FORM 10-K/A

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                   For the fiscal year ended December 31, 1996
                          Commission File No. 000-21153

                                ALYN CORPORATION
             (Exact name of registrant as specified in its charter)
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           Delaware                         33-0709359
 (State or other jurisdiction of       (I.R.S. employer
  incorporation or organization)        identification number)



                                16761 Hale Avenue
                                Irvine, CA 92606
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                    (Address of principal executive offices)

                                 (714) 475-1525
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                     (Telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.001 per share
                               Title of Each Class

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No   
                                             --    --
         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         The approximate aggregate market value of the voting stock held by
non-affiliates of the registrant as of March 14, 1997 was $40,533,500, based on
the closing price of $9.25 on that date.

         As of March 14, 1997, the aggregate number of outstanding shares of
common stock of the registrant was 10,750,000.
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                       DOCUMENTS INCORPORATED BY REFERENCE

         The registrant's Proxy Statement for the Annual Meeting of Stockholders
scheduled to be held on June 2, 1997, is incorporated by reference into Part III
(Items 10, 11, 12 and 13) of this Form 10-K.



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                                     PART I


1.       BUSINESS.

         Unless otherwise indicated, all information in this Annual Report on
Form 10-K gives effect to the merger, effective May 2, 1996, of Alyn
Corporation, a California corporation ("Old Alyn"), with and into Alyn
Corporation, a Delaware corporation formerly named AC Acquisition Corp. ("Alyn"
or the "Company"). Unless the context otherwise requires, the term Company as
used in this Annual Report on Form 10-K includes the Company and its
predecessor, Old Alyn.

         Alyn designs, develops, manufactures and markets consumer and
industrial products utilizing its proprietary advanced metal matrix composite
materials, which it believes have a superior combination of physical properties,
including strength, light weight, stiffness, hardness and fracture resistance,
for a variety of selected markets. The Company has developed technology, for
which it obtained a patent in January 1996, for the application of boron carbide
in combination with aluminum in lightweight metal matrix composites under the
name Boralyn(R). Boron carbide, a principal component of Boralyn(R), is an
advanced ceramic that is the third hardest material in the world, and the
hardest material available at a commercially reasonable cost. The Company
believes that no other material offers a range of properties comparable to those
Boralyn(R) provides. Boralyn(R) is lighter and can be more easily fabricated
than titanium; has a higher specific stiffness than titanium, aluminum or
specialty steel; is one-third the density of many steels; has a resistance to
wear greater than aluminum, specialty steel and titanium; is more resistant to
corrosion than aluminum; is highly fracture resistant; and exhibits minimal
resonance over a wide range of rotational speeds. Boralyn(R) is available in a
range of grades with varying properties to satisfy specific customer
requirements and is easily welded, cast, bent, coated and extruded with
conventional equipment and tools. The Company believes that Boralyn(R) is a
highly effective replacement for many existing premium-priced metal and
composite products, such as those used in high-end sporting goods, high-capacity
disks for computer hard disk drives, neutron shielding and other applications.

         The Company is focusing its initial marketing efforts on the use of
Boralyn(R) in applications where its unique combination of properties will
justify an appropriate price premium. These applications include: (i) high-end
sporting goods such as premium-priced golf club heads and shafts, high-end

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lightweight bicycle frames and components and sports racquets; (ii) disks for
computer hard disk drives; and (iii) neutron shielding for both disposal
containers and reactor installations.

Development of the Company's Business

         The growth of interest in metal matrix composites is a result of the
engineering properties of these composites. Metal matrix composites compare
favorably to other materials with respect to weight, stiffness and strength,
high temperature capabilities, and low thermal expansion, and can be relatively
easily fabricated. Based on independent studies, the Company believes these
materials can provide up to 60% savings in weight compared to traditional
metallic alloys while still retaining key structural and design properties. They
also compare favorably with certain other composite materials, namely
polymer-matrix materials that have temperature and strength limitations, are
sensitive to moisture and in some cases also release gases or moisture.

         The Company was founded in January 1990 by Robin A. Carden, who had
previously been a senior engineer at Ceradyne Inc., a company engaged in
advanced ceramics, where he developed civilian applications for advanced
ceramics originally developed for military use. At that time, boron carbide
technology had recently been declassified by the U.S. Department of Defense. In
order to capitalize on the commercial possibilities of a boron carbide/metallic
alloy composite structure, under Mr. Carden's direction the Company began to
experiment with new techniques for bonding boron carbide to different metals,
creating new composite structures. From 1990 through 1993 the Company continued
development of metal matrix composites, while purchasing and reselling boron
carbide powders in order to generate cash for its Boralyn(R) development
efforts. These efforts led to the filing of a patent application in January
1994, first sales of Boralyn(R) bicycle frames, and the grant of a U.S. patent
for the "Metal Matrix Compositions and Method of Manufacture Thereof" in January
1996, which covers the initial matrix composites and methods for making them.

         Many of the Company's claims with respect to the physical
characteristics of Boralyn(R) have been subjected to, and were verified and
supported by, studies and testing, performed by independent third parties,
including testing by: (i) the Department of Chemical Engineering and Materials
Science of the University of California, Irvine, of its specific strength,
homogeneity, hardness, density and specific stiffness; (ii) Corning Incorporated
CELS - Laboratory Services, of its chemical composition; (iii) the University of
Michigan's Nuclear Reactor Laboratory of its neutron radiation absorption
characteristics; (iv) THoT Technologies, Inc. of its minimal resonance through a
wide range of computer hard disk drive rotational speeds; and (v) Golf
Laboratories, Inc. of its effect on the driving distance achieved by a golf club
head.

         In May 1996, the Company received significant debt financing from new
stockholders, including Kingdon Capital Management Corp. affiliates and Edelson
Technology Partners III, enabling the Company to pursue further its Boralyn(R)
business. In that same month and in the month thereafter, the Company assembled
a senior management team with experience in areas such as operations,
manufacturing, research and development and finance and administration. This
senior management team prepared a comprehensive business, marketing and
manufacturing plan.

