15
                             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 September 30, 1998.
                                  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 November 10, 1998.

<PAGE>


 ALYN  CORPORATION  INDEX
-------------------------------------------------------------------------------
                                                                     Page Number
PART I.   FINANCIAL INFORMATION 

     Item 1.   Financial Statements
          Condensed  Balance Sheet - 
               September 30, 1998 (unaudited) and December 31, 1997        3

          Condensed  Statements  of  Operations  - 
               Three months ended September 30, 1998(unaudited)and 
               September 30, 1997 (unaudited) and nine months ended 
               September 30, 1998 (unaudited) and 
               September 30, 1997 (unaudited)                              4

          Condensed Statements of Stockholders' Equity -
               Nine months ended September 30, 1998 (unaudited)            5

          Condensed Statements of Cash Flows - 
               Nine months ended September 30, 1998 (unaudited
               and September 30, 1997 (unaudited)                          6

          Notes to Condensed Financial Statements (unaudited)              7

     Item 2.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations                      8-12

     Item 3.   Quantitative and Qualitative Disclosures About 
               Market Risk                                                12

PART II.  OTHER INFORMATION                                               13

SIGNATURES                                                                14 

<PAGE>






                             Alyn Corporation
                         Condensed Balance Sheet
                               (Unaudited)


                                           September 30,    December 31,
                                               1998             1997

                                  Assets

Current assets:
     Cash and cash equivalents .......       $  5,928,000    $ 13,126,000
     Accounts receivable, net ........            482,000          94,000
     Inventories .....................            423,000         172,000
     Other current assets ............            125,000         201,000
Total current assets .................          6,958,000      13,593,000

Equipment, furniture and fixtures, net         21,346,000      13,302,000
Other assets, net ....................            586,000       3,454,000
Intangibles, net .....................            711,000         778,000

                                             $ 29,601,000    $ 31,127,000



                   Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable ....................   $    546,000    $    551,000
     Current portion of long term debt ...      1,808,000         999,000
     Accrued and other current liabilities        469,000         326,000
Total current liabilities ................      2,823,000       1,876,000

Long term debt ...........................      7,795,000       5,501,000

Stockholders' equity:
   Common stock ..........................         11,000          11,000
   Additional paid-in capital ............     37,796,000      33,294,000
   Accumulated deficit ...................    (18,824,000)     (9,555,000)
Total stockholders' equity ...............     18,983,000      23,750,000

                                             $ 29,601,000    $ 31,127,000


See Notes to Condensed Financial Statements.


<PAGE>



                                 Alyn Corporation
                        Condensed Statement of Operations
                                   (Unaudited)


                                      Three Months Ended     Nine Months Ended
                                         September 30,         September 30,

                                        1998       1997        1998      1997
                                        ----       ----        ----      ----

Net sales .........................$ 602,000  $  64,000  $  662,000  $  273,000
Contract revenue ..................              14,000                  59,000
                                    --------  ---------    ---------  ---------
Total revenue .....................  602,000     78,000     662,000     332,000
                                    --------  ---------    ---------  ---------
Costs and expenses:

Cost of goods sold ............... 1,813,000     82,000   3,770,000     299,000
Establishment of mfg facilities ...     --      511,000        --     1,029,000
General and administrative expenses  679,000    699,000   2,300,000   1,838,000
Selling and marketing .............  328,000    339,000     928,000   1,004,000
Research and development ..........  628,000    522,000   2,578,000   1,166,000
                                   ---------  ---------   ---------   ---------
Total costs and expenses ......... 3,448,000  2,153,000   9,576,000   5,336,000
                                   ---------  ---------   ---------   ---------

Operating loss                                                                
                                 (2,846,000) (2,075,000) (8,914,000) (5,004,000)

Other income/(expense)             (169,000)    173,000    (354,000)    695,000
                                 -----------  ---------   ----------  ----------
Loss before provision for                                        
income taxes                     (3,015,000) (1,902,000) (9,268,000) (4,309,000)
                                  
Provision for income taxes              -         1,000       1,000      12,000
                                 -----------  ---------  ----------  ----------
Net loss                        ($3,015,000)($1,903,000)($9,269,000)($4,321,000)
                                 ==========  ==========  ==========  ==========
Basic and diluted net loss
per share                            ($0.28)     ($0.18)     ($0.86)     ($0.40)
                                      =====       =====       =====       =====
Common shares used in computing
basic and diluted
net loss per share               10,869,293  10,750,000  10,789,764  10,750,000
                                 ==========  ==========  ==========  ==========




See Notes to Condensed Financial Statements.



