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, 2003

[_]  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 Identification No.)
       incorporation or organization)

              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 (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]

The issuer's revenues for the fiscal year ended September 30, 2003 were
$1,871,500.

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 December
31,  2003  was  $1,897,420
As  of  December 31, 2003, the issuer had a total of 16,950,000 shares of common
stock  outstanding.

Transitional  Small  Business  Disclosure  Format  (check  one):

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 Plan of Operation" and "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 Internet
address  is  www.alloysteel.net.


     OVERVIEW OF BUSINESS

     We  manufacture  and  distribute  Arcoplate, a wear-resistant alloy overlay
wear  plate, through a patented production process.  We believe that wear in the
operating workplace is the largest single factor leading to production losses in
the  mining,  mineral-processing,  and  steel  manufacturing  industries,  and
consequently,  wear solutions are indispensable for businesses with wear-related
concerns.  The wearing of metal parts is generally defined as a gradual decay or
breakdown of the metal.  Because the wear of equipment may have multiple causes,
the selection of alloy 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 offers 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  available  for industrial use, due to its high carbide
content, we believe that the costs associated with tungsten carbide are too high
to  be  a  practical  wear  plate solution for most businesses.  We believe that
Arcoplate  provides businesses with solutions to most wear-related problems at a
cost  competitive with conventional welded overlay wear plates and substantially
lower  than  tungsten carbide.  In addition, we believe that the 3-D Pipefitting
Cladder  process  we  are  developing, when commercially available, will provide
businesses  with  solutions for the problem of wear and down time in pipefitting
systems,  reducing the costs associated with lost production and the replacement
of  worn  pipefittings.


     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, in the
mining  and  mineral  processing  industries,  wear is the primary cause of down
time,  the  period  of  time  when  machinery is not in operation due to wear or
malfunction.  We  believe  that  our  Arcoplate  product line will substantially
lower  down  time  and  the  resulting  lost  production  for  our  customers.


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

     -    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 when in use.

     We  believe  Arcoplate  has  properties  that  allow  it  to  overcome  the
limitations  of  conventional  welded  wear  plates.  Based  upon  independent
laboratory  and field tests, we believe that Arcoplate provides a wear-resistant
barrier  superior to that provided by conventional single or multiple layer wear
plates,  due  to  Arcoplate's higher carbide content and smoother surface layer.
In  addition, Arcoplate wear plate sheets withstand rolling and pressing, within
their  fabrication  guidelines,  into  various  shapes  for  commercial  use.

     Many  of  our  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, performed by independent
laboratories,  universities  and  other  testing  facilities.

     Based  upon  these  independent  studies  and  field tests, we believe that
Arcoplate  is  adaptable  to  a  wide range of industrial applications, and that
Arcoplate significantly reduces wear in any application where abrasive materials
come  into  contact  with  steel  surfaces.

     Arcoplate is designed for installation and use where the wear of structures
and  machinery  frequently  occurs,  including:

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

     -    brick and cement works and 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.

     Our  product  lines  include a range of alloy overlay plates.  Our products
are  designed  for ease of handling and can be fabricated to suit our customers'
requirements  regarding  shape,  size,  weight,  and  special  needs.  Sheets of
Arcoplate  can  be  welded together to cover large surface areas, and can be cut
into  a  range  of  shapes, while still maintaining resistance to wear.  We also
provide  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 postproduction 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 resistant to wear than a
conventional  welded  wear  plate.

     Our  existing  production  equipment  is  presently  operating  at  75%  of
capacity.  The  completion  of  a  new  production  machine, which we previously
expected  in  February  2003,  was  delayed  because  of  an engineering problem
involving  the  alloy  feeder.  A  prototype of a newly designed alloy feeder is
currently  being  constructed, and we expected to commence trial production with
the  new  machine  in  early 2004. If our existing production equipment fails or
malfunctions,  our  production capacity will be reduced. This would likely delay
deliveries  to  customers.


                                        3
<PAGE>
     We are presently distributing Arcoplate products to customers in the United
States,  South  America  and  Australia.  We  intend  to expand our marketing to
include  mining  companies,  original equipment manufacturers, cement plants and
dredging  companies  in  Korea, India, Indonesia, Singapore, South Africa, Japan
and  China.

     The  Arcoplate Division of Collier Unit Trust, the predecessor operation to
Alloy  Steel International, Inc., commenced operations in 1990 and was an entity
controlled by Gene Kostecki, our chief executive officer, director and principal
stockholder.  The  initial prototype equipment commenced producing Arcoplate for
sale  to  customers  in  1991.


     3-D PIPEFITTING CLADDER PROCESS

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

     We  believe  that the 3-D Pipefitting Cladder process will overcome many of
the  problems  associated  with  pipefitting  wear and greatly reduce production
losses due to down time and pipe replacement.  Pipefittings are extensively used
in the dredging, mining, mineral processing, coal-fired power generation, cement
manufacturing,  and  oil  refinery  industries,  where  materials are frequently
transported  via  closed  pipe.

     We  have suspended development of the 3-D Pipefitting Cladder process until
we  resolve  the  problems with the alloy feeder in our new Arcoplate production
machine.


     INDEPENDENT LABORATORY AND FIELD TESTS

     We  base  our beliefs regarding Arcoplate's high wear-resistance on records
of Arcoplate's performance in industrial use, our correspondence with mining and
mineral  processing  businesses  that  have  used  Arcoplate, and the results of
independent  laboratory  and  field  tests.

