AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 31, 2001
REGISTRATION NO. 333-49146

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 4
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933

ALLOY STEEL INTERNATIONAL, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

DELAWARE 3325 98-0233941
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)

Alloy Steel International, Inc.
42 Mercantile Way Malaga
P.O. Box 3087 Malaga D C 6945
Western Australia

(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Gene Kostecki, President, CEO
Alloy Steel International, Inc.
42 Mercantile Way Malaga
P.O. Box 3087 Malaga D C 6945
Western Australia
(Name, address, including zip code, and telephone number, including
area code, of agent for service)

copies to:

Clayton E. Parker, Esq.
Troy J. Rillo, Esq.
Kirkpatrick & Lockhart, LLP
201 South Biscayne Boulevard, Suite 2000
Miami, Florida 33131
Telephone: (305) 539-3300
Facsimile: (305) 358-7095

Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement. If any of the
securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. |X|

If this Form is filed to register additional securities pursuant to
Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. |_|

If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act Registration Statement number of the earlier effective Registration
Statement for the same offering. |_|

If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act Registration Statement number of the earlier effective Registration
Statement for the same offering. |_|

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|

The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.

SUBJECT TO COMPLETION, DATED MAY 31, 2001
ALLOY STEEL INTERNATIONAL, INC.

5,336,250 SHARES OF COMMON STOCK

This is a public offering of shares of common stock of Alloy Steel
International, Inc. No public market currently exists for the common stock.
Sales may be made by selling stockholders at market prices prevailing at the
time of sale or at negotiated prices. We will not receive any of the proceeds
from the sale of the shares of common stock.

Before buying the shares of common stock, carefully read this
prospectus, especially the risk factors beginning on page 4. The purchase of our
securities involves a high degree of risk.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

The date of this prospectus is May ___ , 2001.

TABLE OF CONTENTS

PROSPECTUS SUMMARY........................................................... 1
RISK FACTORS................................................................. 4
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS......................... 6
USE OF PROCEEDS.............................................................. 6
DIVIDEND POLICY.............................................................. 6
CAPITALIZATION............................................................... 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS...................................................... 8
BUSINESS..................................................................... 11
MANAGEMENT................................................................... 17
PRINCIPAL STOCKHOLDERS....................................................... 19
CERTAIN TRANSACTIONS......................................................... 20
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION................................ 21
DESCRIPTION OF SECURITIES.................................................... 24
SHARES ELIGIBLE FOR FUTURE SALE.............................................. 26
LEGAL MATTERS................................................................ 26
EXPERTS...................................................................... 26
HOW TO GET MORE INFORMATION.................................................. 27
Financial Statements.........................................................F-1

iii

PROSPECTUS SUMMARY

THE COMPANY

OUR BUSINESS

We manufacture and distribute Arcoplate, a wear-resistant fused-alloy
steel plate, through a patented production process. The Arcoplate process
enables an alloy overlay to be evenly applied to a sheet of steel, creating a
metallurgical bond between the alloy and the mild steel that is resistant to
wear caused by impact, abrasion and erosion.

We also intend to market for manufacture and distribution, the 3-D Pipe
Fitting Cladder process, a computer-driven and software-based mechanical system
for industrial use. The 3-D Pipe Fitting Cladder process enables wear resistant
alloy coatings to be applied to pipe fittings, where wear is most likely to
occur. Through the 3-D Pipe Fitting Cladder process, we intend to apply alloy
coatings to the interior surfaces of pipe fittings.

CORPORATE BACKGROUND

Alloy Steel International Inc. was incorporated in Delaware in May
2000. Our principal executive office is located at 42 Mercantile Way Malaga,
Malaga D C 6945, Western Australia Our telephone number is 61 + (8) + 9248 3188.
Our Internet address is www.alloysteel.net. Information contained in our web
sites is not intended to be part of this prospectus.

SUMMARY FINANCIAL DATA

The following sets forth summary financial information regarding Alloy
Steel International, Inc. and Arcoplate division, Collier Unit Trust. The
Company was organized on May 4, 2000. Accordingly, no historical operations data
are included in 1999. The unaudited pro forma summary financial information
includes adjustments to reflect the acquisition of the Arcoplate division's net
assets. See pro forma financial statements included elsewhere herein.

Statement of operations data:

HISTORICAL PRO FORMA
MAY 4, 2000 HISTORICAL PRO FORMA
(INCEPTION) TO YEAR ENDED JUNE 30, NINE MONTHS ENDED
SEPTEMBER 30, 2000 1999 2000 MARCH 31, 2001
------------------ ---- ---- --------------

Sales ............................. $ -- $ 1,316,339 $ 1,188,403 $ 1,139,968 $ 1,459,576
Cost of Sales...................... -- 678,431 700,629 523,821 676,368
------------- ------------- ----------------- ---------- -----------
Gross Profit....................... -- 637,908 487,774 616,147 783,208
Selling, general
and administrative.............. (19,859) (395,932) (1,233,556) (623,351) (934,080)
Other Income....................... -- 38,085 -- -- --
------------- ------------- ----------------- ---------- -----------
Net Income (loss).................. $ (19,859) $ 280,061 $ (745,782) $ (7,204) $ (150,872)
============= ============= ================= ============ ===========

Balance sheet data:

HISTORICAL
MARCH 31, 2001

Cash and cash equivalents................................................ 8,674
Working Capital (deficit)................................................ 43,586
Total assets............................................................. 1,511,997
Total liabilities - all current.......................................... 373,735
Stockholders' equity..................................................... 1,138,262

THE OFFERING

Securities Offered...................... This prospectus relates to the
offering of 5,336,250 shares of
common stock which are being offered
for sale by selling stockholders.

Price Per Share......................... Sales may be made at market prices
prevailing at the time of sale, or
at negotiated prices.

Common Stock Outstanding................ 17,050,000 shares.

Use of Proceeds......................... We will not receive any of the
proceeds from the sale of shares by
the selling stockholders.

Risk Factors............................ You should read the "Risk Factors"
section as well as the other
cautionary statements throughout the
entire prospectus, so that you
understand the risks associated with
an investment in our securities.

Proposed Listing........................ We intend to apply for listing of
our shares of common stock on the
National Association of Securities
Dealers, Inc. OTC Bulletin Board.

RISK FACTORS

This offering involves a high degree of risk. You should carefully
consider the following factors and other information in this prospectus before
deciding to invest in our shares of common stock.

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

We have a limited operating history. We anticipate incurring
significant operating losses for at least the next 12 months. We cannot assure
you that we will achieve or maintain profitability. Until we achieve the
manufacturing capacity sufficient to sustain continuous production of Arcoplate
or Arcoplate-based products, we will have substantial production undercapacity,
and we may be unable to fill customer orders. Such events could cause us to
incur substantial operating losses.

WE WILL NOT GENERATE SUFFICIENT REVENUE TO CONTINUE OPERATIONS IF WE
ARE UNABLE TO PRODUCE SIGNIFICANT COMMERCIAL QUANTITIES OF ARCOPLATE AND FUTURE
ALLOY-BASED PRODUCTS.

Although we have prototype equipment, we do not currently have the
equipment necessary for the manufacturing of Arcoplate in significant commercial
quantities. We do not anticipate the completion of additional equipment until
July 2001 at the earliest. In addition, we do not currently manufacture the
commercial equipment necessary for the implementation of the 3-D Pipe Fitting
Cladder process. Accordingly, we have limited internal manufacturing capacity
and no experience in manufacturing our products in industrial or significant
commercial quantities. Due to our limited production capacity, we may be unable
to meet demand for our products. In addition, our manufacturing operations use
certain equipment which, if damaged or otherwise rendered inoperable or
unavailable, could result in the disruption of our manufacturing operations. Any
extended interruption of operations at our manufacturing facility would have a
material adverse effect on our business.

WE MAY NOT BE ABLE TO EXPAND OPERATIONS, IF WE ARE UNABLE TO RAISE
ADDITIONAL CAPITAL.

We believe that the available cash and anticipated cash flow from
operations will be sufficient to satisfy the Company's anticipated capital
requirements for approximately six months. Accordingly, we anticipate that we
will require additional financing to continue operations and pursue our plans
for expansion. Such financing may take the form of the issuance of common stock
or preferred stock or debt securities, or may involve bank or other lender
financing. We cannot assure you that we will be able to obtain such additional
financing on a timely basis, on favorable terms, or at all.

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

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

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

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

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

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

IF WE DO NOT CORRECTLY ANTICIPATE THE MAGNITUDE AND DIRECTION OF
CURRENCY EXPOSURE, THERE COULD BE A MATERIAL ADVERSE IMPACT ON OUR PROSPECTS FOR
PROFITABILITY.

All of our production will take place overseas, and many of the raw
materials and supplies for our products will be purchased in foreign currencies.
In addition, international sales will likely be denominated in local currencies.
These factors may combine to expose us to currency gains and losses in addition
to gains and losses from our basic operations. The magnitude and direction of
future currency exposure cannot be predicted, nor can we assure you that we will
be able to manage such exposure to our benefit or to a neutral effect.

WE HAVE MANY COMPETITORS WHICH HAVE SUBSTANTIALLY GREATER FINANCIAL AND
OTHER RESOURCES THAN WE DO AND THESE COMPETITORS MAY NEGATIVELY AFFECT OUR
BUSINESS.

The wear plate solutions industry is highly competitive. We have
numerous competitors worldwide, including Triton, Inc., Trimay, Ltd., Australian
National Industries, Ltd., Australian Overseas, Ltd., Abresist Corporation and
Duraweld, Ltd. We compete in our chosen markets against several larger
multi-national companies, all of which are well-established and have
substantially greater financial and other resources than we maintain.
Competitive market conditions could adversely affect our results of operations
if we are required to reduce product prices to remain competitive or if we are
unable to achieve significant sales of our products.

OUR BUSINESS WOULD BE MATERIALLY AND ADVERSELY AFFECTED IF WE WERE
UNABLE TO RECEIVE MATERIALS AT PRICES AND ON TERMS PRESENTLY MADE AVAILABLE TO
US BY OUR PRINCIPAL SUPPLIERS.

We presently purchase our principal raw materials, steel and alloy
compound components, from a limited number of suppliers. There are no written
contracts between us and our suppliers, and requirements are purchased using
individual purchase orders, with customary terms regarding payment, quality and
delivery. Although we believe that alternatives are readily available from other
suppliers, we cannot assure you that we will be able to continue to obtain
desired quantities of materials on a timely basis at prices and on terms deemed
reasonable by us. Our business would be materially and adversely affected if we
are unable to continue to receive materials at prices and on terms comparable to
those presently made available to us by our principal suppliers.

SINCE WE DEPEND HEAVILY UPON ELECTRICAL POWER FOR OUR OPERATIONS, ANY
INCREASE IN PRICES WOULD HAVE A MATERIAL ADVERSE AFFECT ON OUR RESULTS OF
OPERATIONS.

We consume a large amount of electrical power during production. The
amount of electrical power consumed during the Arcoplate process represents
approximately 15% of our overall production costs. There may be fluctuations in
the price of electricity due to changes in the regulation of utility companies
in Australia, and in other jurisdictions where we may engage in production. We
cannot assure you that we will be able to continue to obtain our energy supplies
at current prices.

PURCHASERS OF OUR SHARES OF COMMON STOCK MAY BE UNABLE TO SELL THEIR
SHARES BECAUSE ANY MARKET THAT DEVELOPS MAY BE LIMITED.