<PAGE>



                              Alyn Corporation
                Condensed Statement of Stockholders' Equity
                                (Unaudited)

                                                     Additional
                                  Common Stock         Paid-in      Accumulated
                                Shares      Amount     Capital        Deficit

Balance at December 31, 1997   10,750,000  $10,750    $33,294,000   ($9,555,000)

Common stock contributed         (500,000)    (500)           500

Common stock issued               858,000      858      4,502,000

Net loss                                                             (9,269,000)
                               ----------  -------   ------------   ------------

Balance at September 30, 1998  11,108,000  $11,108    $37,796,500  ($18,824,000)
                               ==========  =======    ===========   ============



See Notes to Condensed Financial Statements.

<PAGE>


                       Alyn Corporation
               Condensed Statement of Cash Flows
                              (Unaudited)


                                                      Nine Months Ended
                                                        September 30,
                                                    1998             1997
                                                    ----             ----


Cash flows used in operating activities:         ($7,759,000)    ($5,280,000)
                                                 ------------    ------------

Cash flows used in investing activities:
  Capital expenditures                            (7,044,000)     (8,384,000)
                                                 ------------     -----------

Cash flows from financing activities:
  Proceeds from long term debt (net)               3,103,000               -
  Proceeds from common stock subscription          4,502,000               - 
                                                   ---------      -----------
Cash flows provided by financing activities        7,605,000               -
                                                  ----------      ----------- 
Net decrease in cash and cash equivalents         (7,198,000)    (13,664,000)
                                                  -----------    ------------
Cash and cash equivalents-beginning of period     13,126,000      24,411,000 
                                                  ----------     -----------

Cash and cash equivalents at end of period       $ 5,928,000     $10,747,000
                                                 ===========     ===========


See Notes to Condensed Financial Statements



<PAGE>


                           ALYN CORPORATION
                     NOTES TO 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, 1997,  included in the Company's Form
10-K,  which is on file with the Securities  and Exchange  Commission.
Operating results for the nine months ended September 30, 1998 are not
necessarily  indicative  of the results  that may be expected  for the
year ended December 31, 1998.
        Cost  of  goods  sold  includes,  in  addition  to  the  costs
associated  with the sales for the first three  quarters of 1998,  all
labor,   material   and   overhead   pertaining   to   the   Company's
under-utilization of production capacity.

2. Inventories
                                        September 30,      December 31,
                                            1998              1997
                                            ----              ----
                                         (Unaudited)

 Raw materials                            $423,000          $157,000
 Finished goods                                  -            15,000
                                         ---------          --------
                                          $423,000          $172,000
                                         =========          ========

3. Common Stock Rights Offering

        On August 28, 1998 the Company completed a common stock Rights
Offering to its  stockholders  which  resulted in net  proceeds to the
Company of $4,502,000.  Common shares  outstanding  increased a net of
357,878 to a total of 11,107,878.  The Rights Offering  resulted in an
additional   857,878   common   shares   being   issued  to   existing
stockholders;   however,   Robin  A.  Carden,  the  Company's  Founder
contributed  500,000  common  shares of his stock to the Company at no
charge.  This  contribution  reduced the dilutive effect of the Rights
Offering.





<PAGE>


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

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  Prospectus  dated  July 15,  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
Prospectus  dated July 15,  1998,  that  attempt to advise  interested
parties of certain  risks,  uncertainties  and other  factors that may
affect the Company's business.

