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

                                   FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934

                              For the fiscal year ended September 30, 2005

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                              For the transition period from ______ to ______

                              Commission File Number 000-32875

                         ALLOY STEEL INTERNATIONAL, INC.
                 (Name of small business issuer in its charter)

                     Delaware                              98-0233941
         (State or other jurisdiction of                (I.R.S. Employer
          incorporation or organization)               Identification No.)

                42 Mercantile Way
          P.O. Box 3087 Malaga D C 6945
                Western Australia
    (Address of principal executive offices)

 Issuer's telephone number:  +61 (8) 9248 3188

   Securities registered under Section 12(b)
             of the Exchange Act:                             None

   Securities registered under Section 12(g)
             of the Exchange Act:                Common stock, $0.01 par value

Check whether the issuer is not required to file reports pursuant to Section 13
or Section 15(d) of the Exchange Act [ ]

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of the Form 10-KSB
or any amendment to this Form 10-KSB [X]

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

The issuer's revenues for the fiscal year ended September 30, 2005 was
$3,620,457.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of November
30, 2005 was $8,475,000.

As of November 30, 2005, the issuer had a total of 16,950,000 shares of common
stock outstanding.

Transitional Small Business Disclosure Format (check one):

Yes [ ]          No [X]

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


<PAGE>
                                     PART I

FORWARD-LOOKING STATEMENTS

     Information included or incorporated by reference in this filing may
contain forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act.  This information may
involve known and unknown risks, uncertainties and other factors which may cause
our actual results, performance or achievements to be materially different from
the future results, performance or achievements expressed or implied by any
forward-looking statements.  Forward-looking statements, which involve
assumptions and describe our future plans, strategies and expectations, are
generally identifiable by use of the words "may," "will," "should," "expect,"
"anticipate," "estimate," "believe," "intend" or "project" or the negative of
these words or other variations on these words or comparable terminology.

     This filing contains forward-looking statements, including statements
regarding, among other things, (a) Alloy Steel's projected sales and
profitability, (b) Alloy Steel's growth strategies, (c) anticipated trends in
Alloy Steel's industry, (d) Alloy Steel's future financing plans and (e) Alloy
Steel's anticipated needs for working capital. These statements may be found
under "Management's Discussion and Analysis or Plan of Operation" and
"Description of Business," as well as in this filing generally. Actual events or
results may differ materially from those discussed in forward-looking statements
as a result of various factors. In light of these risks and uncertainties, there
can be no assurance that the forward-looking statements contained in this filing
will in fact occur. In addition to the information expressly required to be
included in this filing, Alloy Steel will provide such further material
information, if any, as may be necessary to make the required statements, in
light of the circumstances under which they are made not misleading.


ITEM 1.   DESCRIPTION OF BUSINESS.

     Alloy Steel International, Inc. was incorporated in Delaware in May 2000.
Our principal executive office is located at 42 Mercantile Way, Malaga, Western
Australia 6945.  Our telephone number is +61 (8) 9248 3188, our facsimile is +61
(8) 9248 3166.  Our Email is info@alloysteel.net and our Internet address is
www.alloysteel.net.


     OVERVIEW OF BUSINESS

     We manufacture and distribute Arcoplate, a wear-resistant alloy overlay
wear plate produced through a patented process.  We believe that wear is the
largest single factor leading to production losses in the mining,
mineral-processing, and steel manufacturing industries. Consequently, wear
solutions are indispensable for these businesses.  The wearing of metal parts is
generally defined as a gradual decay or breakdown of the metal.  This wear of
equipment may be due to many causes and accordingly, the selection of wear plate
solutions can be a relatively complex process.

     In order to minimize the effects of wear, businesses have traditionally
employed such wear-combating materials as rubber compounds, ceramics, alloy
castings, welded overlay wear plates, and quenched and tempered carbon steel
plates. We believe that each of these materials offer a limited solution to the
problem of wear. While tungsten carbide is generally recognized by the mining,
mineral-processing and steel manufacturing industries as the most wear-resistant
material suitable for industrial use, because of its high carbide content, we
believe that the high costs associated with tungsten carbide make it impractical
for most businesses. We believe that Arcoplate provides industry with solutions
to most wear-related problems at a cost which is competitive with conventional
welded overlay wear plates and substantially lower than tungsten carbide. In
addition, the 3-D Pipefitting Cladder process which we are developing, will
provide business with solutions for the problem of wear and down time in
pipefitting systems.


     ARCOPLATE

     The patented process by which we manufacture Arcoplate enables us to
smoothly and evenly apply an alloy overlay to a sheet of steel, creating a
metallurgical bond between the alloy and the steel backing plate that is
resistant to wear caused by impact and/or abrasion.    We believe that our
Arcoplate product line will substantially lower down time and the lost
production resulting from this down time.

     Conventional welded wear plates have been used in the manufacturing, mining
and construction industries for more than half a century and they are
characterized by several functional limitations:


                                        1
<PAGE>
     -    the tendency to separate into chips or fragments when subjected to
          high impact;

     -    uneven base metal dilution resulting in uneven alloy content; and

     -    rough surfaces which result in poor material flow.

     We believe Arcoplate has properties that allow it to overcome the
limitations of conventional welded wear plates. Independent laboratory and field
tests, have shown that Arcoplate provides a wear-resistant barrier superior to
that provided by conventional single or multiple-layer wear plates. This is
because of its higher carbide content and smoother surface layer. Arcoplate wear
plate sheets also can withstand rolling and pressing, within specified
fabrication guidelines.

     The claims with respect to the properties of Arcoplate, such as bond
strength, specific hardness, density, hardness, resonance and wear resistance,
have been subjected to studies and testing, by independent laboratories,
universities and other recognized testing facilities, including Aust-Amet Pty
Ltd and Central Power Research Institute of Bangalore, India. Commercial fees
were paid to Aust-Amet Pty Ltd while no fees were paid to the Power Research
Institute of Bangalore.

     Arcoplate is designed for installation and use where structures and
machinery suffer wear and "hangup" problems. Common situations are:

     -    the mining of iron, gold, nickel, coal, copper and other ores;

     -    brick and cement works;

     -    power stations;

     -    the manufacture of ore feed bins, transfer chutes, dredging systems
          and conveyor side skirts;

     -    bulldozer arms and blades; and

     -    truck tray liners and bucket loader liners.

     Arcoplate is manufactured in a range of grades designed for specific
applications.  Our products are designed for ease of handling and can be
fabricated to suit our customers' specific requirements of shape, size and
weight.  Sheets of Arcoplate can be welded together to cover large surface
areas.  We also provide technical consultation services to customers and their
design engineers.

     We believe that our proprietary method of manufacturing Arcoplate results
in a product that has many technical advantages over conventional welded wear
plates. Conventional welded wear plates are generally characterized by
structural weaknesses and limited wear resistance resulting from inefficient
production methods. In order to achieve a wear-resistant, flat surface, a
conventional wear plate must be rolled and pressed after its layers of
hardfacing have been welded together. This post-production rolling and pressing
can result in a weakened surface structure that cannot withstand high impact
conditions. The Arcoplate process does not require post-production rolling and
pressing. During the Arcoplate process, the plate is coated with the desired
alloy thickness in one application, resulting in a uniform and, therefore,
structurally sound surface. The Arcoplate process maintains a high carbide
content in the overlay, which makes the plate more wear resistant than
conventional welded wear plate.

     The new production machine commenced operations in July 2005. The new
machine produces a 600mm wide plate and the original machine produces a 300mm
wide plate. The 300mm wide machine is currently being refurbished and will be
used for production, research and development purposes.

     Arcoplate products are currently distributed to customers in the United
States, South America, India, Indonesia, Singapore, South Africa, Japan, China,
Canada, Malaysia and other countries.


     3-D PIPEFITTING CLADDER PROCESS

     We have recommenced the development of  the 3-D Pipefitting Cladder
process. This is a computer-driven and software-based mechanical system for
depositing a profiled layer of wear resistant alloy onto interior surfaces of
pipefittings,


                                        2
<PAGE>
used in the dredging, mining, mineral processing, coat-fired power generation,
cement manufacturing, and oil refinery industries. Due to their angled and/or
curved structures, material does not flow uniformly through pipe fittings,
meaning pipe fittings generally have higher wear, resulting in a much shorter
working life, than ordinary straight pipe.

     The 3-D Pipefitting Cladder process under development is based upon the
patented production process we use to make Arcoplate and will enable a wear
resistant alloy coating to be applied to interior surfaces of pipe fittings at
the point where wear is most likely to occur. We believe that the 3-D
Pipefitting Cladder process will overcome many of the problems associated with
pipe fitting wear and greatly reduce production losses due to down time and pipe
replacement.

     With the new Arcoplate production machine now completed and operational,
engineering time is now being spent on development of the 3-D Pipefitting
Cladder process.


     SALES AND MARKETING STRATEGY

     The company's objective is to become an international market leader in
wear-resistant alloy steel products and to establish significant market share
and brand awareness for Arcoplate, and subsequently the 3-D Pipefitting Cladder
process, within the mining, mineral-processing and steel industries. We believe
that we can capitalize on our existing patented process for producing Arcoplate
through the direct manufacture and sale of Arcoplate-based products to original
equipment manufacturers and distributors worldwide.  We intend to establish
market presence by visiting international and domestic trade shows, presenting
technical papers at industry conferences, and appointing distributors who will
be trained to present and promote Arcoplate products as a solution for
wear-related problems. The company is also looking at the feasibility of
licensing the process of Arcoplate production in certain countries to stimulate
growth.

     To facilitate the marketing of Arcoplate in China, one of the largest
markets in the world, we are still negotiating with potential joint venture
partners. The proposed joint venture with Angng New Steel has not progressed
because of commercial differences between the parties. In the interim, we have
been selling direct to end users in China.

     In the year ended September 30, 2005, one customer accounted individually
for at least 10% of our annual sales.

     We anticipate incurring increased expenditures in connection with our
marketing activities.  Our marketing activities are also expected to include
substantial engineering support to assist in the development of products for
specific customer requirements, certain markets and further development of
specification sheets and corporate brochures.

