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, 2004

[ ]  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, 2004 was
$2,986,915.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of November
30, 2004 was $5,763,000.

As of December 30, 2004, 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 these businesses.  The
wearing of metal parts is generally defined as a gradual decay or breakdown of
the metal.  The wear of equipment may be due to many causes and accordingly, the
selection of wear plate solutions can be a relatively complex process.

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


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

     -    the tendency to separate into chips or fragments when subjected to
          high impact;

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

     -    rough surfaces which result in poor material flow.

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

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

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

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

     -    brick and cement works;

     -    power stations;

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

     -    bulldozer arms and blades; and

     -    truck tray liners and bucket loader liners.

     Arcoplate is manufactured in a range of grades designed for specific
applications.  Our products are designed for ease of handling and can be
fabricated to suit our customers' 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.  We also provide technical
consultation services to customers and their design engineers.

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

     The completion of a new production machine which previously was delayed
because of an engineering problem involving the alloy feeder is now undergoing
final trials and will commence production when the Australian plant re-opens on
January 17, 2005 after its annual shutdown, together with the continued
operation of the original machine. The new machine produces a 600mm wide plate
and the original machine produces a 300mm wide plate.

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


                                        3
<PAGE>
     Subsequent to the exhibition of Arcoplate at the Mining Show held in Las
Vegas in September 2004, enquiries are now coming from many other countries.


     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 be based upon the patented
production process we use to make Arcoplate and will enable a wear resistant
alloy coating to be applied to interior surfaces of 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.

     The development of the 3-D Pipefitting Cladder process was suspended until
resolution of the problems with the alloy feeder in our new Arcoplate production
machine. With the new Arcoplate production machine now completed, we intend to
complete the development of the 3D Pipefitting Cladder Process.


     SALES AND MARKETING STRATEGY

     The company's objective is to become an international market leader in
wear-resistant alloy steel products and to establish significant market share
and brand awareness for Arcoplate, and subsequently the 3-D Pipefitting Cladder
process, within the mining, mineral-processing and steel industries.  We intend
to accomplish our objectives by consolidating our market presence in Australia,
and then developing an international market presence, focusing on China, 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.  We intend to establish
market presence by visiting international and domestic trade shows, presenting
technical papers at industry conferences, and appointing distributors who will
be trained to present and promote Arcoplate products as a solution for
wear-related problems.

     We, together with our North American distributor, promoted "Arcoplate" at
the September 2004 Mining Expo held in Las Vegas. The exposition of mining
equipment and allied products is the largest of its kind in the world and held
every four years.

     Although the booth was small, Arcoplate, the company's premium wear
resistant plate, was seen on a much larger stage affixed to the blade of one of
the world's biggest bulldozers, a "Caterpillar D11".

     Sales inquiries have been received from regions as widespread as Peru,
India, Chile and Europe as well as multiple enquiries from users and
organizations looking to be sub distributors in various American states as a
result of participation at the show.

     To facilitate the marketing of Arcoplate in China, the company and Angang
New Steel, the fourth largest steel manufacturer in China, have reached an
agreement in principle to market Arcoplate. We have not entered into any
definitive agreements in connection with this new venture, which is anticipated
to commence operations in January 2005.

     In the year ended September 30, 2004 one customer each accounted
individually for a factor of at least 10% of annual sales.

     We anticipate incurring increased expenditures in connection with our
marketing activities.  Our marketing activities are also expected to include
substantial engineering support to assist in the development of products for
specific customers


                                        4
<PAGE>
and markets, evaluation of Arcoplate by institutions that specialize in
technology analysis for this type of product; development of materials such as
specification sheets and corporate brochures.

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


     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. Research and development is a continuing factor for the
improvement and development of existing and new Arcoplate products.


     MANUFACTURING AND SUPPLY

     The raw materials we employ are principally steel and a proprietary alloy
compound.  We presently purchase steel 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 materials and fluxes on a timely basis at
reasonable prices and upon favorable terms.  We monitor the quality of our
products by frequent tests and material certification, and maintain a strict
internal quality control system to monitor the quality of production.