Overview

        From its inception in 1990 until its initial  public  offering
in October 1996, the Company was engaged in research, development, and
testing of its advanced metal matrix  composite  materials.  Following
its initial public offering,  the Company focused on the establishment
of manufacturing  facilities and prototype  production of metal matrix
composite  products.  In 1997 and the first two  quarters  of 1998 the
Company's  sales were  primarily the result of prototype  orders.  The
Company transitioned to production in the third quarter of 1998.
        The  initial  production  order for metal wood golf club heads
for Taylor  Made Golf  Company is  expected  to begin  shipment in the
first  quarter of 1999.  San  Diego-based  Carbite  Golf has placed an
initial  production  order  for a new line of Polar  Balanced  putters
featuring  Boralyn(R),  with the  first  deliveries  scheduled  in the
fourth quarter of 1998. The Company is also working with The MacGregor
Golf Company on their new Boralyn line of  Tourney(R)  Putters,  which
are expected to debut in January 1999,  with initial  shipments in the
fourth  quarter of 1998.  True Temper Sports  announced that they will
commercially  launch  Boralyn  golf club shafts in 1999,  with initial
production also in the fourth quarter of 1998. General Motors selected
the Company to provide seventeen parts for its Next Generation Vehicle
(NGV), developed by its Advanced Technology Vehicles Group. Production
orders for these parts,  which are for  suspension,  cross-member  and
control arm components,  have been received,  with shipments scheduled
for  delivery  beginning  in early 1999.  The Company  began  shipping
engine cradles to General Motors for its EV-1 electric  vehicle in the
third  quarter  of 1998.  Shipments  have  also  begun  for  aerospace
applications  utilizing both Boralyn(R) and hard-alloy  aluminum.  The
Company  anticipates  completing several production orders for various
aerospace  forgings  and  extrusions  in the  fourth  quarter of 1998.
Development  work  continues in the Company's  computer disk substrate
program.  Test and  evaluation  programs  have begun with three  major
disk-drive manufacturers.
        While  the  Company  has  achieved  sales  of  Boralyn  -based
products in 1998, there can be no assurance that any significant sales
will be achieved.  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 or maintain  profitability,  if achieved,  on a
consistent  basis.  Moreover,  the Company has entered into a ten-year
lease for its main  facility  in  Irvine,  California,  and a ten-year
lease for its additional facility, also in Irvine, and the Company has
committed   substantial   capital  to  equip  both   facilities   with
significant  production  capability.  Unless  and  until  the  Company
achieves a  significant  level of sales,  the Company will continue to
have substantial production  overcapacity and underabsorbed costs that
would  cause the  Company to incur  substantial  additional  operating
losses.

Results of Operations

        For purposes of discussion,  the results of operations for the
 three-month  period  ended  September  30,  1998 are  compared to the
 results of operations for the three-month  period ended September 30,
 1997 and the results of operations  for the  nine-month  period ended
 September  30,  1998 are  compared  to the  nine-month  period  ended
 September 30, 1997.

        Total revenues for the third quarter of 1998 increased 672% to
$602,000  from  $78,000  in the  third  quarter  of  1997.  Production
represents  48% of total  revenue  for the  third  quarter  of 1998 as
compared to 20% of total  revenue for the third  quarter of 1997.  The
remainder  represents   production  tooling  and  prototyping.   Total
revenues for the nine-month  period ended September 30, 1998 increased
99% to $662,000 from $332,000 in the nine-month period ended September
30, 1997. Production for the first nine months of 1998 contributed 51%
of total  revenue as compared to 20% for the same period in 1997.  The
remainder represents production tooling and prototyping. Production in
the  third  quarter  of  1998  included  shipments  to  firms  in  the
aerospace, automotive and golf industries.

        Cost of goods  sold for the third  quarter  of 1998  increased
2,111% to $1,813,000  from $82,000 in the third quarter of 1997.  Cost
of goods sold for the  nine-month  period  ended  September  30,  1998
increased 1,161% to $3,770,000 from $299,000 in the nine-month  period
ended September 30, 1997. As the Company began production in the third
quarter of 1998, all excess manufacturing  capacity costs were charged
to Cost of goods sold.  In 1997,  prior to completion of the Company's
first  manufacturing  facility,  only  labor,  material  and  overhead
directly  associated  with sales went to Cost of goods sold,  with the
remainder charged to Establishment of manufacturing facilities.

        There were no expenses for the  Establishment of manufacturing
facilities during 1998. In the quarter and nine months ended September
30, 1997,  $511,000 and  $1,029,000  of expenses,  respectively,  were
incurred  for the  startup  and testing of  production  equipment  and
charged to Establishment of manufacturing facilities.

        General and  administrative  expenses for the third quarter of
1998  decreased 3% to $679,000  from  $699,000 in the third quarter of
1997. As cost savings measures are put into place, the Company expects
to see general  and  administrative  expenses  decrease in relation to
other expenses,  but remain relatively flat in absolute terms over the
next  two  quarters.  General  and  administrative  expenses  for  the
nine-month period ended September 30, 1998 increased 25% to $2,300,000
from $1,838,000 in the nine-month period ended September 30, 1997. The
increase   represents  higher  employee  recruiting  costs  and  other
generally non-recurring expenses in 1998.