There is currently no public market for our common stock and any public
market that develops may be limited. We intend to apply for listing on the OTC
Bulletin Board, but we cannot assure you that we will be approved for listing.
We cannot assure you that any market for the shares will develop or, if it
develops, that it will be sustained.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements. These
forward-looking statements are not historical facts, but rather are based on our
current expectations, estimates and projections about our industry, our beliefs
and assumptions. Words including "may," "could," "would," "will," "anticipates,"
"expects," "intends," "plans," "projects," "believes," "seeks," "estimates" and
similar expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and other factors, some of which are beyond our control,
are difficult to predict and could cause actual results to differ materially
from those expressed or forecasted in the forward-looking statements. These
risks and uncertainties are described in "Risk Factors" and elsewhere in this
prospectus. We caution you not to place undue reliance on these forward-looking
statements, which reflect our management's view only as of the date of this
prospectus. We are not obligated to update these statements or publicly release
the result of any revisions to them to reflect events or circumstances after the
date of this prospectus or to reflect the occurrence of unanticipated events.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the shares by
the selling stockholders.

DIVIDEND POLICY

We have never paid any dividends on our common stock. We do not intend
to declare or pay dividends on our common stock, but to retain our earnings, if
any, for the operation and expansion of our business. Dividends will be subject
to the discretion of our board of directors and will be contingent on future
earnings, if any, our financial condition, capital requirements, general
business conditions and other factors as our board of directors deems relevant.

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2001:

You should read this table in conjunction with our financial
statements, including the notes to our financial statements, which appear
elsewhere in this prospectus.

Stockholders' equity:........................................ $ --
Preferred stock $.01 par value, authorized
3,000,000 shares; no shares issued and outstanding
Common stock $.01 par value, authorized 50,000,000
shares; issued and outstanding - 17,000,000
shares.................................................... 170,000
Additional paid-in capital................................... 1,286,525
Accumulated deficit.......................................... (27,063)
Deferred compensation........................................ (291,200)
-------------
Total:....................................................... $ 1,138,262
==============

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

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

OVERVIEW

We manufacture and distribute Arcoplate, a wear-resistant
fused-alloy-clad steel plate, which is manufactured by a patented production
process. The Arcoplate process enables an alloy overlay to be evenly applied to
a mild steel backing, creating a metallurgical bond between the alloy and the
mild steel that is resistant to wear caused by impact, abrasion and erosion. We
believe that wear is the primary cause of down time and lost production in
mining and mineral processing, and that our Arcoplate product line will
substantially lower the down time and lost production for our customers.

We have also developed, for manufacture and distribution, the 3-D Pipe
Fitting Cladder process, a computer-driven and software-based mechanical system
for industrial use. The 3-D Pipe Fitting Cladder process enables wear resistant
alloy coatings to be applied to pipe fittings, where wear is most likely to
occur. In pipe fittings, wear generally occurs in pipe bends, elbow pipe joints,
pipe "T" sections and pipe "Y" sections. Through the 3-D Pipe Fitting Cladder
process, we apply alloy coatings to the interior surfaces of pipe fittings. We
believe that the mining and mineral industries, among others, would benefit from
the reduced abrasive wear and downtime associated with the use of the 3-D
Pipe-Fitting Cladder process.

Since Alloy Steel International was formed in May 2000, the following
discussion relates to the unaudited pro forma financial information derived from
the historical financial statements and has been prepared to illustrate the
results of operations of Alloy Steel International as if the acquisition of the
Arcoplate division of the Collier Unit Trust had been consummated as of October
1, 1999. There is no discussion for the nine months ended March 31, 2001 and
March 31, 2000 since comparable information is not included in the financial
statements contained elsewhere in this prospectus.

PLAN OF OPERATION

Our objective during the next 12 months is to expand our capacity to
produce Arcoplate. We believe that additional machinery to produce Arcoplate
will be operational by July 2001 and will cost an additional $175,000. The
additional machinery will supplement our prototype machinery which we have
utilized to generate our sales. We believe that with the addition of new
equipment we will have the capacity to produce Arcoplate which will have a
resale value of $15-$20,000,000. However, we cannot assure you that we will
achieve such capacity or generate such sales. We will also attempt to further
increase the capacity of our facility. We believe that the cost of additional
equipment which would result in a capacity to produce additional Arcoplate with
a $15,000,000 - $20,000,000 resale value would cost $1,500,000 to $2,000,000. In
addition, we intend to build the machinery for the 3-D Pipe Fitting Cladder
Process, the cost of which is approximately $500,000. We intend to seek
additional financing for these capital expenditures, but we cannot assure you
that we will be able to obtain such financing. In the event that we are not able
to obtain such additional financing, we will attempt to finance such
expenditures out of operations or we will attempt to continue operations without
such capital expenditures.

Based upon our expanded capacity as a result of the completion of
additional machinery in July 2001, we intend to add two employees to our sales
and marketing staff, six employees to our manufacturing staff and two employees
to our research and development staff. We intend to achieve market penetration
through a multi-step process consisting of:

o presentation of technical papers at industry related seminars;

o initial discussions of the application highlighting the advantages
of Arcoplate;

o an engineering and marketing evaluation by the prospective
customer of sample material and demonstration products; and

o licensing a production program where approximate expenditures
are made on tooling, equipment and quality control necessary to
fulfill market requirements.

We also intend to continue our research and development activities with
respect to our products. We intend to allocate approximately one-half of 1% of
sales to research and development activities.

Results of Operations (Pro Forma)

Year ended June 30, 1999 compared to year ended June 30, 2000

PRODUCT SALES

For the year ended June 30, 1999 product sales were $1,316,339 as
compared to $1,188,403 for the year ended June 30, 2000, a decrease of 9.7%.
Management believes that product sales decreased because its equipment was shut
down for approximately ten weeks during a relocation of the Company's
facilities.

GROSS PROFIT

For the year ended June 30, 1999 gross profit was $637,908, 48.4% as a
percentage of product sales, as compared to $487,774, 41% as percentage of
product sales for the year ended June 30, 2000. Management believes that the
decrease of gross profit as a percentage of net sales is primarily attributable
to changes in the alloy formula which resulted in an increase in composition
cost.

SELLING GENERAL AND ADMINISTRATIVE EXPENDITURES

For the year ended June 30, 1999, selling, general and administrative
expenses were $395,932, 30.1% as a percentage of product sales, as compared to
$411,297, 31.2% as a percentage of product sales for the year ended June 30,
2000. Management attributes the increase in selling general and administrative
expenses to higher wage levels attributable to increased hardness testing costs.

OTHER INCOME

For the year ended June 30, 1999, we had other income of $38,085
attributable to a reversal of the provision for doubtful accounts.

LIQUIDITY AND CAPITAL RESOURCES

We have funded our requirements for working capital through the sale of
the Company's securities and the sale of the Arcoplate products. As of December
31, 2000, we had working capital of $506,158.

In May 2000, we acquired an exclusive worldwide license, with the
exception of the United States, from Kenside Investments, Ltd., for a 25- year
term, in connection with certain patent and technology rights related to the
Arcoplate process, in exchange for 4,760,000 shares of our common stock. The
license provides for royalty payments to Kenside Investments, Ltd., in an amount
equal to 2% of our net sales of Arcoplate products. Our Chief Executive Officer,
director and principal shareholder, Gene Kostecki controls Kenside Investments,
Ltd.

In June 2000, we completed the sale of 2,217,500 shares of common stock
at a price of $0.16 and 0.25 per share in a private financing transaction to 18
accredited investors resulting in gross proceeds of $420,000. In August 2000, we
completed the sale of 1,718,750 shares of common stock to nine accredited
investors at a price of $0.16 per share in a private financing transaction
resulting in gross proceeds of $275,000. The net proceeds of the offering were
utilized for construction of equipment in the amount of approximately $555,000
and the balance of the funds were utilized in connection with working capital
and registration expenses.

In October 2000, we acquired, from Gene Kostecki and Alan Winduss, the
right to utilize and commercially exploit the 3-D Pipe Fitting Cladder process
in exchange for an aggregate of 3,413,750 shares of common stock. In October
2000, we acquired from Collier Unit Trust, certain mill and office equipment
assets relating to the manufacture, sale and distribution of Arcoplate in
exchange for 1,250,000 shares of common stock. In October 2000, we acquired,
from Collier Unit Trust, certain plant machinery relating to the manufacture,
sale and distribution of Arcoplate for a purchase price of $820,000. Mr.
Kostecki controls Collier Unit Trust.

In October 2000 we entered into five year employment agreements with
Gene Kostecki, our president and chief executive officer and Alan Winduss, our
chief financial officer, which provide for annual salaries of $150,000 and
$80,000, respectively.

Although we have no material commitments for capital expenditures, we
anticipate a substantial increase in our capital expenditures consistent with
anticipated growth in operations, infrastructure and personnel.

We anticipate that the machinery to expand our capacity to produce
Arcoplate will be completed in July 2001. In order to further expand capacity,
we anticipate that we would incur capital expenditures for machinery of
approximately $1,500,000 to $2,000,000. In addition, we anticipate that the cost
of the machinery necessary for the 3-D Pipe Fitting Cladder process will be
approximately $500,000. The 3-D Pipe Fitting Cladder machinery includes a
computer driven software mechanical system which has been designed to overlay
with super alloys wear resistant coating into pipe fittings. We have no material
commitments for the additional financing for the addition of the machinery to
expand our capacity to produce Arcoplate or the machinery for the 3-D Pipe
Fitting Cladder process.

Our capital requirements depend on numerous factors, including, market
acceptance of our products and services, the resources we devote to marketing
and selling our services and our brand promotions, capital expenditures and
other factors. We have experienced a substantial increase in our capital
expenditures since our inception consistent with the growth in our operations
and staffing; we anticipate that this may continue for the foreseeable future
particularly relating to the development of new machines and alloys. We believe
that our current cash will be sufficient to meet our anticipated needs for
working capital, capital expenditures and business expansion for the next six
months. After six months, if cash generated from operations is insufficient to
satisfy our liquidity requirements, we may seek to sell additional equity or
debt securities or to obtain a credit facility. The sale of additional equity or
convertible debt securities could result in additional dilution to our
stockholders. There can be no assurance that financing will be available in
amounts or on terms acceptable to us, if at all.

BUSINESS

GENERAL

OUR BUSINESS

ARCOPLATE

We manufacture and distribute Arcoplate, a wear-resistant
fused-alloy-clad steel wear plate, through a patented production process. The
Arcoplate process enables an alloy overlay to be smoothly and evenly applied to
a sheet of steel, creating a metallurgical bond between the alloy and the steel
that is resistant to wear caused by impact, abrasion and erosion. We believe
that, in the mining and mineral processing industries, wear is the primary cause
of down time, the period of time when machinery is not in operation due to wear
or malfunction. We believe that our Arcoplate product line will substantially
lower down time and the resulting loss of production for our customers. Alloy
Steel International was incorporated in Delaware in May 2000.

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

o the tendency to spall into chips or fragments when subjected to
high impact;

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

o rough surfaces resulting in poor material flow.

We believe that Arcoplate has properties that allow it to overcome the
limitations of conventional wear plate. Based upon independent laboratory and
field tests we believe that Arcoplate is up to six times more wear-resistant
than conventional single or multiple layer wear plates due to a higher carbide
content and a more homogeneous surface layer. In addition, based upon
independent laboratory and field tests, we believe that Arcoplate wear plate
sheets will withstand rolling and pressing, within the fabrication guidelines,
into various shapes for commercial distribution.

Our equipment is presently operating at full capacity. We anticipate
that additional machinery to expand our capacity will be completed in July 2001.
Upon completion of the additional equipment, we intend to increase our sales and
marketing efforts.

We are presently marketing Arcoplate products to customers in
Australia. We intend to expand our marketing to include mining companies,
original equipment manufacturers, cement plants and dredging companies in
Australia, as well as in Korea, India, Indonesia, Singapore, South Africa, Japan
and China.

Unless the context otherwise requires, the description of our business
and the information contained in this Prospectus, includes the operations of our
predecessor, the Arcoplate Division of the Collier Unit Trust and the following:

o the acquisition of a license for the worldwide rights to
commercially exploit the Arcoplate process, with the exception of
the United States, in May 2000;

o the acquisition of certain plant equipment assets of Collier Unit
Trust in October 2000; and

o the acquisition of the 3-D Pipe Fitting Cladder Process in October
2000.

