii) the resolution of any potential issues under
Section  4062(e) of ERISA,  in  connection  with the  cessation of operations at
certain  facilities  owned  by WHX,  H&H or  their  subsidiaries,  and  (iv) the
granting  to the  PBGC  of  subordinate  liens  on the  assets  of H&H  and  its
subsidiaries,  and specified assets of WHX, to collateralize WHX's obligation to
pay the Waiver  Amount to the WHX Pension Plan and to make  certain  payments to
the WHX Pension  Plan in the event of its  termination.  As a result of the PBGC
Settlement  Agreement and the IRS waiver, based on estimates from WHX's actuary,


                                       3

the Company expects its minimum  funding  requirement for the specific plan year
and the  amortization of the 2005  requirement to be $13.1 million (paid in full
in 2006), $6.7 million,  $7.9 million,  and $18.3 million (which amounts reflect
the recent passage of the Pension  Protection Act of 2006) in 2006,  2007,  2008
and through 2011, respectively

AMENDMENTS TO CREDIT AGREEMENTS

      On December 27, 2006,  Wachovia Bank,  National  Association  ("Wachovia")
provided  H&H with an  additional  $7.0  million  loan.  This was pursuant to an
amendment signed on October 30, 2006 which made the additional funds conditional
upon the filing of the Company's 2005 Annual Report on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia and their Loan and Security Agreement
with Steel  Partners  II, L.P.  ("Steel")  (the  beneficial  holder of 5,029,793
shares of the Company's common stock,  representing  approximately  50.3% of the
outstanding  shares) to  provide,  in part,  for:  (i) the  consummation  of the
transactions  contemplated  by the PBGC  Settlement  Agreement and the waiver of
possible  events of  default  that may have  occurred  relating  to the  matters
covered  by the PBGC  Settlement  Agreement;  and (ii) a $42  million  term loan
funded by Ableco  Finance  LLC. A portion of the loan ($26  million) was used to
fund an acquisition  by H&H, $3.2 million was paid as a contribution  to the WHX
Pension Plan, and approximately $12 million of the loan was used to reduce H&H's
outstanding balance under its revolving credit facility.

ACQUISITION

      Pursuant to an Asset Purchase  Agreement (the "Asset Purchase  Agreement")
dated as of December 28, 2006, a subsidiary of H&H acquired a mechanical roofing
fastener  business  from  Illinois  Tool  Works  Inc.  The  purchase  price  was
approximately $26 million,  including a working capital  adjustment.  The assets
acquired included, among other things, machinery, equipment,  inventories of raw
materials,  work-in-process and finished products,  certain contracts,  accounts
receivable  and  intellectual  property  rights,  all as related to the acquired
business and as provided in the Asset Purchase Agreement. This acquired business
develops and manufactures fastening systems for the commercial roofing industry.
WHX believes this acquisition  solidifies its position as a leading manufacturer
and supplier of mechanical fasteners,  accessories and components,  and building
products for the commercial and  residential  construction  industry.  Funds for
payment  of  the  purchase   price  by  H&H  were   obtained   pursuant  to  the
aforementioned term loan.

LIQUIDITY

      As of December 31, 2006,  WHX had cash of  approximately  $0.8 million and
current  liabilities of  approximately  $7.5 million,  including $5.1 million of
mandatorily  redeemable  preferred  shares  payable  to a related  party.  H&H's
availability  under its  revolving  credit  facility and other  facilities as of
December 31, 2006 was $19.1  million.  All such  facilities,  including the term
loans,  expire in March 2007. The Company has significant cash flow obligations,
including  without  limitation  the  amounts  due for the WHX  Pension  Plan (as
amended  by  the  PBGC  Settlement  Agreement  described  above).  Based  on the
Company's forecasted borrowings, the funds available under its credit facilities
may not be sufficient to fund debt service costs,  working  capital  demands and
environmental  remediation costs.  Additionally,  there can be no assurance that
the  Company  will be able  to  obtain  replacement  financing  at  commercially
reasonable  terms upon the  expiration  of its credit  facilities in March 2007.
Consequently,  there  continues  to be  substantial  doubt  about the  Company's
ability to continue as a going concern.

      The  following  2004 Form 10-K for the year ended  December  31, 2004 (the
"2004 10-K") has been prepared to comply with the Company's filing  requirements
under  SEC  rules  and  regulations  as  part  of the  Company's  efforts  to be
considered  a current  filer  under  such rules and  regulations.  The 2004 10-K
should be read in conjunction  with the  previously  filed 2005 10-K, as well as
the updated information included above.

OVERVIEW

WHX CORPORATION

      WHX is a holding  company that  invests in and manages a diverse  group of
businesses.  WHX's primary business is H&H, a diversified  manufacturing company
whose strategic business units encompass three segments:  precious metals,  wire
and tubing, and engineered materials. H&H is essentially a holding company which
owns distinct operating  companies within its corporate  structure.  WHX's other
business  through August 1, 2003, (see below)  consisted of  Wheeling-Pittsburgh
Corporation  ("WPC") and six of its subsidiaries  including  Wheeling-Pittsburgh
Steel Corporation ("WPSC"), a vertically integrated  manufacturer of value-added
and  flat  rolled  steel  products  (see  Note 4 to the  Consolidated  Financial
Statements).  WPSC,  together  with  WPC and its  other  subsidiaries  shall  be
referred  to  herein  as  the  "WPC  Group."  WHX,  together  with  all  of  its
subsidiaries  other  than the WPC  Group,  shall be  referred  to  herein as the
"Company".


                                       4


      On November  16,  2000,  the WPC Group filed  petitions  for relief  under
Chapter 11 of the Bankruptcy Code in the United States  Bankruptcy Court for the
Northern  District of Ohio.  Subsequent to the  commencement  of the  Bankruptcy
Filing,  the WPC Group sought and obtained  several  orders from the  Bankruptcy
Court  that  enabled  the  WPC  Group  to  continue   business   operations   as
debtors-in-possession.  The WPC Plan of Reorganization ("WPC POR") was confirmed
by the Bankruptcy  Court on June 18, 2003 and was consummated on August 1, 2003.
Pursuant to the terms of the WPC POR,  among other things,  the WPC Group ceased
to be a subsidiary of WHX effective  August 1, 2003,  and from that date forward
has been an independent company.

      As a result of the WPC Group Bankruptcy Filing the Company, as of November
16, 2000, no longer  consolidates  WPC with WHX.  Accordingly,  the accompanying
consolidated  statements of operations and the  consolidated  statements of cash
flows  exclude the operating  results of WPC for the periods after  November 16,
2000.

      For additional  information  concerning these  developments,  see Item 3 -
Legal  Proceedings,  and  Item  7 -  Management's  Discussion  and  Analysis  of
Financial  Condition  and Results of Operations  and Note 4 to the  Consolidated
Financial Statements.

                                   THE COMPANY

      WHX  acquired  H&H in April  1998.  H&H's  business  segments  are the (a)
manufacturing and selling of wire and tubing products  fabricated from stainless
steel,  carbon steel and  specialty  alloys;  (b)  manufacturing  and selling of
precious  metal  brazing  products and  precision  electroplated  materials  and
stamped parts; and (c) manufacturing  and selling of other engineered  materials
supplied  to  the  roofing,  construction,  natural  gas,  electric,  and  water
industries.  H&H's  products  are sold to  industrial  users in a wide  range of
applications which include the construction,  electric,  electronic,  automotive
original   equipment,   computer   equipment,   oil,   refrigeration,   utility,
telecommunications, medical and energy related industries.

BUSINESS STRATEGY

      The Company's business strategy is to enhance the growth and profitability
of H&H and to build upon the  strengths of certain of H&H's  businesses  through
internal growth and strategic acquisitions.

      H&H expects to continue to focus on high margin  products  and  innovative
technology,  while  limiting  its  exposure  to  low  margin,  capital-intensive
businesses.  As part of that  strategy,  in 2006 H&H  announced  its decision to
close the  Norristown  Pa.  facility  of Handy & Harman Tube Co. and in 2005 H&H
announced its decision to permanently close its wire and cable operations due to
continuing operating losses, deteriorating margins and rising raw material costs
experienced  by these  businesses.  In 2002,  H&H exited certain of its precious
metal activities that had been part of its historical  business base. In the mid
1990s,  H&H exited its  commodity  automotive  OEM and precious  metal  refining
businesses, and with its strong brand name and customer recognition, expanded in
specialty  metals and materials  product  markets.  H&H focuses on its materials
engineering expertise to expand production of higher value-added  products.  H&H
from time to time continues to evaluate the sale of non-core  assets and certain
underperforming businesses, as well as strategic acquisitions. WHX has provided,
and may  provide  from time to time in the  future,  information  to  interested
parties  regarding  portions  of its  non-core  assets and  businesses  for such
purposes.

PRODUCTS AND PRODUCT MIX

      WIRE AND TUBING SEGMENT

      H&H  manufactures  a wide  variety  of  steel  wire and  tubing  products.
Small-diameter  precision-drawn  tubing fabricated from stainless steel,  nickel
alloy and  carbon  and  alloy  steel is  produced  in many  sizes and  shapes to
critical specifications for use in the semiconductor,  aircraft,  petrochemical,
automotive,    appliance,    refrigeration   and   instrumentation   industries.
Additionally,  tubular product is manufactured  for the medical industry for use
as implants,  surgical  devices and  instrumentation.  Nickel alloy,  galvanized
carbon steel and stainless  steel wire  products  redrawn from rods are produced
for such diverse  applications  as bearings,  cablelashing,  hose  reinforcement
nails,  knitted mesh, wire rope,  cloth, air bags and antennas in the aerospace,
automotive, chemical,  communications,  marine, medical, petrochemical,  welding
and other industries.

      PRECIOUS METALS SEGMENT

      H&H's  precious  metals  activities  include the  fabrication  of precious
metals and their  alloys into  brazing  alloys and the  utilization  of precious
metals in precision  electroplating.  H&H's profits from precious metal products
are derived from the "value added" of processing  and  fabricating  and not from
the purchase and resale of precious metals.  In accordance with general practice
in the  industry,  prices to customers  are a composite of two factors:  (1) the
value of the  precious  metal  content of the product  and (2) the  "fabrication


                                       5


value", which includes the cost of base metals, labor,  overhead,  financing and
profit.  Fabricated  precious metal brazing  alloys are used in many  industries
including   automotive,   air   conditioning,   general   industrial  and  other
metal-joining industries.

      H&H produces  precision-stamped,  electroplated  and molded  materials and
stamped  parts (often using gold,  silver,  palladium and various base metals on
such   materials   and   stamped   parts)   for   use  in   the   semiconductor,
telecommunications, automotive, electronics and computer industries.

      ENGINEERED MATERIALS SEGMENT

      H&H manufactures fasteners,  fastening systems, plastic and steel fittings
and connectors,  non-ferrous  thermite welding powders,  and electro  galvanized
products for the roofing, construction, appliance, do-it-yourself,  natural gas,
electric and water distribution industries.

CUSTOMERS

      H&H is diversified across both industrial markets and customers. H&H sells
to the electronics, telecommunications, semiconductor, computer, aerospace, home
appliance  OEM,   automotive,   construction,   utility,   medical  and  general
manufacturing  industries. In 2004, one customer within our engineered materials
segment accounted for 7.1% of H&H's sales . In 2003, no customers  accounted for
more than 5% of H&H's sales.

RAW MATERIALS

      The raw materials  used by H&H in its precious  metal  operations  consist
principally of silver,  gold, copper,  zinc, nickel, tin, and the platinum group
metals in various forms. H&H purchases its precious metals at free market prices
from  primary  producers or bullion  dealers.  The prices of silver,  gold,  and
palladium  are  subject to  fluctuations  and are  expected  to  continue  to be
affected by world market  conditions.  Nonetheless,  H&H has not experienced any
problem in obtaining  the  necessary  quantities  of raw  materials  and, in the
normal  course of business,  receives  precious  metals from  suppliers.  To the
extent that supplier or customer metals are used by H&H, the amount of inventory
which H&H must own is reduced.  All  precious  metal raw  materials  are readily
available from several sources. Precious metals are purchased at the same prices
and quantities as selling commitments to customers.

      The raw materials used by H&H in its non-precious metal operations consist
principally of stainless, galvanized, and carbon steel, nickel alloys, a variety
of high-performance alloys, and various plastic compositions.  H&H purchases all
such raw materials at open market  prices from  domestic and foreign  suppliers.
H&H has not experienced any problem in obtaining the necessary quantities of raw
materials. Prices and availability, particularly of raw materials purchased from
foreign  suppliers,  are  affected by world  market  conditions  and  government
policies.

BACKLOG

      H&H has no material backlog.

CAPITAL INVESTMENTS

      The Company believes that H&H's business segments must continuously strive
to improve productivity and product quality, and control manufacturing costs, in
order to remain competitive.  Accordingly, H&H's business segments are committed
to making necessary capital  investments with the objectives of reducing overall
manufacturing  costs,  improving the quality of products produced and broadening
the array of products  offered to H&H's several  markets  served.  H&H's capital
expenditures for 2004 for continuing  operations were $9.8 million. In 2005, H&H
spent approximately $20 million on capital expenditures,  of which approximately
$10.0 million relate to a plant expansion at H&H's fastener  facility in Agawam,
MA, and in 2006, H&H established a carbon tubing facility for the  refrigeration
and automotive markets in Mexico.  Capital expenditures are needed to expand and
maintain  productive   capacity,   improve  productivity  and  upgrade  selected
facilities  to  meet  competitive  requirements  and  maintain  compliance  with
environmental  laws  and  regulations.   H&H  anticipates  funding  its  capital
expenditures  from cash on hand;  funds  generated by  operations,  and borrowed
funds. With the exception of 2005 due to a plant expansion,  H&H anticipates its
capital expenditures will approximate  depreciation,  on average,  over the next
few years,.  Other than at H&H,  the Company did not make any  material  capital
expenditures in 2004, 2005 or 2006.


                                       6


ENERGY REQUIREMENTS

      H&H requires significant amounts of electricity and natural gas to operate
its facilities and is subject to price changes in these commodities.  A shortage
of electricity or natural gas, or a government  allocation of supplies resulting
in a general reduction in supplies, could increase costs of production and could
cause some curtailment of production.

EMPLOYMENT

      Total active  employment  of the Company at December  31, 2004  aggregated
1,788  employees.  Of these  employees,  539 were salaried  employees,  546 were
covered by collective  bargaining  agreements and 703 were  non-union  operating
employees.

COMPETITION

      There are many  companies,  both domestic and foreign,  which  manufacture
steel wire and tubing products,  and other specially  engineered products of the
type H&H  manufactures.  There are also a number of  competitors  in each of the
classes of precious metal products we sell. Some of these competitors are larger
than we are and  have  financial  resources  greater  than we do.  Some of these
competitors enjoy certain other competitive  advantages,  including greater name
recognition;  greater  financial,  technical,  marketing and other resources;  a
larger  installed base of customers;  and  well-established  relationships  with
current and potential  customers.  Competition is based on quality,  technology,
service,  and price and in some industries,  new product  introduction,  each of
which is of equal importance.

ITEM 1A.  RISK FACTORS

      This Report includes  "forward-looking  statements"  within the meaning of
Section 27A of the  Securities Act of 1933, as amended (the  "Securities  Act"),
and Section 21E of the Exchange Act, including,  in particular,  forward-looking
statements under the headings "Item 7.  Management's  Discussion and Analysis of
Financial Condition and Results of Operations" and "Item 8. Financial Statements
and  Supplementary  Data." These statements appear in a number of places in this
Report  and  include  statements  regarding  WHX's  intent,  belief  or  current
expectations  with respect to (i) its financing plans, (ii) trends affecting its
financial  condition  or  results  of  operations,   and  (iii)  the  impact  of
competition.  The words "expect,"  "anticipate,"  "intend,"  "plan,"  "believe,"
"seek,"  "estimate,"  and similar  expressions  are  intended  to identify  such
forward-looking   statements;   however,   this  Report  also   contains   other
forward-looking statements in addition to historical information.

      Any  forward-looking  statements  made by WHX are not guarantees of future
performance  and there are various  important  factors  that could cause  actual
results  to  differ  materially  from  those  indicated  in the  forward-looking
statements. This means that indicated results may not be realized.

      Factors  that  could  cause the actual  results  of the  Company in future
periods to differ materially include, but are not limited to, the following:

RISKS RELATING TO OUR FINANCIAL CONDITION AND RECENTLY COMPLETED REORGANIZATION

      THERE IS  SUBSTANTIAL  DOUBT AS TO THE COMPANY'S  ABILITY TO CONTINUE AS A
GOING CONCERN.

      The  accompanying  financial  statements  have been prepared  assuming the
Company will  continue as a going  concern.  The Company  incurred net losses of
$140.4  million,  $159.9  million and $47.9 million for the years ended December
31,  2004,  2003  and  2002,  respectively  and had  negative  cash  flows  from
operations of $39.6 million for the year ended December 31, 2004. As of December
31, 2004, the Company had an accumulated deficit of $617.1 million and a working
capital deficit of $172.7  million.  With the exception of $6.0 million of Other
H&H debt as of December 31, 2004, all debt has been classified as current due to
noncompliance with certain debt covenants.

      In March 2005, WHX filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code. Following WHX's emergence from bankruptcy in July
2005, the Company  continued to experience  liquidity  issues.  WHX is a holding
company and has as its sole source of cash flow distributions from its operating
subsidiary,  H&H, or other discrete  transactions.  H&H's bank credit facilities
and term loans effectively do not permit it to transfer any cash or other assets
to WHX and are  collateralized by substantially all of H&H's assets.  WHX has no
bank credit facility of its own. WHX's ongoing  operating cash flow requirements
consist of funding the minimum  requirements for the WHX Pension Plan and paying
other administrative costs.

        Since emerging from  bankruptcy,  due to covenant  restrictions in H&H's
credit  facilities,  there  have  been no  dividends  from H&H to WHX and  WHX's
sources of cash flow have consisted of:


                                       7


      o   the  issuance of $5.1 million in  preferred  stock by a newly  created
          subsidiary,  which  was  invested  in the  equity  of a  small  public
          company; and

      o   partial  payment  of the  H&H  subordinated  debt  to WHX of  $9.0
          million, which required the approval of the banks participating in the
          H&H  bank  facility.  Subsequent  to this  transaction  in  2006,  the
          remaining  intercompany loan balance of the subordinated debt of $44.2
          million was converted to equity.

Since the filing of its 2005 10-K, the following events have occurred:

      On December  27,  2006,  Wachovia  provided  H&H with an  additional  $7.0
million loan. This was pursuant to an amendment signed on October 30, 2006 which
made the  additional  funds  conditional  upon the filing of the Company's  2005
Annual  Report on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia and their Loan and Security Agreement
with Steel to provide,  in part, for: (i) the  consummation of the  transactions
contemplated by the PBGC Settlement  Agreement and the waiver of possible events
of default that may have  occurred  relating to the matters  covered by the PBGC
Settlement Agreement;  and (ii) a $42 million term loan funded by Ableco Finance
LLC. A portion of the loan ($26 million) was used to fund an acquisition by H&H,
$3.2  million  was  paid  as  a  contribution  to  the  WHX  Pension  Plan,  and
approximately  $12  million  of the loan was used to  reduce  H&H's  outstanding
balance under its revolving credit facility.

      As of December 31, 2006,  WHX had cash of  approximately  $0.8 million and
current  liabilities of  approximately  $7.5 million,  including $5.1 million of
mandatorily  redeemable  preferred  shares  payable  to a related  party.  H&H's
availability  under its  revolving  credit  facility and other  facilities as of
December 31, 2006 was $19.1  million.  All such  facilities,  including the term
loans,  expire in March 2007. The Company has significant cash flow obligations,
including  without  limitation  the  amounts  due for the WHX  Pension  Plan (as
amended by the PBGC  Settlement  Agreement).  Based on the Company's  forecasted
borrowings,  the  funds  available  under  its  credit  facilities  may  not  be
sufficient to fund debt service costs, working capital demands and environmental
remediation costs. Additionally, there can be no assurance that the Company will
be able to obtain  replacement  financing at commercially  reasonable terms upon
the  expiration  of its credit  facilities  in March 2007.  Consequently,  there
continues to be substantial  doubt about the Company's  ability to continue as a
going concern.

H&H'S RESULTS OF OPERATIONS MAY BE NEGATIVELY AFFECTED BY VARIATIONS IN INTEREST
RATES.

      The H&H credit  facilities  are  collateralized  by  accounts  receivable,
inventory,  and  property,  plant and  equipment.  These credit  facilities  are
variable rate obligations which expose H&H to interest rate risks.

WARREN G. LICHTENSTEIN,  OUR CHAIRMAN, AND CERTAIN OTHER OFFICERS AND DIRECTORS,
THROUGH THEIR AFFILIATION WITH STEEL PARTNERS II, L.P., HAS THE ABILITY TO EXERT
SIGNIFICANT INFLUENCE OVER OUR OPERATIONS.

      Warren G. Lichtenstein,  our Chairman,  as the sole managing member of the
general  partner of Steel Partners II, L.P., is also deemed to own  beneficially
the shares of our common stock owned by Steel  Partners II, L.P.  Steel Partners
II, L.P.  beneficially  owns 5,029,793 shares of our common stock,  representing
approximately 50.3% of our outstanding common stock. Mr.  Lichtenstein,  as sole
managing  member of the general  partner of Steel  Partners II,  L.P.,  has sole
investment  and  voting  control  over the  shares  beneficially  owned by Steel
Partners II, L.P. and thus has the ability to exert  significant  influence over
our policies and affairs,  including  the election of our Board of Directors and
the approval of any action requiring stockholder vote, such as amendments to our
Certificate of Incorporation and approving mergers or sales of substantially all
of our assets,  as well as matters where the interests of Mr.  Lichtenstein  and
Steel Partners II, L.P. may differ from the interests of our other  stockholders
in some respects.  In addition,  employees of an affiliate of Steel Partners II,
L.P.  hold  positions  with WHX,  including  Glen M.  Kassan as Chief  Executive
Officer and John J. Quicke as Vice President, and as directors.

RISKS RELATING TO OUR BUSINESSES

IN MANY CASES,  H&H'S COMPETITORS ARE LARGER THAN US AND HAVE  MANUFACTURING AND
FINANCIAL  RESOURCES  GREATER  THAN WE DO,  WHICH MAY HAVE A NEGATIVE  IMPACT ON
H&H'S BUSINESS, OPERATING RESULTS OR FINANCIAL CONDITION.

      There are many  companies,  both domestic and foreign,  which  manufacture
non-precious wire and tubing products,  and other specialty  engineered products
of the type H&H manufactures.  There are also a number of competitors in each of
the classes of precious metals products H&H sells. Some of these competitors are
larger than H&H is and have financial  resources  greater than H&H does. Some of
these competitors enjoy certain other competitive advantages,  including greater
name recognition; greater financial, technical, marketing and other resources; a
larger  installed base of customers;  and  well-established  relationships  with
current and potential customers. H&H may not be able to compete successfully and


                                       8


competition  may have a negative  impact on its business,  operating  results or
financial  condition  by  reducing  the volume of products  sold and/or  selling
prices, and accordingly reducing its revenues and profits.

H&H'S PROFITABILITY MAY BE ADVERSELY AFFECTED BY FLUCTUATIONS IN THE COST OF RAW
MATERIALS.

      H&H is  exposed  to  market  risk and  price  fluctuation  related  to the
purchase of natural  gas,  electricity,  precious  metals,  steel  products  and
certain non-ferrous metals used as raw materials.  Its results of operations may
be  adversely  affected  during  periods  in which  either  the  prices  of such
commodities are unusually high or their  availability  is restricted.  H&H holds
precious metal positions that are subject to market fluctuations. Precious metal
inventory  is included  in  inventory  using the  last-in,  first-out  method of
inventory  accounting.  H&H enters into forward or future  contracts  with major
financial institutions to reduce the economic risk of price fluctuations.

WE SPONSOR A DEFINED  BENEFIT PENSION PLAN WHICH COULD SUBJECT US TO SUBSTANTIAL
CASH FUNDING REQUIREMENTS IN THE FUTURE.

      On September 15, 2006, WHX was required to make a minimum  contribution to
the WHX  Pension  Plan for the 2005  plan year in the  amount of $15.5  million.
However,  we did not make that  contribution due to liquidity issues. We applied
to the IRS for a funding  waiver for the 2005 plan  year,  and on  December  20,
2006, the IRS granted a conditional  waiver of the minimum funding  requirements
for the 2005  plan  year in  accordance  with  section  412 (d) of the  Internal
Revenue Code and section 303 of the Employee  Retirement Income and Security Act
of 1974, as amended  ("ERISA").  On December 28, 2006, WHX, H&H, and the Pension
Benefit  Guaranty  Corporation  (the "PBGC")  entered  into the PBGC  Settlement
Agreement in connection  with the IRS waiver and certain other matters.  The IRS
waiver is  subject to  certain  conditions,  including  a  requirement  that the
Company meet the minimum funding  requirements  for the WHX Pension Plan for the
plan years ending December 31, 2006 through 2010,  without applying for a waiver
of such  requirements.  The PBGC  Settlement  Agreement  and related  agreements
include  the  following:  (i) the  amortization  of the  waived  amount of $15.5
million  (the  "Waiver  Amount")  over a period of five  years,  (ii) the PBGC's
consent to  increase  borrowings  under  H&H's  senior  credit  facility to $125
million in connection with the closing of an acquisition (iii) the resolution of
any potential  issues under  Section  4062(e) of ERISA,  in connection  with the
cessation  of  operations  at  certain  facilities  owned  by WHX,  H&H or their
subsidiaries,  and (iv) the  granting  to the PBGC of  subordinate  liens on the
assets  of  H&H  and  its   subsidiaries,   and  specified  assets  of  WHX,  to
collateralize  WHX's obligation to pay the Waiver Amount to the WHX Pension Plan
and to make  certain  payments  to the WHX  Pension  Plan  in the  event  of its
termination.  As a result of the PBGC  Settlement  Agreement and the IRS waiver,
based on estimates from WHX's actuary,  the Company  expects its minimum funding
requirement  for the  specific  plan  year  and  the  amortization  of the  2005
requirement  to be $13.1  million  (paid in full in 2006),  $6.7  million,  $7.9
million,  and $18.3 million  (which  amounts  reflect the recent  passage of the
Pension  Protection  Act  of  2006)  in  2006,  2007,  2008  and  through  2011,
respectively.

       Our  pension  benefit  costs are  developed  from  actuarial  valuations.
Inherent  in these  valuations  are  assumptions  including  discount  rates and
expected  long-term  rates of return on plan  assets.  Material  changes  in our
pension  costs may occur in the future due to changes in market  conditions  not
consistent with the assumptions,  changes in assumptions,  or other changes such
as a plan  termination,  in which case there may be additional claims related to
payment for unfunded liabilities.

H&H'S BUSINESSES ARE SUBJECT TO GENERAL ECONOMIC CONDITIONS.

      H&H operates in a wide range of  manufacturing  businesses  that serve the
construction,    electric,   electronic,   home   appliance   OEM,   automotive,
refrigeration,   utility,   telecommunications,   medical  and  energy   related
industries.   As  a  result,   H&H's  results  of  operations  tend  not  to  be
disproportionately  affected  by any one  industry  or  segment,  but tend to be
affected by general economic  conditions and other factors worldwide,  including
fluctuations in interest rates,  customer demand,  labor costs and other factors
beyond its control.  The demand for H&H's  customers'  products and,  therefore,
H&H's products, is directly affected by such fluctuations.

THE LOSS OF ANY OF OUR MAJOR CUSTOMERS COULD ADVERSELY AFFECT H&H'S REVENUES AND
FINANCIAL HEALTH.

      In 2004, H&H's 15 largest customers accounted for approximately 37% of its
consolidated net sales. If H&H were to lose any of its relationships  with these
customers, its revenues and profitability could fall.

OUR STRATEGY INCLUDES  SELECTIVE  ACQUISITIONS AND ACQUISITIONS  ENTAIL NUMEROUS
RISKS.

      Our  strategy  includes,  among  other  things,  strategic  and  selective
acquisitions.  This element of our strategy entails several risks, including the
diversion of management's attention from other business concerns, whether or not
we are  successful in finding  acquisitions,  and the potential  need to finance
such acquisitions with additional debt.


                                       9


      In addition,  once found,  acquisitions  entail further risks,  including:
unanticipated costs, including  environmental  liabilities that could materially
adversely  affect  our  results  of  operations;  difficulties  in  assimilating
acquired  businesses;  and negative effects on existing  business  relationships
with suppliers and customers.

H&H'S  COMPETITIVE  ADVANTAGE COULD BE REDUCED IF ITS  INTELLECTUAL  PROPERTY OR
RELATED PROPRIETARY  MANUFACTURING  PROCESSES BECOME KNOWN BY ITS COMPETITORS OR
IF TECHNOLOGICAL CHANGES REDUCE H&H'S CUSTOMERS' NEED FOR ITS PRODUCTS.

      H&H owns a number of  trademarks  and  patents  (in the United  States and
other  jurisdictions)  on its  products  and related  proprietary  manufacturing
processes.  In addition to trademark and patent protection,  H&H relies on trade
secrets,  proprietary  know-how  and  technological  advances  that it  seeks to
protect.  If H&H's  intellectual  property is not properly protected by it or is
independently  discovered by others or otherwise  becomes known,  its protection
against competitive products could be diminished.

H&H COULD INCUR SIGNIFICANT COSTS,  INCLUDING  REMEDIATION COSTS, AS A RESULT OF
COMPLYING WITH ENVIRONMENTAL LAWS.

      H&H's  facilities and  operations  are subject to extensive  environmental
laws and regulations  imposed by federal,  state,  foreign and local authorities
relating to the protection of the environment. It could incur substantial costs,
including cleanup costs, fines or sanctions, and third-party claims for property
damage or personal  injury,  as a result of actual or alleged  violations  of or
liabilities under  environmental  laws. H&H has incurred,  and in the future may
continue to incur,  liability under environmental  statutes and regulations with
respect  to  the  contamination  detected  at  sites  owned  or  operated  by it
(including  contamination  caused by prior  owners and  operators of such sites,
abutters  or  other  persons)  and the  sites at which  H&H is  alleged  to have
disposed of hazardous  substances.  As of December  31, 2005 and 2004,  reserves
were recorded  totaling  $27.5  million and $31.4  million,  respectively,  with
respect to certain presently  estimated  environmental  remediation costs. As of
December  31,  2004,  the  Company had  insurance  receivables  of $2.0  million
relating to these environmental remediation costs, which were recovered in 2006.
The $27.5  million  reserve may not be adequate to cover the  ultimate  costs of
remediation, including discovery of additional contaminants or the imposition of
additional  cleanup  obligations  which could result in  significant  additional
costs. In addition, H&H expects that future regulations, and changes in the text
or  interpretation  of  existing  regulations,  may  subject it to  increasingly
stringent standards. Compliance with such requirements may make it necessary for
H&H to retrofit existing facilities with additional pollution-control equipment,
undertake new measures in connection with the storage, transportation, treatment
and disposal of  by-products  and wastes or take other steps,  which may be at a
substantial cost to H&H.

FACTORS AFFECTING THE VALUE OF SECURITIES ISSUED UNDER THE PLAN OF REORGANIZATION

THERE IS NO ESTABLISHED MARKET FOR OUR NEW COMMON STOCK.

      No  established  market  exists for our new common  stock.  Our new common
stock is  presently  quoted on the pink  sheets.  Following  the  filing of this
Annual Report on Form 10-K and other  delinquent  periodic reports due under the
Securities  Exchange Act of 1934, as amended,  we anticipate that our new common
stock will be quoted on the OTC Bulletin Board,  and we expect to cooperate with
any registered  broker-dealer  who may seek to initiate price quotations for our
new common stock on the OTC Bulletin Board. Again,  however, no assurance can be
made that such  securities  will be quoted on the OTC Bulletin  Board or that an
active  trading  market will exist.  Moreover,  our new common  stock was issued
pursuant  to the Plan to  holders of  pre-petition  Senior  Notes and  Preferred
Stock, and some of these holders may prefer to liquidate their investment rather
than to hold it on a  long-term  basis.  Accordingly,  it is  possible  that the
market for our new common stock will be volatile, at least for an initial period
after the Effective Date of the Plan. In addition,  there can be no assurance as
to the degree of price  volatility  in any market for our new common  stock that
does  develop.  Transfer  restrictions  contained  in our  new  charter  to help
preserve our net operating loss  carryovers  will  generally  prevent any person
from  rapidly  acquiring  amounts of our new common  stock such that such person
would hold 5% or more of our new common stock,  in each case for up to ten years
after July 29, 2005, as specifically provided in our new charter. These transfer
restrictions  could hinder  development  of an active  market for our new common
stock.

WE DO NOT  ANTICIPATE  PAYING  DIVIDENDS ON OUR COMMON STOCK IN THE  FORESEEABLE
FUTURE WHICH MAY LIMIT INVESTOR DEMAND.

      We do not  anticipate  paying any dividends on our new common stock in the
foreseeable  future.  Such lack of dividend prospects may have an adverse impact
on the market demand for our new common stock as certain institutional investors
may invest only in dividend-paying  equity securities or may operate under other
restrictions  that may  prohibit  or limit  their  ability  to invest in our new
common stock.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

      The Company  has an  outstanding  comment  letter  from the  Securities  &
Exchange  Commission ("SEC") regarding its 2003 Report on Form 10-K and its 2004
quarterly reports on Form 10-Q. The Company has had certain discussions with the
SEC  concerning  the issues  raised in its  letter,  in  particular  whether the
Company's goodwill impairment test methodology  complied with generally accepted


                                       10


accounting   principles.   The  Company  responded  to  the  SEC's  comments  in
conjunction  with the filing of its 2005 Form 10-K and has  addressed the issues
in its current filing, including a restatement related to the Company's goodwill
impairment.  As  of  the  filing  of  this  Form  10-K,  those  comments  remain
unresolved.

ITEM 2.   PROPERTIES

      As of December 31, 2004, H&H had 22 active  operating plants in the United
States, Canada, Denmark, France, Malaysia and Singapore (50% owned) with a total
area of approximately  1,550,000 square feet,  including  warehouse,  office and
laboratory  space, but not including the plant used by the Singapore  operation.
H&H also owns or leases  sales,  service and  warehouse  facilities at six other
locations in the United States (which, with H&H's general offices,  have a total
area of  approximately  90,000  square  feet)  and owns  four  non-operating  or
discontinued  locations with a total area of approximately  230,000 square feet.
H&H  considers  its  manufacturing  plants  and  service  facilities  to be well
maintained and efficiently  equipped,  and therefore suitable for the work being
done.  The  productive  capacity and extent of  utilization of its facilities is
dependent in some cases on general business conditions and in other cases on the
seasonality of the utilization of its products. Capacity can be expanded readily
to meet additional demands. Manufacturing facilities of H&H are located in: Fort
Smith, Arkansas; Toronto, Canada; Camden, Delaware; Kolding, Denmark; Evansville
and Indianapolis,  Indiana; Cockeysville,  Maryland (closed in 2005); Agawam and
Westfield, Massachusetts;  Middlesex, New Jersey; Canastota, New York, Oriskany,
New York (closed in 2005);  Canfield,  Ohio;  Tulsa and Broken Arrow,  Oklahoma;
Norristown,  Pennsylvania;  East Providence,  Rhode Island;  Cudahy,  Wisconsin;
Riberac,  France; Penang, Malaysia; and Singapore (50% owned). In 2006, H&H sold
its 50% interest in Singapore and closed its Norristown, Pennsylvania facility.

      All plants are owned except for the  Canastota,  Middlesex,  Riberac,  and
Penang plants, which are leased.

ITEM 3.   LEGAL PROCEEDINGS

BANKRUPTCY FILING

      On March 7, 2005,  WHX filed a  voluntary  petition  to  reorganize  under
Chapter 11 of the United States  Bankruptcy Code with the Bankruptcy  Court. WHX
continued  to operate  its  businesses  and own and manage its  properties  as a
debtor-in-possession  under  the  jurisdiction  of the  Bankruptcy  Court and in
accordance  with the  applicable  provisions  of the  Bankruptcy  Code  until it
emerged from protection under Chapter 11 of the Bankruptcy Code on July 29, 2005
(see below).

      WHX's  primary  business  is H&H,  a  diversified  manufacturing  company.
Neither H&H, nor any of WHX's other subsidiaries or affiliates, were included in
its Bankruptcy  Filing.  All of H&H's operating units conducted  business in the
ordinary course during the  bankruptcy.  WHX's  Bankruptcy  Filing was primarily
intended to reduce its debt, simplify its capital structure,  reduce its overall
cost of capital and provide it with better access to capital markets.

      On March 7, 2005, WHX also filed a proposed Plan of  Reorganization  and a
related  proposed  disclosure  statement with the Bankruptcy  Court.  On June 7,
2005,  WHX filed its first amended  Chapter 11 Plan. On June 8, 2005,  WHX filed
its second amended Disclosure Statement.

      On July 21, 2005, WHX Corporation's  Chapter 11 Plan of Reorganization was
confirmed by the Bankruptcy Court. The Plan became effective on July 29, 2005.

SUMCO INC. V.  UNDERWRITERS AT LLOYD'S,  LONDON,  LEXINGTON  INSURANCE  COMPANY,
HARTFORD FIRE INSURANCE COMPANY, AND WURTTEMBERGISCHE VERSICHERUNG AG

      On July 7, 2004, Sumco Inc. ("Sumco"),  a wholly-owned  subsidiary of H&H,
filed suit in the  Marion  County  Superior  Court of  Indiana  against  certain
underwriters  affiliated  with Lloyd's,  London,  Lexington  Insurance  Company,
Hartford Fire  Insurance  Company,  and  Wurttembergische  Versicherung  AG (the
defendants).  Sumco seeks to recover  monies from these  insurance  carriers for
losses  incurred  as a result of a January  20,  2002 fire at its metal  plating
facility  in  Indianapolis,  Indiana.  At the time of the fire,  Sumco's  parent
corporation,  WHX, had in place  layered fire  insurance  policies with combined
limits of $25 million and a deductible  of $100,000.  The  defendants  represent
carriers  who  provided  $15  million  in  insurance  coverage  in excess of two
underlying  policies of $5 million  each.  Defendants  have  previously  paid $5
million in claims.  Sumco  contends  that its losses are in excess of the policy
limits,  defendants  have acted in bad  faith,  and that it is  entitled  to the
payment of the remaining  approximate $10 million in insurance coverage provided
by the  defendants.  The defendants have denied the allegations of the complaint
and asserted  certain  defenses.  The matter is expected to go to trial in April
2007.

HANDY & HARMAN REFINING GROUP, INC., DEBTOR PLAINTIFFS V. HANDY & HARMAN, DEFENDANT

      H&H was a defendant in a lawsuit (the "Indemnity Action") filed by Handy &
Harman Refining Group, Inc. ("HHRG") (an unrelated party to H&H) seeking a money
judgment in the amount of $8.5 million, plus interest,  which as of December 31,
2005 was alleged to be  approximately  $4.0  million,  for an alleged  breach of


                                       11


contract in connection with H&H's sale of its Precious Metals Refining  Division
to HHRG in 1996.  HHRG  subsequently  filed for  Chapter  11 and  commenced  the
Indemnity  Action in the  Bankruptcy  Court on or about August 14,  2002.  On or
about May 26, 2004,  the Indemnity  Action was  transferred to the United States
District  Court for the District of  Connecticut.  H&H filed a proof of claim in
the HHRG  bankruptcy  which  had an  outstanding  amount of  approximately  $1.9
million and funds had been set aside in that amount by HHRG. The parties settled
this matter in June 2006 for the  surrender of the full amount of H&H's proof of
claim of $1.9 million  plus a payment of $438,000 to HHRG.  The  settlement  was
approved by the Bankruptcy Court.

HH EAST PARCEL, LLC. V. HANDY & HARMAN

      This action  arises out of a purchase and sale  agreement  entered into in
2003  whereby  H&H agreed to sell the  eastern  parcel of a  commercial  site in
Fairfield,  Connecticut to HH East Parcel, LLC ("HH East"). On or about April 5,
2005,  HH East  filed a Demand for  Arbitration  with the  American  Arbitration
Association  seeking  legal and  equitable  relief  including  completion of the
remediation of environmental conditions at the site in accordance with the terms
of  the  agreement.  An  arbitration  hearing  was  held  in  November  2005  in
Connecticut, pursuant to which HH East was awarded an amount equal to $5,000 per
day from January 1, 2005  through the date on which  remediation  is  completed.
This award would amount to  approximately  $3.8 million  through an  anticipated
completion  date  of  February  2007.  H&H  applied  to the  Superior  Court  of
Connecticut,  Fairfield  County,  to have the  arbitration  award  vacated and a
decision  was  issued  on June  26,  2006,  denying  H&H's  application.  H&H is
appealing this decision. H&H has been working cooperatively with the Connecticut
Department of Environmental Protection ("CTDEP") with respect to its obligations
under a consent  order entered into in 1989 that applies to both the eastern and
western  parcels  of  the  property.   H&H  has   substantially   completed  the
investigation of the western parcel, and is continuing the process of evaluating
various options for its remediation.  The sale of the eastern parcel that is the
subject of this litigation triggered statutory obligations under Connecticut law
to investigate and remediate  pollution at or emanating from the eastern parcel.
H&H completed the investigation and has been actively conducting  remediation of
all soil conditions on the eastern parcel for more than three years. Although no
groundwater  remediation  is  required,  there  will be  monitoring  of same for
several years. It is currently  expected that remediation of all soil conditions
on site will be completed by February 2007. The total remediation is expected to
exceed $27.0  million,  of which  approximately  $19.0 million had been expended
through October 2006. H&H received  reimbursement of $2.0 million of these costs
from its carrier under a cost-cap insurance policy and is pursuing its potential
entitlement to additional coverage.

PAUL E. DIXON & DENNIS C. KELLY V. HANDY & HARMAN

      Two former  officers of H&H filed a Statement  of Claim with the  American
Arbitration  Association  ("Arbitration") on or about January 3, 2006,  alleging
four claims  against H&H. The Claimants  were  employees of H&H until  September
2005 when their  employment was terminated by H&H. Their claims include  seeking
payments allegedly due under employment contracts and allegedly arising from the
terminations,  and seeking  recovery of benefits  under what they allege was the
Handy & Harman Supplemental Executive Retirement Plan.

      The Statement of Claim recites that the  employment  agreements of each of
the  Claimants  provides that H&H may  terminate  their  employment at any time,
without prior notice,  for any of the following  reasons:  "(i) [the  officer's]
engaging  in conduct  which is  materially  injurious  to [H&H] or [WHX],  their
subsidiaries  or  affiliates,  or any of their  respective  customer or supplier
relationships, monetarily or otherwise; (ii) [the officer's] engaging in any act
of fraud,  misappropriation  or embezzlement or any act which would constitute a
felony (other than minor traffic violations);  or (iii) [the officer's] material
breach of the  agreement." The Statement of Claim further  alleges,  and H&H has
not disputed,  that each Claimant's  employment was terminated in September 2005
pursuant to a letter,  which  stated in part,  that each  Claimant  had violated
provisions of such  officer's  employment  agreement,  contained in the previous
sentence,  "by, INTER ALIA, attempting to amend and put in place various benefit
plans to  personally  benefit  yourself,  without  notice to, or approval of the
Board of  Directors;  for  further  failing to  disclose  the  existence  of the
relevant  plan  documents  and other  information  to the Board;  for failing to
cooperate in the Company's investigation of these important issues; for material
losses to the Company in connection with these actions....".

      In the  Arbitration,  Claimants  sought an award in  excess of $4  million
each,  plus  interest,   costs  and  attorneys'  fees.   Claimants  also  sought
indemnification for certain matters and an injunction against H&H with regard to
life insurance  policies.  H&H brought a special proceeding on February 15, 2006
in the  Supreme  Court of the State of New York,  County of  Westchester,  for a
judgment staying the arbitration of three of the four claims. On March 10, 2006,
all of the parties filed a stipulation with the court,  discontinuing  the court
proceeding and agreeing therein, among other things, that all claims asserted by
the  Claimants in the  Arbitration  (which was also  discontinued  at that time)
would be asserted in Supreme Court, Westchester County.

      In April 2006,  Claimants  served a request for  benefits,  severance  and
other  amounts,  similar  to those  described  above,  on H&H and  various  plan
administrators and fiduciaries  thereof.  The request was reviewed in accordance
with the  procedures  of the plans at issue and by letter  dated  September  27,
2006,  Claimants were notified that their request was largely denied. They filed
an appeal on December  11, 2006 with the Plan  Administrator,  which  appeal was
denied on  February 9, 2007.  While no action is pending in any court,  H&H does
not  believe  that it is liable to  Claimants  under the  claims  that have been


                                       12


asserted to date, and it intends to defend itself vigorously  against any claims
that may be asserted by  Claimants.  There can be no assurance  that H&H will be
successful in defending  against any such claims,  or that H&H will not have any
liability  on account of claims  that may be  asserted  by  Claimants,  and such
liability,  if any,  cannot be reasonably  estimated at this time.  Accordingly,
there  can be no  assurance  that  the  resolution  of this  matter  will not be
material to the financial  position,  results of operations and cash flow of the
Company.

ARISTA DEVELOPMENT LLC V. HANDY & HARMAN ELECTRONIC MATERIALS CORPORATION

      In  2004,  a  subsidiary  of H&H  entered  into  an  agreement  to  sell a
commercial/industrial  property  in  North  Attleboro,  Massachusetts.  Disputes
between  the  parties  led to suit being  brought in Bristol  Superior  Court in
Massachusetts.  The plaintiff  alleges that H&H is liable for breach of contract
and  certain  consequential  damages  as a result  of H&H's  termination  of the
agreement in 2005, although H&H subsequently  revoked its notice of termination.
H&H has denied  liability and has been vigorously  defending the case. The court
entered a preliminary  injunction  enjoining H&H from  conveying the property to
anyone other than the  plaintiff  during the pendency of the case.  Discovery on
liability and damages has been stayed while the parties are actively  engaged in
settlement  discussions,  on which they have  reached  agreement  in  principle,
subject to certain conditions.  Concurrently with these settlement efforts,  H&H
is  continuing  to  comply  with a 1987  consent  order  from the  Massachusetts
Department of  Environmental  Protection  ("MADEP") to investigate and remediate
the soil and  groundwater  conditions.  H&H is in discussions  with the EPA, the
MADEP and the  plaintiff  in  connection  with the  remedial  activities.  Since
discovery  is not  completed,  it  cannot be known at this  time  whether  it is
foreseeable  or probable  that  plaintiff  would  prevail in the  litigation  or
whether H&H would have any liability to the plaintiff.

ENVIRONMENTAL MATTERS

      H&H entered into an administrative  consent order (the "ACO") in 1986 with
the New Jersey Department of Environmental  Protection  ("NJDEP") with regard to
certain  property  that it  purchased  in 1984 in New Jersey.  The ACO  involves
remediation  to be performed with regard to soil and  groundwater  contamination
allegedly  from TCE.  H&H settled a case  brought by the local  municipality  in
regard to this site in 1998 and also settled with its insurance carriers. H&H is
actively  remediating  the  property  and  continuing  to  investigate  the most
effective   methods  for   achieving   compliance   with  the  ACO.  A  remedial
investigation  report  was  filed  with  the  NJDEP  in May of  2006.  Once  the
investigation has been completed, it will be followed by a feasibility study and
a remedial  action work plan that will be  submitted to NJDEP.  H&H  anticipates
entering into discussions in the near future with NJDEP to address that agency's
natural  resource damage claims,  the ultimate scope and cost of which cannot be
estimated at this time. The ongoing cost of  remediation is presently  estimated
at approximately  $450,000 per year, plus anticipated  additional costs in early
2007 of  approximately  $700,000.  Pursuant to a settlement  agreement  with the
former operator of this facility,  the responsibility for site investigation and
remediation  costs have been  allocated,  75% to the former  operator and 25% to
H&H. To date, total  investigation and remediation costs of $237,000 and $79,000
have been settled by the former  operator and H&H,  respectively,  in accordance
with this agreement.  Additionally,  H&H has insurance coverage for a portion of
those costs for which the company is responsible.

      H&H has been identified as a potentially  responsible  party ("PRP") under
the  Comprehensive  Environmental  Response,   Compensation  and  Liability  Act
("CERCLA") or similar state statutes at several sites and is a party to ACO's in
connection  with  certain  properties.  H&H may be subject to joint and  several
liability  imposed  by CERCLA on  potentially  responsible  parties.  Due to the
technical and regulatory  complexity of remedial activities and the difficulties
attendant in  identifying  potentially  responsible  parties and  allocating  or
determining  liability  among them,  H&H is unable to  reasonably  estimate  the
ultimate cost of compliance with such laws.

      In a case entitled AGERE SYSTEMS,  INC., ET AL. V. ADVANCED  ENVIRONMENTAL
TECHNOLOGY CORP., ET AL. (U.S.  District Court,  EDPA),  five companies,  all of
which are PRPs for the Boarhead Farm site in Bucks County, Pennsylvania, brought
CERCLA contribution and similar claims under  Pennsylvania's  environmental laws
against a number of companies in 2002,  including a subsidiary of H&H, which the
plaintiffs claim  contributed to the  contamination of the Boarhead Farm site. A
number of the  plaintiffs  entered  into  settlements  with several of the named
defendants and consent decrees with the Environmental  Protection Agency ("EPA")
regarding the remediation of groundwater and soil  contamination at the Boarhead
Farm site.  There are currently  nine  non-settling  defendants,  including H&H,
against which the plaintiffs are pursuing their claims.  Fact discovery has been
concluded and the parties are engaged in expert  discovery.  The plaintiffs have
already made  substantial  payments to the EPA in past  response  costs and have
themselves   incurred  costs  for  groundwater  and  soil   remediation,   which
remediation is continuing.  Plaintiffs are seeking reimbursement of a portion of
amounts  incurred  and an  allocation  of future  amounts from H&H and the other
non-settling defendants. H&H has been advised by counsel that its responsibility
for this site,  if any,  should be minimal and has  demanded  coverage  from its
insurance  carrier for any claims for which it could be held  liable.  It is not
possible to reasonably  estimate the cost of remediation or H&H's share, if any,
of the liability at this time.

      H&H received a notice letter from the EPA in August 2006  formally  naming
H&H as a PRP at the Shpack landfill superfund site in Attleboro,  Massachusetts.
H&H then  voluntarily  joined a group of ten (10)  other PRPs  (which  group has
since increased to thirteen (13)) to work  cooperatively to present to the EPA a
good faith  offer  regarding  remediation  of this site.  Investigative  work is
ongoing  to  determine  whether  there are  other  parties  that sent  hazardous
substances to the Shpack site but that have not received notice letters nor been
named as PRPs to date. No allocation as to percentages of responsibility for any
of the PRPs has been assigned or accepted;  H&H has been advised by counsel that


                                       13


its  responsibility,  if any, is extremely low. The PRP group submitted its good
faith offer to the EPA in late October 2006. It is not anticipated  that the EPA
will accept or reject the PRPs' offer until some time in 2007.  If accepted,  it
is not  anticipated  that PRP remedial  activities  at the site will begin until
2008 or after. The remediation of a significant  amount of the  contamination at
the site is the responsibility of the U.S. Army Corps of Engineers. That portion
of the work has begun but is not expected to be  completed  until 2008 or after,
at which time the remaining work will be more clearly defined.  Accordingly,  it
is not  possible  at this  time to  reasonably  estimate  the  scope  or cost of
remediation at the site, nor the portion, if any, to be allocated to H&H.

      As discussed above, H&H has existing and contingent  liabilities  relating
to environmental matters,  including capital expenditures,  costs of remediation
and potential  fines and penalties  relating to possible  violations of national
and state  environmental  laws. H&H has substantial  remediation  expenses on an
ongoing basis,  although such costs are continually  being readjusted based upon
the  emergence of new  techniques  and  alternative  methods.  In addition,  the
Company has insurance  coverage  available for several of these  matters.  Based
upon   information   currently   available,   including   H&H's  prior   capital
expenditures, anticipated capital expenditures, and information available to H&H
on pending  judicial  and  administrative  proceedings,  H&H does not expect its
environmental compliance costs, including the incurrence of additional fines and
penalties,  if  any,  relating  to the  operation  of its  facilities  to have a
material  adverse  effect on the  financial  position,  but there can be no such
assurances. Such costs could be material to H&H's results of operations and cash
flows. We anticipate that H&H will pay such amounts out of its working  capital,
although there is no assurance that H&H will have  sufficient  funds to pay such
amounts. In the event that H&H is unable to fund these liabilities, claims could
be made  against WHX for  payment of such  liabilities.  As further  information
comes  into  the  Company's  possession,  it  will  continue  to  reassess  such
evaluations.

OTHER LITIGATION

      H&H or its  subsidiaries  are a defendant in numerous  cases  pending in a
variety of jurisdictions relating to welding emissions.  Generally,  the factual
underpinning of the plaintiffs'  claims is that the use of welding  products for
their ordinary and intended  purposes in the welding process causes emissions of
fumes  that  contain  manganese,  which is toxic to the  human  central  nervous
system.  The  plaintiffs  assert that they were  over-exposed  to welding  fumes
emitted  by  welding  products  manufactured  and  supplied  by  H&H  and  other
co-defendants.  H&H denies  liability and is defending these actions.  It is not
possible  to  reasonably  estimate  H&H's  exposure  or  share,  if any,  of the
liability at this time.

      In addition to the  foregoing  cases,  there are a number of other product
liability,  exposure,  accident,  casualty and other  claims  against H&H or its
subsidiaries in connection with a variety of products sold by its divisions over
many  years,  as well as  litigation  related to  employment  matters,  contract
matters,  sales and purchase  transactions and general liability claims, many of
which arise in the ordinary course of business. It is not possible to reasonably
estimate H&H's exposure or share, if any, of the liability at this time.

      There is insurance coverage available for many of these actions, which are
being litigated in a variety of jurisdictions. To date, H&H has not incurred and
does not believe it will incur any  significant  liability with respect to these
claims, which it contests vigorously in most cases. However, it is possible that
the  ultimate  resolution  of such  litigation  and claims could have a material
adverse effect on quarterly or annual results of operations,  financial position
and cash flows when they are resolved in future periods.

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

      None.

                                     PART II

ITEM 5.   MARKET FOR THE  REGISTRANT'S  COMMON STOCK,  RELATED  SECURITY  HOLDER
MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

      WHX's old common  stock was traded on the New York Stock  Exchange  during
2004  and part of 2005.  The  number  of  shares  of  common  stock  issued  and
outstanding  as of December 31, 2004 and March 31, 2005,  was  5,485,856.  There
were  approximately  10,900 holders of record of common stock as of December 31,
2004 and March 31, 2005. WHX's shares were delisted from trading on the New York
Stock  Exchange,  effective  at the opening of  business on March 7, 2005,  as a
result of WHX's Chapter 11 bankruptcy filing.  Thereafter,  the old common stock
was quoted on the over the counter "Pink Sheets" under the symbol WHXCQ.PK until
WHX's old common stock was  cancelled on July 29, 2005.  There were no purchases
of common stock made by WHX in 2005, 2004 and 2003.

      WHX emerged from  bankruptcy on July 29, 2005. The new common stock trades
on the over the counter "Pink Sheets" under the symbol WXCP.PK.


                                       14


      The prices set forth in the  following  table  represent  the high and low
sales  prices of WHX's old common stock on the New York Stock  Exchange  through
December 31, 2004.

                        2004        HIGH         LOW

          First Quarter         $   4.39     $   2.59
          Second Quarter            3.00         1.40
          Third Quarter             1.68         1.02
          Fourth Quarter            3.50         2.20

                        2003        HIGH         LOW

          First Quarter         $   3.30     $   0.99
          Second Quarter            2.68         1.30
          Third Quarter             3.09         2.05
          Fourth Quarter            3.50         2.20

      The  historical  prices of the old common stock are not  indicative of the
future trading price of or trading market for the new common stock.

      WHX presently has no plans or  intentions to pay  dividends.  Prior to the
Effective  Date,  pursuant  to  the  terms  of  the  then-existing  Supplemental
Indenture  to  WHX's  10 1/2%  Senior  Notes  (see  Note 12 to the  Consolidated
Financial  Statements),  WHX was prohibited from paying  dividends on its common
stock or  preferred  stock until after  October 1, 2002,  at the  earliest,  and
thereafter  only  in the  event  that  it  satisfied  certain  conditions.  Such
conditions  were  not  satisfied  as of  December  31,  2004.  WHX  was  further
prohibited  from paying  dividends  on its common  stock during such time as the
full cumulative dividends on the preferred stock had not been paid.

      As part of the  Plan of  Reorganization,  on July  29,  2005  all of WHX's
outstanding  securities,  including  WHX's  pre-bankruptcy  filing common stock,
Series A preferred stock,  Series B preferred stock and 10 1/2% senior notes due
2005 were cancelled and annulled.  In full and complete satisfaction of all such
claims, holders of WHX's 10 1/2% senior notes due 2005 received 9,200,000 shares
of the new common  stock  representing  their pro rata share of the  reorganized
company. These shares represent 92% of the equity in the reorganized company. In
full and complete  satisfaction  of all such interests,  preferred  stockholders
received  800,000  shares of the new common  stock  representing  their pro rata
share of the reorganized  company and 752,688  warrants to purchase common stock
of the  reorganized  company,  exercisable  at $11.20  per  share  and  expiring
February 28,  2008.  The common stock  received by the  preferred  stockholders,
collectively,  represents  8% of the  equity  in the  reorganized  company.  The
warrants issued to the preferred stockholders, collectively, represent the right
to purchase an  additional  7% of the equity of the  reorganized  company  after
giving  effect to the  exercise of the  warrants.  Holders of WHX's common stock
received no distributions under the Plan.


                                       15


ITEM 6.    SELECTED FINANCIAL DATA

Five-year Statistical
(Thousands of Dollars except per share data)
                                                       2004           2003         2002 (d)         2001           2000
                                                   ------------   ------------   ------------    -----------   -----------
                                                                  (as Restated   (as Restated   (as Restated   (as Restated
                                                                      (b))           (b))              (c))        (c))

PROFIT AND LOSS (a)
Net sales                                          $   410,919    $   326,296    $   386,393     $   388,139   $ 1,519,436
Pre-tax income (loss) from continuing operations      (138,272)      (146,716)       (54,647)         66,868      (184,721)

Dividend requirement for preferred shareholders         19,424         19,424         19,224          19,329        20,607
Net income (loss) applicable to common stock          (159,868)      (179,348)       (67,125)         82,473      (197,507)
BASIC INCOME (LOSS)  PER SHARE:
Net income (loss)  per share
   applicable to common shares                          (29.38)        (33.35)        (12.61)          16.48        (41.42)
DILUTED INCOME (LOSS)  PER SHARE:
Net income (loss)  per share
   applicable to common shares                          (29.38)        (33.35)        (12.61)           9.69        (41.42)

Total assets - continuing operations                   311,917        410,756        816,325         883,182       911,852
Net assets of discontinued operations                     --             --             --            57,182          --
Short-term debt                                        224,027         40,056           --              --           6,929
Long-term debt                                           6,027        189,344        249,706         432,454       504,983
Equity                                                 (96,929)        63,680        204,110         285,519       178,929

      (a) Includes  the  results of WPC for the period  January 1, 2000  through
          November 16, 2000.

      (b) See Note 1b to the Consolidated  Financial Statements included in this
          Form 10-K regarding restatements of 2003 and 2002.

      (c) As more fully described in Item 7, the Company has restated its fiscal
          2001 and 2000 financial data as follows:

          o   For tax matters in 2001,  the Company  recorded an increase to the
              net  income  applicable  to common  stock of $0.7  million.  As of
              December  31, 2001,  these tax matters  resulted in an increase to
              deferred  tax  assets  of $4.7  million,  a  decrease  in  accrued
              expenses  of $1.9  million,  and a decrease  to  goodwill  of $1.7
              million.  In 2000, the Company  recorded an increase to net income
              applicable  to common  stock of $4.3  million.  As of December 31,
              2000,  these tax matters  resulted in an increase to deferred  tax
              assets of $4.4  million,  a decrease  in accrued  expenses of $1.6
              million, and a decrease to goodwill of $1.7 million.

          o   For  hedge  accounting/inventory  matters  in  2001,  the  Company
              recorded an increase to the net income from continuing  operations
              before  tax and net  income  applicable  to  common  stock of $0.2
              million.  The above adjustments  increased total assets in 2001 by
              $0.6  million.  There was no effect on  either  the  statement  of
              operations or the balance sheet for 2000.

          o   For life  insurance  accrual  matters  in both 2001 and 2000,  the
              Company   recorded  a  decrease  to  net  income  from  continuing
              operations before tax and net income applicable to common stock of
              $0.2  million.  The Company  recorded  an  increase  in  long-term
              liabilities  of $0.6  million  as of  December  31,  2001 and $0.4
              million as of December 31, 2000. The Company  recorded an increase
              to the accumulated deficit as of January 1, 2000 of $0.2 million.

      (d) Operating results for the year ended December 31, 2002 include a $41.1
          million  charge for the  cumulative  effect of a change in  accounting
          principle  related to the  adoption,  on January 1, 2002,  of SFAS No.
          142,  "Goodwill and Other Intangible  Assets:" In accordance with SFAS
          142, the Company no longer  amortizes  goodwill  effective  January 1,
          2002. In 2001 and 2000, the Company recorded goodwill  amortization of
          $7.4 million and $8.0 million, respectively. Had such amortization not
          been recorded in those years,  net income (loss) per share  applicable
          to common stock would have been $10.39 and $(39.74) respectively, on a
          fully diluted basis.

