3
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

(Mark One)
[ x ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE  SECURITIES  EXCHANGE  ACT OF 1934  For  the  quarterly
period ended March 31, 1999.
                                       OR
[    ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                  OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________.

Commission file number 000-21153.

                                ALYN CORPORATION
             (Exact name of registrant as specified in its charter)

          DELAWARE                                          33-0709359
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

                   16761 Hale  Avenue,  Irvine,  California  92606  (Address  of
          principal executive offices, including zip code)

                                 (949) 475-1525
              (Registrant's telephone number, including area code)

                                 Not applicable
(Former name, former address and former fiscal year, if changed since last 
report)

         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 [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

Common Stock, $.001 par value; 11,107,878 shares as of May 11, 1999



<PAGE>

<TABLE>


                                ALYN CORPORATION

                                      INDEX

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

                                                                                                     Page Number
<S>     <C>                                                                                              <C>
PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Condensed Balance Sheet -
                           March 31, 1999 (unaudited) and December 31, 1998                               3

                  Condensed Statement of Operations -
                           Three months ended March 31, 1999 (unaudited) and
                           March 31, 1998 (unaudited)                                                     4

                  Condensed Statement of Stockholders' Equity  -
                           Three months ended March 31, 1999 (unaudited)                                  5

                  Condensed Statement of Cash Flows -
                           Three months ended March 31, 1999 (unaudited) and
                           March 31, 1998 (unaudited)                                                     6

                  Notes to Condensed Financial Statements
                           (unaudited)                                                                    7

         Item 2.  Management's Discussion and Analysis of Financial
                           Condition and Results of Operations                                            9

         Item 3.  Quantitative and Qualitative Disclosures About
                           Market Risk                                                                   15


PART II. OTHER INFORMATION 16

SIGNATURES                                                                                               17

</TABLE>
<PAGE>
<TABLE>


                                Alyn Corporation
                             Condensed Balance Sheet
                                   (Unaudited)

                                                                    March 31,             December 31,
                                                                       1999                   1998
                                                                 -----------------      -----------------
                                        Assets
<S>                                                              <C>                    <C>

Current assets:
     Cash and cash equivalents                                         $3,264,000             $1,232,000
     Restricted cash                                                    1,883,000              2,062,000
     Accounts receivable, net                                           1,178,000                781,000
     Inventories                                                          549,000                401,000
     Other current assets                                                 273,000                424,000
                                                                 -----------------      -----------------                        
           Total current assets                                         7,147,000              4,900,000
                                                                 -----------------      -----------------


     Equipment, furniture and fixtures, net                            20,236,000             20,703,000
     Other assets, net                                                    849,000                626,000
     Intangibles, net                                                     775,000                732,000
                                                                 -----------------      -----------------

                                                                      $29,007,000            $26,961,000
                                                                 =================      =================



        Liabilities, Redeemable Preferred Stock and Stockholders' Equity


Current liabilities:
     Accounts payable                                                    $647,000               $663,000
     Current portion of long term debt                                  1,869,000              1,842,000
     Accrued and other current liabilities                                278,000                956,000
                                                                 -----------------      -----------------                         
           Total current liabilities                                    2,794,000              3,461,000
                                                                 -----------------      -----------------

Long term debt
     Convertible debt                                                   2,297,000                      -
     Long term debt                                                     6,839,000              7,316,000
                                                                 -----------------      -----------------                          
           Total long term debt                                         9,136,000              7,316,000

Redeemable preferred stock                                              1,367,000                      -

Stockholders' equity:
     Preferred stock                                                        4,000                      -
     Common stock                                                          12,000                 12,000
     Additional paid-in capital                                        39,824,000             37,796,000
     Warrants to purchase common stock                                    293,000                      -
     Accumulated deficit                                              (24,423,000)           (21,624,000)
                                                                 -----------------      -----------------                           
           Total stockholders' equity                                  15,710,000             16,184,000
                                                                 -----------------      -----------------

                                                                      $29,007,000            $26,961,000
                                                                 =================      =================


See Notes to Condensed Financial Statements.
</TABLE>
<PAGE>
<TABLE>
                                                        Alyn Corporation
                                               Condensed Statement of Operations
                                                        (Unaudited)


                                                            Three Months Ended
                                                                March 31,
                                                           1999          1998
                                                       ---------------------------
<S>                                                    <C>              <C>                                                  
Net sales                                                   $826,000      $28,000

Costs and expenses:
     Cost of goods sold                                    2,052,000      634,000
     General and administrative expenses                     570,000      616,000
     Selling and marketing                                   281,000      303,000
     Research and development                                406,000    1,154,000
                                                       ---------------------------                                                 
         Total costs and expenses                          3,309,000    2,707,000
                                                       ---------------------------


         Operating loss                                  ($2,483,000) ($2,679,000)

Other income/(expense)                                      (237,000)     (36,000)
                                                       ---------------------------

Loss before provision for income taxes                    (2,720,000)  (2,715,000)

Provision for income taxes                                     1,000        1,000
                                                       ---------------------------                                             

Net loss                                                  (2,721,000)  (2,716,000)

Deductions for preferred stock divdends                       78,000            -
                                                       ---------------------------

Net loss attributable to
     common stockholders                                 ($2,799,000) ($2,716,000)
                                                       ===========================                                                 

Basic and diluted net loss per share                          ($0.25)      ($0.25)
                                                       ===========================

Common shares used in computing
     basic and diluted net loss per share                 11,107,878   10,750,000


See Notes to Condensed Financial Statements.