     GOVERNMENT REGULATION

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

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

     We require, and must comply with, various authorizations, permits and
licenses to conduct our operations.  Government agencies continually monitor our
compliance with authorization, permits and licenses and our facilities are


                                        5
<PAGE>
subject to periodic unannounced inspection by local, state and federal
authorities.  Violations of any permit or license, if not remedied, could result
in our incurring substantial fines, or suspension of our operations.


     COMPETITION

     The wear plate solutions industry is highly competitive.  We compete in
markets against larger multi-national companies, all of which are
well-established 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. 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 15 persons on a full-time basis and 3 contract employees as of
November 30, 2004, including two executive officers, three administrative
personnel, two marketing personnel and eleven manufacturing personnel.  None of
our employees are members of a labor union.  We consider our relationship with
our employees to be good.  We anticipate hiring approximately 4 additional
manufacturing employees in the 2005 calendar year.


ITEM 2.     DESCRIPTION OF PROPERTY.

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

     The current lease expires on June 30, 2005 and we have oral 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. The current monthly rent payable is $7,083.




ITEM 3.     LEGAL PROCEEDINGS.

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


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

     We  held  our Annual Meeting of Stockholders on June 8, 2004. 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      12,681,250                   --

Alan C. Winduss    12,681,250                   --
</TABLE>


                                        6
<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, 2004     High        Low
-----------------------------  ----------  ----------
<S>                            <C>         <C>

October 1 - December 31, 2003  $     0.28  $     0.08

January 1 - March 31, 2004     $     0.25  $     0.12

April 1 - June 30, 2004        $     0.17  $     0.14

July 1 - September 30, 2004    $     0.40  $     0.13


Year ended September 30, 2003      High        Low
-----------------------------  ----------  ----------

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
</TABLE>


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

     As of November 30, 2004, there were approximately 129 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.


                                        7
<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                 None                        None                  2,000,000
security holders (1)
------------------------------------------------------------------------------------------------------
Equity compensation
plans not approved by              -                           -                         -
security holders
------------------------------------------------------------------------------------------------------
Total                             None                        None                  2,000,000
------------------------------------------------------------------------------------------------------
</TABLE>

     (1) Includes our 2000 Stock Option Plan.

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

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


     OVERVIEW

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

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


     PLAN OF OPERATION

     The additional machinery when completed and operational in January 2005
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 $10,000,000 to $12,500,000. This will be obtained by
the utilization of both the new and present machines.

     We intend to achieve market penetration through a multi-step process. In
Australia, we intend to combine targeted marketing with advertising in trade
journals and magazines. At the international level, we intend to establish
market presence by visiting international trade shows, presenting technical
papers at industry conferences, and appointing distributors who will be trained
to present and promote Arcoplate products as a solution for wear-related
problems. We have recently appointed a distributor in America and have concluded
negotiations in November 2004 for a joint venture to market


                                        8
<PAGE>
Arcoplate in China, although we have not entered into any definitive agreements
in connection with this new venture in China.


     RESULTS OF OPERATIONS


     SALES

     Alloy Steel had sales of $2,986,915 for the year ended September 30, 2004,
compared to sales of $1,871,500 for the year ended September 30, 2003. 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
$0.72661 and $0.61274, representing the average foreign exchange rate for the
years ended September 30, 2004 and 2003 respectively.  The increase is due to an
increasing market acceptance of the product and supply to new customers.


     COSTS OF SALES

     Alloy Steel had cost of sales of $1,739,059 for the year ended September
30, 2004, compared to cost of sales of $1,070,766 for the year ended September
30, 2003. The gross profit amounted to $1,247,856 compared to $800,734 for the
year ended September 30, 2003. The gross profit percentage remained steady from
41.78% to 42.79% in 2004 and 2003 respectively.


     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

     Alloy Steel had selling, general and administrative expenses of $1,259,388
for the year ended September 30, 2004, compared to $1,000,107 in the year ended
September 30, 2003. The increase was primarily due to the increased marketing
and promotional activity of the company in the year ending September 30, 2004.


     INCOME BEFORE TAXES

     Our income before tax expense (benefit) was $9,825 for the year ended
September 30, 2004, compared to a loss before income tax expense (benefit) of
($170,459) for the year ended September 30, 2003.