NOTES TO FIVE-YEAR SELECTED FINANCIAL DATA

      On March 7, 2005,  WHX filed a  voluntary  petition  to  reorganize  under
Chapter 11 of the United States  Bankruptcy Code with the Bankruptcy  Court. WHX
continued  to operate  its  businesses  and own and manage its  properties  as a
debtor-in-possession  under  the  jurisdiction  of the  Bankruptcy  Court and in
accordance  with the  applicable  provisions  of the  Bankruptcy  Code  until it
emerged from protection under Chapter 11 of the Bankruptcy Code on July 29, 2005
(see below).

      WHX's  primary  business  is H&H,  a  diversified  manufacturing  company.
Neither H&H nor any of WHX's other  subsidiaries  or affiliates were included in
WHX's Bankruptcy  Filing. All of H&H's operating units conducted business in the
ordinary course during the  bankruptcy.  WHX's  Bankruptcy  Filing was primarily
intended  to reduce  WHX's debt,  simplify  its  capital  structure,  reduce its
overall cost of capital and provide it with better access to capital markets.


                                       16


      On March 7, 2005, WHX also filed a proposed Plan of  Reorganization of WHX
Corporation (as amended, the "Plan") and a related proposed Disclosure Statement
with the Bankruptcy  Court. On June 7, 2005, WHX filed its first amended Chapter
11 Plan. On June 8, 2005, WHX filed its second amended Disclosure Statement.

      On July 21, 2005, WHX's Chapter 11 Plan of Reorganization was confirmed by
the U. S.  Bankruptcy  Court for the  Southern  District  of New York.  The Plan
became effective on July 29, 2005.

      The  Bankruptcy  Filing  created an event of default  under the  Indenture
governing WHX's 10 1/2% Senior Notes due April 15, 2005.  Under the terms of the
Senior Notes, as a result of the Bankruptcy  Filing, the entire unpaid principal
and accrued interest (and any other additional  amounts) became  immediately due
and payable  without any action on the part of the trustee or the note  holders.
The  principal  amount  outstanding  under the Senior Notes at March 7, 2005 was
approximately $92.8 million. Accrued interest to March 7, 2005 was approximately
$3.8 million.

      The  following is a summary of certain  material  features of the Plan and
the Confirmation Order. On the Effective Date:

   o  All of WHX's outstanding securities, including WHX's pre-bankruptcy filing
      common stock,  Series A preferred  stock,  Series B preferred stock and 10
      1/2% Senior Notes were deemed  cancelled and annulled  without further act
      or action.

   o  In full and complete satisfaction of all such claims,  holders of WHX's 10
      1/2% Senior Notes received  9,200,000 shares of common stock  representing
      their prorated share of the reorganized  company.  These shares  represent
      92% of the equity in the reorganized company.

   o  In  full  and  complete  satisfaction  of all  such  interests,  Series  A
      preferred   stockholders   received   366,322   shares  of  common   stock
      representing  their prorated share of the reorganized  company and 344,658
      warrants to purchase common stock of the reorganized company,  exercisable
      at $11.20 per share and expiring on February 28, 2008.

   o  In  full  and  complete  satisfaction  of all  such  interests,  Series  B
      preferred   stockholders   received   433,678   shares  of  common   stock
      representing  their prorated share of the reorganized  company and 408,030
      warrants to purchase common stock of the reorganized company,  exercisable
      at $11.20 per share and expiring on February 28, 2008.

   o  Holders  of  WHX's   pre-bankruptcy   filing  common  stock   received  no
      distribution under the Plan.

      The  common  stock  received  by  the  Series  A and  Series  B  preferred
stockholders,  collectively,  represents  8% of the  equity  in the  reorganized
company.   The  warrants   issued  to  the  Series  A  and  Series  B  preferred
stockholders,  collectively, represent the right to purchase an additional 7% of
the equity of the reorganized company after giving effect to the exercise of the
warrants.

      On the  Effective  Date,  all of the  assets  of WHX  were  vested  in the
reorganized  company  free and clear of all liens,  causes of  actions,  claims,
encumbrances,  equity interests,  and interests against,  in, or on such assets,
except as explicitly provided in the Plan.

      Since the Effective  Date,  the business units of H&H continued to conduct
their businesses in the ordinary course.

      The Company  incurred  $9.5 million in Chapter 11 and related  expenses in
2005.  The 2005 period also included $4.1 million in expenses  related to change
in control and termination benefits for three WHX executives.

      On November 16, 2000, the WPC Group filed petitions seeking reorganization
under Chapter 11 of Title 11 of the United States  Bankruptcy  Code. As a result
of the Bankruptcy Filing (see Note 4 to the Consolidated  Financial Statements),
the Company,  as of November 16, 2000,  deconsolidated the balance sheet of WPC.
As a result of such  deconsolidation,  subsequent  to  November  16,  2000,  the
accompanying  selected  financial  data does not  include  any of the  assets or
liabilities of WPC or the operating  results of WPC. As more fully  discussed in
Item 7 - Management's Discussion and Analysis of Financial Condition and Results
of Operations and Note 4 to the Consolidated Financial Statements, WHX agreed to
provide  additional  funds to the WPC Group  amounting  to $20.0  million.  As a
result,  the Company  recorded for the year ended  December 31, 2002,  an equity
loss in WPC. A Chapter 11 Plan of Reorganization was confirmed by the Bankruptcy
Court on June 18, 2003 and was  consummated  on August 1, 2003.  Pursuant to the
terms  of the WPC  POR,  among  other  things,  the  WPC  Group  ceased  to be a
subsidiary of WHX effective  August 1, 2003, and from that date forward has been
an independent company.

      WHX  had  received  a $10.0  million  subordinated  note  from  WPSC  upon
consummation  of the WPC POR, which had been fully  reserved.  In July 2004, WHX
realized  $5.6  million  upon  the  sale  of the  note  to a  third  party  and,
accordingly,  $5.6 million was recorded in other income in the second quarter of
2004.

      In the five year period  ended  December  31,  2004,  WHX did not make any
purchases of common or preferred stock.


                                       17


      In  connection  with the  refinancing  of the H&H  Senior  Secured  Credit
Facilities  (see  discussion in Item 7 - "Liquidity  and Capital  Resources") in
March 2004, WHX wrote off deferred  financing fees of $1.2 million.  This charge
is classified as loss on early retirement of debt.

      Environmental remediation expenses of $29.0 million were recorded in 2004.
Included in this amount is $26.3 million  related to Fairfield  East (see below)
and $1.1 million for a location in North Attleboro,  Massachusetts.  The balance
of the expense relates to several other locations.

      In  2003,  H&H  sold  a  portion  of its  former  Fairfield,  CT  facility
("Fairfield  East") for $8.0  million.  In  connection  with this sale,  H&H was
responsible  for  demolition  and  environmental  remediation  of the site,  the
estimated  cost of which was included in the loss on sale  recorded in 2003.  In
2004,  H&H  determined  that  an  increase  in  the  reserve  for  environmental
remediation was needed for Fairfield East, in the amount of $28.3 million.  This
increase in the reserve was caused by the  discovery of  underground  debris and
soil  contaminants  that had not been  anticipated.  The Company  has  recovered
insurance in the amount of $2.0 million in 2006 related to this site; therefore,
the net  expense  included  in  environmental  remediation  expense  in the 2004
financial  statements  related to the Fairfield East site is $26.3  million.  An
insurance  receivable  of $2.0 million is included on the  consolidated  balance
sheet.  An  additional  $3.8  million  was  recorded  in  selling,  general  and
administrative expenses as a penalty related to the Fairfield facility in 2004.

       During 2003,  2002,  and 2001,  WHX purchased and retired $17.7  million,
$134.6 million, and $36.4 million, respectively,  aggregate principal amounts of
10 1/2% Senior Notes in the open market,  resulting  in  gains/(losses)  of $3.0
million, $42.5 million, and $19.0 million,  respectively.  In 2004 and 2000, WHX
did not purchase any Notes in the open market.

      In accordance  with Statement of Financial  Accounting  Standards No. 144,
"Accounting for the Impairment or Disposal of Long Lived Assets" (SFAS 144), the
Company has  evaluated  fixed assets  associated  with its HHEM  facility.  This
evaluation  has resulted in the recording of  accelerated  depreciation  of $0.2
million in 2004. This accelerated depreciation is a charge to cost of goods sold
in the  applicable  period.  The  Company is  currently  reviewing  its  options
regarding the HHEM operating unit.

      On May 9, 2006,  the  Company  announced  the  closing of the  Norristown,
Pennsylvania  facility of Handy & Harman Tube Co. ("HHT"). The decision to close
the  Norristown  facility was  principally  based on the  economics of operating
HHT's business at the facility.  HHT manufactures stainless steel tubing that is
supplied in various lengths and forms in both coil and straight  lengths.  HHT's
coil  business  was  relocated  to H&H's Camdel  Metals  Corporation  ("Camdel")
facility located in Camden,  Delaware.  HHT's non-coil business is being offered
for sale and the real  property at the site is also being  offered,  separately,
for sale.

      The  closing  of  Norristown  and the sale of  certain  of its  assets was
completed by the end of 2006,  and most of the remaining  assets are expected to
be sold in 2007.  The decision to close the  Norristown  facility  resulted in a
charge of $1.7  million for  termination  benefits  for  approximately  84 union
employees  and  35  salaried   employees  In  addition,   the  Company  incurred
approximately  $0.7 million in expenses to relocate  aspects of the HHT business
to Camdel.  The operating loss for HHT for 2006 was approximately  $4.0 million,
including  costs of closure.  The Company  expects that the ultimate sale of the
Norristown assets will offset part of the closure costs.

      On June 30, 2004, the Company  evaluated the current  operating  plans and
current  and  forecasted  operating  results  of H&H wire & cable  business.  In
accordance  with SFAS 144, the Company  determined that there were indicators of
impairment   as  of  June  30,  2004  based  on  continued   operating   losses,
deteriorating margins, and rising raw material costs. An estimate of future cash
flows  indicated that as of June 30, 2004,  cash flows would be  insufficient to
support the carrying value of the long-term assets of the business. Accordingly,
these  assets were  written  down to their  estimated  fair value by recording a
non-cash  asset  impairment  charge of $3.9  million in the second  quarter.  In
November 2004,  H&H announced that it had signed a non-binding  letter of intent
to sell its wire  business  and that it was  negotiating  the sale of its  steel
cable business.  The decision to sell was based on continued  operating  losses,
deteriorating  margins  and  rising  raw  material  costs  experienced  by these
businesses.  Based on the  proposed  terms of these  transactions,  the  Company
recorded an additional asset impairment charge of $4.3 million. At that time H&H
stated  that if it were unable to complete  these  sales it would  consider  the
closure of these operations.  On January 13, 2005, H&H determined that a sale of
these  operations   could  not  be  completed  on  terms   satisfactory  to  it.
Accordingly,  H&H decided to permanently close the wire & cable businesses.  The
affected  operations  are located in  Cockeysville,  Maryland and Oriskany,  New
York.

      In the fourth quarter of 2004, H&H communicated to its 146 union employees
its plan to either  sell or close the wire and cable  business  and  recorded  a
restructuring charge of $1.2 million for termination benefits and related costs.
These  termination  benefits were paid in 2005.  Additionally,  $0.4 million was
recorded  as  a  restructuring   charge  for  clean  up  costs  related  to  the
Cockeysville,  Maryland  facility.  The Company  operated these  facilities on a
limited  basis  in the  first  quarter  of 2005 in  order  to  fulfill  customer
commitments.  Operating  losses and closure  costs  incurred in 2005 amounted to
$4.2 million  including  both a $0.7  million gain on the sale of certain  fixed
assets and $0.9 million charge for additional termination benefits. Accordingly,
the  estimated  total cost  including  termination  benefits,  operating  losses
(excluding fixed asset gains) and closure costs was approximately  $6.5 million.


                                       18


These costs were funded from  realization  of working  capital and proceeds from
the sale of fixed assets of these businesses.  In the second quarter of 2005 H&H
concluded  all  operations  of the  wire & cable  business.  The  sale of  land,
buildings,  and certain  machinery & equipment  relating to these businesses was
not completed until 2006.

      In 2003, the Company recorded a $67.3 million non-cash goodwill impairment
charge relating to the following businesses: $29.0 million for specialty tubing,
and $38.3 million for precious metal plating. The Company recorded these charges
because the implied  value of goodwill,  as  determined  by estimated  cash flow
projections, was less than the reporting units' carrying value. For the precious
metals plating business, the primary reason for the impairment charge related to
a facility  that had  experienced  a fire in 2002 and was not  expected to fully
recover for several years. As a result of unanticipated  competitor  discounting
and ongoing competitive pressures in the U.S. automotive industry,  the dynamics
of this business  changed,  resulting in a further  reduction in forecasted cash
flows for the future,  at the end of 2003. With respect to the Tubing  reporting
unit, there was a general decline in business,  led by the semiconductor market,
combined with operational issues related to new processes.

      The Company  conducted the required annual goodwill  impairment review for
2004,  and with the  assistance  of a third party  specialist  computed  updated
valuations  for  each  reporting  unit as  determined  by  estimated  cash  flow
projections  and market  comparables.  Based on the  results of this  review the
Company recorded a $79.8 million non-cash goodwill impairment charge relating to
the following businesses:  $34.2 million for specialty tubing, $19.0 million for
precious metal plating,  and $26.6 million for precious metal  fabrication.  The
Company  recorded  these  charges  because the  implied  value of  goodwill,  as
determined by estimated cash flow  projections  and data on market  comparables,
was less than the reporting  units'  carrying  value.  The decrease in value was
related to a reduction  in the  projection  of future  profitability,  increased
working  capital  requirements,  an  increase  in the  discount  rate,  and  the
identification  of  previously  unrecognized  intangibles.  The precious  metals
fabrication reporting unit experienced a substantial increase in working capital
requirements  as a  result  of the  unanticipated  loss of the  precious  metals
consignment  facility.  Consequently,  the overall  value of this  business  was
diminished  and the goodwill  attributable  to the precious  metals  fabrication
reporting  unit was  impaired  in  2004.  Within  the  precious  metals  plating
reporting unit, one of the business components started experiencing  significant
operational  issues in 2003.  In addition,  this  business  component  failed to
achieve forecasted  profitability from new programs.  Another business component
continued to struggle  beyond  expectations  in its efforts to  reestablish  its
customer  base and  historical  profitability.  As a result of these  additional
unanticipated  changes in this  business,  the forecast  for the precious  metal
plating business was revised and the remaining  goodwill was impaired at the end
of 2004. The Tubing business also had an unexpected and  significant  decline in
the gross  profit of one of its business  components  in 2004 as a result of the
loss of a significant  customer to a competitor and delays in launching  certain
new products.  As a result,  the forecast for this reporting unit declined,  and
additional goodwill was impaired.

      A pre-tax,  non-cash charge for the cost of early retirement incentives of
$11.5  million  was  recognized  in the  third  quarter  of  2003  as a  special
termination  benefit  in  accordance  with  Statement  of  Financial  Accounting
Standards No. 88,  "Employers'  Accounting for Settlement  and  Curtailments  of
Defined  Benefit  Pension Plans and for  Termination  Benefits"  ("SFAS 88"). In
addition,  a  curtailment  occurred  as a result of the break in service for WPC
Group employees that resulted in a pre-tax,  non-cash charge of $36.6 million in
the third quarter of 2003, pursuant to SFAS 88.

      In the first quarter of 2002,  WHX adopted the  provisions of Statement of
Financial  Accounting  Standards No. 142 "Goodwill and Other Intangible Assets."
("SFAS  142") As a  result,  WHX  recorded  a $41.1  million  non-cash  goodwill
impairment charge.  This charge is shown as a cumulative effect of an accounting
change. In addition, as required by SFAS 142, as of January 1, 2002, goodwill is
no longer  amortized.  The impairment  charge of $41.1 million  consisted of the
impairment of all goodwill  attributable  to the Wire group and a portion of the
goodwill  attributable to a reporting unit in the Engineered  Materials segment.
In the case of the Wire group the  Company  had  impaired  all of the Wire group
goodwill  of $32.5  million  on the  basis  that  this  reporting  unit had been
experiencing  negative  gross  profit  and  negative  operating  income  with no
long-term projections of significant improvement.

      In the fourth  quarter of 2002,  the  Company  recorded  an $18.7  million
non-cash  goodwill  impairment  charge  relating to the precious  metal  plating
business.  The Company  recorded this charge because the fair value of goodwill,
as determined by estimated  cash flow  projections,  was less than the reporting
units' carrying value.  This was principally  attributed to a fire at one of its
facilities,  which  resulted  in the  loss of  business  and  profitability.  In
developing the cash flow projections for the reporting unit, the Company reduced
its  forecast  with  respect to this  particular  business  and  projected  that
recovery to historical  profitability  would take several years.  As a result of
this change caused by the fire, as well as other less significant  factors,  the
Company's valuation for this reporting unit was negatively  impacted,  resulting
in the impairment charge of $18.7 million.


      In July 2002, WHX sold the stock of Unimast Incorporated, its wholly owned
subsidiary,  for $95.0 million and  recognized a gain of $11.9  million,  net of
tax.

      During 2002, the Company recorded  restructuring  charges of $20.0 million
relating to the closure of certain  Handy & Harman  operations.  Of this charge,
$8.0 million related to the Wire Group.


                                       19


      In  December  2001,  WHX  sold  its  interest  in  Wheeling-Downs   Racing
Association,  Inc.  for $105.0  million in cash and  recognized  a gain of $88.5
million.   Also   included  in  2001  is  WHX's  equity  share  in  earnings  of
Wheeling-Downs in the amount of $15.0 million.

ITEM 7.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

MANAGEMENT'S PLANS AND LIQUIDITY

      The  accompanying  financial  statements  have been prepared  assuming the
Company will  continue as a going  concern.  The Company  incurred net losses of
$140.4  million , $159.9  million and $47.9 million for the years ended December
31,  2004,  2003  and  2002,  respectively  and had  negative  cash  flows  from
operations of,$39.6 million for the year ended December 31, 2004. As of December
31, 2004, the Company had an accumulated deficit of $617.1 million and a working
capital deficit of $172.7  million.  With the exception of $6.0 million of Other
H&H debt as of December 31, 2004, all debt has been classified as current due to
noncompliance with certain debt covenants.

      On March 7, 2005, the parent company ("WHX"),  filed a voluntary  petition
to  reorganize  under  Chapter  11 of the United  States  Bankruptcy  Code.  WHX
continued  to operate  its  businesses  and own and manage its  properties  as a
debtor-in-possession  under the  jurisdiction  of the bankruptcy  court until it
emerged from  protection  under  Chapter 11 of the  Bankruptcy  Code on July 29,
2005.

      Throughout  2005 and 2006,  the  Company has been  experiencing  liquidity
issues,  which are more fully  described  in Notes 1a and 2 to the  consolidated
financial  statements  included in the 2004 10-K, which raise  substantial doubt
about the Company's  ability to continue as a going  concern . The  accompanying
financial  statements have been prepared assuming the Company will continue as a
going concern and do not include any  adjustments to reflect the possible future
effects on the  recoverability  and  classification of assets or the amounts and
classification  of  liabilities  that  may  result  from  the  outcome  of  this
uncertainty.  The Company  incurred  consolidated  net losses of $34.7  million,
$140.4 million and $159.9  million for the years ended  December 31, 2005,  2004
and 2003,  respectively  and had  negative  cash flows from  operations  of $5.0
million  and  $39.6  million  for the years  ended  December  31,  2005 and 2004
respectively. As of December 31, 2005, the Company had an accumulated deficit of
$394.0 million and a working capital  deficit of $122.1  million.  Additionally,
the Company has not been in compliance with certain of its bank covenants.

      WHX is a  holding  company  and  has as  its  sole  source  of  cash  flow
distributions from its operating  subsidiary,  Handy & Harman ("H&H"),  or other
discrete  transactions.  H&H's bank credit facilities and term loans effectively
do  not  permit  it to  transfer  any  cash  or  other  assets  to WHX  and  are
collateralized  by  substantially  all of H&H's  assets.  WHX has no bank credit
facility of its own. WHX's ongoing operating cash flow  requirements  consist of
funding  the minimum  requirements  for the WHX  Pension  Plan and paying  other
administrative costs.

      Since  emerging from  bankruptcy,  due to covenant  restrictions  in H&H's
credit  facilities,  there  have  been no  dividends  from H&H to WHX and  WHX's
sources of cash flow have consisted of:

          o   the issuance of $5.1 million in preferred stock by a newly created
              subsidiary,  which was  invested  in the equity of a small  public
              company; and

          o   partial  payment  of the  H&H  subordinated  debt  to WHX of  $9.0
              million, which required the approval of the banks participating in
              the H&H bank facility. Subsequent to this transaction in 2006, the
              remaining  intercompany  loan balance of the subordinated  debt of
              $44.2 million was converted to equity.

      Since the filing of its 2005 10-K, the following events have occurred:

Pension Plan

      On December 20, 2006, the Internal  Revenue  Service granted a conditional
waiver of the minimum funding requirements for the WHX Pension Plan for the 2005
plan year in  accordance  with section 412 (d) of the Internal  Revenue Code and
section 303 of the  Employee  Retirement  Income and  Security  Act of 1974,  as
amended ("ERISA"), and on December 28, 2006, WHX, H&H, and the PBGC entered into
the PBGC  Settlement  Agreement  in  connection  with the IRS waiver and certain
other  matters.  The IRS waiver is subject to certain  conditions,  including  a
requirement  that the Company meet the minimum funding  requirements for the WHX


                                       20


Pension Plan for the plan years ending  December 31, 2006 through 2010,  without
applying for a waiver of such  requirements.  The PBGC Settlement  Agreement and
related  agreements  include the following:  (i) the  amortization of the waived
amount of $15.5 million (the "Waiver Amount") over a period of five years,  (ii)
the PBGC's consent to increase  borrowings under H&H's senior credit facility to
$125 million in connection with the closing of an acquisition  described  below,
(iii) the resolution of any potential  issues under Section 4062(e) of ERISA, in
connection with the cessation of operations at certain  facilities owned by WHX,
H&H or their  subsidiaries,  and (iv) the  granting  to the PBGC of  subordinate
liens on the assets of H&H and its subsidiaries, and specified assets of WHX, to
collateralize  WHX's obligation to pay the Waiver Amount to the WHX Pension Plan
and to make  certain  payments  to the WHX  Pension  Plan  in the  event  of its
termination.  As a result of the PBGC  Settlement  Agreement and the IRS waiver,
based on estimates from WHX's actuary,  the Company  expects its minimum funding
requirement  for the  specific  plan  year  and  the  amortization  of the  2005
requirement  to be $13.1  million  (paid in full in 2006),  $6.7  million,  $7.9
million,  and $18.3 million  (which  amounts  reflect the recent  passage of the
Pension  Protection  Act  of  2006)  in  2006,  2007,  2008  and  through  2011,
respectively.

Amendments to Credit Agreements

      On December  27,  2006,  Wachovia  provided  H&H with an  additional  $7.0
million loan. This was pursuant to an amendment signed on October 30, 2006 which
made the  additional  funds  conditional  upon the filing of the Company's  2005
Annual Report on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia and their Loan and Security Agreement
with Steel to provide,  in part, for: (i) the  consummation of the  transactions
contemplated by the PBGC Settlement  Agreement and the waiver of possible events
of default that may have  occurred  relating to the matters  covered by the PBGC
Settlement Agreement;  and (ii) a $42 million term loan funded by Ableco Finance
LLC. A portion of the loan ($26 million) was used to fund an acquisition by H&H,
$3.2  million  was  paid  as  a  contribution  to  the  WHX  Pension  Plan,  and
approximately  $12  million  of the loan was used to  reduce  H&H's  outstanding
balance under its revolving credit facility.

Acquisition

      Pursuant to an Asset Purchase  Agreement (the "Asset Purchase  Agreement")
dated as of December 28, 2006, a subsidiary of H&H acquired a mechanical roofing
fastener  business  from  Illinois  Tool  Works  Inc.  The  purchase  price  was
approximately $26 million,  including a working capital  adjustment.  The assets
acquired included, among other things, machinery, equipment,  inventories of raw
materials,  work-in-process and finished products,  certain contracts,  accounts
receivable  and  intellectual  property  rights,  all as related to the acquired
business and as provided in the Asset Purchase Agreement. This acquired business
develops and manufactures fastening systems for the commercial roofing industry.
WHX believes this acquisition  solidifies its position as a leading manufacturer
and supplier of mechanical fasteners,  accessories and components,  and building
products for the commercial and  residential  construction  industry.  Funds for
payment  of  the  purchase   price  by  H&H  were   obtained   pursuant  to  the
aforementioned term loan.

Liquidity

      As of December 31, 2006,  WHX had cash of  approximately  $0.8 million and
current  liabilities of  approximately  $7.5 million,  including $5.1 million of
mandatorily  redeemable  preferred  shares  payable  to a related  party.  H&H's
availability  under its  revolving  credit  facility and other  facilities as of
December 31, 2006 was $19.1  million.  All such  facilities,  including the term
loans,  expire in March 2007. The Company has significant cash flow obligations,
including  without  limitation  the  amounts  due for the WHX  Pension  Plan (as
amended  by  the  PBGC  Settlement  Agreement  described  above).  Based  on the
Company's forecasted borrowings, the funds available under its credit facilities
may not be sufficient to fund debt service costs,  working  capital  demands and
environmental  remediation costs.  Additionally,  there can be no assurance that
the  Company  will be able  to  obtain  replacement  financing  at  commercially
reasonable  terms upon the  expiration  of its credit  facilities in March 2007.
Consequently,  there  continues  to be  substantial  doubt  about the  Company's
ability to continue as a going concern.

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

      The  Company  has  restated  its  2003,  2002 and prior  years'  financial
statements  to correct  its  accounting  for  goodwill  impairment,  certain tax
matters  and  other   corrections,   including  its  accounting  for  derivative
instruments  (specifically  future contracts on precious metals) and the related
impact on inventory and its accounting for an executive life insurance  program,
as  well  as its  reporting  of  investment  borrowings  on its  2003  and  2002
statements of cash flows, as described below.


                                       21


GOODWILL IMPAIRMENT

      In fiscal  2003,  the Company  previously  recorded a goodwill  impairment
charge  of  $89.0  million  relating  to  several  of its  reporting  units.  In
connection  with the preparation of its 2004 financial  statements,  the Company
identified several errors in its assessment of goodwill impairment  resulting in
the  need to  restate  its  2002 and  2003  consolidated  financial  statements,
including:  (1) the reallocation of goodwill,  upon the date of adoption of SFAS
142, 'Goodwill and Other Intangible Assets',  to the applicable  reporting units
of the Company  based on a more  reasonable  and  supportable  methodology;  (2)
identification of additional reporting units not previously considered;  (3) use
of a different  discount rate that more  appropriately  considered the different
risks  associated  with the  individual  reporting  units rather than an overall
consolidated rate; (4) identification of certain intangible assets that were not
previously  considered in determining the implied  goodwill as of the assessment
date;  and (5) use of a  growth  rate in  determining  the  terminal  value of a
reporting unit, which the Company did not consider in its original valuations.

      The  effect  of  correcting  these  errors  was  to  reduce  the  goodwill
impairment charge, loss from continuing operations and net loss by $21.7 million
for the year ended December 31, 2003. The effect of correcting  these errors for
the year ended December 31, 2002 was to increase the goodwill  impairment charge
and loss from  continuing  operations by $18.7 million,  decrease the cumulative
effect of an  accounting  change by $2.9  million,  and to increase  net loss by
$15.8 million.

TAX MATTERS

      As of December  31,  2002,  the Company had  included  $5.3 million in its
deferred tax assets  related to the recording of an additional  minimum  pension
liability.  As of  December  31,  2003,  the  Company  established  a  valuation
allowance for all deferred tax assets,  and incorrectly  charged $5.3 million to
other comprehensive loss for the valuation allowance related to the deferred tax
asset  associated with the minimum pension  liability.  The Company now believes
that in  accordance  with the  provisions  of SFAS 109,  "Accounting  for Income
Taxes",  the charge to other  comprehensive  loss  should  have been a charge to
income tax  expense.  Accordingly,  the net loss for 2003 has been  increased by
$5.3 million and accumulated other comprehensive loss and accumulated deficit as
of  December  31,  2003  were  decreased  and  increased  by  the  same  amount,
respectively.

      As a result of the  Company's  review of deferred  taxes,  federal  taxes,
state taxes payable and tax reserves  (federal and state),  certain  errors were
identified related to 2003 and prior periods. The effect of these errors on 2003
is an increase  in tax  expense of $12.0  million,  including  the $5.3  million
adjustment to comprehensive  loss discussed above. The Company had established a
valuation  allowance against its net deferred tax asset as of December 31, 2003.
As part of the 2003 restatement,  the Company increased its valuation  allowance
to reflect $1.1 million of deferred tax  liabilities  that can not be considered
when   assessing   the   realizability   of  deferred   tax  assets  in  certain
jurisdictions.  These  deferred tax  liabilities  primarily  relate to temporary
differences for the tax  amortization of tax deductible  goodwill.  In addition,
the Company  increased  its valuation  allowance by $4.6 million for  additional
federal  deferred tax assets that were recorded as part of the  restatement  for
2002 and prior  periods but  required a valuation  allowance  as of December 31,
2003. The Company also increased its valuation allowance to reflect $0.6 million
and $0.1 million of state and foreign  deferred tax  liabilities,  respectively,
that it had  inappropriately  netted against federal  deferred tax assets in its
previously issued 2003 financial statements.  The balance of the restatement for
2003 tax matters relates primarily to state tax issues.

      The effect of tax errors on 2002,  2001 and 2000 is a tax  benefit of $1.3
million,  $0.7  million and $4.3  million,  respectively.  The 2002 and 2001 tax
benefits  relate  primarily to the reversal of federal and state  reserves.  The
2002 benefit  includes a $0.6 million charge for the correction of errors in the
federal tax provision.  The 2000 tax benefit relates  primarily to the recording
of additional deferred tax assets.

      Deferred  taxes  relating  to  hedge  accounting  and  related   inventory
accounts, and executive life restatements were also recorded and are included in
the  adjustments   discussed   above.   The  goodwill   restatement   items  are
non-deductible and accordingly have no impact on tax matters.

      On the  year-end  balance  sheets,  tax  restatement  matters  resulted in
decreases  to accrued  liabilities  of $3.0  million in 2003 and $3.3 million in
2002, an increase to net deferred tax liabilities of $1.9 million in 2003 and an
increase in net deferred tax assets of $4.6 million in 2002, and, a $5.3 million
decrease to other  comprehensive  loss in 2003,  and a $1.7 million  decrease to
goodwill  as of both  December  31,  2003 and 2002.  The  reduction  in  accrued
liabilities  includes the reversal of a $1.7 million tax reserve attributable to
H&H prior to its  acquisition  by the  Company.  The  reversal  of this  reserve
reduced goodwill by the same amount.

INVESTMENT BORROWINGS

      During  fiscal  2003 and  2002,  the  Company  frequently  traded  in U.S.
Treasury  securities  which were  classified as short term  investments and were
considered   trading   securities  under  SFAS  115,   "Accounting  for  Certain
Investments in Debt and Equity  Securities".  Accordingly,  the Company recorded
the  activity in these  trading  investments  as  operating  cash  flows.  As of
December  31,  2002 and 2001,  the  Company  had  short-term  margin  borrowings
aggregating $107.9 million and $110.9 million respectively,  which were borrowed
to fund  these  short-term  investments.  The  Company  has  determined  that it
incorrectly  recorded  changes in such  borrowings as cash flows from  operating
activities  when such  borrowings  should have been  reported as cash flows from
financing activities in accordance with SFAS 95, "Statement of Cash Flows".


                                       22


      The effect of correcting  these errors in 2003 and 2002 was an increase in
cash flows provided by operating  activities of $107.9 million and $3.0 million,
respectively, and an increase in cash flows used in financing activities for the
same amount. This restatement had no effect on the net change in cash for either
period.

OTHER CORRECTIONS

      HEDGE ACCOUNTING/INVENTORY

          In order to produce  certain of its products,  the Company  purchases,
      maintains and utilizes  precious metals  inventory.  The Company maintains
      policies   consistent  with  economically   hedging  its  precious  metals
      inventory against price fluctuations.  Hedge accounting under Statement of
      Financial   Accounting  Standards  No.  133,  "Accounting  for  Derivative
      Instruments and Hedging Activities" (SFAS 133),  requires  contemporaneous
      documentation  at the inception of the  applicable  hedging  relationship,
      including the method for assessing the hedging instrument's  effectiveness
      as well as the method that will be used to measure hedge  ineffectiveness.
      The Company did not meet the  documentation  criteria  necessary  to apply
      hedge  accounting.  Accordingly,  the Company has restated  its  financial
      statements to mark to market the derivative financial  instruments related
      to  precious  metals.  Such mark to  market  adjustments,  including  both
      realized and unrealized  gains and losses,  are recorded in current period
      earnings  as  other  income  or  expense  in  the  Company's  consolidated
      statement  of  operations.  In  addition,  the  Company has  restated  its
      financial  statements to record its precious metal  inventory at LIFO cost
      subject to lower of cost or market with any adjustments  recorded  through
      cost of goods sold. The correction of this error results in an increase to
      2003 cost of goods sold of $0.3 million and other  expense of $0.2 million
      for an aggregate increase to loss from continuing  operations before taxes
      of $0.5  million.  There was no impact  on the 2003  balance  sheet as all
      precious  metal  and  hedges  were  liquidated  during  2003.  In 2002 the
      correction  of this error  results in an increase to cost of goods sold of
      $1.0  million and other  income of $1.3 million for a net decrease to loss
      from  continuing  operations  before taxes of $0.3 million.  Inventory was
      reduced by $5.8  million,  other  current  assets were  increased  by $0.5
      million and accounts  payable were decreased by $5.8 million.  In 2001 the
      correction  of this error  results in a decrease  to cost of goods sold of
      $0.4 million and other income of $0.2 million for a net decrease from loss
      from continuing  operation before taxes of $0.2 million. In 2001 inventory
      and accounts payable were increased by $0.4 million,  other current assets
      increased by $0.2 million.

      LIFE INSURANCE ACCRUAL

          The Company has an Executive  Post-Retirement  Life Insurance  Program
      which provides for life insurance  benefits for certain Company executives
      upon their retirement.  The insurance premium is paid by the Company.  The
      Company accounted for the cost of this program since its inception in 1998
      on a pay as you go basis and did not follow the  guidance  as  required by
      Statement  of  Financial   Accounting  Standards  No.  106  -  "Employers'
      Accounting for  Post-Retirement  Benefits Other Than Pensions" (SFAS 106).
      Under SFAS 106,  the  Company is required to  recognize  in its  financial
      statements  an annual cost and  benefit  obligation  related to  estimated
      future benefit payments to be made to its current and retired  executives.
      Accordingly,  the Company  recorded an increase in  operating  expenses of
      $0.2 million for each of the years ended December 31, 2002,  2001and 2000,
      and a decrease in operating  expenses in the year ended  December 31, 2003
      of $0.1  million  to  reflect a partial  curtailment  with  respect to the
      plans. Long-term liabilities increased as of December 31, 2003, 2002, 2001
      and 2000 in the amount of $0.6  million,  $0.7  million,  $0.6 million and
      $0.4 million,  respectively,  to give effect to the proper  accounting for
      this plan.  An adjustment to decrease  opening  retained  earnings by $0.2
      million was recorded in 2000 for the correction of errors prior to 2000.

RESTATEMENT OF UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

      The Company has  restated its  previously  issued  unaudited  consolidated
financial  statements for the quarters  ended March 31, 2004,  June 30, 2004 and
September 30, 2004 (the "Interim Restatement").  The Interim Restatement will be
given full effect in the  financial  statements  to be included in the Company's
Quarterly  Report on Form 10-Q for the quarters  ended March 31, 2005,  June 30,
2005 and September 30, 2005,  when they are filed.  See Note 19 to  Consolidated
Financial  Statements for details of the  restatements in each of the respective
2004 quarters. The Company does not intend to file restated financial statements
for the quarters  ended March 31, June 30 and September 30, 2003;  however,  the
Company has restated the quarterly 2003 financial  information  included in Note
19.


                                       23


OVERVIEW

      WHX is a holding  company that  invests in and manages a diverse  group of
businesses. WHX's primary business currently is H&H, a diversified manufacturing
company whose  strategic  business units encompass  three  reportable  segments:
precious  metal  plating  and  fabrication,  specialty  tubing,  and  engineered
materials.

      H&H from time to time  continues to evaluate  the sale of non-core  assets
and certain underperforming  businesses, as well as strategic acquisitions.  WHX
has provided,  and may provide from time to time in the future,  information  to
interested  parties regarding portions of its non-core assets and businesses for
such purposes.

      The following table presents information about reportable segments for the
years ended December 31:


                                       24


(in thousands)
                                                                 2004              2003             2002
                                                            -------------     -------------     -------------
                                                                              (as Restated)     (as Restated)
Net Sales

   Precious Metal                                             $ 105,289         $  84,572          $ 142,260
   Wire and Tubing                                              142,977           121,939            132,194
   Engineered Materials                                         162,653           119,785            111,939
                                                              ---------         ---------          ---------

           Net sales                                          $ 410,919         $ 326,296          $ 386,393
                                                              =========         =========          =========

Segment operating income (loss)
   Precious Metal (a) (g)                                     $ (44,550)        $ (35,703)         $ (23,227)
   Wire and Tubing (b) (e) (f) (h)                              (49,631)          (32,994)           (14,071)
   Engineered Materials (e)                                      16,576             8,788              9,624
                                                              ---------         ---------          ---------
           Subtotal                                             (77,605)          (59,909)           (27,674)

Unallocated corporate expenses                                    8,224            16,374             17,547
Environmental remediation expense (c)                            28,971              --                 --
Fairfield penalty (c)                                             3,845              --                 --
Pension - curtailment & special termination benefits               --              48,102               --
Loss (gain) on disposal of assets (d)                              (592)            6,286              2,576
                                                              ---------         ---------          ---------

    Loss from operations                                       (118,053)         (130,671)           (47,797)

Interest expense                                                 25,624            19,166             27,257
Equity in loss of WPC                                              --                --               20,000
Gain on disposition of WPC                                         --                 534               --
Gain (loss) on early retirement of debt                          (1,161)            2,999             42,491
Other income (expense)                                            6,566              (412)            (2,084)
                                                              ---------         ---------          ---------

        Loss from continuing operations before taxes           (138,272)         (146,716)           (54,647)

Tax provision (benefit)                                           2,172            13,208            (25,413)
                                                              ---------         ---------          ---------

      Loss from continuing operations, net                     (140,444)         (159,924)           (29,234)

Income from discontinued operations, net                           --                --               10,601
Gain on sale of discontinued operation (Unimast), net              --                --               11,861
                                                              ---------         ---------          ---------

      Loss  before cumulative effect of accounting change      (140,444)         (159,924)            (6,772)
Cumulative effect of accounting change, net of tax (e)             --                --              (41,129)

                                                              ---------         ---------          ---------
          Net loss                                            $(140,444)        $(159,924)         $ (47,901)
                                                              =========         =========          =========

(a)   Includes  a goodwill  impairment  charge of $45.6  million in 2004,  $38.4
      million in 2003, and $18.7 million in 2002.

(b)   Includes a goodwill  impairment  charge of $34.2 million in 2004 and $29.0
      million in 2003.

(c)   Environmental  remediation  expense and  Fairfield  penalty  have not been
      allocated to the reporting segments since the related facilities have been
      closed for  several  years and are not  indicative  of  current  operating
      results.

(d)   Loss  (gain) on  disposal  of assets  includes  the  following  amounts by
      segment  for  2004,  2003 and 2002  respectively.  Precious  Metal - $101,
      $4,557 and ($749); Wire and Tubing -($13),  $1,485 and $2,044 ; Engineered
      Materials -($4), ($23) and $764; Corporate ($676), $267, and $517.

(e)   The cumulative  effect of a change in accounting  principle ($41.1 million
      charge)  was  recorded  in 2002,  related  to the  adoption  of SFAS  142,
      "Goodwill  and Other  Intangible  Assets".  The split by segment was $32.5
      million  related to Wire & Tubing and $8.6 million  related to  Engineered
      Materials.

(f)   Includes an asset impairment  charge of $8.2 million in 2004.

(g)   Includes restructuring charges of $12.0 million in 2002.

(h)   Includes restructuring charges of $8.0 million in 2002.

2004 COMPARED TO 2003

      Sales in 2004 were $ 410.9 million  compared with $ 326.3 million in 2003.
Sales increased by $20.7 million at the Precious Metal Segment, $21.0 million at
the Wire and Tubing  Segment,  and by $42.9 million at the Engineered  Materials
Segment.  Gross  profit  percentage  decreased  in the 2004 period to 16.4% from
18.7% in 2003. Gross profit percentage in 2004 was negatively impacted by higher
raw material costs, primarily steel and precious metal.


                                       25


      Selling,  general and  administrative  expenses  ("SG&A")  decreased  $1.9
million from $69.4 million in 2003 to $67.5 million in 2004.  This resulted from
decreased  pension  expense of $7.7  million,  lower  professional  fees and the
termination of the WPN management  agreement.  The 2004 period also includes the
reversal of a $1.3 million  reserve for a legal  proceeding  that was settled in
WHX's favor,  offset by $1.8 million of expenses incurred in connection with the
pursuit of various recapitalization options. In 2004 the Company recognized $3.8
million in expenses  relating to an  arbitration  award  against the Company for
failure to remediate in a timely manner  environmental  conditions at a property
that H&H sold in 2003  (Fairfield  East).  Also recorded in 2004 is a reserve of
$1.2 million related to a receivable  from HHRG. The 2003 results  included $4.1
million  associated  with the shut down of certain  H&H  operations,  and a $3.5
million charge for employee separation and related expenses in the first quarter
of  2003.  This  $3.5  million  charge  related  to a  reduction  in  executive,
administrative and information technology personnel at H&H. The 2003 period also
includes  a  $2.2  million  gain  on  insurance  proceeds.  The  balance  of the
fluctuation in selling, general and administrative expenses is increased selling
expenses associated with the increased sales levels noted above.

      Operating  loss from  continuing  operations  for 2004 was $140.4  million
compared to a $159.9  million  operating loss for 2003. In the fourth quarter of
2004, the Company conducted the required annual goodwill  impairment review, and
with the assistance of a third party specialist, computed updated valuations for
each reporting unit using a discounted  cash flow approach and market  approach.
Based on the  results of this  review,  the  Company  recorded  a $79.8  million
non-cash goodwill impairment charge relating to the following businesses:  $34.2
million for specialty  tubing,  $19.0 million for precious  metal  plating,  and
$26.6 million for precious metal fabrication. The Company recorded these charges
because  the fair  value of  goodwill,  as  determined  by  estimated  cash flow
projections and data on market  comparables,  was less than the reporting units'
carrying  value.  The  decrease  in value  was  related  to a  reduction  in the
projection of future profitability,  increased working capital requirements,  an
increase in the discount rate, and the identification of previously unrecognized
intangibles.  The precious  metals  fabrication  reporting  unit  experienced  a
substantial  increase  in  working  capital  requirements  as a  result  of  the
unanticipated  loss of the precious metals consignment  facility.  Consequently,
the overall value of this business was diminished and the goodwill  attributable
to the precious metals  fabrication  reporting unit was impaired in 2004. Within
the precious  metal  plating  reporting  unit,  one of the  business  components
started experiencing  significant  operational issues in 2003. In addition, this
business component failed to achieve forecasted profitability from new programs.
Another  business  component  continued to struggle  beyond  expectations in its
efforts to  reestablish  its customer base and  historical  profitability.  As a
result of these additional  unanticipated changes in this business, the forecast
for the precious metal plating  business was revised and the remaining  goodwill
was impaired at the end of 2004. The Tubing  business also had an unexpected and
significant  decline in the gross  profit of one of its business  components  in
2004 as a result  of the loss of a  significant  customer  to a  competitor  and
delays in  launching  certain new  products.  As a result the  forecast for this
reporting unit declined, and additional goodwill was impaired.

      The 2003  operating  results  include  a $48.1  million  non-cash  pension
curtailment and special  termination  benefit charge related to the consummation
of the WPC Group  Plan of  Reorganization  and a  non-cash  goodwill  impairment
charge of $67.3 million relating to the following  segments:  $29.0 for the wire
and tubing  segment and $38.3 million for precious  metal  plating.  The Company
recorded  these charges  because the fair value of the reporting  units was less
than the  reporting  units'  carrying  value.  For the precious  metals  plating
business,  the primary  reason for the  impairment  charge related to a facility
that had  experienced  a fire in 2002 and was not expected to fully  recover for
several years. As a result of unanticipated  competitor  discounting and ongoing
competitive  pressure  in the U.S.  automotive  industry,  the  dynamics of this
business changed,  resulting in a further reduction in forecasted cash flows for
the future, at the end of 2003. With respect to the Tubing reporting unit, there
was a general decline in business,  led by the  semiconductor  market,  combined
with  operational  issues  related to new  processes.  Also included in the 2003
operating  results is a $3.5 million charge for employee  separation and related
expenses  discussed  above,  a $2.2 million gain on insurance  proceeds,  a $0.9
million gain on the liquidation of certain precious metal inventories and a $1.6
million lower of cost or market charge related to precious metals inventory. The
balance  of the  increase  in  operating  income  is due to the  above-mentioned
increased  sales  levels  partially  offset by  production  inefficiencies  at a
stainless tubing group facility.

      In 2004 the Company  evaluated the current operating plans and current and
forecasted operating results of H&H's wire & cable business.  In accordance with
Statement  of  Financial   Accounting  Standards  Number  144,  "Accounting  for
Impairment  or  Disposal  of  Long-Lived   Assets"  ("SFAS  144"),  the  Company
determined that there were indicators of impairment as of June 30, 2004 based on
continued  operating  losses,  deteriorating  margins,  and rising raw  material
costs.  An estimate of future cash flows indicated that as of June 30, 2004 cash
flows would be  insufficient  to support  the  carrying  value of the  long-term
assets of the  business.  Accordingly,  these  assets were written down to their
estimated  fair value by recording a non-cash  asset  impairment  charge of $3.9
million in the second  quarter.  In November  2004,  H&H  announced  that it had
signed a non-binding  letter of intent to sell its wire business and that it was
negotiating the sale of its steel cable business. The decision to sell was based
on continued  operating  losses,  deteriorating  margins and rising raw material
costs  experienced  by these  businesses.  Based on the proposed  terms of these
transactions the Company recorded an additional asset impairment  charge of $4.3
million.  At that time H&H stated that if it were unable to complete these sales
it would  consider the closure of these  operations.  On January 13,  2005,  H&H
determined  that a sale of these  operations  could  not be  completed  on terms
satisfactory to H&H.  Accordingly,  H&H decided to permanently  close the wire &
cable businesses. The affected operations are located in Cockeysville,  Maryland
and Oriskany, New York.


                                       26


      Environmental  remediation  expenses  of $29.0  million  were  recorded in
2004., as compared to $0.5 million in 2003. Included in the 2004 amount is $26.3
million  related to a facility in  Fairfield  CT.. In 2003,  the Company  sold a
portion of its former Fairfield, CT facility ("Fairfield East) for $8.0 million.
In connection  with this sale,  the Company was  responsible  for demolition and
environmental  remediation of the site, the estimated cost of which was included
in the loss on sale  recorded in 2003.  H&H  determined  that an increase in the
reserve for  environmental  remediation  was needed for  Fairfield  East, in the
amount of $28.3 million which was recorded in the fourth  quarter of 2004.  This
increase in the reserve was caused by the  discovery of  underground  debris and
soil  contaminants  that had not been  anticipated.  The Company  has  recovered
insurance in the amount of $2.0 million related to this site;  therefore the net
expense included in the 2004 financial statements is $26.3 million. An insurance
receivable of $2.0 million is included on the 2004  Consolidated  Balance Sheet.
Additionally,  $1.1 million in environmental  remediation expenses were recorded
in 2004 for a location  in North  Attleboro,  Massachusetts.  The balance of the
expense relates to several other locations.

      Gain on disposal of assets  amounted to $0.6 million in 2004. A balance of
$1.0 million owed for the sale of the  Fairfield,  CT (Fairfield  East) property
was fully  reserved and is included as a loss on  disposition of assets in 2004.
Offsetting  this  loss on  disposal  of  assets  is the  gain on the  sale of an
aircraft of $1.7 million. In 2003, H&H sold its former Fairfield,  CT (Fairfield
East) facility for $8.0 million resulting in a loss on the sale of $3.9 million.
Refer to Item 3 - Legal  Proceedings  for  discussion of  environmental  matters
arising  subsequent to the sale of this  property.  The remainder of the loss on
disposal of assets in 2003 relates to operations that were closed.

      Interest  expense in 2004  increased  $6.4 million,  to $25.6 million from
$19.2  million  in 2003.  This  increase  was due to  increased  interest  rates
partially offset by lower borrowings.  Also included in interest expense in 2004
is a $1.8 million fee in connection with the assignment of an H&H term loan. The
assignment  is  anticipated  to  result in an annual  interest  savings  of $2.8
million.

      As part of the  amended  Chapter  11  Plan of  Reorganization  for the WPC
Group,  WHX  had  agreed  conditionally  to  provide  additional  funds  to WPSC
amounting  to $20.0  million.  As a result  of WHX's  obligation  to fund  $20.0
million to WPC, WHX had recorded a $20.0 million charge as an equity loss in WPC
in the  consolidated  statement of  operations  for the year ended  December 31,
2002. On August 1, 2003, upon consummation of the WPC POR, WHX contributed $20.0
million  in  cash to the  reorganized  company  and  received  a  $10.0  million
subordinated note from WPSC. This note was fully reserved in 2003. In July 2004,
WHX  realized  $5.6  million  upon the sale of the  note to a third  party  and,
accordingly,  the reserve was  reversed  and $5.6  million was recorded in other
income in the second  quarter of 2004.  Also  included in other  income are $0.4
million of net investment earnings.

      In  connection  with the  refinancing  of the H&H  Senior  Secured  Credit
Facility in March 2004,  the Company wrote off deferred  financing  fees of $1.2
million.  This charge is classified as loss on early retirement of debt. In 2003
WHX  recognized  a $3.0 million gain on the early  retirement  of $17.7  million
principal amount of 10 1/2% Senior Notes.

      The  Company  recorded a valuation  allowance  relating to the Federal net
deferred tax assets since it is the opinion of management that it is more likely
than not that such tax benefits will not be realized in future periods. In 2004,
a tax  provision of $2.2  million was  recorded for foreign and state taxes,  as
well as  additional  Federal  deferred tax  liabilities  relating to  intangible
assets with an indefinite life.

      In 2003 a tax  provision  of  $13.2  million  was  recorded.  The  Company
recorded a valuation  allowance  related to the Federal net  deferred tax assets
since it is the opinion of management  that it is more likely than not that such
tax  benefits  will not be  realized  in future  periods.  The  charge  for this
valuation  allowance was $11.6 million.  The balance of the provision relates to
foreign and state taxes.

      Net loss applicable to common stock for 2004 amounted to $159.9 million or
$29.38 per share of common stock after adjusting for preferred stock  dividends,
as compared  to a net loss  applicable  to common  stock of $179.3  million,  or
$33.35 per basic  share of common  stock after  adjusting  for  preferred  stock
dividends.

      The  comments  that  follow  compare  revenues  and  operating  income  by
reportable segment for the years ended 2004 and 2003:

PRECIOUS METALS

      Sales for the Precious  Metals segment  increased $20.7 million from $84.6
million  in 2003 to $105.3  million  in 2004.  Our  precious  metal  fabrication
business  accounted for $12.7  million of the increase.  While 12% of the growth
was from higher metal prices,  the balance was due to growth at current accounts
and increased market share.  The precious metal plating  business  accounted for
$8.0 million of the increase primarily from the growth in automotive sensors.


                                       27


      Operating  loss for the Precious  Metals segment was $44.6 million in 2004
compared to an operating loss of $35.7 million in 2003. The 2004 period includes
a $45.6 million  non-cash charge for goodwill  impairment.  The Company recorded
these  charges  because the fair value of goodwill,  as  determined by estimated
cash flow  projections,  was less than the reporting  units' carrying value. The
decrease  in value  was  related  to a  reduction  in the  projection  of future
profitability,  increased  working capital  requirements  and an increase in the
discount  rate.  The 2003 period  includes a $38.4 million  non-cash  charge for
goodwill impairment,  a $0.9 million gain on the liquidation of certain precious
metal inventories and a $2.2 million gain on insurance  proceeds.  Also included
in 2003 is a non cash lower of cost or market charge of $1.6 million  related to
precious  metal  inventory  and  $1.1  million  of  severance  related  expenses
allocated to this segment from the reduction in salaried  staff at H&H. The 2003
period also includes  approximately  $2.9 million of costs  associated  with the
restructuring  program  announced in 2002.  These costs were  considered  period
charges and were not  included  in the  restructuring  charge  recorded in 2002.
After  considering the above, the balance of the improvement in operating income
in 2004 is related to the above-mentioned  increase in sales partially offset by
higher raw material costs.

WIRE AND TUBING

Sales for the Wire and  Tubing  segment  increased  $21.1  million  from  $121.9
million in 2003 to $143.0 million in 2004. Of the $21.1 million  increase,  $7.7
million  related to market share gains,  $2.9 million related to increased price
of steel in the appliance segment,  Stronger demand in petrochemical,  military,
aircraft  markets  as they  relate to H&H's  Tubing  businesses  increased  $5.5
million,  and price  increases  to offset  higher  steel costs  account for $2.1
million.

      Operating  loss for the Wire and Tubing segment was $49.6 million in 2004.
Operating  loss for 2003 was $33.0  million.  The 2004  period  includes a $34.2
million  non-cash  charge for goodwill  impairment.  The Company  recorded  this
charge because the fair value of goodwill,  as determined by estimated cash flow
projections,  was less than the reporting unit's carrying value. The decrease in
value was  related to a reduction  in the  projection  of future  profitability,
increased  working capital  requirements,  and an increase in the discount rate.
The 2003 period includes a non-cash goodwill  impairment charge of $29.0 million
and $1.5 million of severance  related  expenses  allocated to this segment from
the reduction in salaried staff at H&H. Excluding goodwill  impairment  charges,
and  excluding  the  impairment  charge  relating to the  long-lived  assets and
operating  loss of the wire and  cable  business  (see  below),  2004 had a $3.8
million improvement in operating income over 2003. The improvements  experienced
by this segment are directly related to the sales improvements  discussed above.
The improvements were partially offset by production inefficiencies and the loss
of a major customer at a stainless  tubing group  facility.  These declines were
offset by the  improved  operating  performance  at the  Company's  other tubing
facilities.

      In 2004 the Company  evaluated the current operating plans and current and
forecasted operating results of H&H's wire & cable business.  In accordance with
SFAS 144,  "Accounting  for  Impairment or Disposal of Long-Lived  Assets",  the
Company  determined that there were indicators of impairment as of June 30, 2004
based on  continued  operating  losses,  deteriorating  margins,  and rising raw
material  costs.  An estimate of future cash flows indicated that as of June 30,
2004 cash flows  would be  insufficient  to support  the  carrying  value of the
long-term assets of the business. Accordingly, these assets were written down to
their  estimated fair value by recording a non-cash asset  impairment  charge of
$3.9 million in the second quarter.  In November 2004, H&H announced that it had
signed a non-binding  letter of intent to sell its wire business and that it was
negotiating the sale of its steel cable business. The decision to sell was based
on continued  operating  losses,  deteriorating  margins and rising raw material
costs  experienced  by these  businesses.  Based on the proposed  terms of these
transactions the Company recorded an additional asset impairment  charge of $4.3
million.  At that time H&H stated that if it were unable to complete these sales
it would  consider the closure of these  operations.  On January 13,  2005,  H&H
determined  that a sale of these  operations  could  not be  completed  on terms
satisfactory to H&H.  Accordingly,  H&H decided to permanently  close the wire &
cable businesses.

ENGINEERED MATERIALS

      Sales for the Engineered  Materials  segment  increased $42.9 million from
$119.8  million in 2003 to $162.7  million in 2004.  This  increase in sales was
primarily due to increased  sales prices of $15.0 million to offset rising steel
prices, a stronger  commercial  construction market of $14.3 million and, market
share gains of $14.1 million.

      Operating  income  increased  by $7.8 million from $8.8 million in 2003 to
$16.6 million in 2004. The increase in operating  income is primarily due to the
increase  in sales noted  above,  partially  offset by  increased  steel  costs.
Included in 2003 is $0.9 million of severance related expenses allocated to this
segment from the reduction in salaried staff at H&H.

UNALLOCATED CORPORATE EXPENSES

      Unallocated  corporate  expenses  decreased  from $16.4 million in 2003 to
$8.2 million in 2004.  This decrease is primarily  related to decreased  pension
expense of $7.7 million,  lower  professional  fees, the  termination of the WPN
management  agreement  in January of 2004,  and the  reversal of a $1.3  million


                                       28


reserve for a legal proceeding.  These  improvements were partially offset by an
increase in salary and  benefits,  insurance  costs and $1.8 million of expenses
incurred in connection with the pursuit of various recapitalization options.

2003 COMPARED TO 2002

      Sales in 2003 were $326.3  million  compared with $386.4  million in 2002.
Sales decreased by $57.7 million at the Precious Metal Segment and $10.3 million
at the Wire & Tubing Segment.  Sales increased by $7.8 million at the Engineered
Materials  Segment.  Gross  profit  increased  in the 2003  period to 18.7% from
17.4%.  This increase is primarily due to a gain from the liquidation of certain
precious metal  inventory of $3.2 million in 2003 as well as the absence in 2003
of lower margin sales associated with the Fairfield, CT facility included in the
2002 period.  This was partially  offset in 2003 by increased raw material costs
and a $1.3  million  lower  of cost or  market  adjustment  for  precious  metal
inventory.  Gross profit in 2002 was also negatively affected by $2.9 million in
write downs of  inventory  to disposal  values and  reserves for excess and slow
moving  inventory at the  Company's  stainless  steel wire  facilities.  See the
segment discussion for more detailed analysis of these items.

      Selling,  general and administrative  expenses decreased $4.3 million from
$73.7  million in 2002 to $69.4 million in 2003.  This  resulted from  decreased
pension expense of $2.6 million, a $2.2 million gain on insurance proceeds,  and
the  elimination of SG&A expenses  associated with the facilities that were shut
down in the second half of 2002. Partially offsetting theses decreases is a $3.5
million  charge  related  to  a  reduction  of  executive,   administrative  and
information technology personnel at H&H.

      Operating  loss for 2003 was $159.9  million  compared to a $29.2  million
operating  loss for 2002.  The 2003  operating  results  include a $48.1 million
non-cash pension  curtailment and special  termination benefit charge related to
the consummation of the WPC Group Plan of Reorganization and a non-cash goodwill
impairment  charge of $67.4  million.  Operating  loss at the segment  level was
$59.9  million in 2003  compared to an operating  loss of $27.7 million in 2002.
The 2003  operating  results at the segment  level  includes the  aforementioned
non-cash  goodwill  impairment charge of $67.4 million relating to the following
segments: $29.0 million for wire and tubing and $38.4 million for precious metal
plating.  The  Company  recorded  these  charges  because  the fair value of the
reporting units was less than the reporting units' carrying value. Also included
in the 2003 operating  results is a $3.5 million charge for employee  separation
and related expenses discussed above, a $2.2 million gain on insurance proceeds,
a $0.9 million gain on the  liquidation of certain  precious metal  inventories,
and a $1.6 million  lower of cost or market  charge  related to precious  metals
inventory  Additionally,  the 2003 results include approximately $4.1 million of
costs associated with restructuring  programs at Handy & Harman's Precious Metal
and Wire & Tubing Segments.  These costs were considered period charges and were
not included in the restructuring  charge recorded in 2002 (see below). The 2003
period also benefited from the elimination of operating  losses  associated with
operations  that were closed in 2002.  In 2002,  the  Company  recorded an $18.7
million  non-cash  goodwill  impairment  charge  relating to the precious  metal
plating  business.  The Company  recorded this charge  because the fair value of
this reporting unit, as determined by estimated cash flow projections,  was less
than the reporting  units' carrying value. The 2002 period also includes a $12.0
million and $8.0 million  restructuring charge related to the Company's Precious
Metal and Wire & Tubing  Segments,  respectively.  In addition,  the 2002 period
also  includes a $2.9 million  write down of  inventory to disposal  value and a
$4.5  million  reserve for excess and slow  moving  inventory  at the  Company's
stainless steel wire operations.

      The Company  received  cash  proceeds of $13.0 million on the sale of real
estate  associated with operations that were closed in 2002 and 2003.  Losses on
these sales are  included in losses on  disposals  of assets of $6.3  million in
2003. In connection  with the real estate sales the Company  retained title to a
parcel of land in Fairfield,  CT. This parcel is classified as an asset held for
sale, in the amount of $2.0 million, and is included in other non-current assets
on the Consolidated Balance Sheet at December 31, 2003.

      Loss on disposal of assets  amounted to $2.6 million in 2002. H&H received
cash proceeds of $8.6 million in 2002 primarily related to the sale of machinery
and equipment associated with the Fairfield, CT facility.

      Interest  expense in 2003  decreased by $8.1 million to $19.2 million from
$27.3 million in 2002.  Handy & Harman's  interest  expense  decreased from $9.5
million in 2002 to $7.6 million in 2003,  reflecting  lower borrowings and lower
interest rates.  The remaining $6.2 million of this decline in interest  expense
is primarily related to the early retirement of $17.7 million and $134.6 million
of 10 1/2 % Senior Notes in 2003 and 2002, respectively.

      As part of the  amended  Chapter  11  Plan of  Reorganization  for the WPC
Group, WHX agreed conditionally to provide additional funds to WPSC amounting to
$20.0 million.  As a result of WHX's  obligation to fund $20 million to WPC, WHX
recorded a $20.0  million  charge as an equity  loss in WPC in the  accompanying
consolidated  statement of operations  for the year ended  December 31, 2002. On
August 1, 2003, upon  consummation of the WPC POR, WHX contributed $20.0 million
in cash to the reorganized company.