</TABLE>
<TABLE>

                                                            Alyn Corporation
                                             Condensed Statement of Stockholders' Equity
                                                              (Unaudited)

                                            Preferred Stock -                              Additional
                                                 Series A            Common Stock           Paid-in                    Accumulated
                                            Shares     Amount      Shares     Amount        Capital      Warrants        Deficit
                                          ---------------------- ----------------------- -------------- ------------ ---------------
                                         
<S>                                       <C>         <C>        <C>         <C>          <C>           <C>           <C>

Balance at December 31, 1998                                     11,108,000     $12,000    $37,796,000                 ($21,624,000)

    Issuance of Series A convertible
      preferred stock                        375,000     $4,000                              1,463,000

    Accretion of Series A convertible
      preferred stock dividends                                                                 10,000                      (10,000)

    Beneficial conversion feature of the
      convertible debt                                                                         555,000

    Accretion of Series B redeemable
      convertible preferred stock dividends                                                                                 (64,000)

    Accrual of Series B redeemable convertible
      preferred stock cash dividends                                                                                         (4,000)

    Issuance of warrrants in conjunction with
      issuance of Series B redeemable
      convertible preferred stock and
      convertible debt                                                                                     $293,000

    Net loss                                                                                                             (2,721,000)
                                          ---------------------- ----------------------- -------------- ------------ ---------------
                                         

Balance at March 31, 1999                    375,000     $4,000  11,108,000     $12,000    $39,824,000     $293,000    ($24,423,000)
                                          ====================== ======================= ============== ============ ===============
                                         
See Notes to Condensed Financial Statements.
</TABLE>
      Alyn Corporation
             Condensed Statement of Cash Flows

<TABLE>


                                                                        Three Months Ended
                                                                             March 31,
                                                                      1999              1998
                                                                 ----------------  ----------------
<S>                                                              <C>               <C>                                            
Cash flows used in operating activities:                             ($3,224,000)      ($1,577,000)

Cash flows used in investing activities:
       Capital expenditures                                             (170,000)       (2,727,000)
       Decrease in restricted cash                                       179,000                 -
                                                                 ----------------  ----------------                              
       Total cash flows from investing activities                          9,000        (2,727,000)

Cash flows from financing activities:
       Net payments on debt                                             (450,000)         (126,000)
       Proceeds from convertible debt                                  2,634,000                 -
       Proceeds from warrants                                            293,000                 -
       Proceeds from Series A convertible preferred stock              1,467,000                 -
       Proceeds from Series B redeemable convertible
        preferred stock                                                1,303,000                 -
                                                                 ----------------  ----------------                                
       Total cash flows from  financing activities                     5,247,000          (126,000)

Net increase (decrease) in cash                                        2,032,000        (4,430,000)


Cash and cash equivalents at beginning of period                       1,232,000        13,126,000
                                                                 ----------------  ----------------                               
Cash and cash equivalents at end of period                            $3,264,000        $8,696,000
                                                                 ================  ================
                                                               

       Non cash financing activities:

         Beneficial conversion feature of
          the convertible debt (Note 3)                                 $555,000
                                                                 ================
                                                                

See Notes to Condensed Financial Statements
</TABLE>


<PAGE>



                                ALYN CORPORATION
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


1.       Basis of Presentation

         The accompanying  unaudited  condensed  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included. This financial information should be read in conjunction with the
audited  financial  statements and notes thereto for the year ended December 31,
1998,  included in the Company's  Annual  Report on Form 10-K,  which is on file
with the Securities  and Exchange  Commission.  Operating  results for the three
months ended March 31, 1999 are not  necessarily  indicative of the results that
may be expected for the year ending December 31, 1999.

<TABLE>

2.       Inventories
                                                                   March 31,            December 31,
                                                                      1999                    1998
<S>                                                              <C>                    <C>
         Raw materials                                          $   196,000              $  237,000
         Work in process                                            331,000                 133,000
         Finished goods                                              22,000                  31,000
                                                                -----------             -----------
                                                                $   549,000             $   401,000
                                                                ===========             ===========

</TABLE>

3.       Issuance of Convertible Debt, Redeemable Convertible Preferred Stock 
and Convertible Preferred Stock

         During the first quarter of 1999,  the Company issued 375,000 shares of
Series A Preferred Stock ("Series A convertible preferred stock") for $1,467,000
cash,  net of expenses;  1,500 shares of Series B Exchangeable  Preferred  Stock
("Series B redeemable  convertible preferred stock") for $1,380,000 cash, net of
expenses;  and a Senior  Exchangeable  Promissory Note ("convertible  debt") for
$2,850,000  cash, net of expenses.  The Series A convertible  preferred stock is
convertible into common stock beginning in January 2000 at a set price of $4.00,
while the Series B redeemable  convertible  preferred  stock and the convertible
debt are  currently  convertible  into  common  stock at set prices of $3.57 and
$3.65,  respectively.  Additionally,  each of these convertible securities has a
conversion  rate  that is based on the  lesser  of the set  price or the  market
price, as defined, at the time the securities are converted and, therefore, have
beneficial  conversion  features in  accordance  with EITF Topic No.  D-60.  The
Series  B  convertible  preferred  stock  and  the  convertible  note  are  each
convertible at as much as a 15% discount to the market price, as defined, if the
market price, as defined,  at the time the securities are converted is less than
the set price.