     We intend to market Arcoplate products to consultant engineering companies
both internationally and in Australia in order that they may ultimately
incorporate Arcoplate materials into their equipment and plant designs. We will
offer the services of our own engineering department to assist these engineers
with design planning to optimize solutions for wear and material flow
situations.


     INTELLECTUAL PROPERTY

     We believe that protection of our licensed proprietary technology and
know-how is critical to the development of our business.  We have obtained
patents for process in United States, Mexico, Brazil, Canada, Japan, Burma,
South Korea, Australia, France, Germany, Great Britain, Greece, Italy, Belgium,
Netherlands and Sweden.  We do not yet have intellectual property protection for
the 3-D Pipefitting Cladder process.  We cannot assure you that our existing
patent rights, or any other patent rights that may be granted, will be valid and
enforceable or provide us with meaningful protection from competitors.  We
cannot assure you that any pending patent application will issue as a patent, or
that any claim thereof will provide protection against infringement.  If our
present or future patent rights are ineffective in protecting us against
infringement, our marketing efforts and future revenues could be materially and
adversely affected.  In addition, if a competitor were to infringe our patent
rights, the costs of enforcing our patent rights may be substantial or even
prohibitive.


                                        3
<PAGE>
     RESEARCH AND DEVELOPMENT

     We are continually engaged in the development of new products and
improvements to our existing products.


     MANUFACTURING AND SUPPLY

     The raw materials we employ are principally steel and a proprietary alloy
compound.  We presently purchase steel plate and alloy materials from various
suppliers.  Four of our suppliers, Cometals, Integrate Industries Pty Ltd,
Intersteel and Di Candilo Steel City, account for more than 70% of the raw
material we require.  We also rely heavily on the use of fluxes, compounds
designed to remove impurities, during the manufacturing process.  We purchase
our requirements for fluxes from various suppliers.  We cannot assure you that
we will be able to continue to obtain desired quantities of steel, alloy
materials and fluxes on a timely basis at reasonable prices and upon favorable
terms.  We monitor the quality of our products by frequent tests and material
certification, and maintain a strict internal quality control system to monitor
the quality of production.


     GOVERNMENT REGULATION

     The Arcoplate manufacturing plant is subject to many laws and regulations
relating to the protection of the environment.  These laws and regulations
impose requirements concerning, among other matters, the treatment, acceptance,
identification, storage, handling, transportation and disposal of industrial
by-products, hazardous and solid waste materials, waste water, air emissions,
noise emissions, soil contamination, electromagnetic radiation, surface and
groundwater pollution, employee health and safety, operating permit standards,
monitoring and spill containment requirements, zoning, and land use.  We
frequently examine ways to minimize any impact on the environment and to effect
cost savings relating to environmental compliance.  Our management believes that
we are in material compliance with all applicable environmental laws and that
our products and processes do not present any unusual environmental concerns.

     Our operations are also governed by laws and regulations relating to
workplace safety and health, principally under the Australian Occupational
Safety and Health Act -- 1984 (WA), which, among other requirements, establish
employee training, supervision and general safety standards.  Our management
believes that we are in material compliance with all applicable workplace safety
and health laws and that our products and processes do not present any unusual
safety concerns.

     We require, and must comply with, various authorizations, permits and
licenses to conduct our operations.  Government agencies continually monitor our
compliance with authorization, permits and licenses and our facilities are
subject to periodic unannounced inspection by local, state and federal
authorities.  Violations of any permit or license, if not remedied, could result
in our incurring substantial fines, or suspension of our operations.


     COMPETITION

     The wear plate solutions industry is highly competitive. We compete in
markets against larger multi-national companies, all of which are
well-established and may have substantially greater financial and other
resources than us. Competitive market conditions could adversely affect our
results of operations if we were required to reduce product prices to remain
competitive. In the United States and Canada, major manufacturers of wear plates
include Triton Inc. and Trimay Ltd. In Australia, major manufacturers of wear
plates include Australian National Industries Ltd. and Australian Overseas Ltd.
Other major manufacturers in the European Union and Asia include Vautid (Gmd.)
and Duraweld.


     EMPLOYEES

     We employed eighteen persons on a full-time basis and three contract
employees as of November 30, 2005, including two executive officers, four
administrative personnel, three marketing personnel and nine manufacturing
personnel.  None of our employees are members of a labor union.  We consider our
relationship with our employees to be good.  We do not anticipate hiring
additional manufacturing employees in the 2006 calendar year.


                                        4
<PAGE>
ITEM 2.   DESCRIPTION OF PROPERTY.

     Our business is conducted from leased premises located at 42 Mercantile Way
Malaga Western Australia.

     This lease has been extended for a further five years at the current rental
of $7,083 per calendar month until June 2010.


ITEM 3.   LEGAL PROCEEDINGS.

     There are no material legal proceedings pending or, to our best knowledge,
threatened against us.


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

     We held our Annual Meeting of Stockholders on June 8, 2005. The only
director nominee standing for election, Patrick Joseph O'Neil, was withdrawn
before the meeting.


                                        5
<PAGE>
PART II


ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS AND
          SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

     Our common stock is traded on the Over the Counter Bulletin Board. The
following table sets forth the range of high and low bid quotations for our
common stock for each calendar quarter within the last two years.

<TABLE>
<CAPTION>
                                           Bid Price Per Share
                                         ----------------------
          Year ended September 30, 2005     High         Low
          -----------------------------  ----------  ----------
<S>                                      <C>         <C>
          October 1 - December 31, 2004  $     0.40  $     0.20

          January 1 - March 31, 2005     $     0.84  $     0.28

          April 1 - June 30, 2005        $     0.50  $     0.20

          July 1 - September 30, 2005    $     0.19  $     0.18


          Year ended September 30, 2004     High         Low
          -----------------------------  ----------  ----------

          October 1 - December 31, 2003  $     0.28  $     0.08

          January 1 - March 31, 2004     $     0.25  $     0.12

          April 1 - June 30, 2004        $     0.17  $     0.14

          July 1 - September 30, 2004    $     0.40  $     0.13
</TABLE>


     The above prices were obtained from Nasdaq, Inc.  The quotations represent
inter-dealer quotations, without retail mark-up, markdown or commission, and may
not necessarily represent actual transactions.

     As of November 30, 2005, there were approximately 131 holders of record of
our common stock.

     Our Board of Directors may from time to time declare, and we may pay,
dividends on our outstanding shares in the manner and upon the terms and
conditions provided by law.  To date, we have not declared or paid any dividend.


                                        6
<PAGE>
<TABLE>
<CAPTION>
     EQUITY COMPENSATION PLANS

------------------------------------------------------------------------------------------------------
                                                                               Number of securities
                                                                             remaining available for
                        Number of securities to be     Weighted-average       future issuance under
                          issued upon exercise of      exercise price of    equity compensation plans
                           outstanding options,      outstanding options,     (excluding securities
                            warrants and rights       warrants and rights    reflected in column (a))
----------------------  ---------------------------  ---------------------  --------------------------
                                    (a)                       (b)                      (c)
----------------------  ---------------------------  ---------------------  --------------------------
<S>                     <C>                          <C>                    <C>
  Equity compensation
   plans approved by               None                      None                   2,000,000
 security holders (1)
----------------------  ---------------------------  ---------------------  --------------------------
 Equity compensation
plans not approved by                -                         -                        -
   security holders
----------------------  ---------------------------  ---------------------  --------------------------

      Total                        None                      None                   2,000,000

------------------------------------------------------------------------------------------------------
</TABLE>

     (1) Includes our 2000 Stock Option Plan.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     You should read the following discussion and analysis of our financial
condition and results of operations in conjunction with our financial
statements, the notes to our financial statements and the other financial
information contained elsewhere in this filing.


     OVERVIEW

     We manufacture and distribute Arcoplate, a wear-resistant alloy overlay
wear plate, through a patented production process. This patented process by
which we manufacture Arcoplate enables us to smoothly and evenly apply an alloy
overlay to a sheet of mild steel, creating a metallurgical bond between the
alloy and the steel backing plate that is resistant to wear caused by impact
and/or abrasion.  We believe that in the mining processing industries, wear is
the primary cause of down time, the period of time where machinery is not in
operation because of the necessity of repairs or refurbishment. We believe that
our Arcoplate product line will substantially lower down time and the resulting
lost production.

     We are commercially developing the 3-D Pipefitting Cladder process, a
computer driven and software based mechanical system depositing a profiled layer
of wear resistant alloy onto interior surfaces of pipe fittings, targeted for
industrial use. Due to their angles and/or curved structures, material does not
flow uniformly through pipe fittings, meaning pipe fittings generally have
higher wear, resulting in a much shorter working life, than ordinary straight
pipe. The 3-D Pipefitting Cladder process enables wear resistant alloy coating
to be applied to interior surfaces of bends, elbow joints, "T" sections and "Y"
sections of pipe fittings, where wear is most likely to occur.  This is expected
to be in production by January 2007.


     PLAN OF OPERATION

     We intend to achieve market penetration through a multi-step process. In
Australia, we intend to combine targeted marketing with advertising in trade
journals and magazines. At the international level, we intend to establish
market presence by visiting international trade shows, presenting technical
papers at industry conferences, and appointing distributors who will be trained
to present and promote Arcoplate products as a solution for wear-related
problems. We are presently looking at the feasibility of licensing the
production of Arcoplate in certain countries and market areas.


                                        7
<PAGE>
     RESULTS OF OPERATIONS


     SALES

     Alloy Steel had sales of $3,620,457 for the year ended September 30, 2005,
compared to sales of $2,986,915 for the year ended September 30, 2004. These
sales consist solely of the sale of our Arcoplate product.  Substantially all of
our sales during the periods were denominated in US dollars.  Sales denominated
in Australian dollars were converted into U.S. dollars at the conversion rate of
$0.76618 and $0.72661, representing the average foreign exchange rate for the
years ended September 30, 2005 and 2004 respectively.  The increase is due to an
increasing market acceptance of the product and supply to new customers.


     COSTS OF SALES

     Alloy Steel had cost of sales of $2,323,100 for the year ended September
30, 2005, compared to cost of sales of $1,739,059 for the year ended September
30, 2004. The gross profit amounted to $1,297,357 compared to $1,247,856 for the
year ended September 30, 2004. The gross profit percentage decreased due to
rising costs and competitive market situations to 35.8% in 2005 from 41.78% in
2004.