      Other income  (expense)  was an expense of $0.4 million in 2003.  The 2003
expense  included  transaction  losses of $2.3 million,  $0.6 million loss on an
interest rate swap, and other expenses of $1.3 million  partially  offset by net
investment  earnings of $3.8 million.  Other income  (expense) was an expense of


                                       29


$2.1  million  in 2002.  The 2002  expense  included a $4.8  million  loss on an
interest  rate swap,  other  expenses of $1.2 million,  partially  offset by net
investment earnings of $2.6 million.

      In 2003 WHX  recognized  a $3.0 million  gain on the early  retirement  of
$17.7  million  principal  amount of 10 1/2% Senior  Notes.  In 2002 the Company
recognized  a $42.5  million  gain on the early  retirement  of  $134.6  million
principal amount of 10 1/2% Senior Notes.

      In 2003 a tax  provision  of  $13.2  million  was  recorded.  The  Company
recorded a valuation  allowance  related to the Federal net  deferred tax assets
since it is the opinion of management  that it is more likely than not that such
tax  benefits  will not be  realized  in future  periods.  The  charge  for this
valuation  allowance was $11.6 million.  The balance of the provision relates to
foreign and state taxes.

      In 2002, the Company  recognized a tax benefit from continuing  operations
of $25.4 million on a $54.6 million pre-tax loss., offsetting a tax provision of
$13.1  million from  discontinued  operations on income of $35.6  million.  As a
result of the  termination of a tax sharing  agreement and settlement of certain
inter-company  claims  between  the  Company  and the  WPC  Group,  the  Company
recognized the benefit of the WPC Group's  current year losses and net operating
loss carryforwards to offset taxable income from WHX's other operations.

      On July 31, 2002, the Company sold the stock of Unimast,  its wholly-owned
subsidiary, to Worthington Industries, Inc. for $95.0 million in cash. Under the
terms of the agreement, the buyer assumed approximately $25.6 million of Unimast
debt. As a result of the sale, the consolidated financial statements and related
notes  for 2002  reflect  Unimast  as a  discontinued  operation.  In the  third
quarter,  the Company  recognized  a pre-tax  gain on the sale of  approximately
$18.6  million.  The gain on sale is net of  closing  costs,  transaction  fees,
employee related payments,  and other costs and expenses. Net cash proceeds from
the sale,  after  escrow  of $2.5  million,  closing  costs,  transaction  fees,
employee related payments, and other costs and expenses were approximately $85.0
million.  The Company applied these proceeds in accordance with the terms of the
Indenture for the Company's 10 1/2 % Senior Notes.

      Effective  January 1, 2002, the Company adopted the provisions of SFAS 142
and changed its accounting accordingly. As a result of the adoption of SFAS 142;
the Company did not record amortization expense for existing goodwill during the
year ending  December  31,  2002.  Any  intangible  assets  acquired or goodwill
arising from transactions after June 30, 2001 is subject to the amortization and
non-amortization  provisions  of SFAS 141 and SFAS 142.  The Company  recorded a
$41.1 million non-cash goodwill impairment charge relating to the H&H Wire Group
($32.5 million) and a reporting unit in the Company's Engineered Materials Group
($8.6  million)  in the  first  quarter  of  2002.  This  charge  is  shown as a
cumulative effect of an accounting change.

      Net loss for 2003, before adjusting for preferred stock dividends amounted
to $159.9  million or $33.35 loss per share of common stock after  adjusting for
preferred stock  dividends,.  This compared to a 2002 net loss, before adjusting
for preferred  stock  dividends and  discontinued  operations and the cumulative
effect of an accounting  change,  of $47.9 million,  or $9.10 per basic share of
common stock after adjusting for preferred stock dividends.

      In 2002, the effect of discontinued  operations and the cumulative  effect
of an accounting  change on the Company's  loss per share of common stock was to
reduce/(increase) loss per share by $4.22 and $(7.73), respectively.

      Net loss per common share was $33.35 in 2003 and $12.61 in 2002.

      The  comments  that  follow  compare  revenues  and  operating  income  by
reportable segment for the years ended 2003 and 2002:

PRECIOUS METALS

      Sales for the Precious Metals Segment  decreased $57.7 million from $142.3
million in 2002 to $84.6 million in 2003. The decrease was due to the closing of
the  Fairfield,  CT  facility  at the end of the third  quarter  of 2002 and the
closure of the Fontana, CA facility in 2003.

      Operating  losses  increased  $12.5  million from $23.2 million in 2002 to
$35.7 million in 2003.  Included in the 2003 period is a $38.4 million  non-cash
charge  for  goodwill  impairment,  $0.9  million  in gains  resulting  from the
liquidation of certain  precious  metals, a $1.6 million lower of cost or market
adjustment related to precious metals, a $2.2 million gain on insurance proceeds
and $1.1 million of severance  related  expenses  allocated to this segment from
the  reduction  in  salaried  staff  at  H&H.  The  2003  period  also  includes
approximately  $2.9 million of costs associated with the  restructuring  program
announced in 2002 (see below). Also included in the 2003 period is a decrease in
operating  income of  approximately  $2.0 million due to reduced  margins in the
precious  metal plating units.  In 2002,  the Company  recorded an $18.7 million
non-cash  goodwill  impairment  charge  relating to the precious  metal  plating
business.  The  Company  recorded  this  charge  because  the fair value of this


                                       30


reporting unit, as determined by estimated cash flow projections,  was less than
the  reporting   units'  carrying  value  Included  in  the  2002  period  is  a
restructuring  charge of $12.0 million, as described below, and additional costs
of $1.4 million to maintain  the employee  base until  operations  ceased.  Also
included in the 2002  period is  incremental  operating  income  resulting  from
increased  demand  from  customers  prior to the  closure of the  Fairfield,  CT
facility.

      In April 2002,  H&H announced its decision to exit certain of its precious
metal  activities.  The  affected  product  lines  were  manufactured  at  H&H's
Fairfield,  CT and East  Providence,  RI facilities.  The decision to exit these
operating activities resulted in a restructuring  charge of $12.0 million.  This
charge included $6.6 million for employee separation  expenses,  $0.6 million of
contractual  obligations,  and $4.8  million for costs to close the  facilities,
including  refining charges for inventory  remaining after operations ceased. In
addition,  the Company incurred $1.4 million of incremental costs related to the
restructuring  efforts in the second half of 2002 to maintain the customer  base
in order to fulfill  customer  orders and complete the shutdown  activities.  An
additional  $2.9 million of  associated  costs were incurred  during 2003.  Such
costs  were  not  included  in  the  aforementioned  restructuring  charge.  The
Fairfield, CT facility was sold in 2003 for $8.0 million.

WIRE & TUBING

      Sales for the Wire & Tubing  Segment  decreased  $10.3 million from $132.2
million in 2002 to $121.9 million in 2003. This decline was primarily due to the
shutdown  of the  Liversedge,  England  and  Willingboro,  N.J.  specialty  wire
facilities at the end of 2002. Additionally,  the 2003 period reflects continued
weakness  in  the  semiconductor  fabrication  and  telecommunications  markets.
Partially  offsetting  these  decreases  were  increased  sales at the Company's
domestic and foreign units that service the appliance  industry.  Operating loss
increased by $18.9 million from $14.1 million in 2002 to a loss of $33.0 million
in 2003. Included in the 2003 period is a non-cash goodwill impairment charge of
$29.0 million  related to this segment's  specialty  tubing  operations and $1.5
million  of  severance  related  expenses  allocated  to this  segment  from the
reduction in salaried staff at H&H.  Increasing  operating income were increased
sales at the  Company's  domestic and foreign  units that service the  appliance
industry.  Operating  income  was  also  negatively  impacted  by the  continued
weakness in the  semiconductor  fabrication and  telecommunications  markets and
increased raw material costs. The 2003 period also includes  approximately  $1.2
million of costs  associated  with the Wire Group  portion of the  restructuring
program  announced  in  2002  (see  below).  Offsetting  this  decrease  is  the
elimination of operating losses  associated with the facilities shut down at the
end of 2002. The 2002 period  included Wire Group charges for  restructuring  of
$8.0 million,  as further  described  below,  accelerated  depreciation  of $3.4
million  during the remaining  operating  period which ended  December 31, 2002,
$2.9 million in charges related to the write down of inventories  located at the
Liversedge,  England and Willingboro,  NJ facilities and charges of $4.5 million
for excess and slow moving inventories and allowances for doubtful accounts.

      In September  2002,  the Company  decided to exit certain of its stainless
steel wire  activities.  The affected  operations  were at H&H's  facilities  in
Liversedge,  England and  Willingboro,  NJ. The decision to exit these operating
activities resulted in charges of $10.9 million, including restructuring charges
of $8.0 million.  The components of the $8.0 million  restructuring  charge are:
$2.8 million in employee separation expenses, $4.8 million for the write-down of
production supplies and consumables and facility closing costs, and $0.4 million
in contractual obligations. The remainder of the charge amounted to $2.9 million
for the write-down of inventory to disposal  value.  This charge was included in
cost of sales. In addition, the Company incurred additional costs related to the
restructuring of approximately $1.2 million, above the aforementioned separation
expenses,  in 2003 to maintain  the employee  base in order to fulfill  customer
orders and complete shutdown  activities.  The Company received cash proceeds of
$2.7 million in 2003 from the sale of related land and  buildings.  As discussed
above, the Company incurred  accelerated  depreciation  expense of approximately
$3.4 million on equipment values during the fourth quarter of 2002.

ENGINEERED MATERIALS

      Sales for the  Engineered  Materials  segment  increased $7.9 million from
$111.9  million in 2002 to $119.8  million in 2003.  This  increase in sales was
primarily due to market share gains and new products in this segment's  fastener
business,  partially  offset  by a  decline  in  sales in the  construction  and
appliance  market  in this  segment's  electro-galvanizing  business.  Operating
income decreased $0.8 million from $9.6 million in 2002 to $8.8 million in 2003.
This decrease was primarily  due to a decline in sales in the  construction  and
appliance  markets  in this  segment's  electro-galvanizing  business.  The 2003
period also included  $0.9 million of severance  related  expenses  allocated to
this segment from the reduction in salaried  staff at H&H.  Included in the 2002
period were costs of $1.0 million associated with a litigation settlement.


UNALLOCATED CORPORATE EXPENSES

      Unallocated  corporate  expenses  decreased  from  $17.5  million to $16.4
million. This decrease is primarily related to a decrease in net pension expense
of $2.3 million for the WHX Pension Plan partially offset by increased legal and
insurance  expense.  The decreased  pension expense is primarily  related to the


                                       31


reduction  in  active  participants  as a  result  of the WPC  POR.  The WPC POR
provides, among other things, that no member of the WPC Group is a participating
employer under the WHX Plan and that continuous  service for WPC Group employees
was broken.

LIQUIDITY AND CAPITAL RESOURCES

BANKRUPTCY FILING AND PLAN OF REORGANIZATION OF WHX

      On March 7, 2005,  WHX filed a  voluntary  petition  to  reorganize  under
Chapter 11 of the United States  Bankruptcy Code with the Bankruptcy  Court. WHX
continued  to operate  its  businesses  and own and manage its  properties  as a
debtor-in-possession  under  the  jurisdiction  of the  Bankruptcy  Court and in
accordance  with the  applicable  provisions  of the  Bankruptcy  Code  until it
emerged from protection under Chapter 11 of the Bankruptcy Code on July 29, 2005
(see below).

      WHX's  primary  business  is H&H,  a  diversified  manufacturing  company.
Neither H&H, nor any of WHX's other  subsidiaries or affiliates were included in
WHX's bankruptcy  filing. All of H&H's operating units conducted business in the
ordinary course during the  bankruptcy.  WHX's  bankruptcy  filing was primarily
intended  to reduce  WHX's debt,  simplify  its  capital  structure,  reduce its
overall cost of capital and provide it with better access to capital markets.

      On March 7, 2005, WHX also filed a proposed Plan of  Reorganization of WHX
Corporation  and a related  proposed  disclosure  statement  with the Bankruptcy
Court.  On June 7, 2005, WHX filed its first amended Chapter 11 Plan. On June 8,
2005 WHX filed its second amended Disclosure Statement.

      On July 21, 2005, WHX's Chapter 11 Plan of Reorganization was confirmed by
the Bankruptcy Court. The Plan became effective on July 29, 2005.

      The  bankruptcy  filing  created an event of default  under the  Indenture
governing  WHX's Senior Notes.  Under the terms of the Senior Notes, as a result
of the bankruptcy  filing, the entire unpaid principal and accrued interest (and
any other  additional  amounts)  became  immediately due and payable without any
action on the part of the  trustee or the note  holders.  The  principal  amount
outstanding  under the  Senior  Notes at March 7, 2005 was  approximately  $92.8
million. Accrued interest to March 7, 2005 was approximately $3.8 million.

      The  following is a summary of certain  material  features of the Plan and
the Confirmation Order. On the Effective Date:

      o   All of WHX's outstanding  securities,  including WHX's  pre-bankruptcy
          filing  common  stock,  Series A preferred  stock,  Series B preferred
          stock and 10 1/2% Senior  Notes were  deemed  cancelled  and  annulled
          without further act or action.

      o   In full and complete satisfaction of all such claims, holders of WHX's
          10 1/2%  Senior  Notes  received  9,200,000  shares  of  common  stock
          representing  their prorated share of the reorganized  company.  These
          shares represent 92% of the equity in the reorganized company.

      o   In full and  complete  satisfaction  of all such  interests,  Series A
          preferred   stockholders  received  366,322  shares  of  common  stock
          representing  their  prorated  share of the  reorganized  company  and
          344,658 warrants to purchase common stock of the reorganized  company,
          exercisable at $11.20 per share and expiring on February 28, 2008.

      o   In full and  complete  satisfaction  of all such  interests,  Series B
          preferred   stockholders  received  433,678  shares  of  common  stock
          representing  their  prorated  share of the  reorganized  company  and
          408,030 warrants to purchase common stock of the reorganized  company,
          exercisable at $11.20 per share and expiring on February 28, 2008.

      o   Holders  of WHX's  pre-bankruptcy  filing  common  stock  received  no
          distribution under the Plan.

      The  common  stock  received  by  the  Series  A and  Series  B  preferred
stockholders,  collectively,  represents  8% of the  equity  in the  reorganized
company.   The  warrants   issued  to  the  Series  A  and  Series  B  preferred
stockholders,  collectively, represent the right to purchase an additional 7% of
the equity of the reorganized company after giving effect to the exercise of the
warrants.

      On the  Effective  Date,  all of the  assets  of WHX  were  vested  in the
reorganized  company  free and clear of all liens,  causes of  actions,  claims,
encumbrances,  equity interests,  and interests against,  in, or on such assets,
except as explicitly provided in the Plan.

      The reorganization  value of the assets of WHX immediately before the date
of  confirmation  of the Plan was  greater  than the total of all  post-petition
liabilities and allowed claims.  Despite the ownership change,  the Company does
not qualify for Fresh-Start  reporting in accordance with the American Institute
of Certified Public Accountants Statement of Position 90-7, "Financial Reporting
by  Entities  in  Reorganization   Under  the  Bankruptcy  Code"  ("SOP  90-7").
Accordingly,  the  assets  and  liabilities  of  the  reorganized  company  upon
emergence from bankruptcy are stated at their historical values.


                                       32


      Upon its emergence from  bankruptcy on July 29, 2005,  WHX  experienced an
ownership  change as defined by Section 382 of the Internal  Revenue Code, which
imposes   annual   limitations   on  the   utilization  of  net  operating  loss
carryforwards  post ownership change.  The Company believes it qualifies for the
bankruptcy  exception  to  the  general  Section  382  limitations.  Under  this
exception,  the  annual  limitation  imposed by Section  382  resulting  from an
ownership  change will not apply,  instead the net operating loss  carryforwards
must be  reduced  by  certain  interest  expense  paid to  creditors  who became
stockholders  as a result  of the  bankruptcy  reorganization.  Thus,  WHX's net
operating loss  carryforwards  of $116.0 million as of December 31, 2004 will be
reduced  by  approximately   $31.0  million  to  approximately   $85.0  million.
Additionally,  if WHX should undergo a second  ownership change within two years
of the date of change  as a result  of the  reorganization,  its  remaining  net
operating losses would be effectively reduced to zero. Accordingly,  in order to
avoid subsequent  ownership  changes,  WHX's new charter contains a 5% ownership
limit pursuant to which certain transfers of WHX's shares will be limited.

      Since the Effective  Date,  H&H has continued to conduct its businesses in
the ordinary course.

BANKRUPTCY FILING AND PLAN OF REORGANIZATION OF THE WPC GROUP

      A Chapter  11 Plan of  Reorganization  ("WPC  POR") was  confirmed  by the
Bankruptcy  Court on June 18,  2003  and was  consummated  on  August  1,  2003.
Pursuant to the terms of the WPC POR,  among other things,  the WPC Group ceased
to be a subsidiary of WHX effective  August 1, 2003,  and from that date forward
has been an independent company.

      As part of the WPC POR, WHX agreed to make certain contributions (the "WHX
Contributions") to the WPC Group.  Under the WHX Contributions,  WHX forgave the
repayment of its claims  against the WPC Group of  approximately  $39.0  million
and,  additionally,  contributed to the WPC Group $20 million of cash, for which
WHX received a note in the amount of $10.0 million.  The note was fully reserved
upon  receipt.  In July 2004 WHX realized $5.6 million upon the sale of the note
to a third party and, accordingly, the reserve was reversed and $5.6 million was
recorded in other income.

      On  March  6,  2003,  the  PBGC  published  its  Notice  of  Determination
("Notice") and on March 7, 2003 filed a Summons and Complaint  ("Complaint")  in
United States  District Court for the Southern  District of New York seeking the
involuntary   termination   of  the  WHX  Pension  Plan  (the  "WHX  Plan"),   a
defined-benefit  pension plan  sponsored by the Company  that  provides  pension
benefits to active and retired  employees of WHX and H&H and certain benefits to
active and retired employees or members of the WPC Group. WHX filed an answer to
this  complaint on March 27, 2003,  contesting  the PBGC's  action.  On July 24,
2003, the Company entered into an agreement among the PBGC,  Wheeling-Pittsburgh
Corporation ("WPC"),  Wheeling-Pittsburgh  Steel Corporation  ("WPSC"),  and the
United  Steelworkers of America,  AFL-CIO-CLC  ("USWA") in settlement of matters
relating to the PBGC V. WHX  CORPORATION,  Civil Action No.  03-CV-1553,  in the
United States District Court for the Southern District of New York ("Termination
Litigation"), in which the PBGC was seeking to terminate the WHX Plan. Under the
settlement,  among  other  things,  WHX agreed  (a) that the WHX Plan,  as it is
currently  constituted,  is a single  employer  pension plan,  (b) to contribute
funds to the WHX Plan equal to moneys spent (if any) by WHX or its affiliates to
purchase  WHX  10.5%  Senior  Notes  ("Senior  Notes")  in  future  open  market
transactions,  and (c) to grant to the PBGC a pari passu security interest of up
to $50.0  million in the event WHX  obtained  any future  financing on a secured
basis or provided any security or collateral for the Senior Notes.

      Also under the  settlement,  all parties  agreed that as of the  effective
date of the WPC POR,  (a) no shutdowns  had occurred at any WPC Group  facility,
(b) no member of the WPC Group is a  participating  employer under the WHX Plan,
(c)  continuous  service for WPC Group  employees  was broken,  (d) no WPC Group
employees will become  entitled to "Rule of 65" or "70/80"  Retirement  Benefits
(collectively,  "Shutdown  Benefits")  by reason of events  occurring  after the
effective  date of the WPC POR, and (e) the WHX Plan would provide for a limited
early retirement option to allow up to 650 WPSC  USWA-represented  employees the
right to receive retirement benefits based on the employee's years of service as
of  July  31,  2003  with a  monthly  benefit  equal  to $40  multiplied  by the
employee's years of service.

      Finally,  under  the  settlement,  the PBGC  agreed  (a)  that,  after the
effective  date of the WPC POR, if it  terminates  the WHX Plan at least one day
prior  to a WPC  Group  facility  shutdown,  WHX  shall  be  released  from  any
additional  liability to the PBGC resulting  from the shutdown,  (b) to withdraw
its claims in the WPC Bankruptcy Proceedings, and (c) to dismiss the Termination
Litigation.

      A pre-tax,  non-cash charge for the cost of early retirement incentives of
$11.5  million  was  recognized  in the  third  quarter  of  2003  as a  special
termination  benefit  in  accordance  with  Statement  of  Financial  Accounting
Standards No. 88,  "Employers'  Accounting for Settlement  and  Curtailments  of
Defined  Benefit  Pension Plans and for  Termination  Benefits"  ("SFAS 88"). In
addition,  a  curtailment  occurred  as a result of the break in service for WPC
Group employees that resulted in a pre-tax,  non-cash charge of $36.6 million in
the third quarter of 2003, also pursuant to SFAS 88.


                                       33


      For  WHX  Plan  funding  purposes,  the  impact  of the  changes  was  not
recognized  until the next actuarial  valuation  which occurred as of January 1,
2004. The funding requirements depend on many factors including those identified
above as well as future investment  returns on WHX Plan assets. WHX was required
to make a  contribution  to the WHX Plan of $1.2 and  $6.0  million  in 2005 and
2004, respectively.

      The agreement  with the PBGC also contains the provision that WHX will not
contest a future action by the PBGC to terminate the WHX Plan in connection with
a future WPC Group facility shutdown.  In the event that such a plan termination
occurs,  the PBGC has agreed to  release  WHX from any  claims  relating  to the
shutdown. However, there may be PBGC claims related to unfunded liabilities that
may exist as a result of a termination of the WHX Plan.

      As a  result  of the  consummation  of the WPC POR  and  the  related  WHX
Contributions, the remaining balance in the loss in excess of investment account
of $0.5 million was reversed into income in the third quarter of 2003.

OVERVIEW

      As of  December  31,  2004,  the Company  had  consolidated  cash of $20.8
million, as compared to $42.0 million of consolidated cash at December 31, 2003.
Thus, cash and cash  equivalents  declined by $21.2 million,  consisting of cash
flows  provided by (used in)  operating,  investing and financing  activities of
($39.6)  million,  $20.3 million and ($2.0) million,  respectively.  Losses from
operations  adjusted for non cash and non  operating  items used $38.2  million.
Accounts  receivable used $10.0 million,  inventories used $25.0 million,  trade
payables and other liabilities  provided $30.0 million. WHX paid $6.0 million in
pension contributions. Other non working capital items provided $1.6 million.

      At December 31, 2004 accounts receivable totaled $53.8 million compared to
$42.1 million at December 31, 2003, an increase of $11.7  million.  The increase
in accounts  receivable  reflects the strong  sales  levels for the  three-month
period  ended  December  31, 2004 when  compared to the fourth  quarter of 2003.
Sales for the fourth  quarter of 2004 were $94.1  million as  compared  to $78.5
million for the fourth quarter of 2003.

      At December 31, 2004  inventory  totaled $68.0  million  compared to $41.8
million at December  31,  2003,  an increase of $26.2  million.  The increase in
inventory consisted of an increase in precious metals inventory of $15.4 million
and an increase in non precious metals inventory of $10.8 million.  The precious
metals  increase  is  primarily  related  to the  termination  of the  Company's
precious  metal  consignment  facility  on March 30,  2004  coincident  with H&H
entering into new financing agreements to replace existing Senior Secured Credit
facilities,  including  the  revolving  credit  facility.  At December 31, 2003,
1,605,000  ounces of silver  and  14,617  ounces of gold were  consigned  to the
Company under the  consignment  facility.  Upon  termination of this facility on
March 30, 2004, H&H purchased approximately $15.0 million of precious metal. Non
precious  metal  inventory  increased by $10.8 million from December 31, 2003 to
December  31,  2004.  The  increase  relates  to higher  raw  material  costs of
approximately  $7.0  million  (primarily  steel) and the  balance  to  increased
quantities.  These cost increases occurred primarily in our Engineered Materials
and Wire & Tubing segments.

      H&H's revolving credit  facilities  existing at December 31, 2003 ("Senior
Secured Credit  Facilities") were scheduled to mature on July 31, 2004. On March
31, 2004, H&H obtained new financing  agreements to replace and repay the Senior
Secured Credit Facilities. The new financing agreements included a $70.0 million
(subsequently  reduced to $62.9 million)  revolving  credit facility and a $22.2
million Term A Loan with Wachovia Capital Finance,  formerly Congress  Financial
Corporation,  as agent and a lender ("Wachovia  Facilities") and a $71.0 million
Term B Loan  with  Ableco  Finance  LLP  ("Ableco").  Concurrently  with the new
financing  agreements,  WHX loaned $43.5 million to H&H to repay,  in part,  the
Senior Secured Credit  Facilities.  Such loan was subordinated to the loans from
Wachovia  and  Canpartners.  On  October  29,  2004 the  Ableco  Term B Loan was
assigned to Canpartners  Investments  IV, LLC  ("Canpartners").  On September 8,
2005,  the Term B Loan was assigned to Steel  Partners II, L.P.  ("Steel"),  who
also owns 50.3% of the Company's common stock.

      The new  revolving  credit  facility  provided for up to $62.9  million of
borrowings  dependent on the levels of and  collateralized  by eligible accounts
receivable  and  inventory.  The new  revolving  credit  facility  provided  for
interest at LIBOR plus 2.75% or the U.S.  Base rate plus 1.00%.  An amendment to
the facility on December  29, 2004  lowered the margins on the revolver  loan to
LIBOR plus 2.25% or the U.S. Base Rate plus 0.5%. The Wachovia Facilities mature
on March 31, 2007. The Term A Loan is collateralized  by eligible  equipment and
real  estate,  and  provided  for interest at LIBOR plus 3.25% or the prime rate
plus 1.5%. An amendment to the facility on December 29, 2004 lowered the margins
on the  Term A Loan to  LIBOR  plus  2.5%  or the  U.S.  Base  Rate  plus  .75%.
Borrowings under the Wachovia  Facilities are  collateralized  by first priority
security  interests in and liens upon all present and future stock and assets of
H&H and its  subsidiaries,  including  all contract  rights,  deposit  accounts,
investment property,  inventory,  equipment, real property, and all products and
proceeds  thereof.  The  principal  of the  Term A Loan is  payable  in  monthly
installments  of $0.3  million,  with a balloon  payment  due at  maturity.  The
Wachovia  Facilities  contain  affirmative,  negative,  and financial  covenants
(including  minimum EBITDA,  maximum  leverage,  and fixed charge coverage,  and
restrictions  on cash  distributions  that can be made to WHX). On May 20, 2005,
H&H entered into an amendment to the Loan and Security  Agreement  with Wachovia
("Wachovia  Amendment").  The  Wachovia  Amendment  provided for  amendments  to


                                       34


certain financial  covenants,  an additional equipment loan of up to $3 million,
as well as certain other terms and conditions. On September 8, 2005, H&H entered
into an amendment to the Wachovia Facilities. This amendment provides for, among
other things, (i) the revision of the calculation of components of the borrowing
base which results in an increase in  availability  and (ii) the increase of the
current outstanding amount of the term loan to $22.2 million from $16.0 million.
On December 31, 2004 and December 31, 2006, H&H had approximately  $10.1 million
and $19.1 million,  respectively,  of funds available under the revolving credit
facility.

On December 29, 2005, H&H entered into an amendment to the Wachovia  Facilities.
This  amendment  provides  for,  among  other  things,  (i) the  increase of the
borrowing  base by $3.5 million  through  January 31,  2006,  (ii) the waiver of
certain  defaults and (iii)  certain  related  amendments to the  covenants.  On
January 24,  2006,  H&H entered  into a consent and  amendment  to the  Wachovia
Facilities.  This  consent  and  amendment  was made in  connection  with a loan
agreement  entered  into by  H&H's  wholly-owned  subsidiary,  OMG,  Inc.,  with
Sovereign Bank dated as of January 24, 2006 collateralized by a mortgage on OMG,
Inc.'s  real  property  pursuant  to which an $8.0  million  term  loan was made
available to OMG,  Inc. This consent and  amendment  provides  for,  among other
things,  amending certain definitions to reflect the loan agreement entered into
by OMG,  Inc. On March 31,  2006,  H&H entered into an amendment to the Wachovia
Facilities.  This  amendment  provided for,  among other things,  consent to the
increase  of the Term B Loan on the same  date in the  principal  amount of $9.0
million and the prepayment of a portion of H&H's  subordinated  promissory  note
issued  to WHX (the "WHX  Note") in the  principal  amount of $9.0  million.  On
October 30, 2006, H&H and its bank group amended its facility to provide,  among
other  things,  an  additional  $7.0  million loan upon the filing of WHX's 2005
Annual  Report  on  Form  10-K,  and an  immediate  $3.0  million  of  borrowing
availability under the revolving credit facility. On December 27, 2006, Wachovia
provided H&H with the $7.0 million, upon the filing of the Company's 2005 Annual
Report on Form 10-K.  On December 28, 2006,  H&H and its bank group  amended its
facility to provide,  in part,  for: (i) the  consummation  of the  transactions
contemplated by the PBGC Settlement  Agreement and the waiver of possible events
of default that may have  occurred  relating to the matters  covered by the PBGC
Settlement Agreement;  and (ii) a $42 million term loan funded by Ableco Finance
LLC. A portion of the loan ($26 million) was used to fund an acquisition by H&H,
$3.2  million  was  paid  as  a  contribution  to  the  WHX  Pension  Plan,  and
approximately  $12  million  of the loan was used to  reduce  H&H's  outstanding
balance of its revolving credit facility.

      The Term B Loan matures on March 31, 2007 and provides for annual payments
based on 40% of excess  cash  flow as  defined  in the  agreement.  Interest  is
payable  monthly at the Prime Rate plus 4.0%. At no time shall the Prime Rate of
interest  be below  4.0%.  The Term B  Facility  has a third  priority  security
interest  in and lien on all  assets of H&H,  subject  to the prior  lien of the
Wachovia Facilities,  and a $15.5 million lien granted to the PBGC in connection
with the PBGC  Settlement  Agreement The Term B facility  contains  affirmative,
negative,  and financial covenants  (including minimum EBITDA,  maximum leverage
and fixed charge coverage,  restrictions on cash  distributions that can be made
to WHX and cross-default  provisions with the Wachovia Facilities).  At December
31, 2004 the net liabilities of H&H amounted to $14.3 million,  all of which was
restricted as to the payment of dividends to WHX. In the second quarter of 2005,
H&H  determined  that it would not have been  compliant  with certain  financial
covenants at June 30, 2005.  Accordingly,  on May 20, 2005,  H&H entered into an
amendment  to the Loan and Security  Agreement  with  Canpartners  ("Canpartners
Amendment").  The  Canpartners  Amendment  provided  for  amendments  to certain
financial covenants as well as certain other terms and conditions.  On September
8, 2005,  H&H completed the assignment of its Term B Loan from  Canpartners,  to
Steel, as agent and lender. Substantially all of the terms and conditions of the
Term B Loan  continue  without  amendment.  Steel is the  beneficial  holder  of
5,029,793 shares of WHX's common stock,  representing  approximately  50% of the
outstanding shares. Warren Lichtenstein, the sole executive officer and managing
member of Steel  Partners,  L.L.C.,  the general  partner of Steel  Partners II,
L.P., is the Chairman of the Board of WHX.

      On December  29,  2005,  H&H entered  into an amendment to its Term B Loan
with Steel. This amendment provides for, among other things, (i) the increase of
the Term B Loan by $10  million,  to $81  million,  (ii) the  waiver of  certain
defaults and (iii) certain related  amendments to the covenants.  On January 24,
2006, H&H entered into a consent and amendment to its Term B Loan.  This consent
and  amendment  was  made in  connection  with a  five-year  loan  and  security
agreement  entered  into by  H&H's  wholly-owned  subsidiary,  OMG,  Inc.,  with
Sovereign Bank dated as of January 24, 2006 collateralized by a mortgage on OMG,
Inc.'s  real  property  pursuant  to which an $8.0  million  term  loan was made
available to OMG,  Inc. This consent and  amendment  provides  for,  among other
things,  (i) the amendment of certain  definitions to reflect the loan agreement
entered into by OMG,  Inc. and (ii) the increase of the  indebtedness  covenant,
each to reflect the loan agreement  entered into by OMG, Inc. On March 31, 2006,
H&H entered into an amendment to the Term B Loan.  This amendment  provided for,
among  other  things,  an  additional  loan  of  $9.0  million  to H&H  and  its
subsidiaries  to be  used  to make a  prepayment  on the WHX  Note of up to such
amount, which prepayments and additional loans were made at March 31, 2006.

      In March 2004,  H&H's  wholly  owned  Danish  subsidiary  entered into new
financing  agreements  to replace and repay  existing  debt that had been issued
under a  multi-currency  facility  within the then  existing H&H Senior  Secured
Credit Facilities.  The new Danish facilities are with a Danish bank and include
a  revolving  credit  facility  and term loans.  At December  31, 2004 there was
approximately $6.5 million outstanding under the term loans.

      On October 26, 2005, WHX CS Corp.  ("CS"),  a  wholly-owned  subsidiary of
WHX, entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") by
and between CS and Steel.  Pursuant to the  Agreement,  CS sold 1,000  shares of
Series A Preferred  Stock,  par value $0.01 per share (the "Steel  Shares"),  to
Steel.  Steel paid a purchase price of $5,100 per share or an aggregate purchase


                                       35


price of $5.1 million.  The Steel Shares accrue dividends at 6.0% per annum. The
Steel  Shares  were  required to be  redeemed  by CS for $5.1  million  plus all
accrued and unpaid  dividends  on October 26, 2006 or, at the sole option of the
Board of  Directors  of CS,  on any  earlier  date.  However,  there was no such
redemption  on that date.  The  proceeds of the sale were used by CS to purchase
1,898,337 shares of Cosine Communications, Inc.

      In the Fourth Quarter of 2004 H&H acquired  Protechno s.a., a manufacturer
of brazing alloys and fluxes, located in Riberac, France, for $2.4 million. This
operating entity is included in the Precious Metals segment.

      In 2004,  2003 and 2002,  $9.8  million,  $13.1  million and $9.3 million,
respectively,  were spent on capital  improvements  in H&H.  In 2005,  H&H spent
approximately $20 million on capital expenditures,  of which approximately $10.0
million relate to a plant expansion at H&H's fastener  facility in Agawam,  MA .
In 2006,  H&H  established a carbon tubing  facility for the  refrigeration  and
automotive markets in Mexico.

      In 2003 WHX purchased an aircraft for $19.3 million,  which it sold in the
first  quarter of 2004 for $19.3  million.  The  aircraft  was included in other
current  assets  on WHX's  consolidated  balance  sheet at  December  31,  2003.
Additionally,  WHX sold another aircraft in the second quarter of 2004. The sale
of this aircraft provided $7.0 million in cash and resulted in a pre-tax gain of
$1.7 million.

      WHX  had  received  a $10.0  million  subordinated  note  from  WPSC  upon
consummation  of the WHX POR, which had been fully  reserved.  In July 2004, WHX
realized  $5.6  million  upon  the  sale  of the  note  to a  third  party  and,
accordingly,  the reserve was  reversed  and $5.6  million was recorded in other
income in the second quarter of 2004.

      As a  result  of  the  termination  of a tax  sharing  agreement  and  the
settlement of certain  inter-company  claims between WHX and the WPC Group,  WHX
was able to utilize  significant  income tax loss carry forwards to minimize its
actual income tax payments, so long as the WPC Group remained as a member of the
WHX  consolidated  tax  return.  The WPC group  ceased to be a member of the WHX
consolidated  tax return effective August 1, 2003. In fiscal years 2004 and 2003
the Company  recorded a valuation  allowance  related to the Federal tax benefit
associated  with the net deferred tax asset due to the  uncertainty of realizing
these benefits in the future.

      On September 15, 2006, WHX was required to make a minimum  contribution to
the WHX  Pension  Plan for the 2005  plan year in the  amount of $15.5  million.
However,  we did not make that  contribution due to liquidity issues. We applied
to the IRS for a funding  waiver for the 2005 plan  year,  and on  December  20,
2006, the IRS granted a conditional  waiver of the minimum funding  requirements
for the 2005  plan  year in  accordance  with  section  412 (d) of the  Internal
Revenue Code and section 303 of the Employee  Retirement Income and Security Act
of 1974,  as amended  ("ERISA").  On December 28, 2006,  WHX,  H&H, and the PBGC
entered into the PBGC Settlement Agreement in connection with the IRS waiver and
certain  other  matters.  The IRS  waiver  is  subject  to  certain  conditions,
including a requirement  that the Company meet the minimum funding  requirements
for the WHX Pension  Plan for the plan years  ending  December  31, 2006 through
2010,  without applying for a waiver of such  requirements.  The PBGC Settlement
Agreement and related agreements include the following:  (i) the amortization of
the waived amount of $15.5  million (the "Waiver  Amount") over a period of five
years, (ii) the PBGC's consent to increase  borrowings under H&H's senior credit
facility to $125 million in connection with the closing of an acquisition  (iii)
the  resolution  of any  potential  issues under  Section  4062(e) of ERISA,  in
connection with the cessation of operations at certain  facilities owned by WHX,
H&H or their  subsidiaries,  and (iv) the  granting  to the PBGC of  subordinate
liens on the assets of H&H and its subsidiaries, and specified assets of WHX, to
collateralize  WHX's obligation to pay the Waiver Amount to the WHX Pension Plan
and to make  certain  payments  to the WHX  Pension  Plan  in the  event  of its
termination.  As a result of the PBGC  Settlement  Agreement and the IRS waiver,
based on estimates from WHX's actuary,  the Company  expects its minimum funding
requirement  for the  specific  plan  year  and  the  amortization  of the  2005
requirement  to be $13.1  million  (paid in full in 2006),  $6.7  million,  $7.9
million,  and $18.3 million  (which  amounts  reflect the recent  passage of the
Pension  Protection  Act  of  2006)  in  2006,  2007,  2008  and  through  2011,
respectively.

      As of December 31, 2004,  the total of the  Company's  future  contractual
commitments,  including  the  repayment of debt  obligations  is  summarized  as
follows (in thousands):

                                                                                     Payments Due by Period
                                                            -------------------------------------------------------------------
                        Contractual                                                                                 2010 and
                        Obligations                            Total         2005       2006-2007     2008-2009    thereafter
-------------------------------------------------------------------------------------------------------------------------------
Long-term debt (1),(2)                                        $189,656     $183,631     $  1,018     $  1,032     $  3,976
Short-term debt (1)                                             40,398       40,398         --           --           --
Expected interest payments on long-term debt (2)                20,935       20,038          332          270          295
Operating leases                                                 6,409        2,089        3,314          898          108
Pension and other retirement benefits contributions (3)         49,343        2,965       25,708       12,019        8,651


                                                               36


      (1) Interest on variable-rate debt is based on current prevailing interest
          rates.

      (2) See Note 12 to the Consolidated  Financial Statements included in this
          Form 10-K.  With the  exception of Other H&H Debt,  as of December 31,
          2004,  all debt has been  classified  as current due to  noncompliance
          with  certain  debt  covenants.  Expected  interest  on long term debt
          classified as current includes  interest due through original maturity
          dates.  Should the debt  holders  choose not to demand  payments  as a
          result  of  noncompliance  with  certain  covenants,  long  term  debt
          maturing in each of the next five years is as follows:  2005  $96,923;
          2006 and 2007  $87,741;  2008 and  2009  $1,034;  2010 and  thereafter
          $3,958. As a result of the Company's bankruptcy filing,  subsequent to
          December 31, 2004, the Company was  recapitalized and its overall debt
          level  reduced.  See  Notes  1 and  12 to the  Consolidated  Financial
          Statements included in this Form 10-K.

      (3) Pension and other retirement benefits  contributions include all plans
          as discussed in Note 6 of the Consolidated  Financial Statements.  The
          required  contributions  to the WHX  Pension  Plan do not  reflect any
          changes  in the  contribution  levels  arising  from  the IRS  funding
          waiver. Giving effect to the IRS funding waiver, the pension and other
          retirement benefits contributions would be as follows: $2,965 in 2005;
          $22,208 for the 2006-2007  period;  $18,319 for the 2008-2009  period;
          and $11,851 in 2010 and thereafter, $55,343 in total.

      It is not the Company's usual business  practice to enter into off-balance
sheet  arrangements  such as  guarantees  on loans  and  financial  commitments,
indemnification arrangements, and retained interests in assets transferred to an
unconsolidated entity for securitization purposes. Consequently, the Company has
no off-balance sheet arrangements that have, or are reasonably likely to have, a
material  current  or  future  effect on its  financial  condition,  changes  in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources.

      At December 31, 2004 there were 2.6 million shares of Series A Convertible
Preferred  Stock and 2.9 million shares of Series B Convertible  Preferred Stock
outstanding.  Dividends  on  these  shares  were  cumulative  and  were  payable
quarterly in arrears,  in an amount equal to $3.25 per annum per share of Series
A and $3.75 per  annum  per  share of  Series  B.  Pursuant  to the terms of the
Supplemental  Indenture  to the Senior  Notes,  WHX was  restricted  from paying
dividends on this  Preferred  Stock.  Dividends on the Preferred  Stock have not
been paid since the dividend  payment of October 31, 2000. At December 31, 2004,
preferred dividends in arrears totaled $82.6 million.  As previously  described,
pursuant to the Plan all shares of preferred  stock and accrued  dividends  were
deemed cancelled and annulled on the Effective Date.

      In addition to the above  obligations,  certain customers and suppliers of
the  Precious  Metal  Segment  choose to do  business  on a "pool"  basis.  Such
customers or suppliers  furnish  precious  metal to H&H for return in fabricated
form (customer  metal) or for purchase from or return to the supplier.  When the
customer's  precious  metal is  returned in  fabricated  form,  the  customer is
charged a  fabrication  charge.  The value of  consigned  precious  metal is not
included in the  Company's  balance  sheet.  To the extent that the  quantity of
customer and supplier  precious  metal,  as well as precious metal owned by H&H,
does not meet  operating  needs,  H&H can  purchase or  purchase on  consignment
precious  metal.  At December  31, 2003,  1,605,000  ounces of silver and 14,617
ounces  of gold  were  purchased  on  consignment  by H&H  under  a  consignment
facility.  This  consignment  facility was  terminated on March 30, 2004 and H&H
purchased $15.0 million of precious metal at that point in time.

POST-EMERGENCE LIQUIDITY

      In March 2005, WHX filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code. Following WHX's emergence from bankruptcy in July
2005, the Company  continued to experience  liquidity  issues.  WHX is a holding
company,  which  has as its sole  source  of cash  flow  distributions  from its
operating  subsidiary,  H&H, or other discrete  transactions.  H&H's bank credit
facilities  and term loan  effectively  do not permit it to transfer any cash or
other assets to WHX and are collateralized by substantially all of H&H's assets.
WHX has no bank credit  facility of its own. The Company's  operating  cash flow
requirements  consist of  funding  the  supplemental  retirement  plan,  certain
employee-related and administrative costs and the  bankruptcy-related  expenses,
all of which were paid by March 31, 2006. On an ongoing  basis,  WHX is required
to meet  the  funding  requirements  for  the WHX  Pension  Plan  and pay  other
administrative costs.

      Since  emerging from  bankruptcy,  due to covenant  restrictions  in H&H's
credit  facilities,  there  have  been  no  dividends  from  H&H to WHX  and the
Company's sources of cash flow have consisted of:

          o   The issuance of $5.1 million in preferred stock by a newly created
              subsidiary,  which was  invested  in the equity of a small  public
              company; and

          o   Partial  payment  of the  H&H  subordinated  debt  to WHX of  $9.0
              million, which required the approval of the banks participating in
              the H&H bank facility. Subsequent to this transaction, in 2006 the
              remaining  intercompany  loan balance of the subordinated  debt of
              $44.2 million was converted to equity.


                                       37


      Throughout  2005 and 2006,  the  Company has been  experiencing  liquidity
issues,  which are more fully  described  in Notes 1a and 2 to the  consolidated
financial  statements  included in the 2004 10-K, which raise  substantial doubt
about the Company's  ability to continue as a going  concern . The  accompanying
financial  statements have been prepared assuming the Company will continue as a
going concern and do not include any  adjustments to reflect the possible future
effects on the  recoverability  and  classification of assets or the amounts and
classification  of  liabilities  that  may  result  from  the  outcome  of  this
uncertainty.  The Company  incurred  consolidated  net losses of $34.7  million,
$140.4 million and $159.9  million for the years ended  December 31, 2005,  2004
and 2003,  respectively  and had  negative  cash flows from  operations  of $5.0
million  and  $39.6  million  for the years  ended  December  31,  2005 and 2004
respectively. As of December 31, 2005, the Company had an accumulated deficit of
$394.0 million and a working capital  deficit of $122.1  million.  Additionally,
the Company has not been in compliance with certain of its bank covenants.

      On December  27,  2006,  Wachovia  provided  H&H with an  additional  $7.0
million loan. This was pursuant to an amendment signed on October 30, 2006 which
made the  additional  funds  conditional  upon the filing of the Company's  2005
Annual Report on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia and their Loan and Security Agreement
with Steel to provide,  in part, for: (i) the  consummation of the  transactions
contemplated by the PBGC Settlement  Agreement and the waiver of possible events
of default that may have  occurred  relating to the matters  covered by the PBGC
Settlement Agreement;  and (ii) a $42 million term loan funded by Ableco Finance
LLC. A portion of the loan ($26 million) was used to fund an acquisition by H&H,
$3.2  million  was  paid  as  a  contribution  to  the  WHX  Pension  Plan,  and
approximately  $12  million  of the loan was used to  reduce  H&H's  outstanding
balance under its revolving credit facility.

      As of December 31, 2006,  WHX had cash of  approximately  $0.8 million and
current  liabilities of  approximately  $7.5 million,  including $5.1 million of
mandatorily  redeemable  preferred  shares  payable  to a related  party.  H&H's
availability  under its  revolving  credit  facility and other  facilities as of
December 31, 2006 was $19.1  million.  All such  facilities,  including the term
loans,  expire in March 2007. The Company has significant cash flow obligations,
including  without  limitation  the  amounts  due for the WHX  Pension  Plan (as
amended by the PBGC  Settlement  Agreement).  Based on the Company's  forecasted
borrowings,  the  funds  available  under  its  credit  facilities  may  not  be
sufficient to fund debt service costs, working capital demands and environmental
remediation costs. Additionally, there can be no assurance that the Company will
be able to obtain  replacement  financing at commercially  reasonable terms upon
the  expiration  of its credit  facilities  in March 2007.  Consequently,  there
continues to be substantial  doubt about the Company's  ability to continue as a
going concern.

CRITICAL ACCOUNTING ESTIMATES

      The  Company's  discussion  and analysis of its  financial  condition  and
results of  operations  are based upon its  consolidated  financial  statements,
which have been  prepared in accordance  with  accounting  principles  generally
accepted  in the  United  States  of  America.  Preparation  of these  financial
statements  requires the Company to make estimates and judgments that affect the
reported  amounts of assets,  liabilities,  revenues and  expenses,  and related
disclosure of  contingent  assets and  liabilities.  On an on-going  basis,  the
Company  evaluates  its  estimates,   including  those  related  to  bad  debts,
inventories,  longed lived assets, intangibles, income taxes, pensions and other
post-retirement benefits, and contingencies and litigation.  Estimates are based
on historical  experience,  future cash flows and various other assumptions that
are believed to be reasonable under the circumstances, the results of which form
the  basis  for  making  judgments  about the  carrying  values  of  assets  and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.

      Financial  Reporting  Release No. 60 requires  all  companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Note 2 to the consolidated financial statements,  included
elsewhere in this Form 10-K,  includes a summary of the  significant  accounting
policies  and  methods  used  in  the  preparation  of the  Company's  financial
statements.  The  following  is a  brief  discussion  of  the  more  significant
accounting policies and methods used by the Company.

INVENTORIES

      H&H  holds   precious   metal   positions   that  are  subject  to  market
fluctuations.  The precious metal  inventory is included in inventory  using the
last-in,  first-out (LIFO) method of inventory valuation,  which is equal to the
lower  of cost or  market.  The  derivative  financial  instruments  related  to
precious  metals are marked to market through  current period  earnings as other
income or expense and precious metal  inventory is recorded at LIFO cost subject
to lower of cost or market with any adjustments  recorded  through cost of goods
sold. For precious metals inventories,  no segregation among raw materials, work
in process and finished goods is practicable.

      Non-precious   metal   inventories   are  stated  at  the  lower  of  cost
(principally average cost) or market.  Non-precious metal inventory is evaluated
for estimated excess and obsolescence based upon assumptions about future demand
and market conditions and is adjusted  accordingly.  If actual market conditions
are less favorable than those projected by H&H, write-downs may be required.


                                       38


DERIVATIVES

      H&H  holds   precious   metal   positions   that  are  subject  to  market
fluctuations.  The  Company  maintains  policies  consistent  with  economically
hedging its precious metals  inventory  against price  fluctuations.  Future and
forward  contracts to sell or buy precious  metal are the  derivatives  used for
this objective.  The derivative  financial  contracts related to precious metals
are marked to market on the balance sheet,  and  accordingly,  both realized and
unrealized  gains and losses on these  derivatives are recorded  through current
period  earnings  as  other  income  (loss).  The  estimated  fair  value of the
derivatives is included in other current assets or other current liabilities.

      As of December 31, 2004 the Company had  contracted  for $14.1  million of
forward  contracts with a AA- rated counter party,  and the future contracts are
exchange traded contracts through a third party broker. Accordingly, the Company
has  determined  that there is  minimal  credit  risk of  default.  The  Company
estimates  the fair  value of its  derivative  contracts  through  use of market
quotes or broker valuations when market information is not available.

GOODWILL, OTHER INTANGIBLES AND LONG-LIVED ASSETS

      The  Company  adopted  the  provisions  of SFAS 142  -"Goodwill  and Other
Intangible  Assets",  effective January 1, 2002. SFAS 142 requires that goodwill
and intangible  assets with indefinite lives no longer be amortized,  but rather
be tested at least  annually for  impairment.  Intangible  assets with  definite
lives continue to be amortized over their estimated  lives, and are reviewed for
impairment in accordance  with SFAS No. 144,  "Accounting  for the Impairment or
Disposal of Long-Lived Assets."

      The values  assigned  to  long-lived  assets such as  property,  plant and
equipment,  and goodwill are reviewed as appropriate.  The Company estimates the
depreciable lives of property,  plant and equipment,  and reviews for impairment
if events,  or changes  in  circumstances,  indicate  that the  Company  may not
recover the carrying amount of an asset.

      As of December 31, 2004 there was $49.4  million of goodwill  remaining on
the balance sheet. The evaluation of the  recoverability of goodwill is based on
a  comparison  of the  respective  reporting  units' fair value to its  carrying
value,  including allocated goodwill.  Fair values are determined by discounting
estimated  future  cash  flows and market  comparables.  The  recoverability  of
goodwill  will be  impacted if  estimated  future  operating  cash flows are not
achieved.

PENSION AND POSTRETIREMENT BENEFIT COSTS

      The  Company   and   subsidiaries   maintain  a   qualified   and  several
non-qualified  pension plans and other  postretirement  benefit  plans  covering
substantially  all of its  employees.  Pension  benefits  for  the  WHX  and H&H
participants  included in the WHX Pension Plan are based on years of service and
the amount of  compensation  at the time of retirement.  However,  the qualified
pension  benefits were frozen for most  participants as of December 31, 2005 and
April  30,   2006  for  hourly   and   salaried   non-bargaining   participants,
respectively, with the exception of a single subsidiary.

      On March 4, 2005 WHX adopted the WHX  Corporation  Supplemental  Executive
Retirement Plan,  effective as of February 1, 2004, which provides for specified
benefits to be paid to certain of its employees.  All WHX Supplemental Executive
Retirement  Plan benefits were settled as of August 5, 2005, in accordance  with
FAS 88 and this plan was terminated on December 29, 2005.

      Certain current and retired employees of H&H are covered by postretirement
medical benefit plans.  The benefits  provided are for medical and  prescription
drugs.  Contributions  from a majority of the  participants are required and for
those retirees and spouses, the Company's payments are capped.

      The Company's pension and postretirement  benefit costs are developed from
actuarial valuations. Inherent in these valuations are key assumptions including
discount rates and expected  long-term rates of return on plan assets.  Material
changes in the Company's pension and  postretirement  benefit costs may occur in
the future due to  changes in these  assumptions,  changes in the number of plan
participants, changes in the level of benefits provided, changes to the level of
contributions to these plans and other factors.

      The Company determines its actuarial  assumptions for its pension and post
retirement plans, after consultation with its actuaries,  on December 31 of each
year  to  calculate  liability  information  as of that  date  and  pension  and
postretirement  expense for the following  year. The discount rate assumption is
derived from the rate of return on high quality  bonds as of December 31 of each
year.

      The  Plan's  assets  are  diversified  as to  type of  assets,  investment
strategies  employed,  and number of investment  managers used.  Investments may
include equities,  fixed income, cash equivalents,  convertible securities,  and
hedge funds.  Derivatives  may be used as part of the investment  strategy.  The
Company may direct the transfer of assets between  investment  managers in order
to  rebalance  the  portfolio in  accordance  with asset  allocation  guidelines
established by the Company.


                                       39


      Management  with  the  advice  of its  actuaries  uses  judgment  to  make
assumptions on which our employee  benefit  liabilities  and expenses are based.
The  effect of a 1% change  in two key  assumptions  is  summarized  as  follows
(dollars in millions):

       Assumptions                Statement of       Balances Sheet
                                 Opperations (1)       Impact (2)
-------------------------------------------------------------------
                                         (in millions)
Discount rate
             +1% increase         $  1.0                 $ (36.6)
             -1% decrease            1.7                    40.3

Expected return on assets
             +1% increase           (3.3)
             -1% decrease            3.3

(1)   Estimated impact on 2004 net periodic benefit costs.

(2)   Estimated impact on 2004 additional minimum liability.

ENVIRONMENTAL REMEDIATION

      The  Company  provides  for  remediation  costs  and  penalties  when  the
responsibility  to remediate is probable and the amount of  associated  costs is
reasonably determinable.  Remediation liabilities are accrued based on estimates
of known environmental exposures. The Company regularly monitors the progress of
environmental remediation.  Should studies indicate that the cost of remediation
is to be more than previously estimated, an additional accrual would be recorded
in the period in which such  determination  was made.  As of December  31, 2004,
total accruals for environmental remediation were $28.3 million.

NEW ACCOUNTING STANDARDS

      On September 29, 2006 , the FASB issued Statement of Financial  Accounting
Standards No. 158, "Employers'  Accounting for Defined Benefit Pension and Other
Postretirement  Plans"  (SFAS 158) which  amends SFAS 87 and SFAS 106 to require
recognition  of the  overfunded  or  underfunded  status  of  pension  and other
postretirement  benefit plans on the balance  sheet.  Under SFAS 158,  gains and
losses,  prior service costs and credits,  and any remaining  transition amounts
under  SFAS 87 and SFAS  106 that  have  not yet  been  recognized  through  net
periodic  benefit cost will be recognized  in  accumulated  other  comprehensive
income,  net of tax  effects,  until they are  amortized  as a component  of net
periodic  cost.  SFAS 158 is effective  for  publicly-held  companies for fiscal
years ending after  December 15, 2006.  WHX  Corporation  will adopt the balance
sheet recognition  provisions of SFAS 158 at December 31, 2006. For illustrative
purposes,  we have  considered  the impact of these  provisions  at December 31,
2005,  our most  recent  measurement  date.  At that  time,  our  balance  sheet
reflected a reduction in shareholder  equity of approximately $65 million due to
our defined  benefit  pension and other  postretirement  benefit plans.  The new
provisions  of SFAS 158 would have  resulted  in  additional  reductions  to WHX
Corporation's  shareholders' equity of $1.1 million and $5.0 million at December
31, 2005 and 2004,  respectively.  The Statement  does not affect the results of
operations.

      In September  2006, the FASB issued  Statement of Financial  Standards No.
157,  "Fair  Value  Measurements"  (SFAS  157).  SFAS 157  defines  fair  value,
establishes a framework for measuring fair value in accordance  with  accounting
principles  generally  accepted in the United  States,  and expands  disclosures
about fair value  measurements.  This  statement  does not  require any new fair
value  measurements;  rather,  it applies under other accounting  pronouncements
that require or permit fair value  measurements.  The provisions of SFAS 157 are
effective for fiscal years  beginning  after November 15, 2007. The Company does
not expect the adoption of SFAS 157 to have a material  impact on the  Company's
consolidated financial position or results of operations.

      In June  2006,  the  FASB  issued  Financial  Accounting  Standards  Board
Interpretation   No.  48,  "Accounting  for  Uncertainty  in  Income  Taxes,  an
Interpretation  of SFAS Statement 109" (FIN 48), which  clarifies the accounting
for  uncertainty in tax  positions.  This  Interpretation  provides that the tax
effects  from an  uncertain  tax position  can be  recognized  in our  financial
statements,  only if the position is more likely than not of being  sustained on
audit,  based on the technical merits of the position.  The provisions of FIN 48
are effective as of the beginning of fiscal 2007, with the cumulative  effect of
the change in accounting principle recorded as an adjustment to opening retained
earnings.  We are  currently  evaluating  the impact of  adopting  FIN 48 on our
financial statements.

      In May 2005, the FASB issued Statement of Financial  Accounting  Standards
No. 154,  "Accounting Changes and Error Corrections," (SFAS 154), which replaces
APB Opinion No. 20,  "Accounting  Changes" and FASB Statement No. 3,  "Reporting
Accounting  Changes  in Interim  Financial  Statements."  SFAS No. 154  requires
retrospective  application to prior periods' financial  statements for voluntary
changes in  accounting  principle  unless it is  impracticable.  SFAS No. 154 is
effective for accounting  changes and corrections of errors made in fiscal years
beginning after June 1, 2005.


                                       40


      In  December  2004,  the FASB  issued a  revised  Statement  of  Financial
Accounting  Standards No. 123,  "Share-Based  Payment"  ("SFAS No. 123R").  This
statement eliminates the intrinsic value method as an allowed method for valuing
stock  options   granted  to  employees.   Under  the  intrinsic  value  method,
compensation  expense was  generally  not  recognized  for the issuance of stock
options. The revised statement requires compensation expense to be recognized in
exchange  for the  services  received  based  on the fair  value  of the  equity
instruments on the grant-date.  This statement becomes effective for the Company
as of January 1, 2006.  The  adoption of SFAS No. 123R is not expected to have a
significant impact on the Company's  financial  position,  results of operations
and cash flows.

      In  December  2004,  the FASB issued  Statement  of  Financial  Accounting
Standards  No. 151,  "Inventory  Costs - an amendment of ARB No. 43,  Chapter 4"
("SFAS No.  151").  SFAS No. 151 amends the guidance in ARB No. 43 and clarifies
accounting  for abnormal  amounts of idle facility  expense,  freight,  handling
costs, and wasted material (spoilage). The statement requires that certain items
that may have  previously  been  included in inventory  costs be  recognized  as
current-period  charges  regardless  of whether  they meet the  criterion of "so
abnormal".  SFAS  No.  151  also  requires  allocation  of  fixed  manufacturing
overheads  to the  costs of  conversion  based  on the  normal  capacity  of the
manufacturing facilities. This statement becomes effective for the Company as of
January 1, 2006.  The  Company  will adopt SFAS No. 151 on January 1, 2006,  and
does not expect such adoption to have a significant  impact on its  consolidated
financial statements.

      In  January  2004,  the FASB  issued  FASB Staff  Position  No. FAS 106-1,
"Accounting  and Disclosure  Requirements  Related to the Medicare  Prescription
Drug,  Improvement and Modernization  Act of 2003" (FSP 106-1).  The FSP permits
employers that sponsor postretirement benefit plans (plan sponsors) that provide
prescription  drug  benefits to  retirees  to make a one-time  election to defer
accounting for any effects of the Medicare Prescription Drug,  Improvement,  and
Modernization  Act of 2003 (the "Act").  Without the FSP, plan sponsors would be
required under Statement of Financial  Accounting Standards No. 106, "Employers'
Accounting for Postretirement  Benefits Other Than Pensions", to account for the
effects of the Act in the fiscal period that includes December 8, 2003, the date
the President signed the Act into law. FASB Staff Position No. 106-2 (FSP 106-2)
includes  guidance  on  recognizing  the  effects of the new  legislation  under
various  conditions  surrounding  the assessment of "actuarial  equivalence"  of
subsidies  under the Act. FSP 106-2 is effective for the first interim or annual
period  beginning after June 15, 2004 with earlier  application  permitted.  The
adoption of FSP 106-1 and 106-2 did not have a material  impact on the Company's
financial statements.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

COMMODITY PRICE RISK AND RELATED RISKS

      In the normal  course of business,  H&H is exposed to market risk or price
fluctuation  related to the  purchase  of  natural  gas,  electricity,  precious
metals, steel products and certain non-ferrous metals used as raw material.  H&H
is also  exposed  to the  effects  of  price  fluctuations  on the  value of its
commodity inventories, specifically, H&H's precious metals inventories.

      H&H's market risk strategy has generally been to obtain competitive prices
for its  products and services  and allow  operating  results to reflect  market
price movements dictated by supply and demand.

      H&H enters into  commodity  futures  and  forwards  contracts  on precious
metals that are subject to market  fluctuations in order to  economically  hedge
its precious metals  inventory  against price  fluctuations.  Future and forward
contracts  to sell or buy  precious  metal  are the  derivatives  used  for this
objective.  As these  derivatives are not designated as accounting  hedges under
SFAS 133, they are accounted for as derivatives with no hedge designation. These
derivatives  are marked to market and both  realized  and  unrealized  gains and
losses on these  derivatives  are recorded in current  period  earnings as other
income  (loss).  The  unrealized  gain  or  loss  (open  trade  equity)  on  the
derivatives is included in other current assets or other current liabilities.