         In September 1996, the Company and Taylor Made Golf Company, Inc.
("Taylor Made"), a leading golf club manufacturer, entered into an agreement
which provides for the production and purchase of Boralyn(R)-based metalwood
golf club heads through June 30, 1999, and an exclusive license through that
date should specified minimum volume requirements be met. Under the agreement,
Taylor Made is working with the Company to develop club head designs, molds,
manufacturing, tooling and production and promotional programs in order to
permit deliveries of Boralyn(R)-based metalwood golf club heads for sale during
the second half of 1997. Following completion of product designs, molds and
manufacturing tooling, Taylor Made will purchase a minimum of $42.75 million of
Boralyn(R)

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golf club metalwood heads between July 1, 1997 and June 30, 1999. If Taylor Made
does not purchase Boralyn(R) metalwood golf club heads in that minimum amount,
the Company's sole remedy is to terminate the exclusivity of Taylor Made's
license rights. Taylor Made has placed its first purchase order under the
agreement, covering $2.25 million of metalwood golf club heads.

         On October 22, 1996, the Company completed its initial public offering
(the "Initial Public Offering") of 2,750,000 shares of its common stock at a
price of $13.50 per share. The Company received net proceeds of approximately
$33.3 million after deducting underwriting discounts and offering expenses.
Subsequently, in October 1996, $4.7 million of net proceeds from the Initial
Public Offering were used for repayment of principal, accrued and unpaid
interest thereon and all other amounts owing in respect of a credit facility
from stockholders, and the credit facility was terminated. Following completion
of the Initial Public Offering, the Company added personnel to its marketing,
sales and engineering support staff.

         The Company moved its operations to a newly leased 48,000 square foot
facility in Irvine, California, in October 1996, which it anticipates will
become fully operational in the second quarter of 1997. The new facility
includes sintering, casting (including soluble core), forging and extrusion
capabilities. Prior to commencement of production at the new facility,
production and shipment of Boralyn(R) was undertaken by unaffiliated
subcontractors.

Company Strategy

         Alyn's objective is to become a leader in advanced metal matrix
composite products and establish significant market share and brand awareness
for Boralyn(R) in niche markets, such as higher-priced consumer products and
specialized uses, where value-added premiums can be obtained. The Company
intends to do so by capitalizing on its existing proprietary technology and
patented process for producing Boralyn(R) through the direct manufacture and
sale of Boralyn(R)-based products to industrial and consumer product
manufacturers and distributors, and, to a lesser extent, to producers of
military products. The Company believes that its focus on marketing Boralyn(R)
for use in higher-priced consumer and commercial products and applications where
its properties provide performance advantages will provide it with the best
opportunity for meaningful market penetration. The Company has also developed
what it believes to be a superior manufacturing process which benefits from the
characteristics of Boralyn(R). The Company has filed a patent application for
its soluble core method of manufacturing metal matrix composite die-cast metal
structures, which allow for forming complex hollow chambers and passages, often
within a one-piece structure, without the need for welding together separate
components or other secondary manufacturing processes.

Characteristics of Boralyn(R)

         Boralyn(R) is a new metal matrix composite material with the principal
constituents being aluminum and boron carbide. Boralyn(R) compares favorably to
other materials with which it will compete in markets selected by the Company,
with respect to density, specific strength, specific stiffness, hardness and
resistance to wear, fatigue and corrosion resistance, resonance and neutron
absorption.

         Density. Boralyn(R) exhibits relatively low density compared to certain
alternative materials, such as aluminum. This characteristic contributes to its
greater specific strength and greater specific stiffness.

         Specific Strength. The specific strength range (dependent somewhat on
the grade) of Boralyn(R) is higher by a considerable margin than that of
aluminum, somewhat higher than that of many specialty

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steel and, depending on the grade of Boralyn(R), of titanium as well. Specific
strength is particularly significant in applications such as bicycle components.

         Specific Stiffness. Boralyn(R) has greater specific stiffness when
compared to titanium alloy, aluminum alloy and specialty steel. Specific
stiffness is particularly significant in applications such as computer hard
drive disks and golf club heads.

         Specific Strength/Specific Stiffness. The combination of specific
strength and specific stiffness is important for many products, such as
premium-priced golf clubs and high-end bicycle frames and components, where the
combination of strength, stiffness and light weight is important. Certain grades
of Boralyn(R) exhibit a significantly superior combination of specific strength
and specific stiffness compared to the other competing materials. For many
applications, far less Boralyn(R) is required to provide necessary strength and
stiffness; conversely, for the same weight, Boralyn(R) provides significantly
more strength and stiffness than the other competing materials. Other
applications such as arrows, baseball bats, sailing masts, and spinnaker poles
for boats also benefit from these strength and stiffness advantages.

         Resistance to Wear. Boralyn(R) can easily be welded, extruded or casted
and exhibits greater wear resistance than aluminum or steel, and therefore can
be used to advantage in applications where high wear resistance is significant,
such as in engine blocks, brake discs and pistons.

         Fatigue and Corrosion Resistance. Boralyn(R), in a 5% salt moist
environment, will endure a larger number of stress cycles than aluminum alloy.
This property makes Boralyn(R) superior to aluminum alloy for applications in
which many stress cycles are encountered, particularly in corrosive
environments. Any structural support where stress is applied repeatedly needs
high fatigue characteristics. Bicycle frames and components, airplane
structures, motorcycle frames, piston rods and satellite supports are some of
the applications where high fatigue resistance is necessary, and many of those
applications take place in areas characterized by salt and moist atmospheric
conditions.

         Resonance. Boralyn(R) has lower resonance characteristics than glass
and aluminum substrates (materials commonly used in computer hard disk drives)
over rotational speeds ranging from 1,000 to 10,000 revolutions per minute.
Boralyn(R) disks exhibit minimal resonance over the entire range of rotational
speeds. The lower resonance of Boralyn(R) is of particular advantage in computer
hard disk drives, where lower resonance allows for closer head-to-disk distance
at higher rotational speeds, characteristics that will allow for greater storage
capabilities and faster data transfer rates.