     A  study  conducted  in  1997  by  the  Central Power Research Institute of
Bangalore,  India  concluded that Arcoplate has 13.6 times less erosion loss and
65.0  times  less  abrasion  than  mild steel.  The study further concluded that
Arcoplate  offers  wear-resistance  against  low  stress abrasion at a factor of
6.5:1  or  greater  over  several kinds of  multiple layer wear plates.  A study
conducted  in  November  1997  by Metlabs (a division of AUST-AMET Pty. Ltd.) of
Welshpool,  Australia  reported  that  "the  abrasion  and  wear  resistance  of
[Arcoplate]  would  be  expected  to  be  good  due  to  the  consistency of the
microstructure  and high hardness values and the underlying steel structures." A
field  trial  of  Arcoplate  conducted  in  October  1992  by the Hamersley Iron
Paraburdoo  iron  ore  processing plant, located in Western Australia, concluded
that  Arcoplate was eight times more wear resistant than its multiple layer wear
plate  counterpart.


     SALES AND MARKETING STRATEGY

     Our 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  intend to
accomplish our objectives by consolidating our market presence in Australia, and
then  developing  an  international  market  presence,  focusing on India, South
America,  Brazil,  Indonesia, the United States, and Canada.  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.  At  the local level, we
intend  to  combine  targeted  marketing  with  advertising  in  trade journals,
newspapers  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.

     To  date,  most  of  our orders have been the result of repeat business and
inquiries  from  customers  who  have  learned  of  our  Arcoplate  products  by
word-of-mouth  in their respective industries.  For the year ended September 30,
2003,  four


                                        4
<PAGE>
customers  accounted for 60% of sales.  To strengthen our marketing presence, we
have  appointed  an  Australian  Marketing Manager based in Perth and a regional
Sales  Manager  based  on  the  East  coast  of Australia.  In addition, we have
appointed  an  American  company  as distributors for the North American market.

     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  customers and markets, evaluation of Arcoplate and the 3-D Pipefitting
Cladder  by institutions that specialize in technology analysis for this type of
market;  development of appropriate sales materials such as specification sheets
and  corporate brochures, promotion through displays at selected trade shows and
advertising  in  journals  and  the  trade  press.

     In  order  to  develop  our  Australian and international customer base, we
intend  to  contact  major  mining and mineral processing companies to determine
their current methods for minimizing down time due to wear-related problems.  We
intend  to establish initial contact with these companies by telephone, followed
by  a  targeted  mailing  of  brochures  and  case histories.  After prospective
customers  have  had  the  opportunity  to  review  the contents of our targeted
mailing,  we  will  attempt  to  set  up  a  meeting  with  key employees of the
prospective  customer  in  order  to  review  their  operations,  materials,
wear-related  problems,  and  frequency  of  shut-downs.  We  may  then  suggest
specific  Arcoplate  products,  3-D  Pipefitting  Cladder  procedures  and other
solutions  to  reduce  down time.  For original equipment manufacturers, we will
attempt to review existing operations in order to determine how our products may
assist  in  enhancing  equipment performance.  We intend to hold seminars in our
offices,  or  at  our  customers'  places of business, with operations managers,
maintenance  superintendents  and maintenance schedulers and individuals who are
directly  responsible  for  production  and  machinery  performance.

     In  addition,  we  intend  to  market  our Arcoplate products to consultant
engineering  companies  so  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  consultant  engineers with design
planning in order to maximize material flow, and to minimize wear and down time.


     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 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.


     RESEARCH AND DEVELOPMENT

     We  are  engaged in the development of new products and improvements to our
existing  products  and  we  intend  to maintain laboratory facilities for these
purposes,  as  well  as  a  network of outside independent test laboratories and
specialty  subcontractors.  Our  past  research  and  development  efforts  were
focused  on  Arcoplate's  wear  resistance,  as  compared  with  the  wear plate
solutions  of  our competitors.  Research and development is a continuing factor
for  the  improvement  and  development  of  new  Arcoplate  products.


     MANUFACTURING AND SUPPLY

     The  raw  materials we employ are principally steel and a proprietary alloy
compound.  We  presently  purchase  steel  from and alloy materials from various
suppliers.  Three  of  our suppliers, Cometals, Integrate Industries Pty Ltd and
Di Candilo Steel City, account for more than 50% of the raw material we require.
They supply us with Ferro Chrome and mild steel plates.  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 and fluxes on a timely basis at reasonable
prices  and  terms.  We  monitor


                                        5
<PAGE>
the quality of our products by frequent tests and material certification, and we
maintain  a  strict  internal  quality  control system to monitor the quality of
production  at  our  facility.


     GOVERNMENT REGULATION

     Our  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  several  larger  multi-national  companies,  all  of which are
well-established  in  those markets and may have substantially greater financial
and  other  resources than we do.  Competitive market conditions could adversely
affect our results of operations if we were required to reduce product prices to
remain  competitive.  Wear-resistant  alloy  steel  plates  are  manufactured by
numerous  corporations  worldwide.  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 12 persons on a full-time basis and 6 contract employees as of
December  20,  2003,  including  two  executive  officers,  three administrative
personnel,  two marketing personnel and eleven manufacturing personnel.  None of
our  employees  is a member of a labor union.  We consider our relationship with
our  employees  to  be good.  We anticipate hiring approximately four additional
manufacturing  employees  in  the  2004  calendar  year.


ITEM 2.   DESCRIPTION OF PROPERTY.

     We  conduct our business from leased premises located at 42 Mercantile Way,
Malaga,  Western  Australia.