The Arcoplate Division of Collier Unit Trust commenced operations in
1990. Our initial prototype equipment commenced producing Arcoplate for sale to
customers in 1991. It is anticipated that the Collier Unit Trust will continue
to distribute railroad spares to the mining industry. Arcoplate Holdings UK PLC
holds the United States rights to the Arcoplate process through Arcoplate, Inc.
Presently, such rights are not being exploited. We anticipate that we will
acquire such rights, but we do not have a definitive agreement. Arcoplate
Holdings (UK) PLC is an affiliate of Mr. Kostecki, our chief executive officer,
director and principal stockholder and Mr. Winduss, our chief financial officer,
principal stockholder and a director.

3-D PIPE FITTING CLADDER PROCESS

We intend to commercially utilize the 3-D Pipe Fitting Cladder process,
a computer-driven and software-based mechanical system for industrial use. The
3-D Pipe Fitting Cladder process enables wear resistant alloy coatings to be
applied to pipe fittings, where wear is most likely to occur. In pipe fittings,
wear generally occurs in pipe bends, elbow pipe joints, pipe "T" sections and
pipe "Y" sections. Through the 3-D Pipe Fitting Cladder process, we apply alloy
coatings to the interior surfaces of pipe fittings. We believe that the mining
and mineral industries, among others, would benefit from the reduced abrasive
wear and downtime associated with the use of the 3-D Pipe-Fitting Cladder
process.

THE WEAR PLATE SOLUTIONS INDUSTRY

We believe that wear in the operating workplace is the largest factor
leading to production losses in the mining, mineral-processing, and steel
manufacturing industries and, consequently, wear plate solutions are an integral
resource for businesses with wear-related concerns. The wearing of metal parts
is generally defined as a gradual decay or breakdown of the metal. A metal part
is usually worn by combinations of two or more types of wear. Because the wear
of equipment may have multiple causes, the selection of alloy wear plate
solutions can be a relatively complex process. There are five major types of
wear: abrasive wear, sliding wear, erosion, fretting and gouging.

In order to minimize the effects of wear, businesses have traditionally
employed such wear-combating materials as rubber compounds, ceramics, alloy
castings, welded overlay wear plate, and quenched and tempered carbon steel
plate. We believe that each of these materials offers a limited solution to the
problem of wear, and that conventional welded overlay wear plate has a tendency
to spall (separate) under high impact conditions. While tungsten carbide is
generally recognized by the mining, mineral-processing and steel manufacturing
industries as the most wear-resistant material available for industrial use due
to its high carbide content, we believe that the costs associated with tungsten
carbide are too high to be a practical wear plate solution for most businesses.
We believe that the Arcoplate process provides businesses with solutions to most
wear-related problems at a cost competitive with traditional welded overlay wear
plate, and substantially lower than tungsten carbide. In addition, we believe
that the 3-D Pipe Fitting Cladder process will provide businesses with solutions
for the problem of wear and down time in pipe fitting systems, reducing the
costs associated with lost production and the replacement of worn pipe fittings.

OUR STRATEGY

Our objective is to become an international market leader in
wear-resistant alloy steel products and to establish significant market share
and brand awareness for Arcoplate and the 3-D Pipe Fitting Cladder process
within the mining, mineral-processing and steel industries. We intend to
accomplish our objectives by first establishing a substantial market presence in
Australia, and then developing an international market presence, focusing on
India, South America, Brazil, Indonesia, the United States, and Canada. We
believe that we can capitalize on our existing patented process for producing
Arcoplate through the direct manufacture and sale of Arcoplate-based products to
original equipment manufacturers and distributors worldwide. At the local level,
we intend to combine targeted marketing with advertising in trade journals,
newspapers and magazines. At the international level, we intend to establish
market presence by visiting international trade shows, presenting technical
papers at industry conferences, and appointing distributors who will be supplied
with samples of Arcoplate and who will be trained to present Arcoplate products
as a solution for wear-related problems.

PRODUCTS AND APPLICATIONS

CHARACTERISTICS OF ARCOPLATE

Many of our claims with respect to the physical characteristics of
Arcoplate have been subjected to studies and testing, performed by independent
laboratories, universities and other testing facilities, of Arcoplate's various
properties such as bond strength, specific hardness, density, hardness,
resonance and wear resistance.

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

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

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

o brick and cement works and power stations;

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

o bulldozer arms and blades; and

o truck box liners and bucket loader liners.

Our product lines include a range of standard alloy overlay plates. Our
products are designed for ease of handling and can be fabricated to suit our
customers' equipment and needs regarding shape, size, weight, and other factors.
Sheets of Arcoplate can be welded together to cover large surface areas, and can
be cut into a range of shapes, while still maintaining resistance to wear. We
also provide consultation services to customers and their design engineers with
particular wear-related problems, and we can formulate Arcoplate to meet the
specific requirements of our customers.

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

CHARACTERISTICS OF THE 3-D PIPE FITTING CLADDER PROCESS

We believe that the 3-D Pipe Fitting Cladder process overcomes many of
the problems associated with pipe fitting wear. Pipe fittings are extensively
used in the dredging, mineral processing, coal-fired power generation, cement
manufacturing, and oil refinery industries, where materials are frequently
transported in enclosed pipe. Due to their angled and/or curved structures, pipe
fittings generally have higher wear resulting in a much shorter working life
than ordinary straight pipe, because material flow does not flow uniformly
through pipe fittings. In order to increase the wear-resistance of the pipe
fittings, the 3-D Pipe Fitting Cladder process deposits a profiled layer of
wear-resistant alloy on to wear-susceptible interior surfaces.

We believe that the wear of pipe fittings in industrial pipe results in
substantial production losses due to down time and cost expenditures for
replacement parts. By uniformly applying alloy coatings to the interior surfaces
of pipe fittings with the 3-D Pipe Fitting Cladder process, we believe that the
need for replacement parts, abrasive wear and down time will be greatly reduced.
We believe that the 3-D Pipe Fitting Cladder process enables a variety of
different alloys to coat the interior surfaces of pipe fittings, and it will
therefore be adaptable for use in many different industrial settings.

INDEPENDENT LABORATORY AND FIELD TESTS

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

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

SALES AND MARKETING

To date, most of our orders have been the result of unsolicited
inquiries from prospective customers who have learned of our Arcoplate products
on a word-of-mouth basis in their respective industries. For the year ended June
30, 2000 eight customers accounted for 74% of sales. Sales to such customers
ranged from 6% of sales to 17% of sales.

We intend to achieve market penetration in selected major markets
through a multi-step process consisting of:

o presentation of technical papers at industry related seminars;

o initial discussions of the application highlighting the advantages
of Arcoplate;

o initial discussions of the application highlighting the advantages
of the 3-D Pipe Fitting Cladder process;

o an engineering and marketing evaluation by the prospective
customer of sample material and demonstration products; and

o licensing a production program where appropriate expenditures are
made on tooling, equipment and quality control necessary to
fulfill market requirements.

We anticipate incurring increased expenditures in connection with our
marketing activities. Our marketing activities are also expected to include
substantial applications engineering support to assist in the development of
products for specific customers and markets, evaluation of Arcoplate and the 3-D
Pipe Fitting Cladder by institutions that specialize in technology and/or
markets of this type, development of appropriate sales materials such as
specification sheets and corporate brochures, and promotion through appearances
at selected trade shows and selective advertising in journals and the trade
press.

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

In addition, we intend to market our Arcoplate products to consultant
engineering companies so that they may ultimately incorporate Arcoplate
materials into their equipment designs. We will offer the services of our own
engineering department to assist consultant engineers with design planning in
order to maximize material flow, and to minimize wear and down time.

ACQUISITION OF TECHNOLOGY

In May 2000 we acquired an exclusive license from Kenside Investments,
Ltd., for a 25 year term, to develop and market the proprietary Arcoplate
process, and to commercially exploit the patent rights and technology rights
related to the Arcoplate process worldwide, with the exception of the United
States in exchange for 4,760,000 shares of our common stock. The patent rights
include those rights encompassed by a U.S. patent and a Canadian patent which
were initially assigned to investors George W. Browne and Gene Kostecki, our
Chief Executive Officer. The rights to the patents, and the underlying Arcoplate
process technology, were ultimately transferred to Kenside Investments, Ltd.
Pursuant to the license from Kenside Investments, we have the option to extend
the license for three terms of 10 years each. The license provides for royalty
payments to Kenside Investments, Ltd., in an amount equal to 2% of our net sales
of Arcoplate products. Gene Kostecki, our chief executive officer, director and
principal stockholder, controls Kenside Investments, Ltd.

INTELLECTUAL PROPERTY

We believe that protection of our licensed proprietary technology and
know-how is critical to the development of our business. We have obtained
patents for process in United States, Mexico, Brazil, Canada, Japan, Burma,
South Korea, Australia, France, Germany, Great Britain, Greece, Italy, Belgium,
Netherlands and Sweden. We do not have intellectual property protection for the
3-D Pipe Fitting Cladder process. We cannot assure you that our existing patent
rights, or any other patent rights that may be granted, will be valid and
enforceable or provide us with meaningful protection from competitors. We cannot
assure you that any pending patent application will issue as a patent or that
any claim thereof will provide protection against infringement. If our present
or future patent rights are ineffective in protecting us against infringement,
our marketing efforts and future revenues could be materially and adversely
affected. In addition, if a competitor were to infringe our patent rights, the
costs of enforcing our patent rights may be substantial or even prohibitive.

RESEARCH AND DEVELOPMENT

We are engaged in the development of new products and improvements to
our existing products and we intend to maintain laboratory facilities for these
purposes as well as a network of outside independent test laboratories and
specialty subcontractors. Our past research and development efforts were focused
on Arcoplate's wear resistance, as compared with the wear plate solutions of our
competitors. For the years ended June 30, 1999 and 2000 we incurred research and
development expenses of $62,000 and $45,000, respectively. In the future, we
intend to allocate one-half of 1% of sales to research and development
expenditures. We expect that our techniques will continue to be developed and
refined through empirical tests and prototype development. We expect that we
will devote substantial resources to research and development efforts. We expect
the costs of those efforts will be recorded for accounting purposes as expenses
as they are incurred, notwithstanding that the benefits, if any, from our
research and development efforts (in the form of increased revenues or decreased
product costs), and may not be reflected in our operating results, if at all,
until subsequent periods.

MANUFACTURING AND SUPPLY

The raw materials we employ are principally steel and a proprietary
alloy compound. We presently purchase steel from one supplier, De Candilo & Sons
Pty Ltd. We presently purchase our alloy materials from C.M.C. Australia Pty
Ltd. We also rely heavily on the use of fluxes, devices designed to remove
impurities, during the manufacturing process. We purchase our requirements for
fluxes from Lincoln Electric Australia Ltd Although we believe that steel and
alloy compounds are readily available from other suppliers, we cannot assure you
that we will be able to continue to obtain desired quantities of steel, alloy
and fluxes on a timely basis at prices and terms deemed reasonable by us. We
monitor the quality of our products by frequent tests and material
certification, and we intend to maintain a strict internal quality control
system to monitor the quality of production at our facility.

GOVERNMENT REGULATION

Our Arcoplate manufacturing plant is subject to many laws and
regulations relating to the protection of the environment. These laws and
regulations impose requirements concerning, among other matters, the treatment,

acceptance, identification, storage, handling, transportation and disposal of
industrial by-products, hazardous and solid waste materials, waste water, air
emissions, noise emissions, soil contamination, electromagnetic radiation,
surface and groundwater pollution, employee health and safety, operating permit
standards, monitoring and spill containment requirements, zoning, and land use.
We frequently examine ways to minimize any impact on the environment and to
effect cost savings relating to environmental compliance. Our management
believes that we are in material compliance with all applicable environmental
laws and that our products and processes do not present any unusual
environmental concerns. Our management further believes that the cost of
compliance with all applicable environmental laws is approximately $15,000 per
year.