     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Alloy Steel had selling, general and administrative expenses of $1,382,548
for the year ended September 30, 2005, compared to $1,259,388 in the year ended
September 30, 2004. The increase was primarily due to the increased marketing
and promotional activity of the company in the year ending September 30, 2005.


     INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)

     Our income (loss) before tax expense (benefit) was ($74,518) for the year
ended September 30, 2005, compared to a profit before income tax expense
(benefit) of $9,825 for the year ended September 30, 2004.


     INCOME TAX EXPENSE (BENEFIT)

     Alloy Steel had income tax benefit of ($313,676) for the year ended
September 30, 2005 compared to an income tax expense of $14,050 for the year
ended September 30, 2004. The prior year's income tax expense relates to taxes
payable in Australia.  The current year income tax benefit was a result of
research and development concessions granted by the Australian Taxation Office.


     NET INCOME (LOSS)

     We had net income of $239,158 or $0.01 per share, for the year ended
September 30, 2005, compared to a net loss of ($4,225) or $0.00 per share for
the year ended September 30, 2004.


     LIQUIDITY

     For the year ended September 30, 2005, the net cash provided by operating
activities was $379,464.

     As of the year ended September 30, 2005, we had working capital of
$312,557.


                                        8
<PAGE>
     The Company is obligated under various contractual commitments over the
next five years. The following is a summary of the five-year commitments of the
Company as of September 30, 2005:

<TABLE>
<CAPTION>
                                         LESS THAN                           AFTER
                                TOTAL    1 YEAR      1-3 YEARS   4-5 YEARS   5 YEARS
<S>                            <C>       <C>         <C>         <C>         <C>
CONTRACTUAL OBLIGATIONS
Long term debt                  514,793     140,731     199,650     134,524    39,888
Operating leases                403,750      85,000     170,000     148,750         -
-------------------------------------------------------------------------------------

Total contractual obligations  $918,593  $  225,731  $  369,650  $  283,274  $ 39,888
</TABLE>

     The Consolidated Balance Sheet as of September 30, 2005, reflects the
payment of a deposit for a capital commitment for a major item of plant, being a
plasma cutter. The commitment for this is $208,000 being financed over 60 months
at $3,900 per month commencing in November 2005. The cost of this arrangement
has been included in the contractual obligation table above.

     We anticipate that the funding of our working capital needs will come
primarily from the cash generated from our operations.  To the extent that the
cash generated from our operations is insufficient to meet our working capital
needs or the purchase of machinery or equipment, then we will need to raise
capital from the sale of securities in private offerings or loans.  We have no
commitments for capital.  The sale of additional equity or convertible debt
securities could result in dilution to our stockholders.  There can be no
assurance that financing will be available in amounts or on terms acceptable to
us, if at all.


     SIGNIFICANT CHANGES IN NUMBERS OF EMPLOYEES

     We do not anticipate hiring any additional manufacturing employees in the
next 12 months.


     CRITICAL ACCOUNTING POLICIES

     We have prepared our financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America. This has required us to make estimates, judgments, and assumptions that
affected the amounts we reported. Note 1 of the notes to consolidated financial
statements contains the significant principles that we used to prepare our
consolidated financial statements.

     We have identified several critical accounting policies that require us to
make assumptions that were uncertain at the time of our estimates. Had we used
different estimates and assumptions, the amounts we recorded could have been
significantly different. Additionally, actual results that would have material
effect on our financial condition or results of operation could be based on
different assumptions or conditions. The critical accounting policies that were
affected by the estimates, assumptions, and judgments used in the preparation of
financial statements are listed below.


     ALLOWANCE FOR DOUBTFUL ACCOUNTS

     We do not believe there is a need for a provision for doubtful accounts as
of September 30, 2005.


     INVENTORIES

     Our inventories are recorded at the lower of cost or net realizable market,
with cost based on an average cost method, which approximates the first-in,
first-out basis. We periodically assess this inventory for obsolescence and
potential excess by reducing the difference between our cost and the estimated
market value of the inventory based on assumptions about future demand and
historical sales patterns. Our inventories consist of materials and products
that are subject to technological obsolescence and competitive market
conditions. If market conditions or future demand are less favorable than our
current expectations, additional inventory write downs or reserves may be
required, and that could have an adverse effect on our reported results in the
period the adjustment are made.

     LONG-LIVED ASSETS

     We review our long-lived assets for potential impairment based on a review
of projected undiscounted cash flows associated with these assets. Long-lived
assets are included in impairment evaluations when events and circumstances
exist


                                        9
<PAGE>
that indicate the carrying amount of these assets may not be recoverable.
Measurement of impairment losses for long-lived assets that we expect to hold
and use is based on the estimated fair value of the assets. We have recorded
asset impairment charges when the carrying value of certain assets was in excess
of their fair value. Should market conditions or the assumptions used by us in
determining the fair value of these assets change, or management change plans
for usage of certain assets, additional charges to operations may be required in
the period in which such conditions occur.


                                  RISK FACTORS

     Alloy Steel is subject to various risks that may materially harm our
business, financial condition and results of operations.  YOU SHOULD CAREFULLY
CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AND THE OTHER INFORMATION
IN THIS FILING BEFORE DECIDING TO PURCHASE OUR COMMON STOCK.  THESE ARE NOT THE
ONLY RISKS AND UNCERTAINTIES THAT WE FACE.  IF ANY OF THESE RISKS OR
UNCERTAINTIES ACTUALLY OCCURS, OUR BUSINESS, FINANCIAL CONDITION OR OPERATING
RESULTS COULD BE MATERIALLY HARMED.


     WE HAVE A LIMITED OPERATING HISTORY AND WE MAY NOT BE ABLE TO ACHIEVE OR
     MAINTAIN PROFITABILITY.

     We have a limited operating history.  We may incur significant operating
losses as we attempt to develop and grow our business.  We cannot assure you
that we will achieve or maintain profitability.  Until we achieve the
manufacturing capacity sufficient to sustain continuous production of Arcoplate
or Arcoplate-based products, we will have substantial production under-capacity,
and we may be unable to fill customer orders.  Such events could cause us to
incur substantial operating losses.


     IF WE ARE UNABLE TO EFFECTIVELY MANAGE OUR PLAN OF EXPANSION, WE WILL NOT
     ACHIEVE PROFITABILITY.

     We plan to expand all aspects of our operations.  As a result, we need to
expand our financial and management controls, reporting systems and procedures.
We will also have to expand, train and manage our work force for marketing,
sales, engineering and technical support, product development, and manage
multiple relationships with various customers, vendors, strategic partners and
other third parties.  We will need to continually expand and upgrade our
technology and develop new products.  If we are unable to manage our growth
effectively, we may be unable to handle our operations, control costs or
otherwise function in a profitable manner, or at all.


     THE LOSS OF ANY KEY PERSONNEL WOULD DISRUPT OUR OPERATIONS AND HURT OUR
     PROFITABILITY.

     Our future success depends to a significant extent on the continued
services of our senior management and other key personnel, particularly, Gene
Kostecki, Chairman and Chief Executive Officer, and Alan Winduss, Chief
Financial Officer.  We do not presently maintain keyman life insurance on the
life of either Mr. Kostecki or Mr. Winduss.  The loss of the services of Mr.
Kostecki or Mr. Winduss would likely have a significantly detrimental effect on
our business.  We currently have employment agreements with each of Mr. Kostecki
and Mr. Winduss.  However, if Mr. Kostecki or Mr. Winduss becomes unwilling or
unable to continue in their current positions, it would be significantly more
difficult to operate our business, which could hurt our financial condition and
results of operations.


     IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY, WE COULD LOSE OUR
     COMPETITIVE ADVANTAGE.

     We currently have only limited patent protection for our technology, and
may be unable to obtain even limited protection for our proprietary technology
in certain foreign countries.  Currently, we have patents in various countries.
We cannot assure you that any granted patent or pending patent application will
provide protection against infringement.


     IF WE DO NOT CORRECTLY ANTICIPATE THE MAGNITUDE AND DIRECTION OF CURRENCY
     EXPOSURE, THERE COULD BE A MATERIAL ADVERSE IMPACT ON OUR PROSPECTS FOR
     PROFITABILITY.

     All of our production will take place overseas, and many of the raw
materials and supplies for our products will be purchased in foreign currencies.
In addition, international sales will likely be denominated in local currencies.
These factors


                                       10
<PAGE>
may combine to expose us to currency gains and losses in addition to gains and
losses from our basic operations.  The magnitude and direction of future
currency exposure cannot be predicted, nor can we assure you that we will be
able to manage such exposure to our benefit or to a neutral effect.


     OUR BUSINESS WOULD BE MATERIALLY AND ADVERSELY AFFECTED IF WE WERE UNABLE
     TO RECEIVE MATERIALS AT PRICES AND ON TERMS PRESENTLY MADE AVAILABLE TO US
     BY OUR PRINCIPAL SUPPLIERS.

     We presently purchase our principal raw materials, steel and alloy compound
components, from a limited number of suppliers.  There are no written contracts
between us and our suppliers, and requirements are purchased using individual
purchase orders, with customary terms regarding payment, quality and delivery.
Although we believe that alternatives are readily available from other
suppliers, we cannot assure you that we will be able to continue to obtain
desired quantities of materials on a timely basis at prices and on terms deemed
reasonable by us.  Our business would be materially and adversely affected if we
are unable to continue to receive materials at prices and on terms comparable to
those presently made available to us by our principal suppliers.


     SINCE WE DEPEND HEAVILY UPON ELECTRICAL POWER FOR OUR OPERATIONS, ANY
     INCREASE IN PRICES WOULD ADVERSELY AFFECT OUR BUSINESS AND PROFITABILITY.

     We consume a large amount of electrical power during production.  The
amount of electrical power consumed during the Arcoplate process represents
approximately 5% of our overall production costs.  There may be fluctuations in
the price of electricity due to changes in the regulation of utility companies
in Australia, and in other jurisdictions where we may engage in production.  We
cannot assure you that we will be able to continue to obtain our energy supplies
at current prices, and any material increase in prices of electricity would
adversely affect our business and profitability.