     INCOME TAXES

     Alloy Steel had income tax expense of $14,050 for the year ended September
30, 2004 compared to an income tax benefit of ($193,127) for the year ended
September 30, 2003. The current year's income tax expense relates to taxes
payable in Australia. The prior year income tax benefit was a result of Research
and Development concessions granted by the Australian Taxation Office.


     NET LOSS

     We had net loss of $(4,225) or ($0.00) per share, for the year ended
September 30, 2004, compared to a net income of $22,668 or $0.00 per share for
the year ended September 30, 2003.


     LIQUIDITY

     For the year ended September 30, 2004, the net cash used in operating
activities was $17,639.

      As of the year ended September 30, 2004, we had working capital of
approximately $148,000.


                                        9
<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, 2004:

<TABLE>
<CAPTION>
                                           LESS THAN               AFTER
                               TOTAL       1 YEAR      1-3 YEARS   4-5 YEARS   5 YEARS
CONTRACTUAL OBLIGATIONS
<S>                            <C>         <C>         <C>         <C>         <C>
Long term debt                    369,636     107,629     166,900      95,107           -
Operating leases                   63,750      63,750           -           -           -
Employment agreements             124,000     124,000           -           -           -
-----------------------------------------------------------------------------------------

Total contractual obligations  $  557,386  $  295,379  $  166,900  $   95,107  $        -
</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 for capital.  The sale of additional equity or convertible debt
securities could result in dilution to our stockholders.  There can be no
assurance that financing will be available in amounts or on terms acceptable to
us, if at all.


     SIGNIFICANT CHANGES IN NUMBERS OF EMPLOYEES

     We anticipate hiring approximately four additional manufacturing employees
in the next 12 months.


     CRITICAL ACCOUNTING POLICIES

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

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


     ALLOWANCE FOR DOUBTFUL ACCOUNTS

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


                                       10
<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 these assets may not be recoverable.
Measurement of impairment losses for long-lived assets that we expect to hold
and use is based on the estimated fair value of the assets. We have recorded
asset impairment charges when the carrying value of certain assets was in excess
of their fair value. Should market conditions or the assumptions used by us in
determining the fair value of these assets change, or management change plans
for usage of certain assets, additional charges to operations may be required in
the period in which such conditions occur.


                                  RISK FACTORS

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


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

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


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

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


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

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


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

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


                                       11
<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


                                       12
<PAGE>
its purchases of our products, our revenue and profitability would be adversely
affected.  For the year ended September 30, 2004, 9 customers accounted for 43%
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 Alloy and have significantly greater financial,
marketing, technical and manufacturing resources with more established
distribution channels.  These competitors may be able to respond more quickly to
new or emerging technologies and changes in customer requirements or devote
greater resources to the development, promotion and sale of their products than
we can.  Furthermore, some of our competitors may make strategic acquisitions or
establish cooperative relationships to increase their ability to rapidly gain
market share by addressing the needs of our prospective customers.  These
competitors may enter our existing or future markets with solutions that may be
less expensive, provide higher performance or additional features or be
introduced earlier than our solutions.  If any technology is more reliable,
resistant, and less expensive or has other advantages over our technology, then
the demand for our products and services would decrease, which would seriously
harm our business.

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

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


                                       13
<PAGE>
     WE HAVE LIMITED MARKETING AND SALES CAPABILITY.

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

     -    Establish and develop such a sales force;

     -    Gain market acceptance for our products;

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

     -    Meet our proposed marketing schedules or plans.

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


ITEM 7.     FINANCIAL STATEMENTS.

     Our audited consolidated financial statements for the year ended September
30, 2003 appear following Item 13 of this report and are incorporated herein by
reference.


ITEM 8.     CHANGES IN ACCOUNTING AND FINANCIAL DISCLOSURE.

     None.

ITEM 8A.    CONTROLS AND PROCEDURES

     Our management, with the participation of our President and Chief Executive
Officer  (our  principal executive officer) and our Chief Financial Officer (our
principal  financial  officer),  evaluated  the  effectiveness of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d - 15(e) under the
Securities  Exchange  Act  of  1934),  as  of  September 30, 2004. Based on that
evaluation,  our  principal  executive  officer  and principal financial officer
concluded  that our disclosure controls and procedures were effective as of that
date.