         The Series B redeemable convertible preferred stock must be redeemed by
the  Company at 115% of its  original  issue  price per share plus  accrued  and
unpaid  dividends in the event the Company's common stock ceases to be listed or
quoted on a national  securities  exchange,  the NASDAQ  Stock Market or the OTC
Bulletin Board.

         Each of the holders of these securities  received  registration  rights
for the common stock  underlying  their  securities.  The Company is required to
register the common stock  underlying the Series A convertible  preferred  stock
within one year of issuance  and the Series B redeemable  convertible  preferred
stock and the  convertible  debt are  required  to be  registered  in June 1999,
subject to the timing of SEC review, if any.

         In January  2000,  the  holders of the Series A  convertible  preferred
stock may receive a warrant to purchase up to 120,000  shares of common stock at
the then market price, as defined,  of the underlying common stock if the market
price is less than $5.80 per share.  Upon issuance,  the holders of the Series B
redeemable  convertible  preferred  stock received a warrant to purchase  65,000
shares of common  stock at a price of $3.82  and the  holder of the  convertible
debt received a warrant to purchase 135,000 shares of common stock at a price of
$3.04. The common stock warrant attached to the Series B redeemable  convertible
preferred stock, which was valued by the Company at $77,000,  was reflected as a
reduction to the redeemable  preferred  stock and accreted as a preferred  stock
dividend.  The common stock warrant attached to the convertible  debt, which was
valued by the Company at $216,000,  was reflected as debt discount and amortized
as additional interest expense.  The value of the beneficial  conversion feature
of the  convertible  debt was also  reflected as debt  discount and amortized as
additional  interest  expense in accordance  with EITF Topic No. D-60 based upon
the rate at which the debt becomes convertible.

         Dividends  on the  Series A  convertible  preferred  stock and Series B
redeemable convertible preferred stock are reflected as an adjustment to the net
loss attributable to common  stockholders.  This adjustment reflects the accrual
of a cash dividend of $4,000 based on the annual  dividend of $30 (3%) per share
on the  Series  B  redeemable  convertible  preferred  stock  and the  accretion
dividends of $10,000 and $64,000 related to the beneficial  conversion  features
of the  Series  A  convertible  preferred  stock  and the  Series  B  redeemable
convertible  preferred  stock,  respectively,  in accordance with EITF Topic No.
D-60 based upon the rate at which the preferred stock becomes convertible.

4.       Net loss per share

         Net  loss  per  share  includes  the  deductions  for  preferred  stock
dividends.   However,  the  Company  did  not  include  potential  common  stock
equivalents  from the  exercise  of common  stock  options,  the  conversion  of
preferred  stock  or debt and the  exercise  of  common  stock  warrants  in the
calculation of net loss per share as such inclusion would have an  anti-dilutive
effect.

5.       Recent accounting pronouncements

         In June 1998, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 133 (FAS 133) "Accounting for Derivative Instruments and
Hedging  Activities,"  which defines  derivatives,  requires all  derivatives be
carried  at  fair  value  and  provides  for  hedging  accounting  when  certain
conditions  are met.  This  statement  is effective  for all fiscal  quarters of
fiscal years beginning  after June 15, 1999.  Although the Company has not fully
assessed the  implications  of this new statement,  the Company does not believe
adoption  of FAS 133 will  have a  material  impact on the  Company's  financial
position and results of operations.



<PAGE>



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATION

Cautionary Statement

         The  following  discussion  and  other  sections  of this Form 10-Q may
contain forward-looking  statements within the meaning of the Private Securities
Litigation  Reform Act of 1995,  Section 21E of the  Securities  Exchange Act of
1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and
is subject to the safe harbors created by those sections.  These forward-looking
statements are subject to significant risks and uncertainties, including without
limitation those  identified in the section of this Form 10-Q entitled  "Factors
That May Affect  Future  Results and Financial  Condition"  and in the Company's
Annual  Report on Form 10-K for the year ended  December  31, 1998 as filed with
the Securities and Exchange Commission (the "SEC"). Such risks and uncertainties
may cause actual results to differ materially and adversely from those discussed
in such forward-looking  statements.  The forward-looking statements within this
Form 10-Q are identified by words such as "believes,"  "anticipates," "expects,"
"intends," "may" and other similar expressions. However, these words are not the
exclusive means of identifying such statements. In addition, any statements that
refer to expectations,  projections or other  characterizations of future events
or  circumstances  are  forward-looking  statements.  The Company  disclaims any
obligation   to  publicly   release  the  results  of  any  revisions  to  these
forward-looking  statements which may be made to reflect events or circumstances
occurring  subsequent  to the filing of this Form 10-Q with the SEC or otherwise
to revise or update any oral or written  forward-looking  statement  that may be
made from time to time by or on behalf of the Company. The information contained
in this Form 10-Q is not a complete description of the Company's business or the
risks  associated  with an  investment  in the  Company.  Readers  are  urged to
carefully  review and  consider the various  disclosures  made by the Company in
this Report and in the  Company's  other  filings  with the SEC,  including  its
Annual Report on Form 10-K for the year ended December 31, 1998, that attempt to
advise interested parties of certain risks, uncertainties and other factors that
may affect the Company's business.