     Our  current  lease expires on June 30, 2005, and we have confirmation from
the building owners that this will be extended for a further 5 years on mutually
agreed  terms.  We believe this facility will be adequate for our needs for this
period  of  time.  Our  current  monthly  rent  is  $7083.


                                        6
<PAGE>
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 30, 2003. The following
directors,  constituting  all  of  our directors, were elected at the meeting to
serve  until  their  respective  successors  are duly elected and qualified. The
directors  elected  at the Annual Meeting received the number of votes set forth
opposite  their  respective  names,  as  follows:

<TABLE>
<CAPTION>
                                                   Withheld
                                For Election  Authority/Abstained
                                ------------  -------------------
<S>                             <C>           <C>
               Gene Kostecki      13,061,250                   --
               Alan C. Winduss    13,061,250                   --
</TABLE>


                                        7
<PAGE>
                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

     Our  common  stock  is  principally  traded  on the pink sheets, a facility
maintained by Pink Sheets LLC.  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, 2003        High        Low
               -----------------------------------  ----------  ----------
<S>                                                 <C>         <C>

               October 1 - December 31, 2002        $     0.15  $     0.06
               January 1 - March 31, 2003           $     1.01  $     0.11
               April 1 - June 30, 2003              $     0.19  $     0.09
               July 1 - September 30, 2003          $     0.19  $     0.10

                  Year ended September 30, 2003        High        Low
               -----------------------------------  ----------  ----------
               October 1, 2001 - December 31, 2001  $     3.50  $     1.02
               January 1 - March 31, 2002           $     1.01  $     0.05
               April 1 - June 30, 2002              $     0.30  $     0.07
               July 1 - September 30, 2002          $     0.20  $     0.10
</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  December 31, 2003, there were approximately 23 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.


                                        8
<PAGE>
          EQUITY COMPENSATION PLANS

<TABLE>
<CAPTION>
     -------------------------------------------------------------------------------------------------------
                                                                                     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
     security holders (1)     None                         None                                    2,000,000
     -------------------------------------------------------------------------------------------------------
     Equity compensation
     plans not approved by                              -                      -                           -
     security holders
     -------------------------------------------------------------------------------------------------------

     Total                    None                         None                                    2,000,000

     -------------------------------------------------------------------------------------------------------
<FN>
          (1)  Includes our 2000 Stock Option Plan.
</TABLE>



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. 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,  in  the mining and mineral processing industries,
wear is the primary cause of down time, the period of time when machinery is not
in  operation due to wear or malfunction.  We believe that our Arcoplate product
line  will  substantially  lower down time and the resulting lost production for
our  customers.

     We also intend to commercially develop the 3-D Pipefitting Cladder process,
a computer driven and software based mechanical system for depositing a profiled
layer  of  wear resistant alloy onto interior surfaces of pipefittings, targeted
for  industrial use. Due to their angled and/or curved structures, material does
not  flow  uniformly  through  pipefittings, meaning pipefittings generally have
higher  wear,  resulting  in a much shorter working life, than ordinary straight
pipe.  The  3-D  Pipefitting  Cladder process will enable a wear resistant alloy
coating  to be applied to interior surfaces of bends, elbow joints, "T" sections
and  "Y"  sections  of pipefittings, where wear is most likely to occur. We have
suspended  development  of  the 3-D Pipefitting Cladder process until we resolve
the problems with the alloy feeder in our new Arcoplate production machine.


     PLAN OF OPERATION

     Our  objective  during  the  next  12  months  is to expand our capacity to
produce  Arcoplate  with the completion of additional equipment.  The additional
machinery  will  supplement  our existing production equipment.  We believe that
with  the  addition  of  new  equipment  we  will  have  the capacity to produce
Arcoplate which will have a resale value of $7,500,000-$10,000,000.  However, we
cannot  assure  you  that  we will achieve such capacity or generate such sales.

     We  intend  to  achieve market penetration through a multi-step process. At
the  local  level,  we  intend to combine targeted marketing with advertising in
trade journals, newspapers 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.


                                        9
<PAGE>
     RESULTS OF OPERATIONS


     SALES

     We  had sales of $1,871,500 for the year ended September 30, 2003, compared
to  sales  of  $2,116,314  for  the  year  ended September 30, 2002. 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
$0.61274  and  $.54314,  representing the average foreign exchange rates for the
years  ended  September  30,  2003 and 2002, respectively.  Sales have decreased
compared with the year ended September 2002 primarily due to a decrease in sales
to  our  South American customer together with the termination of the Australian
exclusive  distributor agreement.  The unsuccessful distribution has resulted in
the  Company  recommencing  its  own  marketing  awareness  program.


     COSTS OF SALES

     We  had  cost of sales of $1,070,766 for the year ended September 30, 2003,
compared  to  cost of sales of $1,184,491 for the year ended September 30, 2002.
The  gross  profit  amounted to $800,734 compared to $931,823 for the year ended
September  30, 2002. The gross profit percentage remained steady from 43% to 44%
in  2003  and  2002  respectively.


     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     We  had  selling, general and administrative expenses of $1,000,107 for the
year  ended  September  30,  2003,  compared  to  $1,128,238  in  the year ended
September  30,  2002.  The  decrease  was  primarily due to our reduced activity
during  the  year  ended  September  30,  2003.


     INCOME BEFORE TAXES

     Our  loss  before taxes was $170,459 for the year ended September 30, 2003,
compared  to  a  loss  of  $795,280  for  the  year ended September 30, 2002 The
decrease in the loss for the year ended September 30, 2003 is principally due to
the  $600,000 write off in the year ended September 30 2002 of costs incurred in
connection  with  the  issue  of shares to the facilitators of an equity line of
credit  arrangement  that  was  terminated.  These costs were previously charged
against  capital  in  excess  of par value in the year ended September 30, 2002.