FOREIGN CURRENCY EXCHANGE RATE RISK

      H&H is subject to the risk of price  fluctuations  related to  anticipated
revenues and operating  costs,  firm  commitments for capital  expenditures  and
existing  assets  or  liabilities  denominated  in  currencies  other  than U.S.
dollars. H&H has not generally used derivative instruments to manage this risk.

INTEREST RATE RISK

      Fair  value  of  cash  and  cash  equivalents,   receivables,   short-term
borrowings,  accounts payable, accrued interest and variable-rate long-term debt
approximate  their carrying values and are relatively  insensitive to changes in
interest rates due to the short-term maturity of the instruments or the variable
nature of underlying interest rates.

       At December 31, 2004, the Company's portfolio of debt included fixed-rate
instruments.  Accordingly,  the fair value of such instruments may be relatively
sensitive to effects of interest rate fluctuations.  In addition, the fair value
of such  instruments  is also  affected by investors'  assessments  of the risks
associated  with  industries  in  which  the  Company  operates  as  well as the
Company's overall  creditworthiness and ability to satisfy such obligations upon
their maturity. The Company's fixed-rate instruments were converted to equity in
July 2005 upon emergence from bankruptcy.


                                       41


      A reduction  in long-term  interest  rates could  materially  increase the
Company's cash funding obligations to the WHX Pension Plan.

SAFE HARBOR

      The Company's  quantitative and qualitative  disclosures about market risk
include  forward-looking  statements with respect to management's  opinion about
the risk associated with the Company's financial  instruments.  These statements
are based on certain  assumptions with respect to market prices,  interest rates
and other  industry-specific risk factors. To the extent these assumptions prove
to be inaccurate,  future  outcomes may differ  materially  from those discussed
above.


                                       42


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of WHX Corporation:

      In our  opinion,  the  accompanying  consolidated  balance  sheets and the
related  consolidated  statements  of  operations,  cash  flows and  changes  in
stockholders'  (deficit) equity and comprehensive  income (loss) present fairly,
in all material  respects,  the financial  position of WHX  Corporation  and its
subsidiaries  (the  "Company") at December 31, 2004 and 2003, and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 2004, in conformity  with  accounting  principles  generally
accepted in the United States of America.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  financial  statements  based on our audits.  We conducted  our
audits of these  statements  in  accordance  with the  standards  of the  Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the financial  statements,  assessing  the  accounting  principles  used and the
significant  estimates made by management,  and evaluating the overall financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

      As discussed in Note 1b to the consolidated financial statements, the 2003
and 2002 consolidated financial statements have been restated.

      As  discussed  in  Note  11  to  the  consolidated  financial  statements,
effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets".

      The accompanying financial statements have been prepared assuming that the
Company will continue as a going  concern.  As more fully  described in Notes 1a
and 2 to the  consolidated  financial  statements,  WHX Corporation  ("WHX") had
their plan of  reorganization  (the "Plan") approved by the bankruptcy court and
emerged  from  bankruptcy  effective  July 29,  2005.  The Plan  resulted in the
discharge of all pre-bankruptcy  claims against WHX, except for its liability to
its pension plan, and  substantially  altered the rights and interests of equity
security holders.  WHX is a holding company with no bank facility of its own and
since  emerging from  bankruptcy  has not had access to dividends  from its only
operating  subsidiary,  Handy &  Harman  ("H&H").  Additionally,  H&H  has  also
experienced  certain  liquidity  issues, as more fully described in Note 1a, and
its credit facility  matures on March 31, 2007. WHX has as its principal  source
of  cash  limited  discrete  transactions  as  described  in  Note  1a  and  has
significant cash requirements  including the funding of the WHX Pension Plan and
certain other administrative costs. If WHX does not obtain additional liquidity,
it is likely  that WHX will not have  sufficient  cash to  continue  to  operate
through 2007 and pay its  liabilities as they become due in the normal course of
business.  These conditions raise  substantial doubt about the Company's ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 1a. The  financial  statements  do not  include any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification  of assets or the amounts and  classification of liabilities that
may result from the outcome of this uncertainty.

PricewaterhouseCoopers LLP
New York, New York
December 14, 2006


                                       43


WHX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                   Year Ended December 31,
                                                         --------------------------------------------
                                                              2004           2003           2002
                                                         -------------- -------------- --------------
                                                                        (as Restated)  (as Restated)
                                                               (in thousands except per share)

Net sales                                                  $ 410,919      $ 326,296      $ 386,393
Cost of goods sold                                           343,509        265,304        319,144
                                                           ---------      ---------      ---------
Gross profit                                                  67,410         60,992         67,249
Selling, general and administrative expenses                  67,545         69,430         73,655
Pension - curtailment and special termination benefits          --           48,102           --
Asset impairment charge                                        8,175           --             --
Goodwill impairment charge                                    79,788         67,343         18,651
Environmental remediation expense                             28,971            502            170
Loss (gain) on disposal of assets                               (592)         6,286          2,576
Restructuring charge                                           1,576           --           19,994
                                                           ---------      ---------      ---------
Loss from operations                                        (118,053)      (130,671)       (47,797)
                                                           ---------      ---------      ---------
Other:
      Interest expense                                        25,624         19,166         27,257
      Equity in loss of WPC                                     --             --           20,000
      Gain on disposition of WPC                                --              534           --
      Gain (loss) on early retirement of debt                 (1,161)         2,999         42,491
      Other income (loss)                                      6,566           (412)        (2,084)
                                                           ---------      ---------      ---------
Loss from continuing operations before taxes                (138,272)      (146,716)       (54,647)
Provision for (benefit from) income taxes                      2,172         13,208        (25,413)
                                                           ---------      ---------      ---------
Loss from continuing operations, net                        (140,444)      (159,924)       (29,234)
                                                           ---------      ---------      ---------
Discontinued operations:
      Income from discontinued operations, net of tax           --             --           10,601
      Gain on sale, net of tax                                  --             --           11,861
                                                           ---------      ---------      ---------
                                                                --             --           22,462
                                                           ---------      ---------      ---------
Loss before cumulative effect of accounting change          (140,444)      (159,924)        (6,772)
Cumulative effect of accounting change, net of tax              --             --          (41,129)
                                                           ---------      ---------      ---------
Net loss                                                    (140,444)      (159,924)       (47,901)
Less: Dividend requirement for preferred stock                19,424         19,424         19,224
                                                           ---------      ---------      ---------
Loss applicable to common stock                            $(159,868)     $(179,348)     $ (67,125)
                                                           =========      =========      =========
BASIC AND DILUTED PER SHARE OF COMMON STOCK
Loss from continuing operations
  net of preferred dividends                               $  (29.38)     $  (33.35)     $   (9.10)
Discontinued operations                                         --             --             4.22
Cumulative effect of accounting change                          --             --            (7.73)
                                                           ---------      ---------      ---------
Loss per share applicable to common shares                 $  (29.38)     $  (33.35)     $  (12.61)
                                                           =========      =========      =========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                  44


WHX CORPORATION
CONSOLIDATED BALANCE SHEETS                                                          December 31,
                                                                      ------------------------------------------
                                                                             2004                   2003
                                                                      --------------------   -------------------
                                                                                               (As Restated)

                                                                                    (in thousands)
                                   ASSETS
Current assets:
Cash and cash equivalents                                                 $  20,826               $  41,990
Trade receivables, less allowance for doubtful accounts
   of $1,238 and $1,003                                                      53,811                  42,054
Inventories                                                                  68,041                  41,782
Deferred income taxes                                                           726                     400
Other current assets                                                          9,182                  29,131
                                                                          ---------               ---------
    Total current assets                                                    152,586                 155,357

Property, plant and equipment, at cost, less
   accumulated depreciation and amortization                                 88,054                 104,223
Goodwill and other intangibles                                               49,982                 130,302
Intangible pension asset                                                      1,760                     758
Other non-current assets                                                     19,535                  20,116
                                                                          ---------               ---------
                                                                          $ 311,917               $ 410,756
                                                                          =========               =========

                  LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Trade payables                                                            $  35,800               $  27,300
Accrued environmental liability                                              31,424                    --
Accrued liabilities                                                          33,377                  26,352
Current portion of long-term debt                                           183,629                  40,056
Short-term debt                                                              40,398                    --
Deferred income taxes                                                           702                   1,500
                                                                          ---------               ---------
    Total current liabilities                                               325,330                  95,208

Long-term debt                                                                6,027                 189,344
Accrued pension liability                                                    18,786                  27,367
Other employee benefit liabilities                                            9,617                   9,488
Deferred  income taxes                                                        2,084                     758
Additional minimum pension liability                                         47,002                  24,911
                                                                          ---------               ---------
                                                                            408,846                 347,076
                                                                          ---------               ---------

Commitments and contingencies

Stockholders' (deficit) equity:
Preferred stock - $.10 par value; authorized 10,000
   shares; issued and outstanding: 5,523  shares                                552                     552
Common stock -  $.01 par value; authorized 60,000
   shares; issued and outstanding: 5,486                                         55                      55
Accumulated other comprehensive loss                                        (36,611)                (16,380)
Additional paid-in capital                                                  556,206                 556,206
Unearned compensation - restricted stock awards                                 (33)                    (99)
Accumulated deficit                                                        (617,098)               (476,654)
                                                                          ---------               ---------
                                                                            (96,929)                 63,680
                                                                          ---------               ---------
                                                                          $ 311,917               $ 410,756
                                                                          =========               =========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                      45


WHX CORPORATION                                                               Year Ended December 31,
                                                                   --------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS                                  2004           2003           2002
                                                                   -------------- -------------- --------------
                                              (In thousands)                      (as Restated)  (as Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                             $(140,444)     $(159,924)     $ (47,901)
Items not affecting cash from operating activities:
  Cumulative effect of accounting change                                  --             --           41,129
  Goodwill impairment charge                                            79,788         67,343         18,651
  Asset impairment charge                                                8,175           --             --
  Restructuring charge                                                   1,576           --            5,424
  Depreciation and amortization                                         14,108         14,280         20,218
  Amortization of debt related costs                                     2,671          1,836          2,647
  Other postretirement benefits                                          1,221            974          1,435
  (Gain) loss on early retirement of debt                                1,161         (2,999)       (42,491)
  Gain on WPSC note recovery                                            (5,596)          --             --
  Deferred income taxes                                                    202         10,930        (10,713)
  (Gain) loss on derivatives - (unrealized)                                (82)           498           (295)
  Reclassification of net cash settlements on derivative instruments      (467)          (308)        (1,033)
  Loss (gain) on asset dispositions                                       (592)         6,286          2,576
  Pension - curtailment and special termination benefits                  --           48,102           --
  Gain on disposition of WPC                                              --             (534)          --
  Equity income in affiliated companies                                    (48)           (38)        20,045
  Discontinued operations                                                 --             --          (17,140)
  Other                                                                     66             99         (1,062)
Decrease (increase) in working capital elements,
  net of effect of acquisitions:
      Trade receivables                                                 (9,956)         1,236          2,185
      Inventories                                                      (24,982)        21,320         22,563
      Short term investments-trading                                      --          205,275         39,608
      Other current assets                                               1,998            331         (1,623)
      Other current liabilities                                         30,083        (26,732)        29,987
      Discontinued operations                                             --             --          (10,925)
  Other items-net                                                        1,567         (4,099)        (4,666)
  Discontinued operations                                                 --             --           (1,505)
                                                                     ---------      ---------      ---------
Net cash provided by (used in) operating activities                    (39,551)       183,876         67,114
                                                                     ---------      ---------      ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Net proceeds on sale of discontinued operations                         --             --           84,869
  Acquisitions                                                          (2,410)          --           (3,057)
  Net payments to WPC                                                     --          (19,500)         1,250
  Cash received on WPSC note recovery                                    5,596           --             --
  Sale (Purchase) of aircraft for resale                                19,301        (19,255)          --
  Plant additions and improvements                                      (9,810)       (13,087)        (9,335)
  Net cash settlements on derivative instruments                           467            308          1,033
  Net cash flow used in discontinued operations                           --             --           (1,136)
  Proceeds from sales of assets                                          7,111         12,958          8,630
                                                                     ---------      ---------      ---------
Net cash provided by (used in) investing activities                     20,255        (38,576)        82,254
                                                                     ---------      ---------      ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net revolver borrowings                                               40,398         (2,622)           --
  Repayment of H&H Senior Secured Credit Facility                     (149,684)          --          (48,193)
  Net borrowings from  H&H Senior Secured Credit Facility               20,604           --             --
  Repayment of H&H Industrial Revenue Bonds                             (7,500)          --             --
  Cash proceeds from term loans                                         99,250           --             --
  Repayment of term loans - Domestic                                    (2,848)          --             --
  Repayment of term loans - Foreign                                       (359)          --             --
  Debt issuance fees                                                    (5,392)          --             --
  Cash paid on early extinguishment of debt                               --          (14,302)       (87,612)
  Investment account borrowings                                           --         (107,857)        (3,089)
  Net change in overdrafts                                               3,489           (530)            27
  Proceeds from loan repayment - Unimast                                  --            3,204           --
                                                                     ---------      ---------      ---------
Net cash provided by (used in) financing activities                     (2,042)      (122,107)      (138,867)
                                                                     ---------      ---------      ---------
NET CHANGE FOR THE PERIOD                                              (21,338)        23,193         10,501
EFFECT OF EXCHANGE RATE CHANGES ON NET CASH                                174            401            106
Cash and cash equivalents at beginning of year                          41,990         18,396          7,789
                                                                     ---------      ---------      ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR                             $  20,826      $  41,990      $  18,396
                                                                     =========      =========      =========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                      46


WHX CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY AND COMPREHENSIVE INCOME (LOSS)

                                                                   Accumulated                                      Total
                                                                      Other                                         Stock-
                                                                  Comprehensive            Unearned  Additional    holder's
                                                                     Income     Accumulated  Compen-   Paid-in     (Deficit)
(Dollars and Shares in Thousands) Common Stock    Preferred Stock    (Loss)       Deficit    sation    Capital      Equity
--------------------------------- ------------    ---------------  ----------     -------    ------   ---------   ----------
                                 Shares  Amount   Shares  Amount
                                 ------  ------   ------  ------
BALANCE, DECEMBER 31, 2001
   (as previously reported
   in 2003)                      5,357   $  54     5,571   $ 557   $  (2,268)   $(273,445)   $--      $ 556,006   $ 280,904

Restatement of beginning
   balance                                                                          4,616                             4,616
                                                                                ---------                         ---------
BALANCE, DECEMBER 31, 2001
   (as restated)                                                                 (268,829)                          285,520

Net loss (as restated)                                                            (47,901)                          (47,901)

Conversion of preferred shares
   to common shares                 49    --         (48)     (5)                                             3          (2)
Current period change                                                (33,507)                                       (33,507)
                                 -----   -----   -------   -----   ---------    ---------    -----    ---------   ---------

BALANCE, DECEMBER 31, 2002
   (as restated)                 5,406      54     5,523     552     (35,775)    (316,730)    --        556,009     204,110

Net loss                                                                         (159,924)                         (159,924)
Current period change                                                 19,395                                         19,395
Deferred compensation               80       1                                                (198)         197        --
Compensation expense                                                                            99                       99
                                 -----   -----   -------   -----   ---------    ---------    -----    ---------   ---------

BALANCE, DECEMBER 31, 2003
   (as restated)                 5,486      55     5,523     552     (16,380)    (476,654)     (99)     556,206      63,680

Current period change                                                (20,231)                                       (20,231)
Net loss                                                                         (140,444)                         (140,444)
Compensation expense                                                                            66                       66
                                 -----   -----   -------   -----   ---------    ---------    -----    ---------   ---------

BALANCE, DECEMBER 31, 2004       5,486   $  55   $ 5,523   $ 552   $ (36,611)   $(617,098)   $ (33)   $ 556,206   $ (96,929)
                                 =====   =====   =======   =====   =========    =========    =====    =========   =========


                                                                      Year Ended December 31,
                                                        ----------------------------------------------------

                                                            2004                2003                2002
                                                        ----------           ----------           ----------
Comprehensive Income (Loss)                                                (As Restated)        (As Restated)
----------------------------------------------

Net loss (as previously reported in 2003)               $(140,444)           $(159,924)           $ (33,534)
Restatement of net loss                                                                             (14,367)
                                                                                                  ---------
Net loss (as restated)                                                                              (47,901)

Minimum pension liability adjustment                      (21,248)              16,014              (34,748)
Foreign currency translation adjustment                     1,017                2,239                1,241
Write off  foreign currency translation losses               --                  1,142                 --
                                                        ---------            ---------            ---------
COMPREHENSIVE LOSS                                      $(160,675)           $(140,529)           $ (81,408)
                                                        =========            =========            =========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                     47


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

      On March 7, 2005, WHX  Corporation,  the parent company  ("WHX"),  filed a
voluntary petition  ("Bankruptcy  Filing") to reorganize under Chapter 11 of the
United States  Bankruptcy Code with the United States  Bankruptcy  Court for the
Southern District of New York (the "Bankruptcy Court"). WHX continued to operate
its businesses and own and manage its properties as a debtor-in-possession under
the  jurisdiction of the Bankruptcy  Court and in accordance with the applicable
provisions of the Bankruptcy Code until it emerged from protection under Chapter
11 on July 29, 2005 (the "Effective Date") (see Note 2).

      WHX is a holding  company that  invests in and manages a diverse  group of
businesses that are managed on a decentralized  basis. WHX's primary business is
Handy & Harman  ("H&H"),  a diversified  manufacturing  company whose  strategic
business units encompass three reportable  segments:  precious metals,  wire and
tubing,  and  engineered  materials.  WHX's other business (up through August 1,
2003 - see  below  and  Note 4)  consisted  of  Wheeling-Pittsburgh  Corporation
("WPC")and  six  of  its  subsidiaries,   including   Wheeling-Pittsburgh  Steel
Corporation  ("WPSC"); a vertically  integrated  manufacturer of value-added and
flat rolled steel products.  WPSC, together with WPC and its other subsidiaries,
shall be referred to herein as the "WPC  Group." WHX,  together  with all of its
subsidiaries  other  than the WPC  Group,  shall be  referred  to  herein as the
"Company."

      On November 16, 2000, the WPC Group filed petitions seeking reorganization
under Chapter 11 of Title 11 of the United States  Bankruptcy Code  ("Bankruptcy
Filing") (see Note 4). As a result of the Bankruptcy Filing, WHX, as of November
16, 2000, deconsolidated the balance sheet of WPC. Accordingly, the accompanying
consolidated  balance sheets at December 31, 2004 and 2003 do not include any of
the assets or liabilities of WPC, and the accompanying  consolidated  statements
of  operations  and the  consolidated  statements  of cash flows exclude WPC. As
discussed in Note 4, a Chapter 11 Plan of Reorganization (the "WPC POR") for the
WPC Group was consummated on August 1, 2003. Among other things,  as a result of
the  consummation  of the WPC POR,  each  member of the WPC Group is no longer a
subsidiary of WHX.

NOTE 1a - MANAGEMENT'S PLANS AND LIQUIDITY

      The  accompanying  financial  statements  have been prepared  assuming the
Company will  continue as a going  concern.  The Company  incurred net losses of
$140.4  million,  $159.9  million and $47.9 million for the years ended December
31,  2004,  2003  and  2002,  respectively  and had  negative  cash  flows  from
operations of,$39.6 million for the year ended December 31, 2004. As of December
31, 2004, the Company had an accumulated deficit of $617.1 million and a working
capital deficit of $172.7  million.  With the exception of $6.0 million of Other
H&H debt,,  all debt has been  classified as current as of December 31, 2004 due
to noncompliance with certain debt covenants.

      In March 2005, WHX filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code. Following WHX's emergence from bankruptcy in July
2005, the Company  continued to experience  liquidity  issues.  WHX is a holding
company and has as its sole source of cash flow distributions from its operating
subsidiary,  H&H, or other discrete  transactions.  H&H's bank credit facilities
and term loan  effectively do not permit it to transfer any cash or other assets
to WHX and are  collateralized by substantially all of H&H's assets.  WHX has no
bank credit facility of its own. WHX's operating cash flow requirements  consist
of funding the supplemental retirement plan, certain  employee-related costs and
the bankruptcy-related expenses, all of which were paid by March 31, 2006. On an
ongoing  basis,  WHX is required to meet the  funding  requirements  for the WHX
Pension Plan and pay other administrative costs.

      Since  emerging from  bankruptcy,  due to covenant  restrictions  in H&H's
credit  facilities,  there  have  been no  dividends  from H&H to WHX and  WHX's
sources of cash flow have consisted of:

          o   The issuance of $5.1 million in preferred stock by a newly created
              subsidiary,  which was  invested  in the equity of a small  public
              company; and

          o   Partial  payment  of the  H&H  subordinated  debt  to WHX of  $9.0
              million, which required the approval of the banks participating in
              the H&H bank facility. Subsequent to this transaction, in 2006 the
              remaining intercompany  subordinated debt balance of $44.2 million
              was converted to equity.

      As of September 30, 2006, WHX had cash of  approximately  $1.6 million and
current  liabilities of  approximately  $6.9 million,  including $5.1 million of
mandatorily  redeemable preferred shares issued by a wholly-owned  subsidiary of
WHX and  payable to a related  party.  WHX also has  significant  2006 cash flow
obligations,  including without  limitation the minimum funding  requirement for
the WHX Pension  Plan,  which is estimated to be $20.6 million ($4.9 million was
paid as of July 14, 2006 and $5.0 million was paid by H&H in October 2006),  and


                                       48


estimated other administrative costs for 2006 of approximately $3.8 million. The
Pension Benefit Guaranty  Corporation ("PBGC) filed a lien against the assets of
H&H to collateralize,  among other things, the funding deficiency  existing as a
result of WHX's failure to make required contributions to the WHX Pension Plan.,
and on October 20, 2006 the PBGC  entered  into a lien  subordination  agreement
with H&H's  revolving  credit  facility  lender.  This  subordination  agreement
provides that the subordination  provisions shall not apply to any debt incurred
after December 31, 2006. . As previously indicated, there are no current sources
of cash  available to WHX to satisfy these  obligations,  other than the sale of
its subsidiary's equity investment (estimated market value at September 30, 2006
of $5.0 million),  possible insurance proceeds from current  litigation,  or the
sale of H&H  (which  is not  currently  contemplated).  If WHX does  not  obtain
additional  liquidity,  it is likely that WHX will not have  sufficient  cash to
continue to operate through the end of 2007.

      In 2006 WHX applied to the Internal  Revenue Service ("IRS") for a funding
waiver for the WHX  Pension  Plan  contributions  for the 2005 and the 2006 plan
years, but subsequently withdrew its request for the 2006 plan year. If granted,
this waiver would change the minimum funding requirements to $13.1 million, $6.7
million,  $7.9  million  and $18.3  million  (which  amounts  reflect the recent
passage of the Pension  Protection  Act of 2006 by Congress which had the effect
of changing the minimum funding  requirements)  in 2006,  2007, 2008 and through
2011 respectively,  from $20.6 million,  $2.7 million,  $0.0 million,  and $16.7
million (which amounts reflect the recent passage of the Pension  Protection Act
of 2006 by Congress) in such years  without the waiver.  WHX is required to make
quarterly  funding  payments  for each plan year.  In  addition,  the  remaining
minimum  required  contribution  for such earlier year is required to be made by
September 15 of the following  year. On September 15, 2006,  WHX was required to
make a  minimum  contribution  for the 2005  plan  year in the  amount  of $15.5
million.  However,  WHX did not  make  that  contribution  due to its  liquidity
issues. If the funding waiver described above is granted,  such payment would no
longer be due. WHX has made  contributions  in 2006 in the  aggregate  amount of
$13.1  million.  The  penalties  for failure to make timely  payment of the 2005
minimum funding requirement could result in penalties of 10% of such deficiency,
as  well  as an  additional  penalty  of  100%  of  such  amount  under  certain
circumstances.  In  addition,  the  failure  to make  timely  quarterly  funding
payments  could  result in the  assessment  of  interest.  The PBGC filed a lien
against  the assets of H&H to  collateralize,  among other  things,  the funding
deficiency,  and on October 20, 2006 entered into a Lien Subordination Agreement
with Wachovia Bank, National Association, in its capacity as agent ("Wachovia").
On October 26, 2006,  WHX entered into a  non-binding  letter of intent with the
PBGC ("PBGC LOI"), which provides, among other things, for the PBGC to recommend
to the IRS that it approve the funding  waiver  application  for the WHX Pension
Plan for the 2005 plan year,  which amount  would be amortized  over five years,
and for the PBGC to receive certain  subordinate  liens on the assets of H&H and
the  Company  to  collateralize  the  waiver  amount and  certain  other  agreed
obligations.  WHX and the PBGC  are  presently  working  to  prepare  definitive
documentation  relating  to the letter of intent  with the PBGC.  If the funding
waiver  is  not  granted,  or  definitive  documentation  is not  finalized  and
executed,  there  is no  assurance  that WHX will be able to  obtain  the  funds
required  to make the  payments.  H&H is jointly  and  severally  liable for the
funding of the WHX Pension Plan.

      The Company intends to attempt to refinance the H&H bank credit facilities
and to restructure  its Term B Loan,  which is held by a related  party,  and is
contemplating  other financing options.  As part of any such refinancing,  it is
possible that additional  liquidity will be provided and that the restriction on
distributions  from H&H to WHX will be modified.  There can be no assurance that
any refinancing  will be completed in a timely manner,  if at all. If WHX cannot
obtain additional debt or equity  financing,  or liquidity upon a refinancing of
the H&H bank credit  facilities,  there can be no  assurance  that WHX will have
sufficient funds to continue to operate.

      As of September 30, 2006,  H&H's  availability  under its revolving credit
facility  was  $11.7  million;   however,  based  on  the  Company's  forecasted
borrowings,  these  available  funds may not be  sufficient to fund debt service
costs,  working  capital  demands  (especially in light of recent high commodity
prices,  primarily silver and gold), and environmental  remediation  costs. From
January 1, 2006  through  September  30,  2006,  H&H spent  approximately  $12.2
million for the remediation of environmental  conditions at the site of a former
manufacturing  facility  which it had  previously  sold.  H&H  expects  to spend
approximately   an  additional  $8.8  million  through  2007  to  complete  this
remediation.  In  addition,  H&H may owe the buyer of the  property a penalty of
approximately  $3.8 million,  based on an estimated  completion date in February
2007,  which will increase if the  remediation is not completed by this date. An
arbitration  award,  which was  upheld by a court and is  currently  on  appeal,
concluded  that  H&H will be  obligated  to pay this  penalty.  However,  H&H is
awaiting a judicial  decision  as to the  enforceability  of this  penalty.  The
amount of availability  provided by H&H's revolving credit facility limits H&H's
borrowing  ability and is anticipated to continue to limit H&H's liquidity until
it can refinance  this facility.  Additionally,  this credit  facility  contains
various financial covenants,  including minimum EBITDA, as defined, fixed charge
coverage  ratio and  limitations  on  capital  expenditures.  The  Company is in
violation of certain of these  covenants.  The facility  also  includes  certain
financial  reporting  requirements,  which the  Company has been unable to meet.
Historically, H&H has been able to obtain amendments to financial covenants when
future  results  were not expected to comply with these  covenants.  H&H has not
obtained an amendment for these  covenant  violations,  and, as a result,  is in
default of the  facility.  Accordingly,  the  Company  has  classified  all debt
subject to these covenants as current liabilities in the accompanying  financial
statements  as of December  31,  2004.  H&H and its bank group have  amended its
facility as of October 30, 2006 to provide,  among other  things,  an additional
loan upon the filing of its 2005  Annual  Report on Form 10K,  and an  immediate
$3.0 million of borrowing  availability  under its  revolving  credit  facility.
H&H's revolving  credit facility also matures on March 31, 2007. There can be no
assurance  that this  amendment will provide H&H with the liquidity it requires,
that current or future covenant  violations will be waived by the banks, or that
replacement financing will be obtained upon commercially reasonable terms, if at
all.


                                       49


      The above conditions raise  substantial  doubt about the Company's ability
to continue as a going concern.  These  financial  statements do not include any
adjustments  to reflect the possible  future effects on the  recoverability  and
classification  of assets or amounts and  classification of liabilities that may
result from the outcome of this uncertainty.

NOTE 1b - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

      The  Company  has  restated  its  2003,  2002 and prior  year's  financial
statements  to correct  its  accounting  for  goodwill  impairment,  certain tax
matters  and  other   corrections,   including  its  accounting  for  derivative
instruments  (specifically futures contracts on precious metals) and the related
impact on inventory, and its accounting for an executive life insurance program,
as  well  as its  reporting  of  investment  borrowings  on its  2003  and  2002
statements of cash flows, all as described below.

GOODWILL IMPAIRMENT

      In fiscal  2003 the  Company  previously  recorded a  goodwill  impairment
charge of $89.0  million  relating  to several of its  reporting  units,  and in
fiscal 2002 the Company previously reported no goodwill impairment at the end of
the year and a cumulative effect of an accounting change related to the adoption
of SFAS 142,  'Goodwill  and  Other  Intangible  Assets'  ("SFAS  142"),  of $44
million.  In connection with the  preparation of its 2004 financial  statements,
the Company identified  several errors in its assessment of goodwill  impairment
resulting  in the need to  restate  its 2002  and  2003  consolidated  financial
statements,  including:  (1) the  reallocation  of  goodwill,  upon  the date of
adoption of SFAS 142, to the applicable  reporting units of the Company based on
a more reasonable and supportable methodology;  (2) identification of additional
reporting units not previously  considered;  (3) use of different discount rates
that more  appropriately  considered  the different  risks  associated  with the
individual  reporting  units  rather than the  overall  consolidated  rate;  (4)
identification of certain intangible assets that were not previously  considered
in determining the implied  goodwill as of the assessment date; and (5) use of a
growth rate in  determining  the terminal value of a reporting  unit,  which the
Company did not consider in its original  valuations.  The effect of  correcting
these errors was to reduce the goodwill  impairment charge, loss from continuing
operations  and net loss by $21.7 million for the year ended  December 31, 2003.
The effect of correcting  these errors for the year ended  December 31, 2002 was
to increase the goodwill  impairment charge and loss from continuing  operations
by $18.7 million, decrease the cumulative effect of an accounting change by $2.9
million, and to increase net loss by $15.8 million.

TAX MATTERS

      As of December  31,  2002,  the Company had  included  $5.3 million in its
deferred tax assets  related to the recording of an additional  minimum  pension
liability.  As of  December  31,  2003,  the  Company  established  a  valuation
allowance for all deferred tax assets,  and incorrectly  charged $5.3 million to
other comprehensive loss for the valuation allowance related to the deferred tax
asset  associated with the minimum pension  liability.  The Company now believes
that in  accordance  with the  provisions  of SFAS 109,  "Accounting  for Income
Taxes",  the charge to other  comprehensive  loss  should  have been a charge to
income tax  expense.  Accordingly,  the net loss for 2003 has been  increased by
$5.3 million and accumulated other comprehensive loss and accumulated deficit as
of  December  31,  2003  were  decreased  and  increased  by  the  same  amount,
respectively.

      As a result of the  Company's  review of deferred  taxes,  federal  taxes,
state taxes payable and tax reserves  (federal and state),  certain  errors were
identified related to 2003 and prior periods. The effect of these errors on 2003
is an increase  in tax  expense of $12.0  million,  including  the $5.3  million
adjustment to comprehensive  loss discussed above. The Company had established a
valuation  allowance against its net deferred tax asset as of December 31, 2003.
As part of the 2003 restatement,  the Company increased its valuation  allowance
to reflect $1.1 million of deferred tax  liabilities  that cannot be  considered
when   assessing   the   realizability   of  deferred   tax  assets  in  certain
jurisdictions.  These  deferred tax  liabilities  primarily  relate to temporary
differences for the tax amortization of  tax-deductible  goodwill.  In addition,
the Company  increased  its valuation  allowance by $4.6 million for  additional
federal  deferred tax assets that were recorded as part of the  restatement  for
2002 and prior  periods,  but required a valuation  allowance as of December 31,
2003. The Company also increased its valuation allowance to reflect $0.6 million
and $0.1 million of state and foreign  deferred tax  liabilities,  respectively,
that it had  inappropriately  netted against federal  deferred tax assets in its
previously issued 2003 financial statements.  The balance of the restatement for
2003 tax matters relates primarily to state tax issues.

      The  effect of tax errors on 2002 is a net tax  benefit  of $1.3  million,
primarily  relating to the  reversal of federal  and state  reserves,  partially
offset by a $0.6  million  charge for the  correction  of various  errors in the
federal tax provision.  As of January 1, 2002,, tax restatement matters resulted
in a $5.0 million decrease to accumulated  deficit.  The decrease to accumulated
deficit  relates  primarily to  additional  deferred tax assets that should have
been recorded in periods prior to 2002.


                                       50


      Deferred  taxes  relating  to  hedge  accounting  and  related   inventory
accounts,  and executive life restatement were also recorded and are included in
the  adjustments   discussed   above.   The  goodwill   restatement   items  are
non-deductible and accordingly have no impact on tax matters.

      As of December 31, 2003, tax restatement matters resulted in a decrease to
accrued  liabilities of $3.0 million an increase to net deferred tax liabilities
of $1.9 million, a $5.3 million decrease to other comprehensive loss, and a $1.7
million decrease to goodwill.  The reduction in accrued liabilities includes the
reversal  of a  $1.7  million  tax  reserve  attributable  to H&H  prior  to its
acquisition by the Company. The reversal of this reserve reduced goodwill by the
same amount.  Additionally,  adjustments related to tax matters were recorded to
decrease  accumulated  deficit by $6.3 million and $5.0 million as of January 1,
2003 and 2002, respectively.

INVESTMENT BORROWINGS

      During  fiscal  2003 and  2002,  the  Company  frequently  traded  in U.S.
Treasury  securities  which were  classified as short term  investments and were
considered   trading   securities  under  SFAS  115,   "Accounting  for  Certain
Investments in Debt and Equity  Securities".  Accordingly,  the Company recorded
the  activity in these  trading  investments  as  operating  cash  flows.  As of
December  31,  2002 and 2001  the  Company  had  short-term  margin  borrowings,
aggregating $107.9 million and $110.9 million, respectively, which were borrowed
to fund  these  short-term  investments.  The  Company  has  determined  that it
incorrectly  recorded  changes in such  borrowings as cash flows from  operating
activities  when such  borrowings  should have been  reported as cash flows from
financing activities in accordance with SFAS 95, "Statement of Cash Flows".

      The effect of correcting  these errors in 2003 and 2002 was an increase in
cash flows provided by operating  activities of $107.9 million and $3.1 million,
respectively, and an increase in cash flows used in financing activities for the
same amounts.  This  restatement had no effect on the net change in cash for the
respective periods.

OTHER CORRECTIONS:

      HEDGE ACCOUNTING/INVENTORY

      In order to  produce  certain  of its  products,  the  Company  purchases,
maintains and utilizes precious metals inventory. The Company maintains policies
consistent with economically hedging its precious metals inventory against price
fluctuations.  Hedge  accounting  under  SFAS 133,  "Accounting  for  Derivative
Instruments and Hedging Activities",  requires contemporaneous  documentation at
the inception of the applicable hedging  relationship,  including the method for
assessing the hedging instrument's effectiveness as well as the method that will
be  used to  measure  hedge  ineffectiveness.  The  Company  did  not  meet  the
documentation  criteria  necessary to apply hedge  accounting.  Accordingly  the
Company has restated its financial  statements to mark to market the  derivative
instruments  related to precious  metals.  Such  mark-to-market  adjustments are
recorded in current period  earnings as other income or expense in the Company's
consolidated statement of operations.  In addition, the Company has restated its
financial  statements  to record  its  precious  metal  inventory  at LIFO cost,
subject to lower of cost or market with any adjustments recorded through cost of
goods sold.  The  correction of this error results in an increase to fiscal 2003
cost of goods sold of $0.3  million  and other  expense of $0.2  million  for an
aggregate  increase  to loss from  continuing  operations  before  taxes of $0.5
million.

      There is no impact on the 2003  balance  sheet as all  precious  metal and
hedges were liquidated during 2003.  However,  as of December 31, 2002 inventory
was reduced by $5.8 million,  other current assets increased by $0.5 million and
accounts  payable  decreased by $5.8  million.  Accordingly,  these 2002 balance
sheet  changes  resulted in  equivalent  changes in the 2003  statement  of cash
flows.  Additionally,  the accumulated deficit as of January 1, 2002 was reduced
by $0.2 million.

      In 2002 the  correction  of this error  results in an  increase to cost of
goods sold of $1.0  million and other  income of $1.3 million for a net decrease
to loss from continuing operations before taxes of $0.3 million.

      LIFE INSURANCE ACCRUAL

      The Company has an Executive  Post-Retirement Life Insurance Program which
provides for life insurance  benefits for certain Company  executives upon their
retirement.  The insurance premium is paid by the Company. The Company accounted
for the cost of this  program  since  its  inception  in 1998 on a pay as you go
basis and did not  follow  the  guidance  as  required  by SFAS 106  "Employers'
Accounting for  Post-Retirement  Benefits Other Than Pensions."  Under SFAS 106,
the Company is required to recognize in its financial  statements an annual cost
and benefit  obligation  related to estimated future benefit payments to be made
to its current  and retired  executives.  Accordingly,  the Company  recorded an
increase in  operating  expenses  for the year ended  December  31, 2002 of $0.2
million,  and a decrease in  operating  expenses in the year ended  December 31,
2003 of $0.1 million to reflect a partial curtailment with respect to the plans.
Long-term  liabilities  increased  as of December 31, 2003 in the amount of $0.6
million, to give effect to the proper accounting for this plan. An adjustment to
increase  accumulated deficit as of January 1, 2002 by $0.6 million was recorded
for the correction of errors prior to 2002.


                                       51


      A summary of the impact of the  restatements  noted above on the Company's
consolidated  balance  sheet  as of  December  31,  2003,  and the  consolidated
statements of  operations,  cash flows and changes in  stockholders'  equity and
comprehensive loss for the year ended December 31, 2003 follows:


                                       52


                                                                           Year Ended December 31, 2003

                                                                  Previously
                                               As     Reclass for  Reported
         (In thousands)                   Previously  Presentation  with      Goodwill   Tax      Investment    Other       As
                                            Reported   Purposes    Reclass   Impairment  Matters  Borrowings   Matters    Restated
                                            --------   --------    -------   ----------  -------  ----------   -------    --------
CONSOLIDATED STATEMENT OF OPERATIONS

Cost of sales                               $265,001              $265,001                                    $    303    $265,304
Gross profit                                  61,295                61,295                                        (303)     60,992
Selling, general and
   administrative expenses                    70,063      (502)     69,561                                        (131)     69,430
Goodwill impairment charge                    89,000                89,000    (21,657)                                      67,343
Environmental remediation expense               --         502         502                                                     502
Loss from operations                        (152,156)             (152,156)    21,657                             (172)   (130,671)
Other income (expense)                          (222)                 (222)                                       (190)       (412)
Loss from continuing operations
   before taxes                             (168,011)             (168,011)    21,657                             (362)   (146,716)
Income taxes                                   1,197                 1,197               12,011                             13,208
Loss from continuing operations             (169,208)             (169,208)    21,657   (12,011)                  (362)   (159,924)
Net loss                                    (169,208)             (169,208)    21,657   (12,011)                  (362)   (159,924)
Net loss applicable to common stock         (188,632)             (188,632)    21,657   (12,011)                  (362)   (179,348)
Net loss per share - basic and diluted        (35.08)               (35.08)      4.03     (2.23)                 (0.07)     (33.35)

CONSOLIDATED BALANCE SHEET

Deferred income taxes-current asset             --                               --         400                                400
Goodwill and other intangibles               126,089               126,089      5,877    (1,664)                           130,302
Total Assets                                 406,146               406,143      5,877    (1,264)                           410,756
Other employee benefit liabilities             7,840     1,047       8,887                                         599       9,486
Other liabilities                              1,047    (1,047)       --                                                      --
Accrued liabilities                           22,083     7,312      29,391               (3,039)                            26,352
Interest payable                               2,085    (2,085)       --                                                      --
Payroll and employee benefits                  5,227    (5,227)       --                                                      --
Deferred income taxes-current liability         --                    --                  1,500                              1,500
Deferred taxes-non current liability            --                    --                    758                                758
Total Liabilities                            347,261               347,261                 (784)                   599     347,076
Accumulated other comprehensive loss         (21,642)              (21,642)               5,262                            (16,380)
Accumulated deficit                         (476,187)             (476,187)     5,877    (5,745)                  (599)   (476,654)
Stockholders' equity                          58,885                58,885      5,877      (483)                  (599)     63,680
Total Liabilities and Equity                 406,146               406,146      5,877    (1,267)                  --       410,756

CONSOLIDATED STATEMENT OF CASH FLOWS

Net loss                                    (169,208)             (169,208)    21,657   (12,011)                  (362)   (159,924)
Goodwill impairment charge                    89,000                89,000    (21,657)                                      67,343
(Gain) loss on derivatives - (unrealized)       --                    --                                           190         190
Pension - curtailment and special
   termination benefits                       53,215    (5,113)     48,102                                                  48,102
Other postretirement benefits                    413       692       1,105                                        (131)        974
Inventory                                     27,139                27,139                                      (5,819)     21,320
Investment account borrowings               (107,857)             (107,857)                        107,857                    --
Other current liabilities                    (38,443)    5,642     (32,801)                 254                  5,814     (26,733)
Other items-net                               (3,407)     (692)     (4,099)                                                 (4,099)
Deferred income taxes                           (827)                 (827)              11,757                             10,930
Net cash provided by (used in)
   operating activities                       75,797       530      76,327                         107,857        (308)    183,876
Derivative activity                             --                    --                                           308         308
Net cash provided by (used in)
   investing activities                      (38,884)              (38,884)                                        308     (38,576)
Net change in overdrafts                        --        (530)       (530)                                                   (530)
Investment account borrowings                   --                    --                          (107,857)               (107,857)
Net cash provided by (used in)
   financing activities                      (13,720)     (530)    (14,250)                       (107,857)               (122,107)



                                                                 53


                                                              Year Ended December 31, 2003
         (In thousands)
                                                As
                                            Previously     Goodwill      Tax       Investment   Other       As
                                             Reported     Impairment    Matters    Borrowings   Matters   Restated
                                             ---------    ----------    -------    ----------   -------   ---------

CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIT) AND
COMPREHENSIVE LOSS

Accumulated Other Comprehensive Loss
            Balance at beginning of year      (35,775)                                                      (35,775)
                   Current period change       14,133                    5,262                               19,395
                  Balance at end of year      (21,642)                   5,262                              (16,380)

Accumulated Deficit
            Balance at beginning of year     (306,979)     (15,780)      6,265                  (236)      (316,730)
                                Net loss     (169,208)      21,657     (12,011)                 (362)      (159,924)
                  Balance at end of year     (476,187)       5,877      (5,745)                 (599)      (476,654)

Comprehensive Loss
                               Net loss      (169,208)      21,657     (12,011)                 (362)      (159,924)
       Other comprehensive income (loss)        3,381                                                         3,381
    Minimum pension liability adjustment       10,752                    5,262                               16,014
                      Comprehensive Loss     (155,075)      21,657      (6,749)                 (362)      (140,529)


      A summary of the impact of the  restatements  noted above on the Company's
consolidated  statements  of  operations,  changes in  stockholders'  equity and
comprehensive loss and cash flows for the year ended December 31, 2002 follows:


                                                        54


                                                                  Year Ended December 31, 2002
                                                                  Previously
                                               As     Reclass for  Reported
         (In thousands)                   Previously  Presentation  with      Goodwill   Tax      Investment    Other       As
                                            Reported   Purposes    Reclass   Impairment  Matters  Borrowings   Matters    Restated
                                            --------   --------    -------   ----------  -------  ----------   -------    --------
CONSOLIDATED STATEMENT OF OPERATIONS
Cost of sales                               $ 318,104             $ 318,104                                  $   1,040    $ 319,144
Gross profit                                   68,289                68,289                                     (1,040)      67,249
Selling, general and
   administrative expenses                     73,652      (170)     73,482                                        173       73,655
Environmental remediation expense                --         170         170                                                     170
Goodwill impairment charge                       --                    --       18,651                                       18,651
Loss from operations                          (27,933)              (27,933)   (18,651)                         (1,213)     (47,797)
Other income (expense)                         (3,412)               (3,412)                                     1,328       (2,084)
Loss from continuing operation
   before tax                                 (36,111)              (36,111)   (18,651)                            115      (54,647)
Income taxes                                  (24,115)              (24,115)             (1,298)                            (25,413)
Loss from continuing operations               (11,996)              (11,996)   (18,651)   1,298                    115      (29,234)
Cumulative effect of accounting change        (44,000)              (44,000)     2,871                                      (41,129)
Net loss                                      (33,534)              (33,534)   (15,780)   1,298                    115      (47,901)
Net loss applicable to common stock           (52,758)              (52,758)   (15,780)   1,298                    115      (67,125)
Net loss per share - basic and diluted          (9.90)                (9.90)     (2.96)    0.24                   0.01       (12.61)

CONSOLIDATED STATEMENT OF CASH FLOWS
Net loss                                      (33,534)              (33,534)   (15,780)   1,298                    115      (47,901)
Goodwill impairment charge                       --                    --       18,651                                       18,651
(Gain) loss on derivatives- (unrealized)         --                    --                                       (1,328)      (1,328)
Cumulative effect of accounting change         44,000                44,000     (2,871)                                      41,129
Other postretirement benefits                     200     1,062       1,262                                        173        1,435
Pension expense                                 7,736    (7,736)       --                                                      --
Inventory                                      16,358                16,358                                      6,205       22,563
Investment account borrowings                  (3,089)               (3,089)                        3,089                      --
Other current liabilities                      29,883     7,709      37,592              (1,407)                (6,198)      29,987
Deferred income taxes                         (10,822)              (10,822)                109                             (10,713)
Other                                            --      (1,062)     (1,062)                                                 (1,062)
Net cash provided by operating activities      65,307      (249)     65,058                         3,089       (1,033)      67,114
(Gain ) loss on derivative activity-
   realized                                      --                    --                                        1,033        1,033
Net cash flow used-discontinued operations       --      (1,136)     (1,136)                                                 (1,136)
Net cash provided by investing activities      82,357    (1,136)     81,221                                      1,033       82,254
Investment account borrowings                    --                    --                          (3,089)                   (3,089)
Net change in overdrafts                         --          27          27                                                      27
Net cash used in financing activities        (135,805)       27    (135,778)                       (3,089)                 (138,867)
Net cash used in discontinued operations       (1,358)    1,358        --                                                      --

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) AND COMPREHENSIVE INCOME
ACCUMULATED DEFICIT
Balance at beginning of year                 (273,445)             (273,445)              4,967                   (351)    (268,829)
Net loss                                      (33,534)              (33,534)   (15,780)   1,298                    115      (47,901)
Balance at end of year                       (306,979)             (306,979)   (15,780)   6,265                   (236)    (316,730)

Net loss                                      (33,534)              (33,534)   (15,780)   1,298                    115      (47,901)
Foreign currency translation adjustment         1,241                 1,241                                                   1,241
Minimum pension liability adj., net of tax    (34,748)              (34,748)                                                (34,748)
Comprehensive Loss                            (67,041)              (67,041)   (15,780)   1,298                    115      (81,408)

Accumulated other comprehensive loss          (35,775)              (35,775)                                                (35,775)

Stockholders' equity                          213,861               213,861    (15,780)   6,267                   (238)     204,110


                                                                 55


RESTATEMENT OF UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

      The Company has  restated its  previously  issued  unaudited  consolidated
financial  statements for the quarters  ended March 31, 2004,  June 30, 2004 and
September 30, 2004 (the "Interim Restatement").  The Interim Restatement will be
given full effect in the  financial  statements  to be included in the Company's
Quarterly  Report on Form 10-Q for the quarters  ended March 31, 2005,  June 30,
2005 and September 30, 2005, when they are filed. See Note 19 for details of the
restatements  in each of the  respective  2004  quarters.  The Company  does not
intend to file restated  financial  statements  for the quarters ended March 31,
June 30 and September 30, 2003; however,  the Company has restated the quarterly
2003 financial information included in Note 19.

ACCOUNTING POLICIES

USE OF ESTIMATES

      The  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and liabilities and the
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements.  Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

      Cash and cash  equivalents  include cash on hand and on deposit and highly
liquid debt instruments with original maturities of three months or less.

REVENUE RECOGNITION

      Revenue is  recognized  on the sale of product when the related goods have
been shipped and title and risk of loss has passed to the customer.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS

       The Company carries its accounts receivable at their face amounts less an
allowance for doubtful accounts.  On a periodic basis, the Company evaluates its
accounts receivable and establishes the allowance for doubtful accounts based on
a combination of specific customer circumstances and credit conditions and based
on a history of write-offs and collections.

INVENTORIES

      Inventories are stated at the lower of cost or market.  Cost is determined
by the  last-in  first-out  ("LIFO")  method  for  precious  metal  inventories.
Non-precious  metals  inventories  are stated at the lower of cost  (principally
average cost) or market. For precious metals  inventories,  no segregation among
raw materials, work in process and finished goods is practicable.

DERIVATIVES

      H&H enters into  commodity  futures  and  forwards  contracts  on precious
metals that are subject to market  fluctuations in order to  economically  hedge
its precious metals  inventory  against price  fluctuations.  Future and forward
contracts  to sell or buy  precious  metal  are the  derivatives  used  for this
objective.  As these  derivatives are not designated as accounting  hedges under
SFAS 133, they are accounted for as derivatives with no hedge designation. These
derivatives  are marked to market and both  realized  and  unrealized  gains and
losses on these  derivatives  are recorded in current  period  earnings as other
income  (loss).  The  unrealized  gain  or  loss  (open  trade  equity)  on  the
derivatives is included in other current assets or other current liabilities.

PROPERTY, PLANT AND EQUIPMENT

      Depreciation of property,  plant and equipment is provided  principally on
the  straight-line  method over the estimated useful lives of the assets,  which
range  as  follows:  machinery  &  equipment  3 - 10  years  and  buildings  and
improvements 10 - 30 years.  Interest cost is capitalized for qualifying  assets
during the assets'  acquisition  period.  Maintenance and repairs are charged to
income  and  renewals  and  betterments  are  capitalized.  Profit  or  loss  on
dispositions is credited or charged to operating income.


                                       56


GOODWILL AND INTANGIBLES

      The Company  adopted the  provisions of Statement of Financial  Accounting
Standards  ("SFAS") No. 142,  "Goodwill and Other Intangible  Assets," effective
January 1, 2002. As a result,  goodwill is no longer  amortized,  but instead is
reviewed  annually for  impairment  in  accordance  with the  provisions of this
statement.  The evaluation of the  recoverability of the unamortized  balance of
goodwill is based on a comparison of the respective  reporting unit's fair value
to its carrying value, including allocated goodwill.  Fair values are determined
by discounting  estimated future cash flows. The  recoverability of goodwill may
be impacted if estimated future operating cash flows are not achieved. Purchased
patents are stated at cost,  which is amortized  over the  respective  remaining
lives of the patents.

STOCK-BASED COMPENSATION

      At December 31, 2004 the Company had six stock-based  compensation  plans,
which are more  fully  described  in Note 13.  These  plans  were  cancelled  in
conjunction  with WHX's  emergence  from  bankruptcy  in July 2005.  The Company
accounted for these plans under the recognition  and  measurement  principles of
Accounting  Principles Board (APB) Opinion No. 25, " Accounting for Stock Issued
to Employees," and related interpretations. No stock-based compensation cost for
the issuance of stock options is reflected in net income, as all options granted
under  these  plans  had an  exercise  price  equal to the  market  value of the
underlying common stock on the date of the option grant.

      In 2003 the Company  awarded  80,000 shares of restricted  common stock to
members of the Board of  Directors  at a fair  market  value of $2.48 per share.
These shares vested 1/3 immediately and 1/3 each year thereafter over a two-year
period  and  are  recorded  as a  separate  component  of  Stockholders  Equity.
Compensation  expense related to restricted  stock awards is recognized over the
vesting period.

      The following table  illustrates the effect on net income and earnings per
share if WHX had applied the fair-value  recognition  provisions of Statement of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation," ("SFAS 123"), to stock-based employee compensation.

(in thousands - except per share data)
                                                       2004            2003            2002
                                                   -----------      ----------      ----------
                                                                   (as Restated)   (as Restated)
Net loss, as reported
applicable to common shareholders                   $(159,868)      $(179,348)      $ (67,125)

Add: Compensation Expense                                  66              99               0

Deduct: total stock-based employee
               compensation expense determined
               under fair-value based method
               for all awards                             473             710             470
                                                    ---------       ---------       ---------

Pro forma net loss                                  $(160,275)      $(179,959)      $ (67,595)
                                                    =========       =========       =========


Loss per share:
     Basic and diluted - as reported                $  (29.38)      $  (33.35)      $  (12.61)
     Basic and diluted - Pro forma                  $  (29.45)      $  (33.47)      $  (12.69)

      The  pro-forma  amounts  and the  fair  value  of each  option  grant  are
estimated on the date of grant using the Black-Scholes option-pricing model. The
following   weighted-average   assumptions   were  used  in  the   Black-Scholes
calculation:  expected volatility of 104.2% in 2004, 98.6% in 2003, and 80.4% in
2002;  risk-free  interest rate of 3.4% in 2004, 2.4% in 2003, and 3.1% in 2002,
an expected life of 5 years and a dividend yield of zero.

ENVIRONMENTAL MATTERS

      The Company accrues for losses associated with  environmental  remediation
obligations when such losses are probable and reasonably estimable. Accruals for
estimated  losses  from  environmental  remediation  obligations  generally  are
recognized no later than completion of the remedial feasibility study.


                                       57


      Such   accruals   are   adjusted  as  further   information   develops  or
circumstances change. Costs of future expenditures for environmental remediation
obligations   are  not  discounted  to  their  present   value.   Recoveries  of
environmental  remediation  costs from other parties are recorded as assets when
their receipt is deemed probable.

INCOME TAXES

      Income taxes are provided using the asset and liability  method  presented
by SFAS.109,  "Accounting  for Income Taxes"  ("SFAS  109").  Under this method,
income  taxes  (i.e.,  deferred  tax assets,  deferred  tax  liabilities,  taxes
currently  payable/refunds  receivable  and tax expense)  are recorded  based on
amounts refundable or payable in the current year and include the results of any
differences  between U.S. GAAP and tax reporting.  Deferred income taxes reflect
the tax effect of net operating loss  carryforwards,  capital loss carryforwards
and the net tax effects of temporary  differences between the carrying amount of
assets and  liabilities  for financial  reporting  and income tax  purposes,  as
determined  under  enacted  tax  laws  and  rates.   Valuation   allowances  are
established when management determines that it is more likely than not that some
portion or the entire  deferred  tax asset will not be realized.  The  financial
effect  of  changes  in tax laws or  rates is  accounted  for in the  period  of
enactment.

EARNINGS PER SHARE

      Pursuant to SFAS 128,  "Earnings per Share," basic  earnings per share are
based on the  weighted  average  number of shares  of Common  Stock  outstanding
during each year, excluding redeemable common shares. Diluted earnings per share
gives effect to dilutive potential common shares outstanding during the period.

FOREIGN CURRENCY TRANSLATION

      Assets and  liabilities of foreign  subsidiaries  have been  translated at
current  exchange rates,  and related revenues and expenses have been translated
at average  rates of exchange in effect  during the year.  Resulting  cumulative
translation   adjustments  have  been  recorded  as  a  separate   component  of
accumulated other comprehensive income.

RECLASSIFICATION

      Certain  amounts for prior years have been  reclassified to conform to the
current year presentation.

NOTE 2 -VOLUNTARY PETITION UNDER CHAPTER 11 OF U.S. BANKRUPTCY CODE

      On March 7, 2005, WHX Corporation filed a voluntary petition  ("Bankruptcy
Filing") to reorganize  under Chapter 11 of the United  States  Bankruptcy  Code
with the United States  Bankruptcy  Court for the Southern  District of New York
(the  "Bankruptcy  Court").  WHX continued to operate its businesses and own and
manage its properties as a  debtor-in-possession  under the  jurisdiction of the
Bankruptcy  Court  and in  accordance  with  the  applicable  provisions  of the
Bankruptcy  Code  until it  emerged  from  protection  under  Chapter  11 of the
Bankruptcy Code on July 29, 2005 (see below).

      WHX's  primary  business  is H&H,  a  diversified  manufacturing  company.
Neither H&H nor any of WHX's other  subsidiaries  or affiliates were included in
WHX's Bankruptcy  Filing. All of H&H's operating units conducted business in the
ordinary course during the  bankruptcy.  WHX's  Bankruptcy  Filing was primarily
intended  to reduce  WHX's debt,  simplify  its  capital  structure,  reduce its
overall cost of capital and provide it with better access to capital markets.

      On March 7, 2005, WHX also filed a proposed Plan of  Reorganization of WHX
Corporation (as amended, the "Plan") and a related proposed disclosure statement
(as amended,  the "Disclosure  Statement") with the Bankruptcy Court. On June 7,
2005, WHX filed its first amended Chapter 11 Plan. On June 8, 2005 WHX filed its
second amended Disclosure Statement.

      On July 21, 2005, WHX Corporation's  Chapter 11 Plan of Reorganization was
confirmed by the U. S. Bankruptcy  Court for the Southern  District of New York.
The Plan became effective on July 29, 2005 ("Effective Date").

      The  Bankruptcy  Filing  created an event of default  under the  Indenture
governing  WHX's 10 1/2% Senior Notes (the  "Senior  Notes") due April 15, 2005.
Under the terms of the Senior Notes, as a result of the Bankruptcy  Filing,  the
entire unpaid principal and accrued interest (and any other additional  amounts)
became immediately due and payable without any action on the part of the trustee
or the note holders.  The principal amount outstanding under the Senior Notes at
March 7, 2005 was approximately $92.8 million. Accrued interest to March 7, 2005
was approximately $3.8 million.

      The  following is a summary of certain  material  features of the Plan and
the Confirmation Order. On the Effective Date:


                                       58


      o   All of WHX's outstanding  securities,  including WHX's  pre-bankruptcy
          filing  common  stock,  Series A preferred  stock,  Series B preferred
          stock and 10 1/2% Senior  Notes were  deemed  cancelled  and  annulled
          without further act or action.

      o   In full and complete satisfaction of all such claims, holders of WHX's
          10 1/2%  Senior  Notes  received  9,200,000  shares  of  common  stock
          representing  their prorated share of the reorganized  company.  These
          shares represent 92% of the equity in the reorganized company.

      o   In full and  complete  satisfaction  of all such  interests,  Series A
          preferred   stockholders  received  366,322  shares  of  common  stock
          representing  their  prorated  share of the  reorganized  company  and
          344,658 warrants to purchase common stock of the reorganized  company,
          exercisable at $11.20 per share and expiring on February 28, 2008.

      o   In full and  complete  satisfaction  of all such  interests,  Series B
          preferred   stockholders  received  433,678  shares  of  common  stock
          representing  their  prorated  share of the  reorganized  company  and
          408,030 warrants to purchase common stock of the reorganized  company,
          exercisable at $11.20 per share and expiring on February 28, 2008.

      o   Holders  of WHX's  pre-bankruptcy  filing  common  stock  received  no
          distribution under the Plan.

      The  common  stock  received  by  the  Series  A and  Series  B  preferred
stockholders,  collectively,  represents  8% of the  equity  in the  reorganized
company.   The  warrants   issued  to  the  Series  A  and  Series  B  preferred
stockholders,  collectively, represent the right to purchase an additional 7% of
the equity of the reorganized company after giving effect to the exercise of the
warrants.

      On the  Effective  Date,  all of the  assets  of WHX  were  vested  in the
reorganized  company  free and clear of all liens,  causes of  actions,  claims,
encumbrances,  equity interests,  and interests against,  in, or on such assets,
except  as  explicitly  provided  in the Plan.  Preferred  stock  dividends  and
interest on WHX's debt of $11.7 million from March 7, 2005 to July 29, 2005 were
not recorded while WHX was being reorganized in Chapter 11,and were not included
as a claim of the bankruptcy proceedings.

      The reorganization  value of the assets of WHX immediately before the date
of  confirmation  of the Plan was  greater  than the total of all  post-petition
liabilities  and  allowed  claims.  As a result the  Company did not qualify for
Fresh-Start  reporting in  accordance  with the American  Institute of Certified
Public Accountants  Statement of Position 90-7, "Financial Reporting by Entities
in  Reorganization  Under the  Bankruptcy  Code".  Accordingly,  the  assets and
liabilities of the reorganized company upon emergence from bankruptcy  continued
to be reported at their historical values.

      Upon its emergence from  bankruptcy on July 29, 2005,  WHX  experienced an
ownership  change as defined by Section 382 of the Internal  Revenue Code, which
imposes   annual   limitations   on  the   utilization  of  net  operating  loss
carryforwards  post ownership change.  The Company believes it qualifies for the
bankruptcy  exception  to  the  general  Section  382  limitations.  Under  this
exception,  the  annual  limitation  imposed by Section  382  resulting  from an
ownership  change will not apply,  instead the net operating loss  carryforwards
must  be  reduced  by  certain   interest  expense  paid  creditors  who  became
stockholders  as a result  of the  bankruptcy  reorganization.  Thus,  WHX's net
operating loss  carryforwards  of $116.0 million as of December 31, 2004 will be
reduced  by  approximately   $31.0  million  to  approximately   $85.0  million.
Additionally,  if WHX should undergo a second  ownership change within two years
of the date of change  as a result  of the  reorganization,  its  remaining  net
operating  losses  would  be  reduced  to zero.  Accordingly,  in order to avoid
subsequent  ownership  changes,  WHX's new charter contains a 5% ownership limit
pursuant to which certain transfers of WHX's shares will be limited.