         Neutron Absorption. Neutron absorption (attenuation) in boron
carbide-based materials such as Boralyn(R) is primarily a function of the
density (referred to as areal density) and degree of uniformity of distribution
(i.e., homogeneity) of boron carbide particles within the material. The
predictable homogeneity of Boralyn(R) allows for the design of structures to
customer requirements without incorporating additional material, compared with
competing materials that the Company believes can require as much as 40%
additional material to compensate for irregular distribution of
neutron-absorbing particles (i.e., relative lack of homogeneity) and therefore
achieve adequate levels of uniform absorption. Accordingly, Boralyn(R) can
produce the same neutron absorbing results as competing materials, but with less
Boralyn(R), thereby reducing the weight and cost of the structure.

         Broad Range of Available Grades. Boralyn(R) is available in various
grades depending principally on the aluminum alloy of choice and the percent of
boron carbide that is included. A specific grade can be matched to a specific
application where a specific property or properties are to be highlighted. For
example, in aerospace applications, where thermal expansion is a problem due to
the extremes of the environment, the percentage of boron carbide can be
increased to lower the thermal expansion; for

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transducers, the electrical resistivity can be lowered by decreasing the boron
carbide to a few percent; for better wearability, 20% to 25% boron carbide can
be used for harder surfaces.

         Ease of Fabrication. In addition to the properties described above,
Boralyn(R) also has excellent brazing and welding capabilities, can be easily
extruded and wrought and can be used in a variety of casting processes. The
Company has also developed what it believes to be a superior manufacturing
process that benefits from the characteristics of Boralyn(R). The Company
recently filed a patent application for its soluble core method of manufacturing
metal matrix composite die-cast metal structures, which allows for forming
complex hollow chambers and passages, often within a one-piece structure,
without the need for welding together separate components or other secondary
manufacturing processes.

Products and Applications

         The Company is focusing its initial marketing efforts on the use of
Boralyn(R) in applications where its unique combination of properties will
justify an appropriate price premium. These applications include the following:

         High-end Sporting Goods. The Company has targeted premium-priced golf
club heads and shafts and high-end lightweight bicycle frames and components as
a primary market for Boralyn(R)-based products.

                  Golf Club Heads and Shafts. The U.S. wholesale market for
premium-priced golf clubs was estimated by industry sources to be approximately
$890 million in 1994, reflecting a 23% increase over the prior year. The Company
believes that the higher specific stiffness, higher specific strength and ease
of fabrication of Boralyn(R), compared with titanium, allow the design and
manufacture of golf club heads with a larger "sweet spot" and better mass
distribution compared with titanium heads, thus yielding what golfers term a
"more forgiving" golf club. In an independent third-party's comparison test
against two premium-priced titanium golf club heads, a Boralyn(R) golf club head
drove the ball longer distances. The higher specific stiffness of Boralyn(R)
compared with graphite composite, a commonly used golf club shaft material, also
should permit stiffer shafts of the same weight to be made with Boralyn(R).

         On September 10, 1996, the Company and Taylor Made, a leading golf club
manufacturer, entered into a Sale of Goods Agreement and Exclusive License (as
amended in October 1996, the "Agreement and License") which provides for the
production and purchase of Boralyn(R)-based metalwood golf club heads through
June 30, 1999, and an exclusive license through that date should specified
minimum volume requirements be met. Under the Agreement and License, Taylor Made
is working with the Company to develop club head designs, molds, manufacturing,
tooling and production and promotional programs in order to permit deliveries of
Boralyn(R)-based metalwood golf club heads for sale during the second half of
1997. Following a completion of product designs, molds and manufacturing
tooling, Taylor Made will purchase a minimum of $42.75 million of Boralyn(R)
golf club metalwood heads between July 1, 1997 and June 30, 1999. If Taylor Made
does not purchase Boralyn(R) metalwood golf club heads in that minimum amount,
the Company's sole remedy is to terminate the exclusivity of Taylor Made's
license rights. Taylor Made has placed its first purchase order under the
Agreement and License, covering $2.25 million of metalwood golf club heads. The
Company and Taylor Made are continuing to work on Boralyn(R) metalwood golf club
heads and other golf club equipment.

         Taylor Made has been provided an exclusive world-wide license regarding
Boralyn(R) metalwood golf club heads through June 30, 1999, subject to its
meeting minimum annual and quarterly order volume requirements specified in the
Agreement and License as follows: minimum orders of $9.0

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million for the twelve months ending June 30, 1998, with orders in any quarter
in that period to be not less than $1.5 million; and minimum orders of $33.75
million for the twelve months ending June 30, 1999, with orders in any quarter
in that period to be not less than $6.375 million. The order minimums are
subject to adjustment under certain circumstances, including late deliveries.
Taylor Made is required to give the Company notice at least 90 days prior to any
calendar quarter in which Taylor Made will not or does not expect to meet the
minimum order volume requirement for that quarter, and the Company may then
terminate the exclusivity of Taylor Made's license rights as its sole remedy.
Manufacturing of products for delivery under the Agreement and License are to be
made at the Company's plant. If that facility has insufficient capacity to
process order volume at any time, however, Boralyn(R)-based products to be
delivered to Taylor Made will be manufactured at one or more second sources
approved by the Company at facilities under the direct control and supervision
of the Company. Products delivered to Taylor Made under the Agreement and
License will independently display the "Boralyn(R)" name. The Company
anticipates that the Boralyn(R)-based metalwood golf club heads manufactured for
Taylor Made will be a premium-priced product.

         The Agreement and License also provides the framework for ongoing
discussions between the Company and Taylor Made and between the Company and
Taylor Made's parent, France-based Salomon Group, regarding an extension of
their relationship and the possible inclusion of Boralyn(R) in additional golf
club equipment and in other sporting goods by members of Salomon Group.

         Prior to entering into the Agreement and License, the Company had
produced prototype golf club heads for Taylor Made. The Company has also
produced prototype golf club heads for certain other major golf club or sporting
goods equipment producers, including pre-tooling versions based on production
molds customized for Boralyn(R) composite heads. The Company believes that
production and customer approval of pre-tooling versions of golf clubs based on
customized molds is usually the final step before receipt of a definitive
production or purchase order. The Company has ceased further activities and
negotiations with those companies in accordance with the Agreement and License.
Should the Company and Taylor Made fail to reach an agreement to extend their
relationship to include additional Boralyn(R) golf club equipment, however, the
Company expects to resume activities concerning such other golf club equipment
with one or more of those other companies, and may initiate similar activities
with other golf club producers.