ITEM 8B.     OTHER INFORMATION

     None.


                                       14
<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:

NAME             AGE   POSITION
---------------  ---  ----------------------------------------

Gene Kostecki    59   President, Chief Executive Officer and a
                      Director

Alan C. Winduss  63   Chief Financial Officer, Secretary and a
                      Director

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

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

     Alan C. Winduss has served as a director and as our Chief Financial Officer
and Secretary since June 2000. From July 1979 to the present, Mr. Winduss has
served as 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 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, 2004, our officers, directors, and greater than
ten percent beneficial owners complied with all Sections 16(a) filing
requirements applicable to them.


                                       15
<PAGE>
ITEM 10.     EXECUTIVE COMPENSATION.

     The following table sets forth the annual cash compensation for services
rendered by our Chief Executive Officer for the fiscal year ended September 30,
2004. 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, 2004:

<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                 2004  $150,000  $     0             -             -
President and Chief           2003  $150,000  $     0             -             -
Executive Officer             2002  $150,000  $     0             -             -
</TABLE>

     STOCK OPTION PLAN

     In May 2000, we adopted the 2000 Stock Option Plan.  The purpose of the
plan is to enable us to attract, retain and motivate key employees, directors,
and consultants, by providing them with stock options.  Options granted under
the plan may be either incentive stock options, as defined in Section 422A of
the Internal Revenue Code of 1986, or non-qualified stock options.  We have
reserved 2,000,000 shares of common stock for issuance under the plan.  As of
November 30, 2004, 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.  Effective July
2004, the agreements were amended to reduce the annual salary payable by the
parent company to approximately $87,000 and $37,000, respectively. The balance
of emoluments due under the contract are being paid by the Australian operating
subsidiary. 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.


     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.


                                       16
<PAGE>
     In addition, our certificate of incorporation provides that, generally, a
director shall not be personally liable to us or our stockholders for monetary
damages for breach of the director's fiduciary duty.  However, in accordance
with Delaware law, a director will not be indemnified for a breach of its duty
of loyalty, acts or omissions not in good faith or involving intentional
misconduct or a knowing violation or any transaction from which the director
derived improper personal benefit.


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

     The following table sets forth, as of November 30 2004, 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, 2004, but
excludes shares of common stock underlying options or warrants held by any other
person.  Unless otherwise indicated, the address of each beneficial owner is c/o
Alloy Steel, 42 Mercantile Way Malaga, P.O. Box 3087 Malaga D C 6945, Western
Australia.

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

Gene Kostecki                                        10,598,000          62.5%

Alan C. Winduss                                       1,893,250          11.2%

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

ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

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

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

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

     In October 2000, Alloy Steel International, Inc. 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.

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


                                       17
<PAGE>
     As at September 30, 2004 the Company has a non-interest bearing loan of
approximately $141,742 payable to an entity controlled by Mr Gene Kostecki. The
loan has no stated repayment terms and is unsecured.


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*
10.15        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Gene Kostecki.
10.16        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Alan Winduss.
31.1         Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)**
31.2         Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)**
32.1         Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350**
32.2         Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350**
</TABLE>

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

     (b)     Reports on Form 8-K.

     None.


                                       18
<PAGE>
ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES.

     The Board of Directors reviewed all services performed for the company by
Rothstein Kass & Company, P.C, the company's independent auditors, for the
fiscal year ended September 30, 2004, within and outside the scope of their
quarterly and annual auditing function. The aggregate fees billed by the
Company's independent auditors for each of the last two fiscal years are as
follows:

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

Audit Fees          20,500  23,150

Audit-Related Fees       -       -

Tax Fees                  -    600

All Other Fees            -      -

     The fees labeled as Tax Fees above principally involved preparation of the
tax return for the company. At a meeting held on October 28, 2004, the Board of
Directors reviewed the non-audit services listed above and determined that such
services are compatible with the continued preservation of the status of
Rothsetin Kass as independent auditors.