      Since the  Effective  Date,  H&H and its  subsidiaries  have  continued to
conduct their businesses in the ordinary course.

NOTE 3 -RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      On September 29, 2006, the Financial  Accounting  Standards Board ("FASB")
issued SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other
Postretirement  Plans (SFAS  158") which  amends SFAS 87 and SFAS 106 to require
recognition  of the  overfunded  or  underfunded  status  of  pension  and other
postretirement  benefit plans on the balance  sheet.  Under SFAS 158,  gains and
losses,  prior service costs and credits,  and any remaining  transition amounts
under  SFAS 87 and SFAS  106 that  have  not yet  been  recognized  through  net
periodic  benefit cost will be recognized  in  accumulated  other  comprehensive
income,  net of tax  effects,  until they are  amortized  as a component  of net
periodic  cost.  SFAS 158 is effective  for  publicly-held  companies for fiscal
years ending after  December 15, 2006.  WHX  Corporation  will adopt the balance
sheet recognition  provisions of SFAS 158 at December 31, 2006. For illustrative
purposes,  we have  considered  the impact of these  provisions  at December 31,
2005,  our most  recent  measurement  date.  At that  time,  our  balance  sheet
reflected a reduction in stockholders'  equity of approximately  $65 million due
to our defined benefit pension and other  postretirement  benefit plans. The new
provisions  of SFAS 158 would have  resulted  in  additional  reductions  to WHX
Corporation's  shareholders' equity of $1.1 million and $5.0 million at December
31, 2005 and 2004,  respectively.  The Statement  does not affect the results of
operations.

      In September 2006, the FASB issued SFAS No.157,  "Fair Value Measurements"
SFAS No. 157 defines fair value,  establishes  a framework  for  measuring  fair
value in accordance with accounting  principles generally accepted in the United
States, and expands  disclosures about fair value  measurements.  This statement
does not require any new fair value measurements; rather, it applies under other
accounting  pronouncements that require or permit fair value  measurements.  The
provisions  of SFAS No. 157 are  effective  for  fiscal  years  beginning  after


                                       59


November 15,  2007.  The Company does not expect the adoption of SFAS No. 157 to
have a material  impact on the  Company's  consolidated  financial  position  or
results of operations.

      In June 2006, the FASB issued FASB  Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes" an Interpretation of FASB Statement 109 ("FIN 48"),
which  clarifies  the  accounting  for   uncertainty  in  tax  positions.   This
Interpretation  provides that the tax effects from an uncertain tax position can
be recognized in our financial  statements,  only if the position is more likely
than not of being  sustained  on  audit,  based on the  technical  merits of the
position.  The  provisions of FIN 48 are effective as of the beginning of fiscal
2007, with the cumulative effect of the change in accounting  principle recorded
as an adjustment to opening retained earnings.  We are currently  evaluating the
impact of adopting FIN 48 on our financial statements.

      In May 2005, the FASB issued SFAS No. 154,  "Accounting  Changes and Error
Corrections,"  which replaces APB Opinion No. 20, "Accounting  Changes" and FASB
Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements."
SFAS No. 154 requires  retrospective  application  to prior  periods'  financial
statements  for  voluntary   changes  in  accounting   principle  unless  it  is
impracticable.  SFAS No. 154 is effective for accounting changes and corrections
of errors made in fiscal years beginning after June 1, 2005.

      In  December  2004,  the FASB  issued a  revised  Statement  of  Financial
Accounting  Standards No. 123,  "Share-Based  Payment"  ("SFAS No.  123").  This
statement eliminates the intrinsic value method as an allowed method for valuing
stock  options   granted  to  employees.   Under  the  intrinsic  value  method,
compensation  expense was  generally  not  recognized  for the issuance of stock
options. The revised statement requires compensation expense to be recognized in
exchange  for the  services  received  based  on the fair  value  of the  equity
instruments on the grant-date.  This statement  became effective for the Company
as of  January  1, 2006,  and did not have a  material  impact on the  Company's
financial position, results of operations or cash flows.

      In  December  2004,  the FASB issued  Statement  of  Financial  Accounting
Standards  No. 151,  "Inventory  Costs - an amendment of ARB No. 43,  Chapter 4"
("SFAS No.  151").  SFAS No. 151 amends the guidance in ARB No. 43 and clarifies
accounting  for abnormal  amounts of idle facility  expense,  freight,  handling
costs, and wasted material (spoilage). The statement requires that certain items
that may have  previously  been  included in inventory  costs be  recognized  as
current-period  charges  regardless  of whether  they meet the  criterion of "so
abnormal".  SFAS  No.  151  also  requires  allocation  of  fixed  manufacturing
overheads  to the  costs of  conversion  based  on the  normal  capacity  of the
manufacturing facilities. This statement becomes effective for the Company as of
January 1, 2006. The Company adopted the provision of SFAS No. 151 on January 1,
2006,  and its adoption did not have a  significant  effect on its  consolidated
financial statements.

      In  January  2004,  the FASB  issued  FASB Staff  Position  No. FAS 106-1,
"Accounting  and Disclosure  Requirements  Related to the Medicare  Prescription
Drug,  Improvement and Modernization  Act of 2003" (FSP 106-1).  The FSP permits
employers that sponsor postretirement benefit plans (plan sponsors) that provide
prescription  drug  benefits to  retirees  to make a one-time  election to defer
accounting for any effects of the Medicare Prescription Drug,  Improvement,  and
Modernization  Act of 2003 (the "Act").  Without the FSP, plan sponsors would be
required under Statement of Financial  Accounting Standards No. 106, "Employers'
Accounting for Postretirement  Benefits Other Than Pensions", to account for the
effects of the Act in the fiscal period that includes December 8, 2003, the date
the President signed the Act into law. FASB Staff Position No. 106-2 (FSP 106-2)
includes  guidance  on  recognizing  the  effects of the new  legislation  under
various  conditions  surrounding  the assessment of "actuarial  equivalence"  of
subsidies  under the Act. FSP 106-2 is effective for the first interim or annual
period  beginning after June 15, 2004 with earlier  application  permitted.  The
adoption  of FSP  106-2 on July 1,  2004 did not have a  material  impact on the
Company's financial statements.

NOTE 4 - WPC GROUP BANKRUPTCY

      Wheeling-Pittsburgh  Corporation  ("WPC")  and  six  of  its  subsidiaries
(collectively  referred to as the "WPC  Group"),  including  Wheeling-Pittsburgh
Steel Corporation ("WPSC"), a vertically integrated  manufacturer of value-added
and flat  rolled  steel  products,  was a wholly  owned  subsidiary  of WHX.  On
November 16, 2000, the WPC Group filed a petition seeking  reorganization  under
Chapter 11 of Title 11 of the United States Bankruptcy Code. As a result of this
bankruptcy  filing,  as of November 16,  2000,  the Company  deconsolidated  the
balance sheets of the WPC Group. A Chapter 11 Plan of Reorganization for the WPC
Group (the "WPC POR") was confirmed by the Bankruptcy Court on June 18, 2003 and
was  consummated on August 1, 2003.  Pursuant to the terms of the WPC POR, among
other things, the WPC Group ceased to be a subsidiary of WHX effective August 1,
2003, and from that date forward has been an independent company.

      As part of the WPC POR, the Company  agreed to make certain  contributions
(the  "WHX   Contributions")   to  the  reorganized   company.   Under  the  WHX
Contributions,  the Company  forgave the repayment of its claims against the WPC
Group of  approximately  $39.0  million and,  additionally,  contributed  to the
reorganized company $20.0 million of cash, for which the Company received a note
in the amount of $10.0  million.  The note was fully  reserved upon receipt.  On
March 6, 2003, the PBGC published its Notice of Determination  ("Notice") and on
March 7, 2003  filed a Summons  and  Complaint  ("Complaint")  in United  States
District  Court for the Southern  District of New York  seeking the  involuntary
termination of the WHX Pension Plan (the "WHX Plan"),  a defined benefit pension


                                       60


plan  sponsored  by the Company  that  provides  pension  benefits to active and
retired  employees  of WHX and H&H and  certain  benefits  to active and retired
employees of members of the WPC Group.  WHX filed an answer to this complaint on
March 27, 2003,  contesting  the PBGC's  action.  On July 24, 2003,  the Company
entered into an agreement among the PBGC, WPC, WPSC, and the United Steelworkers
of America,  AFL-CIO-CLC  ("USWA") in settlement of matters relating to the PBGC
V. WHX CORPORATION,  Civil Action No. 03-CV-1553,  in the United States District
Court for the Southern District of New York ("Termination Litigation"), in which
the PBGC was seeking to  terminate  the WHX Plan.  Under the  settlement,  among
other things, WHX agreed (a) that the WHX Plan, as it is currently  constituted,
is a single employer pension plan, (b) to contribute funds to the WHX Plan equal
to moneys spent (if any) by WHX or its  affiliates  to purchase WHX 10.5% Senior
Notes ("Senior Notes") in future open market  transactions,  and (c) to grant to
the PBGC a pari passu security  interest of up to $50.0 million in the event WHX
obtains any future  financing  on a secured  basis or provides  any  security or
collateral for the Senior Notes.

      Also under the  settlement,  all parties  agreed that as of the  effective
date of the WPC POR,  (a) no shutdowns  had occurred at any WPC Group  facility,
(b) no member of the WPC Group is a  participating  employer under the WHX Plan,
(c)  continuous  service for WPC Group  employees  was broken,  (d) no WPC Group
employees will become  entitled to "Rule of 65" or "70/80"  Retirement  Benefits
(collectively,  "Shutdown  Benefits")  by reason of events  occurring  after the
effective  date of the WPC POR, and (e) the WHX Plan would provide for a limited
early retirement option to allow up to 650 WPSC  USWA-represented  employees the
right to receive retirement benefits based on the employee's years of service as
of  July  31,  2003  with a  monthly  benefit  equal  to $40  multiplied  by the
employee's years of service.

      Finally,  under  the  settlement,  the PBGC  agreed  (a)  that,  after the
effective  date of the WPC POR, if it  terminates  the WHX Plan at least one day
prior  to a WPC  Group  facility  shutdown,  WHX  shall  be  released  from  any
additional  liability to PBGC resulting  from the shutdown,  (b) to withdraw its
claims in the WPC  Bankruptcy  Proceedings,  and (c) to dismiss the  Termination
Litigation.

      A pre-tax,  non-cash charge for the cost of early retirement incentives of
$11.5  million  was  recognized  in the  third  quarter  of  2003  as a  special
termination  benefit  in  accordance  with  Statement  of  Financial  Accounting
Standards No. 88,  "Employers'  Accounting for Settlement  and  Curtailments  of
Defined  Benefit  Pension Plans and for  Termination  Benefits"  ("SFAS 88"). In
addition,  a  curtailment  occurred  as a result of the break in service for WPC
Group employees that resulted in a pre-tax,  non-cash charge of $36.6 million in
the third quarter of 2003, pursuant to SFAS 88.

      For  WHX  Plan  funding  purposes,  the  impact  of the  changes  was  not
recognized  until the next actuarial  valuation  which occurred as of January 1,
2004. The funding requirements depend on many factors including those identified
above  as well as  future  investment  returns  on WHX Plan  assets.  WHX made a
contribution to the WHX Plan of $6.0 million in 2004.

      The agreement  with the PBGC also contains the provision that WHX will not
contest a future action by the PBGC to terminate the WHX Plan in connection with
a future WPC Group facility shutdown.  In the event that such a plan termination
occurs,  the PBGC has agreed to  release  WHX from any  claims  relating  to the
shutdown. However, there may be PBGC claims related to unfunded liabilities that
may exist as a result of a termination of the WHX Plan.

      In connection  with past collective  bargaining  agreements by and between
the WPC Group and the USWA,  the WPC Group  was  obligated  to  provide  certain
medical  insurance,  life insurance,  disability and surviving spouse retirement
benefits to retired employees and their dependents ("OPEB Obligations"). WHX was
not a signatory to any of those  agreements.  However,  WHX had  previously  and
separately  agreed  to  be  contingently  liable  for  a  portion  of  the  OPEB
Obligations.  WHX's contingent obligation would have been triggered in the event
that the WPC Group  failed to satisfy  its OPEB  Obligations.  WHX's  contingent
obligation  was  limited  to  25%  of the  Accumulated  Post-Retirement  Benefit
Obligation with respect to the WPC Group's employees and retirees represented by
the USWA.  WPC's total OPEB  Obligation  at January 1, 2003 was  estimated to be
$314.1  million.  WHX has  estimated  that  approximately  85% of employees  and
retirees  entitled to such OPEB  Obligations  are  represented by the USWA. As a
result of the  consummation of the WPC POR, WHX's  contingent  liability for the
OPEB Obligation was eliminated.

      As a  result  of the  consummation  of the WPC POR  and  the  related  WHX
Contributions, the remaining balance in the loss in excess of investment account
of $0.5 million was reversed into income in the third quarter of 2003.


NOTE 5   BUSINESS RESTRUCTURING CHARGES

      In 2004 the Company  evaluated the current operating plans and current and
forecasted  operating  results of its wire & cable business.  In accordance with
Statement  of  Financial   Accounting  Standards  Number  144,  "Accounting  for
Impairment  or  Disposal  of  Long-Lived   Assets"  ("SFAS  144"),  the  Company
determined that there were indicators of impairment as of June 30, 2004 based on
continued  operating  losses,  deteriorating  margins,  and rising raw  material
costs.  An estimate of future cash flows indicated that as of June 30, 2004 cash
flows would be  insufficient  to support the  carrying  value of the  long-lived
assets of the  business.  Accordingly,  these  assets were written down to their
estimated  fair value by recording a non-cash  asset  impairment  charge of $3.9
million in the second quarter.  In November 2004, the Company  announced that it
had signed a non-binding  letter of intent to sell its wire business and that it
was negotiating  the sale of its steel cable business.  The decision to sell was
based on the continued cash flow drain on the Company caused by these businesses
from further increases in operating losses, deteriorating margins and rising raw
material costs.  Based on the proposed terms of these  transactions  the Company
recorded an additional asset impairment charge of $4.3 million. At that time the
Company  stated that if it were unable to complete these sales it would consider
the closure of these  operations.  On January 13, 2005,  the Company  determined
that a sale of these operations could not be completed on terms  satisfactory to
the Company.  Accordingly,  the Company decided to permanently  close the wire &
cable businesses. The affected operations are located in Cockeysville,  Maryland
and Oriskany, New York.

      In the fourth quarter of 2004, H&H communicated to its 146 union employees
the plan to either sell or close the wire and cable business.  Accordingly,  H&H
recorded a  restructuring  charge of $1.2 million for  termination  benefits and
related costs. These termination benefits were paid in 2005. Additionally,  $0.4
million was recorded as a restructuring charge for clean up costs related to the
Cockeysville,  Maryland  facility.  The Company  operated these  facilities on a
limited  basis  in the  first  quarter  of 2005 in  order  to  fulfill  customer
commitments.  Operating  losses and closure  costs  incurred in 2005 amounted to
$4.2 million  including a $0.7 million gain on the sale of certain  fixed assets
and $0.9 million in termination benefits.  Accordingly, the estimated total cost
including termination  benefits,  operating losses (excluding fixed asset gains)
and closure costs will be approximately $6.5 million. These costs will be funded
from  realization of working  capital and proceeds from the sale of fixed assets
of these businesses. In the second quarter of 2005, H&H concluded all operations
of the wire & cable  business.  In 2006 the Company  sold land,  buildings,  and
certain machinery & equipment  relating to these businesses for $7.3 million and
recognized a gain on these sales of $4.5 million.

      During  April 2002,  H&H  decided to exit  certain of its  precious  metal
manufacturing activities.  The affected product lines were manufactured at H&H's
Fairfield,  CT and East  Providence,  RI facilities.  The decision to exit these
operating  activities resulted in a restructuring charge of $12.0 million in the
year ended  December 31,  2002.  This charge  included  $6.6 million in employee
separation expenses (approximately 251 employees, substantially all of whom were
terminated by June 30, 2003); $0.6 million of contractual obligations,  and $4.8
million  in  costs to close  the  facilities,  including  refining  charges  for
inventory  remaining  after  operations  ceased.  An additional  $2.9 million of
associated  costs were incurred  during 2003. Such costs are not included in the
aforementioned restructuring charge.

      The Company received $8.0 million in 2003 for the sale of certain property
associated with the Fairfield facility. The Company recorded a $3.9 million loss
on the sale of property in 2003. In  connection  with this sale of the Fairfield
facility  the  Company  was   responsible   for  demolition  and   environmental
remediation of the site, the estimated cost of which was included in the loss on
sale  recorded  in 2003.  H&H  determined  that an  increase  in the reserve for
environmental  remediation was needed in the amount of $28.3 million,  which was
recorded in the fourth quarter of 2004. This change in reserve was caused by the
discovery  of  underground  debris  and  soil  contaminants  that  had not  been
anticipated.  These additional  costs are included in environmental  remediation
expense.  The Company retains title to a parcel of land adjacent to the property
sold in 2003.  This parcel is classified  as other  non-current  assets,  in the
amount of $2.0 million, on the consolidated  balance sheets at December 31, 2004
and 2003.

      The following table represents the activity of the restructuring reserve:

                                         Reserve                                       Reserve
                                         Balance                                       Balance
                                       December 31,              Cost                December 31,
(In Thousands)                             2001     Expense    Incurred   Adjustment     2002
                                        --------   --------    --------   ---------- ------------
Employee separation and related costs   $   --     $  6,636    $ (5,278)   $   --     $  1,358

Facility closing and refining costs         --        4,743      (3,626)       --        1,117

Contractual obligations                     --          625        (488)       --          137
                                        --------   --------    --------    --------   --------

                                        $   --     $ 12,004    $ (9,392)   $   --     $  2,612
                                        ========   ========    ========    ========   ========


                                       62


                                         Reserve                               Reserve
                                         Balance                               Balance
                                       December 31,    Cost                  December 31,
                                           2002      Incurred    Adjustment      2003
                                       ------------  --------    ----------  ------------
(in thousands)

Employee separation and related costs   $ 1,358      $  (882)     $  (476)     $  --

Facility closing and refining costs       1,117       (1,622)         505         --

Contractual obligations                     137          (63)         (74)        --
                                        -------      -------      -------      -------
                                        $ 2,612      $(2,567)     $   (45)     $  --
                                        =======      =======      =======      =======

      In September  2002,  the Company  decided to exit certain of its stainless
steel wire  activities.  The affected  operations  were at H&H's  facilities  in
Liversedge,  England and  Willingboro,  NJ. The decision to exit these operating
activities resulted in restructuring  charges of $8.0 million in the second half
of 2002.  The  components of the  restructuring  charges  were:  $2.8 million in
employee  separation  expenses  (approximately  121 employees,  all of whom were
terminated  by June 30,  2003),  $4.8 million for the  write-down  of production
supplies  and  consumables  and  facility  closing  costs,  and $0.4  million in
contractual  obligations.  An additional  $1.2 million of associated  costs were
incurred  during  2003.  Such  costs  are  not  included  in the  aforementioned
restructuring charge. As of December 31, 2003, the Company received $1.4 million
for the sale of the Liversedge, England property and $1.3 million on the sale of
the Willingboro, NJ property.

      The following table represents the activity of this restructuring reserve:

                                         Reserve                                       Reserve
                                         Balance                                       Balance
                                       December 31,              Cost                December 31,
(In Thousands)                             2001     Expense    Incurred   Adjustment     2002
                                        --------   --------    --------   ---------- ------------

Employee separation and related costs   $  --      $ 2,770     $(1,573)    $  --      $ 1,197

Facility closing costs                     --        4,833      (3,592)       --        1,241

Contractual obligations                    --          387         (13)       --          374
                                        -------    -------     -------     -------    -------
                                        $  --      $ 7,990     $(5,178)    $  --      $ 2,812
                                        =======    =======     =======     =======    =======


                                         Reserve                               Reserve
                                         Balance                               Balance
                                       December 31,    Cost                  December 31,
                                           2002      Incurred    Adjustment      2003
                                       ------------  --------    ----------  ------------
(in thousands)

Employee separation and related costs   $ 1,197      $(1,121)     $   (76)     $  --

Facility closing costs                    1,241       (1,592)         351         --

Contractual obligations                     374         (144)        (230)        --
                                        -------      -------      -------      -------

                                        $ 2,812      $(2,857)     $    45      $  --
                                        =======      =======      =======      =======


      The adjustments made to the  restructuring  reserves during the year ended
December 31, 2003 represented  revisions to the original cost estimates based on
actual costs incurred.

      On July 31, 2002, the Company sold the stock of Unimast,  its wholly owned
subsidiary, to Worthington Industries, Inc. for $95.0 million in cash. Under the
terms of the agreement,  the buyer assumed certain debt of Unimast. In the third
quarter  of  2002,  the  Company  recognized  a  pre-tax  gain  on the  sale  of
approximately  $18.6  million.  The  gain  on  sale  is  net of  closing  costs,
transaction fees, employee related payments,  and other costs and expenses.  Net
cash  proceeds  from the sale,  after  escrow of $2.5  million,  closing  costs,
transaction fees,  employee related payments,  and other costs and expenses were
approximately  $85.0 million.  The Company applied the proceeds from the sale to
reduce  other  corporate  debt  pursuant to the terms of the  Indenture  for the
Company's 10 1/2 % Senior Notes.


                                       63


      As a result of the sale, the consolidated financial statements and related
notes for 2002 reflect Unimast as a discontinued operation.

      Operating results of discontinued operations were as follows:

                                              Year Ended
                                         December 31, 2002 (a)
                                         ---------------------
(in thousands)

Net sales                                     $ 150,997

Operating income                                 17,652

Interest/ other income (expense)                   (806)

Income taxes                                      6,245

Net income                                       10,601

(a) Seven month period ended 07/31/2002.

NOTE 6 - PENSIONS, OTHER POSTRETIREMENT AND POST-EMPLOYMENT BENEFITS

      The Company maintains  several  qualified and non-qualified  pension plans
and  other  postretirement  benefit  plans  covering  substantially  all  of its
employees.  The Company's pension,  health care benefit and significant  defined
contribution plans are discussed below. The Company's other defined contribution
plans are not significant individually or in the aggregate.

QUALIFIED PENSION PLANS

      The  Company's   defined  benefit  plan,  the  WHX  Pension  Plan,  covers
substantially  all WHX and H&H employees  and certain  employees of WHX's former
subsidiary,  WPC. The WHX Pension Plan was  established in May 1998, as a result
of the merger of the former Handy & Harman plans,  which  covered  substantially
all H&H employees, and the WPC plan. The WPC plan, covering most USW represented
employees  of WPC was created  pursuant  to a  collective  bargaining  agreement
ratified on August 12, 1997. Prior to that date,  benefits were provided through
a  defined   contribution  plan,  the   Wheeling-Pittsburgh   Steel  Corporation
Retirement Security Plan ("RSP"). The assets of the RSP were merged into the WPC
plan as of  December  1,  1997.  Under the terms of the WHX  Pension  Plan,  the
benefit  formula and  provisions for the WPC and H&H  participants  continued as
they were designed under each of the respective plans prior to the merger.

      The qualified  pension  benefits under the WHX Pension Plan were frozen as
of December 31, 2005 and April 30, 2006 for hourly and  salaried  non-bargaining
participants,  respectively,  with the  exception  of a single  operating  unit.
Future benefits for the impacted  employees will be provided through  additional
contributions to the defined contribution plan.

      As  discussed  in  Note  4,  WPC  Group  employees  ceased  to  be  active
participants  in the WHX Pension  Plan  effective  July 31, 2003 and as a result
such  employees no longer accrued  benefits under the WHX Plan.  Pursuant to the
provisions of SFAS 88, this event  constituted a curtailment of the WHX Plan and
required   WHX  to  revalue   the  pension   liability   as  of  July  31,  2003
("re-measurement date"). The curtailment resulted in a pre-tax,  non-cash charge
to income of $36.6 million in the third quarter of 2003.

      In addition,  a special  termination benefit was provided to 540 WPC Group
employees.  In the third  quarter of 2003,  WHX  recognized a non-cash,  pre-tax
charge of $11.5 million relating to this benefit.

      Pension  benefits  for the WHX and H&H  participants  included  in the WHX
Pension Plan are based on years of service and the amount of compensation at the
time of retirement. However, as noted above, the qualified pension benefits were
frozen for most participants.

      Pension benefits for the WPC participants include both defined benefit and
defined contribution features, since the plan includes the account balances from
the RSP. The gross  benefit,  before  offsets,  is calculated  based on years of
service and the benefit  multiplier  under the plan.  This gross  amount is then
offset for the benefits payable from the RSP and benefits payable by the Pension
Benefit  Guaranty  Corporation  from  previously  terminated  plans.  Individual
employee  accounts  established  under the RSP are maintained until  retirement.
Upon  retirement,  participants  who are  eligible  for the WHX Pension Plan and
maintain  RSP account  balances  will  normally  receive  benefits  from the WHX


                                       64


Pension Plan.  When these  participants  become  eligible for benefits under the
Plan,  their  vested  balances in the RSP Plan become  assets of the WHX Pension
Plan. Aggregate account balances held in trust in individual employees' accounts
totaled  $115.9  million  and $109.4  million  at  December  31,  2004 and 2003,
respectively  Such individual  account balances can only be utilized to fund all
or a portion of the respective  individual's gross pension benefit as determined
by the defined benefit plan's benefit  formula.  These assets cannot be utilized
to fund any of the net  benefit  that is the basis for  determining  the defined
benefit plan's benefit obligation at December 31, 2004.

      The  Company's  funding  policy is to  contribute  annually an amount that
satisfies the minimum funding standards of ERISA. Prior to 2004, the Company had
not been required to make any such  contributions due to the plan's fully funded
status. The Company contributed $6.0 million to the WHX Pension Plan in 2004. As
more fully  described in Note 1a, in 2006, the Company  applied to the IRS for a
funding waiver with respect to the WHX Pension Plan.

      In addition to the WHX Pension  Plan,  H&H provided  pension  coverage for
employees of its former U.K. subsidiary through a separate plan governed by U.K.
statutory requirements.  In 2004, H&H liquidated its former U.K. subsidiary with
no further obligation to contribute to its pension plan.

      The  measurement  date for plan  obligations  is December 31. The discount
rate is the rate at which the plan's  obligations  could be effectively  settled
and is based on high-quality bond yields as of the measurement date.

The following table presents a  reconciliation  of beginning and ending balances
of the projected benefit obligation.

                                           Domestic Plan               Foreign Plan
                                     -----------------------     -----------------------
                                        2004          2003          2004           2003
                                     ---------     ---------     ---------     ---------
                                                         (In Thousands)

Benefit obligation at January 1      $ 388,464     $ 372,767     $  10,405     $  10,026

Service cost                               978         4,182          --             250

Interest cost                           24,326        22,128          --             563

Actuarial (gain)/loss                   30,101         2,227          --            (252)

Benefits paid                          (41,267)      (36,943)         --            (817)

Plan amendments - implementation           820           376          --            --

Curtailments                              --         (28,426)         --            (392)

Special termination benefits              --          11,472          --            --

Liquidation of subsidiary                 --            --         (10,405)        1,027

Transfers from RSP                       6,764        40,681          --            --
                                     ---------     ---------     ---------     ---------
Benefit obligation at December 31    $ 410,186     $ 388,464     $    --       $  10,405
                                     =========     =========     =========     =========


The following table presents the beginning-of-year  and end-of-year  accumulated
benefit obligation.



                                                     Domestic Plan           Foreign Plan
                                                  -------------------    --------------------
                                                    2004       2003        2004        2003
                                                  --------   --------    --------    --------
                                                                 (In Thousands)

Accumulated benefit obligation at January 1       $386,990   $367,544    $ 10,405    $  9,325
Accumulated benefit obligation at December 31      408,852    386,990        --        10,405



The following  table  presents  weighted-average  assumptions  used to determine
benefit obligations at December 31,

                                   Domestic Plan     Foreign Plan
                                  ---------------    --------------
                                  2004      2003     2004     2003
                                  ---------------    --------------
Discount rate                     5.75%     6.25%     N/A     5.60%

Rate of compensation increase     4.00%     4.00%     N/A     3.80%


                                       65


The following table presents a  reconciliation  of beginning and ending balances
of the fair value of plan assets.

                                                 Domestic Plan              Foreign Plan
                                           -----------------------   -----------------------
                                              2004         2003         2004         2003
                                           ----------   ----------   ----------   ----------
                                                             (in thousands)

Fair value of plan assets at January 1     $ 339,310    $ 304,137    $   5,807    $   5,386
Actual returns on plan assets                 32,543       31,435         --            645
Benefits paid                                (41,267)     (36,943)        --           (817)
Company contributions                          6,024         --           --             21
Liquidation of subsidiary                       --           --         (5,807)        --
Foreign currency exchange rate changes          --           --           --            572
Transfers from RSP                             6,764       40,681         --           --
                                           ---------    ---------    ---------    ---------
Fair value of plan assets at December 31   $ 343,374    $ 339,310    $    --      $   5,807
                                           =========    =========    =========    =========

Funded status                              $ (66,812)   $ (49,154)   $    --      $  (4,598)
Unrecognized prior service cost                1,450          715         --           --
Unrecognized actuarial (gain)/loss            46,576       21,072         --          4,396
Unrecognized transition obligation              --           --           --             42
                                           ---------    ---------    ---------    ---------
Net amount recognized                      $ (18,786)   $ (27,367)   $    --      $    (160)
                                           =========    =========    =========    =========

      Employer  contributions  consist of funds paid from employer assets into a
qualified pension trust account.

      WHX's domestic pension plan weighted-average asset allocations at December
31, 2004 and 2003, by asset category, are as follows:

                                    Plan Assets
                                2004            2003
                                ----            ----
ASSET CATEGORY
Equity Securities                39%             41%
Debt Securities                   8%              9%
Convertible Securities            8%             11%
Cash                              1%              1%
Other (Hedge Funds)              44%             38%
                                ----            ----
   Total                        100%            100%
                                ====            ====

      The  Company's  investment  policy is to maximize the total rate of return
with a view to long-term  funding  objectives of the pension plan to ensure that
funds are available to meet benefit obligations when due. The three to five year
objective of the Plan is to achieve a rate of return that exceeds the  Company's
expected earnings rate by 150 basis points at prudent levels of risk.  Therefore
the pension plan assets are diversified to the extent necessary to minimize risk
and to achieve an optimal balance  between risk and return.  There are no target
allocations.  The Plan's assets are diversified as to type of assets, investment
strategies  employed,  and number of investment  managers used.  Investments may
include equities,  fixed income, cash equivalents,  convertible securities,  and
hedge funds.  Derivatives  may be used as part of the investment  strategy.  The
Company may direct the transfer of assets between  investment  managers in order
to  rebalance  the  portfolio in  accordance  with asset  allocation  guidelines
established by the Company.

The funded  status of the  plans,  reconciled  to the  amounts  reported  on the
balance sheet, follows.


                                       66


The following table provides the amount  recognized in the consolidated  balance
sheets as of December 31:

                                             Domestic Plan              Foreign Plan
                                         -----------------------------------------------------
                                           2004          2003          2004          2003
                                         -----------------------------------------------------
         (in thousands)                              (as Restated)               (as Restated)

Accrued pension liability                $(18,786)     $(27,367)     $   --        $   --
Additional minimum pension liability      (46,692)      (20,314)         --          (4,598)
Intangible pension asset                    1,450           716          --              42
Accumulated other comprehensive income     45,242        19,598          --           4,396
                                         --------      --------      --------      --------
Net liability recognized                 $(18,786)     $(27,367)     $   --        $   (160)
                                         ========      ========      ========      ========

The following table presents the components of net periodic pension cost.

                                                                   Domestic Plan                         Foreign Plan
                                                    ---------------------------------------- -------------------------------------
                                                         2004          2003        2002           2004       2003        2002
                                                    ---------------------------------------- -------------------------------------
                                                    (In thousands)

Service cost                                           $    978      $  4,182    $  6,472       $   --     $    250    $    211
Interest cost                                            24,326        22,129      23,551           --          563         536
Expected return on plan assets                          (27,947)      (24,590)    (28,346)          --         (383)       (461)
Amortization of prior service cost                           86         3,393       5,769           --                     --
Recognized actuarial (gain)/loss                           --            --          --             --          279        --
Amortization of unrecognized transition obligation                                                  --            4           4
                                                       --------      --------    --------       --------   --------    --------
                                                         (2,557)        5,114      7,446                       713         290
                                                       --------      --------    --------       --------   --------    --------
Curtailment (gain)/loss                                    --   (a)    36,629        --             --         --          --
Special termination benefit charge                         --   (a)    11,472        --             --         --          --
                                                       --------      --------    --------       --------   --------    --------
                                                       $ (2,557)     $ 53,215    $  7,446       $   --     $    713    $    290
                                                       ========      ========    ========       ========   ========    ========

(a) $36,629 curtailment loss and $11,472 special termination benefit charge relate to the exclusion of Wheeling-Pittsburgh Steel
    Corporation as a participating employer in the qualified pension as of July 31, 2003.

The following table presents weighted-average  assumptions used to determine net
periodic benefit cost for years ended December 31,

                                             Domestic Plan                          Foreign Plan
                                   --------------------------------     ----------------------------------
                                     2004        2003        2002         2004          2003        2002
                                   --------------------------------     ----------------------------------

Discount rate                        6.25%       6.75%(a)    7.25%         N/A          5.60%       5.60%
Expected return on assets            8.50%       8.50%       9.25%         N/A          7.00%       7.00%
Rate of compensation increase        4.00%       4.00%       4.00%         N/A          3.40%       3.40%

(a) discount rate of 6.75% applied for the period January 1 through July 31, 2003.  The discount rate was
    changed to 6.50% for the remeasurement effective August 1, 2003.

      In  determining  the  expected  long-term  rate of return on  assets,  the
Company evaluated input from its investment consultants, investment managers and
actuaries.  In addition, the Company considered its historical compound returns,
which have been in excess of the Company's  forward-looking returns. The Company
determines its actuarial  assumptions for its pension and post retirement plans,
after consultation with its actuaries,  on December 31 of each year to calculate
liability information as of that date and pension and postretirement expense for
the following  year.  The discount  rate  assumption is derived from the rate of
return on high-quality bonds as of December 31 of each year.


                                       67


CONTRIBUTIONS

      Cash funding requirements are developed annually from actuarial valuations
in accordance with ERISA. Inherent in these valuations are assumptions including
discount rates, mortality,  retirement, turnover and expected long-term rates of
return on plan assets.  Material changes in cash funding  requirements may occur
in the future due to changes in these assumptions or if certain  assumptions are
not realized.

      The estimated  minimum  funding  requirements  for the WHX Pension Plan in
2005,  2006, 2007, 2008 and through 2011 are $15.5 million,  $5.1 million,  $2.7
million,  $0.0, and $16.7 million  respectively.  Cash funding  requirements are
developed annually from actuarial valuations in accordance with ERISA.  Inherent
in  these  valuations  are  assumptions  including  discount  rates,  mortality,
retirement,  turnover  and  expected  long-term  rates of return on plan assets.
Material  changes in cash  funding  requirements  may occur in the future due to
changes in these  assumptions or if certain  assumptions  are not realized.  The
Company  does  not  have  funds  available  to make  the  2006  minimum  funding
requirements.  The Company  applied to the IRS for a funding waiver for the 2005
and the 2006 plan years, but subsequently withdrew its request for the 2006 plan
year. See Note 20-Subsequent Events,

BENEFIT PAYMENTS

      Estimated  future benefit payments for the WHX Pension Plan are as follows
(in thousands):

                  2005         $ 32,875
                  2006           34,523
                  2007           32,625
                  2008           32,310
                  2009           32,067
             2010-2014          183,795

NON-QUALIFIED PENSION PLANS

      In addition to the  aforementioned  benefit plans, H&H has a non-qualified
pension plan for certain  current and retired  employees.  On March 4, 2005, WHX
adopted the WHX Corporation Supplemental Executive Retirement Plan, effective as
of February 1, 2004, which provides for specified benefits to be paid to certain
of its  employees.  The WHX Corporate  Supplemental  Executive  Retirement  Plan
(SERP)  benefits were settled as of August 5, 2005,  in accordance  with SFAS 88
and this plan was terminated on December 29, 2005.

      The measurement date for plan obligations is December 31.

The following table presents a  reconciliation  of beginning and ending balances
of the projected benefit obligation for these non-qualified plans.

                                                2004            2003
                                              --------        --------
                                                   (in thousands)
Benefit obligation at January 1               $ 1,101         $ 1,100
Service cost                                      194              98
Interest cost                                     130              58
Actuarial loss                                    141             121
Plan implementation                               919            --
Benefits paid                                     (10)           (846)
Curtailment                                      --               570
                                              -------         -------
Benefit obligation at December 31             $ 2,475         $ 1,101
                                              =======         =======


                                       68


The following table presents the beginning- of- year and end-of-year accumulated
benefit obligation. (In thousands):
                                                   2004     2003
                                                  ---------------
Accumulated benefit obligation at January 1       $  553   $  814
Accumulated benefit obligation at December 31      1,060      553

The following  table  presents  weighted-average  assumptions  used to determine
benefit obligations at December 31:

                                    ------        ------
                                     2004          2003
                                    ------        ------

Discount rate                        5.75%         6.25%
H&H rate of compensation increase    5.00%         5.00%
WHX rate of compensation increase    4.00%         4.00%

The funded  status of the  plans,  reconciled  to the  amounts  reported  on the
balance sheets as of December 31 follows:

                                      2004       2003
                                    --------   --------
                                      (in thousands)

Projected benefit obligation        $(2,475)   $(1,101)
Fair value of assets                   --         --
                                    -------    -------
Funded status                        (2,475)    (1,101)
Unrecognized prior service cost       1,068        232
Unrecognized loss                       166         26
                                    -------    -------
Net amount recognized               $(1,241)   $  (843)
                                    =======    =======

The following table presents the amounts recognized in the consolidated  balance
sheets for these non-qualified plans as of December 31:

                                           2004       2003
                                         --------   --------
                                           (in thousands)

Accrued pension liability                $(1,241)   $  (843)
Additional minimum pension liability        (310)      --
Intangible pension asset                     310       --
Accumulated other comprehensive income      --         --
                                         -------    -------
Net liability recognized                 $(1,241)   $  (843)
                                         =======    =======


                                       69


The following table presents the components of net periodic pension cost for the
non-qualified pension plans.

                                         2004    2003     2002
                                        ------  ------   ------
                                             (in thousands)

Service cost                            $ 194   $  98    $ 131
Interest cost                             130      58       61
Amortization of prior service cost         84      23       22
Amortization of actuarial gain (loss)    --       (16)      (8)
Special termination benefit              --       570     --
                                        -----   -----    -----
                                        $ 408   $ 733    $ 206
                                        =====   =====    =====

The following table presents weighted-average  assumptions used to determine net
periodic benefit cost for years ended December 31,

                                          2004        2003        2002
                                        --------    --------    --------

Discount rate                             6.25%       6.75%       7.25%
H&H rate of compensation increase         5.00%       5.00%       5.00%
WHX rate of compensation increase         4.00%         N/A         N/A

CONTRIBUTIONS

      The non-qualified plan is not funded.  Employer contributions are equal to
annual benefit payments.

BENEFIT PAYMENTS

      All WHX Supplemental Executive Retirement Plan benefits were settled as of
August 5, 2005 in  accordance  with SFAS 88.  The  settlement  payment  was $0.5
million.  The plan was later  terminated on December 29, 2005.  Estimated future
benefit payments for the Handy & Harman non-qualified plan are as follows:

                      (in thousands)
                  2005               10
                  2006              389
                  2007                6
                  2008                5
                  2009                5
                  2010                5
           2011 - 2015               22

401(k) PLANS

      Certain H&H employees  participate in an H&H sponsored savings plan, which
qualifies  under Section 401(k) of the Internal  Revenue Code. This savings plan
allows  eligible  employees  to  contribute  from 1% to 15% of their income on a
pretax basis.  H&H matches 50% of the first 3% of the  employee's  contribution.
Until  the 4th  Quarter  of 2004,  most of  H&H's  matching  contributions  were
invested in shares of WHX common stock and became immediately vested.  After the
4th Quarter of 2004,  all  matching  contributions  were in cash.  The charge to
operations  for the Company's  matching  contribution  amounted to $0.7 million,
$0.7 million, and $0.7 million, for 2004, 2003 and 2002, respectively.


                                       70


      The number of shares of the Company's  pre-bankruptcy  filing common stock
held by the H&H 401(k) plan was  465,277  and  353,734 at December  31, 2004 and
2003  respectively.  On July 21,  2005,  WHX  Corporation's  Chapter  11 Plan of
Reorganization  was  confirmed  by the U. S.  Bankruptcy  Court for the Southern
District of New York.  The Plan became  effective on July 29,  2005.  Holders of
WHX's  pre-bankruptcy  filing common stock  received no  distribution  under the
Plan.

OTHER POSTRETIREMENT BENEFITS

      Certain current and retired employees of H&H are covered by postretirement
medical benefit plans.  The benefits  provided are for medical and  prescription
drugs.  Contributions from a majority of the participants are required,  and for
those retirees and spouses the Company's payments are capped.

      The measurement date for plan obligations is December 31.

      The  following  table  presents a  reconciliation  of beginning and ending
balances of the Accumulated Postretirement Benefit Obligation ("APBO"):

                                   2004            2003
                              -------------   -------------
         (in thousands)                       (as Restated)
APBO at January 1,               $ 8,527        $ 8,633
Service cost                          61             37
Interest cost                        521            475
Actuarial loss                       596           (588)
Plan amendments                     --            1,196
Benefits paid (net)               (1,084)        (1,226)
                                 -------        -------
APBO at December 31,             $ 8,621        $ 8,527
                                 =======        =======

The above H&H other post-retirement benefit plans are unfunded.

The following  table  presents  weighted-average  assumptions  used to determine
benefit obligations at December 31,

                                               2004       2003
                                              ------     ------

Discount rate                                  5.75%      6.25%
Health care cost trend rate - initial         10.00%     10.00%
Health care cost trend rate - ultimate         5.00%      5.00%
Year ultimate is reached                       2008       2007

      At December 31, 2004, the health care cost trend rate was 10.0% decreasing
to an ultimate rate of 5% by the year 2008. A one  percentage  point increase in
healthcare  cost  trend  rates  in each  year  would  increase  the  accumulated
postretirement  benefit  obligation  as of December 31, 2004 by $0.6 million and
the  aggregate of the service cost and interest  cost  components of 2004 annual
expense by $47,000.  A one percentage  point  decrease in healthcare  cost trend
rates  in each  year  would  decrease  the  accumulated  postretirement  benefit
obligation  as of December  31, 2004 by $0.5  million and the  aggregate  of the
service cost and interest cost components of 2004 annual expense by $38,000.

The following table presents the amounts recognized in the consolidated  balance
sheets for this plan as of December 31:


                                       71


                                          2004          2003
                                     -------------  -------------
            (in thousands)                          (as Restated)
Funded status                           $(8,621)      $(8,527)
Unrecognized prior service cost             988         1,097
Unrecognized actuarial Loss                --            (615)
                                        -------       -------
Net amount recognized                   $(7,633)      $(8,045)
                                        =======       =======

The  following  table  presents  the  components  of net  periodic  cost for the
postretirement medical benefit plans:

                                          2004         2003            2002
                                     -------------  -------------  -------------
            (in thousands)                          (as Restated)  (as Restated)
Service cost                            $    61       $    37        $    48
Interest cost                               521           475            577
Amortization of prior service cost          109            18            177
Amortization of actuarial gain              (21)         (158)           (26)
Curtailment                                --            --              280
                                        -------       -------        -------
                                        $   670       $   372        $ 1,056
                                        =======       =======        =======

Weighted average  assumptions used to determine net postretirement  cost for the
three years ended December 31 were as follows:

                                               2004       2003       2002
                                             --------   --------   ---------
Discount rate                                  6.25%      6.25%      6.75%
Health care cost trend rate - initial         10.00%     10.00%     12.00%
Health care cost trend rate - ultimate         5.00%      5.00%      5.00%
Year ultimate is reached                       2007       2006       2007

CONTRIBUTIONS
      Employer  contributions  are  expected to be $1.1 million and $0.7 million
for the 2005 and 2006 plan years.

BENEFIT PAYMENTS
      Expected benefit payments are as follows:

                           (in thousands)
                      2005           $ 1,129
                      2006               661
                      2007               654
                      2008               577
                      2009               542
                      2010               509
               2011 - 2015             2,342

      One of the  Company's  postretirement  welfare  plans is  affected  by The
Medicare  Prescription  Drug,  Improvement  and  Modernization  Act of 2003 (the
"Act").  Beginning  in 2006,  the Act  provides  a federal  subsidy  payment  to
companies  providing  benefit plans that meet certain  criteria  regarding their
generosity.  The Company expects to receive those subsidy payments.  The Company
has accounted for the Act in accordance  with FASB Staff Position No. FAS 106-2,
which required, in the Company's case, recognition on July 1, 2004. The adoption
of FSP 106-2 on July 1,  2004 did not have a  material  impact on the  Company's
financial  statements.  The effect of the Medicare Part D subsidy is expected to
reduce the Company's future contributions by approximately 14%.

      The Company has an Executive  Post-Retirement Life Insurance Program which
provides for life insurance  benefits equal to three and one half times payroll,
as defined for certain Company executives upon their retirement.  Under FAS 106,
the Company is required to recognize in its financial  statements an annual cost
and benefit  obligation  related to estimated future benefit payments to be made
to its current and retired executives. Funding for these obligations are made by
the Company.


                                       72


The following table presents a  reconciliation  of beginning and ending balances
of the Executive Life Insurance Obligation  Accumulated  Postretirement  Benefit
Obligation ("APBO"):

                                  2004          2003
                             -------------  -------------
                                            (as Restated)
                                    (in thousands)
APBO at January 1,               $ 600          $ 867
Service cost                        99            174
Interest cost                       44             70
Actuarial  loss                     99            119
Curtailment                       --             (630)
                                 -----          -----
APBO at December 31,             $ 842          $ 600
                                 =====          =====

Weighted  average  assumptions  used to determine the executive  life  insurance
benefit obligations at December 31 were as follows:

                                             2004    2003    2002
                                             -----   -----   -----
          Discount rate                      5.75%   6.25%   6.75%

The following table presents the amounts recognized in the consolidated  balance
sheets for this plan as of December 31:

                                  2004          2003
                             -------------  -------------
                                            (as Restated)
                                    (in thousands)
Funded status                    $(842)         $(600)
Unrecognized loss                   99           --
                                 -----          -----
Net amount recognized            $(743)         $(600)
                                 =====          =====

The  following  table  presents  the  components  of net  periodic  cost for the
Executive Life Insurance Obligation:

                               2004          2003            2002
                          -------------  -------------  -------------
                                         (as Restated)  (as Restated)
                         (in thousands)
Service cost                     $  99       $ 174          $ 123
Interest cost                       44          70             50
Curtailment                       --          (378)          --
Amortization of actuarial loss    --             3           --
                                 -----       -----          -----
                                 $ 143       $(131)         $ 173
                                 =====       =====          =====

Weighted average  assumptions used to determine the executive life insurance net
periodic cost for the years ended December 31 were as follows:

                                             2004    2003    2002
                                             -----   -----   -----
          Discount rate                      6.25%   6.75%   7.25%
          Rate of compensation increase      4.00%   4.00%   4.00%


                                       73


CONTRIBUTIONS

      No employer contributions were made for the 2005 plan year.

BENEFIT PAYMENTS

      Expected benefit payments are as follows:

                                  (in thousands)
                                 2005         --
                                 2006         --
                                 2007         667
                                 2008         --
                                 2009         --
                                 2010         --
                          2011 - 2015         --

NOTE 7 - INCOME TAXES

      The  provision  for (benefit  from) income taxes for the three years ended
December 31 is as follows:

                   (in thousands)                     2004            2003            2002
                                                -------------    -------------    -------------
                                                                 (as Restated)    (as Restated)
Income Taxes
Current
          Federal tax provision (benefit)          $   --          $   --          $   (814)
          State tax provision                         1,544           1,400             917
          Foreign tax provision                         426             303             376
                                                   --------        --------        --------
               Total income taxes current             1,970           1,703             479
                                                   --------        --------        --------
Deferred
          Federal tax provision (benefit)               258          11,620         (25,925)
          State tax provision (benefit)                 (64)           (226)             33
          Foreign tax provision                           8             111            --
                                                   --------        --------        --------
               Total income taxes deferred              202          11,505         (25,892)
                                                   --------        --------        --------
Income tax provision (benefit)                     $  2,172        $ 13,208        $(25,413)
                                                   ========        ========        ========

COMPONENTS OF TOTAL INCOME TAXES

Continuing operations                              $  2,172        $ 13,208        $(25,413)
Discontinued operations                                --              --            13,131
                                                   --------        --------        --------
Income tax provision (benefit)                     $  2,172        $ 13,208        $(12,282)
                                                   ========        ========        ========

      Deferred  income taxes result from temporary  differences in the financial
reporting  basis and tax basis of assets and  liabilities.  The amounts shown on
the  following  table  represent  the total  differences  between the  Company's
consolidated  tax return basis of assets and liabilities  and the  corresponding
basis for financial reporting.


                                       74


DEFERRED INCOME TAX SOURCES
                                                           2004             2003
                                                       -------------    -------------
              (in thousands)                                            (as Restated)

ASSETS
Postretirement and postemployment employee benefits      $  2,872        $  3,282
Net operating loss carryforwards                           40,594          37,504
Capital loss carryforward                                   1,394            --
Additional minimum pension liability                       15,791           8,410
Minimum tax credit carryforwards                            1,850           1,850
Inventory                                                     400             477
Pension                                                     6,575           9,578
Environmental costs                                        10,731            --
Accrued expenses                                            3,330           1,964
Miscellaneous other                                           342             319
                                                         --------        --------
Deferred tax assets                                        83,879          63,384
                                                         --------        --------

LIABILITIES
Property plant and equipment                               (4,116)         (9,191)
Intangible assets                                          (1,358)         (1,100)
State income taxes                                           (583)           (647)
Foreign - net                                                (119)           (111)
                                                         --------        --------
Deferred tax liability                                     (6,176)        (11,049)
Valuation allowance                                       (79,763)        (54,193)
                                                         --------        --------
Net deferred income tax liability                        $ (2,060)       $ (1,858)
                                                         ========        ========

      Net  deferred  tax  assets  amounting  to $79.8  million  have been  fully
reserved  since,  in the opinion of management,  it is more likely than not that
such tax benefits will not be realized in future  periods.  Included in deferred
tax assets at December  31, 2004 are federal net  operating  loss  carryforwards
(NOL's) of $116.0 million.  These NOL's expire between 2005 and 2024. Management
performs a  periodic  evaluation  of  deferred  tax  assets and will  adjust the
valuation allowance as circumstances  warrant.  Also included in deferred income
tax assets is a capital loss  carryforward of $4.0 million related  primarily to
the sale of the WPC $10.0 million note.

      Upon  its  emergence  from  bankruptcy  on  July  29,  2005,  the  Company
experienced  an  ownership  change as  defined by  Section  382 of the  Internal
Revenue  Code,  which  imposes  annual  limitations  on the  utilization  of net
operating carryforwards post ownership change. The Company believes it qualifies
for the bankruptcy exception to the general Section 382 limitations.  Under this
exception,  the  annual  limitation  imposed by Section  382  resulting  from an
ownership change will not apply.  Instead,  the net operating loss carryforwards
must be  reduced  by  certain  interest  expense  paid to  creditors  who became
stockholders as a result of the bankruptcy reorganization.  Additionally, if the
Company  should undergo a second  ownership  change within two years of July 29,
2005 (the date of the  reorganization)  its remaining net operating losses would
effectively  be  reduced  to zero.  Accordingly,  in  order to avoid  subsequent
ownership  changes,  the  Company's  new charter  contains a 5% ownership  limit
pursuant to which certain transfers of the Company's shares will be limited.

      In 2003,  WHX reduced its minimum  pension  liability  with  corresponding
credits to other comprehensive income and intangible pension asset. The deferred
tax asset of $13.4 million associated with this reduction in the minimum pension
liability was charged to other  comprehensive  income. In addition,  the Company
established a valuation  allowance  against the $5.3 million  deferred tax asset
related to the remaining minimum pension liability. This valuation allowance was
charged to the 2003 deferred tax provision.

      In 2002,  the Company  recognized  a tax benefit of $4.5  million from net
operating loss carryforwards of the WPC Group of $12.9 million.

      Deferred income taxes have not been provided on the undistributed earnings
of foreign subsidiaries.  These earnings have been permanently  reinvested,  and
the Company  does not plan to initiate  any action  that would  precipitate  the
payment of income taxes thereon.  As of December 31, 2004 and 2003 , the Company
had $3.8  million  and $3.5  million,  respectively,  of  undistributed  foreign
earnings.


                                       75


      Total  state  and  foreign  income  taxes  paid in 2004,  2003 and 2002 by
continuing  operations  were  $1.0  million,  $0.5  million,  and $0.2  million,
respectively.

      As of December 31, 2004, for Federal  income tax purposes,  the statute of
limitations for audit by the Internal  Revenue Service ("IRS") is open for years
2001 through 2004.  Management believes it has adequately provided for all taxes
on income.

      The  provision  for  income  taxes  differs  from the amount of income tax
determined by applying the applicable U.S.  statutory Federal income tax rate to
pretax income as follows:

                                                                             Year Ended December 31
                                                                   2004               2003               2002
                                                             ------------------------------------------------------
                                                                                 (as Restated)      (as Restated)
                                                             ------------------------------------------------------
                                                                                 (in thousands)

                                                                ---------          ---------          ---------
Loss from continuing operations before taxes                    $(138,272)         $(146,716)         $ (54,647)
                                                                =========          =========          =========


Tax benefit at statutory rate                                   $ (48,395)         $ (51,351)         $ (19,126)
Increase (decrease)  in tax due to:
         Equity earnings of foreign affiliates                        (44)               (34)               (34)
         Equity in loss of WPC                                       --                 --                7,000
         Non deductible goodwill impairment charge                 27,926             23,570              6,528
         State income tax, net of Federal effect                      940                684                596
         Increase in valuation allowance                           24,958             46,999              3,000
         Sale of WPC note                                          (3,500)              --                 --
         Net effect of foreign tax rate                               114                179                456
         Benefit of current year losses of
           non-consolidated subsidiary (WPC)                         --               (7,095)           (16,662)
         Benefit of net operating loss carryforwards of
           non-consolidated subsidiary (WPC)                         --                 --               (4,520)
         Recognition of AMT credit                                   --                 --               (1,655)
         Other                                                        173                256               (996)
                                                                ---------          ---------          ---------
Tax provision                                                   $   2,172          $  13,208          $ (25,413)
                                                                =========          =========          =========

      The WPC Group was included in the  consolidated  Federal income tax return
of WHX  through  August 1,  2003,  after  which the WPC Group  filed a  separate
Federal income tax return.

NOTE 8 - OTHER CURRENT ASSETS

      In the first  quarter of 2003 the Company  purchased an aircraft for $19.3
million,  which it sold in the  first  quarter  of 2004 for $19.3  million.  The
aircraft is  included  in other  current  assets on the  Company's  consolidated
balance sheet at December 31, 2003.

NOTE 9 - INVENTORIES

                                                                               December 31
                                                                           2004            2003
                                                                       ------------    -------------
                                                                             (in thousands)

Finished products                                                        $ 19,101        $ 14,938
In-process                                                                  8,135           7,992
Raw materials                                                              23,997          17,290
Fine and fabricated precious metal in various stages of completion         17,092           1,575
                                                                         --------        --------
                                                                           68,325          41,795
LIFO reserve                                                                 (284)            (13)
                                                                         --------        --------
                                                                         $ 68,041        $ 41,782
                                                                         ========        ========


                                       76


      During 2003 precious metal inventory quantities were reduced, resulting in
liquidations of LIFO  inventories.  This reduction  resulted in a liquidation of
LIFO  inventory  quantities  carried at lower  costs  prevailing  in prior years
compared with the cost of 2003 purchases,  the effect of which increased pre-tax
income by  approximately  $0.9 million.  The operating  income for 2004 and 2003
includes a non-cash  charge to cost of goods  sold  resulting  from the lower of
cost or  market  adjustment  to  precious  metal  inventories  in the  amount of
approximately $1.0 million and $1.6 million, respectively.

      Certain  customers and suppliers of the H&H Precious  Metal Segment choose
to do business on a "toll" basis.  Such customers and suppliers furnish precious
metal to H&H for return in fabricated form (customer metal) or for purchase from
or return to the supplier.  When the  customer's  precious  metal is returned in
fabricated form, the customer is charged a fabrication charge. The value of this
toll precious  metal is not included in the Company's  balance  sheet.  Up until
March 2004,  the Company  maintained a consignment  arrangement  with respect to
most of its  precious  metal  inventory.  Consequently,  to the extent  that the
quantity of customer  and supplier  precious  metal,  as well as precious  metal
owned by the Company,  did not meet  operating  needs,  the Company would either
consign or buy precious metal. At December 31, 2003,  1,605,000 ounces of silver
and 14,617 ounces of gold were  consigned to the Company under this  consignment
facility. The weighted-average  consignment rates under the Consignment Facility
for  gold  were  4.75%  and  2.0%  per  annum at  December  31,  2003 and  2002,
respectively, and for silver, were 4.58% and 2.1% per annum at December 31, 2003
and 2002,  respectively,  based on the  market  value of the  related  consigned
precious metal.  This consignment  facility was terminated on March 30, 2004 and
H&H purchased approximately $15.0 million of precious metal.

The  following  table  summarizes  customer  toll and H&H owned  precious  metal
quantities:

                                                         December 31
                                            ----------------------------------
   Silver ounces:                                2004                 2003
                                            -------------         ------------
  Customer metal                                 124,000              136,000
  H&H owned metal                                    1,347,900                 --
  On consignment                                    --              1,605,000
                                               ---------            ---------
        Total                                  1,471,900            1,741,000
                                               =========            =========

Gold ounces:
  Customer metal                                   1,347                2,793
  H&H owned metal                                 14,617                 --
  On consignment                                    --                 14,617
                                               ---------            ---------
        Total                                     15,964               17,410
                                               =========            =========

Palladium ounces:
  Customer metal                                   1,296                  936
                                               =========            =========

Supplemental inventory information:                      December 31
                                            ----------------------------------
                                                 2004                 2003
                                            -------------         ------------
                                              (in thousands, except per ounce)
Precious metals stated at LIFO cost          $    16,808           $    1,562
Market value per ounce:
   Silver                                    $      6.845          $    5.960
   Gold                                      $    435.60           $   416.70
   Palladium                                 $    184.00           $   193.00


NOTE 10 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of:
                                                         December 31
                                            ----------------------------------
                                                 2004                 2003
                                            -------------         ------------
                                                      (in thousands)
Land                                         $     8,562           $     8,512
Buildings, machinery and equipment               151,861               159,385
Construction in progress                           6,156                 4,790
                                             -----------           -----------
                                                 166,579               172,687
Accumulated depreciation and amortization         78,525                68,464
                                             -----------           -----------
                                             $    88,054           $   104,223
                                             ===========           ===========


                                       77


      Depreciation  expense for continuing  operations for the years 2004,  2003
and 2002 was $13.8  million,  $14.1  million  and $20.1  million,  respectively.
Included  in  depreciation  expense  in  2002  is $3.4  million  in  accelerated
depreciation on equipment,  related to the exit of certain  stainless steel wire
activities. See Note 6.

NOTE 11 - GOODWILL AND OTHER INTANGIBLES

      In July 2001, the FASB issued Statement of Financial  Accounting Standards
Nos. 141 and 142, "Business  Combinations"  ("SFAS 141") and "Goodwill and Other
Intangible Assets" ("SFAS 142"),  respectively.  SFAS 141 supersedes  Accounting
Principles Board Opinion No. 16, "Business  Combinations."  The most significant
changes  made by SFAS  141  are:  (1)  requiring  that the  purchase  method  of
accounting be used for all business combinations  initiated after June 30, 2001,
(2)  establishing  specific  criteria for the  recognition of intangible  assets
separately from goodwill,  and (3) requiring unallocated negative goodwill to be
written off immediately as an extraordinary gain, instead of being amortized.

      SFAS  142  supersedes   Accounting   Principals   Board  Opinion  No.  17,
"Intangible  Assets." SFAS 142 primarily  addresses the  accounting for goodwill
and intangible assets subsequent to their  acquisition  (i.e.,  post-acquisition
accounting).  The most significant changes made by SFAS 142 are (1) goodwill and
indefinite life intangible assets will no longer be amortized, (2) goodwill will
be tested for  impairment  at least  annually at the reporting  unit level,  (3)
intangible  assets  deemed  to have  an  indefinite  life  will  be  tested  for
impairment  at least  annually,  and (4) the  amortization  period of intangible
assets with finite lives will no longer be limited to forty (40) years.

      Effective  January 1, 2002, the Company adopted the provisions of SFAS 142
and changed its accounting accordingly. As a result of the adoption of SFAS 142;
the Company did not record amortization expense for existing goodwill during the
year ending  December  31,  2002.  Any  intangible  assets  acquired or goodwill
arising from transactions after June 30, 2001 is subject to the amortization and
non-amortization  provisions  of SFAS 141 and SFAS 142.  The Company  recorded a
$41.1 million non-cash goodwill impairment charge relating to the H&H Wire Group
($32.5 million) and a reporting unit in the Company's Engineered Materials Group
($8.6  million) as of the date of adoption  in the first  quarter of 2002.  This
charge is shown as a  cumulative  effect of an  accounting  change.  The Company
recorded  these  charges  because the fair value of these  reporting  units,  as
determined  by estimated  cash flow  projections,  were less than the  reporting
units' carrying value.