         There can be no assurance that the Company will enter into any
agreement or receive any additional production or purchase orders from Taylor
Made, or will enter into any agreement with any other golf club producer or any
other member of Salomon Group.

         Bicycle Components and Frames. The U.S. retail market for bicycles,
bicycle components and related products and services was estimated by industry
sources to be approximately $5 billion in 1994. The Company believes that
approximately 220,000 premium-priced (over $600 at retail) bicycles were sold in
1995. The Company has received orders for prototype components or frames from
leading manufacturers of bicycle components and/or frames, and from several
smaller bicycle component and/or frame manufacturers. The Company has also
entered into an agreement with Mavic S.A., a wholly-owned subsidiary of Salomon
Group, relating to the development of Boralyn(R)-based bicycle wheel rims. The
higher specific strength and specific stiffness of Boralyn(R) compared to
aluminum and specialty steel allows for the production of lighter bicycle
components and frames with no decrease in strength or stiffness, or if weight is
not a dominant consideration, for stiffer components and frames with no increase
in weight. These characteristics improve riding efficiency.

         Other potential sporting goods applications where strength and
stiffness are important include baseball bats, tennis and other sports racquets
and arrows. The Company has received orders from Worth Inc., for prototype
baseball bats, and from Spalding Sports Worldwide, Inc., a division of Spalding
& Evenflo Cos., Inc. for prototype racquetball and tennis racquets.

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         Computer Hard Disks. The U.S. wholesale market for computer hard disk
substrates was estimated by industry sources to be approximately 247 million
units in 1996. The Company believes that disks for high-speed, high-capacity
drives, which the Company is targeting in its marketing efforts, represent
between 5% and 10% of the total market. The Company has produced preliminary
sample disk substrates of Boralyn(R) for evaluation by several major disk drive
manufacturers, and has received small prototype orders from three of those
manufacturers. Compared with conventional aluminum and glass substrates
currently in use as disks in computer hard drives, Boralyn(R) disks exhibit
minimal resonance over the entire range of rotational speeds, from initial
spin-up to current maximum speeds of existing substrates, as well as at
substantially higher rotational speeds. Lower resonance disks will permit hard
disk drives to be designed for closer head-to-disk distances and higher
rotational speeds, characteristics that will allow for greater storage
capabilities and faster data transfer rates. In order to realize the benefits of
Boralyn(R), hard disk drive manufacturers will have to modify existing hard disk
drive designs, and such modifications may be substantial. The Company believes
that hard disk drive manufacturers will be motivated to modify or introduce new
hard disk drive designs only after a substantial testing period and significant
marketing efforts by the Company. The Company expects to incur substantial
expenses in connection with those testing and marketing efforts, and anticipates
ultimately that disks based on Boralyn(R) will be accepted by hard disk drive
manufacturers, if at all, only if such disks can be demonstrated to have
superior characteristics and can be offered at competitive prices. Further, the
Company expects that use of disks based on Boralyn(R) will commence with, and
could be limited to, high-end computer hard disk drives, which constitute a
small but significant percentage of the current market for computer hard disks.
The Company does not anticipate production orders for hard disk applications
prior to the second half of 1997, as a result of stringent testing requirements,
substantial marketing efforts and the redesign of computer hard disk drives by
disk drive manufacturers that would be necessary to realize the benefits of
disks based on Boralyn(R), and there can be no assurance that any production
orders will be obtained.

         Other Industrial Applications. Other potential industrial applications
of Boralyn(R) include its use in components for the aerospace/defense sector;
assembly equipment; automotive and motorcycle components; marine applications;
and armor for government and military vehicles and for personal protection.

         Neutron Shielding. Materials traditionally used for neutron absorption
in nuclear reactors and disposal containers for radioactive products and waste
require a separate neutron-absorbing material such as boron carbide, encased in
layers of metallic alloy such as aluminum supported by steel, in order to
provide stiffness and structural integrity. The metal matrix structure of
Boralyn(R), combined with its boron carbide ingredients, provides acceptable
neutron absorption characteristics as well as stiffness in an homogeneous,
single structure, with advantages in ease of use and fabrication. Although the
Company has had preliminary discussions with an international nuclear plant
construction company concerning prototype disposal containers, the Company has
elected to defer delivering prototypes in the neutron shielding field in order
that it may concentrate its efforts currently on high-end sporting goods,
computer hard disks and other industrial applications. The Company does not
anticipate production orders for neutron shielding applications until at least
late 1997, and there can be no assurance that any production orders will be
obtained.

Marketing and Customer Support

         The Company intends to achieve market penetration in selected markets
through a multi-step process usually consisting of initial discussions of the
application highlighting the advantages of Boralyn(R), an engineering and
marketing evaluation by the prospective customer of sample material and
demonstration products, appropriate agreements allowing the customer to use and
market Boralyn(R) in the relevant application and market and, finally, a
production program where appropriate expenditures are made on tooling, equipment
and quality control necessary to fulfill market requirements. The

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Company intends to sell primarily to OEM customers, with distribution from the
Company manufacturing site to customer facilities.

         The Company anticipates incurring increased expenditures in connection
with its marketing activities in the next two years, and has allocated a
substantial portion of the net proceeds of the Initial Public Offering to fund
those activities. The existing sales staff on June 30, 1996 of two persons
increased to eight persons at December 31, 1996, and is expected to increase to
approximately 10 persons by the end of 1997. The Company's marketing activities
are also expected to include substantial applications engineering support to
assist in the development of products for specific customers and markets,
evaluation of Boralyn(R) by institutions that specialize in technology and/or
markets of this type, development of appropriate sales materials such as
specification sheets and corporate brochures, and promotion through appearances
at selected trade shows and selective advertising in journals and the trade
press. For example, the Company exhibited Boralyn(R) bicycle components and
frames at the annual Interbike Exhibition in Anaheim, California in September
1996. These activities, if successful, may not result in proportional or any
revenue increases in the same period in which those activities occur. The
Company's marketing activities will initially focus on prospective customers in
the United States, but it is anticipated that international efforts will develop
within the next 18 months. However, in view of the anticipated concentration
outside the United States, and particularly in Europe, of prospective customers
for neutron shielding applications of Boralyn(R), the Company believes that it
may be required to focus on international marketing efforts in order to obtain
any significant production orders for such applications.