Overview

         Since its inception in 1990,  the Company has been engaged in research,
development, testing and prototype production of advanced metal matrix composite
materials,  utilizing  proprietary  technology  primarily for the application of
boron carbide in combination with aluminum alloys, under the name Boralyn(R). In
the 3rd  quarter  of 1998,  the  Company  made  the  transition  from  prototype
development to production with continued quarter over quarter increases in total
revenues.  The  Company  continues  its  work  on the  MacGregor  Golf  line  of
Tourney(R)  Boralyn  putters  and  Carbite  Golf line of new  Polar  Balanced(R)
Boralyn(R)  putters with  deliveries  scheduled  for the 2nd and 3rd quarters of
1999,  respectively.  Shipments to  Transnuclear  of Boralyn(R),  for use in dry
storage of spent nuclear fuel rods, were on schedule for the 1st quarter of 1999
and  was  well  received  by  Transnuclear.  Continued  work  on the  suspension
components  for General  Motors NGV (Next  Generation  Vehicle)  has  progressed
nicely  with  prototype  shipments  occurring  in the 1st  quarter of 1999.  The
Company also continues to make progress on developing hard-disk substrates using
Boralyn(R)  and has produced  prototype  disks which meet industry  standard for
"sputter ready disks" and has delivered  them to several of the major  producers
of hard-disk drives for their evaluation and specific product requirements.  The
backlog  continues  to  increase  with  approximately  $1.5  million  in  orders
resulting  from the Company's  international  sales and  distribution  partners.
While the Company  expects to achieve  sales of  Boralyn(R)  -based  products in
1999, there can be no assurance that any significant sales will be achieved. The
Company was unprofitable through March 31, 1999 and incurred a loss for the full
year 1998 as a result  of  start-up  and under  absorbed  expenses  relating  to
production orders, and will incur additional losses thereafter.

Results of Operations

For purposes of  discussion,  the results of  operations  for the quarter  ended
March 31, 1999 are compared to the results of  operations  for the quarter ended
March 31, 1998.

         Net sales for the 1st quarter of 1999 increased  2850% to $826,000 from
$28,000  in the 1st  quarter  of  1998.  Increases  in sales  resulted  from the
Company's  transition in the 3rd quarter of 1998 from prototyping to production.
Shipments  in the  1st  quarter  of  1999  were  to  companies  in the  nuclear,
automotive and aerospace industries.

         Cost of  goods  sold  for the 1st  quarter  of 1999  increased  224% to
$2,052,000  from  $634,000 in the 1st quarter of 1998.  The  increase in cost of
goods  sold in the 1st  quarter  of 1999 was a result of the 2850%  increase  in
sales as the Company moved from prototyping to production.

         General  and  administrative  expenses  for  the  1st  quarter  of 1999
decreased 7% to $570,000 from $616,000 in the 1st quarter of 1998. The change is
insignificant.  These  expenses  may  increase  as the Company  accelerates  its
production efforts.


         Selling and marketing expenses for the 1st quarter of 1999 decreased by
7% to $281,000 from $303,000 in the 1st quarter of 1998. As the Company  expands
its sales efforts in certain target industries and internationally,  selling and
marketing expenses are expected to increase.

         Research and development expenses for the 1st quarter of 1999 decreased
65% to $406,000 from  $1,154,000 in the 1st quarter of 1998. The decrease in 1st
quarter of 1999 was attributable to the Company's  transition in the 3rd quarter
of 1998  from  prototyping  to  production.  The  Company  expects  to  continue
investing in research and development of new applications of Boralyn(R).

Liquidity and Capital Resources

         At March 31, 1999, the Company had working  capital of  $4,353,000.  In
March 1999,  the Company  completed an equity  offering of $1.4 million,  net of
expenses, and an exchangeable debt offering of $2.8 million, net of expenses. In
January 1999, the Company completed an equity offering of $1.45 million,  net of
expenses.  The Company received $4.5 million,  net of expenses,  from its Common
Stock  Rights  Offering  completed in August  1998.  Prior to August  1998,  the
Company funded its operations  through proceeds from its initial public offering
in October 1996 of $33.3 million, net of expenses, and through debt financing of
$10.5  million,  of which $6.5 million was  completed in December  1997 and $4.0
million was completed in the second quarter of 1998.  Cash balances in excess of
those required to fund operations are invested in interest-bearing  high quality
short-term  investment grade corporate  securities and government  securities in
accordance  with  investment  guidelines  approved  by the  Company's  Board  of
Directors.