     OUR COMMON STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND MAY
     FLUCTUATE SIGNIFICANTLY.

     There has been a limited public market for our common stock and there can
be no assurance that an active trading market for our common stock will develop.
As a result, this could adversely affect our shareholders' ability to sell our
common stock in short time periods, or possibly at all.  Our common stock has
experienced, and is likely to experience in the future, significant price and
volume fluctuations, which could adversely affect the market price of our common
stock without regard to our operating performance.  In addition, we believe that
factors such as quarterly fluctuations in our financial results and changes in
the overall economy or the condition of the financial markets could cause the
price of our common stock to fluctuate substantially.


     WE MAY NEED TO RAISE ADDITIONAL CAPITAL TO FINANCE OPERATIONS OR EXPANSION.

     We have relied on significant external financing to fund our operations.
Such financing has historically come from a combination of borrowings from and
sale of common stock to third parties and funds provided by certain officers and
directors.  We cannot assure you that financing whether from external sources or
related parties will be available if needed or on favorable terms.  The sale of
our common stock to raise capital may cause dilution to our existing
shareholders.  Our inability to obtain adequate financing will result in the
need to reduce or curtail our business operations.  Any of these events would be
materially harmful to our business and may result in a lower stock price.


     WE HAVE A LIMITED CUSTOMER BASE.

     At present, our customer base consists primarily of companies involved in
the mining and dredging industries.  Our ability to operate depends on
increasing our customer base and achieving sufficient gross profit margins.  We
cannot assure you that we will be able to increase our customer base or to
operate profitably.  If any of our major customers stop or delay its purchases
of our products, our revenue and profitability would be adversely affected.  For
the year ended September 30, 2005, five customers accounted for 43.0% of our
sales.  We anticipate that sales of our products to relatively few customers
will continue to account for a significant portion of our revenue.  If these
customers cancel or delay their purchase orders, our revenue may decline.  We
cannot assure you that our current customers will continue to place orders with
us, that orders by existing customers will continue at the levels of previous
periods or that we will be able to obtain orders from new customers.


                                       11
<PAGE>
Although our financial performance depends on large orders from key customers
and resellers, we do not have binding commitments from any of them.


     OUR COMMON STOCK IS DEEMED TO BE "PENNY STOCK," WHICH MAY MAKE IT MORE
DIFFICULT FOR SHAREHOLDERS TO SELL THEIR SHARES DUE TO SUITABILITY REQUIREMENTS.

     Our common stock is deemed to be "penny stock" as that term is defined in
Rule 3a51-1 promulgated under the Securities Exchange Act of 1934.  Penny stocks
are stock:

     -    With a price of less than $5.00 per share;

     -    That are not traded on a "recognized" national exchange;

     -    Whose prices are not quoted on the Nasdaq automated quotation system
          (Nasdaq listed stock must still have a price of not less than $5.00
          per share); or

     -    In issuers with net tangible assets less than $2.0 million (if the
          issuer has been in continuous operation for at least three years) or
          $5.0 million (if in continuous operation for less than three years),
          or with average revenues of less than $6.0 million for the last three
          years.

     Broker/dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks.  Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor.  These requirements may
reduce the potential market for our common stock by reducing the number of
potential investors.  This may make it more difficult our shareholders to resell
shares to third parties or to otherwise dispose of them.  This could cause our
stock price to decline.


     WE FACE SIGNIFICANT COMPETITION WITHIN OUR MARKET.

     We expect competition to persist and intensify in the future. The wear
plate solutions industry is highly competitive.  We have numerous competitors
worldwide, including Triton, Inc., Trimay, Ltd., Australian National Industries,
Ltd., Australian Overseas, Ltd., Abresist Corporation and Duraweld, Ltd.
Competitive market conditions could adversely affect our results of operations
if we are required to reduce product prices to remain competitive or if we are
unable to achieve significant sales of our products.

     Many of our competitors (including those identified above) are
substantially larger than Alloy and have significantly greater financial,
marketing, technical and manufacturing resources with more established
distribution channels.  These competitors may be able to respond more quickly to
new or emerging technologies and changes in customer requirements or devote
greater resources to the development, promotion and sale of their products than
we can.  Furthermore, some of our competitors may make strategic acquisitions or
establish cooperative relationships to increase their ability to rapidly gain
market share by addressing the needs of our prospective customers.  These
competitors may enter our existing or future markets with solutions that may be
less expensive, provide higher performance or additional features or be
introduced earlier than our solutions.  If any technology is more reliable,
resistant, and less expensive or has other advantages over our technology, then
the demand for our products and services would decrease, which would seriously
harm our business.

     We expect our competitors to continue to improve the performance of their
current products and introduce new products and technologies as industry
standards and customer requirements evolve.  These new products and technologies
could supplant or provide lower cost alternatives to our products.  To be
competitive, we must continue to invest resources in research and development,
sales and marketing, and customer support.

     Increased competition is likely to result in price reductions, reduced
gross margins, longer sales cycles, and loss of market share, any of which would
seriously harm our business and results of operations.


                                       12
<PAGE>
     WE HAVE LIMITED MARKETING AND SALES CAPABILITY.

     Because of our previous limited working capital, we have not had the
resources to fully implement our marketing and sales strategy.  In order to
increase our revenues, we are in the process of further implementing a marketing
and sales force with technical expertise and marketing capability.  There can be
no assurance that we will be able to:

     -    Establish and develop such a sales force;

     -    Gain market acceptance for our products;

     -    Obtain and retain qualified sales personnel on acceptable terms; and

     -    Meet our proposed marketing schedules or plans.

     To the extent that we arrange with third parties to market our products,
the success of such marketing will depend on the efforts of these third parties.


ITEM 7.   FINANCIAL STATEMENTS.

     Our audited consolidated financial statements for the year ended September
30, 2005 appear following Item 14 of this report and are incorporated herein by
reference.


ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

     None.

ITEM 8A.  CONTROLS AND PROCEDURES

(a)  Evaluation of disclosure controls and procedures

     Based on their evaluation of our disclosure controls and procedures (as
defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act")), our principal executive officer and principal financial
officer have concluded that as of the end of the period covered by this Annual
Report on Form 10-KSB such disclosure controls and procedures are effective to
ensure that 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 Securities and Exchange Commission rules
and forms.

(b)  Changes in internal control over financial reporting.

     During the last quarter of the year under report, there was no change in
our internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 8B.  OTHER INFORMATION

     None.


                                       13
<PAGE>
                                    PART III


ITEM. 9   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     Our present directors and executive officers are as follows:

<TABLE>
<CAPTION>
         NAME             AGE                  POSITION
         ---------------  ---  ----------------------------------------
<S>                       <C>  <C>

         Gene Kostecki     60  President, Chief Executive Officer and a
                               Director

         Alan C. Winduss   64  Chief Financial Officer, Secretary and a
                               Director
</TABLE>

     The following is a brief summary of the background of each executive
officer and director:

     Gene Kostecki has served as a director and as our President and Chief
Executive Officer since June 2000. From July 1995 to July 1997, Mr. Kostecki
served as Managing Director of the Collier Unit Trust, an engineering business
and distributor based in Western Australia.  He acts as our President and Chief
Executive Officer on a full-time basis.

     Alan C. Winduss has served as a director and as our Chief Financial Officer
and Secretary since June 2000. From July 1979 to the present, Mr. Winduss has
served as director of Winduss & Associates Pty Ltd, an accounting firm in
Western Australia, which specializes in commercial accounting, corporate finance
and management.  He intends to devote approximately 70% of his time to his
duties as one of our executive officers.


     BOARD COMPOSITION

     Our Board of Directors currently consists of two directors.  At each annual
meeting of our stockholders, all of our directors are elected to serve from the
time of election and qualification until the next annual meeting following
election.  In addition, our bylaws provide that the maximum authorized number of
directors may be changed by resolution of the stockholders or by resolution of
the board of directors.

     Each officer is elected by, and serves at the discretion of, our board of
directors.  There are no family relationships among any of our directors,
officers or key employees.


     CONTROL BY OFFICERS AND DIRECTORS

     Our directors and executive officers own approximately 74.0% of the
outstanding shares of our common stock.  Accordingly, these stockholders possess
substantial control over our operations.  This control may allow them to amend
corporate filings, elect all of our board of directors, and substantially
control all matters requiring approval by our stockholders, including approval
of significant corporate transactions.


     COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires our directors and executive officers, and persons who
beneficially own more than ten percent of a registered class of our equity
securities, to file with the Securities and Exchange Commission (the
"Commission") initial reports of ownership and reports of changes in ownership
of our common stock and other equity securities.  Officers, directors, and
persons who beneficially own more than ten percent of a registered class of our
equity securities are required by the regulations of the Commission to furnish
us with copies of all Section 16(a) forms they file.  To our knowledge, based
solely on review of the copies of such reports furnished to us, during the
fiscal year ended September 30, 2005, our officers, directors, and greater than
ten percent beneficial owners complied with all Sections 16(a) filing
requirements applicable to them.


                                       14
<PAGE>
ITEM 10.  EXECUTIVE COMPENSATION.

     The following table sets forth the annual cash compensation for services
rendered by our Chief Executive Officer for the fiscal year ended September 30,
2005. No other executive officer earned or secured more than $100,000 in salary
and bonus for services rendered during the fiscal year ended September 30, 2005:

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                             ANNUAL COMPENSATION
                           -----------------------
                                                     LONG-TERM     ALL OTHER
NAME AND POSITION    YEAR    SALARY       BONUS     COMPENSATION  COMPENSATION
-------------------  ----  ----------  -----------  ------------  ------------
<S>                  <C>   <C>         <C>          <C>           <C>
Gene Kostecki        2005  $  150,000  $         0       -              -
President and Chief  2004  $  150,000  $         0       -              -
Executive Officer    2003  $  150,000  $         0       -              -
</TABLE>

     STOCK OPTION PLAN

     In May 2000, we adopted the 2000 Stock Option Plan.  The purpose of the
plan is to enable us to attract, retain and motivate key employees, directors,
and consultants, by providing them with stock options.  Options granted under
the plan may be either incentive stock options, as defined in Section 422A of
the Internal Revenue Code of 1986, or non-qualified stock options.  We have
reserved 2,000,000 shares of common stock for issuance under the plan.  As of
November 30 2005, no options had been granted pursuant to the plan.