Patents and Trademarks

         The Company believes that protection of its proprietary technology and
know-how is important to the development of its business. It seeks to protect
its interests through a combination of patent protection and confidentiality
agreements with key employees, as well as by limiting the availability of
certain critical information to a small number of key employees.

         The Company intends to pursue a vigorous patent application program in
the United States and abroad. The Company has obtained one United States patent
(No. 5,486,223, issued to Robin A. Carden in January 1996, and which expires in
January 2014), that it believes provides protection for its proprietary
Boralyn(R) technology and contains claims that cover the use of Boralyn(R),
particularly in high-end sporting goods, as well as in certain other markets
targeted by the Company. The Company has also filed additional patent
applications, including divisional patent applications and continuation-in- part
applications that stem from the Company's original patent application. The
divisional patent applications relate to methods of fabricating Boralyn(R) and
to bicycle frames that were disclosed in the original patent application. The
continuation-in-part patent applications expand the scope of the claims in the
original patent, and cover the Company's processes of fabricating Boralyn(R).
Divisional patent applications and continuation-in-part patent applications
generally are likely to complete the U.S. Patent Office review process on an
expedited basis and, with respect to claims having a common subject matter with
those in the original patent, are entitled to the date of filing of the original
patent for purposes of considering patentability. The divisional patent
application relating to bicycle frames was allowed in June 1996 and is expected
to issue in March 1997. The divisional patent application relating to methods of
fabricating Boralyn(R) was allowed in September 1996. There can be no assurance
that the Company's pending continuation-in-part applications will receive
expedited review. New patent applications recently filed by the Company cover
(i) application of Boralyn(R) in neutron shielding, (ii) application of
Boralyn(R) in computer hard disk drives and (iii) a new soluble core
manufacturing method for Boralyn(R)-based structures. The Company is not aware
of any reason why its pending applications should not be granted with claims
that will provide coverage and, therefore, adequate protection for its
anticipated business activities, although there can be no assurance in that
regard.


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         There can be no assurance that the Company's existing patent and the
divisional patent applications that were allowed, or any other patents that may
be granted, will be valid and enforceable or provide the Company with meaningful
protection from competitors. There also can be no assurance that any pending
patent application will issue as a patent or that any claim thereof will provide
protection against infringement. If the Company's present or future patent
rights are ineffective in protecting the Company against infringement, the
Company's marketing efforts and future revenues could be materially and
adversely affected. Moreover, if a competitor were to infringe the Company's
patent, the costs of enforcing the Company's patent rights may be substantial or
even prohibitive. The Company currently has only limited patent protection for
its technology outside the United States, and may be unable to obtain even
limited protection for its proprietary technology in certain foreign countries.

         The Company believes that its current and anticipated business does not
infringe on any patent owned by others, although there can also be no assurance
that the Company's products will not infringe the patent rights of others or
that it will not be forced to expend substantial funds to defend against
infringement claims of, or to obtain licenses from, third parties.

Research and Development

         The Company continuously engages in the development of new products and
improvements to its existing formulations and will maintain laboratory
facilities for these purposes as well as a network of outside independent test
laboratories and specialty subcontractors. As of December 31, 1996, the Company
employed five persons in research and development activities. The Company's past
research and development effort was focused on various applications for cast,
forged and extruded Boralyn(R) products, and the tooling and methods for product
production, and the formulation of other metal matrix composites using magnesium
and titanium. It is expected that formulations and techniques will continue to
be developed and refined through empirical tests and prototype development. The
Company expects that it will devote substantial resources to research and
development efforts. The costs of those efforts will be recorded for accounting
purposes as expenses as they are incurred, notwithstanding that the benefits, if
any, from the Company's research and development efforts (in the form of
increased revenues or decreased product costs) may not be reflected in the
Company's operating results, if at all, until subsequent periods.

Manufacturing and Supply

         Raw materials used by Alyn are principally aluminum and boron carbide.
The Company presently purchases boron carbide from a limited number of
suppliers, including one supplier that provides approximately 50% of the
Company's present requirements. Although the Company believes that boron carbide
is readily available from other suppliers, there can be no assurance that the
Company will be able to continue to obtain desired quantities of boron carbide
on a timely basis at prices and terms deemed reasonable by the Company. Alyn's
other principal raw material, aluminum, is available from several domestic
suppliers and the Company is not dependent on the availability of supplies from
any other single source.

         Unlike a number of other metal-matrix composites, Boralyn(R) is not
made through a molten process. Instead of adding boron carbide powder into the
molten base metal alloy, the various powdered elements are blended dry and mixed
uniformly to avoid stratification and settling. After the particulates have
sufficiently mixed, they are directed into a die and then into a cylindrical
container, where the particulates are subjected to up to 85,000 pounds per
square inch (psi) of pressure, transforming the elements into a solid ingot.
These Boralyn(R) ingots are used for casting and to extrude forms such as plates
and tubes for use in various consumer products and other end uses.


                                      -11-


<PAGE>



         The Company monitors the quality of its products that are produced by
subcontractors by frequent tests and material certification, and intends to
maintain a strict internal quality control system to monitor the quality of
production at its renovated facility. The quality control laboratory is expected
to be capable of conducting both physical and chemical testing. The Company also
maintains product liability insurance at levels it believes to be adequate.

         The Company intends to maintain a sufficient inventory of raw materials
and finished Boralyn(R) in the on-site warehouse that will occupy part of its
newly-leased facility, which is expected to be ready for inventory storage by
March 1997. Finished inventory generally is expected to be warehoused for
distribution by commercial trucking throughout the United States at the
Company's plant, but products produced for third parties are likely to be
immediately released to third party warehouses and not remain at the Company's
plant.