                                       19
<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 14, 2005            ALLOY STEEL INTERNATIONAL, INC.
                                   (Registrant)


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

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


/s/ Gene Kostecki                Director and
-----------------        President and Chief Executive         January 14, 2005
  Gene Kostecki      Officer (Principal Executive Officer)

                                  Director and
/s/ Alan c. Winduss       Chief Financial Officer and          January 14, 2005
-------------------   Secretary (Principal Financial and
  Alan C. Winduss              Accounting Officer)


                                       20
<PAGE>
<TABLE>
<CAPTION>
                                              Alloy Steel International, Inc.

                                           Annual Report on Form 10-KSB for the
                                               Year Ended September 30, 2004

                                                       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.]
10.15        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Gene Kostecki.
10.16        Amendment dated July 1, 2004, to Employment Agreement between Alloy Steel and Alan Winduss.
31.1         Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)
31.2         Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)
32.1         Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.
             1350
32.2         Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
</TABLE>


                                       21
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
(ITEM 7)

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




INDEPENDENT AUDITORS' REPORT                                                 F-2

CONSOLIDATED FINANCIAL STATEMENTS

   Consolidated Balance Sheet
   September 30, 2004                                                        F-3

   Consolidated Statements of Operations
   Years Ended September 30, 2004 and 2003                                   F-4

   Consolidated Statements of Stockholders' Equity
   Years Ended September 30, 2004 and 2003                                   F-5

   Consolidated Statements of Cash Flows
   Years Ended September 30, 2004 and 2003                                   F-6

   Notes to Consolidated Financial Statements                           F-7 - 15


                                      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, 2004, and
the related consolidated statements of operations, stockholders' equity and cash
flows  for  the  years  ended  September  30, 2004 and 2003.  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 the standards of the Public Company
Accounting  Oversight  Board  (United  States).  Those standards require that we
plan  and  perform  the  audit  to obtain reasonable assurance about whether the
consolidated  financial  statements are free of material misstatement.  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, 2004, and the results of its operations and its cash flows for the
years  ended  September  30,  2004  and  2003,  in  conformity  with  accounting
principles  generally  accepted  in  the  United  States  of  America.


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


Roseland, New Jersey
December 17, 2004


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

                           CONSOLIDATED BALANCE SHEET
                               September 30, 2004


                               ASSETS


CURRENT ASSETS
<S>                                                      <C>
  Cash and cash equivalents                              $   42,038
  Accounts receivable, less allowance for doubtful
  accounts of $53,087                                       818,864
  Inventories                                               399,402
  Prepaid expenses and other current assets                  61,089
                                                         -----------
    Total current assets                                  1,321,393
                                                         -----------

PROPERTY AND EQUIPMENT, net                               1,616,357
                                                         -----------

OTHER ASSETS
  Other                                                       3,226
  Deferred tax assets                                        32,934
  Intangibles                                                90,512
                                                         -----------
    Total other assets                                      126,672
                                                         -----------
                                                         $3,064,422
                                                         ===========

                LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
  Notes payable, current portion                         $  107,630
  Accounts payable and other current liabilities          1,054,919
  Income taxes payable                                       11,068
                                                         -----------
    Total current liabilities                             1,173,617
                                                         -----------

LONG-TERM LIABILITIES
  Deferred tax liabilities                                   13,134
  Notes payable, less current portion                       262,006
  Loan payable, related party                               141,742
                                                         -----------
    Total long-term liabilities                             416,882
                                                         -----------

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                                      (943,500)
  Accumulated other comprehensive income                    474,541
                                                         -----------
    Total stockholders' equity                            1,473,923
                                                         -----------

                                                         $3,064,422
                                                         ===========
</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, 2004 and 2003


                                                       2004          2003
                                                   ------------  ------------
<S>                                                <C>           <C>

SALES                                               $2,986,915    $1,871,500

COST OF SALES                                        1,739,059     1,070,766
                                                   ------------  ------------

GROSS PROFIT                                         1,247,856       800,734

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES                                             1,259,388     1,000,107

                                                   ------------  ------------

LOSS FROM OPERATIONS                                   (11,532)     (199,373)
                                                   ------------  ------------