     Our Board of Directors will administer the plan.  Our Board has the power
to determine the terms of any options granted under the plan, including the
exercise price, the number of shares subject to the option, and conditions of
exercise.  Options granted under the plan are generally not transferable, and
each option is generally exercisable during the lifetime of the holder only by
the holder.  The exercise price of all incentive stock options granted under the
plan must be at least equal to the fair market value of the shares of common
stock on the date of the grant.  With respect to any participant who owns stock
possessing more than 10% of the voting power of all classes of our stock, the
exercise price of any incentive stock option granted must be equal to at least
110% of the fair market value on the grant date.  Our Board of Directors
approves the terms of each option.  These terms are reflected in a written stock
option agreement.


     EMPLOYMENT AGREEMENTS

     There are currently no employment agreements in place with either Mr. G.
Kostecki our President and Chief Executive Officer or Mr. A. Winduss our Chief
Financial Officer and Secretary. New agreements are currently being discussed
and negotiated.


     LIMITATIONS OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Our certificate of incorporation and bylaws limit the liability of
directors and officers to the maximum extent permitted by Delaware law.  We will
indemnify any person who was or is a party, or is threatened to be made a party
to, an action, suit or proceeding, whether civil, criminal, administrative or
investigative, if that person is or was a director, officer, employee or agent
of ours or serves or served any other enterprise at our request.

     In addition, our certificate of incorporation provides that, generally, a
director shall not be personally liable to us or our stockholders for monetary
damages for breach of the director's fiduciary duty.  However, in accordance
with Delaware law, a director will not be indemnified for a breach of its duty
of loyalty, acts or omissions not in good faith or involving intentional
misconduct or a knowing violation or any transaction from which the director
derived improper personal benefit.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth, as of November 30 2005, the number and
percentage of outstanding shares of common stock beneficially owned by:


                                       15
<PAGE>
     -    each person who we know beneficially owns more than 5% of the
          outstanding shares of our common stock;

     -    each of our executive officers and directors; and

     -    all of our officers and directors as a group.

     Except as otherwise noted, the persons named in this table, based upon
information provided by these persons, have sole voting and investment power
with respect to all shares of common stock owned by them.  The number of shares
of common stock outstanding used in calculating the percentage for each listed
person includes the shares of common stock underlying options or warrants held
by such person that are exercisable within 60 days of November 30, 2005, but
excludes shares of common stock underlying options or warrants held by any other
person.  Unless otherwise indicated, the address of each beneficial owner is c/o
Alloy Steel, 42 Mercantile Way Malaga, P.O. Box 3087 Malaga D C 6945, Western
Australia.

<TABLE>
<CAPTION>
                                                                   PERCENTAGE
                                                                       OF
                                                                     COMMON
                                                                      STOCK
                                                        NUMBER    BENEFICIALLY
NAME OF BENEFICIAL OWNER                              OF SHARES       OWNED
---------------------------------------------------  -----------  ------------
<S>                                                  <C>          <C>
Gene Kostecki                                         10,598,000         62.5%

Alan C. Winduss                                        1,893,250         11.2%

All officers and directors as a group (two persons)   12,491,250         74.0%
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Messrs. Gene Kostecki and Alan Winduss are both directors of Alloy Steel
International, Inc. and its subsidiary, Alloy Steel Australia (Int) Pty Ltd.

     Mr. Winduss is a director of a public accounting firm Winduss & Associates
Pty Ltd, which provides accounting and secretarial services to Alloy Steel's
subsidiary, Alloy Steel Australia (Int.) Pty Ltd.  These services are provided
at normal commercial rates and conditions.  The cost of these services are
recovered under the fees paid by Mr. Winduss' consulting agreement.

     Alloy Steel Australia (Int.) Pty Ltd. paid rent of $85,000, for commercial
premises it occupied during the year, to Raglan Securities Pty Ltd., a company
controlled by Gene Kostecki.

     The license granted to use the Alloy process provides for royalty payments
to Kenside Investments, Ltd., in an amount equal to 2% of our net sales of
Arcoplate products.  Our Chief Executive Officer, director and principal
shareholder, Gene Kostecki controls Kenside Investments, Ltd.

     At September 30, 2005 we had a non-interest bearing loan of approximately
$150,344 payable to an entity controlled by Mr Gene Kostecki. The loan has no
stated repayment terms and is unsecured.


ITEM 13.  EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.  DESCRIPTION
-----------  ---------------------------------------------------------------------------------------------------
<S>          <C>
3.1          Certificate of Incorporation*

3.2          By-laws*

4.1          Specimen Certificate*


                                       16
<PAGE>
EXHIBIT NO.  DESCRIPTION
-----------  ---------------------------------------------------------------------------------------------------
10.1         2000 Stock Option Plan*

10.2         License Agreement, dated May 4, 2000, between Alloy Steel and Kenside Investments, Ltd.*

10.3         Employment Agreement, dated October 2, 2000, between Alloy Steel and Gene Kostecki*

10.4         Employment Agreement, dated October 2, 2000, between Alloy Steel and Alan Winduss*

10.5         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Berryhill Investments, Ltd.*

10.6         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Chartreuse Nominees Pty. Ltd.*

10.7         Amended and Restated Consulting Agreement, dated October 2, 2000, between Alloy Steel and Persia
             Consulting Group, Inc.*

10.8         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Ragstar Investments, Ltd.*

10.9         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Alan Winduss Pty. Ltd.*

10.10        Consulting Agreement, dated October 2, 2000, between Alloy Steel and Ames Nominees Pty. Ltd.*

10.11        Lease Agreement, dated July 1, 2000, between Alloy Steel and Raglan Securities Pty. Ltd.*

10.12        Asset Purchase Agreement, dated October 2, 2000 between Alloy Steel and Collier Unit Trust*

10.13        Equipment Purchase Agreement, dated October 2, 2000, between Alloy Steel and Collier Unit Trust*

10.14        Asset Purchase Agreement, dated October 2, 2000, by and among Alloy Steel and Gene Kostecki and
             Alan Winduss*

10.15        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Gene Kostecki*

10.16        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Alan Winduss*

31.1         Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)**

31.2         Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)**

32.1         Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18
             U.S.C. 1350**

32.2         Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18
             U.S.C. 1350**
</TABLE>

  *  Previously filed.  See Exhibit Index.
 **  Filed herewith.


                                       17
<PAGE>
ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

     The Board of Directors reviewed all services performed for the company by
Rothstein Kass & Company, P.C, our independent auditors, for the fiscal year
ended September 30, 2005, within and outside the scope of their quarterly and
annual auditing function. The aggregate fees billed by our independent auditors
for each of the last two fiscal years are as follows:

<TABLE>
<CAPTION>
                          2005         2004
                         ------       ------
<S>                      <C>          <C>
Audit Fees               48,212       20,500

Audit-Related Fees       -            -

Tax Fees                 -            -

All Other Fees           -            -
</TABLE>

The fees labeled Audit-Related Fees above principally involved the auditing of
the annual financial statements of the company and the economic entity and
review of the audit of the overseas operating entity, together with the review
of quarterly financial statements as lodged with regulatory authorities.


                                       18
<PAGE>
SIGNATURES


     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated: December 22, 2005                ALLOY STEEL INTERNATIONAL, INC.
                                        (Registrant)


                                        By: /s/ Gene Kostecki
                                           -------------------------------------
                                           Gene Kostecki
                                           President and Chief Executive Officer

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

/s/ Gene Kostecki                   Director and
----------------------      President and Chief Executive
    Gene Kostecki       Officer (Principal Executive Officer) December 22, 2005

                                    Director and
/s/ Alan C. Winduss          Chief Financial Officer and
----------------------   Secretary (Principal Financial and   December 22, 2005
    Alan C. Winduss              Accounting Officer)


                                       19
<PAGE>
<TABLE>
<CAPTION>
                                              Alloy Steel International, Inc.

                                           Annual Report on Form 10-KSB for the
                                               Year Ended September 30, 2005

                                                       EXHIBIT INDEX


EXHIBIT NO.  DESCRIPTION
-----------  ------------------------------------------------------------------------------------------------------------
<S>          <C>
3.1          Certificate of Incorporation [Incorporated by reference to Exhibit 3.1 to our Registration Statement on Form
             SB-2, SEC File No. 333-49146, filed on November 2, 2000, as amended (the "Registration Statement").]

3.2          By-laws [Incorporated by reference to Exhibit 3.2 to the Registration Statement.]

4.1          Specimen Certificate [Incorporated by reference to Exhibit 4.1 to the Registration Statement.]

10.1         2000 Stock Option Plan [Incorporated by reference to Exhibit 10.1 to the Registration Statement.]

10.2         License Agreement, dated May 4, 2000, between Alloy Steel and Kenside Investments, Ltd. [Incorporated by
             reference to Exhibit 10.2 to the Registration Statement.]

10.3         Employment Agreement, dated October 2, 2000, between Alloy Steel and Gene Kostecki [Incorporated by
             reference to Exhibit 10.3 to the Registration Statement.]

10.4         Employment Agreement, dated October 2, 2000, between Alloy Steel and Alan Winduss [Incorporated by
             reference to Exhibit 10.4 to the Registration Statement.]

10.5         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Berryhill Investments, Ltd.
             [Incorporated by reference to Exhibit 10.5 to the Registration Statement.]

10.6         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Chartreuse Nominees Pty. Ltd.
             [Incorporated by reference to Exhibit 10.6 to the Registration Statement.]

10.7         Amended and Restated Consulting Agreement, dated October 2, 2000, between Alloy Steel and Persia
             Consulting Group, Inc. [Incorporated by reference to Exhibit 10.7 to the Registration Statement.]

10.8         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Ragstar Investments, Ltd.
             [Incorporated by reference to Exhibit 10.8 to the Registration Statement.]

10.9         Consulting Agreement, dated October 2, 2000, between Alloy Steel and Alan Winduss Pty. Ltd. [Incorporated
             by reference to Exhibit 10.9 to the Registration Statement.]