Government Regulation

         The Company's manufacturing and packaging operations are subject to a
wide range of federal, state and local regulations, including the discharge,
handling and disposal of hazardous wastes regulations contained in the
environmental laws and the plant and laboratory safety requirements of various
occupational safety and health laws that are applicable to all the Company's
facilities and operations.

         The Company believes it has complied in all material respects with
regard to governmental regulations applicable to it. To date, those regulations
have not materially restricted or impeded the Company's operations.

Competition

         The materials industry is highly competitive. The Company competes in
its chosen markets against several larger multi-national companies, all of which
are well-established in those markets and have substantially greater financial
and other resources than those of the Company. Competitive market conditions
could adversely affect the Company's results of operations if it were required
to reduce product prices to remain competitive or were unable to achieve
significant sales of its products.

         In the golf club market, the Company competes primarily with titanium,
used widely today in premium-priced golf club heads, with the base material
being supplied by companies such as RMI Titanium Company, Tremont Industries,
Inc., and Titanium Metals Corporation of America (Timet), and with clubs
produced by CoastCast and Sturm Ruger. In the premium-priced bicycle market, the
current market uses titanium, aluminum alloys, and other materials supplied by
companies such as The Aluminum Corporation of America (Alcoa), Reynolds Metals
Co., Easton Aluminum, Inc., Sandvik Steel Co. and Oregon Metallurgical
Corporation (Oremet Titanium). In the computer disk drive market, the disks
currently being used are made from aluminum supplied by Alcoa and other
suppliers. For neutron shielding, current disposal containers typically use
Boral, a material supplied by AAR Brook & Perkins.

Personnel

         The Company employed 33 persons as of December 31, 1996, including
three Company executive officers, five research and development personnel, 11
manufacturing personnel and eight persons engaged in sales and marketing
activities. None of the Company's employees is a member of a labor union. The
Company considers its relationship with its employees to be good. The Company
anticipates hiring approximately 40 additional manufacturing, eight additional
research and product development and six additional sales and marketing
personnel during 1997.


                                      -12-


<PAGE>



Risk Factors

         An investment in the shares of Common Stock of the Company involves a
high degree of risk and should only be made by persons who can afford a loss of
their entire investment. In evaluating an investment in the Common Stock,
existing stockholders and prospective investors should consider carefully, among
other matters, the following risk factors, as well as the other information
contained in this Report.

         Emerging Technology; Substantial Risk of Uncertain Market Acceptance.
Since commencement of operations in 1990, the Company has been engaged in the
formulation, development and fabrication of Boralyn(R) for use in commercial and
consumer products. As with any new technology, there is the substantial risk
that the marketplace may not be receptive to products based on it. The Company
expects to incur substantial expenses as it continues its development and
marketing activities and, if they are successful, to penetrate the markets for
its products. Market acceptance of the Company's products will depend, in large
part, upon the pricing of those products and the Company's ability to
manufacture and deliver them on a timely basis, as well as the ability of the
Company to demonstrate the advantages of its products over competing
methodologies and products. There can be no assurance that the Company will be
able to market Boralyn(R) successfully or that any of the Company's future boron
carbide-based or other products will be accepted in the marketplace. The costs
of the Company's marketing efforts will be substantial and will be recorded as
expenses as they are incurred, notwithstanding that the benefits, if any, from
those marketing efforts (in the form of revenues) may not be reflected, if at
all, until subsequent periods.

         Limited Operating History; Prior Losses. The Company has a limited
operating history, having commenced its materials development and manufacturing
activities in 1990, and having had extremely limited revenues through 1996, with
net revenue declining from $540,000 in 1993 to $194,000 in 1996. The Company has
not received a production order for Boralyn(R) since late 1994, when it ceased
supplying a bicycle frame manufacturer in order to pursue what it believed to be
more promising marketing and distribution channels in the high-end bicycle frame
and components market. The Company had a net loss of $2,255,000 for the year
ended December 31, 1996, compared with a net loss of $245,000 for the year ended
December 31, 1995 and a net loss of $470,000 in the year ended December 31,
1994. The Company anticipates incurring operating losses for the current fiscal
year, and may continue to incur losses thereafter. There can be no assurance
that the Company will ever achieve profitability in the future or maintain
profitability, if achieved, on a consistent basis. Moreover, the Company has
entered into a five-year lease of a facility in Irvine, California, and has
committed substantial capital, including approximately $12.6 million of the net
proceeds of the Initial Public Offering, to provide that facility with
significant production capability. Unless and until the Company achieves a
significant level of sales of Boralyn(R) or Boralyn(R)-based products, the
Company will have substantial production overcapacity and underabsorbed costs
that would cause the Company to incur substantial operating losses.

         No Manufacturing Experience; Reliance on Manufacturing Facilities. The
Company is only now developing internal manufacturing capacity and no experience
in manufacturing its products in commercial quantities. The Company intends to
manufacture a substantial portion of its products at its newly- leased facility
in Irvine, California. The new facility, when fully equipped, will include
sintering, casting (including soluble core) and extrusion capabilities, although
there can be no assurance that these capabilities will be adequate for all of
the Company's future fabrication requirements, or, on the other hand, that the
Company will be able to fully utilize the plant's capacity. The manufacturing
process for Boralyn(R) utilizes high temperature and high pressure processes and
may be subject to volatile chemical reactions. A mechanical or human failure or
unforeseen condition, including natural disasters such as earthquakes,
characteristic of Southern California, could result in temporary interruption of
the Company's manufacturing capacity. Moreover, the Company's manufacturing

                                      -13-


<PAGE>



operations will use certain equipment which, if damaged or otherwise rendered
inoperable or unavailable, could result in the disruption of the Company's
manufacturing operations. Although the Company has obtained business
interruption insurance with coverage for lost profits and out-of-pocket expenses
of $1.0 million per occurrence, and presently maintains and intends to continue
to maintain other property and casualty coverage that it believes to be
adequate, any extended interruption of operations at the Company's manufacturing
facility would have a material adverse effect on the business of the Company.