         The Company's  future liquidity and capital funding  requirements  will
depend on numerous  factors,  including  results of  marketing  its metal matrix
composite  materials,  their acceptance in the market,  the timing of production
orders and their delivery and the costs and timing of growth in sales, marketing
and manufacturing  activities.  The Company's working capital needs will rise as
the Company  increases  production.  The Company  intends to use additional debt
financing  for some of its  existing  and  future  working  capital  needs.  The
Company's  ability to obtain  future  working  capital  debt  financing  will be
dependent in part on the quality and amount of the Company's trade  receivables,
inventory and unsecured capital equipment. If the Company achieves its operating
plan for 1999, it believes that internally  generated funds,  cash on hand, debt
and equity investment capital raised by the Company in the first quarter of 1999
and planned equity,  equipment and accounts receivable  financing should satisfy
the Company's anticipated capital needs for the next 12 months.  However, if the
Company fails to complete its planned equity,  equipment and accounts receivable
financing,  inadequate  capital to finance  operations may result.  Also, if the
Company fails to reach its planned  revenue  levels,  additional  capital may be
required.  There can be so assurance the Company will ever achieve a significant
level of sales or profitability.

Factors That May Affect Future Results And Financial Condition

         In future  periods the  Company's  business,  financial  condition  and
results of operations  may be affected in a material and adverse  manner by many
factors, including, but not limited to, the following:

We have a limited operating history, limited revenues and prior losses

         We commenced our materials development  activities in 1990. However, we
only  completed our  manufacturing  facilities in 1998 and therefore have a very
limited  operating  history.  Our  limited  operating  history  has  resulted in
extremely limited revenues through 1998, with total revenues of $364,000 in 1997
and $1.3  million  in 1998.  Due to these  limited  revenues  and our  extensive
materials  development  activities,  we had net  losses of $12.1  million,  $7.3
million and $2.3 million for the years ended  December 31, 1998,  1997 and 1996,
respectively.  We are also expecting to incur losses in fiscal year 1999 and may
continue to incur losses thereafter.  We may never generate  sufficient revenues
to  achieve  profitability.  Even  if we do  achieve  profitability,  we may not
sustain or increase profitability on a quarterly or annual basis in the future.

Our future operating results will fluctuate significantly

         We have experienced, and will likely continue to experience, long sales
cycle times,  lengthy customer design  processes for new product  introductions,
and market trends that may significantly limit management's  ability to forecast
accurately  time-to-market  schedules or short-term  results of  operations.  We
cannot predict our operating results due to the uncertainty of these factors and
our limited operating history. Our operating results may vary significantly from
quarter to quarter,  in part because of the costs associated with changes in our
products and personnel and the size and actual  delivery dates of orders for our
products.  As a result,  our operating results for any particular quarter should
not  be  considered  indicative  of  any  future  results  and  period-to-period
comparisons  of our  operating  results  will  not  necessarily  be  meaningful.
Fluctuations  caused by variations in quarterly operating results or our failure
to meet market  analysts'  projections  or public  expectations  could cause the
market price of our common stock to decline and perhaps decline significantly.

We must  achieve  significant  product  sales to  offset  substantial  lease and
capital commitments we made to establish production capability

         We have entered into long-term leases for our two facilities located in
Irvine,  California.  For our main  facility,  we have entered into a lease that
expires in 2008 with a five-year  option. We also have a ten-year lease expiring
in 2008 for our second Irvine facility. We have committed substantial capital to
provide both facilities with significant production capability. Unless and until
we achieve a significant level of sales of our Boralyn- based products,  we will
have substantial  production  over-capacity and under-absorbed  costs that would
cause us to incur substantial operating losses.

We have limited manufacturing history and significant manufacturing risks

          Our limited  operating  history has resulted in limited  experience in
manufacturing  our  products  in  commercial  quantities.  While  we  have  made
substantial   lease  and  capital   commitments  to  support  our  manufacturing
capabilities,  we cannot be sure that we will fully utilize our capacity or that
our facilities will be adequate for all of our future fabrication  requirements.
In addition, the manufacture of our products presents several potential hazards.
For example,  the  manufacturing  processes for Boralyn utilize high temperature
and  high  pressure  and may be  subject  to  volatile  chemical  reactions.  In
addition,   a  mechanical  or  human  failure  or  natural   disasters  such  as
earthquakes, characteristic of Southern California, could result in interruption
of our  manufacturing  activities  or  significantly  impact  our  manufacturing
capacity.  Moreover,  our  manufacturing  operations will use certain  equipment
that, if damaged,  inoperable or  unavailable,  could disrupt our  manufacturing
operations.  To address  these risks,  we have  obtained  business  interruption
insurance with coverage for lost profits and out-of-pocket  expenses of up to $8
million per  occurrence.  In addition,  we maintain  other property and casualty
coverage.  Despite our efforts to minimize and insure against our  manufacturing
risks, any extended  interruption of our  manufacturing  operations would have a
material  adverse  effect  on our  business,  operating  results  and  financial
condition.