10.10        Consulting Agreement, dated October 2, 2000, between Alloy Steel and Ames Nominees Pty. Ltd.
             [Incorporated by reference to Exhibit 10.10 to the Registration Statement.]

10.11        Lease Agreement, dated July 1, 2000, between Alloy Steel and Raglan Securities Pty. Ltd. [Incorporated by
             reference to Exhibit 10.11 to the Registration Statement.]

10.12        Asset Purchase Agreement, dated October 2, 2000 between Alloy Steel and Collier Unit Trust [Incorporated
             by reference to Exhibit 10.12 to the Registration Statement.]

10.13        Equipment Purchase Agreement, dated October 2, 2000, between Alloy Steel and Collier Unit Trust
             [Incorporated by reference to Exhibit 10.13 to the Registration Statement.]

10.14        Asset Purchase Agreement, dated October 2, 2000, by and among Alloy Steel and Gene Kostecki and Alan
             Winduss [Incorporated by reference to Exhibit 10.14 to the Registration Statement.]

10.15        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Gene Kostecki.

10.16        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Alan Winduss.

31.1         Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)

31.2         Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)

32.1         Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350

32.2         Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
</TABLE>


                                       20
<PAGE>
<TABLE>
<CAPTION>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
(ITEM 7)


<S>                                                      <C>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM       F-2

CONSOLIDATED FINANCIAL STATEMENTS

  Consolidated Balance Sheet
    September 30, 2005                                        F-3

  Consolidated Statements of Operations
    Years ended September 30, 2005 and 2004                   F-4

  Consolidated Statements of Stockholders' Equity
    Years ended September 30, 2005 and 2004                   F-5

  Consolidated Statements of Cash Flows
    Years ended September 30, 2005 and 2004                   F-6

  Notes to Consolidated Financial Statements             F-7 - 15
</TABLE>


<PAGE>
            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders of
Alloy Steel International, Inc.


We  have  audited  the  accompanying  consolidated  balance sheet of Alloy Steel
International, Inc. and Subsidiary (the "Company") as of September 30, 2005, and
the related consolidated statements of operations, stockholders' equity and cash
flows  for  each  of  the years ended in the two year period September 30, 2005.
These  consolidated financial statements are the responsibility of the Company's
management.  Our  responsibility  is to express an opinion on these consolidated
financial  statements  based  on  our  audits.

We  conducted  our  audit 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
consolidated financial statements are free of material misstatement. The Company
is  not  required  to  have,  nor  were  we  engaged to perform, an audit of its
internal  control  over financial reporting. Our audit included consideration of
internal  control  over  financial  reporting  as  a  basis  for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing  an  opinion  on  the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the consolidated financial statements, assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall consolidated financial statement presentation. We believe
that  our  audit  provides  a  reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material respects, the financial position of the Company as of
September  30,  2005,  and  the results of its operations and its cash flows for
each of the years ended in the two year period September 30, 2005, in conformity
with  accounting  principles generally accepted in the United States of America.


                                             /s/Rothstein, Kass & Company, P.C.


Roseland, New Jersey
December 15, 2005


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                 ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
                               September 30, 2005


                                     ASSETS


<S>                                                      <C>
CURRENT ASSETS
  Cash and cash equivalents                              $  127,920
  Accounts receivable                                       591,782
  Inventories                                               656,434
  Income taxes receivable                                   325,444
  Prepaid expenses and other current assets                  95,594
                                                         -----------
    Total current assets                                  1,797,174
                                                         -----------

PROPERTY AND EQUIPMENT, net                               1,720,501
                                                         -----------


OTHER ASSETS
  Other                                                      10,215
  Deferred tax assets                                        21,209
  Intangibles                                                90,512
                                                         -----------
    Total other assets                                      121,936
                                                         -----------

                                                         $3,639,611
                                                         ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
  Notes payable, current portion                         $   62,567
  Notes payable, officers, current portion                   52,424
  Accrued officers' salaries                                224,096
  Royalties payable, related party                          262,578
  Accounts payable and other current liabilities            882,952
                                                         -----------
    Total current liabilities                             1,484,617
                                                         -----------

LONG-TERM LIABILITIES
  Notes payable, less current portion                        35,750
  Notes payable, officers, less current portion             146,895
  Employee entitlement provisions                             5,920
  Loan payable, related party                               150,344
                                                         -----------
    Total long-term liabilities                             338,909
                                                         -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Preferred stock, $.01 par value, authorized 3,000,000
  shares; issued and outstanding - none
  Common stock, $.01 par value, authorized  50,000,000
  shares; issued and outstanding 16,950,000 shares          169,500
  Capital in excess of par value                          1,773,382
  Accumulated deficit                                      (704,342)
  Accumulated other comprehensive income                    577,545
                                                         -----------
    Total stockholders' equity                            1,816,085
                                                         -----------

                                                         $3,639,611
                                                         ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                 ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     Years ended September 30, 2005 and 2004


                                                         2005          2004
                                                     ------------  ------------
<S>                                                  <C>           <C>
SALES                                                $ 3,620,457   $ 2,986,915


COST OF SALES                                          2,323,100     1,739,059
                                                     ------------  ------------

GROSS PROFIT                                           1,297,357     1,247,856

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES                                               1,382,548     1,259,388
                                                     ------------  ------------

LOSS FROM OPERATIONS                                     (85,191)      (11,532)
                                                     ------------  ------------

OTHER INCOME (EXPENSE)
  Interest income                                         14,402         8,646
  Interest expense                                       (10,728)      (10,895)
  Insurance recovery                                       6,974         1,435
  Commission received                                         25
  Export grant received                                                 19,611
  Profit on disposal of property and equipment                           2,560
                                                     ------------  ------------
                                                          10,673        21,357
                                                     ------------  ------------

INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)        (74,518)        9,825

INCOME TAX EXPENSE (BENEFIT)                            (313,676)       14,050
                                                     ------------  ------------

NET INCOME (LOSS)                                    $   239,158   $    (4,225)
                                                     ============  ============


BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE     $      0.01   $     (0.00)
                                                     ============  ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  USED IN COMPUTING BASIC AND DILUTED INCOME (LOSS)
  PER COMMON SHARE                                    16,950,000    16,950,000
                                                     ============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                        ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

                                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                            Years ended September 30, 2005 and 2004


                                                                                                Accumulated
                                    Common Stock         Capital                     Compre-       Other            Total
                                --------------------    in excess     Accumulated    hensive   Comprehensive    Stockholders'
                                  Shares     Amount   of par value      Deficit      Income        Income          Equity
                                ----------  --------  -------------  -------------  ---------  --------------  ---------------
<S>                             <C>         <C>       <C>            <C>            <C>        <C>             <C>

Balances, September 30,  2003   16,950,000  $169,500  $   1,773,382  $   (939,275)             $      373,352  $    1,376,959


Net loss                                                                   (4,225)  $ (4,225)                          (4,225)

Other comprehensive income,
 foreign currency translation
 adjustment                                                                          101,189          101,189         101,189
                                                                                    ---------

Total comprehensive income -
 Year ended September 30, 2004                                                      $ 96,964
                                                                                    =========
                                ----------  --------  -------------  -------------             --------------  ---------------

Balances, September 30, 2004    16,950,000   169,500      1,773,382      (943,500)                    474,541       1,473,923


Net income                                                                239,158   $239,158                          239,158

Other comprehensive income,
 foreign currency translation
 adjustment                                                                          103,004          103,004         103,004
                                                                                    ---------

Total comprehensive income -
Year ended September 30, 2005                                                       $342,162
                                                                                    =========
                                ----------  --------  -------------  -------------             --------------  ---------------

Balances, September 30, 2005    16,950,000  $169,500  $   1,773,382  $   (704,342)             $      577,545  $    1,816,085
                                ==========  ========  =============  =============             ==============  ===============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                       ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Years ended September 30, 2005 and 2004


                                                                           2005        2004
                                                                        ----------  ----------
<S>                                                                     <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                     $ 239,158   $  (4,225)
  Adjustments to reconcile net income (loss) to net cash provided by
    (used in) operating activities:
    Depreciation                                                          149,381     116,653
    Deferred income taxes                                                    (209)    (20,072)
    Profit on disposal of property and equipment                                       (2,560)
    Increase (decrease) in cash and cash equivalents
      attributable to changes in operating assets and liabilities:
        Accounts receivable                                               279,004    (611,728)
        Inventories                                                      (234,594)    (70,694)
        Income taxes receivable                                          (327,960)          -
        Prepaid expenses and other current assets                           2,176     (24,365)
        Accrued officers' salaries                                         35,801    (123,901)
        Accounts payable and other current liabilities                    248,537     712,033
        Income taxes payable                                              (11,830)     11,220
                                                                        ----------  ----------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                       379,464     (17,639)
                                                                        ----------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                                   (167,437)   (104,992)
    Payment on deposit for investment                                      (6,847)     (3,270)
    Proceeds on disposal of property and equipment                              -       3,204
                                                                        ----------  ----------

NET CASH USED IN INVESTING ACTIVITIES                                    (174,284)   (105,058)
                                                                        ----------  ----------

NET CASH USED IN FINANCING ACTIVITIES, repayment on
notes and loan payables                                                  (239,358)    (61,218)
                                                                        ----------  ----------

EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH
  AND CASH EQUIVALENTS                                                    120,060      12,572
                                                                        ----------  ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                       85,882    (171,343)

CASH AND CASH EQUIVALENTS, beginning of year                               42,038     213,381
                                                                        ----------  ----------

CASH AND CASH EQUIVALENTS, end of year                                  $ 127,920   $  42,038
                                                                        ==========  ==========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
 cash paid during the years for:

  Income taxes                                                          $  26,325   $  22,902
                                                                        ==========  ==========

  Interest                                                              $  10,728   $  10,895
                                                                        ==========  ==========

SUPPLEMENTAL DISCLOSURES OF NON-CASH
  INVESTING AND FINANCING ACTIVITIES,
  Equipment acquired under notes payable                                $  21,095   $  44,120
                                                                        ==========  ==========

  Conversion of consulting fees payable to notes payable, officers      $       -   $ 242,925
                                                                        ==========  ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.   NATURE OF OPERATIONS

Alloy  Steel  International,  Inc. (ASII) and its wholly-owned subsidiary, Alloy
Steel  Australia  (Int.)  Pty  Limited  (ASAI)  (collectively  the  "Company")
manufacture  and distribute Arcoplate, a wear-resistant fused-alloy steel plate,
to  customers  throughout  the  world.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis  of  Presentation

The  Company  adheres  to accounting principles generally accepted in the United
States  of  America.  The  Company's  consolidated  financial  statements  are
denominated  in  United  States  dollars.