OTHER INCOME (EXPENSE)
  Interest income                                        8,646        13,306
  Interest expense                                     (10,895)       (8,603)
  Insurance recovery                                     1,435         4,892
  Export grant received                                 19,611        19,181
  Profit on disposal of property and equipment           2,560           138
                                                   ------------  ------------
                                                        21,357        28,914
                                                   ------------  ------------

INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)        9,825      (170,459)

INCOME TAX EXPENSE (BENEFIT)                            14,050      (193,127)

NET INCOME (LOSS)                                  $    (4,225)  $    22,668
                                                   ============  ============


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


WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 USED IN COMPUTING BASIC AND DILUTED 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, 2004 and 2003



                                                                Common Stock         Capital
                                                            --------------------    in excess     Accumulated    Comprehensive
                                                              Shares     Amount   of par value      Deficit         Income
                                                            ----------  --------  -------------  -------------  ---------------
<S>                                                         <C>         <C>       <C>            <C>            <C>
Balances, September 30,  2002                               16,950,000  $169,500  $   1,773,382  $   (961,943)


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      (939,275)

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

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

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

Balances, September 30, 2004                                16,950,000  $169,500  $   1,773,382  $   (943,500)
                                                            ==========  ========  =============  =============


                                                             Accumulated
                                                                Other            Total
                                                            Comprehensive    Stockholders'
                                                                Income          Equity
                                                            --------------  ---------------
<S>                                                         <C>             <C>
Balances, September 30,  2002                               $       35,381  $    1,016,320


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       1,376,959


Net loss                                                                            (4,225)

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

Total comprehensive income - Year ended September 30, 2004

                                                            --------------  ---------------

Balances, September 30, 2004                                $      474,541  $    1,473,923
                                                            ==============  ===============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
[GRAPHIC OMITTED]            ROTHSTEIN, KASS & COMPANY, P.C.

                       ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Years ended September 30, 2004 and 2003


                                                                        2004        2003
                                                                     ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                  <C>         <C>
  Net income (loss)                                                  $  (4,225)  $  22,668
  Adjustments to reconcile net income (loss) to net cash
   used in operating activities:
    Depreciation                                                       116,653      90,974
    Profit on disposal of property and equipment                        (2,560)       (138)
    Plant under construction written off                                             8,458
    Application of research and development credit
     to income taxes payable                                                      (170,448)
    Deferred income taxes                                              (20,072)
    Increase (decrease) in cash and cash equivalents
     attributable to changes in operating assets and liabilities:
      Accounts receivable                                             (611,728)    (72,184)
      Inventories                                                      (70,694)   (153,187)
      Prepaid expenses and other current assets                        (24,365)      7,886
      Accounts payable and other current liabilities                   588,132     173,538
      Income taxes payable                                              11,220
                                                                     ----------  ----------

NET CASH USED IN OPERATING ACTIVITIES                                  (17,639)    (92,433)
                                                                     ----------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                                (104,992)    (29,059)
    Payment for deposit for investment                                  (3,270)
    Proceeds on disposal of property and equipment                       3,204         368
                                                                     ----------  ----------

NET CASH USED IN INVESTING ACTIVITIES                                 (105,058)    (28,691)

CASH FLOWS FROM FINANCING ACTIVITIES, repayment of
 borrowings                                                            (61,218)    (37,022)
                                                                     ----------  ----------

EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH
  AND CASH EQUIVALENTS                                                  12,572      83,079
                                                                     ----------  ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                             (171,343)    (75,067)

CASH AND CASH EQUIVALENTS, beginning of year                           213,381     288,448
                                                                     ----------  ----------

CASH AND CASH EQUIVALENTS, end of year                               $  42,038   $ 213,381
                                                                     ==========  ==========

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

  Income taxes                                                       $  22,902           -
                                                                     ==========  ==========

  Interest                                                           $  10,895   $   8,603
                                                                     ==========  ==========

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

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

          See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


1.  NATURE OF OPERATIONS

Alloy  Steel  International,  Inc. (ASII) and its wholly-owned subsidiary, Alloy
Steel  Australia  (Int.)  Pty  Limited  (ASAI)  (collectively  the  "Company")
manufacture  and distribute 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  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:

                                ESTIMATED
    ASSET                      USEFUL LIVES
Plant and equipment              5-10 years
Furniture and fixtures            5-7 years
Vehicles                          3-5 years
Office and computer equipment     3-5 years

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

Intangibles

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

Advertising

Advertising  costs  are  charged  to operations as incurred and were $25,662 and
$4,365  for  the  years  ended  September  30,  2004  and  2003,  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  not  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,  2004:

Raw materials   $ 119,098
Finished goods    280,304
                ---------

                $ 399,402
                =========


4.  PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid  expenses and other current assets consist of the following at September
30,  2004:

Prepaid expenses  $ 29,331
GST receivable      31,758
                  --------

                  $ 61,089
                  ========


5.  PROPERTY AND EQUIPMENT

Property  and  equipment  consists  of  the  following  at  September  30, 2004:

Plant and equipment            $   462,838
Furniture and fixtures              23,356
Vehicles                            46,386
Office and computer equipment       77,699
                               -----------
                                   610,279
Less accumulated depreciation      382,126
                               -----------
                                   228,153
Construction in progress         1,388,204
                               -----------

                               $ 1,616,357
                               ===========


                                      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,  2004 and 2003 was
approximately  $117,000  and  approximately  $91,000,  respectively.


6.  ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

Accounts  payable  and  other  current  liabilities  consist of the following at
September  30,  2004:

Accounts payable and accrued expenses  $   673,344
Accrued officers salary                    188,295
Royalties payable, related party           193,280
                                       -----------

                                       $ 1,054,919
                                       ===========


7.  NOTES PAYABLE

Notes  payable  at  September  30,  2004  consists  of  the  following:

Note payable (a)       $  34,140
Note payable (b)          44,579
Note payable (c)          17,069
Note payable (d)          19,773
Note payable (e)          17,263
Note payable (f)          79,997
Note payable (g)         156,815
                       ---------
                         369,636
Less current portion     107,630
                       ---------

                       $ 262,006
                       =========


(a)  The note is payable in monthly installments of $1,566 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 $2,147 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 $783 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.

(d)  The note is payable in monthly installments of $603 including interest at a
     rate  of  7.75%  per annum, with a final payment in April 2007. The note is
     collateralized  by  the  underlying  equipment  and  is  guaranteed  by the
     officers  of  the  Company.


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


7.  NOTES PAYABLE (CONTINUED)

(e)  The note is payable in monthly installments of $393 including interest at a
     rate  of  7.9% per annum, with a final payment in January 2009. The note is
     collateralized  by  the  underlying  equipment  and  is  guaranteed  by the
     officers  of  the  Company.

(f)  The note is payable in monthly installments of $1,438 including interest at
     a  rate  of  1%  per  annum, with a final payment in June 2009. The note is
     unsecured  and  is  due  to  an  officer  of  the  Company.

(g)  The note is payable in monthly installments of $2,818 including interest at
     a  rate  of  1%  per  annum, with a final payment in June 2009. The note is
     unsecured  and  is  due  to  an  officer  of  the  Company.

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

YEAR ENDING SEPTEMBER 30,
          2005                       $ 107,630
          2006                         105,474
          2007                          61,425
          2008                          55,418
          2009                          39,689
                                     ---------

                                     $ 369,636
                                     =========


8.  LOAN PAYABLE, RELATED PARTY

As of September 30, 2004, the Company has a non-interest bearing loan payable to
a  related party with no stated repayment terms of approximately $141,742 and is
included  in  accounts  payable  and  other  current  liabilities.

9.  INCOME TAXES

Income  (loss) before income tax expense (benefit) for the years ended September
30,  2004  and  2003  were  derived  in  the  following  jurisdictions:


                  2004        2003
Australia       $ 46,834   $(118,191)
US               (37,009)    (52,268)
                ---------------------

                $  9,825   $(170,459)
                =====================


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


9.  INCOME TAXES (CONTINUED)

The  components  of  income  tax  expense (benefit) are as follows for the years
ended  September  30,  2004  and  2003:

                                           2004       2003
                        CURRENT
                          Foreign       $ 33,850   $ (193,127)
                                        ----------------------

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

                                        $ 14,050   $ (193,127)
                                        ======================


As of September 30, 2004, the Company had US net operating loss carryforwards of
approximately  $1,482,000  expiring  through  2024.