     INCOME TAXES

     We had an income tax benefit of ($193,127) for the year ended September 30,
2003  compared  to  an expense $3,467 for the year ended September 30, 2002. The
2002  income tax expense related to taxes payable in Australia.  The 2003 income
tax  benefit  was a result of Research and Development concessions being granted
by  the  Australian  Taxation  Office.


     NET LOSS

     We  had  net  profit  of  $22,668,  or  $0.00 per share, for the year ended
September  30, 2003, compared to a net loss of $798,747, or $0.05 per share, for
the  year  ended  September  30,  2002.


     LIQUIDITY AND CAPITAL RESOURCES

     For  the  year  ended  September 30, 2003, the total cash used by operating
activities was $92,433, principally as a result of an increase in inventories of
$153,187  and  an increase in accounts receivable of $72,184 partially offset by
an  increase  in  accounts  payable  of  $173,538.

     As of the year ended September 30, 2003, we had working capital of $9,684.


                                       10
<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,  2003:

<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              $134,158  $   43,664  $   90,494  $        -  $      -
  Operating leases             148,750      85,000      63,750
  Employment agreements        460,000     230,000     230,000
                              ------------------------------------------------------

TOTAL CONTRACTUAL OBLIGATONS  $742,908  $  348,664  $  384,244  $        -  $      -
                              ======================================================
</TABLE>

     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 to raise capital.  The sale of additional equity or convertible debt
securities  could  result  in dilution to our stockholders.  Our working capital
may  impair  our  ability to obtain certain types of financing, including a bank
line  of  credit.  There can be no assurance that financing will be available in
amounts  or  on  terms  acceptable  to  us,  or  at  all.

     SIGNIFICANT  CHANGES  IN  NUMBERS  OF  EMPLOYEES

     We  anticipate hiring approximately four additional manufacturing employees
in  the  next  12  months  and  an  additional  marketing person was employed in
December  2003.


     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  Notes  to Consolidated
Financial Statements contains the significant accounting principles that we used
to  prepare  our  consolidated  financial  statements.

     We  have identified several critical accounting policies that require us to
make assumptions about matters 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
a  material  effect on our financial condition or results of operations 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

     The  allowance  of  doubtful accounts is based on an evaluation of specific
customer  accounts  in  which  available  facts  and  circumstances  indicate
collectibility  may  be a problem. In addition, the allowance includes a general
reserve  for  all  customers  based  on  historical  collection  experience.

     INVENTORIES

     Our  inventories  are  recorded  at  the lower of cost or market, with cost
based on a 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,  which could have an adverse effect on our reported
results  in  the  period  the  adjustment  are  made.


                                       11
<PAGE>
     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  that indicate the carrying amount of those 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

     We are 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, President 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.


                                       12
<PAGE>
     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 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


                                       13
<PAGE>
its purchases of our products, our revenue and profitability would be adversely
affected.  For the year ended September 30, 2003, 14 customers accounted for 61%
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.
Although our financial performance depends on large orders from a 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 we are and have significantly greater financial,
sales, marketing, technical, manufacturing and other resources and 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.


                                       14
<PAGE>
     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.


     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, 2003 appear following Item 13 of this report and are incorporated herein by
reference.


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

     On January 16, 2002, we dismissed HJ & Associates, LLC as our independent
certified public accountant.  HJ & Associates reviewed our quarterly report for
the period ended June 30, 2001, but did not initiate an audit or render an audit
report on our financial statements.  HJ & Associates' dismissal was recommended
and approved by our Board of Directors.   For the interim periods reviewed by HJ
& Associates prior to dismissal, there were no disagreements on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to their satisfaction
would have caused HJ & Associates to make reference thereto in connection with
their opinion.  For the interim periods reviewed by HJ & Associates prior to
dismissal, HJ & Associates did not advise us of any of the matters identified in
paragraph (a)(1)(iv)(B) of Item 304 of Regulation S-B.

     On January 16, 2002, we engaged Rothstein, Kass & Company, P.C. as our
principal accountant to audit the our financial statements.  We did not consult
Rothstein Kass on any matters described in paragraph (a)(2)(i) or (ii) of Item
304 of Regulation S-B during the period specified in paragraph (a)(1) of Item
304 of Regulation S-B prior to engaging  Rothstein Kass.


                                       15
<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     58  President, Chief Executive Officer and a
                           Director
     Alan C. Winduss   62  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 1997 to the present, Mr. Kostecki
served as the Chief Executive Officer and director of Arcoplate, Inc. and
Arcoplate Holdings (UK) PLC.  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 1997 to the present, Mr. Winduss
served as the Chief Financial Officer and director of Arcoplate, Inc. and
Arcoplate Holdings (UK) PLC.  From July 1979 to the present, Mr. Winduss has
served as the senior principal 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


                                       16
<PAGE>
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, 2003, our officers, directors, and greater than ten percent
beneficial owners complied with all Sections 16(a) filing requirements
applicable to them.