Our products have not yet gained market acceptance in commercial quantities

          Market  acceptance  of our products in commercial  quantities  depends
upon pricing of products and our ability to manufacture and deliver  products on
a timely basis. In addition, our ability to achieve commercial acceptance of our
products is dependent upon our ability to demonstrate  the advantages of Boralyn
products  over  competing  material  methodologies  and  products.  We also have
experienced,  and will likely  continue  to  experience,  long sales  cycles and
lengthy  customer  product  design  times prior to  production  orders.  We must
address  each  of  these  factors  effectively  in  order  to  achieve  customer
acceptance  in  commercial  quantities of Boralyn or our other current or future
products.  The costs of our 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.



<PAGE>


We may be unable to obtain the additional capital required to grow our business

          Our ability to grow our business is highly  dependent upon our ability
to  generate  capital  from our  operations  and to raise  needed debt or equity
financing.  If we are able to achieve our  operating  plan for 1999,  we believe
that our cash on hand  (including debt and equity  investment  capital raised in
the first quarter of 1999), capital generated from our internal operations,  and
planned  equipment  and  accounts   receivable   financing  should  satisfy  our
anticipated  capital needs for the next 12 months.  However, if we fail to reach
our planned revenue objectives, we may have inadequate working capital. Also, if
we fail to complete our planned equipment and accounts receivable financing,  we
may have  inadequate  capital to finance our  operations.  Our ability to obtain
future  working  capital debt financing will be dependent in part on the quality
and amount of our trade receivables,  inventory and unsecured capital equipment.
If we are  unable  to  receive  adequate  debt  financing,  we may  have to seek
additional equity financing which may not be available on favorable terms, if at
all. Our ability to achieve future  liquidity and capital  funding  requirements
through our operations will depend on numerous factors, including:

     o results of marketing  our metal  matrix  composite  capabilities;  
     o market acceptance of our products; 
     o the timing of production orders and our ability to make  delivery of 
       products;  
     o our costs of sales and timing of growth in sales; and  
     o our ability  to  effectively  manage  our  marketing  and  manufacturing
       activities.


We depend on our key personnel and management team

         Our future success and  profitability is  substantially  dependent upon
the  performance  of our  executives , Steven S. Price (our  President and Chief
Executive Officer), Robin A. Carden (our Founder),  Richard L. Little (our Chief
Financial  Officer  and  Secretary)  and Jon A.  Knartzer  (our Vice  President,
Operations).  We seek to retain our key personnel with competitive  compensation
and each of our senior executives has a substantial potential equity interest in
the form of stock options.  However,  a departure by any of these individuals or
any other key employees  could  significantly  diminish our level of management,
technical, marketing and sales expertise and we would have the difficult task of
finding and hiring  replacements  who have these skills.  We do maintain key-man
life  insurance  policies of $2.5 million each on the lives of Mr. Price and Mr.
Carden;  however,  we do not maintain key-man life insurance  policies on either
Mr. Little or Mr. Knartzer.

         Our future  growth  will be  dependent  upon our ability to attract and
retain additional qualified management,  technical,  scientific,  administrative
and other personnel. Due to our location in Irvine, California and the nature of
our  business,  we  believe  we  will  experience  significant  competition  for
qualified management, supervisory, engineering and other personnel.

We face rapid technological change in our industry which may necessitate 
development of new products

         We operate in a rapidly  evolving field - advanced  materials - that is
likely to be  affected  by future  technological  developments.  Our  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 critical
factors in our ability to grow and remain competitive. We cannot be sure that we
will be able to develop new  products or that any new  products  can be marketed
successfully.  In addition,  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.  If we fail to timely develop and introduce new products
or to  enhance  our  current  products,  our  business,  operating  results  and
financial condition could be materially adversely affected.  Moreover, we expect
to  devote  substantial   resources  to  technology   development  efforts.  For
accounting purposes,  the costs of those efforts will be recorded as expenses as
they  are  incurred,  notwithstanding  that  the  benefits,  if  any,  from  our
technology  development  efforts (in the form of increased revenues or decreased
product costs) may not be reflected,  if at all, until subsequent  periods. As a
result, our  period-to-period  operating results could be adversely impacted and
difficult to predict.



<PAGE>


We currently depend on a limited number of customers

         Due to the early stage nature of our business, we currently have only a
limited  number of  customers,  several of whom may be material to our near-term
results of operations.  Even after we mature, however,  certain customers may be
material to our business,  operations  and future  prospects.  We cannot be sure
that one or more  principal  customers  will not suffer  business  or  financial
setbacks  resulting in reduction or  cancellation of product orders or our 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,  or our  failure  to
successfully market our products to new customers, could have a material adverse
effect on our business, operating results and financial condition.

We currently depend on a limited number of suppliers

         We  presently  purchase  our  principal  ceramic  raw  material,  boron
carbide,  from a limited  number  of  suppliers,  including  one  supplier  that
provides  approximately 50% of our present  requirements.  Our business would be
materially and adversely affected if we are unable to continue to purchase boron
carbide at prices and on terms comparable to those presently  available from our
principal  suppliers.  Although we believe that boron carbide is available  from
other  suppliers,  we  project  that to take  full  advantage  of the  potential
opportunity,  we must develop additional boron carbide supplies. There can be no
assurance that we will be able to continue to obtain desired quantities of boron
carbide on a timely basis or at prices and terms we consider reasonable.