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

We require, and must comply with, various authorizations, permits and
licenses to conduct our operations. Government agencies continually monitor our
compliance with authorization, permits and licenses and our facilities are
subject to periodic unannounced inspection by local, state and federal
authorities. Violations of any permit or license, if not remedied, could result
in our incurring substantial fines, or suspension of our operations.

COMPETITION

The wear plate solutions industry is highly competitive. We compete in
our chosen markets against several larger multi-national companies, all of which
are well-established in those markets and have substantially greater financial
and other resources than we do. Competitive market conditions could adversely
affect our results of operations if we were required to reduce product prices to
remain competitive or if we are unable to achieve significant sales of our
products. Wear-resistant alloy steel plates are manufactured by numerous
corporations worldwide. In the United States and Canada, major manufacturers of
wear plates include Triton, Inc. and Trimay, Ltd. In Australia, major
manufacturers of wear plates include Australian National Industries, Ltd. and
Australian Overseas, Ltd. Other major manufacturers in the European Union and
Asia include Vautid (Gmd.) and Duraweld.

EMPLOYEES

We employed 11 persons on a full-time basis as of December 31, 2000,
including two Company executive officers, six manufacturing personnel and three
persons engaged in sales and marketing activities. None of our employees is a
member of a labor union. We consider our relationship with our employees to be
good. We anticipate hiring approximately six additional manufacturing employees,
two additional research and product development employees and two additional
sales and marketing employees in the next 12 months.

PROPERTY

We lease our facility in Perth, Australia, at a monthly rental of
$7,083 per month. The lease expires in June 2005. Of the total 26,000 square
foot area of the facility, approximately 4,000 square feet will be utilized for
office space and approximately 22,000 square feet will be utilized for
manufacturing operations dedicated to Arcoplate manufacturing, secondary
processes and warehousing. The facility is designed for expansion of capacity to
match our anticipated needs. We believe that the replacement value of the
facility is presently adequately covered by insurance.

LEGAL PROCEEDINGS

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

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information concerning our directors and
executive officers.

NAME AGE POSITION

Gene Kostecki 55 President, Chief Executive Officer and
Director
Alan Charles Winduss 59 Chief Financial Officer and Director

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

Gene Kostecki has served as our Chief Executive Officer, President, and
Director since June 2000. From July 1997 to the present, Mr. Kostecki served as
the Chief Executive Officer and director of Arcoplate, Inc. and Arcoplate
Holdings (UK) PLC. From July 1995 to July 1997, Mr. Kostecki served as Managing
Director of the Collier Unit Trust, an engineering business and distributor
based in Western Australia. Mr. Kostecki intends to resign from his positions in
Arcoplate, Inc. and Arcoplate (UK) PLC. He intends to act as President and Chief
Executive Officer of Alloy Steel International on a full-time basis.

Alan Charles Winduss has served as our Chief Financial Officer, Vice
President and Director since June 2000. From July 1997 to the present, Mr.
Winduss served as the Chief Financial Officer and director of Arcoplate, Inc.
and Arcoplate Holdings (UK) PLC. From July 1979 to the present, Mr. Winduss has
served as the senior principal of Winduss & Cook, an accounting firm in Western
Australia, which specializes in commercial accounting, corporate finance and
management. Mr. Winduss intends to resign from his positions in Arcoplate, Inc.
and Arcoplate (UK) PLC. He intends to devote approximately 70% of his time to
his duties as Chief Financial Officer and a director of Alloy Steel
International.

BOARD COMPOSITION

Our board of directors currently consists of two directors. At each
annual meeting of our stockholders, all of our directors are elected to serve
from the time of election and qualification until the next annual meeting
following election. In addition, our bylaws provide that the maximum authorized
number of directors may be changed by resolution of the stockholders or by
resolution of the board of directors.

Each officer is elected by, and serves at the discretion of, our board
of directors. There are no family relationships among any of our directors,
officers or key employees.

CONTROL BY OFFICERS AND DIRECTORS

Our directors and executive officers own approximately 73% of the
outstanding shares of our common stock. Accordingly, these stockholders possess
substantial control over our operations. This control may allow them to amend
corporate filings, elect all of our board of directors, and substantially
control all matters requiring approval by our stockholders, including approval
of significant corporate transactions. If you purchase our common stock, you may
have no effective voice in our management.

EXECUTIVE COMPENSATION

Our executives did not receive any cash or non-cash compensation for
the period from May 4, 2000 (inception) through September 30, 2000.

EMPLOYMENT AGREEMENTS

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

We have entered into consulting agreements with Berryhill Investments,
Ltd., Chartreuse Nominees Pty., Ltd., Persia Consultants, Inc., Ames Nominees
Pty. Ltd., Alan Winduss Pty. Ltd and Ragstar Investments, Ltd., commencing as of
October 2, 2000, which provide for compensation in the amount of 150,000,
500,000, 1,350,000, 937,500, 312,500 and 90,000 shares, respectively, of our
common stock. Pursuant to the terms of each agreement, the consultants shall
provide certain advisory services with regard to corporate development.

STOCK OPTION PLAN

In May 2000, we adopted the 2000 Stock Option Plan. The purpose of the
plan is to enable us to attract, retain and motivate key employees, directors,
and consultants, by providing them with stock options. Options granted under the
plan may be either incentive stock options, as defined in Section 422A of the
Internal Revenue Code of 1986, or non-qualified stock options. We have reserved
500,000 shares of common stock for issuance under the plan. As of the date of
this prospectus, no options have been granted pursuant to the plan.

Our board of directors will administer the plan. Our board has the
power to determine the terms of any options granted under the plan, including
the exercise price, the number of shares subject to the option, and conditions
of exercise. Options granted under the plan are generally not transferable, and
each option is generally exercisable during the lifetime of the holder only by
the holder. The exercise price of all incentive stock options granted under the
plan must be at least equal to the fair market value of the shares of common
stock on the date of the grant. With respect to any participant who owns stock
possessing more than 10% of the voting power of all classes of our stock, the
exercise price of any incentive stock option granted must be equal to at least
110% of the fair market value on the grant date. Our board of directors approves
the terms of each option. These terms are reflected in a written stock option
agreement.

LIMITATIONS OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our certificate of incorporation and bylaws limit the liability of
directors and officers to the maximum extent permitted by Delaware law. We will
indemnify any person who was or is a party, or is threatened to be made a party
to, an action, suit or proceeding, whether civil, criminal, administrative or
investigative, if that person is or was a director, officer, employee or agent
of ours or serves or served any other enterprise at our request.

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

We have been advised that it is the position of the commission that
insofar as the indemnification provisions referenced above may be invoked to
disclaim liability for damages arising under the Securities Act, these
provisions are against public policy as expressed in the Securities Act and are,
therefore, unenforceable.

PRINCIPAL STOCKHOLDERS

The following table sets forth as of April 30, 2001, the number and
percentage of outstanding shares of common stock beneficially owned by:

o each person who we know beneficially owns more
than 5% of the outstanding shares of our common
stock;

o each of our executive officers and directors; and

o all of our officers and directors as a group.

Except as otherwise noted, the persons named in this table, based upon
information provided by these persons, have sole voting and investment power
with respect to all shares of common stock owned by them. The number of shares
of common stock outstanding used in calculating the percentage for each listed
person includes the shares of common stock underlying options or warrants held
by such person that are exercisable within 60 days of the date of this
Prospectus, but excludes shares of common stock underlying options or warrants
held by any other person. Unless otherwise indicated, the address of each
beneficial owner is c/o Alloy Steel, 42 Mercantile Way Malaga, P.O. Box 3087
Malaga D C 6945, Western Australia.

PERCENTAGE OF
COMMON STOCK
NAME OF NUMBER OF BENEFICIALLY
BENEFICIAL OWNER SHARES OWNED

Gene Kostecki............................................ 10,598,000(1) 62.3%

Alan Charles Winduss..................................... 1,893,250(2) 11.1%

Persia Consultants, Inc.................................. 1,350,000 7.9%
One World Trade Center, 87th Floor
New York, New York 10048

All present officers and
directors as a group (Two persons)..................... 12,491,250 73.4%

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

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

CERTAIN TRANSACTIONS

In May 2000, we acquired an exclusive worldwide license from Kenside
Investments, Ltd., excluding the United States, for a 25-year term, in
connection with certain patent and technology rights related to the Arcoplate
process, in exchange for 4,760,000 shares of our common stock. The license
provides for royalty payments to Kenside Investments, Ltd., in an amount equal
to 2% of our net sales of Arcoplate products. Our Chief Executive Officer,
director and principal shareholder, Gene Kostecki controls Kenside Investments,
Ltd. Research and development expenses of approximately $1,800,000 were incurred
in developing the technology and building the equipment for the technology by
entities controlled by Mr. Kostecki.

In October 2000, we acquired certain assets of Collier Unit Trust in
exchange for 1,250,000 shares of our common stock. In October 2000, we also
acquired the Arcoplate manufacturing plant and plant equipment from Collier Unit
Trust for an aggregate purchase price of $820,000. The initial cost of such
plant and equipment was approximately $880,000. Our Chief Executive Officer,
director and principal shareholder, Gene Kostecki controls the Collier Unit
Trust.

In October 2000, we acquired the right to utilize the 3-D Pipe Fitting
Cladder process, from Gene Kostecki and Alan Winduss, in exchange for an
aggregate of 3,413,750 shares of our common stock. Mr. Kostecki incurred
research and development expenses of approximately $600,000 in developing the
3-D Pipe Fitting Cladder Process.

In October 2000, we entered into 12 month consulting agreements with
Chartreuse Nominees Pty., Ltd., Ames Nominees Pty. Ltd., Alan Winduss Pty. Ltd.
and Ragstar Investments, Ltd., which provide for compensation in the amount of
500,000, 937,500, 312,500 and 90,000 shares, respectively. Mr. Winduss controls
Chartreuse Nominees Pty. Ltd., Alan Winduss Pty. Ltd. and Ragstar Investments,
Ltd. Mr. Kostecki controls Ames Nominees Pty. Ltd. Each of the consultants shall
provide corporate development and other advisory services including strategic
planning, investigation of potential strategic alliances, structuring potential
capital transactions, preparation of internal financial statements, reports and
projections, and financial analysis of competitors and new operations. The
consultants have not provided any significant services to us to date. It is
anticipated that Alan Winduss Pty Ltd. will provide financial consulting
services with respect to doing business in Australia through Winduss & Cook, an
accounting firm in Western Australia, of which Mr. Winduss is a principal.
Chartreusse Nominees Pty Ltd. will provide financial consulting services with
respect to doing business in Latin America through Winduss & Cook and Sue Ellen
Ames, Mr. Winduss' daughter. Ragstar Investments Ltd. will provide financial
consulting services with respect to doing business in China through Winduss &
Cook and Sue Ellen Ames, Mr. Winduss' daughter. Ames Nominees Pty Ltd. through
Mr. Kostecki and Steven Kostecki, his son and the Collier Unit Trust will
provide technical advisory services with respect to the manufacture of the
equipment to produce Arcoplate.

We entered into a 12 month consulting agreement with Persia
Consultants, Inc. in October 2000. Pursuant to the consulting agreement we have
issued 1,350,000 shares of common stock to Persia Consultants. The consulting
services to be performed by Persia will primarily be performed by Hamid
Fashandi. Mr. Fashandi has been in the financial services industry for six
years. Persia Consultants will provide services to us as we request. Persia
Consultants has provided us with due diligence on potential acquisition
candidates, provided advice on doing business in the United States and financial
advisory services with respect to our transition from a private company to a
public company. Persia Consultants will also serve as our presence in the United
States and provide investor and public relations services as well as crisis
management services.

In July 2000, we entered into a lease agreement with Raglan Securities
Pty. Ltd., for our office facilities, for a term of five years, at an annual
rent of $85,000. Mr. Kostecki controls Raglan Securities Pty. Ltd.