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,
2003. 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, 2003:

<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        2003  $  150,000  $         0             -             -
President and Chief  2002  $  150,000  $         0             -             -
Executive Officer    2001  $  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
December 20, 2003, 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

     We have entered into five-year employment agreements, commencing as of
October 2, 2000, with Gene Kostecki, our President and Chief Executive Officer,
and Alan C. Winduss, our Chief Financial Officer and Secretary, which provide
for an annual salary of $150,000 and $80,000, respectively.  The employment
agreements provide that each of Mr. Kostecki and Mr. Winduss are eligible to
receive incentive bonus compensation, at the discretion of the Board of
Directors, based on their respective performance and contributions to our
success.  The employment agreements provide for termination based on death,
disability or voluntary resignation and each provides for severance payments
upon termination in the event that there is termination without cause, if the
employee terminates his employment for good reason or in the event of a change
in control.  The employment agreement defines "good reason" as any violation of
the employment agreement by us, any reduction in the employee's salary or
benefits or the assignment to the employee of duties inconsistent with his
position.  If the employment agreement is terminated without cause, as a result
of change of control, or terminated by the employee for good reason, the amount
of the severance payment will be equal to three times that average annual
compensation payable under the employment agreement.


                                       17
<PAGE>
     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 December 31, 2003, the number and
percentage of outstanding shares of common stock beneficially owned by:

     -    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 December 20, 2003, 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, P.O. Box 3087, Malaga D C 6945, Western
Australia.

<TABLE>
<CAPTION>
                                                                                 PERCENTAGE
                                                                                     OF
                                                                                   COMMON
                                                                   NUMBER           STOCK
                                                                                BENEFICIALLY
          NAME OF BENEFICIAL OWNER                                OF SHARES         OWNED
          ---------------------------------------------------  ---------------  -------------
<S>                                                            <C>              <C>

          Gene Kostecki                                        10,598,000  (1)          62.5%
          Alan C. Winduss                                       1,893,250  (2)          11.2%
          All officers and directors as a group (two persons)      12,491,250           74.0%

<FN>
(1)  The number of shares of common stock beneficially owned by Mr. Kostecki
     includes (i) 4,760,000 shares issued to Kenside Investments, Ltd., (ii)
     1,250,000 shares issued to Collier Unit Trust, and (iii) 937,500 shares
     issued to Ames Nominees Pty. Ltd.

(2)  The number of shares of common stock beneficially owned by Mr. Winduss
     includes (i) 500,000 shares issued to Chartreuse Nominees Pty. Ltd., (ii)
     90,000 shares issued to Ragstar Investments, Ltd., and (iii) 312,500 shares
     issued to Alan Winduss Pty. Ltd.
</TABLE>


                                       18
<PAGE>
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Messrs. Gene Kostecki and Alan Winduss are both directors of Alloy Steel
International, Inc. and our 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 our subsidiary,
Alloy Steel Australia (Int.) Pty Ltd.  These services are provided at normal
commercial rates and conditions.  The cost of these services is 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.

     In October 2000, we acquired from Mr. Kostecki and Mr. Winduss the right to
utilize and commercially exploit the 3-D Pipefitting Cladder process in exchange
for 3,413,750 shares of common stock.

     Our license to use the process to manufacture Arcoplate provides for
royalty payments to Kenside Investments, Ltd., an entity controlled by Mr.
Kostecki, in an amount equal to 2% of our net sales of Arcoplate products.

ITEM 13.  EXHIBITS, LISTS AND REPORTS ON FORM 8-K.

     (a)  Exhibits.

<TABLE>
<CAPTION>
EXHIBIT NO.  DESCRIPTION
-----------  --------------------------------------------------------------------------------------------------------------
<C>          <S>
3.1          Certificate of Incorporation*
3.2          By-laws*
4.1          Specimen Certificate*
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*
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**


                                       19
<PAGE>
EXHIBIT NO.  DESCRIPTION
-----------  --------------------------------------------------------------------------------------------------------------
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**
<FN>

      *   Previously filed. See Exhibit Index.

     **   Filed  herewith.
</TABLE>



     (b)  Reports on Form 8-K.

     None.


                                       20
<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: January 9, 2003        ALLOY STEEL INTERNATIONAL, INC.
                                   (Registrant)

                                        /s/ Gene Kostecki
                                   By:------------------------------------------
                                        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          January 9, 2003
   Gene Kostecki       Officer (Principal Executive Officer)

s/Alan Winduss                     Director and                  January 9, 2003
---------------------       Chief Financial Officer and
   Alan C. Winduss         Secretary (Principal Financial
                               and Accounting Officer)


                                       21
<PAGE>
<TABLE>
<CAPTION>
                                              Alloy Steel International, Inc.

                                           Annual Report on Form 10-KSB for the
                                               Year Ended September 30, 2003

                                                       EXHIBIT INDEX


EXHIBIT NO.  DESCRIPTION
-----------  -------------------------------------------------------------------------------------------------------------
<C>          <S>
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.]
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>


                                       22
<PAGE>
                         ALLOY STEEL INTERNATIONAL, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS
                                       AND
                          INDEPENDENT AUDITORS' REPORT

                               SEPTEMBER 30, 2003


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

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
(ITEM 7)

================================================================================


<S>                                                                          <C>
INDEPENDENT AUDITORS' REPORT                                                 F-2


CONSOLIDATED FINANCIAL STATEMENTS

   Consolidated Balance Sheet
   September 30, 2003                                                        F-3

   Consolidated Statements of Operations
   Years Ended September 30, 2003 and 2002                                   F-4

   Consolidated Statements of Stockholders' Equity
   Years Ended September 30, 2003 and 2002                                   F-5

   Consolidated Statements of Cash Flows
   Years Ended September 30, 2003 and 2002                                   F-6

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


                                      F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT


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, 2003, and
the related consolidated statements of operations, stockholders' equity and cash
flows  for  the  years  ended  September  30, 2003 and 2002.  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 audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  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.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An  audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material respects, the financial position of the Company as of
September 30, 2003, and the results of its operations and its cash flows for the
years  ended  September  30,  2003  and  2002,  in  conformity  with  accounting
principles  generally  accepted  in  the  United  States  of  America.