Principles  of  Consolidation

The  consolidated  financial  statements  include the accounts of ASII and ASAI.
All  material  intercompany  balances  and  transactions have been eliminated in
consolidation.

Revenue  Recognition

The  Company  recognizes  revenues when products are shipped and title passes to
customers.  Provisions  are  established,  as  appropriate,  for  uncollectible
accounts,  returns  and  allowances  and  warranties  in  connection with sales.

Cash and Cash Equivalents

The  Company  considers  all  highly-liquid  debt  instruments  purchased  with
maturities  of  three  months  or  less  to  be  cash  equivalents.

Accounts Receivable

The  Company  carries  its  accounts  receivable  at  cost less an allowance for
doubtful  accounts.  On  a periodic basis, the Company evaluates its receivables
and establishes an allowance for doubtful accounts, based on the history of past
write-offs  and collections and current credit conditions.  Accounts are written
off  as  uncollectible  once  the  Company has exhausted its collection efforts.

Fair  Value  of  Financial  Instruments

The  fair  value  of  the  Company's  assets  and  liabilities  which qualify as
financial instruments under Statement of Financial Accounting Standards ("SFAS")
No.  107,  "Disclosures About Fair Value of Financial Instruments," approximates
the  carrying  amounts presented in the accompanying consolidated balance sheet.

Inventories

Inventories  are  valued  at the lower of cost or net realizable value.  Cost is
determined  principally  on  the  average  cost  method,  which approximates the
first-in,  first-out  method.


                                      F-7
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impairment  of  Long-Lived  Assets

The  Company periodically assesses the recoverability of the carrying amounts of
long-lived  assets,  including  intangible  assets.  A  loss  is recognized when
expected undiscounted future cash flows are less than the carrying amount of the
asset.  The  impairment  loss  is the difference by which the carrying amount of
the  asset  exceeds  its  fair  value.

Property  and  Equipment

Property  and  equipment  are  stated  at  cost  less  accumulated depreciation.
Depreciation  is  computed  using  the  straight-line  method over the estimated
useful  lives  of  the  assets  as  follows:

<TABLE>
<CAPTION>
                                          ESTIMATED
          ASSET                          USEFUL LIVES
<S>                                      <C>
     Plant and equipment                   5-20 years
     Furniture and fixtures                 5-7 years
     Vehicles                               3-5 years
     Office and computer equipment          3-5 years
</TABLE>

Maintenance  and  repairs  are  charged  to  operations,  while  betterments and
improvements  are  capitalized.

Intangibles

Intangibles include intellectual property rights of $90,512, which will be
amortized over the lesser of the estimated useful or economic life, or five
years, commencing from the time the property rights are first commercially
exploited by the Company.

Advertising

Advertising costs are charged to operations as incurred and were approximately
$12,000 and $26,000 for the years ended September 30, 2005 and 2004,
respectively.

Income  Taxes

The  Company  complies  with  SFAS No. 109, "Accounting for Income Taxes", which
requires  an  asset  and  liability  approach  to financial reporting for income
taxes.  Deferred  income tax assets and liabilities are computed for differences
between  the  financial  statement  and tax bases of assets and liabilities that
will  result  in future taxable or deductible amounts, based on enacted tax laws
and  rates  applicable  to  the periods in which the differences are expected to
affect taxable income.  Valuation allowances are established, when necessary, to
reduce  deferred  income  tax  assets  to  the  amount  expected to be realized.


                                      F-8
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income (Loss) Per Common Share

SFAS  No.  128,  "Earnings  Per  Share", requires dual presentation of basic and
diluted  income  (loss) per share for all periods presented. Basic income (loss)
per  share  excludes  dilution  and  is  computed  by dividing net income (loss)
available to common stockholders by the weighted-average number of common shares
outstanding during the period. Diluted earnings per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were  exercised  or  converted  into common stock or resulted in the issuance of
common  stock  that  then  shared in the earnings of the Company. Diluted income
(loss)  per  common  share  was the same as basic income (loss) per common share
since  there  were  no  common  stock  equivalents  outstanding  for  both years
presented.

Use  of  Estimates

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

New  Accounting  Pronouncements

In  May  2005, the Financial Accounting Standards Board ("FASB") issued SFAS No.
154,  "Accounting  Changes  and  Error  Corrections."  This  statement generally
requires  retrospective  application  to  prior periods' financial statements of
voluntary  changes  in  accounting  principles  unless  it  is  impracticable to
determine  either  the  period-specific  effects or the cumulative effect of the
change.  Under  the prior rules, changes in accounting principles were generally
recognized by including in net income of the period of the previous guidance for
reporting  the correction of an error in previously issued financial statements,
change  in  accounting  estimate  or  justification  of  a  change in accounting
principle  on  the  basis  of  preferability.  This  statement  is effective for
accounting  changes  made in the fiscal years beginning after December 15, 2005.
Adoption  of  the provisions of the Statement is not expected to have a material
effect  on  the  operations  or  financial  position  of  the  Company.

In  December  2004, the FASB issued SFAS No. 123(R), "Accounting for Stock-Based
Compensation  (Revised)".  SFAS No. 123(R) supersedes APB No. 25 and its related
implementation  guidance.  SFAS  No.  123(R)  establishes  standards  for  the
accounting  for transactions in which an entity exchanges its equity instruments
for  goods or services. It also addresses transactions in which an entity incurs
liabilities  in  exchange for goods or services that are based on the fair value
of  the  entity's  instruments  or  that may be settled by the issuance of those
equity  instruments.  SFAS  No.  123(R)  focuses  primarily  on  accounting  for
transactions in which an entity obtains employee services in share-based payment
transactions.  SFAS  No.  123(R) requires a public entity to measure the cost of
employee  services received in exchange for an award of equity instruments based
on  the  grant-date fair value of the award (with limited exceptions). That cost
will  be  recognized  over  the  period  during which an employee is required to
provide  service  in  exchange for the award during the requisite service period
(usually  the  vesting  period). No compensation costs are recognized for equity
instruments  for  which  employees  do  not  render  the  requisite service. The
grant-date  fair value of employee share options and similar instruments will be
estimated using option-pricing models adjusted for the unique characteristics of
those  instruments  (unless  observable  market  prices  for the same or similar
instruments are available). If an equity award is modified after the grant date,
incremental  compensation  cost  will  be  recognized  in an amount equal to the
excess  of  the  fair  value  of  the  modified award over the fair value of the
original  award  immediately  before  the  modification.  The  Company  has  not
completed  its  evaluation  of  SFAS No. 123(R) but expects that the adoption of
this  new  standard,  which  will  take  effect January 1, 2006, will not have a
material  impact  on  the  operating  results  of  the  Company.


                                      F-9
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New Accounting Pronouncements (Continued)

In  November  2004, the FASB issued SFAS No. 151, "Inventory Costs, an Amendment
of  Accounting Research Bulletin (ARB) No. 43, Chapter 4". This statement amends
the  guidance  in  ARB  No.  43  Chapter  4  "Inventory  Pricing" to clarify the
accounting  for  abnormal  amounts  of  idle facility expense, freight, handling
costs  and wasted material. SFAS No. 151 requires that those items be recognized
as  current  period charges regardless of whether they meet the criterion of "so
abnormal."  In  addition,  this  statement  requires  that  allocation  of fixed
production  overheads to the costs of conversion be based on the normal capacity
of the production facilities. The provisions of this statement will be effective
for  inventory costs incurred during fiscal years beginning after June 15, 2005.
The  Company is currently evaluating the impact that this statement will have on
its  consolidated  financial  statements,  but  does  not believe it will have a
material  effect  on  the  Company's  performance.


Foreign  Currency  Translation

Assets  and  liabilities of the Company's wholly-owned subsidiary are translated
into  U.S.  dollars  at  year-end exchange rates, revenues and expenses and cash
flows  are  translated  at  average rates prevailing during the year.  Resulting
translation  adjustments  are  recorded  as  a  component  of  accumulated other
comprehensive  income.


3.   INVENTORIES

Inventories consist of the following at September 30, 2005:

<TABLE>
<CAPTION>
<S>                         <C>
     Raw materials          $217,878
     Work in progress        154,620
     Finished goods          283,936
                            --------
                            $656,434
                            ========
</TABLE>


4.   PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid  expenses and other current assets consist of the following at September
30,  2005:

<TABLE>
<CAPTION>
<S>                              <C>
     Prepaid expenses            $ 55,363
     GST receivable                40,231
                                 --------
                                 $ 95,594
                                 ========
</TABLE>


                                      F-10
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



5.   PROPERTY AND EQUIPMENT

Property and equipment consists of the following at September 30, 2005:

<TABLE>
<CAPTION>
<S>                                      <C>
     Plant and equipment                 $2,067,094
     Furniture and fixtures                  28,879
     Vehicles                                81,892
     Office and computer equipment           95,998
                                         ----------
                                          2,273,863
     Less accumulated depreciation          553,362
                                         ----------
                                         $1,720,501
                                         ==========
</TABLE>


Depreciation expense for the years ended September 30, 2005 and 2004 was
approximately $149,000 and $117,000, respectively. At September 30, 2005,
property and equipment included approximately $298,000 and accumulated
depreciation included approximately $176,000, related to assets acquired under
notes payable.


6.   NOTES PAYABLE

Notes payable at September 30, 2005 consists of the following:

<TABLE>
<CAPTION>
<S>                              <C>
     Note payable (a)            $ 18,010
     Note payable (b)              22,269
     Note payable (c)               9,004
     Note payable (d)              14,710
     Note payable (e)              14,620
     Note payable (f)              19,704
                                 --------
                                   98,317
     Less current portion          62,567
                                 --------
                                 $ 35,750
                                 ========
</TABLE>


(a)  The note is payable in monthly installments of $1,661 including interest at
     a  rate  of  6.6% per annum, with a final balloon payment in November 2005.
     The  note  is  collateralized  by  the  underlying  equipment.