      Goodwill consisted of the following at December 31, 2004, 2003, and 2002:

The changes in the  carrying  amount of goodwill by  reportable  segment for the
year ended December 31, 2004 were as follows:

(in thousands)
                                              Precious        Wire &       Engineered
                                               Metals         Tubing        Materials       Total
                                            -------------   ------------   ------------   -----------

Balance as of January 1, 2004                $  45,630       $  36,404       $  47,551    $ 129,585

Impairment loss                                (45,630)        (34,158)           --        (79,788)

Pre acquisition foreign NOL utilized              --              (351)           --           (351)
                                             ---------       ---------       ---------    ---------

Balance at December 31, 2004                 $    --         $   1,895       $  47,551    $  49,446
                                             =========       =========       =========    =========


                                                  78


      The changes in the carrying  amount of goodwill by reportable  segment for
the year ended December 31, 2003 were as follows:

(in thousands)
                                              Precious        Wire &       Engineered
                        (as Restated)          Metals         Tubing        Materials       Total
                                            -------------   ------------   ------------   -----------

Balance as of January 1, 2003                $  83,992       $  65,598       $  47,551    $ 197,141

Impairment loss                                (38,362)        (28,981)           --        (67,343)

Pre acquisition foreign NOL utilized              --              (213)           --           (213)
                                             ---------       ---------       ---------    ---------

Balance at December 31, 2003                 $  45,630       $  36,404       $  47,551    $ 129,585
                                             =========       =========       =========    =========

      The changes in the carrying  amount of goodwill by reportable  segment for
the year ended  December  31,  2002 were as follows:

(in thousands)
                                              Precious        Wire &       Engineered
                        (as Restated)          Metals         Tubing        Materials       Total
                                            -------------   ------------   ------------   -----------

Balance as of January 1, 2002                $ 102,643       $  98,587       $  52,972    $ 254,202

Cumulative effect of accounting change                         (32,535)         (8,594)     (41,129)

Additions                                                                        3,173        3,173

Impairment loss                                (18,651)           --                        (18,651)

Pre acquisition foreign NOL utilized              --              (454)           --           (454)
                                             ---------       ---------       ---------    ---------

Balance at December 31, 2002                 $  83,992       $  65,598       $  47,551    $ 197,141
                                             =========       =========       =========    =========

      The Company  conducted the required annual goodwill  impairment review for
2004,  and with the  assistance  of a third party  specialist  computed  updated
valuations  for each  reporting  unit using a discounted  cash flow approach and
market  approach.  Based on the results of this  review the  Company  recorded a
$79.8 million  non-cash  goodwill  impairment  charge  relating to the following
businesses:  $34.2  million for  specialty  tubing,  $45.6  million for precious
metals.  The Company  recorded these charges because the fair value of goodwill,
as determined by estimated cash flow projections and data on market comparables,
was less than the reporting  units'  carrying  value.  The decrease in value was
related to a reduction  in the  projection  of future  profitability,  increased
working capital requirements, and changes in the discount rates.

      In 2003 the Company recorded a $67.3 million non-cash goodwill  impairment
charge relating to the following businesses: $29.0 million for specialty tubing,
and $38.3 million for precious metal plating. The Company recorded these charges
because  the fair  value of  goodwill,  as  determined  by  estimated  cash flow
projections, was less than the reporting units' carrying value.

      In addition to the  aforementioned  cumulative effect upon the adoption of
SFAS 142 in 2002, the Company also recorded an $18.7 million  non-cash  goodwill
impairment charge relating to the precious metal plating business as a result of
its annual goodwill impairment review.. The Company recorded this charge because
the fair value of this  reporting  unit, as  determined  by estimated  cash flow
projections, was less than the reporting units' carrying value.

      As of December  31, 2004 and 2003,  the Company had $0.5  million and $0.8
million,  respectively,  of other intangible  assets,  which will continue to be
amortized over their remaining useful lives ranging from 3 to 17 years.


                                       79


NOTE 12 - DEBT

Debt at December 31, 2004 and 2003 is as follows:

                                             Year Ended December 31
                                            ------------------------
                                               2004         2003
                                            ------------------------
                                                   (in thousands)

WHX Senior Notes due 2005, 10 1/2%           $ 92,820       $ 92,820
H&H Senior Secured Credit Facility               --          129,080
H&H Credit Facility - Term Loan A              19,301           --
H&H Term Loan - Term Loan B                    71,000           --
Other H&H debt                                  6,535          7,500
                                             --------       --------
                                              189,656        229,400
Less portion due within one year              183,629         40,056
                                             --------       --------
Total long-term debt                         $  6,027       $189,344
                                             ========       ========

      The  fair  value  of the  above  debt at  December  31,  2004 and 2003 was
$185,015 and $205,092, respectively. Fair value of the Senior Notes was based on
trading in the public  market.  The fair value of the  remaining  long term debt
approximates its carrying cost due to variable interest rates.

      With the  exception  of Other H&H debt,  all debt has been  classified  as
current  as of  December  31,  2004  due  to  noncompliance  with  certain  debt
covenants.  Should the debt holders choose not to demand payments as a result of
noncompliance  with certain  covenants,  long term debt  maturing in each of the
next five years is as follows:  2005 $96,918;  2006 $4,101;  2007 $83,630;  2008
$515; 2009 $517; 2010 and thereafter $3,975.

      A summary  of the  financial  agreements  at  December  31,  2004 and 2003
follows:

WHX CORPORATION 10 1/2% SENIOR NOTES DUE 2005

      The WHX 10 1/2% Senior  Notes in the amount of $92.8  million  were due on
April 15, 2005.  The  Bankruptcy  Filing  created an event of default  under the
Indenture  governing the Senior Notes. Under the terms of the Senior Notes, as a
result of the  Bankruptcy  Filing,  the  entire  unpaid  principal  and  accrued
interest (and any other additional  amounts) became  immediately due and payable
without  any  action  on the  part of the  trustee  or the note  holders.  As of
December 31, 2004 the principal  amount  outstanding  under the Senior Notes was
approximately $92.8 million. Accrued interest to March 7, 2005 was approximately
$3.8 million. The right of note holders to seek remedies to enforce their rights
under the Senior Notes  described above was stayed as a result of the Bankruptcy
Filing, and other creditors' rights of enforcement are subject to the applicable
provisions of the Bankruptcy  Code. Note holders had no claims or rights against
any of WHX's  subsidiaries.  Pursuant  to the Plan and  Bankruptcy  Filing,  the
Senior Notes were deemed cancelled and annulled, and its holders received shares
of new WHX common stock equal to 92% of the equity in the  reorganized  company.
See Note 2.

      During 2003,  the Company  purchased and retired  $17.7 million  aggregate
principal  amount of the Notes in the open  market  resulting  in a gain of $3.0
million. During 2002, the Company purchased and retired $134.6 million aggregate
principal  amount of the Notes in the open market  resulting  in a gain of $42.5
million.

HANDY & HARMAN SENIOR SECURED CREDIT FACILITY

      H&H entered into the $300.0 million Senior Secured Credit Facility in 1998
with Citibank,  N.A., as agent. Interest under this facility was calculated at a
rate  determined  either  using  the  Citibank  prime  rate or  LIBOR,  plus the
Applicable  Margin.  The Applicable Margin was a percentage per annum determined
by reference to the total leverage ratio of H&H. The rates in effect at December
31,  2003 were LIBOR + 1.50% or LIBOR + 2.25%,  depending  on the tranche of the
facility.  Borrowings  outstanding  under this  facility  at  December  31, 2003
totaled $129.1  million.,  H&H refinanced the Senior Secured Credit  Facility on
March 31, 2004 and entered into new credit facilities (see below).


                                       80


      In connection with the  refinancing of the H&H credit  facilities in March
2004, the Company wrote off deferred financing fees of $1.2 million. This charge
is classified as loss on early retirement of debt.

HANDY & HARMAN CREDIT FACILITIES

      On March 31,  2004,  H&H entered  into a revolving  credit  facility  (the
"Revolver")  and a $22.2  million  Term A Loan with  Wachovia  Capital  Finance,
formerly  Congress  Financial  Corporation,  as  agent  and  lender,  ("Wachovia
Facilities") and a $71.0 million Term B Loan with Ableco Finance LLP ("Ableco").
On October 29, 2004 the Term B Loan was assigned to Canpartners  Investments IV,
LLC ("Canpartners").

      The Revolver  provided for up to $62.9 million of borrowings  dependent on
the levels of and collateralized by eligible accounts  receivable and inventory.
The Revolver  provided  for  interest at LIBOR plus 2.75% or the U.S.  Base rate
plus 1.00%.  An  amendment  to the  facility on  December  29, 2004  lowered the
margins on the Revolver to LIBOR plus 2.25% or the U.S.  Base Rate plus 0.5% The
Wachovia  Facilities mature on March 31, 2007. The Term A Loan is collateralized
by eligible  equipment and real estate,  and provided for interest at LIBOR plus
3.25% or the prime rate plus 1.5%.  An amendment to the facility on December 29,
2004 lowered the margins on the Term Loan A to LIBOR plus 2.5% or the U.S.  Base
Rate plus .75%.  Borrowings under the Wachovia  Facilities are collateralized by
first priority security interests in and liens upon all present and future stock
and assets of H&H and its subsidiaries  including all contract  rights,  deposit
accounts,  investment property,  inventory,  equipment,  real property,  and all
products and proceeds  thereof.  The  principal of the Term A Loan is payable in
monthly   installments  of  $0.3  million.   The  Wachovia   Facilities  contain
affirmative,  negative,  and  financial  covenants  (including  minimum  EBITDA,
maximum  leverage,   and  fixed  charge  coverage,   and  restrictions  on  cash
distributions  that can be made to WHX).  On May 20,  2005,  H&H entered into an
amendment  to  the  Loan  and  Security   Agreement  with  Wachovia   ("Wachovia
Amendment"). The Wachovia Amendment provided for amendments to certain financial
covenants,  an additional equipment loan of up to $3 million, as well as certain
other terms and conditions.  On September 8, 2005, H&H entered into an amendment
to the Wachovia Facilities. This amendment provides for, among other things, (i)
the  revision of the  calculation  of  components  of the  borrowing  base which
results in an  increase  in  availability  and (ii) the  increase of the current
outstanding amount of the Term A Loan to $22.2 million.  The amended Term A Loan
originally  required  monthly  payments  of $0.3  million.  The  Term A Loan was
reduced  by the  proceeds  received  from the sale of H&H's  Wire  group.  As of
September  30,  2006,  the amount  outstanding  was $13.7  million  with monthly
payments of $0.2 million.  On December 31, 2004 and September 30, 2006,, H&H had
approximately  $10.1  million  and $11.7  million of funds  available  under the
Revolver.

      On December  29,  2005,  H&H entered  into an  amendment  to the  Wachovia
Facilities. This amendment provides for, among other things, (i) the increase of
the borrowing base by $3.5 million  through January 31, 2006, (ii) the waiver of
certain  defaults and (iii)  certain  related  amendments to the  covenants.  On
January 24,  2006,  H&H entered  into a consent and  amendment  to the  Wachovia
Facilities.  This  consent  and  amendment  was made in  connection  with a loan
agreement  entered  into by  H&H's  wholly-owned  subsidiary,  OMG,  Inc.,  with
Sovereign Bank dated as of January 24, 2006 collateralized by a mortgage on OMG,
Inc.'s  real  property  pursuant  to which an $8.0  million  term  loan was made
available to OMG,  Inc. This consent and  amendment  provides  for,  among other
things,  amending certain definitions to reflect the loan agreement entered into
by OMG, Inc.

      On  March  31,  2006,  H&H  entered  into  an  amendment  to the  Wachovia
Facilities.  This  amendment  provided for,  among other things,  consent to the
increase  of the Term B Loan on the same  date in the  principal  amount of $9.0
million  and the  prepayment  of a portion  of H&H's  subordinated  intercompany
promissory  note issued to WHX (the "WHX Note") in the principal  amount of $9.0
million.  After the payment of $9.0 million by H&H, WHX  converted the remaining
intercompany note balance to equity.

      On October  30,  2006,  H&H and its bank group  amended  its  facility  to
provide,  among other things, an additional $7.0 million loan upon the filing of
its 2005 Annual Report on Form 10-K,  and an immediate $3.0 million of borrowing
availability under its revolving credit facility

      The Term B Loan matures on March 31, 2007 and provides for annual payments
based on 40% of excess  cash flow as  defined  in the  agreement.  Interest  was
payable  monthly  at the Prime  Rate plus 8%. At no time will the Prime  Rate of
interest  be below  4%.  The Term B  Facility  has a  second  priority  security
interest in and lien on all assets of H&H, subject only to the prior lien of the
Wachovia Facilities.  The Term B facility contains  affirmative,  negative,  and
financial covenants (including minimum EBITDA, maximum leverage and fixed charge
coverage,  restrictions on cash  distributions that can be made to WHX and cross
default provisions with the Wachovia Facilities).

      On October 29, 2004,  Handy & Harman completed the assignment of its $71.0
million Term B Loan from Ableco, as agent, and the existing lenders thereto,  to
Canpartners  Investments  IV, LLC  ("Canpartners"),  an entity  affiliated  with
Canyon Capital Advisors LLC, as agent and lender. Substantially all of the terms
and conditions of the term loan continued without amendment,  with the principal
exception  that the  interest  rate for the loan was  reduced by 4.0% per annum,
effective October 29, 2004. In connection with the assignment,  the Company paid
third  party fees of  approximately  $1.8  million.  These fees are  included in
interest expense.


                                       81


      On May 20,  2005,  H&H entered  into an amendment to the Loan and Security
Agreement with Canpartners ("Canpartners Amendment").  The Canpartners Amendment
provided for amendments to certain financial  covenants as well as certain other
terms and conditions.  On September 8, 2005, H&H completed the assignment of its
approximately $70.6 million Term B Loan from Canpartners,  to Steel Partners II,
L.P.  ("Steel"),  as  agent  and  lender.  Substantially  all of the  terms  and
conditions  of  the  Term  B  Loan  continue  without  amendment.  Steel  is the
beneficial   holder  of  5,029,793   shares  of  the  Company's   common  stock,
representing  approximately 50% of the outstanding shares.  Warren Lichtenstein,
the sole executive  officer and managing member of Steel Partners,  L.L.C.,  the
general  partner of Steel Partners II, L.P., is the Chairman of the Board of the
Company.

      On December  29,  2005,  H&H entered  into an amendment to its Term B Loan
with Steel. This amendment provides for, among other things, (i) the increase of
the Term B Loan in January 2006 by $10 million, to $81 million,  (ii) the waiver
of certain  defaults and (iii) certain related  amendments to the covenants.  On
January 24, 2006,  H&H entered into a consent and  amendment to its Term B Loan.
This consent and  amendment  was made in  connection  with a five-year  loan and
security  agreement entered into by H&H's  wholly-owned  subsidiary,  OMG, Inc.,
with Sovereign Bank dated as of January 24, 2006 collateralized by a mortgage on
OMG,  Inc.'s real property  pursuant to which an $8.0 million term loan was made
available to OMG,  Inc. This consent and  amendment  provides  for,  among other
things,  (i) the amendment of certain  definitions to reflect the loan agreement
entered into by OMG,  Inc. and (ii) the increase of the  indebtedness  covenant,
each to reflect the loan agreement entered into by OMG, Inc.

      On March 31, 2006, H&H entered into an amendment to the Term B Loan.  This
amendment  provided for, among other things,  an additional loan of $9.0 million
to H&H and its  subsidiaries  to be used to make a prepayment on the WHX Note of
up to such amount.

      As of September 30, 2006,  H&H's  availability  under its revolving credit
facility  was  $11.7  million;   however,  based  on  the  Company's  forecasted
borrowings,  these  available  funds may not be  sufficient to fund debt service
costs,  working  capital  demands  (especially in light of recent high commodity
prices,  primarily silver and gold), and environmental  remediation  costs. From
January 1, 2006  through  September  30,  2006,  H&H spent  approximately  $12.2
million for the remediation of environmental  conditions at the site of a former
manufacturing  facility  which it had  previously  sold.  H&H  expects  to spend
approximately   an  additional  $8.8  million  through  2007  to  complete  this
remediation.  In  addition,  H&H may owe the buyer of the  property a penalty of
approximately  $3.8 million,  based on an estimated  completion date in February
2007,  which will increase if the  remediation is not completed by this date. An
arbitration  award,  which was  upheld by a court and is  currently  on  appeal,
concluded  that  H&H will be  obligated  to pay this  penalty.  However,  H&H is
awaiting a judicial  decision  as to the  enforceability  of this  penalty.  The
amount of availability  provided by H&H's revolving credit facility limits H&H's
borrowing  ability and is anticipated to continue to limit H&H's liquidity until
it can refinance  this facility.  Additionally,  this credit  facility  contains
various financial covenants,  including minimum EBITDA, as defined, fixed charge
coverage  ratio and  limitations  on  capital  expenditures.  The  Company is in
violation of certain of these  covenants.  The facility  also  includes  certain
financial  reporting  requirements,  which the  Company has been unable to meet.
Historically, H&H has been able to obtain amendments to financial covenants when
future  results  were not expected to comply with these  covenants.  H&H has not
obtained an amendment  for these  covenant  violations,  and as a result,  is in
default of the  facility.  Accordingly,  the  Company  has  classified  all debt
subject to theses  covenants  as current  liabilities  in the  December 31, 2004
balance  sheet.  H&H and its bank group have  amended its facility as of October
30, 2006 to provide,  among other things,  an additional  $7.0 million loan upon
the filing of its 2005 Annual Report on Form 10-K, and an immediate $3.0 million
of borrowing  availability under its revolving credit facility.  H&H's revolving
credit  facility also matures on March 31, 2007.  There can be no assurance that
this amendment will provide H&H with the liquidity it requires,  that current or
future  covenant  violations  will be waived by the banks,  or that  replacement
financing will be obtained upon commercially reasonable terms, if at all.

OTHER HANDY & HARMAN DEBT

      In March  2004,  H&H's  wholly  owned  Danish  subsidiary  entered  into a
financing  agreement  to replace  and repay  existing  debt that had been issued
under a  multi-currency  facility  within the existing H&H Senior Secured Credit
Facilities.  The new  Danish  facilities  are with a Danish  bank and  include a
revolving  credit  facility  and term  loans.  At  December  31,  2004 there was
approximately  $6.5 million  outstanding  under the term loans.  At December 31,
2004, there were no borrowings under the new revolving credit facility.

RESTRICTED NET ASSETS OF SUBSIDIARIES

      As  described  above,  the prior Handy & Harman loan  agreement  contained
provisions  restricting cash payments to WHX. The agreement  allowed the payment
of management fees, income taxes pursuant to a tax sharing agreement and certain
other  expenses.  In  addition,  dividends  could  only  be paid  under  certain
conditions.  At December 31, 2004, the net  liabilities of H&H amounted to $14.3
million.


                                       82


SHORT TERM DEBT

      Short term debt,  representing  borrowings under the Revolver, at December
31, 2004 and 2003 was $40,398 and -0-, respectively.

INTEREST COST

      Cash interest paid in 2004,  2003,  and 2002 was $20.1,  $17.2,  and $27.4
million,  respectively.  The Company has not  capitalized  any interest costs in
2004,  2003,  and 2002.  Weighted  average  interest  rates for the years  ended
December 31, 2004, 2003, and 2002 were 8.49%, 6.21%, and 7.29%, respectively.

NOTE 13 - STOCKHOLDERS' (DEFICIT) EQUITY

      The  authorized  capital stock of WHX  consisted of  60,000,000  shares of
Common Stock,  $.01 par value, of which 5,485,856  shares were outstanding as of
December 31, 2004 and 2003, and 10,000,000  shares of Preferred Stock,  $.10 par
value,  of which  2,573,926  shares of Series A Convertible  Preferred Stock and
2,949,000 shares of Series B Convertible  Preferred Stock were outstanding as of
December 31, 2004 and 2003. As a result of the Plan and Bankruptcy  Filing,  the
authorized  capital stock of  reorganized  WHX consists of 40,000,000  shares of
Common  Stock,  $0.01 par value,  of which  10,000,000  shares  were  issued and
outstanding  as of December 31, 2005 and  5,000,000  shares of preferred  stock,
none of which were issued and outstanding as of December 31, 2005. In accordance
with the Plan,  the original  common stock was cancelled  with no  consideration
provided to the common  stockholders  and the Series A and Series B  Convertible
Preferred  Stock  was  cancelled  in  exchange  for 8% of the  common  stock  of
reorganized WHX , plus warrants to purchase common stock in reorganized WHX.

SERIES A CONVERTIBLE PREFERRED STOCK AND SERIES B CONVERTIBLE PREFERRED STOCK

      In July 1993, the Company issued  3,000,000 shares of Series A Convertible
Preferred Stock for net proceeds of $145.0 million.  The Senior Notes prohibited
the payment of dividends on the Company's preferred stock until October 1, 2002,
at the earliest,  and  thereafter  only in the event that the Company  satisfied
certain conditions set forth in the Indenture,  as amended. Such conditions were
not  satisfied as of December 31, 2004.  Dividends on the shares of the Series A
Convertible  Preferred Stock were cumulative and payable quarterly in arrears on
January 1, April 1, July 1 and  October 1 of each  year,  in an amount  equal to
$3.25 per share per annum.

      Each share of the Series A Convertible  Preferred Stock was convertible at
the option of the holder  thereof at any time into shares of Common Stock of the
Company,  par value $.01 per share,  at a  conversion  rate of 1.0562  shares of
Common Stock for each share of Series A Convertible  Preferred Stock, subject to
adjustment under certain conditions.

      The Series A Convertible  Preferred  Stock was redeemable at the option of
the Company,  in whole or in part, for cash,  initially at $52.275 per share and
thereafter  at prices  declining  ratably  to $50 per share on and after July 1,
2003,  plus, in each case,  accrued and unpaid dividends to the redemption date.
The Series A Convertible  Preferred Stock was not entitled to the benefit of any
sinking fund.

      The Company also issued 3,500,000 shares of Series B Convertible Preferred
Stock in  September  1994 for net proceeds of $169.8  million.  The Senior Notes
prohibited  the payment of  dividends  on the  Company's  preferred  stock until
October 1, 2002,  at the  earliest,  and  thereafter  only in the event that the
Company  satisfied  certain  conditions set forth in the Indenture,  as amended.
Such  conditions  were not  satisfied as of December 31, 2004.  Dividends on the
shares of the Series B Convertible  Preferred  Stock were cumulative and payable
quarterly  in arrears on January 1, April 1, July 1 and  October 1 of each year,
in an amount equal to $3.75 per share per annum.

      Each share of the Series B Convertible  Preferred Stock was convertible at
the option of the holder  thereof at any time into shares of Common Stock of the
Company,  par value  $.01 per share,  at a  conversion  rate of 0.8170  share of
Common Stock for each share of Series B Convertible  Preferred Stock, subject to
adjustment under certain conditions.

      The Series B Convertible  Preferred  Stock was redeemable at the option of
the Company,  in whole or in part, for cash,  initially at $52.625 per share and
thereafter at prices declining  ratably to $50 per share on and after October 1,
2004,  plus, in each case,  accrued and unpaid dividends to the redemption date.
The Series B Convertible  Preferred Stock was not entitled to the benefit of any
sinking fund.


                                       83


      At  December  31,  2004  dividends  in  arrears  to Series A and  Series B
Convertible  Preferred  Shareholders  were  $35.6  million  and  $47.0  million,
respectively.  At December 31, 2003, dividends in arrears to Series A and Series
B  Convertible  Preferred  Shareholders  were $27.2  million and $35.9  million,
respectively.

      As previously  described,  upon emergence from  bankruptcy,  all shares of
preferred stock and accrued dividends were deemed cancelled and annulled.

POST-BANKRUPTCY STOCK OPTION PLANS

      The  Company has agreed to grant stock  options  upon  adoption of a stock
option plan by the Board of Directors and registration thereof with the SEC , or
in lieu thereof, phantom stock options or equivalent other consideration (at the
sole  discretion  of the  Company),  to various  officers  and  employees of the
Company,  on or as of the following effective dates (in the case of December 31,
2006, on or before) and in the following respective amounts,  with strike prices
or equivalent values as if granted on the dates set forth:

            June 30, 2006            25,000 shares
            September 30, 2006       85,000 shares
            December 31, 2006       215,000 shares

      The trading price per share of the  Company's  common stock as of June 30,
2006 and September 30, 2006 was $9.20 and $9.00, respectively and as of November
30, 2006 the  trading  price was $9.35 per share.  Under SFAS 123R,  the Company
will be  required  to adjust  its  obligation  to the fair  value of such  stock
options or phantom stock options from the effective date of grant up to the date
of actual grant.  The Company has not adopted a stock option plan as of November
30, 2006.

PRE-BANKRUPTCY STOCK OPTION PLANS

      The  following  stock  option  plans were in effect until WHX emerged from
bankruptcy in July 2005. In accordance with the plan of reorganization  all such
stock option plans were cancelled and annulled.

2003 INCENTIVE STOCK PLAN

      The WHX Corporation 2003 Incentive Stock Plan ("2003 Plan"),  was intended
to assist the Company in  securing  and  retaining  in the employ of the Company
directors,  officers,  consultants,  advisors and  employees by allowing them to
participate in the ownership and the  development  and financial  success of the
Company through the grant of incentive and non-qualified options  (collectively,
the "Options"),  stock appreciation  rights,  restricted stock, and other equity
incentives or stock or stock based awards ("Equity Incentives"). Incentive stock
options  granted  under the Option  Plan were  intended to be  "Incentive  Stock
Options" as defined by Section 422 of the United States Internal Revenue Code of
1986, as amended (the "Code").

      An  aggregate  of 250,000  shares of Common Stock were subject to the 2003
Plan. The 2003 Plan was administered by a committee ("Committee")  consisting of
two or more non-employee members of the Board of Directors.  The term of Options
granted  under the 2003 Plan did exceed 10 years  (five  years in the case of an
incentive Option granted to an optionee owning more than 10% of the voting stock
of the Company (a"10% Holder")). The Option price for Options was not to be less
than 100% of the fair market value of the shares of Common Stock at the time the
Option was granted; provided, however, that with respect to an incentive option,
in the case of a 10% Holder,  the purchase  price per share was at least 110% of
such fair market value.  The aggregate fair market value of the shares of Common
Stock as to which an optionee may first exercise  incentive stock options in any
calendar  year did not  exceed  $100,000.  Payment  for  shares  purchased  upon
exercise  of  Options  is to be made in  cash,  but,  at the  discretion  of the
Committee, may be made by delivery of other shares of Common Stock of comparable
value.

      In 2003 the Company  awarded  80,000 shares of restricted  common stock to
members of the Board of  Directors  at a fair  market  value of $2.48 per share.
These shares vested 1/3  immediately and 1/3 in 2004 and continued to vest until
such stock was cancelled on the Effective Date.  Compensation expense related to
restricted stock awards was recognized over the vesting period.

2001 STOCK OPTION PLAN

      The WHX Corporation 2001 Stock Option Plan ("2001 Plan"),  was intended to
assist the  Company  in  securing  and  retaining  in the employ of the  Company
directors,  officers,  consultants,  advisors and  employees by allowing them to
participate in the ownership and the  development  and financial  success of the
Company through the grant of incentive and non-qualified options  (collectively,
the "2001 Options").  Incentive stock options granted under the Option Plan were
intended to be "Incentive Stock Options" as defined by Section 422 of the Code.


                                       84


      An aggregate of 500,000  shares of Common Stock were reserved for issuance
upon exercise of Options under the 2001 Plan. The 2001 Plan was  administered by
a committee ("2001 Committee") consisting of two or more non-employee members of
the Board of Directors.  The term of Options granted under the 2001 Plan may not
exceed 10 years (five years in the case of an incentive  2001 Option  granted to
an  optionee  owning  more than 10% of the voting  stock of the  Company (a "10%
Holder")). The Option price for 2001 Options was not to be less than 100% of the
fair  market  value of the  shares of Common  Stock at the time the  Option  was
granted;  provided,  however,  that with respect to an incentive  option, in the
case of a 10%  Holder,  the  purchase  price per share was at least 110% of such
fair market value. The aggregate fair market value of the shares of Common Stock
as to which an  optionee  may first  exercise  incentive  stock  options  in any
calendar  year did not  exceed  $100,000.  Payment  for  shares  purchased  upon
exercise of 2001 Options was to be made in cash,  but at the  discretion  of the
2001  Committee,  may be made by  delivery  of other  shares of Common  Stock of
comparable value.

1991 STOCK OPTION PLAN

      The WHX  Corporation  Stock  Option Plan ("1991  Plan"),  as amended,  was
intended  to assist the Company in  securing  and  retaining  key  employees  by
allowing them to participate in the ownership and growth of the Company  through
the  grant of  incentive  and  non-qualified  options  (collectively,  the "1991
Options") to full-time  employees  of the  Company.  In 2001,  the 1991 Plan was
amended.  This amendment  expanded the definition of persons eligible to receive
grants  of  options  under the 1991 Plan to  directors,  officers,  consultants,
advisors and  employees of WHX and its  subsidiaries.  Incentive  stock  options
granted under the Option Plan were intended to be "Incentive  Stock  Options" as
defined by Section 422 of the Code.

      An  aggregate  of  1,250,000  shares of Common  Stock  were  reserved  for
issuance upon exercise of 1991 Options under the 1991 Plan, as amended. The 1991
Plan was  administered by a committee (the "1991  Committee")  consisting of not
less than two non-employee  members of the Board of Directors.  The term of 1991
Options  granted  under the 1991 Plan did not exceed 15 years (five years in the
case of an incentive 1991 Option granted to an optionee  owning more than 10% of
the voting stock of the Company). The Option price for 1991 Options was not less
than 100% of the fair market value of the shares of Common Stock at the time the
options from 1991 Option Plan were granted; provided, however, that with respect
to an incentive  option,  in the case of a 10% Holder,  the  purchase  price per
share was at least 110% of such fair market  value.  The  aggregate  fair market
value of the shares of Common Stock as to which an optionee  may first  exercise
incentive  stock options in any calendar year did not exceed  $100,000.  Payment
for shares purchased upon exercise of Options was to be made in cash, but at the
discretion of the 1991 Committee,  was to be made by delivery of other shares of
Common Stock of comparable value.

DIRECTORS OPTION PLANS

      The 1993  Directors  D&O Plan  ("1993 D&O Plan") was  authorized  to issue
shares of Common  Stock  pursuant to the  exercise of options  with respect to a
maximum of 133,333  shares of Common Stock.  The options vested over three years
from the date of grant.  The 1997 Directors  Stock Option Plan ("1997 D&O Plan")
was authorized to issue an additional 133,333 shares of Common Stock.

OPTION GRANTS TO WPN CORPORATION

      On July 29, 1993 ("Approval  Date"),  the Board of Directors  approved the
grant  of  options  to WPN  Corp.  (See  Note 15 to the  consolidated  financial
statements) to purchase  333,333 shares of Common Stock ("Option  Grants").  The
Option Grants were approved by the stockholders on March 31, 1994. These options
expired unexercised on April 29, 2003.

      On August 4, 1997 the  compensation  committee  of the Board of  Directors
granted an option to purchase 333,333 shares of Common Stock to WPN Corp, at the
then  market  price per share,  subject to  stockholder  approval.  The Board of
Directors  approved  such grant on  September  25,  1997,  and the  stockholders
approved it on December 1, 1997  (measurement  date).  In January 2004 WPN Corp.
elected to cancel the options to purchase 333,333 shares of common stock.


                                       85


A SUMMARY OF THE OPTION PLANS:
                                                                                                               Weighted
                                              Number of Options                                                 Average
                           1991         D&O           WPN         2001         2003              Prices          Option
                           Plan         Plan         Grant        Plan         Plan         Low        High      Price
                          -------      -------     --------      -------      -------     -------     --------  --------

Balance 1/1/02            939,885      187,222      666,667      356,667         --       $ 4.890     $ 49.875  $ 28.602
   Granted                   --           --           --         86,000         --         2.300        2.300     2.300
   Cancelled             (132,254)     (25,222)        --        (65,667)        --         4.890       49.875    25.459
                          -------      -------      -------      -------      -------
Balance 12/31/02          807,631      162,000      666,667      377,000         --         2.300       49.875    27.805
   Granted                193,255       10,000         --        198,167      160,078       2.070        3.150     2.614
   Cancelled             (524,797)     (52,000)    (333,334)     (93,667)        --         2.300       49.875    34.500
                          -------      -------      -------      -------      -------
Balance 12/31/03          476,089      120,000      333,333      481,500      160,078       2.300       49.875    14.603
   Granted                150,000       10,000         --           --           --         1.720        1.950     1.940
   Cancelled              (71,433)        --       (333,333)     (11,666)     (12,500)      1.950       39.938    23.756
                          -------      -------      -------      -------      -------
Balance 12/31/04          554,656      130,000         --        469,834      147,578       1.720       49.875     9.880
                          =======      =======      =======      =======      =======

      Options  outstanding at December 31, 2004 which were  exercisable  totaled
1,074,733  and  have  a  weighted  average  option  price  of  $11.29.   Options
outstanding  at December 31, 2004 had a  weighted-average  remaining life of 5.4
years.

      On the  Effective  Date of the Plan of  Reorganization,  all of the  above
options were cancelled and annulled.

EARNINGS PER SHARE

      The  computation  of basic  earnings  per  common  share is based upon the
weighted average number of shares of common stock outstanding.

      In 2004 and 2003,  the  conversion  of  preferred  stock,  the exercise of
options to purchase  common stock,  and the  inclusion of non-vested  restricted
common stock awards would have had an anti-dilutive effect. At December 31, 2004
and  December  31, 2003 the assumed  conversion  of  preferred  stock would have
increased  outstanding shares of common stock by 5,127,914 shares. Stock options
to  purchase  1,302,068  shares  and  1,571,000  shares  of  common  stock  were
outstanding  during 2004 and 2003,  respectively,  but were not  included in the
computation of diluted  earnings per share because the options  exercise  prices
were greater  than the average  market  price of the common  shares  during such
period.  At  December  31,  2004 and 2003 there were  26,667 and 53,333  shares,
respectively,  of  non-vested  common stock  associated  with  restricted  stock
awards. A reconciliation of the income and shares used in the earnings per share
computation follows:

                                                         Year Ended December 31, 2004
                                             Income (Loss)          Shares             Per-share
                                              (Numerator)        (Denominator)          Amount
                                             -------------       -------------      -------------

                                                         (Dollars and Shares in Thousands)

Net loss                                      $(140,444)
Less: Preferred stock dividends                  19,424
                                              ---------

Basic EPS and Diluted EPS
     Loss available to common stockholders    $(159,868)             5,442             $ (29.38)
                                              =========              =====             ========

      The assumed  conversion of preferred  stock, the exercise of stock options
and the effect of non-vested restricted stock awards had an anti-dilutive effect
on earnings per-share in 2004.


                                       86


                                                    Year Ended December 31, 2003
                                                            (As Restated)
                                              Income (Loss)     Shares       Per-share
                                               (Numerator)   (Denominator)     Amount
                                                =========      =========     =========
                                                   (Dollars and Shares in Thousands)

Net loss                                        $(159,924)
Less: Preferred stock dividends                    19,424
                                                ---------
Basic EPS and Diluted EPS
  Loss available to common stockholders         $(179,348)         5,377     $  (33.35)
                                                =========      =========     =========

      The assumed  conversion of preferred  stock, the exercise of stock options
and the effect of non-vested restricted stock awards had an anti-dilutive effect
on earnings per-share in 2003.


                                                    Year Ended December 31, 2002
                                                            (As Restated)
                                              Income (Loss)     Shares       Per-share
                                               (Numerator)   (Denominator)     Amount
                                                =========      =========     =========
                                                   (Dollars and Shares in Thousands)

Net loss                                        $(47,901)
Less: Preferred stock dividends                   19,224
                                                ---------
Basic EPS and Diluted EPS
  Loss available to common stockholders         $(67,125)          5,325     $  (12.61)
                                                =========      =========     =========

      The  assumed  conversion  of  preferred  stock and the  exercise  of stock
options would have had an anti-dilutive effect on earnings per-share in 2002.

      As described  above,  as part of the Plan of  Reorganization,  on July 29,
2005 in exchange for the  extinguishment  and  cancellation of their stock,  the
Series A preferred  stockholders,  and Series B preferred  stockholders received
their  pro  rata  share  of  800,000  shares  of the  new  common  stock  of the
reorganized WHX and their pro rata share of 752,688  warrants to purchase common
stock of the reorganized  company,  exercisable at $11.20 per share and expiring
February 28, 2008.  As of the Effective  Date,  the warrants were valued at $1.3
million using the Black-Scholes valuation method at $1.71 per warrant.


ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

      Accumulated other comprehensive  income (loss) balances as of December 31,
2004, 2003 and 2002 were comprised as follows:

                                             2004          2003          2002
                                          ---------     ---------     ---------
                                                      (As Restated) (As Restated)
Minimum pension liability adjustment
   (net of tax of $5,262 and $5,262)      $ (39,980)    $ (18,732)    $ (34,748)
Foreign currency translation adjustment       3,369         2,352        (1,027)
                                          ---------     ---------     ---------
                                          $ (36,611)    $ (16,380)    $ (35,775)
                                          =========     =========     =========


                                       87


NOTE 14- COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments:

      The Company leases certain facilities under non-cancelable operating lease
arrangements.  Rent expense for  continuing  operations for the Company in 2004,
2003 and 2002 was $2.4  million,  $2.2  million and $3.0  million  respectively.
Future  minimum  operating  lease and rental  commitments  under  non-cancelable
operating leases are as follows (in thousands):

                              2005          2,089
                              2006          1,934
                              2007          1,381
                              2008            541
                              2009            358
                              Thereafter      107
                                           ------
                                           $6,410
                                           ======

Legal Matters:

SUMCO INC. V.  UNDERWRITERS AT LLOYD'S,  LONDON,  LEXINGTON  INSURANCE  COMPANY,
HARTFORD FIRE INSURANCE COMPANY, AND WURTTEMBERGISCHE VERSICHERUNG AG

      On July 7, 2004, Sumco Inc. ("Sumco"),  a wholly-owned  subsidiary of H&H,
filed suit in the  Marion  County  Superior  Court of  Indiana  against  certain
underwriters  affiliated  with Lloyd's,  London,  Lexington  Insurance  Company,
Hartford Fire  Insurance  Company,  and  Wurttembergische  Versicherung  AG (the
defendants).  Sumco seeks to recover  monies from these  insurance  carriers for
losses  incurred as a result of a January 20,  2002,  fire at its metal  plating
facility  in  Indianapolis,  Indiana.  At the time of the fire,  Sumco's  parent
corporation,  WHX, had in place  layered fire  insurance  policies with combined
limits of $25 million and a deductible  of $100,000.  The  defendants  represent
carriers  who  provided  $15  million  in  insurance  coverage  in excess of two
underlying  policies of $5 million  each.  Defendants  have  previously  paid $5
million in claims.  Sumco  contends  that its losses are in excess of the policy
limits,  defendants  have acted in bad  faith,  and that it is  entitled  to the
payment of the remaining  approximate $10 million in insurance coverage provided
by the  defendants.  The defendants have denied the allegations of the complaint
and asserted  certain  defenses.  The matter is expected to go to trial in April
2007.

HANDY & HARMAN  REFINING  GROUP,  INC.,  DEBTOR  PLAINTIFFS  V.  HANDY & HARMAN,
DEFENDANT

      H&H was a defendant in a lawsuit (the "Indemnity Action") filed by Handy &
Harman Refining Group, Inc. ("HHRG") (an unrelated party to H&H) seeking a money
judgment in the amount of $8.5 million, plus interest,  which as of December 31,
2005 was  alleged to be  approximately  $4  million,  for an  alleged  breach of
contract in connection with H&H's sale of its Precious Metals Refining  Division
to HHRG in 1996.  HHRG  subsequently  filed for  Chapter  11 and  commenced  the
Indemnity  Action in the  Bankruptcy  Court on or about August 14,  2002.  On or
about May 26, 2004,  the Indemnity  Action was  transferred to the United States
District  Court for the District of  Connecticut.  H&H filed a proof of claim in
the HHRG  bankruptcy  which  had an  outstanding  amount of  approximately  $1.9
million and funds had been set aside in that amount by HHRG. The parties settled
this matter in June 2006 for the  surrender of the full amount of H&H's proof of
claim of $1.9 million  plus a payment of $438,000 to HHRG.  The  settlement  was
approved by the Bankruptcy Court.

HH EAST PARCEL, LLC. V. HANDY & HARMAN

      This action  arises out of a purchase and sale  agreement  entered into in
2003  whereby  H&H agreed to sell the  eastern  parcel of a  commercial  site in
Fairfield,  Connecticut to HH East Parcel, LLC ("HH East"). On or about April 5,
2005,  HH East  filed a Demand for  Arbitration  with the  American  Arbitration
Association  seeking  legal and  equitable  relief  including  completion of the
remediation of environmental conditions at the site in accordance with the terms
of  the  agreement.  An  arbitration  hearing  was  held  in  November  2005  in
Connecticut, pursuant to which HH East was awarded an amount equal to $5,000 per
day from January 1, 2005  through the date on which  remediation  is  completed.
This award would amount to $3.8 million  through an anticipated  completion date


                                       88


of February 2007. H&H applied to the Superior  Court of  Connecticut,  Fairfield
County,  to have the arbitration award vacated and a decision was issued on June
26, 2006,  denying H&H's  application.  H&H is appealing this decision.  H&H has
been  working  cooperatively  with  the  Connecticut  DEP  with  respect  to its
obligations  under a consent order entered into in 1989 that applies to both the
eastern and western parcels of the property. H&H has substantially completed the
investigation of the western parcel, and is continuing the process of evaluating
various options for its remediation.  The sale of the eastern parcel that is the
subject of this litigation triggered statutory obligations under Connecticut law
to investigate and remediate  pollution at or emanating from the eastern parcel.
H&H completed the investigation and has been actively conducting  remediation of
all soil conditions on the eastern parcel for more than three years. Although no
groundwater  remediation  is  required,  there  will be  monitoring  of same for
several years. It is currently  expected that remediation of all soil conditions
on site will be completed by February 2007. The total remediation is expected to
exceed $27.0  million,  of which  approximately  $19.0 million had been expended
through October 2006. H&H received  reimbursement of $2.0 million of these costs
from its carrier under a cost-cap insurance policy and is pursuing its potential
entitlement to additional coverage.


PAUL E. DIXON & DENNIS C. KELLY V. HANDY & HARMAN

      Two former  officers of H&H filed a Statement  of Claim with the  American
Arbitration  Association  ("Arbitration") on or about January 3, 2006,  alleging
four claims  against H&H. The Claimants  were  employees of H&H until  September
2005 when their  employment was terminated by H&H. Their claims include  seeking
payments allegedly due under employment contracts and allegedly arising from the
terminations,  and seeking  recovery of benefits  under what they allege was the
Handy & Harman Supplemental Executive Retirement Plan.

      The Statement of Claim recites that the  employment  agreements of each of
the  Claimants  provides that H&H may  terminate  their  employment at any time,
without prior notice,  for any of the following  reasons:  "(i) [the  officer's]
engaging  in conduct  which is  materially  injurious  to [H&H] or [WHX],  their
subsidiaries  or  affiliates,  or any of their  respective  customer or supplier
relationships, monetarily or otherwise; (ii) [the officer's] engaging in any act
of fraud,  misappropriation  or embezzlement or any act which would constitute a
felony (other than minor traffic violations);  or (iii) [the officer's] material
breach of the  agreement." The Statement of Claim further  alleges,  and H&H has
not disputed,  that each Claimant's  employment was terminated in September 2005
pursuant to a letter,  which  stated in part,  that each  Claimant  had violated
provisions of such  officer's  employment  agreement,  contained in the previous
sentence,  "by, INTER ALIA, attempting to amend and put in place various benefit
plans to  personally  benefit  yourself,  without  notice to, or approval of the
Board of  Directors;  for  further  failing to  disclose  the  existence  of the
relevant  plan  documents  and other  information  to the Board;  for failing to
cooperate in the Company's investigation of these important issues; for material
losses to the Company in connection with these actions; ...."

      In the  Arbitration,  Claimants  sought an award in  excess of $4  million
each,  plus  interest,   costs  and  attorneys'  fees.   Claimants  also  sought
indemnification for certain matters and an injunction against H&H with regard to
life insurance  policies.  H&H brought a special proceeding on February 15, 2006
in the  Supreme  Court of the State of New York,  County of  Westchester,  for a
judgment staying the arbitration of three of the four claims. On March 10, 2006,
all of the parties filed a stipulation with the court,  discontinuing  the court
proceeding and agreeing therein, among other things, that all claims asserted by
the  Claimants in the  Arbitration  (which was also  discontinued  at that time)
would be asserted in Supreme Court, Westchester County.

      In April 2006,  Claimants  served a request for  benefits,  severance  and
other  amounts,  similar  to those  described  above,  on H&H and  various  plan
administrators and fiduciaries  thereof.  The request was reviewed in accordance
with the  procedures  of the plans at issue and by letter  dated  September  27,
2006,  Claimants were notified that their request was largely denied. They filed
an appeal on December  11, 2006 with the Plan  Administrator,  which  appeal was
denied on  February 9, 2007.  While no action is pending in any court,  H&H does
not  believe  that it is liable to  Claimants  under the  claims  that have been
asserted to date, and it intends to defend itself vigorously  against any claims
that may be asserted by  Claimants.  There can be no assurance  that H&H will be
successful in defending  against any such claims,  or that H&H will not have any
liability  on account of claims  that may be  asserted  by  Claimants,  and such
liability,  if any,  cannot be reasonably  estimated at this time.  Accordingly,
there  can be no  assurance  that  the  resolution  of this  matter  will not be
material to the financial  position,  results of operations and cash flow of the
Company.

ARISTA DEVELOPMENT LLC V. HANDY & HARMAN ELECTRONIC MATERIALS CORPORATION

      In  2004,  a  subsidiary  of H&H  entered  into  an  agreement  to  sell a
commercial/industrial  property  in  North  Attleboro,  Massachusetts.  Disputes
between  the  parties  led to suit being  brought in Bristol  Superior  Court in
Massachusetts.  The plaintiff  alleges that H&H is liable for breach of contract
and  certain  consequential  damages  as a result  of H&H's  termination  of the
agreement in 2005, although H&H subsequently  revoked its notice of termination.
H&H has denied  liability and has been vigorously  defending the case. The court
entered a preliminary  injunction  enjoining H&H from  conveying the property to
anyone other than the  plaintiff  during the pendency of the case.  Discovery on
liability and damages has been stayed while the parties are actively  engaged in
settlement  discussions.  Concurrently  with these  settlement  efforts,  H&H is
continuing  to comply  with a 1987  consent  order  from the  Massachusetts  DEP
("MADEP") to investigate and remediate the soil and groundwater conditions.  H&H


                                       89


is in discussions  with the EPA, the MADEP and the plaintiff in connection  with
the remedial activities. Since discovery is not completed, it cannot be known at
this time whether it is foreseeable or probable that plaintiff  would prevail in
the litigation or whether H&H would have any liability to the plaintiff.

ENVIRONMENTAL MATTERS

      H&H entered into an administrative  consent order (the "ACO") in 1986 with
the New Jersey Department of Environmental  Protection  ("NJDEP") with regard to
certain  property  that it  purchased  in 1984 in New Jersey.  The ACO  involves
remediation  to be performed with regard to soil and  groundwater  contamination
allegedly  from TCE.  H&H settled a case  brought by the local  municipality  in
regard to this site in 1998 and also settled with its insurance carriers. H&H is
actively  remediating  the  property  and  continuing  to  investigate  the most
effective   methods  for   achieving   compliance   with  the  ACO.  A  remedial
investigation  report  was  filed  with  the  NJDEP  in May of  2006.  Once  the
investigation has been completed, it will be followed by a feasibility study and
a remedial  action work plan that will be  submitted to NJDEP.  H&H  anticipates
entering into discussions in the near future with NJDEP to address that agency's
natural  resource damage claims,  the ultimate scope and cost of which cannot be
estimated at this time. The ongoing cost of  remediation is presently  estimated
at approximately  $450,000 per year, plus anticipated  additional costs in early
2007 of  approximately  $700,000,  Pursuant to a settlement  agreement  with the
former operator of this facility,  the responsibility for site investigation and
remediation  costs have been  allocated,  75% to the former  operator and 25% to
H&H. To date, total remediation and investigative  costs of $237,000 and $79,000
have been settled by the former  operator and H&H,  respectively,  in accordance
with this agreement.  Additionally,  H&H has insurance coverage for a portion of
those costs for which the company is responsible.

      H&H has been identified as a potentially  responsible  party ("PRP") under
the  Comprehensive  Environmental  Response,   Compensation  and  Liability  Act
("CERCLA") or similar state statutes at several sites and is a party to ACO's in
connection  with  certain  properties.  H&H may be subject to joint and  several
liability  imposed  by CERCLA on  potentially  responsible  parties.  Due to the
technical and regulatory  complexity of remedial activities and the difficulties
attendant in  identifying  potentially  responsible  parties and  allocating  or
determining  liability  among them,  H&H is unable to  reasonably  estimate  the
ultimate cost of compliance with such laws.

       In a case entitled AGERE SYSTEMS,  INC., ET AL. V. ADVANCED ENVIRONMENTAL
TECHNOLOGY CORP., ET AL. (U.S.  District Court,  EDPA),  five companies,  all of
which are PRPs for the Boarhead Farm site in Bucks County, Pennsylvania, brought
CERCLA contribution and similar claims under  Pennsylvania's  environmental laws
against a number of companies in 2002,  including a subsidiary of H&H, which the
plaintiffs claim  contributed to the  contamination of the Boarhead Farm site. A
number of the  plaintiffs  entered  into  settlements  with several of the named
defendants  and  consent  decrees  with the EPA  regarding  the  remediation  of
groundwater  and  soil  contamination  at the  Boarhead  Farm  site.  There  are
currently  nine  non-settling  defendants,  including  H&H,  against  which  the
plaintiffs are pursuing their claims.  Fact discovery has been concluded and the
parties  are engaged in expert  discovery.  The  plaintiffs  have  already  made
substantial  payments  to the EPA in past  response  costs  and have  themselves
incurred  costs for  groundwater  and soil  remediation,  which  remediation  is
continuing.  Plaintiffs  are  seeking  reimbursement  of a  portion  of  amounts
incurred and an allocation of future amounts from H&H and the other non-settling
defendants.  H&H has been  advised by counsel that its  responsibility  for this
site,  if any,  should be minimal and has demanded  coverage  from its insurance
carrier for any claims for which it could be held liable.  It is not possible to
reasonably  estimate  the cost of  remediation  or H&H's  share,  if any, of the
liability at this time.

      H&H received a notice letter from the EPA in August 2006  formally  naming
H&H as a PRP at the Shpack landfill superfund site in Attleboro,  Massachusetts.
H&H then  voluntarily  joined a group of ten (10)  other PRPs  (which  group has
since increased to thirteen (13)) to work  cooperatively to present to the EPA a
good faith  offer  regarding  remediation  of this site.  Investigative  work is
ongoing  to  determine  whether  there are  other  parties  that sent  hazardous
substances to the Shpack site but that have not received notice letters nor been
named as PRPs to date. No allocation as to percentages of responsibility for any
of the PRPs has been assigned or accepted;  H&H has been advised by counsel that
its  responsibility,  if any, is extremely low. The PRP group submitted its good
faith offer to the EPA in late October 2006. It is not anticipated  that the EPA
will  accept or reject  the PRPs'  offer  until  2007.  If  accepted,  it is not
anticipated  that PRP remedial  activities  at the site will begin until 2008 or
after. The remediation of a significant  amount of the contamination at the site
is the  responsibility of the U.S. Army Corps of Engineers.  That portion of the
work has begun but is not expected to be completed until 2008 or after, at which
time the remaining  work will be more clearly  defined.  Accordingly,  it is not
possible at this time to reasonably estimate the scope or cost of remediation at
the site, nor the portion, if any, to be allocated to H&H.

      As discussed above, H&H has existing and contingent  liabilities  relating
to environmental matters,  including capital expenditures,  costs of remediation
and potential  fines and penalties  relating to possible  violations of national
and state  environmental  laws. H&H has substantial  remediation  expenses on an
ongoing basis,  although such costs are continually  being readjusted based upon
the  emergence of new  techniques  and  alternative  methods.  In addition,  the
Company has insurance  coverage  available for several of these  matters.  Based
upon   information   currently   available,   including   H&H's  prior   capital
expenditures, anticipated capital expenditures, and information available to H&H
on pending  judicial  and  administrative  proceedings,  H&H does not expect its
environmental compliance costs, including the incurrence of additional fines and
penalties,  if any,  relating  to the  operation  of its  facilities,  to have a
material  adverse  effect on the financial  position of H&H, but there can be no
such assurances.  Such costs could be material to H&H's results of operation and
cash  flows.  We  anticipate  that H&H will pay such  amounts out of its working
capital,  although there is no assurance that H&H will have sufficient  funds to
pay such  amounts.  In the event that H&H is unable to fund  these  liabilities,


                                       90


claims  could be made  against WHX for payment of such  liabilities.  As further
information  comes into the Company's  possession,  it will continue to reassess
such evaluations.

OTHER LITIGATION

      H&H or its  subsidiaries  are a defendant in numerous  cases  pending in a
variety of jurisdictions relating to welding emissions.  Generally,  the factual
underpinning of the plaintiffs'  claims is that the use of welding  products for
their ordinary and intended  purposes in the welding process causes emissions of
fumes  that  contain  manganese,  which is toxic to the  human  central  nervous
system.  The  plaintiffs  assert that they were  over-exposed  to welding  fumes
emitted  by  welding  products  manufactured  and  supplied  by  H&H  and  other
co-defendants. H&H denies liability and is defending these actions.

      In addition to the  foregoing  cases,  there are a number of other product
liability,  exposure,  accident,  casualty and other  claims  against H&H or its
subsidiaries in connection with a variety of products sold by its divisions over
many  years,  as well as  litigation  related to  employment  matters,  contract
matters,  sales and purchase  transactions and general liability claims, many of
which arise in the ordinary course of business.

       There is insurance  coverage  available for many of these actions,  which
are being litigated in a variety of jurisdictions. To date, H&H has not incurred
any  significant  liability  with  respect to these  claims,  which it  contests
vigorously in most cases.  However,  it is possible that the ultimate resolution
of such  litigation  and  claims  could have a  material  adverse  effect on the
Company's results of operations, financial position and cash flows when they are
resolved in future periods.


NOTE 15 - RELATED PARTY TRANSACTIONS

      The  Company  owns  50% of  the  outstanding  common  stock  of  H&H  Mfg.
(Singapore)  and  accounts  for its  investment  under the  equity  method.  The
investment  balance of H&H Mfg at  December  31, 2004 and 2003 was $ 4.0 million
and $3.9 million, respectively, and is included in other non-current assets.

      On September 8, 2005,  H&H completed the  assignment of its  approximately
$70.6  million  Term B  Loan  from  Canpartners,  to  Steel  Partners  II,  L.P.
("Steel"), as agent and lender. Substantially all of the terms and conditions of
the Term B Loan continue without  amendment.  Steel is the beneficial  holder of
5,029,793 shares of the Company's common stock,  representing  approximately 50%
of the outstanding shares.  Warren Lichtenstein,  the sole executive officer and
managing member of Steel Partners, L.L.C., the general partner of Steel Partners
II, L.P., is the Chairman of the Board of the Company.

      A current member of the Company's Board of Directors owns 49% of Abundance
Corp.,  which had a consulting  agreement  with WHX (as it existed  prior to the
Effective  Date of the Chapter 11 Plan of  Reorganization)  that  terminated  in
February of 2005. Abundance Corp. was paid $200,000 per annum under the terms of
the consulting  agreement.  Fees of $31,818, $0.2 million, and $0.2 million were
incurred for services performed in 2002, 2003, and 2004.

      Mr.  Kassan,  an Executive  Vice  President  with Steel Partners Ltd., was
appointed Chief Executive Officer of WHX on October 7, 2005. In 2005, Mr. Kassan
received no compensation. In 2006, the Compensation Committee approved salary of
$0.6 million per annum for Mr. Kassan, effective January 1, 2006.

      During the period  January 1, 2002 to December 31,  2004,  the Company was
billed $2.7  million in legal fees for services  performed by Olshan,  Grundman,
Frome,  Rosenzweig  &  Wolosky  LLP  ("Olshan"),  a law  firm in  which a former
director of the Company was a retired  partner  with the law firm.  The director
resigned upon emergence from bankruptcy in July 2005.

      The former  Chairman of the Board of the Company is the president and sole
shareholder of WPN Corp. ("WPN"). Pursuant to a management agreement as amended,
and approved by a majority of the non-management  directors of the Company,  WPN
provided certain financial,  management  advisory and consulting services to the
Company. Such services included,  among others,  identification,  evaluation and
negotiation  of  acquisitions,   financing  matters  for  the  Company  and  its
subsidiaries,   review  of  annual  and  quarterly   budgets,   supervision  and
administration,  as appropriate,  of all the Company's  accounting and financial
functions and review and supervision of reporting  obligations under Federal and
state securities laws. In exchange for such services, WPN received a monthly fee
of  $520,833  during  2002 and  through  October  2003 and  $400,000  per  month
thereafter.  In January  2004 the Company  announced,  among other  things,  the
retirement of the Chairman of the Board. In connection  with this  announcement,
effective  February 1, 2004,  the management  agreement  between WHX and WPN was
terminated.  On February  1, 2004,  WPN entered  into an  Investment  Consulting
Agreement  with the Company on behalf of the WHX Pension Plan Trust  pursuant to
which WPN Corp.  would  continue  to manage the assets of the WHX  Pension  Plan
Trust.  Under the  Agreement,  WPN Corp.  is paid by the WHX Pension  Plan Trust
.525% per year of the amount of the assets  under  management.  The WHX  Pension


                                       91


Plan Trust Agreement was negotiated by a board committee composed of independent
directors,   which  committee   recommended  the  approval  of  such  Investment
Consulting Agreement to the full board, which approved such agreement.

      The WPC Group  participates  in the WHX defined benefit pension plan. As a
result of an agreement  with WPC made in  conjunction  with its  emergence  from
bankruptcy,  WHX could not  charge  any  pension  expense  to the WPC Group with
respect to the WHX Pension  Plan.  As a result,  WHX incurred  non-cash  pension
expense of  approximately  $52.9  million  (including  curtailment  and  special
termination  benefits) for the WPC Group in 2003. The non-cash  pension  expense
for 2003 includes $48.1 million  pension  curtailment  and  termination  benefit
charges related to the consummation of the WPC Group Plan of Reorganization.

NOTE 16 -  OTHER INCOME AND (EXPENSE)

                                                Year Ended December 31,
                                        2004           2003           2002
                                      -------        -------        -------
                                                   (As Restated)   (As Restated)
                                                   (In Thousands)

Interest and investment income        $   439        $ 6,465        $ 5,115
Interest rate swap                       --             (625)        (4,781)
Foreign currency transaction loss         155         (2,255)          --
Gain on WPSC Note Recovery              5,596           --             --
Gain (loss) on derivatives                549           (190)         1,328
Other, net                               (173)        (3,807)        (3,746)
                                      -------        -------        -------
                                      $ 6,566        $  (412)       $(2,084)
                                      =======        =======        =======


      As part of the  amended  Chapter  11  Plan of  Reorganization  for the WPC
Group,  WHX  had  agreed  conditionally  to  provide  additional  funds  to WPSC
amounting to $20.0 million. On August 1, 2003, upon consummation of the WPC POR,
WHX contributed $20.0 million in cash to the reorganized  company and received a
$10.0 million subordinated note from WPSC. This note was fully reserved in 2003.
In July 2004,  WHX  realized  $5.6  million upon the sale of the note to a third
party and,  accordingly,  the reserve was reversed and $5.6 million was recorded
in other income in the second quarter of 2004.

NOTE 17 - GAIN/(LOSS) ON EARLY RETIREMENT OF DEBT


                                                Year Ended December 31,
                                        2004           2003           2002
                                      -------        -------        -------
                                                   (As Restated)   (As Restated)
                                                   (In Thousands)


Discount on early debt retirement     $   --         $  3,382       $ 46,943
Unamortized debt issuance cost          (1,161)          (153)        (1,729)
Unamortized consent fee                   --             (230)        (2,723)
                                      --------       --------       --------
                                      $ (1,161)      $  2,999       $ 42,491
                                      ========       ========       ========


      In  connection  with the  refinancing  of the H&H  Senior  Secured  Credit
Facilities in March 2004, the Company wrote off deferred  financing fees of $1.2
million.  In 2003,  the Company  purchased and retired  $17.7 million  aggregate
principal  amount of 10 1/2% Senior Notes in the open market resulting in a $3.0
million  gain.  In 2002,  the  Company  purchased  and  retired  $134.6  million
aggregate  principal amount of 10 1/2% Senior Notes in the open market resulting
in a $42.5 million gain.


                                       92


NOTE 18 - REPORTABLE SEGMENTS

      The  Company has three  reportable  segments:  (1)  Precious  Metal.  This
segment  manufactures  and  sells  precious  metal  products  and  electroplated
material, containing silver, gold, and palladium in combination with base metals
for use in a wide variety of industrial applications;  (2) Wire and Tubing. This
segment  manufactures  and sells  metal  wire,  cable and  tubing  products  and
fabrications  primarily from stainless steel, carbon steel and specialty alloys,
for use in a wide variety of industrial applications;  (3) Engineered Materials.
This segment manufactures specialty roofing and construction fasteners, products
for gas,  electricity and water  distribution  using steel and plastic which are
sold to the construction and natural gas and water distribution industries,  and
electrogalvinized products used in the construction and appliance industries.

      Management  has  determined  that  certain  operating  segments  should be
aggregated  and presented  within a single  reporting  segment on the basis that
such operating  segments have similar economic  characteristics  and share other
qualitative  characteristics.  Management  reviews  gross  profit and  operating
income to evaluate  segment  performance.  Operating  income for the  reportable
segments  excludes  unallocated  general  corporate  expenses.  Other income and
expense,  interest expense,  and income taxes are not presented by segment since
they are  excluded  from the  measure of segment  profitability  reviewed by the
Company's management.