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


Roseland,  New  Jersey
December  12,  2003


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

                 ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
                               September 30, 2003



                                     ASSETS


<S>                                                                  <C>
CURRENT ASSETS
Cash and cash equivalents                                            $  213,381
  Accounts receivable, less allowance for doubtful
  accounts of $25,260                                                   203,500
  Inventories                                                           311,456
  Prepaid expenses and other current assets                              31,269
                                                                     -----------

    Total current assets                                                759,606
                                                                     -----------

PROPERTY AND EQUIPMENT, net                                           1,501,169
                                                                     -----------

OTHER ASSETS
  Intangibles                                                            90,512
                                                                     -----------


                                                                     $2,351,287
                                                                     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
  Notes payable, current portion                                     $   43,664
  Accounts payable and other current liabilities                        706,258
                                                                     -----------

    Total current liabilities                                           749,922

LONG-TERM LIABILITIES
  Notes payable, less current portion                                    90,494
  Loan payable, related party                                           133,914
                                                                     -----------

    Total liabilities                                                   974,330
                                                                     -----------

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                                                  (939,277)
  Accumulated other comprehensive income                                373,352
                                                                     -----------

    Total stockholders' equity                                        1,376,957
                                                                     -----------

                                                                     $2,351,287
                                                                     ===========
</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, 2003 and 2002


                                                               2003        2002
                                                          -----------  ------------
<S>                                                       <C>          <C>
SALES                                                     $ 1,871,500  $ 2,116,314

COST OF SALES                                               1,070,766    1,184,491
                                                          ------------ ------------

GROSS PROFIT                                                  800,734      931,823

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES                                                    1,000,107    1,128,238
COST IN CONNECTION WITH EQUITY LINE OF CREDIT                       -      600,000
                                                          ------------ ------------

                                                            1,000,107    1,728,238
                                                          ------------ ------------

LOSS FROM OPERATIONS                                         (199,373)    (796,415)
                                                          ------------ ------------

OTHER INCOME (EXPENSES)
  Interest expense                                             (8,603)      (8,827)
  Interest income                                              13,306        9,962
  Insurance recovery                                            4,892            -
  Export grant received                                        19,181            -
  Profit on disposal of plant and equipment                       138            -
                                                          ------------ ------------

                                                               28,914        9,962
                                                          ------------  -----------

LOSS BEFORE INCOME TAXES                                     (170,459)    (795,280)

INCOME TAX EXPENSE (BENEFIT)                                 (193,127)       3,467
                                                          ------------  -----------

NET INCOME (LOSS)                                         $    22,668  $  (798,747)
                                                          ===========  ============


BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE          $      0.00  $     (0.05)
                                                          ===========  ============


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, 2003 and 2002


                                                                                     Capital
                                                              Common     Shares     In Excess    Accumulated    Comprehensive
                                                              Shares     Amount   of Par Value     Deficit      Income (Loss)
                                                            ----------  --------  -------------  ------------

<S>                                                         <C>         <C>       <C>            <C>           <C>
Balances, October 1,  2001                                  16,950,000  $169,500  $   1,173,382    ($163,198)

Costs incurred in connection with issuance of
  common stock related to the equity line of credit                                     600,000

Net loss                                                                                            (798,747)       ($798,747)

Other comprehensive loss, foreign currency
 translation adjustment                                                                                               119,947
                                                                                                               ---------------

Total comprehensive loss - Year ended September 30, 2002                                                            ($678,800)
                                                                                                               ===============
                                                            ----------  --------  -------------  ------------
Balances, September 30, 2002                                16,950,000   169,500      1,773,382     (961,945)


Net income                                                                                            22,668   $       22,668

Other comprehensive income, foreign currency
 translation adjustment                                                                                               337,971
                                                                                                               ---------------

Total comprehensive income - Year ended September 30, 2003                                                     $      360,639
                                                                                                               ===============
                                                            ----------  --------  -------------  ------------

Balances, September 30, 2003                                16,950,000  $169,500  $   1,773,382    ($939,277)
                                                            ==========  ========  =============  ============

                                                               Accumulated
                                                                  Other           Total
                                                             Comprehensive    Stockholders'
                                                              Income (Loss)      Equity
                                                             --------------  ---------------

<S>                                                         <C>              <C>
Balances, October 1,  2001                                        ($84,566)  $    1,095,118

Costs incurred in connection with issuance of
  common stock related to the equity line of credit                                 600,000

Net loss                                                                           (798,747)

Other comprehensive loss, foreign currency
 translation adjustment                                            119,947          119,947


Total comprehensive loss - Year ended September 30, 2002

                                                             --------------  ---------------
Balances, September 30, 2002                                        35,381        1,016,318


Net income                                                                           22,668

Other comprehensive income, foreign currency
 translation adjustment                                            337,971          337,971


Total comprehensive income - Year ended September 30, 2003

                                                             --------------  ---------------
Balances, September 30, 2003                                $      373,352   $    1,376,957
                                                            ===============  ===============
</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, 2003 and 2002