In June 2000, we sold 919,500 shares of our common stock to Gene
Kostecki, and 308,000 shares of our common stock to Alan Winduss at a price of
$0.16 per share.

Mr. Kostecki and Mr. Winduss may be deemed promoters of Alloy Steel
International.

SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION

The registration statement, of which this prospectus forms a part,
relates to our registration, for the account of the selling stockholders, of an
aggregate of 5,336,250 shares of common stock. We will not receive any of the
proceeds from the sale of these shares.

The sale of the selling stockholders' shares by the selling
stockholders may be effected from time to time in transactions, which may
include block transactions by or for the account of the selling stockholders, in
the over-the-counter market or in negotiated transactions, or through the
writing of options on the selling stockholders' shares, a combination of these
methods of sale, or otherwise. Sales may be made at market prices prevailing at
the time of sale, or at negotiated prices.

The selling stockholders may effect the transactions by selling their
shares directly to purchasers, through broker/dealers acting as agents for the
selling stockholders, or to broker/dealers who may purchase shares as principals
and thereafter sell the selling stockholders' shares from time to time in the
over-the-counter market, in negotiated transactions, or otherwise. These
broker/dealers, if any, may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders and/or the purchaser
for whom which broker-dealers may act as agents or to whom they may sell as
principals or both, which compensation as to a particular broker-dealer may be
in excess of customary commissions.

Under Regulation M the selling stockholders during the time each is
engaged in distributing shares covered by this prospectus, each must comply with
the requirements of Regulation M under the Exchange Act. Under those rules and
regulations, they:

o may not engage in any stabilization activity in connection with
our securities; and

o may not bid for or purchase any of our securities or attempt to
induce any person to purchase any of our securities other than as
permitted under the Exchange Act.

The selling stockholders and broker-dealers, if any, acting in
connection with these sales might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act. Any commission they receive and
any profit upon the resale of the securities might be deemed to be underwriting
discounts and commissions under the Securities Act.

Sales of any shares of common stock by the selling stockholders may
depress the price of the common stock in any market that may develop for the
common stock.

At the time a particular offer of the shares is made by or on behalf of
a selling stockholder, to the extent required, a prospectus supplement will be
distributed which will set forth the number of shares being offered and the
terms of the offering, including the name or names of any underwriters, dealers,
or agents, the purchase price paid by any underwriter for shares purchased from
the selling stockholder and any discounts commissions, or concessions allowed or
reallowed or paid to dealers, and the proposed selling price to the public.

Under the Exchange Act and its regulations, any person engaged in the
distribution of shares of common stock, or securities convertible into common
stock, offered by this prospectus may not simultaneously engage in market-making
activities with respect to the common stock during the applicable "cooling off"
period prior to the commencement of this distribution. In addition, and without
limiting the foregoing, the selling stockholders will be subject to applicable
provisions of the Exchange Act and its rules and regulations, including without
limitation Regulation M promulgated under the Exchange Act, in connection with
transactions in the shares, which provisions may limit the timing of purchases
and sales of shares of common stock by the selling stockholders.

The following table sets forth information known to us regarding
ownership of our common stock by each of the selling stockholders as of April
30, 2001 and as adjusted to reflect the sale of shares offered by this
prospectus. None of the selling stockholders has had any position with, held any
office of, or had any other material relationship with us during the past three
years, except as follows:

o Persia Consultants, Inc. is a consultant to the Company.

o Gene Kostecki is Chairman, Chief Executive Officer and Director of
the Company.

o Alan Winduss is Chief Financial Officer and Director of the
Company.

o David Gonzalez is Vice President and Secretary of the Company.

We believe, based on information supplied by the following persons,
that the persons named in this table have sole voting and investment power with
respect to all shares of common stock which they beneficially own. The last
column in this table assumes the sale of all of our shares offered in this
prospectus.

COMMON SHARES
SHARES STOCK OWNED AFTER OFFERING
NAMES OF SELLING BENEFICIALLY OFFERED BY
STOCKHOLDERS OWNED BENEFICIAL OWNER NUMBER PERCENT

Hong Zhu....................................... 62,500 62,500 0 0
Persia Consultants, Inc........................ 1,350,000 1,350,000 0 0
Janice Magill.................................. 31,250 31,250 0 0
Jennifer Richards.............................. 31,250 31,250 0 0
Judith Saunders................................ 31,250 31,250 0 0
Jillian Clazie................................. 31,250 31,250 0 0
Barbara Kearney................................ 31,250 31,250 0 0
Norma Merrey................................... 31,250 31,250 0 0
Gene Kostecki.................................. 10,598,000 919,500 9,678,500 56.9%
Alan Winduss................................... 1,893,250 308,000 1,585,250 9.3%
Balmere Assets Ltd............................. 40,000 40,000 0 0
Robert McDougall............................... 400,000 400,000 0 0
Allan Bray..................................... 100,000 100,000 0 0
Dave Peters.................................... 40,000 40,000 0 0
Yeowart Gregory................................ 20,000 20,000 0 0
Terry Taylor................................... 10,000 10,000 0 0
New Wave Nominees.............................. 62,500 62,500 0 0
Gillian Woodford............................... 100,000 100,000 0 0
Darren Whittaker............................... 10,000 10,000 0 0
Joris Claessens................................ 20,000 20,000 0 0
Po-Chin King................................... 125,000 125,000 0 0
Chung Kuan Yen................................. 125,000 125,000 0 0
Peter Che Nan Chen............................. 593,750 593,750 0 0
Sui Wa Chau.................................... 312,500 312,500 0 0
Wei Z. Yen..................................... 250,000 250,000 0 0
Jinsheng Yi.................................... 62,500 62,500 0 0
Shuhai Guo..................................... 62,500 62,500 0 0
Xiangdong Liang................................ 125,000 125,000 0 0
David Gonzalez................................. 50,000 50,000 0 0

MARKET FOR COMMON STOCK

We intend to apply for listing of our common stock on the OTC Bulletin
Board. The OTC Bulletin Board experiences a high level of price and volume
volatility. Market prices for many companies, particularly small and emerging
growth companies have experienced wide price fluctuations not necessarily
related to their operating performance as such:

o The market price for our common stock may be affected by general
stock market volatility;

o Purchasers may have trouble reselling their stock;

o Broker/dealers may not be able to resell our stock as easily as
stocks which are traded on larger exchanges;

Financial results and various factors affecting our industry in
general may significantly affect the market price for our common stock.

In addition, our shares of common stock may be subject to Rule 15g-9
under the Exchange Act. This rule imposes additional sales practice requirements
on broker/dealers which sell such securities to persons other than established
customers and accredited investors. Generally, these individuals have a net
worth in excess of $1,000,000 or annual incomes exceeding $200,000 or $300,000
together with their spouses. For transactions covered by this Rule, a
broker/dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. Consequently, such Rule may affect the ability of broker/dealers to sell
our common stock and may affect the ability of purchasers in the offering to
sell their shares. We cannot assure you that we can sustain an active trading
market.

DESCRIPTION OF SECURITIES

The following section should be read in conjunction with detailed
provisions of our certificate of incorporation and bylaws, copies of which have
been filed with our registration statement of which this prospectus forms a
part. Our capital stock is also governed by the provisions of applicable
Delaware law.

GENERAL

Our authorized capital stock consists of 50,000,000 shares of common
stock, $0.01 par value, and 3,000,000 shares of preferred stock, $0.01 par
value. As of April 30, 2001, 17,050,000 shares of common stock were issued and
outstanding. As of the date of this prospectus, we have approximately 40 holders
of our common stock. No shares of preferred stock are outstanding.

COMMON STOCK

Each holder of common stock is entitled to one vote per share, either
in person or by proxy, on all matters that may be voted upon by the owners of
our shares at meetings of our stockholders. There is no provision for cumulative
voting with respect to the election of directors by the holders of common stock.
Therefore, the holders of more than 50% of our shares of outstanding common
stock can, if they choose to do so, elect all of our directors. In this event,
the holders of the remaining shares of common stock will not be able to elect
any directors.

The holders of common stock:

o have equal rights to dividends from funds legally available
therefor, when and if declared by our board of directors;

o are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs; and

o do not have preemptive rights, conversion rights, or redemption of
sinking fund provisions.

The rights, preferences and privileges of the holders of common stock
may be adversely affected by the rights of the holders of shares of any series
of preferred stock that we designate in the future.

PREFERRED STOCK

The board of directors is authorized, without stockholder approval,
from time to time to issue up to an aggregate of 3,000,000 shares of preferred
stock in one or more series. The board of directors can fix the rights,
preferences and privileges of the shares of each series and any qualifications,
limitations or restrictions. Issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third-party to acquire, or of discouraging a third-party from attempting to
acquire a majority of our outstanding voting stock. We have no present plans to
issue any shares of preferred stock.

PRIVATE FINANCINGS

In June 2000, we completed the sale of 2,217,500 shares of common stock
at prices of $0.16 and 0.25 per share in a private financing transaction to 18
accredited investors resulting in gross proceeds of $420,000. In August 2000, we
completed the sale of 1,718,750 shares of common stock to nine accredited
investors at a price of $0.16 per share in a private financing transaction
resulting in gross proceeds of $275,000. We have agreed to register the shares
of common stock issued in these private financing transactions which are being
offered by this prospectus.

DELAWARE LAW AND CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS

We are subject to Section 203 of the Delaware General Corporation Law
regulating corporate takeovers. This section prevents us from engaging, under
some circumstances, in a business combination, which includes a merger or sale
of more than 10% of its assets, with any interested stockholder, defined as a
stockholder who owns 15% or more of its outstanding voting stock, as well as
affiliates and associates of any such persons, for three years following the
date such stockholder became an interested stockholder unless:

o the transaction in which the stockholder became an interested
stockholder is approved by the board of directors prior to the
date the interested stockholder attained that status;

o upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of our voting stock outstanding at
the time the transaction commenced, excluding shares owned by
persons who are directors or officers and shares owned by employee
stock plans; or

o the business combination is approved by the board of directors and
authorized by the affirmative vote of at least two-thirds of the
outstanding voting stock not owned by the interested stockholder.

Some of the provisions of our certificate of incorporation and bylaws
could discourage, delay or prevent an acquisition of Alloy Steel International
Inc. at a premium price. Our bylaws provide that any vacancy on the board of
directors may be filled by a majority of the directors then in office. Our
bylaws provide that special meetings of stockholders may be called only by a
majority of the directors of our board or the President or by at least 25% of
the holders of shares of common stock.

In addition, the certificate of incorporation also authorizes the board
of directors to issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to change control of Alloy Steel
International Inc.

TRANSFER AGENT

We intend to appoint Continental Stock Transfer & Trust Company as the
transfer agent and registrar for our shares of common stock.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common
stock. Future sales of substantial amounts of common stock in the public market,
or the availability of shares for sale, could adversely affect the prevailing
market price of our common stock and our ability to raise capital through an
offering of equity securities.

The 5,336,250 shares of common stock offered in this offering will be
immediately tradeable without restriction under the Securities Act, except for
any shares held by an "affiliate" of ours, as that term is defined in the
Securities Act. Affiliates will be subject to the resale limitations of Rule 144
under the Securities Act. The remaining 11,413,750 shares of common stock will
be deemed "restricted securities" as defined in Rule 144.

In general, under Rule 144, a stockholder, or stockholder whose shares
are aggregated, who has beneficially owned "restricted securities" for at least
one year will be entitled to sell an amount of shares within any three month
period equal to the greater of:

o 1% of the then outstanding shares of common stock; or

o the average weekly trading volume in the common stock during the
four calendar weeks immediately preceding the date on which notice
of the sale is filed with the commission, provided certain
requirements are satisfied.

In addition, our affiliates must comply with additional requirements of
Rule 144 in order to sell shares of common stock, including shares acquired by
affiliates in this offering. Under Rule 144, a stockholder who had not been our
affiliate at any time during the 90 days preceding a sale by him, would be
entitled to sell those shares without regard to the Rule 144 requirements if he
owned the restricted shares of common stock for a period of at least two years.
The foregoing summary of Rule 144 is not a complete description.