         Rapid Technological Change and New Product Development. The Company
operates in a rapidly evolving field -- advanced composite materials -- that is
likely to be affected by future technological developments. The Company's
ability to anticipate changes in technologies, markets and industry trends and
to develop and introduce new and enhanced products on a timely basis will be a
critical factor in its ability to grow and remain competitive. There can be no
assurance that new products will be completed or that any new products can be
marketed successfully. In addition, the anticipated development schedules for
new or improved products are inherently difficult to predict and are subject to
change as a result of shifting priorities in response to customers' requirements
and competitors' new product introductions. Moreover, the Company expects that
it will devote substantial resources to research and development efforts. The
costs of those efforts will be expensed as they are incurred, notwithstanding
that the benefits, if any, from the Company's research and development efforts
(in the form of increased revenues or decreased product costs) may not be
reflected, if at all, until subsequent periods.

         In order to realize the benefits of Boralyn(R), hard disk drive
manufacturers will have to modify existing hard disk drive designs. The Company
believes that hard disk drive manufacturers will be motivated to modify or
introduce new hard disk drive designs only after a substantial testing period
and significant marketing efforts by the Company. The Company expects to incur
substantial expenses in connection with those testing and marketing efforts, and
anticipates ultimately that disks based on Boralyn(R) will be accepted by hard
disk drive manufacturers, if at all, only if such disks can be demonstrated to
have superior characteristics and can be offered at competitive prices. Further,
the Company expects that use of disks based on Boralyn(R) will commence with,
and could be limited to, high-end computer hard disk drives, which constitute a
small but significant percentage of the current market for computer hard disks.

         Dependence on Patents. The Company has obtained one United States
patent that it believes provides protection for its proprietary Boralyn(R)
technology and contains claims that cover the use of Boralyn(R), particularly in
high-end sporting goods, as well as in certain other markets targeted by the
Company. The Company has also filed additional patent applications, including
divisional patent applications and continuation-in-part applications that stem
from the Company's original patent application. The divisional patent
applications relate to methods of fabricating Boralyn(R) and to bicycle frames
that were disclosed in the original patent application. The continuation-in-part
patent applications expand the scope of the claims in the original patent, and
cover the Company's processes of fabricating Boralyn(R). Divisional patent
applications and continuation-in-part patent applications generally are likely
to complete the U.S. Patent Office review process on an expedited basis and,
with respect to claims having a common subject matter with those in the original
patent, are entitled to the date of filing of the original patent for purposes
of considering patentability. The divisional patent application relating to
bicycle frames was allowed in June 1996 and is expected to issue in March 1997.
The divisional patent application relating to methods of fabricating Boralyn(R)
was allowed in September 1996. There can be no assurance that the Company's
pending continuation-in-part patent applications will continue to receive
expedited review. New patent applications recently filed by the Company cover
(i) application of Boralyn(R) in neutron shielding, (ii) application of
Boralyn(R) in computer hard disk drives and (iii) a new soluble core
manufacturing method for Boralyn(R)-based structures. The Company is not aware
of any reason why its pending applications should not be granted with claims

                                      -14-


<PAGE>



that will provide coverage and, therefore, adequate protection for its
anticipated business activities, although there can be no assurance in that
regard. There can also be no assurance that the Company's existing patent and
the divisional patent applications that were allowed, or any other patents that
may be granted, will be valid and enforceable or provide the Company with
meaningful protection from competitors. Further, there can be no assurance that
any pending patent application will issue as a patent or that any claim thereof
will provide protection against infringement. If the Company's present or future
patent rights are ineffective in protecting the Company against infringement,
the Company's marketing efforts and future revenues could be materially and
adversely affected. Moreover, if a competitor were to infringe the Company's
patent, the costs of enforcing the Company's patent rights may be substantial or
even prohibitive. There can also be no assurance that the Company's future
products will not infringe the patent rights of others or that the Company will
not be forced to expend substantial funds to defend against infringement claims
of, or to obtain licenses from, third parties. The Company currently has only
limited patent protection for its technology outside the United States, and may
be unable to obtain even limited protection for its proprietary technology in
certain foreign countries.

         Product Liability Risks. The Company faces an inherent business risk of
exposure to product liability claims in the event that any of its products are
alleged to be defective or cause harmful effects. The cost of defending or
settling product liability claims may be substantial. The Company currently
maintains and intends to continue to maintain product liability insurance
coverage that it believes to be adequate. There can be no assurance that the
Company will be able to obtain such insurance on acceptable terms in the future
or that such insurance will adequately cover any claims.

         Dependence on Management. The Company's future success and
profitability is substantially dependent upon the performance of its senior
executives, including Robin A. Carden, the Company's founder and principal
stockholder, and Walter R. Menetrey, its chief operating officer. Each of the
Company's senior executives has an employment agreement with the Company and has
a substantial equity interest in the Company through ownership of shares of
Common Stock or the grant of options to purchase shares of Common Stock. The
loss of Mr. Carden or Mr. Menetrey could have a material adverse effect on the
Company. Moreover, the Company does not maintain key-man life insurance on any
of its executives other than a $5.0 million policy on the life of Mr. Carden.
The Company's future growth will also be dependent upon its ability to attract
and retain additional qualified management, technical, scientific,
administrative and other personnel. By reason both of its location and the
nature of its business, the Company believes it will experience significant
competition for qualified management, supervisory, engineering and other
personnel. There can be no assurance that the Company will be successful in
hiring or retaining the personnel it requires for continued growth.

         Need for Additional Management Information Systems. The Company's
existing management information and accounting systems are not designed for, and
are likely to be inadequate to handle, information and accounting requirements
arising from large-scale production of Boralyn(R) and future sales growth,
should they materialize. A portion of the net proceeds of the Initial Public
Offering have been allocated to procurement and installation of accounting and
manufacturing production management software and related computer hardware
designed for a large-scale manufacturing enterprise, which is being installed
during the first half of 1997. There can be no assurance that such management
information systems will be adequate for the Company's future needs.

         Competition. The materials industry is highly competitive. The Company
competes in its chosen markets against several larger multi-national companies,
all of which are well-established in those markets and have substantially
greater financial and other resources than those of the Company. Competitive
market conditions could adversely affect the Company's results of operations if
it were required to reduce product prices to remain competitive or were unable
to achieve significant sales of its products.