                                       93


      The following table presents  information  about reportable  segments for the years
ending December 31:

(in thousands)
                                                                2004                2003               2002
                                                              ---------          ---------          ---------
Net Sales                                                                      (As Restated)      (As Restated)

   Precious Metal                                             $ 105,289          $  84,572          $ 142,260
   Wire & Tubing                                                142,977            121,939            132,194
   Engineered Materials                                         162,653            119,785            111,939
                                                              ---------          ---------          ---------
      Net sales                                               $ 410,919          $ 326,296          $ 386,393
                                                              =========          =========          =========

Segment operating income (loss)
   Precious Metal(a)(g)                                       $ (44,550)         $ (35,703)         $ (23,227)
   Wire & Tubing(b)(e)(f)(h)                                    (49,631)           (32,994)           (14,071)
   Engineered Materials(e)                                       16,576              8,788              9,624
                                                              ---------          ---------          ---------
      Subtotal                                                  (77,605)           (59,909)           (27,674)

Unallocated corporate expenses                                    8,224             16,374             17,547
Pension - curtailment & special termination benefits               --               48,102               --
Environmental remediation expense (c)                            28,971
Fairfield penalty (c)                                             3,845               --                 --
Loss (gain) on disposal of assets (d)                              (592)             6,286              2,576
                                                              ---------          ---------          ---------
   Loss from operations                                        (118,053)          (130,671)           (47,797)

Interest expense                                                 25,624             19,166             27,257
Equity in loss of WPC                                              --                 --               20,000
Gain on disposition of WPC                                         --                  534               --
Gain/(loss) on early retirement of debt                          (1,161)             2,999             42,491
Other income (expense)                                            6,566               (412)            (2,084)
                                                              ---------          ---------          ---------

      Loss before taxes, discontinued operations
        and cumulative effect of an accounting change          (138,272)          (146,716)           (54,647)


Tax provision (benefit)                                           2,172             13,208            (25,413)
Income from discontinued operations - net of tax                   --                 --               10,601
Gain on sale of Unimast - net of tax of $6,886                     --                 --               11,861
                                                              ---------          ---------          ---------

      Loss before cumulative effect of an
        accounting change                                      (140,444)          (159,924)            (6,772)

Cumulative effect of an accounting change - net of tax (e)         --                 --              (41,129)
                                                              ---------          ---------          ---------
          Net loss                                            $(140,444)         $(159,924)         $ (47,901)
                                                              =========          =========          =========

(a) Includes  a  goodwill  impairment  charge of $45.6  million  in 2004,  $38.4
    million in 2003, and $18.7 million in 2002.
(b) Includes a  goodwill  impairment  charge of $34.2  million in 2004 and $29.0
    million in 2003.
(c) Environmental  remediation  expense  and  Fairfield  penalty  have  not been
    allocated to the reporting  segments since the related  facilities have been
    closed  for  several  years  and are not  indicative  of  current  operating
    results.
(d) Loss (gain) on disposal of assets includes the following  amounts by segment
    for 2004,  2003 and 2002,  respectively.  Precious Metal - $101,  $4,557 and
    ($749);  Wire & Tubing - ($13),  $1,485 and $2,044;  Engineered  Materials -
    ($4),($23) and $764; Corporate ($676), $267, and $517.
(e) The cumulative  effect of a change in  accounting  principle ($41.1  million
    charge) was recorded in 2002, related to the adoption of SFAS 142, "Goodwill
    and Other Intangible Assets". The split by segment was $32.5 million related
    to Wire & Tubing and $8.6 million related to Engineered Materials.
(f) Includes an asset impairment charge of $8.2 million in 2004.
(g) Includes restructuring charges of $12.0 million in 2002.
(h) Includes restructuring charges of $8.0 million in 2002.


                                       94


(in Thousands)
                                               2004          2003          2002
                                             -------       -------       -------
CAPITAL EXPENDITURES

   Precious Metal                            $ 2,337       $   588       $ 1,995
   Wire and Tubing                             2,653         9,668         2,627
   Engineered Materials                        3,054         2,782         3,265
   Corporate and other                         1,766            49         1,448
                                             -------       -------       -------
Total                                        $ 9,810       $13,087       $ 9,335
                                             =======       =======       =======


(in thousands)
                                               2004          2003
                                             -------       -------
TOTAL ASSETS                                            (As Restated)

   Precious Metal                            $ 70,970      $110,989
   Wire and Tubing                             68,825       127,522
   Engineered Materials                       106,658        95,705
   Discontinued Operations                     19,185          --
   Corporate and other                         46,279        76,540
                                             --------      --------
Total                                        $311,917      $410,756
                                             ========      ========


      The following table presents revenue and long-lived  asset  information by
geographic  area as of and for the years ended  December 31.  Long-lived  assets
consist of property, plant and equipment and the Company's 50% investment in H&H
Manufacturing (Singapore).

GEOGRAPHIC INFORMATION

                                     Revenue                                 Long-lived Assets
(in Thousands)         2004           2003           2002           2004           2003           2002
                     --------       --------       --------       --------       --------       --------
                                 (As Restated)   (As Restated)                (As Restated)   (As Restated)
United States        $385,816       $307,106       $361,679       $ 79,410       $ 95,671       $ 97,191
Foreign                25,103         19,190         24,714         12,646         12,441         14,186
                     --------       --------       --------       --------       --------       --------

                     $410,919       $326,296       $386,393       $ 92,056       $108,112       $111,377
                     ========       ========       ========       ========       ========       ========



      Foreign  revenue is based on the country in which the legal  subsidiary is
domiciled.   Revenue  from  no  single  foreign  country  was  material  to  the
consolidated revenues of the Company.

      In  2004,  a  customer  of  the  Company's  Engineered  Materials  Segment
accounted for 7.1% of H&H's consolidated  sales. No other customer accounted for
more than 5% of H&H's sales in 2004, 2003 or 2002.

NOTE 19 - QUARTERLY INFORMATION (UNAUDITED)

      The Company has restated its unaudited  consolidated financial information
for the quarters  ended March 31, June 30,  September  30, and December 31, 2004
and 2003 (the "Quarter  Restatement").  The Quarter  Restatement  related to the
2004  quarters  will be given  full  effect in the  financial  statements  to be
included in the Company's  Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2005,  June 30, 2005 and September 30, 2005,  when they are filed.  In
addition  to the  details  of the  corrections  described  in Note 1b,  the 2004
quarters  ended June 30 and September 30 have been corrected for an error in the
timing of and  amount  recognized  with  respect  to  certain  long-lived  asset
impairments  under SFAS 144,  `Accounting  for the  Impairment  or  Disposal  of
Long-Lived Assets'.

      The restated  financial  results by quarter for the two fiscal years ended
December 31, 2004 and 2003 are as follows:


                                       95


                                                                                                   Loss Per Share
                                                             Gross       Operating    Net Income   Applicable to
                                             Net Sales       Profit    Income (Loss)    (Loss)     Common Shares
                                           ------------- ------------- ------------- ------------- -------------
2004:
     1ST QUARTER AS REPORTED                  97,494        18,031         4,142        (1,985)        (1.26)
     Restatement Adjustments
         Hedge accounting/inventory                                                       (590)
         Precious Metals inventory                             245           245           245
         Executive life insurance                                            (36)          (36)
         Tax Matters                                                                       (30)
                                           ------------- ------------- ------------- -------------
     AS RESTATED                              97,494        18,276         4,351        (2,396)(a)     (1.34)


     2ND QUARTER AS REPORTED                 107,840        20,329          (488)         (954)        (1.07)
     Restatement Adjustments
         Long - lived asset impairment                                     5,060         5,060
         Hedge accounting/inventory                                                      3,666
         Precious Metals inventory                          (2,902)       (2,902)       (2,902)
         Executive life insurance                                            (36)          (36)
         Tax Matters                                                                      (375)
                                           ------------- ------------- ------------- -------------
     AS RESTATED                             107,840        17,427         1,634 (b)     4,459 (c)     (0.07)


     3RD QUARTER AS REPORTED                 111,483        19,601         5,119        (2,073)        (1.28)
     Restatement Adjustments
         Long - lived asset impairment                                    (4,235)       (4,235)
         Hedge accounting/inventory                                                     (2,189)
         Precious Metals inventory                           1,343         1,343         1,343
         Executive life insurance                                            (36)          (36)
         Tax Matters                                                                      (243)
                                           ------------- ------------- ------------- -------------
     AS RESTATED                             111,483        20,944         2,191 (d)    (7,433)        (2.26)

     4TH QUARTER                              94,102        10,763      (126,229)(e)  (135,074)       (25.71)


-------------------------------------------------------------------------------------------------------------
2003:
     1ST QUARTER AS REPORTED                  81,000        14,051        (7,935)       (8,848)        (2.57)
     Restatement Adjustments
         Hedge accounting/inventory                                                     (1,545)
         Precious Metals inventory                           1,326         1,326          1,326
         Executive life insurance                                             33            33
         Tax Matters                                                                      (209)
                                           ------------- ------------- ------------- -------------
     AS RESTATED                              81,000        15,377        (6,576)       (9,243)        (2.64)

     2ND QUARTER AS REPORTED                  83,519        16,388        (4,383)       (4,058)        (1.67)
     Restatement Adjustments
         Hedge accounting/inventory                                                        361
         Precious Metals inventory                            (101)         (101)         (101)
         Executive life insurance                                             33            33
         Tax Matters                                                                       (89)
                                           ------------- ------------- ------------- -------------
     AS RESTATED                              83,519        16,287        (4,451)       (3,854)        (1.63)

     3RD QUARTER AS REPORTED                  83,269        16,829      (132,693)     (142,565)       (27.38)
     Restatement Adjustments
         Goodwill                                                         21,656        21,657
         Hedge accounting/inventory                                                        590
         Precious Metals inventory                          (1,124)       (1,124)       (1,124)
         Executive life insurance                                             33            33
         Tax Matters                                                                   (10,820)
                                           ------------- ------------- ------------- -------------
     AS RESTATED                              83,269        15,705      (112,128)(f)  (132,229)       (25.46)


     4TH QUARTER AS REPORTED                  78,508        14,027        (7,144)      (13,737)        (3.43)

     Restatement Adjustments
         Hedge accounting/inventory                                                        404
         Precious Metals inventory                            (404)         (404)         (404)
         Executive life insurance                                             33            33
         Tax Matters                                                                      (894)
                                           ------------- ------------- ------------- -------------
     AS RESTATED                              78,508         13,623        (7,515)     (14,598)        (3.62)



                                       96


(a) Includes $1,161 loss on early retirement of debt.
(b) Includes  $3,940 asset  impairment  charge and $1,275  income on reversal of
    reserve for legal proceeding  settled in the Company's favor.  Also includes
    $1,707 gain on sale of fixed assets.
(c) Includes $5,629 gain on sale of WPSC note.
(d) Includes $4,235 asset impairment charge.
(e) Includes $ 79,788 goodwill impairment charge,  $1,576 restructuring  charge,
    $1,784 re-capitalization expenses, and $28,971 in environmental remediation.
(f) Includes $67,400 goodwill  impairment  charge and $48,102 charge for pension
    curtailment and special termination benefits.

NOTE 20:  SUBSEQUENT EVENTS (UNAUDITED)

PENSION FUNDING WAIVER:

      On December 20, 2006, the Internal  Revenue  Service granted a conditional
waiver of the minimum funding requirements for the WHX Pension Plan for the 2005
plan year (the "IRS Waiver") in accordance  with section 412 (d) of the Internal
Revenue Code and section 303 of the Employee  Retirement Income and Security Act
of 1974, as amended ("ERISA"),  and on December 28, 2006, WHX, H&H, and the PBGC
entered  into a  settlement  agreement  (the  "PBGC  Settlement  Agreement")  in
connection  with the IRS waiver and  certain  other  matters.  The IRS Waiver is
subject to certain conditions, including a requirement that the Company meet the
minimum funding  requirements for the WHX Pension Plan for the plan years ending
December  31,  2006  through  2010,  without  applying  for  a  waiver  of  such
requirements.  The PBGC Settlement  Agreement and related agreements provide, in
part,  for (i) the  amortization  of the  waived  amount of $15.5  million  (the
"Waiver  Amount")  over a period  of five  years,  (ii) the  PBGC's  consent  to
increase  borrowings  under H&H's  senior  credit  facility  to $125  million in
connection  with the  closing  of an  acquisition  described  below,  (iii)  the
resolution of any potential issues under Section 4062(e) of ERISA, in connection
with the  cessation of  operations  at certain  facilities  owned by WHX, H&H or
their  subsidiaries,  and (iv) the granting to the PBGC of subordinate  liens on
the  assets  of H&H  and its  subsidiaries,  and  specified  assets  of WHX,  to
collateralize  WHX's obligation to pay the Waiver Amount to the WHX Pension Plan
and to make  certain  payments  to the WHX  Pension  Plan  in the  event  of its
termination.  As a result of the PBGC  Settlement  Agreement and the IRS Waiver,
based on  estimates  from WHX's  actuary,  the  Company  now expects its minimum
funding  requirement for the specific plan year and the amortization of the 2005
requirement  to be $13.1  million  (paid in full in 2006),  $6.7  million,  $7.9
million,  and $18.3 million  (which  amounts  reflect the recent  passage of the
Pension  Protection  Act  of  2006)  in  2006,  2007,  2008  and  through  2011,
respectively.

AMENDMENTS TO CREDIT FACILITIES:

      On December 27, 2006,  upon the filing of the Company's 2005 Annual Report
on Form 10-K,  Wachovia  provided H&H with an additional $7.0 million loan. This
was  pursuant  to an  Amendment  signed  on  October  30,  2006  which  made the
additional funds conditional upon the filing of the Company's 2005 Annual Report
on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia  ("Amendment  No. 11") and their Loan
and Security  Agreement with Steel ("Amendment No. 8"). The amendments  provide,
in part,  for the  consummation  of the  transactions  contemplated  by the PBGC
Settlement  Agreement and the waiver of possible events of default that may have
occurred relating to the matters covered by the PBGC Settlement Agreement.

      On December 28, 2006, H&H, and certain of H&H's subsidiaries amended their
Loan and Security  Agreement with Wachovia  ("Amendment  No. 12") and their Loan
and  Security  Agreement  with  Steel  ("Amendment  No.  9").  Amendment  No. 12
provides,  in part,  for a $42 million term loan funded by Ableco Finance LLC, a
portion of which was used to fund the acquisition described below. Amendment No.
9 included conforming amendments.

      As stated above,  H&H granted a lien of $15.5 million on its assets to the
PBGC on December 28, 2006 in connection with the PBGC Settlement Agreement. Such
lien is subordinate to that of Wachovia,  but senior to that of Steel.  Thus, on
that same date,  WHX entered into a guarantee  agreement with Steel in which WHX
agreed to guarantee up to $15.5 million of principal amount of H&H's Term B Loan
owed to Steel.  To  collateralize  this  guarantee,  Steel  was  granted a first
priority lien on specified assets of WHX.

ACQUISITION:

      Effective December 28, 2006,  pursuant to an Asset Purchase Agreement (the
"Asset Purchase  Agreement")  dated as of December 28, 2006, a subsidiary of H&H
acquired a mechanical  roofing  fastener  business from Illinois Tool Works Inc.
The purchase price was  approximately  $26 million,  including a working capital
adjustment.  The  assets  acquired  included,  among  other  things,  machinery,
equipment, inventories of raw materials,  work-in-process and finished products,
certain contracts,  accounts receivable and intellectual property rights, all as
related  to  the  acquired  business  and as  provided  in  the  Asset  Purchase
Agreement.


                                       97


      This acquired business develops and manufactures fastening systems for the
commercial  roofing  industry.  WHX believes  this  acquisition  solidifies  its
position  as a  leading  manufacturer  and  supplier  of  mechanical  fasteners,
accessories  and  components,  and  building  products  for the  commercial  and
residential construction industry.

      Funds for payment of the purchase  price by H&H were obtained  pursuant to
H&H's existing revolving credit facility (as discussed above).

LIQUIDITY

      As of December 31, 2006,  WHX had cash of  approximately  $0.8 million and
current  liabilities of  approximately  $7.5 million,  including $5.1 million of
mandatorily  redeemable  preferred shares issued by a wholly owned subsidiary of
WHX in 2005 and  payable  to a  related  party.  H&H's  availability  under  its
revolving credit facility and other facilities as of December 31, 2006 was $19.1
million.  Such  facilities  expire in March 2007. The Company  continues to have
significant cash flow obligations,  including without limitation the amounts due
for the WHX Pension Plan (as amended by the PBGC Settlement  Agreement described
above). Based on the Company's forecasted borrowings,  the funds available under
its credit facilities may not be sufficient to fund debt service costs,  working
capital demands and environmental remediation costs. Additionally,  there can be
no assurance  that the Company will be able to obtain  replacement  financing at
commercially  reasonable  terms upon the  expiration  of its credit  facilities.
Consequently,  there  continues  to be  substantial  doubt  about the  Company's
ability to continue as a going concern.



ITEM 9. CHANGES  IN  AND  DISAGREEMENTS   WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
        FINANCIAL DISCLOSURES

      On January 17, 2007, WHX dismissed  PricewaterhouseCoopers  LLP ("PwC") as
its independent registered public accounting firm, effective upon the completion
by PwC of its procedures regarding: (i) the Company's 2004 Annual Report on Form
10-K; and (ii) the financial  statements of the Company as of March 31, 2005 and
for the quarter then ended,  the financial  statements of the Company as of June
30, 2005 and for the quarter and six-month  periods then ended and the financial
statements  of the  Company as of  September  30,  2005 and for the  quarter and
nine-month  periods  then ended and the Forms 10-Q for 2005 in which each of the
above described financial  statements will be included.  The decision to dismiss
PwC was approved by the Company's Audit Committee.

      The  reports of PwC on the  financial  statements  of the  Company for the
fiscal  years ended  December  31, 2005 and 2004,  and the reports of PwC on the
financial  statements  included  herein did not contain  any adverse  opinion or
disclaimer  of opinion and were not  qualified  or  modified as to  uncertainty,
audit  scope  or  accounting  principle,  except  for an  explanatory  paragraph
disclosing  substantial doubt about the Company's ability to continue as a going
concern.

      During the fiscal years ended December 31, 2005, 2004 and 2003,and through
the date of this filing,  there were no disagreements  with PwC on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure which, if not resolved to the satisfaction of PwC, would have
caused  them to  make  reference  thereto  in  their  reports  on the  financial
statements for such years.

      During the fiscal  years  ended  December  31,  2005,  2004 and 2003,  and
through the date of this filing,, there were no "reportable events" as that term
is described in Item  304(a)(1)(v)  of Regulation S-K, other than as reported in
Item 9A of its 2005 Annual Report on Form 10-K and Item 9A below.

      On January 22, 2007, the Company  engaged Grant Thornton LLP ("GT") as the
Company's  independent  registered public  accountant.  The engagement of GT was
approved by the Audit Committee of the Company's Board of Directors.  During the
years ended December 31, 2005,  2004 and 2003 and through  January 22, 2007, the
Company did not consult  with GT with respect to either (i) the  application  of
accounting principles to a specified transaction,  either completed or proposed;
(ii) the type of audit opinion that might be rendered on the Company's financial
statements;  or (iii) any matter that was either the subject of disagreement (as
defined in Item  304(a)(1)(iv)  of  Regulation  S-K) or a  reportable  event (as
defined in Item 304(a)(1)(v) of Regulation S-K).


ITEM 9A.    CONTROLS AND PROCEDURES

      EVALUATION  OF  DISCLOSURE  CONTROLS AND  PROCEDURES.  As required by Rule
13a-15(b) under the Securities Exchange Act of 1934, as amended,  (the "Exchange
Act")  we  conducted  an  evaluation   under  the   supervision   and  with  the
participation of our management,  including the Chief Executive  Officer and the
Chief Financial  Officer,  of the  effectiveness of our disclosure  controls and
procedures  as of the end of the period  covered by this  report.  Based on that
evaluation we identified certain material  weaknesses in our disclosure controls
and procedures  (discussed below), and the Chief Executive Officer and the Chief
Financial  Officer  concluded  that  as of  December  31,  2005  and  2004,  our
disclosure  controls and  procedures  were not  effective  in ensuring  that all


                                       98


information required to be disclosed in reports that we file or submit under the
Exchange Act is recorded,  processed,  summarized  and reported  within the time
periods  specified  in the SEC rules and  forms  and that  such  information  is
accumulated and  communicated  to our management,  including our Chief Executive
Officer and Chief Financial  Officer,  in a manner that allows timely  decisions
regarding required disclosure.

      As more  fully  described  in  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations and in Note 1b to the Consolidated
Financial  Statements,  the Company  determined  it was necessary to restate its
2003, 2002 and prior years' audited consolidated  financial statements,  and its
unaudited interim consolidated financial statements for all quarters in 2004 and
2003.

      Notwithstanding the existence of the material weaknesses  discussed below,
the  Company's   management  has  concluded  that  the  consolidated   financial
statements  included in this Form 10-K fairly present, in all material respects,
the Company's financial  position,  results of operations and cash flows for the
interim and annual  periods  presented in  conformity  with  generally  accepted
accounting principles.

      Although  we are not  currently  required  to  assess  and  report  on the
effectiveness  of our internal  control  over  financial  reporting  under Rules
13a-15 and 15d-15 of the Exchange  Act,  management  is required to evaluate the
effectiveness  of our disclosure  controls and procedures  under Rule 13a-15(b).
Because of its inherent limitations,  internal controls over disclosure controls
and procedures may not prevent or detect misstatements. Also, projections of any
evaluation of  effectiveness to future periods are subject to the risk that such
controls may become  inadequate  because of changes in  conditions,  or that the
degree  of  compliance  with  such   disclosure   controls  and  procedures  may
deteriorate.

      A material  weakness is a control  deficiency,  or  combination of control
deficiencies  that  results  in more than a remote  likelihood  that a  material
misstatement of the annual or interim financial statements will not be prevented
or  detected.  As of December  31,  2005 and 2004,  we have  concluded  that the
Company did not maintain effective disclosure controls and procedures due to the
following material weaknesses:

            (a) We did not  maintain a sufficient  number of  personnel  with an
            appropriate  level of  knowledge,  experience  and  training  in the
            application of generally accepted accounting principles commensurate
            with the Company's global financial  reporting  requirements and the
            complexity of our operations and transactions.

            (b)  We did  not  maintain  appropriately  designed  and  documented
            company-wide policies and procedures.

            (c) We did not maintain an effective  anti-fraud program designed to
            detect and prevent fraud, including (i) an effective  whistle-blower
            program,  and (ii) an  ongoing  program to manage  identified  fraud
            risks.

     These material weaknesses  contributed to the material weaknesses discussed
in items 1 to 6 below and the resulting  restatement of our annual  consolidated
financial  statements  for  2003,  2002  and  prior  years,  restatement  of the
unaudited  consolidated quarterly financial statements for 2004 and 2003 as well
as  audit  adjustments  to the  2005  and  2004  annual  consolidated  financial
statements and the 2005 unaudited  consolidated  quarterly financial statements.
Additionally, these control deficiencies could result in a material misstatement
in any of the Company's  accounts or disclosures that would result in a material
misstatement  of the annual or interim  consolidated  financial  statements that
would not be prevented or detected.  As of December 31, 2005 and,  2004,  we did
not maintain effective controls over:

     (1) the accuracy,  valuation and  disclosure of our goodwill and intangible
asset  accounts  and the  related  impairment  expense  accounts.  Specifically,
effective  controls  were not  designed  and in place to ensure that an adequate
periodic impairment analysis was conducted,  reviewed,  and approved in order to
identify and accurately record  impairments as required under generally accepted
accounting  principles.  This control deficiency  resulted in the restatement of
our  annual  consolidated  financial  statements  for  2003  and  2002,  and the
unaudited  quarterly  consolidated  financial  statements  for the quarter ended
September  30,  2003,  as well as audit  adjustments  to the  annual  and fourth
quarter of 2004 consolidated  financial statements.  Additionally,  this control
deficiency  could  result in a material  misstatement  of  goodwill,  intangible
assets and related  impairment  expense accounts that would result in a material
misstatement  of the annual or interim  consolidated  financial  statements that
would not be prevented or detected. Accordingly,  management has determined that
this control deficiency constitutes a material weakness.

     (2) the  accounting  for  income  taxes,  including  the  completeness  and
accuracy of income taxes payable,  deferred  income tax assets,  liabilities and
related valuation allowances and the income tax provision.  Specifically, we did
not  appropriately  apply  generally  accepted  accounting   principles  in  the
estimation  of tax reserves and the  recording of valuation  allowances  against
deferred tax assets. Additionally, we did not have effective controls to monitor
the difference between the income tax basis and the financial reporting basis of
assets and  liabilities  and  reconcile the  difference  to deferred  income tax
assets and liabilities.  This control deficiency  resulted in the restatement of
the annual  consolidated  financial  statements for 2003 and prior years and all


                                       99


unaudited  quarterly  consolidated  financial  statements  for 2004 and 2003 and
audit adjustments to the annual consolidated  financial  statements for 2005 and
2004  and  the  2005  unaudited  consolidated  quarterly  financial  statements.
Additionally, this control deficiency could result in a material misstatement of
income taxes payable,  deferred  income tax assets and  liabilities,  income tax
provision  and other  comprehensive  income  that  would  result  in a  material
misstatement  of the annual or interim  consolidated  financial  statements that
would not be prevented or detected. Accordingly,  management has determined that
this control deficiency constitutes a material weakness.

     (3)  the  completeness  and  accuracy  of  our  environmental   remediation
liability  reserves.  Specifically,  we  did  not  have  effective  controls  to
accurately  estimate or monitor for completeness our  environmental  remediation
liabilities  arising from  contractual  obligations or regulatory  requirements.
This  control  deficiency  resulted  in audit  adjustments  to the 2005 and 2004
annual  consolidated  financial  statements  and the  2005  unaudited  quarterly
consolidated financial statements.  Additionally,  this control deficiency could
result  in  a  material  misstatement  of  environmental  remediation  liability
reserves and environmental  remediation expenses that would result in a material
misstatement to annual or interim  consolidated  financial statements that would
not be prevented or detected.  Accordingly,  management has determined that this
control deficiency constitutes a material weakness.

     (4)  the  valuation  of   long-lived   assets  for   impairment   purposes.
Specifically,  we did not have  effective  controls to ensure the  accuracy  and
valuation  of an  impairment  charge taken in the second  quarter of 2004.  This
control  deficiency  resulted  in  a  restatement  of  our  unaudited  quarterly
condensed consolidated financial statements for the second and third quarters of
2004 and audit adjustments in the annual consolidated  financial  statements for
2004.  Additionally,   this  control  deficiency  could  result  in  a  material
misstatement of property,  plant and equipment and asset impairment charges that
would result in a material  misstatement  of the annual or interim  consolidated
financial  statements  that would not be  prevented  or  detected.  Accordingly,
management has determined  that this control  deficiency  constitutes a material
weakness.

     (5) the  accounting  for  derivative  instruments  and  hedging  activities
related to precious metal inventory.  Specifically,  effective controls were not
designed and in place to ensure the appropriate documentation had been completed
in order to qualify for hedge  accounting  treatment with respect to futures and
forward contracts  specifically  purchased to mitigate the Company's exposure to
changes  in  the  value  of  precious  metal  inventory,  including  appropriate
identification  of the instruments,  assessment of effectiveness and maintenance
of   contemporaneous   documentation  in  accordance  with  generally   accepted
accounting  principles.  This control deficiency  resulted in the restatement of
the annual  consolidated  financial  statements  for the year ended December 31,
2003  and  prior  years,  the 2004 and  2003  unaudited  quarterly  consolidated
financial  statements,  as well as audit adjustments in the annual  consolidated
financial  statements  for  2005  and  2004  and the  2005  unaudited  quarterly
consolidated financial statements.  Additionally,  this control deficiency could
result in a material misstatement of inventory and cost of goods sold as well as
other current  assets or accrued  liabilities  and other income  (expense)  that
would result in a material  misstatement  of the annual or interim  consolidated
financial  statements  that would not be  prevented  or  detected.  Accordingly,
management has determined  that this control  deficiency  constitutes a material
weakness.

     (6) the preparation and review of the consolidated statement of cash flows.
Specifically,  we did not maintain  effective  controls over the accuracy of the
classification  of short-term  borrowings  used to fund  purchases of short-term
investments  as cash flows from financing  activities,  as required by generally
accepted  accounting  principles.   This  control  deficiency  resulted  in  the
restatement of the annual consolidated  financial  statements for the year ended
December 31, 2003 and prior years.  Additionally,  this control deficiency could
result in a material  misstatement  of operating and  financing  cash flows that
would result in a material  misstatement  of the annual or interim  consolidated
financial  statements  that would not be  prevented  or  detected.  Accordingly,
management has determined  that this control  deficiency  constitutes a material
weakness.



PLANS FOR REMEDIATION

The Company has taken the following  actions to address the material  weaknesses
noted above.

   o  Engaged an independent third-party valuation firm in the second quarter of
      2005 to assist  management  in evaluating  the  impairment of goodwill and
      intangible asset accounts;

   o  Increased the Company's  accounting  and financial  resources by hiring an
      Assistant  Controller and a Treasurer and retaining a regional  accounting
      firm of certified  public  accountants to assist  financial  management in
      addressing various accounting matters;

   o  Increased  the level of review and  discussion on  significant  accounting
      matters, including goodwill valuation,  environmental issues, tax matters,
      cash flow  presentation and hedging and related  supporting  documentation
      with senior finance management;

   o  Consolidated corporate office functions;

   o  Improved controls regarding timely communication of all significant events
      to management and the Board of Directors; and


                                      100


   o  Enhanced  the monthly  financial  reporting to senior  management  and the
      Board.

Additional actions planned by management include:

   o  Hiring additional experienced financial personnel;

   o  Updating the Company's  accounting  policies and procedures to ensure such
      accounting policies and procedures are complete and current;

   o  Considering  the  engagement  of an  additional  third  party  resource to
      support the internal accounting and financial personnel; and

   o  Reviewing and modifying the nature and scope of internal audit activities.


      Management will consider the design and operating  effectiveness  of these
actions and will make additional  changes it determines  appropriate.  We cannot
assure you that the measures we have taken,  or will take,  to  remediate  these
material  weaknesses  will  be  effective  or that  we  will  be  successful  in
implementing  them before  December 31, 2007 or December 31, 2008,  the dates on
which  the  Company  and its  independent  registered  public  accounting  firm,
respectively,  must first report on the  effectiveness  of our internal  control
over financial  reporting under the Section 404 provisions of the Sarbanes-Oxley
Act.

      Internal  control over disclosure  controls and procedures,  no matter how
well designed, has inherent limitations. Therefore, even those internal controls
determined to be effective can provide only reasonable assurance with respect to
financial  statement  preparation and presentation.  We will continue to improve
the design and  effectiveness  of our disclosure  controls and procedures to the
extent  necessary  in the future to provide  our senior  management  with timely
access to such material information, and to correct any deficiencies that we may
discover in the future.


                                      101


                                    PART III


ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

      Set forth below are the names and certain  other  information  relating to
the current members of the Board of Directors:

                                   Principal Occupation                         First Year
                                  for the Past Five Years                         Became
Name                         and Current Public Directorships             Age   a Director
----                         --------------------------------             ---   ----------

Warren G.          CHAIRMAN  OF  THE  BOARD  OF  DIRECTORS.   Warren  G.  41       2005
Lichtenstein       Lichtenstein  is a Co-Founder and the Managing Member
                   of   Steel   Partners   II,   L.P.,   an   investment
                   partnership.  In 1993,  Steel  Partners  II, LP began
                   investing in undervalued securities, including equity
                   and debt  (senior  and  subordinated)  of public  and
                   private companies in easy to understand businesses.

                   Prior  to  opening   Steel   Partners   II,  LP,  Mr.
                   Lichtenstein  co-founded Steel Partners, L.P. in 1990
                   and  co-managed  the business and  operations of that
                   partnership.

                   Mr.  Lichtenstein  previously  worked  at  Ballantrae
                   Partners, L.P. as an  acquisition/arbitrage  analyst.
                   Ballantrae   invested  in  risk  arbitrage,   special
                   situations,  and  undervalued  companies,  which  the
                   partnership  desired to  influence  or  control.  Mr.
                   Lichtenstein  began his  career in 1988 as an analyst
                   at Para Partners,  L.P.,  which invested in arbitrage
                   and related situations.

                   In  association  with Steel  Partners II,  L.P.,  Mr.
                   Lichtenstein  is a Co-Founder of Steel Partners Japan
                   Strategic  Fund,  Steel  Partners China Access Fund I
                   LP, and President and CEO of Steel Partners,  Ltd. He
                   is also a director of KT&G Corporation,  and Chairman
                   of   SL   Industries,    Inc.,    United   Industrial
                   Corporation,  and WHX  Corporation.  Over the past 15
                   years, Mr. Lichtenstein has served as a director of a
                   number of  companies  including:  Alpha  Technologies
                   Group,   Aydin   Corp.,   BKF,    CellPro/CPX,    ECC
                   International Corporation,  Gateway Industries, Layne
                   Christensen  Company,  PLM  International,  Puroflow,
                   Inc., Saratoga Beverage Group, Synercom Technologies,
                   TAB,   Tandycrafts,    Tech-Sym   Corp.,   USDL   and
                   Webfinancial.

                   Mr.  Lichtenstein  is a graduate of the University of
                   Pennsylvania with a degree in Economics.

Joshua E.          DIRECTOR.  Vice  President  of SPL since  June  2001.  33       2005
Schechter          Associate in the corporate  finance group of Imperial
                   Capital  LLC, a provider of mergers and  acquisitions
                   advisory  services,  from  March  1998 to June  2001.
                   Senior analyst at Leifer Capital, an investment bank,
                   from August 1997 to February  1998. Tax consultant at
                   Ernst & Young,  LLP from  January  1996 to July 1997.
                   Director of Jackson Products, Inc. since 2004.


                                    102


John J. Quicke     DIRECTOR AND VICE PRESIDENT. Operating Partner of SPL  57       2005
                   since September 2005. Director of WHX since July 2005
                   and Vice  President  since  October  2005.  Director,
                   Chairman,  of NOVT  Corporation  ("NOVT") since April
                   2006.  Director of Layne  Christensen  since  October
                   2006.  Director of Angelica  Corporation since August
                   2006.  A  director,  President  and  Chief  Operating
                   Officer   of   Sequa   Corporation,   a   diversified
                   industrial company, from 1993 to March 2004, and Vice
                   Chairman  and  Executive  Officer of Sequa from March
                   2004 to March 2005.  As Vice  Chairman and  Executive
                   Officer of Sequa,  Mr. Quicke was responsible for the
                   Automotive,   Metal  Coating,   Specialty  Chemicals,
                   Industrial  Machinery  and  Other  Product  operating
                   segments  of the  company.  Occasionally  served as a
                   consultant  to  Steel  and  explored  other  business
                   opportunities from March 2005 to August 2005.

Glen M. Kassan     VICE  CHAIRMAN  OF THE BOARD OF  DIRECTORS  AND CHIEF  63       2005
                   EXECUTIVE  OFFICER.  Executive  Vice President of SPL
                   and  its   predecessor   since  June  2001  and  Vice
                   President  of  its  predecessor   from  October  1999
                   through May 2001.  Vice  President,  Chief  Financial
                   Officer  and  Secretary  of  WebFinancial  since June
                   2000.  Director of SL Industries  since January 2002,
                   Vice Chairman  since August 2005 and  President  from
                   February 2002 through August 2005. Director of United
                   Industrial since 2002.

Jack L. Howard     DIRECTOR.  Registered principal of Mutual Securities,  45       2005
                   Inc., a registered  broker-dealer,  since 1989.  Vice
                   President of SPL and its  predecessor  since December
                   2003.  Director of  WebFinancial  since 1996 and Vice
                   President  since  1997.  Chairman  of  the  Board  of
                   WebFinancial  since 2005.  Secretary,  Treasurer  and
                   Chief Financial  Officer of WebFinancial from 1997 to
                   2000.  Chairman  of the  Board  and  Chief  Executive
                   Officer of Gateway  Industries,  Inc.,  a provider of
                   database   development   and  Web  site   design  and
                   development  services,   since  February  2004,  Vice
                   President of Gateway since December 2001 and director
                   since May  1994.  Director  of Cosine  Communications
                   Inc., a global telecommunications equipment supplier,
                   since July 2005.  Director of BNS  Holding,  Inc.,  a
                   holding  company  that owns the  majority  of Collins
                   Industries,   a   manufacturer   of   school   buses,
                   ambulances,  and  terminal  trucks.  Director of NOVT
                   Corporation,  a former  developer of advanced medical
                   treatments for coronary and vascular disease.

Louis Klein Jr.    DIRECTOR.   Trustee  of  Manville   Personal   Injury  71       2002
                   Settlement  Trust  since  1991.  Trustee of WT Mutual
                   Fund and WT  Investment  Trust I  (Wilmington  Trust)
                   since 1998. Trustee of the CRM Mutual Fund since 2005
                   and  Director of Bulwark  Corporation  since 1998,  a
                   private company engaged in real estate investment.

Garen W. Smith     DIRECTOR.  Chairman  of the  Board  of Handy & Harman  64       2002
                   from 2003 through  September  2005.  Vice  President,
                   Secretary  and  Treasurer  of  Abundance   Corp.,   a
                   consulting  company  that  provided  services  to the
                   Company  from 2002 to February  2005.  President  and
                   Chief Executive Officer of Unimast  Incorporated from
                   1991 to 2002.


                                    103


Daniel P. Murphy   DIRECTOR;  PRESIDENT AND CHIEF  EXECUTIVE  OFFICER OF  45       2005
                   H&H.  President  of H&H  since  February  2003.  Vice
                   President  of H&H  Engineered  Materials  Group  from
                   January  2002  through  February  2003.  President of
                   Olympic  Manufacturing Group, Inc. from February 1994
                   through December 2001.

EXECUTIVE OFFICERS
      The  following  table  contains  the  names,  positions  and  ages  of the
executive officers of the Company who are not directors.

                               Principal Occupation for the Past
Name                     Five Years and Current Public Directorships      Age
----                     -------------------------------------------      ---

Robert K. Hynes    CHIEF  FINANCIAL  OFFICER.  Chief  Financial  Officer  52
                   since January 2003. Vice President--Finance from June
                   2001  through  January  2003.  Vice  President of H&H
                   since  March 2000.  Director  of Audit and  Financial
                   Standards of H&H from April 1995 through March 2000.

Ellen T. Harmon    VICE PRESIDENT,  GENERAL COUNSEL AND SECRETARY. Vice   52
                   President,  General Counsel and Secretary of each of
                   the  Company  and H&H since  February  2006.  Senior
                   Vice  President,  General  Counsel and  Secretary of
                   The  Robert  Allen  Group,  Inc.,  an  international
                   designer and  distributor  of home  furnishings  and
                   fabrics  to the  interior  design  trade,  furniture
                   manufacturers,  and  the  contract  and  hospitality
                   markets,  from January 2004  through  January  2006.
                   Vice  President,  General  Counsel and  Secretary of
                   Metallurg,   Inc.,  an  international  producer  and
                   supplier of high-quality  specialty  metals,  alloys
                   and metallic  chemicals  utilized in the  production
                   of  high-performance  aluminum and titanium  alloys,
                   specialty    steel,    superalloys    and    certain
                   non-metallic  materials for various  applications in
                   the    aerospace,    power    supply,    automotive,
                   petrochemical   processing  and   telecommunications
                   industries, from 1999 through 2002.


AUDIT COMMITTEE

      The  Company  has  a  separately-standing   audit  committee  (the  "Audit
Committee") established in accordance with Section 3(a) (58) (A) of the Exchange
Act. The members of the Audit  Committee are Louis Klein Jr. and Garen W. Smith.
Each of Messrs.  Klein and Smith are  non-employee  members of the Board.  After
reviewing the qualifications of the current members of the Audit Committee,  and
any  relationships  they may have  with the  Company  that  might  affect  their
independence  from the Company,  the Board has  determined  that (1) all current
Audit Committee  members are "independent" as that concept is defined in Section
10A of the Exchange Act, (2) all current Audit Committee members are financially
literate,  and (3) Mr. Klein qualifies as an "audit committee  financial expert"
under the applicable rules promulgated pursuant to the Exchange Act.

NOMINATING COMMITTEE

      The members of the Nominating  Committee,  which last took action in 2004,
are no longer  directors of the  Company.  The Company has adopted a policy with
respect to  procedures  by which  stockholders  may  recommend  nominees  to the
Company's   Board  of  Directors  as  further   described  in  the   Stockholder
Recommendations   below.   The  Company's   Board  has  assumed  the  roles  and
responsibilities  of the  nominating  committee and is giving  consideration  to
reconstituting the Nominating Committee and adopting a charter.

STOCKHOLDER RECOMMENDATIONS

      The  Company  has adopted a policy  with  respect to  procedures  by which
stockholders  may recommend  nominees to the Company's Board of Directors.  This
policy  is  identical  to the  policy  in  place  prior to  confirmation  of the
Company's  Plan with the  exception of the address of the  Company's  Secretary.
Stockholders  wishing to submit  recommendations for candidates to be considered
for election  should write to the  Corporate  Secretary,  WHX  Corporation,  555
Theodore Fremd Avenue,  Rye, New York 10580.  Any such stockholder must meet and
evidence  the minimum  eligibility  requirements  specified in Exchange Act Rule
14a-8 and must submit,  within the same  timeframe for  submitting a stockholder
proposal  required by Rule 14a-8:  (1) evidence in accordance with Rule 14a-8 of
compliance  with  the  stockholder  eligibility  requirements,  (2) the  written


                                    104


consent of the candidate(s) for nomination as a director,  (3) a resume or other
written  statement of the  qualifications  of a candidate(s) for nomination as a
director,  and (4) all information regarding the candidate(s) and the submitting
stockholder  that would be required to be disclosed in a proxy  statement  filed
with the SEC if the  candidate(s)  were  nominated  for  election  to the Board,
including  the  number  and class of all  shares  of each  class of stock of the
Company owned of record and beneficially by each such persons,  and the name and
address of the submitting stockholder(s).

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section  16(a)  of the  Exchange  Act  requires  the  Company's  executive
officers and directors,  and persons who  beneficially own more than ten percent
(10%) of a registered class of the Company's equity securities,  to file reports
of ownership and changes in ownership  with the SEC. In addition,  under Section
16(a),  trusts for which a reporting  person is a trustee and a beneficiary  (or
for which a member of his immediate family is a beneficiary) may have a separate
reporting  obligation  with regard to  ownership  of the Common  Stock and other
equity  securities of the Company.  Such reporting persons are required by rules
of the SEC to furnish the Company with copies of all Section  16(a) reports they
file.  Based  solely upon a review of the copies of such forms  furnished to the
Company and  written  representations  from the  Company's  executive  officers,
directors  and  greater  than ten percent  (10%)  beneficial  stockholders,  the
Company  believes  that during the year ended  December  31,  2004,  all persons
subject to the  reporting  requirements  of  Section  16(a)  filed the  required
reports on a timely basis.

CODE OF CONDUCT AND ETHICS

      The  Company  has  adopted a written  Code of Ethics  that  applies to its
principal executive officer,  principal financial officer,  principal accounting
officer or controller, and persons performing similar functions.

SEC FILINGS

      The public may read and attain  copies of the  Company's  filings from the
SEC at the public  reference room at 450 Fifth St, N.W.,  Washington D.C. 20549.
The Company is an electronic  filer with the SEC and its reports,  proxies,  and
information statements are maintained at the following site: HTTP://WWW.SEC.GOV.
Shareholders  may request a written copy of the report by writing to the Company
at  555  Theodore  Fremd  Avenue,  Rye,  New  York  10580,  attention  Corporate
Secretary.


                                    105


ITEM 11.    EXECUTIVE COMPENSATION

      SUMMARY COMPENSATION TABLE. The following table sets forth, for the fiscal
years indicated, all compensation awarded to, paid to or earned by the following
type of executive  officers for the fiscal years ended  December 31, 2002,  2003
and 2004:  (i)  individuals  who  served  as, or acted in the  capacity  of, the
Company's  principal  executive  officer for the fiscal year ended  December 31,
2004; (ii) the Company's four most highly compensated executive officers,  which
together with the principal  executive  officer are the most highly  compensated
officers of the Company whose salary and bonus exceeded $100,000 with respect to
the fiscal  year ended  December  31,  2004 and who were  employed at the end of
fiscal year 2004; and (iii) up to two additional individuals for whom disclosure
would have been provided but for the fact that the individual was not serving as
an executive  officer of the Company at the end of fiscal year 2004. Please note
that the  executive  officers  identified  in (i),  (ii)  and  (iii)  above  are
collectively referred to as the "Named Executive Officers."

                           SUMMARY COMPENSATION TABLE


Name and Principal                                                     Long Term
     Position                        Annual Compensation              Compensation
---------------------  ---------------------------------------------  -------------
                                                       Other Annual    Securities     All Other
                                Salary      Bonus      Compensation    Underlying     Compensation
                        Year      ($)      ($)(1)          ($)         Options (#)      ($)(2)
                       ------  ---------  ----------  --------------  -------------  --------------
Neale X. Trangucci(3)   2004    504,167   100,000(4)        --             --             --
Chief Executive         2003       --        --             --           45,000           --
Officer                 2002       --        --             --             --             --



Stewart E. Tabin(5)     2004    458,333   100,000(4)        --             --             --
President               2003       --        --             --           45,000           --
                        2002       --        --             --             --             --


Neil D. Arnold (6)      2004    412,500   100,000(4)        --             --             --
Executive Chairman      2003       --        --             --           45,000        500,000(7)
of the Board            2002       --        --             --             --          500,000(7)

Robert K. Hynes         2004    250,000   100,000           --           15,000            815(8)
Chief Financial         2003    249,846    75,000           --           20,000            785(8)
Officer                 2002    219,961    75,000           --            7,500            755(8)


Daniel P. Murphy        2004    350,000   140,000           --           20,000          1,397(8)
President of H&H        2003    337,307   125,000           --          100,000          1,323(8)
                        2002    249,935   110,000           --            5,000            149(8)

---------------------------
(1)   Mr.  Hynes was  granted a bonus by the  Company in each of 2004,  2003 and
      2002 for services  performed in the prior year.  Mr.  Murphy was granted a
      bonus in 2004 for services  performed in the prior year. All bonus amounts
      have been attributed to the year in which the services were performed.

(2)   Amounts shown, unless otherwise noted,  reflect employer  contributions to
      pension plans.

(3)   Mr. Trangucci was appointed Chief Executive Officer effective  February 1,
      2004 and resigned effective  September 20, 2005.  Pursuant to a management
      agreement  effective as of January 3, 1991 and  terminated  on January 31,
      2004, WPN Corp.  provided financial,  management,  advisory and consulting
      services to the Company. Mr. Trangucci was an officer of WPN until January
      2004. For more information, see "WPN Management Agreement" below.

(4)   Bonus was granted in February 2005 in  recognition of services in 2004, as
      well as to incentivize the executive in the coming year in connection with
      the Company's recapitalization.

(5)   Mr. Tabin was appointed  President effective February 1, 2004 and resigned
      effective September 20, 2005. Pursuant to a management agreement effective
      as of  January  3, 1991 and  terminated  on January  31,  2004,  WPN Corp.
      provided  financial,  management,  advisory and consulting services to the
      Company.  Mr.  Tabin was an officer of WPN until  January  2004.  For more
      information, see "WPN Management Agreement" below.

(6)   Mr. Arnold was appointed  Chairman effective February 1, 2004 and resigned
      effective  August 10, 2005,  prior to such time Mr.  Arnold  served as the
      Company's Principal Executive Officer in 2004.


                                      106


(7)   Mr. Arnold did not receive any direct compensation from the Company.  Such
      amount was received  from WPN as payment for Mr.  Arnold's  services as an
      officer of WPN. Mr. Arnold joined WPN as an officer in August 2001.

(8)   Represents insurance premiums paid by the Company.

      OPTION GRANTS TABLE.  The following  table sets forth certain  information
regarding  stock  option  grants  made to each of the Named  Executive  Officers
during the fiscal year ended December 31, 2004.

                                          OPTION GRANTS IN LAST FISCAL YEAR

                                                                                              Potential Realizable
                                                                                                 Value at Assumed
                                                                                              Annual Rates of Stock
                                                                                              Price Appreciation for
                                   Individual Grants                                                Option Term
                                   -----------------                                          ----------------------
                        Number of Securities      Percent of
                         Underlying Options      Total Options
                              Granted             Granted to       Exercise
                                                 Employees in       Price        Expiration
Name                           (#)                Fiscal Year       ($/Sh)          Date           5%($)   10%($)
----                   ---------------------     -------------     --------      ----------        -----   ------
Neale X. Trangucci...           --                    --              --             --             --       --
Stewart E. Tabin.....           --                    --              --             --             --       --
Neil D. Arnold.......           --                    --              --             --             --       --
Robert K. Hynes......         15,000(1)               10%           $1.95         04/13/14        18,395   46,617
Daniel P. Murphy........      20,000(1)               13.3%         $1.95         04/13/14        24,527   62,156

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

(1)   Granted under the 1991 Incentive and Nonqualified  Stock Option Plan on April 14, 2004.  33.33% of such options
      vest six months from the grant date,  33.33% vest on the first anniversary of the grant date and 33.34% vest on
      the second anniversary of the grant date.

                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR-END OPTION VALUES

      The following table sets forth certain information  concerning unexercised
stock options held by the Named Executive Officers as of December 31, 2004.




                             Number of Securities      Value of Unexercised
                            Underlying Unexercised     In-the-Money Options
                               Options at 2004             at 2004 Fiscal
                              Fiscal Year-End(#)           Year-End ($)(1)
           Name            Exercisable/unexercisable  Exercisable/unexercisable
           ----            -------------------------  -------------------------

Neale X. Trangucci........    86,664/15,000              0/0
Stewart E. Tabin..........    86,662/15,002              0/0
Neil D. Arnold ...........   104,661/15,000              0/0
Robert K. Hynes...........    49,164/16,668              0/0
Daniel P. Murphy............. 88,329/46,670              0/0
-------------------

(1)   On December 31, 2004 the last reported  sales price of the Common Stock as
      reported on the NYSE Composite Tape was $1.15.


      LONG-TERM  INCENTIVE AND PENSION PLANS. Other than as described below, the
Company does not have any long-term incentive or defined benefit pension plans.


                                      107


      In January  1999,  H&H amended and restated its Long Term  Incentive  Plan
("LTIP"), in which the final cycle had been terminated on December 31, 1998. The
LTIP is a  performance-based  plan pursuant to which  executives of H&H earn the
right to receive awards based on the  achievement of  pre-established  financial
performance and other goals.  The amended LTIP  established  overlapping  cycles
with each cycle  encompassing five fiscal years,  commencing on January 1, 1999.
LTIP  participants  are  selected  by  H&H's  Chief  Executive  Officer  and the
Compensation Committee of the Board of the Company. Mr. Murphy is the only Named
Executive Officers who participates in the Amended and Restated LTIP.

      H&H maintains a  Supplemental  Executive  Retirement  Plan ("H&H SERP") to
provide  executive  officers the amount of reduction  in their  formula  pension
benefits  under the WHX Pension Plan on account of the  limitation  on pay under
Section  401(a) (17) of the Internal  Revenue Code ("IRC") and the limitation on
benefits under Section 415 of the IRC. The H&H SERP also applies the WHX Pension
Plan formula to the Career  Average Pay  generally  after  including  25% of the
bonus  amounts  received.  This plan was frozen as of December 31, 2005 and will
recognize  no pay or service  after this date.  The second  plan,  the WHX SERP,
provides benefits to named executives of WHX. The benefits for the WHX SERP were
fully  paid-out under change in control  provisions  during 2005 after which the
plan was terminated.  The  participants  who were paid-out of the WHX SERP still
have deferred vested benefits under the WHX Pension Plan. Amounts received under
the SERPs are not subject to Cost of Living increases.

      The following table shows the projected Annual  Retirement  Benefits.  For
participants  employed on December 31, 2005, these benefits are shown as payable
on the basis of ten years of certain  payments and  thereafter for life, to each
of the individuals  listed in the Summary  Compensation Table at age 65 assuming
continuation of employment  until age 65. For  participants  who were terminated
during 2005,  their lump sum benefit amount from the SERP and their deferred age
65 annual  benefit from the WHX Pension Plan are shown.  The amounts shown under
Salary  reflect  the  2005  rate of  salary  as plan  compensation  for  Messrs.
Trangucci, Tabin, Hynes and Murphy of $550,000, $500,000, $250,000 and $350,000,
respectively,  and include the benefits  payable under both the WHX Pension Plan
and the SERPs.  The amount of benefits  shown under Bonus would be payable under
the H&H SERP and assumes continuation of the amount of Bonus received on average
over the period 2002 - 2004.

EXECUTIVE PENSION BENEFITS

                   Normal                        Annual Retirement Benefits From:
                 Retirement
Name            Date ("NRD")   Service At NRD*     Salary     Bonus     Total
----            ------------   ---------------     ------     -----     -----
R.K. Hynes      Sept. 1, 2019   16 yrs. 5 mos.    $49,033    $4,618    $53,651
D.P. Murphy     May 1, 2026      4 yrs. 0 mos.     23,820     1,840     25,660
* This plan was frozen as of  December  31,  2005 and will  recognize  no pay or
service after this date.

FOR THE FOLLOWING PARTICIPANTS, ALL BENEFITS ARE SALARY RELATED.

Name            Termination Date  Service At Term   Lump Sum       Annual Age 65
----            ----------------  ---------------     Serp           Whx Pension
                                                      ----           -----------
N.X. Trangucci   July 31, 2005     14 yrs. 7 mos.   $299,466   --      $30,961
S.E. Tabin       July 31, 2005     14 yrs. 7 mos.    259,231   --       31,048


      DEFERRED COMPENSATION  AGREEMENTS.  Except as described below with respect
to the employment agreements of Messrs. Trangucci,  Tabin, Arnold, Hynes, Smith,
and Murphy,  no plan or arrangement  exists which results in  compensation  to a
Named  Executive  Officer  in excess of  $100,000  upon  such  officer's  future
termination of employment or upon a change-of-control.

      BOARD COMPENSATION.  Prior to the effective date of the Plan, Directors of
the  Company who were not  employees  of the  Company or its  subsidiaries  were
entitled  to receive  compensation  for  serving as  directors  in the amount of
$40,000 per annum, $1,000 per Board meeting, $800 per Committee meeting attended
in person,  $500 per telephonic  meeting (other than the Stock Option  Committee
and the Audit Committee),  and $1,000 per day of consultation and other services
provided  other than at  meetings  of the Board or  Committees  thereof,  at the
request of the  Chairman  of the Board.  Committee  Chairmen  also  received  an
additional  annual fee of $1,800 (other than the Stock Option  Committee and the
Audit Committee).  Each Audit Committee member received a payment of $20,000 per
year, and the chairman of the Audit Committee  received a payment of $25,000 per
year.

      Currently,  Directors  of the  Company  who are (1) not  employees  of the
Company or its  subsidiaries  or (2) otherwise  affiliated  with the Company are
entitled  to receive  compensation  for  serving as  directors  in the amount of
$25,000 per annum,  $1,500 per Board meeting attended in person or by telephone,
and $1,000 per Committee  meeting attended in person or by telephone (other than
members of the Audit  Committee).  Committee  Chairmen  also receive  additional
compensation  in the amount of $5,000 per annum  (other than the Chairman of the
Audit  Committee).  Each Audit Committee member receives a payment of $5,000 per
year, and the Chairman of the Audit Committee  receives a payment of $10,000 per
year. Members of Special Committees receive a payment of $10,000 per year.


                                      108


      Mr.  Garen W. Smith  became a  consultant  of the  Company  pursuant  to a
one-year  consulting  agreement  between the Company and  Abundance  Corporation
("Abundance"),  of which Mr. Smith is an officer and an employee, dated February
12, 2003. The agreement terminated pursuant to its terms in February 2005.

      WPN MANAGEMENT AGREEMENT.  Pursuant to a management agreement effective as
of January 3, 1991, as amended,  which was  initially  approved by a majority of
the Company's  disinterested  directors,  and was terminated on January 31, 2004
(the  "Management  Agreement"),  WPN Corp.  ("WPN"),  of which Ronald LaBow, the
former  Chairman of the Board of the  Company,  is the sole  stockholder  and an
officer and director,  provided financial,  management,  advisory and consulting
services to the Company, subject to the supervision and control of the Company's
disinterested directors.  Messrs. Trangucci, Tabin and Arnold were also officers
of WPN until  January  2004.  WPN  received a monthly  fee of  $520,833.33  from
January  through October of 2003, and $400,000 for each of November and December
of 2003, and January 2004.  The Company  believed that the cost of obtaining the
type and quality of services rendered by WPN under the Management  Agreement was
no less  favorable  than that at which the  Company  could  have  obtained  such
services from unaffiliated entities.

      EMPLOYMENT  AGREEMENTS.  Mr. Neale X.  Trangucci  became  Chief  Executive
Officer  of the  Company  pursuant  to a  two-year  employment  agreement  dated
February 1, 2004.  The  agreement  provides for an annual salary of no less than
$550,000 and an annual bonus to be awarded at the Company's sole discretion.  In
the event that either (i) the  agreement is terminated by the Company other than
with cause, or (ii) he elects termination following a material diminution in his
position or a change in control of the  Company,  Mr.  Trangucci  will receive a
payment  of twice the base  salary in  effect  at the time of  termination.  Mr.
Trangucci was granted a bonus of $100,000 in February 2005 in recognition of his
services in 2004, as well as to incentivize him in connection with the Company's
recapitalization.  Effective  March 4, 2005, the Company entered into an Amended
and Restated  Employment  Agreement with Mr. Trangucci,  as described below. Mr.
Trangucci  resigned from his position with the Company  effective  September 20,
2005 as further discussed below.

      Mr. Stewart E. Tabin was employed as President of the Company  pursuant to
a two-year  employment  agreement dated February 1, 2004. The agreement provides
for an annual  salary of no less than $500,000 and an annual bonus to be awarded
at the Company's sole discretion.  In the event that either (i) the agreement is
terminated by the Company other than with cause,  or (ii) he elects  termination
following a material  diminution  in his  position or a change in control of the
Company,  Mr. Tabin will receive a payment of twice the base salary in effect at
the time of  termination.  Mr. Tabin was granted a bonus of $100,000 in February
2005 in recognition  of his services in 2004, as well as to  incentivize  him in
connection  with the Company's  recapitalization.  Effective  March 4, 2005, the
Company  entered  into an Amended and  Restated  Employment  Agreement  with Mr.
Tabin, as described below. Mr. Tabin resigned from his position with the Company
effective September 20, 2005 as further discussed below.

      Mr. Neil Arnold  became  Executive  Chairman of the Company  pursuant to a
two-year employment agreement dated February 1, 2004. The agreement provides for
an annual  salary of no less than  $450,000 and an annual bonus to be awarded at
the  Company's  sole  discretion.  In the event that either (i) the agreement is
terminated by the Company other than with cause,  or (ii) he elects  termination
following a material  diminution  in his  position or a change in control of the
Company, Mr. Arnold will receive a payment of twice the base salary in effect at
the time of termination.  Mr. Arnold was granted a bonus of $100,000 in February
2005 in recognition  of his services in 2004, as well as to  incentivize  him in
connection  with the Company's  recapitalization.  Effective  March 4, 2005, the
Company  entered  into an Amended and  Restated  Employment  Agreement  with Mr.
Arnold,  as described  below.  Mr.  Arnold  resigned  from his position with the
Company effective August 10, 2005 as further discussed below.

      Mr. Robert K. Hynes became Vice  President-Finance of the Company pursuant
to a one-year  employment  agreement dated July 1, 2001, which has been and will
continue to be  automatically  extended for successive  one-year  periods unless
earlier terminated  pursuant to the provisions of such agreement.  Mr. Hynes was
promoted to Chief Financial Officer in January 2003. The agreement  provides for
an annual salary to Mr. Hynes of no less than $200,000 and an annual bonus to be
awarded at the  Company's  sole  discretion.  Mr.  Hynes was  granted a bonus of
$100,000, $75,000, and $75,000 in each of 2005, 2004 and 2003, respectively, for
services  performed  in the prior  year.  In the event  that his  employment  is
terminated  by the  Company  other than with  cause,  Mr.  Hynes will  receive a
payment of one year's base  salary at the highest  rate in effect for the twelve
preceding  months plus bonus plan and compensation  accrued.  Effective March 4,
2005, the Company entered into an Amended and Restated Employment Agreement with
Mr. Hynes, as described below.

      Mr.  Daniel P. Murphy,  Jr. has been the  President of H&H since  February
2003.  On February  11, 2004,  Mr.  Murphy  entered  into a two-year  employment
agreement  with  H&H,  which  has been and will be  automatically  extended  for
successive two-year periods unless earlier terminated pursuant to the provisions
of such agreement.  The agreement  provides for an annual salary of no less than
$350,000 and an annual bonus to be awarded at H&H's sole discretion, as ratified
by the Board of WHX. Mr.  Murphy was granted  bonuses of $140,000,  $125,000 and
$110,000 in 2005,  2004 and 2003,  respectively,  for services  performed in the
prior year.  In the event that either (i) the  agreement  is  terminated  by H&H
other than with cause, and other than due to Mr. Murphy's death or disability,or
(ii) he elects  termination  following a material  diminution in his position or
relocation  of the  Company's  headquarters,  and the Company fails to cure such
diminution or relocation  within ten days of receipt of written  notice from Mr.
Murphy,  or (iii) a change in  control of H&H (as to which H&H has the option to
continue  his  employment  for a sixty-day  period),  Mr.  Murphy will receive a
payment of two years'  base  salary at the base  salary in effect at the time of
termination.