        Sales and  marketing  expenses  for the third  quarter of 1998
decreased 3 % to $328,000  from $339,000 in the third quarter of 1997.
Sales and marketing expenses for the nine-month period ended September
30, 1998  decreased 8 % to $928,000 from  $1,004,000 in the nine-month
period ended September 30, 1997.

        Research and  development  expenses  for the third  quarter of
1998  increased  20% to $628,000 from $522,000 in the third quarter of
1997.  Expenses relating to disk substrate research were higher in the
third quarter of 1998 as compared to the same period in 1997. Research
and development expenses for the nine-month period ended September 30,
1998  increased 121% to $2,578,000  from  $1,166,000 in the nine-month
period ended September 30, 1997. This increase was  attributable to an
increase in internal development of products, including development of
the disk substrate program.  The Company expects to continue investing
in research and development of new applications for Boralyn.

Liquidity and Capital Resources

        At September 30, 1998,  the Company had cash of $5,928,000 and
working  capital of $4,135,000.  The Company has funded its operations
through:  a) net proceeds from its initial public  offering in October
1996 of $33.3  million;  b) debt  financing  of $10.5  million  - $6.5
million  completed in December 1997 and $4.0 million  completed in the
second  quarter of 1998;  and c) net proceeds of $4.5 million from the
initial  phase of equity  financing,  in the form of the common  stock
Rights  Offering,  completed  in August 1998.  The Company  intends to
complete its financing  plans  through  additional  equity  financing,
although there can be no assurance that such financing,  if available,
will be available under  commercially  reasonable terms. 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 capabilities, 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 intends to use debt financing for some of its
existing and future capital needs. The Company believes that cash flow
from  operations,  current cash balances,  and its bank line of credit
will  be   sufficient   to  finance  its  working  and  other  capital
requirements for the next eighteen months.

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:

        Limited  Revenues  and  Prior  Losses.  The  Company  has  had
extremely  limited  revenues to date.  The Company  reported total net
revenues of $662,000 and a net loss of $9,269,000  for the  nine-month
period  ended  September  30,  1998.  The Company  reported  total net
revenues of $364,000 and a net loss of  $7,316,000  for the year ended
December 31,  1997,  and total net revenues of $194,000 and a net loss
of  $2,255,000  for the year ended  December  31,  1996.  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   or  maintain
profitability,  if achieved,  on a  consistent  basis.  Moreover,  the
Company has  entered  into a ten-year  lease for its main  facility in
Irvine,  California, and a ten-year lease for its additional facility,
also in Irvine, and the Company has committed  substantial  capital to
equip both facilities with significant production  capability.  Unless
and until the  Company  achieves  a  significant  level of sales,  the
Company will continue to have substantial production  overcapacity and
underabsorbed  costs that would cause the Company to incur substantial
additional operating losses.

        Limited Manufacturing History; Manufacturing Risk. The Company
has  only  limited   experience  in  manufacturing   its  products  in
commercial quantities. There can be no assurance that the Company will
be able to fully utilize its plants' capacity or that these facilities
will  be  adequate  for  all  of  the  Company's  future   fabrication
requirements.  The  manufacturing  processes for Boralyn  utilize high
temperature and high pressure 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  interruption  of the Company's
manufacturing   capacity.   Moreover,   the  Company's   manufacturing
operations are using certain  equipment  that, 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 up to $8 million per  occurrence,
and presently  maintains,  and intends to continue to maintain,  other
property and casualty coverage, an extended interruption of operations
at the  Company's  manufacturing  facilities  would  have  a  material
adverse effect on the business of the Company.

        No Assurance of Market  Acceptance in  Commercial  Quantities.
Market acceptance of the Company's  products in commercial  quantities
will  depend  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  material  methodologies  and  products.  The
Company has experienced,  and will likely continue to experience, long
sales  cycles and  lengthy  customer  product  design  times  prior to
production  orders.  There can be no  assurance  that the  Company can
achieve customer acceptance in commercial quantities of Boralyn or the
Company's other current or future products. 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.

        Revenue Timing;  Quarterly  Fluctuations in Operating Results.
The Company has  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.  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
and the size  and  actual  delivery  dates of  orders.  The  Company's
operating  results  for any  particular  quarter  are not  necessarily
indicative of any future results. Fluctuations caused by variations in
quarterly operating results or the Company's failure to meet analysts'
projections  or  public  expectations  as  to  operating  results  may
adversely affect the market price of the Company's Common Stock.