We depend on the protection of our patents

         We have been granted one United States patent that contains claims that
cover the use of Boralyn.  We believe this patent  provides  protection  for our
proprietary  Boralyn  technology.  We  have  been  granted  additional  patents,
including divisional (extension) patents and  continuation-in-part  patents that
stem from our original patent  application.  We have also applied for additional
patents.  We cannot be sure that our existing patents, or any other patents that
may be  granted,  will be valid and  enforceable  or provide us with  meaningful
protection from competitors.  Further, we cannot be sure that any pending patent
application  will issue or that any claim under pending  patents will provide us
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.  Moreover,  if a
competitor  were to infringe  any of our  patents,  the costs of  enforcing  our
patent rights may be substantial or even prohibitive. We cannot be sure that our
future  products  will not infringe the patent  rights of others or that we will
not be forced to expend substantial funds to defend against  infringement claims
of, or to obtain  licenses from,  third parties.  We currently have only limited
patent  protection for our technology  outside the United States,  and we may be
unable to obtain even  limited  protection  for our  proprietary  technology  in
certain foreign countries.

We depend on our trademarks for current and future markets

         The market for our  products is and will remain  dependent in part upon
the goodwill engendered by our trademarks and trade names.  Trademark protection
is  therefore  material  to  our  business.  Although  Boralyn  is a  registered
trademark in the United  States,  we cannot be certain that we can  successfully
assert trademark or trade name protection for our significant marks and names in
the  United  States or other  markets,  and the costs of such  efforts  could be
substantial.

Our industry is very competitive

         The materials industry is highly competitive.  We compete in our chosen
markets  against several larger domestic and  multi-national  companies,  all of
which are well  established in their respective  markets and have  substantially
greater financial and other resources than us. There are also several competing,
small  advanced  materials  companies,   similar  to  Alyn.  Competitive  market
conditions  could  adversely  affect our  results of  operations  and  financial
condition if we were required to reduce  product  prices to remain  competitive,
were  unable  to  achieve  significant  sales  of  our  products  or  unable  to
successfully develop and sell new or enhanced products.

We face product liability risks

         As a  participant  in the  materials  industry,  we  face  an  inherent
business risk of exposure to product  liability  claims in the event that any of
our products are alleged to be defective or cause harmful  effects.  The cost of
defending or settling product liability claims may be substantial.  We currently
maintain,  and intend to  continue  to  maintain,  product  liability  insurance
coverage.  However,  we  cannot  be sure  that we  will be able to  obtain  such
insurance  on  acceptable  terms  in the  future  or that  such  insurance  will
adequately cover any claims.

Our stock price could be  adversely  affected by the sale of shares  issuable to
holders of our recently issued preferred stock and exchangeable note

         During  the first  quarter  of 1999,  we raised  an  aggregate  of $6.0
million ($5.65  million,  net of expenses) in financing  through the issuance of
Series A Preferred Stock, Series B Preferred Stock and an Exchangeable Note. The
Series A Preferred Stock is  exchangeable  for common stock beginning in January
2000, while the Series B Preferred Stock and the Exchangeable Note are currently
exchangeable  for common stock at set prices of $3.57 and $3.65 ("Set  Prices"),
respectively.  Each of the  holders of these  securities  received  registration
rights for the common stock  underlying  their securities and we are required to
file a  registration  statement for the holders of Series B Preferred  Stock and
the Exchangeable Note in April 1999.  Additionally,  each of these  exchangeable
securities  has an exchange rate that is based on the lesser of the Set Price or
the  market  price  at the time  the  securities  are  exchanged.  The  Series B
Preferred Stock and the Exchangeable Note are each exchangeable at up to as much
as a 15%  discount  to the  market  price  if the  market  price at the time the
securities are exchanged is less than the Set Price. At a minimum, the number of
shares of common stock  issuable  upon  exchange of all of these  securities  is
1,617,086.  In  addition,  we may be required  to issue up to 287,500  shares of
common stock pursuant to warrants  granted in connection with these  financings.
Any  decrease  in the  price of our stock  could  result  in the  issuance  of a
substantial  number of additional  common stock shares that would be immediately
available for resale on the public  market for the Series B Preferred  Stock and
the  Exchangeable  Note.  Depending  upon the trading  volume of our stock,  any
significant  block sales of these  shares  issuable in exchange  for these newly
issued securities could have an adverse effect on the market price of our stock.
Additionally,  any  perception  by the public that these  shares might be resold
immediately and are not to be held as long term investments could materially and
adversely  affect  our stock  price.  Any  adverse  impact  on our  stock  price
resulting from these recently issued  exchangeable  securities would cause these
securities to become  exchangeable  for even more shares of common stock.  Also,
any negative impact to our stock price caused by these  exchangeable  securities
could impair our ability to raise additional equity capital.