LEGAL MATTERS

The validity of the common stock being offered in this prospectus will
be passed upon for us by Kirkpatrick & Lockhart LLP, Miami, Florida.

EXPERTS

The financial statements of Alloy Steel International, Inc. as of
September 30, 2000 and for the period May 4, 2000 (inception) to September 30,
2000 appearing in this Prospectus and Registration Statement, have been audited
by Feldman Sherb & Co., P.C., independent auditors, as set forth in their report
thereon appearing in the Registration Statement, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing. The financial statements of the Arcoplate Division -- Collier Unit
Trust, for June 30, 2000 and for each of the two years in the period then ended
appearing in this Prospectus and Registration Statement have been audited by
Feldman Sherb & Co., P.C, independent auditors, as set forth in their report
thereon appearing in the Registration Statement, and are included in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.

HOW TO GET MORE INFORMATION

We have filed with the Securities and Exchange Commission a
registration statement on Form SB-2 under the Securities Act with respect to the
securities offered by this prospectus. This prospectus, which forms a part of
the registration statement, does not contain all the information set forth in
the registration statement, as permitted by the rules and regulations of the
Commission. For further information with respect to us and the securities
offered by this prospectus, reference is made to the registration statement.
Statements contained in this prospectus as to the contents of any contract or
other document that we have filed as an exhibit to the registration statement
are qualified in their entirety by reference to the to the exhibits for a
complete statement of their terms and conditions. The registration statement and
other information may be read and copied at the Commission's Public Reference
Room at 450 Fifth Street N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at 7 World Trade Center, Suite 1300, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The
public may obtain information on the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. The Commission maintains a web site at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the
Commission.

Upon effectiveness of the registration statement, we will be subject to
the reporting and other requirements of the Exchange Act and we intend to
furnish our stockholders annual reports containing financial statements audited
by our independent auditors and to make available quarterly reports containing
unaudited financial statements for each of the first three quarters of each
year.

We intend to apply for the listing of our common stock on the NASD OTC
Bulletin Board. After this offering is effective, you may obtain certain
information about us on Nasdaq's Internet site (http://www.Nasdaq-Amex.com).

INDEX TO FINANCIAL STATEMENTS

ALLOY STEEL INTERNATIONAL, INC.

PAGE

Independent Auditors' Report.................................................................................. F-1

Balance Sheets, September 30, 2000 and March 31, 2001......................................................... F-2

Statements of Operations, May 4, 2000 (Inception) to September 30,
2000 and six months ended March 31, 2001...................................................................... F-3

Statements of Changes in Stockholders' Equity, May 4, 2000
(Inception) to September 30, 2000 and six months ended March 31, 2001......................................... F-4

Statements of Cash Flows May 4, 2000 (Inception) to September 30,
2000 and six months ended March 31, 2001...................................................................... F-5

Notes to Financial Statements................................................................................. F-6-9

ARCOPLATE DIVISION - COLLIER UNIT TRUST

Independent Auditors' Report.................................................................................. F-10

Statements of Assets and Liabilities, June 30, 2000 and September
30, 2000...................................................................................................... F-11

Statements of Revenues and Expenses, Year Ended June 30, 2000 and
1999 and Three
Months Ended September 30, 2000 and 1999.................................................................. F-12

Statements of Cash Flows, Year Ended June 30, 2000 and 1999 and
Three Months Ended
September 30, 2000 and 1999............................................................................... F-13

Notes to Financial Statements................................................................................. F-14-15

Pro Forma Financial Statements (Unaudited).................................................................... F-16

Pro Forma Statements of Operations, Year Ended June 30, 2000 and
Nine Months
Ended March 31, 2001...................................................................................... F-17

Notes to Pro Forma Statements of Operations................................................................... F-18

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Alloy Steel International, Inc.

We have audited the accompanying balance sheet of Alloy Steel
International, Inc. (A Development Stage Company) as of September 30, 2000 and
the related statements of operations, stockholder's equity and cash flows for
the period May 4, 2000 (inception) to September 30, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, the financial position of Alloy Steel International, Inc. (A Development
Stage Company) as of September 30, 2000 and the results of its operations and
its cash flows for the period May 4, 2000 (inception) to September 30, 2000 in
conformity with generally accepted accounting principles.

/s/ FELDMAN SHERB AND CO., P.C.
-------------------------------
Feldman Sherb and Co, P.C
Certified Public Accountants

New York, New York
October 27, 2000

F-1

ALLOY STEEL INTERNATIONAL, INC
BALANCE SHEETS

SEPTEMBER 30, MARCH 31,
2000 2001
---- ----
(UNAUDITED)

ASSETS

CURRENT ASSETS:
Cash ........................................................................... $ 8,674 $ 8,674
Accounts receivable.............................................................. -- 314,653
Inventories...................................................................... -- 93,994
------------- --------------
TOTAL CURRENT ASSETS......................................................... 8,674 417,321
PROPERTY AND EQUIPMENT, net......................................................... -- 63,848
CONSTRUCTION IN PROGRESS............................................................ 576,871 1,030,828
------------- --------------
$ 585,545 $ 1,511,997
============= ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES - Accounts payable and accrued expenses......................... $ 21,800 $ 373,735
------------- ---------------
STOCKHOLDERS' EQUITY:
Preferred stock - $0.01 par value; authorized 3,000,000 shares;
issued and outstanding - none................................................ -- --
Common stock - $0.01 par value; shares authorized - 50,000,000
shares; issued and outstanding - 8,696,250 shares and
17,000,000 shares............................................................ 86,963 170,000
Additional paid-in capital.......................................................... 496,641 1,286,525
Accumulated deficit................................................................. (19,859) (27,063)
Deferred compensation............................................................... -- (291,200)
------------- --------------
TOTAL STOCKHOLDERS' EQUITY................................................... 563,745 1,138,262
------------- --------------
$ 585,545 $ 1,511,997
============= ==============

See notes to financial statements.

F-2

ALLOY STEEL INTERNATIONAL, INC
STATEMENTS OF OPERATIONS

MAY 4, 2000 SIX MONTHS
(INCEPTION) TO ENDED
SEPTEMBER 30, MARCH 31,
2000 2001
---- ----
(UNAUDITED)

SALES .............................................................................. $ -- $ 1,139,968
COST OF SALES........................................................................ -- 523,821
-------------- -------------
GROSS PROFIT......................................................................... -- 616,147
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES......................................... 19,859 623,351
-------------- -------------
NET LOSS............................................................................. $ (19,859) $ (7,204)
============== =============
BASIC AND DILUTED LOSS PER COMMON SHARE.............................................. $ (0.00) $ (0.00)
============== =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING........................................... 8,696,250 17,000,000
============== =============

See notes to financial statements.

F-3

ALLOY STEEL INTERNATIONAL, INC
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

PREFERRED STOCK COMMON STOCK ADDITIONAL DEFERRED
PAID-IN ACCUMULATED COMPENSATION
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT COSTS TOTAL
------ ------ ------ ------ ------- ------- ----- -----

Balance, May 4, 2000
(Inception)............... -- $ -- -- $ -- $ -- $ -- $ -- $ --
Stock issued for cash:
May 4, - 31, 2000
- $0.16 -
$0.25 per share..... 2,217,500 22,175 397,825 -- 420,000
June 26, - July 7,
2000 -
$0.16 per share............... -- -- 1,718,750 17,188 257,812 -- 275,000
Offering expenses............. -- -- -- -- (111,396) -- (111,396)
Stock issued for license- .... 4,760,000 47,600 (47,600) --
recorded at predecessor
basis
Net loss ................. -- -- -- -- -- (19,859) (19,859)
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Balance, September 30, 2000... -- -- 8,696,250 86,963 496,641 (19,859) 563,745
Stock issued for consulting
services and professional
fees $0.16 per share..... 3,640,000 36,400 546,000 -- (582,400) --
Stock issued to acquire net
assets of Arcoplate
division - Collier Unit
Trust and Cladder -
predecessor basis........ 4,663,750 46,637 243,884 290,521
Amortization of deferred
compensation costs....... 291,200 291,200
Loss six months ended
March 31, 2001........... -- -- -- (7,204) (7,204)
---------- ---------- ---------- ---------- --------- ---------- --------- ----------
Balance March 31, 2001
(unaudited).............. -- $ -- 17,000,000 $ 170,000 $ 1,286,525 $ (27,063) $(291,200) $1,138,262
=========== ========== ========== =========== ========= ============ ========= ==========

See notes to financial statements.

F-4

ALLOY STEEL INTERNATIONAL, INC
STATEMENTS OF CASH FLOWS

MAY 4, 2000 SIX MONTHS
(INCEPTION) TO ENDED
SEPTEMBER 30, MARCH 31,
2000 2001
---- ----
(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................................................... $ (19,859) $ (7,204)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation................................................................... -- 8,800
Amortization of deferred compensation.......................................... -- 291,200
Changes in assets and liabilities
Increase in accounts receivable................................................ -- (314,653)
Increase in inventories........................................................ -- (93,994)
Increase in accounts payable and accrued expenses.............................. 21,800 351,935
------------- -------------
CASH PROVIDED BY OPERATING ACTIVITIES............................................. 2,041 236,084
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment............................................. -- (72,648)
Increase in construction in progress........................................... (576,871) (163,436)
------------- -------------
CASH USED IN INVESTING ACTIVITIES................................................. (576,871) (236,084)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock..................................... 583,604 --
------------- -------------
NET INCREASE IN CASH.............................................................. 8,674 --
Cash, beginning of period......................................................... -- 8,674
------------- -------------
Cash, end of period............................................................... $ 8,674 $ 8,674
============= =============
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID DURING PERIOD FOR
INTEREST AND/OR INCOME TAXES................................................ $ -- $ --
============= =============
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for Arcoplate
Division net assets and Cladder............................................. $ -- $ 290,521
Stock issued for consulting and professional services.......................... $ -- $ 582,400

See notes to financial statements.

F-5

ALLOY STEEL INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 4, 2000 (INCEPTION) TO SEPTEMBER 30, 2000

1. ORGANIZATION AND BUSINESS DESCRIPTION

Alloy Steel International, Inc. (the "Company") was incorporated in
Delaware in May 2000 for the purpose of manufacturing and distributing
Arcoplate, a wear-resistant fused-alloy steel plate, through a patented
production process. The Company was in the development stage through
September 30, 2000.

2. SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.

CASH AND CASH EQUIVALENTS

The Company considers highly liquid investments with original
maturities of three months or less to be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company considers its financial instruments and obligations, which
are carried at cost, to approximate fair value due to the near-term due
dates.

DEPRECIATION

Property and equipment are recorded at cost. Depreciation is provided
by the straight-line method over the estimated useful lives of the
related assets and will commence when assets are put into use.

IMPAIRMENT OF LONG-LIVED ASSETS

In the event that facts and circumstances indicate that the cost of an
asset may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required, the estimated future
undiscounted cash flows associated with the asset would be compared to
the asset's carrying amount to determine if a write-down to market
value is required. At March 31, 2001, the Company did not believe that
any impairment had occurred.

REVENUE RECOGNITION

Revenues are recognized when products are shipped, provided that no
significant vendor obligations remain and collection of the resulting
receivable is deemed probable by management.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are charged to expense as incurred.

INCOME TAXES

Deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to affect taxable income. Valuation allowances
are established when necessary to reduce deferred tax assets to the
amounts expected to be realized.

F-6

STOCK OPTIONS

The Company accounts for all transactions under which employees,
officers and directors receive shares of stock in the Company in
accordance with the provisions of Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees." In accordance with
Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
"Accounting for Stock-Based Compensation," the Company adopted the pro
forma disclosure requirements of SFAS 123. Accordingly, no compensation
has been recognized in the results of operations for the employees,
officers and directors stock option plan.