                                                                  2003        2002
                                                               ----------  -----------
<S>                                                            <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                            $  22,668    ($798,747)
  Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
    Depreciation and amortization                                 90,974       82,158
    Costs in connection with equity line of credit                     -      600,000
    Gain on disposal of plant and equipment                         (138)           -
    Provision for loss on investment                                   -        3,926
    Plant under construction written off                           8,458       40,211
    Application of research and development credit
    to income taxes payable                                     (170,448)           -
  Increase (Decrease) in cash attributable to changes
   in operating assets and liabilities:
    Accounts receivable                                          (72,184)      78,234
    Inventories                                                 (153,187)     119,683
    Prepaid expenses and other current assets                      7,886       14,752
    Accounts payable and other current liabilities               173,538      215,751
    Income taxes payable                                               -      (81,641)
                                                               ----------  -----------

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES              (92,433)     274,327
                                                               ----------  -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property plant and equipment                     (29,059)    (219,077)
    Proceeds on disposal of plant and equipment                      368            -
                                                               ----------  -----------

NET CASH USED IN INVESTING ACTIVITIES                            (28,691)    (219,077)
                                                               ----------  -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from borrowings                                             -       79,026
  Repayment of borrowings                                        (37,022)     (26,183)
                                                               ----------  -----------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES              (37,022)      52,843
                                                               ----------  -----------

EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS                                              83,079        1,221
                                                               ----------  -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS             (75,067)     109,314

CASH AND CASH EQUIVALENTS, beginning of year                     288,448      179,134
                                                               ----------  -----------

CASH AND CASH EQUIVALENTS, end of year                         $ 213,381   $  288,448
                                                               =========   ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
 cash paid during the years for:
  Income taxes                                                 $       0   $  108,622
                                                               =========   ===========

Interest                                                       $   8,603   $    8,827
                                                               =========   ===========
</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 Acroplate, 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  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                   5-10 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.

Advertising

Advertising  costs  are  charged  to  operations as incurred and were $4,365 and
$12,939  for  the  years  ended  September  30,  2003  and  2002,  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.

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  April  2003,  the  FASB  issued  SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
financial accounting and reporting for derivative instruments, including certain
derivative  instruments  embedded  in other contracts and for hedging activities
under  SFAS  No. 133. The Statement is generally effective for contracts entered
into  or  modified  after June 30, 2003 and for hedging relationships designated
after  June  30, 2003 and should be applied prospectively. The implementation of
this  standard  did  not  have  a  material  impact  on  the Company's financial
position,  results  of  operations  or  cash  flows.

In  May  2003,  the  FASB  issued SFAS No. 150, Accounting for Certain Financial
Instruments  with  Characteristics  of Both Liabilities and Equity. SFAS No. 150
requires  certain  freestanding  financial  instruments,  such  as  mandatorily
redeemable  preferred  stock,  to  be  measured  at fair value and classified as
liabilities.  The  Statement  is  generally  effective for financial instruments
entered into or modified after May 31, 2003, and otherwise shall be effective at
the  beginning  of  the first interim period beginning after June 15, 2003.  The
adoption  of  SFAS No. 150 did have a material effect on the Company's financial
position,  results  of  operations  or  cash  flows.


                                      F-9
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Foreign  Currency  Translation

Assets  and  liabilities of the Company's wholly-owned subsidiary are translated
into  U.S.  dollars  at  year-end  exchange rates, and revenues and expenses 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, 2003:

<TABLE>
<CAPTION>
<S>                              <C>
  Raw materials                  $   60,998
  Finished goods                    250,458
                                 ----------

                                 $  311,456
                                 ==========
</TABLE>


4.   PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid  expenses and other current assets consist of the following at September
30,  2003:

<TABLE>
<CAPTION>
<S>                              <C>
  Prepaid expenses               $   16,011
  GST receivable                     15,258
                                 ----------

                                 $   31,269
                                 ==========
</TABLE>


5.   PROPERTY AND EQUIPMENT

Property and equipment consists of the following at September 30, 2003:

<TABLE>
<CAPTION>
<S>                              <C>
  Plant and equipment            $  430,874
  Furniture and fixtures             21,164
  Vehicles                            9,265
  Office and computer equipment      48,036
                                 ----------

                                    509,339
  Less accumulated depreciation     254,929
                                 ----------

                                    254,410
  Construction in progress        1,246,759
                                 ----------

                                 $1,501,169
                                 ==========
</TABLE>


                                      F-10
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


5.   PROPERTY AND EQUIPMENT (CONTINUED)

Depreciation expense for the years ended September 30, 2003 and 2002 was $90,974
and  $82,158,  respectively.


6.   ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

Accounts payable and other current liabilities consist of the following at
September 30, 2003:

<TABLE>
<CAPTION>
<S>                                      <C>
  Accounts payable and accrued expenses  $  258,204
  Accrued officers salary                   312,196
  Royalties payable                         135,858
                                         ----------

                                         $  706,258
                                         ==========
</TABLE>


7.   NOTES PAYABLE

Notes payable at September 30, 2003 consists of the following:

<TABLE>
<CAPTION>
<S>                         <C>
     Note payable (a)       $ 47,433
     Note payable (b)         63,012
     Note payable (c)         23,713
                            --------

                             134,158
     Less current portion     43,664
                            --------

                            $ 90,494
                            ========
<FN>
     (a)  The  note  is  payable  in  monthly  installments  of $1,339 including
          interest at a rate of 6.6% per annum, with a final payment in November
          2005.  The  note  is  collateralized  by  the  underlying  equipment.

     (b)  The  note  is  payable  in  monthly  installments  of $1,835 including
          interest  at  a  rate  of  6.435%  per  annum, with a final payment in
          October  2005. The note is collateralized by the underlying equipment.