                                      F-11
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



6.   NOTES PAYABLE (CONTINUED)

(b)  The note is payable in monthly installments of $2,277 including interest at
     a  rate  of 6.435% per annum, with a final balloon payment in October 2005.
     The  note  is  collateralized  by  the  underlying  equipment.

(c)  The note is payable in monthly installments of $831 including interest at a
     rate  of 6.6% per annum, with a final balloon payment in November 2005. The
     note  is  collateralized  by  the  underlying  equipment.

(d)  The note is payable in monthly installments of $639 including interest at a
     rate  of  7.75%  per annum, with a final balloon payment in April 2007. The
     note is collateralized by the underlying equipment and is guaranteed by the
     officers  of  the  Company.

(e)  The note is payable in monthly installments of $417 including interest at a
     rate  of  7.9% per annum, with a final balloon payment in January 2009. The
     note is collateralized by the underlying equipment and is guaranteed by the
     officers  of  the  Company.

(f)  The note is payable in monthly installments of $327 including interest at a
     rate  of  7.61%  per annum, with a final balloon payment in March 2010. The
     note is collateralized by the underlying equipment and is guaranteed by the
     officers  of  the  Company.

Aggregate  annual  principal  payments  for  each  of the following years are as
follows:

<TABLE>
<CAPTION>
<S>                                  <C>
     YEAR ENDING SEPTEMBER 30,
     2006                            $ 62,567
     2007                              14,346
     2008                               8,243
     2009                               4,846
     2010                               8,315
                                     --------

                                     $ 98,317
                                     ========
</TABLE>


7.   NOTES PAYABLE, OFFICERS

Notes payable, officers at September 30, 2005 consists of the following:


<TABLE>
<CAPTION>
<S>                        <C>
     Note payable (a)      $ 67,332
     Note payable (b)       131,987
                           --------
                            199,319
     Less Current Portion    52,424
                           --------
                           $146,895
                           ========
</TABLE>

(a)  The note is payable in monthly installments of $1,524 including interest at
     a  rate  of  1%  per  annum, with a final payment in June 2009. The note is
     unsecured  and  is  due  to  an  officer  of  the  Company.

(b)  The note is payable in monthly installments of $2,989 including interest at
     a  rate  of  1%  per  annum, with a final payment in June 2009. The note is
     unsecured  and  is  due  to  an  officer  of  the  Company.

Aggregate  annual  principal  payments  for  each  of the following years are as
follows:

<TABLE>
<CAPTION>
<S>                                  <C>
     YEAR ENDING SEPTEMBER 30,
     2006                            $ 52,424
     2007                              52,949
     2008                              53,482
     2009                              40,464
                                     --------
                                      199,319
                                     ========
</TABLE>

8.   LOAN PAYABLE, RELATED PARTY

As of September 30, 2005, the Company has a non-interest bearing loan payable to
a  related  party  with no stated repayment terms of approximately $150,344. The
loan  payable  is  not  expected  to  be  repaid  before  October  1,  2006.


                                      F-12
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



9.   INCOME TAXES

Income  (loss) before income tax expense (benefit) for the years ended September
30,  2005  and  2004  were  derived  in  the  following  jurisdictions:

<TABLE>
<CAPTION>
                       2005       2004
<S>                  <C>        <C>
     Australia       $(66,515)  $ 46,834
     US                (8,003)   (37,009)
                     --------------------

                     $(74,518)  $  9,825
                     ====================
</TABLE>


The  components  of  income  tax  expense (benefit) are as follows for the years
ended  September  30,  2005  and  2004:

<TABLE>
<CAPTION>
                         2005      2004
<S>                  <C>         <C>
     CURRENT
       Foreign       $(312,267)  $ 33,850

     DEFERRED
       Foreign          (1,409)   (19,800)
                     ---------------------

                     $(313,676)  $ 14,050
                     =====================
</TABLE>


As of September 30, 2005, the Company had US net operating loss carryforwards of
approximately  $1,499,000  expiring  through  2025.

The  components  of  the  deferred  tax  assets  and  liabilities consist of the
following at September 30, 2005 and 2004:

<TABLE>
<CAPTION>
                                                  2005      2004
<S>                                           <C>        <C>
     Deferred tax assets
       Net operating loss carryforwards       $ 509,680  $506,959
       Other                                     28,564    32,934
                                              --------------------
                                                538,244   539,893
     Less valuation allowance                   509,680   506,959
                                              --------------------
                                              $  28,564  $ 32,934
                                              ====================
     Deferred tax liabilities
       Other                                  $  (7,355) $(13,134)
                                              ====================

     Deferred taxes assets, net               $  21,209   $19,800
                                              ====================
</TABLE>

SFAS  No. 109, requires that the Company record a valuation allowance when it is
more  likely  than not that some portion or all of the deferred income tax asset
will  not  be  realized.  The  change  in  the  valuation  allowance amounted to
approximately  $3,000  and  $16,000  for  the years ended September 30, 2005 and
2004,  respectively.  The ultimate realization of this deferred income tax asset
depends on the Company's ability to generate sufficient taxable income in future
years.

The Company also has certain foreign tax credits available for future use.


                                      F-13
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



9.   INCOME TAXES (CONTINUED)

The  effective tax rate in 2005 and 2004 differs from the U.S. federal statutory
rate  as  follows:

<TABLE>
<CAPTION>
                                            2005    2004
<S>                                      <C>       <C>
     U.S. federal statutory rate          (34.0)%   34.0%
     Change in valuation allowance                 128.0
     Change in estimated research
       and development credit                      (19.0)
     Refund related to prior years
       research and development credit   (312.0)
     Overaccrual from prior year          (83.0)
     Other                                  8.0
                                         ----------------

     Effective tax rate                  (421.0)%  143.0%
                                         ================
</TABLE>


10.  STOCK OPTIONS

During  2000,  the Company's Board of Directors (the Committee) adopted, and the
stockholders  approved,  the 2000 stock option plan (the Plan) pursuant to which
500,000  shares  of common stock were reserved for issuance upon the exercise of
options  granted  to  key employees, members of the Committee and consultants of
the  Company.  Options  under  the  Plan  may  be  incentive  stock  options,
nonqualified  stock  options,  or any combination thereof, and the Committee may
grant  options at an exercise price which is not less than the fair market value
on the date such options are granted. The Plan further provides that the maximum
period  in  which  stock  options  may  be  exercised  will be determined by the
Committee, except that they may not be exercisable after ten years from the date
of  grant  or  five years from the date of grant for any person owning more than
ten  percent of the voting power of all classes of the Company's stock.  For the
years ending September 30, 2005 and 2004, there were no stock options granted or
outstanding  stock  options.


11.  COMMITMENTS AND CONTINGENCIES

Operating Lease

The  Company  leases its office and manufacturing space from a related party for
approximately  $85,000  per  annum  plus  certain  expenses  (as  defined in the
agreement).  The  lease  expires  on  June  30,  2010.

Rent  expense  for the years ended September 30, 2005 and 2004 was approximately
$85,000  in  each  year.

Royalty  Agreements

The Company has a licensing agreement with a related party, which relates to the
sale  of  all  products sold in the United States of America. Under the terms of
the  agreement,  the Company is required to pay royalties of 2% on the net sales
of  these products, calculated at the end of each quarter. The agreement expires
in  2025  and has three ten-year renewal options to extend unless written notice
of non-renewal is given by either party within 120 days prior to its expiration.
At  September  30, 2005, approximately $262,500 was payable under this agreement
and  is  included  in  accounts  payable  and  other  current  liabilities.

Royalty  expense  was  approximately  $69,000  and  $57,000  for the years ended
September  30,  2005  and  2004,  respectively.


                                      F-14
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS



11.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

Employment  Agreements

The  Company  has  employment  agreements  with  two  of its executives, who are
principal  stockholders,  requiring  the  payment  of  a  minimum  annual  base
compensation  of  approximately $80,000 and $150,000, adjusted semi-annually for
increases  approved  by  the Board of Directors, but not less than the base year
amount,  plus incentive compensation based on the executives performance and the
Company's  success.  The agreements were automatically renewed for an additional
year  starting  on June 13, 2005, since neither party gave notice of non-renewal
within  180  days  prior  to  their  expiration. Approximately $230,000 has been
expensed  under these agreements in the years ended September 30, 2005 and 2004,
and  is  included  in  selling,  general  and  administrative  expenses.

Equipment  Purchase

During  August  2005, the Company entered into an agreement to purchase a Plasma
Cutter and paid a deposit of approximately $32,900 on the equipment. The Company
is  committed  to acquiring the equipment after fiscal year end with the balance
of  approximately  $208,000  to  be financed upon delivery of the equipment. The
Company  has  arranged  for  financing  the balance by issuing a note payable in
sixty  monthly  installments  of $3,900 commencing in November 2005. The note is
collateralized  by the underlying equipment and is guaranteed by the officers of
the  Company.

12.  MAJOR CUSTOMERS, SUPPLIERS AND GEOGRAPHIC INFORMATION

The Company had revenues from one customer for each of the years ended September
30,  2005  and  2004,  of  approximately  $721,000  and  $300,000, respectively.
Accounts  receivable  due  from the respective customers were approximately $nil
and  $300,000  at  September  30,  2005  and  2004,  respectively.

For  the  years  ended  September  30,  2005  and  2004,  the  Company purchased
approximately  41%  and  54%  of  its  inventories from two and three suppliers,
respectively.

For  the years ended September 30, 2005 and 2004, revenues were derived from the
following:

<TABLE>
<CAPTION>
                      2005    2004
<S>                  <C>     <C>
     Australia          50%     39%
     Americas           26%     36%
     Other              24%     25%
                     --------------

                       100%    100%
                     ==============
</TABLE>


13.  LIQUIDITY

The  Company  has  suffered recurring losses from operations, has an accumulated
deficit  and  is  dependent upon its principal stockholders and their affiliated
companies for financial support. Certain stockholders and affiliates have agreed
to  provide  working  capital  and  financial support as needed at least through
October  1,  2006,  by  deferring  payments  under  various  agreements with the
Company if necessary.


                                      F-15