NET LOSS PER COMMON SHARE

The Company has adopted the provisions of Statement of Financial
Accounting Standard No. 128, "Earnings per Share", which requires that
the Company report basic and diluted earnings (loss) per share for all
periods reported. Basic net income (loss) per share is computed by
dividing net income (loss) by the weighted average number of common
shares outstanding for the period. Diluted net income (loss) per share
is computed by dividing net income (loss) by the weighted average
number of common shares outstanding for the period, adjusted for the
dilutive effect of common stock equivalents.

Diluted net loss per share was the same as basic net loss per share
since the inclusion of stock options would have been anti-dilutive.

NEW ACCOUNTING PRONOUNCEMENTS

The Company will adopt Statement of Financial Accounting Standard No.
133 ("SFAS No. 133"), "Accounting for Derivative Instruments and
Hedging Activities" for the year ended June 30, 2001. SFAS No. 133
establishes a new model for accounting for derivatives and hedging
activities and supersedes and amends a number of existing standards.
The application of the new pronouncement is not expected to have a
material impact on the Company's financial statements.

INTERIM UNAUDITED FINANCIAL INFORMATION

The accompanying balance sheet as of March 31, 2001 and the statements
of operations, changes in stockholders' equity and cash flows for the
six months ended March 31, 2001 are unaudited. In the opinion of
management, such unaudited financial statements include all
adjustments, consisting of normal, recurring accruals necessary for a
fair presentation thereof. The results of operations for any interim
period are not necessarily indicative of the results for the year.

3. CONSTRUCTION IN PROGRESS

The Company intends to construct steel plating equipment in Western
Australia, for the purpose of manufacturing Arcoplate in commercial
quantities. Accordingly, funds approximating $555,000 derived from the
private placement of common shares were disbursed as progress payments
for the construction work as of March 31, 2001. Such work is being done
by the Collier Unit Trust, an affiliated entity.

4. ACQUISITION OF NET ASSETS OF ARCOPLATE DIVISION - COLLIER UNIT TRUST
AND CLADDER

In October 2000, the Company acquired substantially all of the net
assets of the Arcoplate Division-Collier Unit Trust, an Australian
entity, in exchange for 1,250,000 shares of the Company's common stock.
These assets included the Arcoplate manufacturing plant and related
facilities, mill equipment, office equipment, and motor vehicles. The
Company's chief executive officer, and principal shareholder, Gene
Kostecki controls the Collier Unit Trust.

In addition, the Company issued 3,413,750 shares of common stock to
Messrs. Kostecki and Winduss (Company officers and shareholders) to
acquire a 3-D Pipe Fitting Cladder. The Cladder is a computer-driven,
software-based mechanical system for industrial use, which the Company
intends to commercialize worldwide.

The above transactions were recorded as distributions of capital to the
recipients and will be reflected in subsequent financial statements at
the predecessor's basis.

F-7

5. ACQUISITION OF LICENSES

In May 2000, the Company obtained an exclusive license from Kenside
Investments, Ltd. for a 25-year term, to develop and market the
proprietary Arcoplate process, to commercially exploit certain patent
rights and technology rights related to the Arcoplate process in
exchange for 4,760,000 shares of the Company's common stock. The
license grants the licensee worldwide rights (except in the Unites
States) to the process. The license provides for quarterly royalty
payments to Kenside Investments, Ltd. of 2% of the Company's net sales
of Arcoplate products. Mr. Kostecki, an officer and principal
shareholder of the Company, controls Kenside Investments, Ltd. The
transaction was recorded as a distribution of capital to the recipient
and is accordingly reflected in the financial statements at the
predecessor's basis.

6. STOCK OPTION PLAN

In May 2000, the Company adopted the 2000 Stock Option Plan (the
"Plan") to enable the Company to attract, retain and motivate key
employees, directors and consultants. Options granted under the plan
may be either incentive stock options, as defined in Section 422A of
the Internal Revenue Code, or non-qualified stock options. The Company
has reserved 500,000 shares of common stock for issuance under the
Plan. As of September 30, 2000 no options were granted under the Plan.

The Company's board of directors will administer the Plan. The board
has the power to determine the terms of options granted under the Plan,
including the exercise price, the number of shares subject to the
option, and conditions of exercise. Options granted under the Plan are
generally not transferable, and each option is generally exercisable
during the lifetime of the holder, only by the holder. The exercise
price of all incentive stock options granted under the Plan must be at
least equal to the fair market value of the shares of common stock on
the date of the grant. The exercise price of any incentive stock option
granted to a participant owning more than 10% of the voting power of
all classes of the Company's stock must be equal to at least 110% of
the shares' fair market value on the grant date.

F-8

7. COMMITMENTS

OPERATING LEASE

The Company leases its facilities in Perth, Australia, which expires in
June 2005, for $7,083 per month. Approximately 22,000 square feet will
be used for manufacturing operations dedicated to Arcoplate
manufacturing, secondary processes and warehousing, and approximately
4,000 square feet will be used for office space.

Future minimum lease payments are $84,996 per annum through September
30, 2004 and $63,747 for the period October 1, 2004 through June 30,
2005.

EMPLOYMENT AGREEMENTS

The Company is obligated under five year employment agreements with its
President and its Vice-President commencing October 1, 2000. The
agreements provide for base salaries in the first year of $150,000 and
$80,000, respectively, and such additional amounts to be determined by
the board of directors in each subsequent year.

CONSULTING AGREEMENTS

The Company has entered into one year consulting agreements with four
persons who may be deemed affiliates, for services commencing October
1, 2000. Aggregate compensation for such services is 1,840,000 shares
of common stock valued at $294,400.

F-9

INDEPENDENT AUDITOR'S REPORT

To the Trustees of
Arcoplate Division - Collier Unit Trust

We have audited the accompanying statement of assets and liabilities of
Arcoplate Division - Collier Unit Trust as of June 30, 2000 and the related
statement of revenues and expenses and cash flows for the years ended June 30,
2000 and 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

In our opinion, the financial statements referred to above present
fairly, the financial position of Arcoplate Division - Collier Unit Trust as of
June 30, 2000 and the results of its operations and its cash flows for the years
ended June 30, 2000 and 1999 in conformity with generally accepted accounting
principles.

/s/ FELDMAN SHERB AND CO., P.C.
-------------------------------
Feldman Sherb and Co, P.C
Certified Public Accountants

New York, New York
October 26, 2000

F-10

ARCOPLATE DIVISION
COLLIER UNIT TRUST
STATEMENTS OF ASSETS AND LIABILITIES

ASSETS

JUNE 30, SEPTEMBER 30,
2000 2000
---- ----
(UNAUDITED)

CURRENT ASSETS:
Trade receivables................................................................ $ 117,639 $ 177,191
Inventories...................................................................... 133,540 94,351
---------- ----------
TOTAL CURRENT ASSETS................................................................ 251,179 271,542
---------- ----------
PROPERTY AND EQUIPMENT, net......................................................... 95,185 81,870
---------- ----------
TOTAL ASSETS........................................................................ 346,364 353,412
LESS: ACCOUNTS PAYABLE AND ACCRUED EXPENSES......................................... 56,277 62,891
---------- ----------
NET ASSETS.......................................................................... $ 290,087 $ 290,521
=========== ===========

See notes to financial statements.

F-11

ARCOPLATE DIVISION
COLLIER UNIT TRUST
STATEMENTS OF REVENUES AND EXPENSES

THREE MONTHS
YEAR ENDED JUNE 30, ENDED SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
(UNAUDITED)

SALES .......................................... $ 1,188,403 $ 1,316,339 $ 319,608 $ 236,131
COST OF SALES.................................... 700,629 678,431 152,547 113,283
------------- -------------- ------------- --------------
GROSS PROFIT..................................... 487,774 637,908 167,061 122,848
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES........................ 411,297 395,932 107,629 96,242
OTHER INCOME - BAD DEBT RECOVERY................. -- 38,085 -- --
------------- -------------- ------------- --------------
EXCESS OF REVENUES OVER EXPENSES................. $ 76,477 $ 280,061 $ 59,432 $ 26,606
============= =============== ============= ==============

See notes to financial statements.

F-12

ARCOPLATE DIVISION
COLLIER UNIT TRUST
STATEMENTS OF CASH FLOWS

THREE MONTHS
YEAR ENDED JUNE 30, ENDED SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
Excess of revenues over expenses.............. $ 76,477 $ 280,061 $ 59,432 $ 26,606
Adjustments to reconcile excess of
revenues over expenses to net cash
provided by operating activities:
Depreciation............................... 25,563 23,206 6,400 5,800
Changes in operating assets and liabilities:
Decrease (increase) in trade
receivables.............................. 283,254 (263,766) (59,552) 186,572
Decrease (increase) in inventories......... (45,448) (35,428) 39,189 (88,471)
Increase (decrease) in accounts
payable and accrued expenses............... (68,897) 9,828 6,614 (112,499)
------------- -------------- ------------- --------------
Net cash provided by operating activities........ 270,949 (13,901) 52,083 18,008
------------- -------------- ------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment......... (21,869) -- 5,469 --
------------- -------------- ------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of advances -
Collier Unit Trust......................... (249,080) (13,901) (57,552) (18,008)
------------- -------------- ------------- --------------
NET INCREASE IN CASH............................. -- -- -- --
CASH, beginning of year.......................... -- -- -- --
------------- -------------- ------------- --------------
CASH, end of year................................ $ -- $ -- $ -- $ --
============= ============== ============= ==============

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during period for:
Interest................................... $ 17,459 $ 15,815 $ 4,365 $ 3,954
============= ============== ============= ==============
Taxes......................................... $ -- $ -- $ -- $ --
============= ============== ============= ==============

See notes to financial statements.

F-13

ARCOPLATE DIVISION
COLLIER UNIT TRUST
NOTES TO FINANCIAL STATEMENTS

1. THE COMPANY

The accompanying financial statements include the accounts of
Arcoplate, a division of Collier Unit Trust (the "Company"), on a
"stand alone" basis. The financial statements include revenues,
expenses, assets and liabilities directly attributable to the Arcoplate
division of the Company. Costs that could not be directly attributable
to the Arcoplate division have been allocated on a percentage of sales
basis. Items specifically excluded include bank liability, trust
beneficiary loan accounts, money owing to and from third parties that
have no relationship to the Arcoplate operations or assets that are not
utilized in the production or sale of Arcoplate products. Arcoplate
Division manufactures and distributes "Arcoplate", a wear-resistant
fused-alloy steel plate, through a patented production process.
Arcoplate Division operates in facilities provided by its affiliate,
Collier Unit Trust, located in Western Australia.

2. ACQUISITION OF NET ASSETS OF ARCOPLATE DIVISION - COLLIER
UNIT TRUST

In October 2000, Alloy Steel International, Inc., a United States
Corporation in the development stage, acquired substantially all of the
net assets of the Arcoplate Division - Collier Unit Trust in exchange
for 1,250,000 shares of Alloy Steel common stock. These assets included
the Arcoplate manufacturing plant and related facilities, mill
equipment, and motor vehicles. Alloy Steel's chief executive officer,
and principal shareholder controls the Collier Unit Trust.

3. SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company considers its financial instruments and obligations, which
are carried at cost, to approximate fair value due to their near-term
due dates.

INVENTORIES

Inventories consisting primarily of finished products are valued at the
lower of average cost or market.

DEPRECIATION

Property and equipment are recorded at cost. Depreciation is provided
by the straight - line method over the estimated useful lives of the
related assets, which range from four to seven years.

FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions resulted in no significant gains or
losses in the years ended June 30, 2000 and 1999.

IMPAIRMENT OF LONG-LIVED ASSETS

In the event that facts and circumstances indicate that the cost of an
asset may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required, the estimated future
undiscounted cash flows associated with the asset would be compared to
the asset's carrying amount to determine if a write-down to market
value is required. At June 30, 2000 management did not believe that any
impairment had occurred.