     (c)  The note is payable in monthly installments of $669 including interest
          at  a  rate  of 6.6% per annum, with a final payment in November 2005.
          The  note  is  collateralized  by  the  underlying  equipment.
</TABLE>


                                      F-11
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


9.   NOTES PAYABLE (CONTINUED)

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

<TABLE>
<CAPTION>
<S>                             <C>
     YEAR ENDING SEPTEMBER 30,
            2004                $43,664
            2005                 46,598
            2006                 43,896
</TABLE>


6.   LOAN PAYABLE, RELATED PARTY

As of September 30, 2003, the Company has a non-interest bearing loan payable to
a  related  party  with  no  stated  repayment  terms of approximately $134,000.


9.   INCOME TAXES

Loss  before  income  taxes for the years ended September 30, 2003 and 2002 were
derived  in  the  following  jurisdictions:

<TABLE>
<CAPTION>
                        2003        2002
<S>                  <C>         <C>
Australia            $(118,191)  $ (34,998)
US                     (52,268)   (760,282)
                     ----------  ----------

                     $(170,459)  $(795,280)
                     ==========  ==========
</TABLE>


The components of income tax expense (benefit) are as follows for the years
ended September 30, 2003 and 2002:

<TABLE>
<CAPTION>
                            2003      2002
<S>                      <C>         <C>
CURRENT
  Foreign                $(193,127)  $3,467
                         ----------  ------

DEFERRED
  Foreign                        -        -
                         ----------  ------

                         $(193,127)  $3,467
</TABLE>


As of September 30, 2003, the Company had US net operating loss carryforwards of
approximately $1,445,000 expiring through 2023 and Australian net operating loss
carryforwards of approximately $48,000.


                                      F-12
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


9.   INCOME TAXES (CONTINUED)

The components of the net deferred income tax asset consist of the following at
September 2003 and 2002:

<TABLE>
<CAPTION>
                                      2003      2002
<S>                                 <C>       <C>
Deferred tax assets
  Net operating loss carryforwards  $542,764  $481,191
  Other                                6,488     7,355
                                    --------  --------

                                     549,252   488,546
Less valuation allowance             549,252   488,546
                                    --------  --------

Deferred tax liabilities
  Other
                                    --------  --------

Net deferred income tax asset       $      -  $      -
                                    ========  ========
</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 $61,000 and $271,000 for the years ended September 30, 2003 and
2002, 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 effective tax rate in 2003 and 2002 differs from the U.S. federal statutory
rate as follows:

<TABLE>
<CAPTION>
                                                 2003    2002
<S>                                             <C>     <C>
U.S. federal statutory rate                     (34.0)% (34.0)%
Change in valuation allowance                    35.6    34.0
Over-accrual of income taxes due to
application of research and development credit  111.7
                                                ------  -------

Effective tax rate                              113.3%      - %
                                                ===============
</TABLE>


                                      F-13
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


10.  STOCK OPTIONS

During  2000,  the  Company's  Board  of Directors 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  Board of Directors and consultants of the
Company.  Options  under  the  Plan may be incentive stock options, nonqualified
stock  options,  or  any  combination  thereof,  and  the  Board  of  Directors
(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, 2003 and 2002 there were no stock options granted.

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,  2005.

Rent  expense  for the years ended September 30, 2003 and 2002 was approximately
$85,000  in  each  year.

Royalty  Agreements

The  Company has a licensing agreement with a related party, of which relates to
the  sale of certain products.  Under the terms of the agreement, the Company is
required  to  pay  royalties  of  2%  on  the net sales of the related 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,
2003, approximately $136,000 was payable under this agreement and is included in
accounts  payable  and  other  current  liabilities.

Royalty  expense  was  approximately  $37,000  and  $42,000  for the years ended
September  30,  2003  and  2002,  respectively.

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  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 expire in 2005 and are automatically renewed
for  an  additional year unless either party gives written notice of non-renewal
within  180  days  prior  to  their expiration.  Approximately $230,000 has been
expensed  under  these  agreements in each of the years ended September 30, 2003
and  2002,  and  is  included  in  selling, general and administrative expenses.


                                      F-14
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


12.  STOCKHOLDERS'  EQUITY


In September 2001, the Company issued 200,000 shares to Cornell Capital Partners
("Cornell") relating to an equity line of credit agreement pursuant to which the
Company  could  sell  up to $10,000,000 of common stock back to Cornell.  During
the  fiscal year ended September 30, 2002, this agreement was terminated and the
Company  expensed  the $600,000 relating to the stock issued for the equity line
of  credit  and  capital  in  excess  of  par  was  increased  by  $600,000.


13.  MAJOR  CUSTOMERS,  SUPPLIERS  AND  GEOGRAPHIC  INFORMATION

The  Company  had  revenues from two customers for the years ended September 30,
2003  and  2002 aggregating approximately $817,000 and $1,260,000, respectively.
Accounts  receivable  due  from  these  customers were approximately $35,000 and
$89,000  at  September  30,  2003  and  2002,  respectively.

For  the  years  ended  September  30,  2003  and  2002,  the  Company purchased
approximately  81%  and  86%  of  its  inventories  from  three  suppliers.

For the years ended September 30, 2003 and 2002 revenues were derived from the
following:

<TABLE>
<CAPTION>
                          2003   2002
<S>                       <C>    <C>
Australia/Asia             29 %    35%
South America              31 %    42%
US & Other                 40 %    23%
                          -----  -----

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


14.  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.  The stockholders and affiliates have agreed to
provide  working  capital and other financial support as needed at least through
October  1,  2004.


                                      F-15
<PAGE>