                                      109


      On March 4, 2005, WHX and H&H entered into amended and restated employment
agreements with each of Messrs. Trangucci, Tabin, Arnold and Hynes. Such amended
and restated employment agreements had the following principal changes from each
such executive's original employment agreement: (i) H&H was added as a party and
each of such  executives'  duties  were  expanded  to  specifically  include the
performance  of  executive  management  services on behalf of H&H;  (ii) each of
Messrs. Trangucci, Tabin and Arnold are entitled to a bonus of $250,000 upon the
entry of an order by a court of competent  jurisdiction  confirming a plan filed
by the Company, or its successor, under Chapter 11 of the United States Code, if
such executive is still employed by the WHX Group on such date, and if not still
employed  on  such  date,  such  bonus  shall  be  paid  under  certain  limited
circumstances;  (iii) the Amended and Restated Employment Agreements for each of
Messrs.  Tabin and Trangucci provide for certain retirement benefits pursuant to
a separate unfunded agreement to the extent such benefits cannot be fully funded
under the  Company's  Pension  Plan;  (iv) the  Company  and H&H are jointly and
severally  liable for all amounts to be paid to each executive there under;  and
(v) the indemnification  provisions were amended to, among other things, provide
for  indemnification  of the  executives by the WHX Group to the fullest  extent
permitted by the Company's Certificate of Incorporation and By-Laws and Delaware
General  Corporation  Law. On March 4, 2005,  the WHX Group also adopted the WHX
Corporation  Supplemental Executive Retirement Plan, effective as of February 1,
2004,  which  provides  for  specified  benefits  to be paid to  certain  of the
executives  pursuant  to the  terms of their  Amended  and  Restated  Employment
Agreements.

      Each of Messrs.  Trangucci,  Tabin and Arnold  received a bonus payment of
$250,000 on July 26, 2005, in connection with the confirmation of the plan filed
by WHX under Chapter 11 of the United States Code pursuant to the terms of their
amended and restated employment  agreements.  In connection with his resignation
on August 10,  2005 Mr.  Arnold  received a  severance  payment of  $900,000  as
required by his Employment  Agreement  following the effective date of the Plan.
In connection  with the  resignation  of Messrs.  Trangucci and Tabin from their
respective  positions with the Company on September 20, 2005, Messrs.  Trangucci
and Tabin  received  severance  payments equal to $1.1 million and $1.0 million,
respectively as required by each of their  employment  agreements  following the
Effective Date of the Plan.

      Pursuant to  Acknowledgement  and Release  Agreements,  dated November 10,
2005, each of Messrs.  Murphy and Hynes agreed to remain with the Company in the
period after the Company's emergence from bankruptcy. Each of Messrs. Murphy and
Hynes  agreed to remain an employee  of the  Company  through at least March 31,
2006 in exchange for (i) a cash bonus of $250,000  paid on March 31, 2006 to Mr.
Murphy,  and $250,000 to Mr. Hynes,  payable in installments,  the last of which
vests upon  filing of the  Company's  2005 Annual  Report on Form 10-K,  (ii) an
increase in the life insurance levels provided in the H&H  Post-Retirement  Life
Insurance Program and (iii)  recommendations to the Board of 100,000 options and
25,000 options,  respectively, to purchase Company common stock upon adoption of
a stock option plan.  In addition,  each of Messrs  Murphy and Hynes  provided a
release to the Company.

      Ms. Ellen T. Harmon became Vice  President,  Secretary and General Counsel
of the Company pursuant to a one year employment  agreement on February 6, 2006,
which will be  automatically  extended for  successive  one-year  periods unless
earlier  terminated  pursuant to its terms. The agreement provides for an annual
salary of no less than  $260,000;  25,000  options to  purchase  Company  common
stock;  and an annual bonus to be awarded at the Company's sole  discretion.  In
the event that either (i) the  agreement is terminated by the Company other than
with cause, and other than due to Ms. Harmon's death or disability,  or (ii) Ms.
Harmon elects termination  following a material diminution in her position, or a
relocation  of the  Company's  headquarters,  and the Company fails to cure such
diminution  or relocation  within 10 days of receipt of written  notice from Ms.
Harmon,  she will receive a payment of one year's base salary at the base salary
in effect at the time of termination plus monthly COBRA payments (which will end
if she  becomes  eligible  to  receive  comparable  benefits  from a  subsequent
employer),   any  bonus  payments  to  which  she  may  then  be  entitled,  and
continuation of a car allowance.  In the event that Ms.  Harmon's  employment is
terminated  due to her death or  disability,  her  estate  will be paid all life
insurance  proceeds to which it is entitled and she will be paid any  disability
insurance proceeds to which she is entitled, respectively.

COMPENSATION  COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.  Messrs.  Davidow,
Goldsmith  and Olshan each served as a member of the  Compensation  Committee of
the Board  during the fiscal  year ended  December  31,  2004.  Mr.  Olshan is a
retired partner of Olshan Grundman Frome Rosenzweig & Wolosky LLP ("OGFR&W") and
retains the title of Of Counsel.  The Company has retained OGFR&W as its outside
counsel since January 1991. The fees paid such firm by the Company do not exceed
5% of such firm's gross revenues for the fiscal year ended December 31, 2004.



ITEM 12.    SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT AND
            RELATED STOCKHOLDER MATTERS

      The following  table sets forth  information  concerning  ownership of the
Common Stock of WHX  outstanding  at November 3,, 2006, by (i) each person known
by the  Company  to be the  beneficial  owner of more than five  percent  of its
Common Stock, (ii) each director,  (iii) each of the executive officers named in
the summary  compensation table and (iv) all directors and executive officers of
the Company as a group.


                                      110


                                                  Shares
                                               Beneficially     Percentage
Name and Address of Beneficial Owner             Owned(1)      of Class(1)
-------------------------------------            --------      -----------
Steel Partners II, L.P.(2).................      5,029,793          50.3%
590 Madison Avenue
New York, New York  10022

Praesidium Investment Management Company,          726,541          7.27%
LLC (3)....................................
747 Third Avenue
New York, New York  10017

GAMCO Investors, Inc (4)...................        620,270          6.20%
One Corporate Center
Rye, New York  10580-1435

Warren Lichtenstein (2)....................      5,029,793          50.3%

Louis Klein Jr.............................          2,000              *

Garen W. Smith(5)..........................            285              *

Joshua E. Schechter........................              0              0

John J. Quicke................................           0              0

Glen M. Kassan.............................              0              0

Jack L. Howard.............................              0              0

Daniel P. Murphy...........................              0              0

Robert K. Hynes............................              0              0

Neale X. Trangucci.........................              0              0

Stewart E. Tabin...........................              0              0

Neil Arnold................................              0              0

All Directors and Executive Officers as a
Group
(12 persons) ..............................      5,032,078          50.3%

----------------------------
* less than 1%

(1) Based  upon  shares of  Common  Stock  outstanding  at  November  3, 2006 of
10,000,485 shares.

(2) Based upon  Amendment  No. 2 to  Schedule  13D filed by Steel on October 31,
2005, Steel  beneficially owns 5,029,793 shares of Common Stock. Steel Partners,
L.L.C.  ("Steel  L.L.C.")  as the general  partner  for Steel,  may be deemed to
beneficially own the shares of Common Stock owned by Steel. Mr. Lichtenstein, as
the sole executive officer and managing member of Steel L.L.C., may be deemed to
beneficially own the shares of Common Stock owned by Steel. Mr. Lichtenstein has
sole voting and dispositive power with respect to the 5,029,793 shares of Common
Stock  owned by Steel by virtue of his  authority  to vote and  dispose  of such
shares. Mr. Lichtenstein  disclaims beneficial ownership of the shares of Common
Stock owned by Steel except to the extent of his pecuniary interest therein.

(3) Based on a Schedule 13G filed by Praesidium  Investment  Management Company,
LLC  ("Praesidium") on November 15, 2005,  Praesidium  beneficially owns 726,541
shares of Common Stock.

(4) Based on a Schedule 13G filed by GAMCO Investors,  Inc. on November 2, 2006,
GAMCO beneficially owns 620,270 shares of Common Stock.


                                      111


(5) Includes 138 shares of Common Stock  issuable upon his exercise of a warrant
within 60 days hereof.



EQUITY COMPENSATION PLAN SUMMARY

       The  following  table sets forth  information  as of  December  31,  2005
regarding the number of shares of Common Stock issued and available for issuance
under the Company's existing equity compensation plans:

                                                               Number of securities
                                                              remaining available for
                                         Weighted-average      future issuance under
               Number of securities to   exercise price of   equity compensation plans
               be issued upon exercise      outstanding        (excluding securities
               of outstanding options,   options, warrants         reflected in
Plan category    warrants and rights        and rights              column (a))
--------------------------------------------------------------------------------------
                         (a)                    (b)                    (c)

Warrants               752,688                11.20


ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Warren G. Lichtenstein,  Chairman of the Board of the Company,  is also the sole
executive  officer and managing  member of Steel L.L.C.,  the general partner of
Steel.  Mr.  Lichtenstein is also the President,  Chief Executive  Officer and a
Director of SPL, a management  and advisory  company  that  provides  management
services  to Steel  and its  affiliates.  Steel  owns  5,029,793  shares  of the
Company's  Common  Stock.  In  addition,  Glen M.  Kassan  (Director  and  Chief
Executive  Officer of WHX), John J. Quicke (Director and Vice President of WHX),
Jack L. Howard  (Director) and Joshua E.  Schechter  (Director) are employees of
Steel Partners, Ltd., an affiliate of Steel.

      Marvin L.  Olshan,  a director  of the  Company  through  July 2005,  is a
retired partner of Olshan Grundman Frome Rosenzweig & Wolosky LLP ("OGFR&W") who
retains the title Of Counsel at OGFR&W.  The  Company has engaged  OGFR&W as its
outside  counsel since  January 1991.  The fees paid such firm by the Company do
not exceed 5% of such firm's gross  revenues for the fiscal year ended  December
31, 2004.

      Neil D. Arnold,  a director of the Company  through July 2005,  joined WPN
Corp.  as an officer in August 2001.  WPN Corp. is wholly owned by Ronald LaBow,
who is the former Chairman of the Board and was party to a management  agreement
with the Company until January 31, 2004.

      Garen W. Smith,  a director of the Company,  owns 49% of Abundance  Corp.,
which had a consulting  agreement with WHX (as it existed prior to the effective
date of the Chapter 11 Plan of  Reorganization)  that  terminated in February of
2005.  Abundance  Corp.  was paid  $200,000  per  annum  under  the terms of the
consulting agreement.

      Each of Messrs.  Trangucci,  Tabin and Arnold  received a bonus payment of
$250,000.  In connection with his resignation on August 10, 2005, as required by
his  Employment  Agreement  following the effective date of the Plan, Mr. Arnold
received a severance payment of $900,000.  In connection with the resignation of
Messrs.  Trangucci and Tabin from their respective positions with the Company on
September 20, 2005, as required by each of their employment agreements following
the effective date of the Plan,  Messrs.  Trangucci and Tabin received severance
payments equal to $1.1 million and $1.0 million, respectively.

      Pursuant  to the  Management  Agreement  with  WPN,  which  was  initially
approved  by a  majority  of  the  Company's  disinterested  directors  and  was
terminated  on January  31,  2004,  WPN  provided  the Company  with  financial,
management,  advisory,  and consulting services,  subject to the supervision and
control of the disinterested  directors.  Messrs.  Trangucci,  Tabin, and Arnold
were officers of WPN until January 2004.  The Company  believed that the cost of
obtaining the type and quality of services  rendered by WPN under the Management
Agreement  was no less  favorable  than the cost at which the Company could have
obtained such services from unaffiliated entities.

      As previously  described,  pursuant to the Management  Agreement with WPN,
WPN  provided  financial,  management  advisory and  consulting  services to the
Company,  including the  management of the assets of the WHX Pension Plan Trust.
On February 1, 2004,  WPN entered into an Investment  Consulting  Agreement with
the Company on behalf of the WHX Pension Plan Trust  pursuant to which WPN Corp.


                                      112


would continue to manage the assets of the WHX Pension Plan Trust. Ronald LaBow,
the former Chairman of the Board of the Company,  is the sole stockholder and an
officer and director of WPN Corp.  Under the Agreement,  WPN Corp. is paid .525%
per year of the amount of the assets  under  management.  The WHX  Pension  Plan
Trust  Agreement was  negotiated by a board  committee  composed of  independent
directors,   which  committee   recommended  the  approval  of  such  Investment
Consulting Agreement to the full board, which approved such agreement.




ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES


FEES

      PricewaterhouseCoopers LLP, or "PwC," served as our independent registered
public  accounting  firm,  or  "independent  auditor" for the fiscal years ended
December 31, 2003 and 2004. PwC's fees and expenses for services  rendered to us
for the  past  two  fiscal  years  are set  forth in the  table  below.  We have
determined that the provision of these services is compatible  with  maintaining
the independence of our independent  auditors.  The aggregate fees billed by PwC
were as follows:

                                  2003          2003
Fees:               2004           WHX        WPC Group
                 ----------    ----------    ----------

Audit            $2,634,722    $  590,000    $   88,000
Audit-related       218,850        88,000        37,000
Tax                  95,900        27,000          --
Other                  --            --          37,000
                 ----------    ----------    ----------

Total            $2,949,472    $  705,000    $  162,000
                 ==========    ==========    ==========


      Audit fees were for services in connection with the audit of the financial
statements  included  in our  Annual  Report  on Form  10-K and  reviews  of the
financial   statements   included  in  our  Quarterly   Reports  on  Form  10-Q.
Audit-related  fees were for services in connection  with employee  benefit plan
audits.  Tax fees related to tax  compliance,  preparation  of tax returns,  tax
planning and tax assistance for international service employees.  All other fees
related to bankruptcy case administration.


POLICY ON PRE-APPROVED AUDIT SERVICES


       WHX's  Audit   Committee  has  established   pre-approval   policies  and
procedures that govern the engagement of PwC and the services provided by PwC to
us. The policies and  procedures  are  detailed as to the  particular  services.
WHX's Audit  Committee  is informed of the  services  provided to us by PwC. All
fees  and  expenses  for  services  rendered  by  PwC  in  2004  and  2005  were
pre-approved by our Audit Committee.


                                      113


                                     PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

   (a) 3.   EXHIBITS


       2.1   First  Amended  Chapter 11 Plan of  Reorganization  of the Company,
             dated June 8, 2005 (incorporated by reference to Exhibit 2.1 to the
             Company's Form 8-K filed July 28, 2005).
       2.2   Third Amended Joint Plan of Reorganization  of  Wheeling-Pittsburgh
             Steel Corporation, dated May 19, 2003 (incorporated by reference to
             Exhibit  2.1  to  Wheeling-Pittsburgh   Corporation's  Registration
             Statement on Form 10).
       3.1   Amended  and  Restated   Certificate   of   Incorporation   of  WHX
             (incorporated  by  reference to Exhibit 3.1 to the  Company's  Form
             10-K filed December 27, 2006).
       3.2   Amended and Restated  By-Laws of WHX  (incorporated by reference to
             Exhibit 3.2 to the Company's Form 10-K filed December 27, 2006).
       4.1   Loan and Security Agreement by and among Handy & Harman, certain of
             its affiliates and Congress Financial Corporation,  dated March 31,
             2004  (incorporated  by reference  to Exhibit 4.2 to the  Company's
             Form 10-K filed April 14, 2004).
       4.2   Consent and Amendment  No. 1 to Loan and Security  Agreement by and
             among  Handy &  Harman,  certain  of its  affiliates  and  Congress
             Financial Corporation, dated as of August 31, 2004 (incorporated by
             reference to Exhibit 4.1 to the Company's  Form 10-Q filed November
             15, 2004).
       4.3   Amendment No. 2 to Loan and Security Agreement by and among Handy &
             Harman,   certain  of  its   affiliates   and  Congress   Financial
             Corporation,   dated  as  of  October  29,  2004  (incorporated  by
             reference to Exhibit 4.2 to the Company's  Form 10-Q filed November
             15, 2004).
       4.4   Amendment No. 3 to Loan and Security Agreement by and among Handy &
             Harman,   certain  of  its   affiliates   and  Congress   Financial
             Corporation,  dated  as of  December  29,  2004.  (incorporated  by
             reference to Exhibit 4.4 to the Company's  Form 10-K filed December
             27, 2006).
       4.5   Amendment No. 4 to Loan and Security Agreement by and among Handy &
             Harman,  certain of its  affiliates  and  Wachovia  Bank,  National
             Association, a national banking association, successor by merger to
             Congress   Financial   Corporation,   dated  as  of  May  20,  2005
             (incorporated  by  reference to Exhibit 4.5 to the  Company's  Form
             10-K filed December 27, 2006).
       4.6   Amendment No. 5 to Loan and Security Agreement by and among Handy &
             Harman,  certain of its  affiliates  and  Wachovia  Bank,  National
             Association, a national banking association, successor by merger to
             Congress  Financial  Corporation,  dated as of  September  8,  2005
             (incorporated  by  reference to Exhibit 4.6 to the  Company's  Form
             10-K filed December 27, 2006).
       4.7   Amendment  No. 6 and Waiver to Loan and  Security  Agreement by and
             among Handy & Harman,  certain of its affiliates and Wachovia Bank,
             National Association, a national banking association,  successor by
             merger to Congress Financial Corporation,  dated as of December 29,
             2005  (incorporated  by reference  to Exhibit 4.7 to the  Company's
             Form 10-K filed December 27, 2006).
       4.8   Consent and Amendment  No. 7 to Loan and Security  Agreement by and
             among Handy & Harman,  certain of its affiliates and Wachovia Bank,
             National Association, a national banking association,  successor by
             merger to Congress Financial  Corporation,  dated as of January 24,
             2006  (incorporated  by reference  to Exhibit 4.8 to the  Company's
             Form 10-K filed December 27, 2006).
       4.9   Amendment No. 8 to Loan and Security Agreement by and among Handy &
             Harman,  certain of its  affiliates  and  Wachovia  Bank,  National
             Association, a national banking association, successor by merger to
             Congress  Financial  Corporation,   dated  as  of  March  31,  2006
             (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K
             filed April 6, 2006).


                                      114


       4.10  Amendment  No. 9 to the Loan and  Security  Agreement  by and among
             Handy &  Harman,  certain  of its  affiliates  and  Wachovia  Bank,
             National Association, a national banking association,  successor by
             merger to Congress Financial Corporation, dated as of July 18, 2006
             (incorporated  by reference to Exhibit 99.1 to the  Company's  Form
             8-K filed July 24, 2006).
       4.11  Amendment  No. 10 to the Loan and  Security  Agreement by and among
             Handy &  Harman,  certain  of its  affiliates  and  Wachovia  Bank,
             National Association, a national banking association,  successor by
             merger to Congress Financial  Corporation,  dated as of October 30,
             2006  (incorporated  by reference to Exhibit 99.1 to the  Company's
             Form 8-K filed November 03, 2006).
       4.12  Amendment  No. 11 to the Loan and  Security  Agreement by and among
             Handy & Harman and its  subsidiaries,  and Wachovia Bank,  National
             Association,  as agent,  dated December 28, 2006  (incorporated  by
             reference to Exhibit 99.1.3 to the Company's Form 8-K filed January
             4, 2007).
       4.13  Amendment  No. 12 to the Loan and  Security  Agreement by and among
             Handy & Harman and its  subsidiaries,  and Wachovia Bank,  National
             Association,  as agent,  dated December 28, 2006  (incorporated  by
             reference to Exhibit 99.1.4 to the Company's Form 8-K filed January
             4, 2007).
       4.14  Certificate  of  Designations,  Preferences  and Other  Rights  and
             Qualifications  of  Series  A  Preferred  Stock  of  WHX  CS  Corp.
             (incorporated by reference to Exhibit 4.1 to the Company's Form 8-K
             filed November 1, 2005).
       4.15  Loan and Security Agreement by and among Handy & Harman, certain of
             its  affiliates  and  Ableco  Finance  LLC,  dated  March 31,  2004
             (incorporated  by  reference to Exhibit 4.3 to the  Company's  Form
             10-K filed April 14, 2004).
       4.16  Loan and Security Agreement  Amendment by and among Handy & Harman,
             certain of its  affiliates  and  Canpartners  Investments  IV, LLC,
             dated as of October 29, 2004  (incorporated by reference to Exhibit
             4.3 to the Company's Form 10-Q filed November 15, 2004).
       4.17  Amendment No. 2 to Loan and Security Agreement by and among Handy &
             Harman,  certain of its affiliates and Canpartners  Investments IV,
             LLC,  dated as of December 29, 2004  (incorporated  by reference to
             Exhibit 4.15 to the Company's Form 10-K filed December 27, 2006).
       4.18  Amendment  No. 3 and Waiver to Loan and  Security  Agreement by and
             among Handy & Harman,  certain of its affiliates and Steel Partners
             II, L.P., successor by assignment from Canpartners  Investments IV,
             LLC,  dated as of December 29, 2005  (incorporated  by reference to
             Exhibit 4.16 to the Company's Form 10-K filed December 27, 2006).
       4.19  Consent and Amendment  No. 4 to Loan and Security  Agreement by and
             among Handy & Harman,  certain of its affiliates and Steel Partners
             II, L.P., successor by assignment from Canpartners  Investments IV,
             LLC,  dated as of January 24, 2006  (incorporated  by  reference to
             Exhibit 4.17 to the Company's  Form 10-K filed  December 27, 2006).
       4.20  Amendment No. 5 to Loan and Security Agreement by and among
             Handy & Harman,  certain of its  affiliates  and Steel Partners II,
             L.P., successor by assignment from Canpartners Investments IV, LLC,
             dated as of March 31, 2006  (incorporated  by  reference to Exhibit
             4.2 to the Company's Form 8-K filed April 6, 2006).
       4.21  Amendment No. 6 to the Loan and Security Agreement by and
             among Handy & Harman, certain of its affiliates and Steel
             Partners  II,  L.P.,   successor  by  assignment  from  Canpartners
             Investments  IV, LLC,  dated as of July 18, 2006  (incorporated  by
             reference to Exhibit 99.2 to the Company's  Form 8-K filed July 24,
             2006).
       4.22  Amendment  No. 7 to the Loan and  Security  Agreement  by and among
             Handy & Harman,  certain of its  affiliates  and Steel Partners II,
             L.P., successor by assignment from Canpartners Investments IV, LLC,
             dated as of October 30, 2006  (incorporated by reference to Exhibit
             99.2 to the Company's Form 8-K filed November 3, 2006).
       4.23  Amendment  No. 8 to the Loan and  Security  Agreement  by and among
             Handy & Harman and its  subsidiaries,  and Steel  Partners II, L.P,
             dated  December  28, 2006  (incorporated  by  reference  to Exhibit
             99.1.5 to the Company's Form 8-K filed January 4, 2007).
       4.24  Amendment  No. 9 to the Loan and  Security  Agreement  by and among
             Handy & Harman and its subsidiaries,  and Steel Partners ,II., L.P.
             dated  December  28, 2006  (incorporated  by  reference  to Exhibit
             99.1.6 to the Company's Form 8-K filed January 4, 2007).


                                      115


      10.1   Settlement and Release  Agreement by and among  Wheeling-Pittsburgh
             Steel  Corporation  ("WPSC")  and  Wheeling-Pittsburgh  Corporation
             ("WPC"),  the Company and certain  affiliates of WPSC,  WPC and the
             Company (incorporated by reference to Exhibit 99.1 to the Company's
             Form 8-K filed May 30, 2001).
      10.2   Amended and Restated Employment Agreement by and among WHX, H&H and
             Robert  K.  Hynes,  dated  as of  March 4,  2005  (incorporated  by
             reference to Exhibit 10.4 to the Company's  Form 8-K filed March 8,
             2005).
      10.3   Employment  Agreement  by and  between  H&H and  Daniel P.  Murphy,
             effective  February 11, 2004  (incorporated by reference to Exhibit
             10.1 to the Company's Form 10-Q filed November 15, 2004).
      10.4   Warrant  Agreement by and between the Company and  Equiserve  Trust
             Company, N.A., dated as of July 29, 2005 (incorporated by reference
             to  Exhibit  10.4 to the  Company's  Form 10-K filed  December  27,
             2006).
      10.5   Acknowledgement  and Release dated  November 14, 2005, by and among
             WHX, H&H and Robert K. Hynes  (incorporated by reference to Exhibit
             10.2 to the Company's Form 8-K filed April 6, 2006).
      10.6   Acknowledgement and Release dated November 10, 2005, by and between
             H&H and Daniel P. Murphy (incorporated by reference to Exhibit 10.1
             to the Company's 8K filed April 6, 2006).
      10.7   Employment  Agreement  by and among WHX,  H&H and Ellen T.  Harmon,
             dated as of February 6, 2006  (incorporated by reference to Exhibit
             10.7 to the Company's Form 10-K filed December 27, 2006).
      10.8   Stock  Purchase  Agreement  by and between  WHX CS Corp.  and Steel
             Partners  II,  L.P.,  dated  October  26,  2005   (incorporated  by
             reference to Exhibit 10.1 to the Company's  Form 8-K filed November
             1, 2005).
      10.9   Supplemental  Executive Retirement Plan (As Amended and Restated as
             of January 1, 1998)  (incorporated  by reference to Exhibit 10.9 to
             the Company's Form 10-K filed December 27, 2006).
      10.10  Agreement by and among the Pension  Benefit  Guaranty  Corporation,
             WHX       Corporation,       Wheeling-Pittsburgh       Corporation,
             Wheeling-Pittsburgh  Steel Corporation and the United Steel Workers
             of America,  AFL-CIO-CLC,  dated as of July 31, 2003 ( incorporated
             by  reference  to Exhibit  10.10 to the  Company's  Form 10-K filed
             December 27, 2006).
      10.11  2006 Bonus Plan of the Company. (incorporated by reference
             to Exhibit 10.11 to the Company's Form 10-K filed December
             27, 2006)
             10.12 Settlement  Agreement by and among WHX  Corporation,  Handy &
             Harman, and Pension Benefit Guaranty Corporation dated December 28,
             2006  (incorporated by reference to Exhibit 99.1.2 to the Company's
             Form 8-K filed January 4, 2007).
     *10.12  Asset Purchase Agreement by and among Illinois Tool Works Inc., ITW
             Canada, OMG Roofing, Inc. and OMG, Inc, dated December 28, 2006.
      14.1   Code of Ethics of WHX  Corporation  (incorporated  by  reference to
             Exhibit 14.1 to the Company's Form 10-K filed December 27, 2006).
      21.1   Subsidiaries  of Registrant  (incorporated  by reference to Exhibit
             21.1 to the Company's Form 10-K filed December 27, 2006).
     *31.1   Certification  by Principal  Executive  Officer pursuant to Section
             302 of the Sarbanes-Oxley Act of 2002.
     *31.2   Certification  by Principal  Financial  Officer pursuant to Section
             302 of the Sarbanes-Oxley Act of 2002.
     *32     Certification   by  Principal   Executive   Officer  and  Principal
             Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
             of 2002.


   (b) Financial Statements and Schedules:

      1.Audited Financial Statements of WHX Corporation (Parent Only).

      2. Schedule II - Valuation and Qualifying Accounts and Reserves


* - filed herewith.


                                      116


                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on March 8, 2007.

                                          WHX CORPORATION


                                          By: /s/ Glen M. Kassan
                                              ---------------------------
                                          Name:  Glen M. Kassan
                                          Title: Chief Executive Officer

                                POWER OF ATTORNEY

      WHX  Corporation  and each of the  undersigned  do hereby  appoint Glen M.
Kassan  and Robert K.  Hynes,  and each of them  severally,  its or his true and
lawful  attorney to execute on behalf of WHX Corporation and the undersigned any
and all  amendments to this Annual Report on Form 10-K and to file the same with
all exhibits  thereto and other  documents  in  connection  therewith,  with the
Securities and Exchange Commission;  each of such attorneys shall have the power
to act hereunder with or without the other.

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

By: /s/ Warren G. Lichtenstein                            March 8, 2007
    ---------------------------------------------         ------------
    Warren G. Lichtenstein, Chairman of the Board         Date

By: /s/ Glen M. Kassan                                    March 8, 2007
    --------------------------------------------          ------------
    Glen M. Kassan, Director and Chief Executive          Date
    Officer (Principal Executive Officer)

By: /s/ Robert K. Hynes                                   March 8, 2007
    ---------------------------------------------         ------------
    Robert K. Hynes, Chief Financial Officer              Date
    (Principal Accounting Officer)

By: /s/ Joshua E. Schechter                               March 8, 2007
    ---------------------------------------------         ------------
    Joshua E. Schechter, Director                         Date

By: /s/ John J. Quicke                                    March 8, 2007
    ---------------------------------------------         ------------
    John J. Quicke, Director                              Date

By: /s/ Louis Klein, Jr.                                  March 8, 2007
    ---------------------------------------------         ------------
    Louis Klein Jr., Director                             Date

By: /s/ Jack L. Howard                                    March 8, 2007
    ---------------------------------------------         ------------
    Jack L. Howard, Director                              Date

By: /s/ Daniel P. Murphy, Jr.                             March 8, 2007
    ---------------------------------------------         ------------
    Daniel P. Murphy, Jr., Director                       Date

By: /s/ Garen W. Smith                                    March 8, 2007
    ---------------------------------------------         ------------
    Garen W. Smith, Director                              Date



                                      117


            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                        ON FINANCIAL STATEMENT SCHEDULES


To the Board of Directors and
Stockholders of WHX Corporation:

      Our audits of the  consolidated  financial  statements  referred to in our
report  dated  December  14,  2006  appearing  in  the  2004  Annual  Report  to
Shareholders  of  WHX  Corporation  (which  report  and  consolidated  financial
statements  are included in Item 8 of this Form 10-K) also  included an audit of
the financial statement schedules listed in Item 15(b) (1) and Item 15(b) (2) of
this Form 10-K.  In our  opinion,  the  financial  statement  schedules  present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.

      As  discussed in Note 1 to the WHX  Corporation  (Parent  Only)  financial
statements  (the "WHX  financial  statements"),  the 2003 and 2002  consolidated
financial  statements and the 2003 and 2002 WHX financial  statements  have been
restated.

      As discussed in Note 4 to the WHX financial statements,  effective January
1, 2002, WHX Corporation adopted Statement of Financial Accounting Standards No.
142, "Goodwill and Other Intangible Assets".

      The accompanying WHX financial statements have been prepared assuming that
WHX Corporation  (the parent company)  ("WHX") will continue as a going concern.
As more fully described in Note 1 to the WHX financial statements, WHX had their
plan of reorganization (the "Plan") approved by the bankruptcy court and emerged
from bankruptcy effective  July 29, 2005.  The Plan resulted in the discharge of
all  pre-bankruptcy  claims against WHX, except for its liability to its pension
plan,  and  substantially  altered the rights and  interests of equity  security
holders.  WHX is a holding  company  with no bank  facility of its own and since
emerging from bankruptcy has not had access to dividends from its only operating
subsidiary,  Handy & Harman  ("H&H").  Additionally,  H&H has  also  experienced
certain liquidity issues, and its credit facility matures on March 31, 2007. WHX
has as its principal  source of cash certain limited  discrete  transactions and
has significant cash requirements  including the funding of the WHX Pension Plan
and  certain  other  administrative  costs.  If WHX does not  obtain  additional
liquidity,  it is likely that WHX will not have  sufficient  cash to continue to
operate  through 2007 and pay its  liabilities  as they become due in the normal
course of business.  These conditions raise  substantial doubt about the ability
of WHX to continue  as a going  concern.  Management's  plans in regard to these
matters are also  described in Note 1 to the WHX financial  statements.  The WHX
financial  statements  do not include any  adjustments  to reflect the  possible
future effects on the recoverability and classification of assets or the amounts
and  classification  of  liabilities  that may result  from the  outcome of this
uncertainty.


/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
New York, New York
December 14, 2006



WHX CORPORATION (PARENT ONLY)

STATEMENTS OF OPERATIONS
                                                                 Year Ended December 31,
                                                            2004        2003        2002
                                                         ---------    ---------    ---------
                                                                    (As Restated) (As Restated)
                                                                    (In Thousands)
Cost and Expenses:

Pension expense (credit)                                 $  (3,957)   $   5,114    $   7,446
Pension - Curtailment and special benefits                    --         48,102         --
Administrative and general expense                          10,198       10,157        8,531
                                                         ---------    ---------    ---------
       Subtotal - expenses                                   6,241       63,373       15,977
                                                         ---------    ---------    ---------

Interest expense                                            10,775       11,276       16,977
Interest Income -H& H Subordinated Note                     (2,264)        --           --
Gain on early retirement of debt                              --          2,999       42,491
Gain on disposition of WPC                                    --            534         --
Contribution to WPC group                                     --           --         20,000
Gain on sale of Unimast net of taxes                          --           --         11,860
Other income (expense) - net                                 5,940       (2,369)      (2,495)
                                                         ---------    ---------    ---------
LOSS BEFORE TAXES AND EQUITY LOSSES OF SUBSIDIARIES         (8,812)     (73,485)      (1,098)
Tax provision                                                 --          7,800        2,465
                                                         ---------    ---------    ---------
Net loss before equity in after-tax
    losses of subsidiaries                                  (8,812)     (81,285)      (3,563)
Equity in after tax losses of subsidiaries                (131,632)     (78,639)     (13,810)
Equity in after tax income of discontinued operations         --           --         10,601
Equity in cumulative effect of change in accounting by
subsidiaries                                                  --           --        (41,129)
                                                         ---------    ---------    ---------

NET LOSS                                                  (140,444)    (159,924)     (47,901)
Less: Dividend requirement for preferred stock              19,424       19,424       19,224
                                                         ---------    ---------    ---------
Net loss applicable to common stock                      $(159,868)   $(179,348)   $ (67,125)
                                                         =========    =========    =========

SEE NOTES TO PARENT ONLY FINANCIAL STATEMENTS


                                       F-2


WHX CORPORATION (PARENT ONLY)
Balance Sheets
                                                                           December 31,
                                                                   -----------------------------
                                                                     2004              2003
                                                                   -----------------------------
                  ASSETS                                                           (As Restated)
                                                                          (in thousands)

Current assets:
Cash and cash equivalents                                          $     458        $     312
Other current assets                                                   2,698            3,408
                                                                   ---------        ---------
    Total current assets                                               3,156            3,720

Investment in and advances to subsidiaries - net                      12,566          196,336
Intangible pension asset                                               1,953              716
Prepaid pension asset                                                   --               --
Subordinated Note - Handy & Harman                                    49,290            3,577
Deferred income taxes                                                   --               --
Deferred charges and other assets                                        390            3,886
                                                                   ---------        ---------
                                                                   $  67,355        $ 208,235
                                                                   =========        =========

    LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current liabilities:
Accrued expenses                                                   $   5,482        $   4,055
Current portion of long-term debt                                     92,820             --
                                                                   ---------        ---------
    Total current liabilities                                         98,302            4,055

Long-term debt                                                          --             92,820
Accrued pension liability                                             18,786           27,367
Other post-employment benefits                                           194             --
Additional minimum pension liability                                  47,002           20,313
                                                                   ---------        ---------
                                                                     164,284          144,555
                                                                   ---------        ---------

Commitments and contingencies

Stockholders' (Deficit) Equity:
Preferred stock - $.10 par value; 10,000 shares authorized;
   5,523 shares issued and outstanding                                   552              552
Common stock - $.01 par value;  60,000 shares authorized;
   5,486 shares issued and outstanding                                    55               55
Accumulated other comprehensive  loss                                (36,611)         (16,380)
Additional paid-in capital                                           556,206          556,206
Unearned compensation - restricted stock awards                          (33)             (99)
Accumulated deficit                                                 (617,098)        (476,654)
                                                                   ---------        ---------
                                                                     (96,929)          63,680
                                                                   ---------        ---------
                                                                   $  67,355        $ 208,235
                                                                   =========        =========

SEE NOTES TO PARENT ONLY FINANCIAL STATEMENTS


                                              F-3



WHX CORPORATION (PARENT ONLY)
CONSOLIDATED STATEMENTS OF CASH FLOWS                                              Year Ended December 31,
                                                                       -----------------------------------------------
                                                                          2004             2003             2002
                                                                       ---------        ---------         ---------
              (in thousands)                                                          (As restated)     (As restated)
Cash flows from operating activities:
   Net loss                                                            $(140,444)       $(159,924)        $ (47,901)
   Items not affecting cash from operating activities:
      Amortization of deferred financing fees                                992              951             1,651
      Deferred income taxes                                                 --              2,471             2,465
      Gain on WPSC note recovery                                          (5,596)            --
      Gain on sale of discontinued operations                                                               (18,747)
      Equity in after-tax losses of subsidiaries                         131,632           78,639            20,810
      Equity in cumulative effect of change in
        accounting by subsidiaries                                          --               --              41,129
      Equity in after-tax income from discontinued operations               --               --             (10,601)
      Gain on disposition of WPC                                            --               (534)             --
      Pension curtailment and special benefits                              --             48,102              --
      Gain on early retirement of debt                                      --             (2,999)          (42,491)
 Decrease/(increase)  in  working  capital  elements
      Receivables - including affiliated companies                        55,037           76,165            54,472
      Other current                                                       (6,194)          (9,277)            6,019
 Other items (net)                                                         2,572              958               335
                                                                       ---------        ---------         ---------
 Net cash provided by operating activities                                37,999           34,552             7,141
                                                                       ---------        ---------         ---------

 Cash flows from investing activities:
      Receipts from/(advances to) WPC                                       --            (19,500)            1,250
      Dividend from affiliated companies                                    --              2,713              --
      Handy & Harman - Subordinated Note                                 (43,449)            --                --
      Cash received on WPSC note recovery                                  5,596             --                --
      Net proceeds from sale of  discontinued operations                                                     84,869
      Contribution to Handy & Harman                                        --             (8,000)           (5,000)
                                                                       ---------        ---------         ---------
 Net cash provided by/(used in) by investing activities
                                                                         (37,853)         (24,787)           81,119
                                                                       ---------        ---------         ---------
 Cash flows from financing activities:
      Cash paid on early extinguishment of debt                             --            (14,302)          (87,612)
      Due from Unimast                                                      --              3,204              --
                                                                       ---------        ---------         ---------
 Net cash used by financing activities                                      --            (11,098)          (87,612)
                                                                       ---------        ---------         ---------
 Net change for the period                                                   146           (1,333)              648
 Cash and cash equivalents at beginning of period                            312            1,645               997
                                                                       ---------        ---------         ---------
 Cash and cash equivalents at end of period                            $     458        $     312         $   1,645
                                                                       =========        =========         =========

SEE NOTES TO PARENT ONLY FINANCIAL STATEMENTS


                                                         F-4


NOTES TO WHX PARENT ONLY FINANCIAL STATEMENTS


NOTE 1 - BACKGROUND

      BASIS OF PRESENTATION

      The WHX Corporation (Parent Only) ("WHX") financial statements include the
accounts of all  subsidiary  companies  accounted for under the equity method of
accounting.  Certain information and footnote  disclosures  normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles  ("GAAP")  have been  condensed  or  omitted.  These WHX parent  only
financial  statements  are prepared on the same basis of  accounting  as the WHX
consolidated  financial  statements,   except  that  the  WHX  subsidiaries  are
accounted for under the equity method of accounting.  For a complete description
of the  accounting  policies and other required GAAP  disclosures,  refer to the
Company's audited consolidated  financial statements for the year ended December
31, 2004 contained in Item 8 of this Form 10-K.

        WHX is a  holding  company  that has been  structured  to  invest in and
manage a diverse group of businesses.  Its primary subsidiary company is Handy &
Harman (H&H), a diversified manufacturing company whose strategic business units
encompass  three  segments:  precious  metal,  wire and tubing,  and  engineered
materials.  Other  subsidiaries of WHX include  unrestricted  investments in WHX
Aviation, WHX Metals, and Wheeling-Pittsburgh  Capital Corporation.  These other
subsidiaries  maintain certain investments on behalf of the parent company,  but
have no other operating  activity.  On December 31, 2003 Handy & Harman acquired
the outstanding common stock of Canfield Metal Coatings from WHX in exchange for
a  subordinated  note.  WHX  also  had  a  wholly  owned  subsidiary,   Wheeling
-Pittsburgh  Corporation and its subsidiaries  (the "WPC Group") which filed for
bankruptcy  on November  16, 2000 and,  as a result of this  bankruptcy,  was no
longer  reported  as part of the WHX  consolidated  group  as of the  bankruptcy
filing  date  (See  Note  4 to  the  consolidated  financial  statements  of WHX
Corporation and it  subsidiaries in Item 8 of this Form 10-K (the  "consolidated
financial statements")).

      RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

      As  described in Note 1b to the  consolidated  financial  statements,  WHX
Corporation and its consolidated  subsidiaries  (the "Company") has restated its
2003 and prior  year's  financial  statements  to  correct  its  accounting  for
goodwill  impairment,  certain tax  matters,  and other  corrections,  including
accounting  for derivative  instruments  and the related impact on inventory and
its  accounting  for  an  executive  life  insurance  program,  as  well  as its
presentation of investment  borrowings in the statement of cash flows.  With the
exception of certain tax matters, the items being restated represent adjustments
recorded in the financial statements of the WHX subsidiaries,  and are reflected
in the 2003 and 2002 restated WHX financial  statements as  corrections  to: the
statement of operations - (i) equity in after-tax  losses of  subsidiaries,  and
(ii) equity in cumulative  effect of change in accounting by  subsidiaries;  the
balance  sheet  -  (iii)  investment  in  and  advances  to  subsidiaries,  (iv)
accumulated  comprehensive loss, and (v) accumulated  deficit; and the statement
of cash  flows - (vi)  equity in  after-tax  losses of  subsidiaries,  and (vii)
equity in cumulative effect of change in accounting by subsidiaries .

      WHX  previously  consolidated  its  subsidiaries,  other  than H&H and its
subsidiaries,  in these parent-only financial statements. Upon further review of
the  requirements  for  reporting  under  this  supplemental  schedule,  WHX has
concluded  that its previous  reporting  was incorrect and has restated the 2003
and 2002  financial  statements  to present the parent  company on a stand-alone
basis with all subsidiary activity flowing through equity in after-tax losses of
subsidiaries   within  the  statement  of  operations  and  equity  in  loss  of
subsidiaries  in the  statement  of cash  flows.  In  addition,  the  previously
reported  Investment  in and  advances to  subsidiaries  -net as of December 31,
2003, has been restated from $119,830 to $196,336 to include the net activity of
all subsidiaries of WHX for the year ended December 31, 2003 and prior years.

      LIQUIDITY

      The accompanying financial statements have been prepared assuming WHX will
continue as a going  concern.  WHX has  incurred  net losses of $140.4  million,
$159.9  million,  and $47.9 million for the years ended December 31, 2004,  2003
and 2002,  respectively,  and had an accumulated deficit of $617.1 million as of
December 31, 2004.

      In March 2005, WHX filed for bankruptcy protection under Chapter 11 of the
United States Bankruptcy Code. Following WHX's emergence from bankruptcy in July
2005, it continued to experience  liquidity issues. WHX is a holding company and
has as its sole source of cash flow distributions from its operating subsidiary,
H&H, or other discrete transactions.  H&H's bank credit facilities and term loan
effectively do not permit it to transfer any cash or other assets to WHX and are
collateralized  by  substantially  all of H&H's  assets.  WHX has no bank credit
facility of its own. WHX's operating cash flow  requirements  consist of funding
the  supplemental  retirement  plan,  certain  employee-related  costs  and  the


                                      F-5


bankruptcy-related  expenses,  all of which were paid by March 31,  2006.  On an
ongoing  basis,  WHX is required to meet the  funding  requirements  for the WHX
Pension Plan and pay other administrative costs.

      Since  emerging from  bankruptcy,  due to covenant  restrictions  in H&H's
credit  facilities,  there have been no dividends  from H&H to WHX, and the sole
source  of cash  flow  for WHX  has  consisted  of  partial  payment  of the H&H
subordinated  debt to WHX of $9.0  million,  which  required the approval of the
banks participating in the H&H bank facility. Subsequent to this transaction, in
2006, the remaining intercompany  subordinated debt balance of $44.2 million was
converted to equity.

      As of September 30, 2006, WHX had cash of  approximately  $0.7 million and
current liabilities of approximately $9.5 million. WHX also has significant 2006
cash  flow  obligations,   including  without  limitation  the  minimum  funding
requirement  for the WHX Pension  Plan,  which is estimated to be $20.6  million
($4.9  million was paid as of July 14, 2006 and $5.0  million was paid by H&H in
October 2006) and estimated other administrative costs for 2006 of approximately
$3.8 million.  The Pension Benefit  Guaranty  Corporation  ("PBGC") filed a lien
against  the assets of H&H to  collateralize,  among other  things,  the funding
deficiency existing as a result of WHX's failure to make required  contributions
to the WHX Pension  Plan,  and on October 20, 2006 the PBGC  entered into a lien
subordination  agreement  with H&H's  revolving  credit  facility  lender.  This
subordination  agreement  provides that the  subordination  provisions shall not
apply to any debt incurred  after  December 31, 2006.  As previously  indicated,
there  are no  current  sources  of  cash  available  to WHX  to  satisfy  these
obligations,   other  than  the  sale  of  its  subsidiary's  equity  investment
(estimated  market  value  at  September  30,  2006 of $5.0  million),  possible
insurance  proceeds  from current  litigation,  or the sale of H&H (which is not
currently  contemplated).  If WHX does not obtain  additional  liquidity,  it is
likely that WHX will not have sufficient cash to continue to operate through the
end of 2007.

      Additional  information  regarding  liquidity  issues  at WHX  and H&H are
described  in  Note  1a to the  consolidated  financial  statements.  The  above
conditions  raise  substantial  doubt  about the ability of WHX to continue as a
going  concern.  These  financial  statements do not include any  adjustments to
reflect the possible future effects on the  recoverability and classification of
assets or amounts and  classification  of  liabilities  that may result from the
outcome of this uncertainty

NOTE 2 - INVESTMENT IN AND ADVANCES TO SUBSIDIARIES - NET

      The following  table  details the  investments  in  associated  companies,
accounted for under the equity method of accounting.

                                                               December 31
                                                            2004          2003
                                                          --------      --------
                   (in Thousands)                                     (As Restated)
Investment in:

Handy & Harman                                            $ (4,590)     $124,852
WHX Aviation                                                   145        26,046
WHX Capital                                                   --          29,319
Wheeling-Pittsburgh Capital Corporation                     17,011         1,119
WHX Metals                                                    --          15,000
                                                          --------      --------
Investment in and advances to subsidiaries - net          $ 12,566      $196,336
                                                          ========      ========


      The decrease in the Investment in Subsidiaries account principally results
from the 2004  net  loss of H&H,  which  included  a $79.8  million  charge  for
goodwill impairment, an $8.2 million charge for impairment of long-lived assets,
and environmental remediation expenses and penalty totaling $32.8 million.

      The H&H loan agreements  contain  provisions  restricting cash payments to
WHX. The agreements allow the payment of management fees,  income taxes pursuant
to tax sharing agreements, and certain other expenses. In addition dividends may
be paid under certain  conditions.  At December 31, 2004 the net  liabilities of
H&H  amounted  to  $14.3  million.  Under  these  circumstances,  the  H&H  loan
agreements  prohibit the payment of  dividends  to WHX. On March 31,  2004,  H&H
obtained new financing agreements to replace its existing credit facilities. The
new  financing  agreements  included a revolving  credit  facility  and two term
loans. Concurrent with the new financing agreements, WHX loaned $43.5 million to
H&H to repay, in part, the existing credit facilities (the "Subordinated Note").
Such loan was  subordinated to the new financing  agreements.  On March 31, 2006
H&H  entered  into an  amendment  to one of the term loans  which,  among  other
things,  provided  for  the  payment  of  $9.0  million  from  H&H  towards  the
outstanding  balance of the Subordinated  Note.  Subsequent to this transaction,
the remaining balance of the Subordinated Note was converted to equity.


                                      F-6


NOTE 3 -  OTHER INCOME (EXPENSE)

                                                  Year Ended December 31,
                                            2004        2003           2002
                                          -------      -------       -------
                                                    (As Restated)  (As Restated)
                                                   (In Thousands)
Interest and investment income/(loss)     $   310      $   120       $     6
Gain on WPSC Note Recovery (a)              5,596         --            --
WPN management fee (b)                       --         (2,500)       (2,500)
Other, net                                     34           11            (1)
                                          -------      -------       -------
                                          $ 5,940      $(2,369)      $(2,495)
                                          =======      =======       =======

      (a) As part of the amended Chapter 11 Plan of  Reorganization  for the WPC
Group,  WHX  had  agreed  conditionally  to  provide  additional  funds  to WPSC
amounting to $20.0 million. On August 1, 2003, upon consummation of the WPC POR,
WHX contributed $20.0 million in cash to the reorganized  company and received a
$10.0 million subordinated note from WPSC. This note was fully reserved in 2003.
In July 2004,  WHX  realized  $5.6  million upon the sale of the note to a third
party and,  accordingly,  the reserve was reversed and $5.6 million was recorded
in other income in the second quarter of 2004.

      (b)  Pursuant to a  management  agreement  as amended,  and  approved by a
majority of the  non-management  directors of the Company,  WPN provided certain
financial,  management  advisory and  consulting  services to WHX. Such services
included,   among  others,   identification,   evaluation  and   negotiation  of
acquisitions,  financing matters for WHX and its subsidiaries,  review of annual
and quarterly budgets,  supervision and administration,  as appropriate,  of all
WHX's accounting and financial functions and review and supervision of reporting
obligations  under  Federal and state  securities  laws.  In  exchange  for such
services, WPN received a monthly fee of $520,833 during 2002 and through October
2003 and $400,000 per month thereafter.  In January 2004 the Company  announced,
among other things,  the retirement of the Chairman of the Board.  In connection
with this  announcement,  effective  February 1, 2004, the management  agreement
between WHX and WPN was terminated.

NOTE 4 - EQUITY IN EARNINGS (LOSS) OF SUBSIDIARIES

The  following  schedule  provides  a  summary  of  equity  earnings  (loss)  of
subsidiaries,  excluding the cumulative effect of an accounting  change,  net of
tax, by the subsidiaries:


                                                  Year Ended December 31,
                                             2004         2003         2002
                                           -------      -------       -------
                                                    (As Restated)  (As Restated)
                                                   (In Thousands)

Handy & Harman                            $(134,727)   $ (87,533)    $ (19,210)
CMCC (a)                                       --          2,453         2,566
WHX Aviation                                  1,256         (986)         (909)
Wheeling-Pittsburgh Capital Corporation       1,839        5,234         3,332
WHX Metals                                     --          2,193           411
                                          ---------    ---------     ---------
                                          $(131,632)   $ (78,639)    $ (13,810)
                                          =========    =========     =========

(a) Effective December 31, 2004 CMCC is a subsidiary of Handy & Harman.

      Effective January 1, 2002, the Company adopted the provisions of Statement
of Financial  Accounting  Standards  Nos. 141 and 142,  "Business  Combinations"
("SFAS  141")  and  "Goodwill  and  Other   Intangible   Assets"  ("SFAS  142"),
respectively,  and  changed  its  accounting  accordingly.  As a  result  of the
adoption of SFAS 142, H&H, (the only subsidiary  owned by the Company that had a
carrying  value for goodwill) did not record  amortization  expense for existing
goodwill  during the year ended December 31, 2002. In accordance  with SFAS 142,
upon  adoption,  H&H tested its existing  goodwill for impairment and recorded a
$41.1  million  non-cash  goodwill  impairment  charge  relating  to  two of its
subsidiaries.  This  charge is shown as a  cumulative  effect  of an  accounting


                                       F-7


change.  The Company  recorded  this  charges  because the fair value of the two
reporting  units,  as determined by estimated cash flow  projections,  were less
than the reporting units' carrying value.

NOTE 5 - DISCONTINUED OPERATION

      As a result  of the sale of  Unimast,  the WHX  financial  statements  and
related notes for the periods presented herein reflect Unimast as a discontinued
operation.

      At December 31, 2002 WHX Corporation had a note receivable of $3.2 million
due from  Unimast.  This note paid interest at a variable rate and matured March
2003.  Interest  remitted by Unimast to WHX  amounted to $30,000 and $163,000 in
2003 and 2002,  respectively.  Unimast remitted  principal payments amounting to
$3.2 million and $2.0 million to WHX in 2003 and 2002, respectively.

      WHX received management fees from Unimast of $146,000 in 2002.

NOTE 6 - RELATED PARTY TRANSACTIONS

      For the year ended  December 31, 2002,  WHX charged its  subsidiary,  H&H,
$750,000 as a management  fee.  WHX did not charge H&H a management  fee in 2004
and 2003.

      Unimast was included in WHX's  consolidated tax return,  up to its sale on
July  31,  2002.  The Tax  Sharing  Agreement  with  Unimast  specified  funding
requirements to WHX as pre-tax income  multiplied by the federal statutory rate.
To the  extent  that  this  cash  payment  to WHX  exceeds  or is less  than the
requirement  "as if"  Unimast  was an  independent  corporation,  a dividend  or
capital contribution is recorded by WHX. Income tax payments to WHX from Unimast
in 2002 amounted to $6.2 million.

      In 2003, WHX  contributed  $8.0 million to H&H. In 2002,  WHX  contributed
$5.0 million to H&H.

      In 2003,  WHX  advanced  to H&H $12.3  million,  representing  anticipated
insurance proceeds due to H&H under WHX's property insurance policy. At December
31, 2004 and 2003,  $7.3  million of such  payment is included in WHX  financial
statements as an advance to H&H.

      At December 31, 2003,  H&H  acquired the stock of Canfield  Metal  Coating
Corporation  from WHX at book value in exchange for a  subordinated  note in the
amount of $3.6 million.

      Concurrently  with the March 31, 2004 refinancing of H&H, WHX loaned $43.5
million to H&H to repay,  in part, the Senior Secured  Credit  Facilities.  Such
loan is  subordinated to the loans from Wachovia and  Canpartners.  In addition,
WHX deposited  $5.0 million of cash with Ableco as  collateral  security for the
H&H obligation. All of the cash collateral was returned to WHX prior to December
31, 2004.

NOTE 7 - SUBSEQUENT EVENTS (UNAUDITED)

PENSION FUNDING WAIVER:

      On December 20, 2006, the Internal  Revenue  Service granted a conditional
waiver of the minimum funding requirements for the WHX Pension Plan for the 2005
plan year (the "IRS Waiver") in accordance  with section 412 (d) of the Internal
Revenue Code and section 303 of the Employee  Retirement Income and Security Act
of 1974, as amended ("ERISA"),  and on December 28, 2006, WHX, H&H, and the PBGC
entered  into a  settlement  agreement  (the  "PBGC  Settlement  Agreement")  in
connection  with the IRS waiver and  certain  other  matters.  The IRS Waiver is
subject to certain conditions, including a requirement that the Company meet the
minimum funding  requirements for the WHX Pension Plan for the plan years ending
December  31,  2006  through  2010,  without  applying  for  a  waiver  of  such
requirements.  The PBGC Settlement  Agreement and related agreements provide, in
part,  for (i) the  amortization  of the  waived  amount of $15.5  million  (the
"Waiver  Amount")  over a period  of five  years,  (ii) the  PBGC's  consent  to
increase  borrowings  under H&H's  senior  credit  facility  to $125  million in
connection  with the  closing  of an  acquisition  described  below,  (iii)  the
resolution of any potential issues under Section 4062(e) of ERISA, in connection
with the  cessation of  operations  at certain  facilities  owned by WHX, H&H or
their  subsidiaries,  and (iv) the granting to the PBGC of subordinate  liens on
the  assets  of H&H  and its  subsidiaries,  and  specified  assets  of WHX,  to
collateralize  WHX's obligation to pay the Waiver Amount to the WHX Pension Plan
and to make  certain  payments  to the WHX  Pension  Plan  in the  event  of its
termination.  As a result of the PBGC  Settlement  Agreement and the IRS Waiver,
based on  estimates  from WHX's  actuary,  the  Company  now expects its minimum
funding  requirement for the specific plan year and the amortization of the 2005
requirement  to be $13.1  million  (paid in full in 2006),  $6.7  million,  $7.9
million,  and $18.3 million  (which  amounts  reflect the recent  passage of the
Pension  Protection  Act  of  2006)  in  2006,  2007,  2008  and  through  2011,
respectively.


                                      F-8


AMENDMENTS TO CREDIT FACILITIES:

      On December 27, 2006,  upon the filing of the Company's 2005 Annual Report
on Form 10-K,  Wachovia  provided H&H with an additional $7.0 million loan. This
was  pursuant  to an  Amendment  signed  on  October  30,  2006  which  made the
additional funds conditional upon the filing of the Company's 2005 Annual Report
on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia  ("Amendment  No. 11") and their Loan
and Security  Agreement with Steel ("Amendment No. 8"). The amendments  provide,
in part,  for the  consummation  of the  transactions  contemplated  by the PBGC
Settlement  Agreement and the waiver of possible events of default that may have
occurred relating to the matters covered by the PBGC Settlement Agreement.

      On December 28, 2006, H&H, and certain of H&H's subsidiaries amended their
Loan and Security  Agreement with Wachovia  ("Amendment  No. 12") and their Loan
and  Security  Agreement  with  Steel  ("Amendment  No.  9").  Amendment  No. 12
provides,  in part,  for a $42 million term loan funded by Ableco Finance LLC, a
portion of which was used to fund the acquisition described below. Amendment No.
9 included conforming amendments.

      As stated above,  H&H granted a lien of $15.5 million on its assets to the
PBGC on December 28, 2006 in connection with the PBGC Settlement Agreement. Such
lien is subordinate to that of Wachovia,  but senior to that of Steel.  Thus, on
that same date,  WHX entered into a guarantee  agreement with Steel in which WHX
agreed to guarantee up to $15.5 million of principal amount of H&H's Term B Loan
owed to Steel.  To  collateralize  this  guarantee,  Steel  was  granted a first
priority lien on specified assets of WHX.

ACQUISITION:

      Effective December 28, 2006,  pursuant to an Asset Purchase Agreement (the
"Asset Purchase  Agreement")  dated as of December 28, 2006, a subsidiary of H&H
acquired a mechanical  roofing  fastener  business from Illinois Tool Works Inc.
The purchase price was  approximately  $26 million,  including a working capital
adjustment.  This acquired business develops and manufactures  fastening systems
for the commercial  roofing industry.  WHX believes this acquisition  solidifies
its position as a leading  manufacturer  and supplier of  mechanical  fasteners,
accessories  and  components,  and  building  products  for the  commercial  and
residential construction industry.

      Funds for payment of the purchase  price by H&H were obtained  pursuant to
H&H's existing revolving credit facility (as discussed above).

LIQUIDITY:

            As of December 31, 2006, WHX had cash of approximately  $0.8 million
and current liabilities of approximately $7.5 million, including $5.1 million of
mandatorily  redeemable  preferred shares issued by a wholly owned subsidiary of
WHX in 2005 and  payable  to a  related  party.  H&H's  availability  under  its
revolving credit facility and other facilities as of December 31, 2006 was $19.1
million.  Such  facilities  expire in March 2007. The Company  continues to have
significant cash flow obligations,  including without limitation the amounts due
for the WHX Pension Plan (as amended by the PBGC Settlement  Agreement described
above). Based on the Company's forecasted borrowings,  the funds available under
its credit facilities may not be sufficient to fund debt service costs,  working
capital demands and environmental remediation costs. Additionally,  there can be
no assurance  that the Company will be able to obtain  replacement  financing at
commercially  reasonable  terms upon the  expiration  of its credit  facilities.
Consequently,  there  continues  to be  substantial  doubt  about the  Company's
ability to continue as a going concern.


                                      F-9


                                                   WHX Corporation
                             Schedule II -Valuation and Qualifying Accounts and Reserves

                                                            Balance at    Charged to     Additions/     Balance at
                                                            Beginning     Costs and     (Deductions)      End of
Description                                                 of Period      Expenses       Describe       of Period
--------------------------------------------------------------------------------------------------------------------

Deducted from asset accounts:

Year ended December 31, 2004

Valuation allowance on foreign NOL's                           5,810         --           (5,810)(1)          --
Valuation allowance on federal NOL's                          31,694        8,900           --              40,594
Valuation allowance on other net deferred tax assets          16,689       15,100          7,380(2)         39,169
                                                            -------------------------------------------------------
                                                              54,193       24,000          1,570            79,763
                                                            -------------------------------------------------------
Allowance for Doubtful Accounts                                1,003          249            (14)            1,238
                                                            -------------------------------------------------------
Total                                                         55,196       24,249          1,556            81,001
                                                            -------------------------------------------------------


Year ended December 31, 2003 (as restated)


Valuation allowance on foreign NOL's                           5,350          460           --               5,810
Valuation allowance on federal NOL's                            --         31,694           --              31,694
Valuation allowance on other net deferred tax assets            --         13,543          3,146(2)         16,689
                                                            -------------------------------------------------------
                                                               5,350       45,697          3,146            54,193
                                                            -------------------------------------------------------
Allowance for Doubtful Accounts                                2,307          621         (1,925)            1,003
                                                            -------------------------------------------------------
Total                                                          7,657       46,318          1,221            55,196
                                                            -------------------------------------------------------

Year ended December 31, 2002 (as restated)

Valuation allowance on foreign NOL's                           2,429        2,921           --               5,350
Allowance for doubtful accounts                                1,563        1,798         (1,054)            2,307
                                                            -------------------------------------------------------
                                                               3,992        4,719         (1,054)            7,657
                                                            -------------------------------------------------------


(1)  Reduction of NOLs (and related valuation allowance) due to expiration of carryforward period.

(2)  Increase in valuation allowance relates to deferred tax asset for minimum pension liabilities recorded in other
     comprehensive income.


                                                        F-10