The  components  of  the  deferred  tax  assets  and  liabilities consist of the
following  at  September  2004  and  2003:

                                          2004          2003

Deferred tax assets
  Net operating loss carryfowards    $  503,719    $  491,135
  Other                                  32,934
                                     ------------------------

                                        536,653       491,135
Less valuation allowance                503,719       491,135
                                     ------------------------

                                     $   32,934    $        -
                                     ========================
Deferred tax liabilities
  Other                              $  (13,134)   $        -
                                     ========================

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  $13,000  and  $61,000  for the years ended September 30, 2004 and
2003,  respectively.  The ultimate realization of this deferred income tax asset
depends on the Company's ability to generate sufficient taxable income in future
years.

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


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


9.  INCOME TAXES (CONTINUED)

The  effective tax rate in 2004 and 2003 differs from the U.S. federal statutory
rate  as  follows:


                                                      2004    2003

U.S. federal statutory rate                           34.0%  (34.0)%
Change in valuation allowance                        128.0     35.6
Change in estimated research
and development credit                                       (114.9)
Differences between U.S. and foreign tax rates       (19.0)
                                                     ---------------

Effective tax rate                                   143.0% (113.3%)
                                                   =================


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, 2004 and 2003, 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, 2004 and 2003 was approximately
$85,000  in  each  year.

Royalty  Agreements

The Company has a licensing agreement with a related party, which relates to the
sale of all products sold. Under the terms of the agreement, the Company is
required to pay royalties of 2% on the net sales of these products, calculated
at the end of each quarter. The agreement expires in 2025 and has three ten-year
renewal options to extend unless written notice of non-renewal is given by
either party within 120 days prior to its expiration. At September 30, 2004,
approximately $193,000 was payable under this agreement and is included in
accounts payable and other current liabilities.

Royalty  expense  was  approximately  $57,000  and  $37,000  for the years ended
September  30,  2004  and  2003,  respectively.


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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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


11.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

Employment  Agreements

The  Company  has  employment  agreements  with  two  of its executives, who are
principal  stockholders,  requiring  the  payment  of  a  minimum  annual  base
compensation  of  approximately $80,000 and $150,000, adjusted semi-annually for
increases  approved  by  the Board of Directors, but not less than the base year
amount,  plus incentive compensation based on the executives performance and the
Company's  success.  In  July  2004,  the  agreements were amended to reduce the
minimum  annual  base  compensation  to  approximately  $37,000  and  $87,000,
respectively.  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 $171,000 and $230,000
has  been  expensed under these agreements in the years ended September 30, 2004
and  2003,  respectively  and is included in selling, general and administrative
expenses.


12.  MAJOR  CUSTOMERS,  SUPPLIERS  AND  GEOGRAPHIC  INFORMATION

The  Company  had  revenues  from  one  and  two  customers  for the years ended
September  30,  2004  and 2003, aggregating approximately $300,000 and $817,000,
respectively.  Accounts  receivable  due from these customers were approximately
$300,000 and $35,000 at September 30, 2004 and 2003, respectively.

For  the  years  ended  September  30,  2004  and  2003,  the  Company purchased
approximately 54% and 81% of its inventories from three suppliers.

For  the years ended September 30, 2004 and 2003, revenues were derived from the
following:

                2004     2003

Australia         39%      29%
Americas          36%      47%
Other             25%      24%
                --------------
                 100%     100%
                ==============


13.  LIQUIDITY

The  Company  has  suffered recurring losses from operations, has an accumulated
deficit  and  is  dependent upon its principal stockholders and their affiliated
companies for financial support. Certain stockholders and affiliates have agreed
to  provide  working  capital  and  financial support as needed at least through
October  1,  2005,  by  deferring  payments  under  various  agreements with the
Company.


                                      F-15
<PAGE>