        Rapid Technological  Change and New Product  Development.  The
Company  operates in a rapidly  evolving field - advanced  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 critical  factors 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,  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.  For accounting purposes,  the costs of those
efforts   will  be  recorded   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,  if at  all,  until
subsequent periods.

        Possible Dependence on Significant  Customers.  In view of the
early stage nature of the Company's business,  currently it has only a
limited  number of  customers,  several of whom may be material to the
Company's  near term  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.

        Dependence on Patents. The Company has been granted one United
States patent that it believes provides protection for its proprietary
Boralyn  technology and contains claims that cover the use of Boralyn.
The Company has been granted additional patents,  including divisional
(extension) patents and  continuation-in-part  patents, that stem from
the Company's original patent application. The Company has applied for
additional  patents.  There  can be no  assurance  that the  Company's
existing  patents 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 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  any patent  issued to the  Company,  the
costs of enforcing the Company's  patent rights may be  substantial or
even prohibitive.  There can 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.

        Competition. The materials industry is highly competitive. The
Company competes in its 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 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.

        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. 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  Principal  Suppliers.  The  Company  presently
purchases its principal  ceramic 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  purchase  boron  carbide  at  prices  and  on  terms
comparable to those presently available from its principal  suppliers.
Although the Company  believes  that boron  carbide is 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 or at  prices  and on  terms  deemed  reasonable  by the
Company.

        Dependence on  Management.  The Company's  future  success and
profitability is  substantially  dependent upon the performance of its
senior  executives,   particularly  Steven  S.  Price,  the  Company's
President and Chief Executive  Officer.  The loss of services from any
of the  Company's  senior  executives  could have a  material  adverse
effect  on  the  Company.  The  Company  does  maintain  key-man  life
insurance  policies of $2.5  million on each of the lives of Mr. Price
and Mr. Carden,  the Company's  Founder.  The Company's  future growth
will 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.

        Dependence on Trademarks for Current and Future  Markets.  The
market for the Company's products is and will remain dependent in part
upon the  goodwill  engendered  by its  trademarks  and  trade  names.
Trademark  protection is therefore material to the Company's business.
Although  Boralyn 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 could be substantial.

        Year  2000  Compliance.   The  Company  believes  its  current
accounting and management information systems are Year 2000 compliant.
The  Company  is in the  process  of  evaluating  all  other  internal
software  applications,  hardware,  office equipment and manufacturing
equipment for Year 2000  compatibility.  It will utilize both internal
and external  resources to reprogram and/or replace any  deficiencies;
this  evaluation  should be completed by January 1999.  The Company is
not  currently  aware  of any  incompatibility  and  believes  that no
material  expenditures  will be  required  and there  would not be any
material  effect on  operations.  The Company has determined it has no
exposure  related to its  products.  Formal  communications  have been
initiated  with all  significant  suppliers  and  large  customers  to
determine the extent to which the Company is vulnerable to those third
parties'  failure to address  their own Year 2000  Issue.  The Company
expects to have analyzed and accessed the possible risk of significant
business interruptions as a result of a third party's noncompliance by
March 1999.  At that time,  any  necessary  contingency  plans will be
developed  to address any  material  consequences  the  Company  could
suffer if a third party is not Year 2000 compliant. However, there can
be no  guarantee  that the failure of other  companies  to  adequately
address the Year 2000 Issue will not have a material adverse effect on
the Company.  The Company expects to complete its Year 2000 compliance
efforts by mid 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.

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

        None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

        The  following  items  were  reported  on Form 8-K  during the
Quarter Ended September 30, 1998:

        A   press  release dated July 2, 1998 was filed on Form 8-K on
            July 2, 1998 titled,  "Alyn Corporation Responds to Recent
            Sharp  Decline  in  Share  Price  and  Provides   Business
            Update".
        A   press  release  dated August 3, 1998 was filed on Form 8-K
            on August 3, 1998 titled, "Alyn Corporation Reports Second
            Quarter Results".
        A   press  release dated August 23, 1998 was filed on Form 8-K
            on August 23,  1998  titled,  "Alyn  Corporation  Provides
            Further Business Update".



<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: _______________________________
                                                       Steven S. Price
                                                         President and
                                               Chief Executive Officer








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




Dated:  November 10, 1998