                                      -15-


<PAGE>




         Need for Future Capital. Future growth will be dependent, in part, upon
the capital resources available to the Company from time to time. The Company's
ability to obtain future debt financing will be dependent in part on the quality
and amount of the Company's trade receivables and inventory. The Company
believes that internally generated funds and cash on hand should satisfy the
Company's anticipated capital needs for the next 21 to 24 months. However, there
can be no assurance that those funds will be sufficient to support the Company's
business strategy or that, if additional financing is required, it will be
available in amounts and on terms satisfactory to the Company, if at all.

         Dependence on Trademarks for Current and Future Markets. The market for
the Company's products is and will remain dependent upon the goodwill engendered
by its trademarks and trade names. Trademark protection is therefore material to
the Company's business. Although Boralyn(R) is registered in the United States,
there can be no assurance that the Company will be successful in asserting
trademark or trade name protection for its significant marks and names in the
United States or other markets, and the costs to the Company of such efforts may
be substantial.

         Dependence on Principal Suppliers. The Company presently purchases its
principal raw material, boron carbide, from a limited number of suppliers,
including one supplier that provides approximately 50% of the Company's present
requirements. The Company's business would be materially and adversely affected
if it were unable to continue to receive boron carbide at prices and on terms
presently made available to it by its principal supplier. Although the Company
believes that boron carbide is readily available from other suppliers, there can
be no assurance that the Company will be able to continue to obtain desired
quantities of boron carbide on a timely basis at prices and on terms deemed
reasonable by the Company. The Company's business would be materially and
adversely affected if it were unable to continue to receive boron carbide at
prices and on terms comparable to those presently made available to it by its
principal supplier.

         Possible Dependence on Significant Customers. In view of the very early
stage nature of the Company's business, currently it has only a limited number
of customers, each of whom is material to the Company's present results of
operations. Even after the Company matures, however, certain customers may be
material to the business, operations and future prospects of the Company. There
can be no assurance that one or more principal customers will not suffer
business or financial setbacks resulting in reduction or cancellation of product
orders or the Company being unable to obtain payment from such customers at any
time or from time to time. The loss of sales to one or more significant
customers could have a material adverse effect on the business and operations of
the Company. The Company currently has granted an exclusive world wide license
covering metalwood golf club heads to Taylor Made, and is exclusively discussing
other related products. Although the Company generally does not intend to enter
into exclusive production or distribution arrangements with any customer, there
may be circumstances in which the benefits offered by a proposed exclusive
arrangement would justify the Company committing to an exclusive relationship as
regards a product or product line for a period of months or years. However,
there can be no assurance that the prospective benefits of such an exclusive
relationship would, in fact, materialize, and the existence of exclusive
relationships with one or more parties might prevent the Company from pursuing
other market alternatives, with possible adverse results on future revenues and
prospects.

         Quarterly Fluctuations in Operating Results. The Company's operating
results may vary significantly from quarter to quarter, in part because of the
costs associated with changes in the Company's products and personnel, the size
and actual delivery dates of orders, and the timing of, and costs related to,
any future acquisitions. The Company's operating results for any particular
quarter are not necessarily indicative of any future results. The uncertainties
associated with new product introduction and market trends may limit
management's ability to forecast accurately short-term results of operations.
Fluctuations caused by variations in quarterly operating results or the
Company's failure

                                      -16-


<PAGE>



to meet analyst's projections or public expectations as to operating results may
adversely affect the market price of the Common Stock.

         Control by Certain Stockholders; Anti-takeover Provisions. Certain of
the Company's present stockholders own a substantial majority of the outstanding
shares of Common Stock. Consequently, those stockholders have the ability to
elect all the Company's directors and to control the outcome of all other issues
submitted to the Company's stockholders, and other stockholders do not have the
ability to elect any of the Company's directors or to control the outcome of
other matters submitted to the stockholders. Additionally, the Company's Board
of Directors has the authority to issue up to 5,000,000 shares of Preferred
Stock and to determine the price, rights, preferences and privileges of those
shares without any further vote or action by the stockholders. The rights of
holders of Common Stock will be subject to, and may be adversely affected by,
the rights of holders of any Preferred Stock that may be issued in the future.
Although the Company has no present intention to issue shares of Preferred
Stock, any issuance of Preferred Stock, while potentially providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire a majority of the outstanding voting stock of the Company. Certain
provisions of Delaware law applicable to the Company may also discourage
third-party attempts to acquire control.

         Shares Eligible for Future Sale. Future sales of shares of Common Stock
by existing stockholders pursuant to Rule 144 promulgated under the Securities
Act of 1933, as amended, or otherwise, could have an adverse effect on the price
of the shares of Common Stock. In addition, the Company has contractually
granted certain of its existing stockholders, including, among others, Robin A.
Carden, Walter R. Menetrey, M. Kingdon Offshore NV, Kingdon Associates, L.P.,
Kingdon Partners, L.P., Udi Toledano and Edelson Technology Partners III,
certain registration rights. No prediction can be made as to the effect that
future sales of Common Stock, or the availability of shares of Common Stock for
future sales, will have on the market price of the Common Stock prevailing from
time to time. Sales of substantial amounts of Common Stock, or the perception
that such sales could occur, could adversely affect prevailing market prices for
the Common Stock.

         Possible Volatility of Stock Price. Trading volume and prices for the
Common Stock could be subject to wide fluctuations in response to quarterly
variations in operations, results, announcements with respect to sales and
earnings, as well as technological innovations, and new product developments and
other events or factors, which cannot be foreseen or predicted by the Company,
including the sale or attempted sale of a large amount of securities in the
public market, the registration for resale of any shares of Common Stock, and
the effect on the Company's earnings of existing or future equity-based
compensation awards to management.


                                      -17-

<PAGE>


                                    SIGNATURE


          Pursuant to the requirements of Section 13 or 15(d) and Rule 12b-15 of
the Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                 ALYN CORPORATION

                                  By:    /s/ Walter R. Menetrey
                                         ------------------------------------
                                         Walter R. Menetrey, Executive Vice
                                         President and Chief Operating Officer
Dated:  March 28, 1997


                                       S-1