Our stock  price could be  adversely  affected by the  perception  that  certain
shareholders  could  require us to sell their shares of our stock by  exercising
their registration rights

         Future  sales of our common stock by existing  stockholders  under Rule
144 could have an adverse effect on the price of our stock. In addition, certain
of our stockholders of common stock have  contractual  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 our 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 our stock.

We are subject to risks associated with year 2000 compliance

         We are in the process of  upgrading  or replacing  our  accounting  and
management  information systems to be Year 2000 compliant and believe we will be
Year 2000  compliant on a timely  basis.  We will use both internal and external
resources to reprogram  and/or  replace any  deficiencies.  We are not currently
aware of any other  incompatibility  and believe  that no material  expenditures
will be  required.  We do not  believe  that the Year 2000  issue  will have any
material  effect on our operations and we have  determined  there is no exposure
related to our products.  Formal  communications  have been  initiated  with all
significant  suppliers  and large  customers to determine the extent to which we
are  vulnerable to such parties'  failure to address their own Year 2000 issues.
We expect  to have  analyzed  and  accessed  the  possible  risk of  significant
business  interruptions  as a result of any such party's  noncompliance  by June
1999. At that time, any necessary contingency plans will be developed to address
any  material  consequences  that we could suffer if such party is not Year 2000
compliant. Despite our efforts to assess Year 2000 compliance, we cannot be sure
that the failure of other  companies to  adequately  address the Year 2000 issue
will not have a material  adverse effect on our business,  operating  results or
financial  condition.  Overall,  we expect to complete our Year 2000  compliance
efforts in 1999.  The total  estimated  project  cost,  which is not  considered
material,  includes the estimated  costs and time  associated with the impact of
third party compliance.  However, there can be no guarantee that these estimates
will be achieved and actual results could differ materially from those plans.

Certain of our stockholders retain substantial influence

         Certain  of our  present  holders  of common  stock  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.
Additionally,  those  stockholders  would be able to influence  significantly  a
proposed amendment to our charter, a merger proposal,  a proposed sale of assets
or other major corporate transaction or a non-negotiated  takeover attempt. Such
concentration  of ownership may  discourage a potential  acquirer from making an
offer to buy our company,  which,  in turn,  could  adversely  affect the market
price of our common stock.

         Under the terms of our recently completed  financings,  certain holders
of the newly  issued  exchangeable  securities  must  approve  certain  actions,
including future financings or issuance of senior securities. These restrictions
could affect our ability to raise capital or effect  certain  corporate  changes
which could adversely  affect our business,  results of operations and financial
condition.

Certain of our charter  provisions  could adversely  affect the rights of common
stock and we are subject to Delaware anti-takeover provisions

         Under our charter,  the Board of Directors  has the  authority to issue
shares of preferred  stock and to determine the price,  rights,  preferences and
privileges  of those  shares  without  any  further  vote of, or action  by, our
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 has
been issued or may be issued in the future.  Issuance of preferred stock,  while
potentially   providing  desirable   flexibility  in  connection  with  possible
acquisitions  and other  corporate  purposes,  could have an effect of making it
more difficult for a third party to acquire a majority of our outstanding voting
stock.  Certain  provisions of Delaware law applicable to us may also discourage
third-party attempts to acquire control.

Our stock price may be volatile

         Trading volume and prices for our common stock could be subject to wide
fluctuations in response to quarterly  variations in our operations and 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 us.  These  factors  include  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 our
earnings on existing or future  equity-based  compensation awards to management.
The market price of our common stock could also be influenced by developments or
matters not related to us.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not Applicable



<PAGE>


                                ALYN CORPORATION

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.

ITEM 5.  OTHER INFORMATION

         The  Company's  Preliminary  Proxy  for  the  1999  annual  meeting  of
stockholders  was filed on April 30. Because of its inclusion of certain matters
pertaining to the Company's recently filed  Registration  Statement on Form S-3,
the Securities and Exchange Commission has notified the Company of its intent to
formally  review  the  Proxy  Statement.  Accordingly,  the  annual  meeting  of
stockholders  was been rescheduled to September 16, 1999 for all shareholders of
record as of August 16, 1999.

         In accordance with regulations issued by the SEC, stockholder proposals
intended for  presentation  at the 2000 Annual Meeting of  stockholders  must be
received by the Company at its principal  executive  office,  16761 Hale Avenue,
Irvine,  CA 92606, a reasonable time before the Company begins to print and mail
its proxy materials, if such proposals are to be considered for inclusion in the
Company's proxy statement for the 2000 Annual Meeting of stockholders.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits.  The following exhibit is filed as part of this report:

                  EXHIBIT
                    NO.          DESCRIPTION

                    27.1         Financial Data Schedule

(b)      Reports on Form 8-K

                  Form 8-K  filed on April 29,  1999  describing  the  Company's
                  recently  completed  financing  transactions and attaching the
                  definitive documents of the transactions.




<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  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
                                   (Registrant)



                                   By: _______________________________
                                   Arne van Roon
                                   Chief Executive Officer and
                                   President





                                   By: _______________________________
                                   Richard L. Little
                                   Vice President, Finance and Administration
                                   and Chief Accounting Officer

Dated:  May 17, 1999