F-14

REVENUE RECOGNITION

Revenues are recognized when products are shipped, provided that no
significant vendor obligations remain and collection of the resulting
receivable is deemed probable by management.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are charged to expense as incurred.

NEW ACCOUNTING PRONOUNCEMENTS

The Company will adopt Statement of Financial Accounting Standard No.
133 ("SFAS No. 133"), "Accounting for Derivative Instruments and
Hedging activities" for the year ended June 30, 2001. SFAS No, 133
establishes a new model for accounting for derivatives and hedging
activities and supersedes and amends a number of existing standards.
The application of the new pronouncement is not expected to have a
material impact on the Company's financial statements.

4. INVENTORIES

Inventories at June 30, 2000 consisted of the following:

Raw materials and supplies......................................... $ 33,830
Finished products.................................................. 99,710
--------------
$ 133,540
==============

5. PROPERTY AND EQUIPMENT

At June 30, 2000, property and equipment consisted of the following:

Machinery and equipment............................................ $ 206,895
Furniture and fixtures............................................. 38,642
Motor vehicle...................................................... 10,900
--------------
Less: accumulated depreciation................................... 161,252
--------------
$ 95,185
================
6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

At June 30, 2000, accounts payable and accrued expenses were as
follows:

Trade payables..................................................... $ 50,252
Accrued employee benefits.......................................... 6,025
--------------
$ 56,277
===============

F-15

7. BASIS OF PRESENTATION (UNAUDITED FINANCIAL STATEMENTS)

The accompanying unaudited condensed financial statements for the year
ended June 30, 2000 and for the nine months ended March 31, 2001 have
been prepared in accordance with generally accepted accounting
principles for interim financial information and in accordance with
Rule 10-01 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.
Operating results for the nine months ended March 31, 2001 are not
necessarily indicative of the results that may be expected for the full
fiscal year or any other interim reporting period. For further
information, refer to the financial statements and footnotes contained
elsewhere in this filing.

F-16

ALLOY STEEL INTERNATIONAL, INC.

UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma statements of operations for the year ended
June 30, 2000 and for the nine months ended March 31, 2001 present the pro forma
results of operations of the Company as if the acquisition of the Arcoplate
division of the Collier Unit Trust had been consummated as of the beginning of
each of the periods presented.

These pro forma financial statements should be read in conjunction with the
Company's financial statements and those of the Arcoplate division of the
Collier Unit Trust included elsewhere herein. The pro forma statements of
operations do not necessarily reflect actual results which may have occurred if
the acquisition of the Arcoplate division of the Collier Unit Trust had taken
place as of the beginning of the above indicated periods, nor are they
indicative of the results of future operations

F-17

ALLOY STEEL INTERNATIONAL, INC
PRO FORMA STATEMENTS OF OPERATIONS
(UNAUDITED)

ALLOY STEEL
INTERNATIONAL, ARCOPLATE DIVISION PRO FORMA
INC. COLLIER UNIT TRUST ADJUSTMENTS PRO FORMA
MAY 4, 2000
(INCEPTION) YEAR ENDED
TO JUNE 30, 2000 JUNE 30, 2000

SALES ......................................... $ -- $ 1,188,403 $ 1,188,403
COST OF SALES................................... 700,629 700,629
------------- --------------- --------------
GROSS PROFIT.................................... -- 487,774 487,774
SELLING, GENERAL AND............................ 230,000(a)
ADMINISTRATIVE EXPENSES......................... 9,859 411,297 582,400(b) 1,233,556
------------- --------------- --------------
NET INCOME (LOSS)............................... $ (9,859) $ 76,477 $ (745,782)
============= =============== ==============
NET INCOME PER SHARE............................ $ (0.04)
==============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING.................................. 17,000,000
==============

ALLOY STEEL ARCOPLATE DIVISION PRO FORMA
INTERNATIONAL, COLLIER UNIT TRUST ADJUSTMENTS PRO FORMA
INC.

NINE MONTHS ENDED
MARCH 31, 2001

SALES ......................................... $ 1,139,968 $ 319,608 $ 1,459,576
COST OF SALES................................... 523,821 152,547 676,368
------------- --------------- --------------
GROSS PROFIT.................................... 616,147 167,061 783,208
SELLING, GENERAL AND............................ 57,500 (a)
ADMINISTRATIVE EXPENSES......................... 623,351 107,629 145,600 (b) 934,080
------------- --------------- --------------
NET INCOME (LOSS)............................... $ (7,204) $ 59,432 $ (150,872)
============= ================ ==============
NET LOSS PER SHARE.............................. $ (0.01)
==============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING............................ 17,000,000
==============

See notes to pro forma statements of operations

F-18

ALLOY STEEL INTERNATIONAL, INC
NOTES TO PRO FORMA STATEMENTS OF OPERATIONS
(UNAUDITED)

a) Gives effect to employment agreements with the Company's president and
vice-president for annual salaries of $150,000 and $80,000,
respectively.

b) Gives effect to 3,640,000 common shares, valued at $582,400, for
consulting services provided over the periods indicated.

F-19

ALLOY STEEL INTERNATIONAL, INC.
5,586,250 SHARES OF COMMON STOCK

PROSPECTUS

_____________, 2001

You may rely only on the information contained in this prospectus. We
have not authorized anyone to provide any information or to make any
representations other than those contained in this prospectus, and, if given or
made, such information or representation must not be relied upon as having been
authorized by Alloy Steel International, Inc. This prospectus does not
constitute an offer or solicitation to any person in any jurisdiction where such
offer or solicitation would be unlawful. Neither delivery of this prospectus nor
any sale of the shares of common stock hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of Alloy
Steel International, Inc. since the date hereof.

Until _________, 2001 (90 days after the date of this prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following is a statement of the estimated expenses to be paid by us
in connection with the issuance and distribution of the securities being
registered:

SEC Registration Fee......................................... $ 4,424
Legal Fees and Expenses *.................................... $ 75,000
Accounting Fees and Expenses *............................... $ 35,000
Printing..................................................... $ 5,000
Miscellaneous................................................ $ 5,000
--------
Total........................................................ $124,424

* estimate

II-1

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

During the past three years, we have sold unregistered securities as
described below. Unless otherwise indicated, there were no underwriters involved
in the transactions and there were no underwriting discounts or commissions paid
in connection therewith, except as disclosed below. Unless otherwise indicated,
the issuances of these securities were considered to be exempt from registration
under Section 4(2) of the Securities Act of 1933, as amended, and the
regulations promulgated thereunder. The purchasers of the securities in such
transaction represented their intention to acquire the securities for investment
only and not with a view to or for sale in connection with any distribution
thereof and appropriate legends were affixed to the certificates for the
securities issued in such transaction. The purchasers of the securities in the
transactions had adequate access to information about us.

(1) On May 4, 2000, Kenside Investments, Ltd, an accredited investor, was
issued 4,760,000 shares of common stock for a license to commercially
exploit the Arcoplate process worldwide, under Section 4(2) of the
Securities Act.

(2) In June 2000, in connection with a private financing to accredited
investors pursuant to Rule 506 Regulation D, we sold 2,217,500 shares
of our common stock to the individuals and in the amounts set forth
below.

DATE OF CLOSING NAME NUMBER OF SHARES PRICE PER SHARE

June 30, 2000 Janice Magill 31,250 $0.16
June 30, 2000 Jennifer Richards 31,250 $0.16
June 30, 2000 Judith Saunders 31,250 $0.16
June 30, 2000 Barbara Kearney 31,250 $0.16
June 30, 2000 Jillian Clazie 31,250 $0.16
June 30, 2000 Norma Kearney 31,250 $0.16
June 30, 2000 Gene Kostecki 919,500 $0.16
June 30, 2000 Alan Winduss 308,000 $0.16
June 30, 2000 Balmere Assets Ltd. 40,000 $0.25
June 30, 2000 Robert McDougall 400,000 $0.25
June 30, 2000 Allan Bray 100,000 $0.25
June 30, 2000 Dave Peters 40,000 $0.25
June 30, 2000 Yeowart Gregory 20,000 $0.25
June 30, 2000 Terry Taylor 10,000 $0.25
June 30, 2000 New Wave Nominees Pty. Ltd. 62,500 $0.25
June 30, 2000 Gillian Woodford 100,000 $0.25
June 30, 2000 Darren Whittaker 10,000 $0.25
June 30, 2000 Joris Claessens 20,000 $0.25

(3) In June through July 2000, in connection with a private financing to
accredited investors pursuant to pursuant to Rule 506 of Regulation D,
we sold 1,718,750 shares of our common stock at a price of $0.16 per
share to the individuals listed below.

II-2

DATE OF CLOSING NAME NUMBER OF SHARES

June 28, 2000 Hong Zhu 62,500
June 28, 2000 Po-Chin King 125,000
June 28, 2000 Wei Z. Yen 250,000
June 28, 2000 Jinsheng Yi 62,500
June 28, 2000 Shuhai Guo 62,500
June 28, 2000 Xiangdong Liang 125,000
June 29, 2000 Peter Che Nan Chen 593,750
June 29, 2000 Sui Wa Chau 312,500
July 5, 2000 Chung Kuan Yen 125,000

(4) On October 2, 2000, Gene Kostecki an accredited investor was issued
2,731,000 shares of common stock in connection with the purchase of
the 3-D Pipe Fitting Cladder process, under Section 4(2) of the
Securities Act.

(5) On October 2, 2000, Alan Winduss an accredited investor was issued
682,750 shares of common stock in connection with the purchase of the
3-D Pipe Fitting Cladder process, under Section 4(2) of the Securities
Act.

(6) On October 2, 2000, Collier Unit Trust an accredited investor was
issued 1,250,000 shares of common stock in connection with the
purchase of plant equipment assets, under Section 4(2) of the
Securities Act.

(7) On October 2, 2000, Alan Winduss Pty. Ltd an affiliate of our chief
financial officer and a director was issued 312,500 shares of common
stock under Section 4(2) of the Securities Act for financial
consulting service with respect to doing business in Australia.

(8) On October 2, 2000, Ames Nominees Pty Ltd an affiliate of our chief
executive officer and a director was issued 937,500 shares of common
stock under Section 4(2) of the Securities Act with respect to
technical advisory services.

(9) On October 2, 2000, Berryhill Investments, Ltd a sophisticated
investor was issued 150,000 shares of common stock for corporate
development consulting services under Section 4(2) of the Securities
Act.

(10) On October 2, 2000, Chartreuse Nominees Pty. Ltd an affiliate of our
chief financial officer and a director was issued 500,000 shares of
common stock under Section 4(2) of the Securities Act for financial
consulting services with respect to doing business in Latin America.

(11) On October 2, 2000, Persia Consultants, Inc. a sophisticated investor
was issued 1,350,000 shares of common stock for financial consulting
services with respect to doing business in the United States under
Section 4(2) of the Securities Act.

(12) On October 2, 2000, Ragstar Investments, Ltd. an affiliate of our
chief financial officer and a director was issued 90,000 shares of
common stock under Section 4(2) of the Securities Act for financial
consulting services with respect to doing business in China.

(13) On October 2, 2000, Silverman, Collura & Chernis, P.C., former counsel
to the Company, was issued 300,000 shares of common stock for legal
services under Section 4(2) of the Securities Act. The Company
disputes whether Silverman, Collura & Chernis, P.C. are entitled to
these shares.

II-3

ITEM 28. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
issuer pursuant to any charter provision, by-law contract arrangements statute,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the issuer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the issuer will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The undersigned issuer hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to suit information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
Offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

(4) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the issuer under Rule 424(b)(1), or (4) or 497(h), under the
Securities Act as part of this registration statement as of the time the
Commission declared it effective.

(5) For determining any liability under the Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement at that time as the initial bona fide offering of those
securities.

(6) To provide to the underwriter at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.

II-4

ITEM 27. EXHIBITS

3.1 Certificate of Incorporation(1)

3.2 By-laws(1)

4.1 Specimen Certificate

5.1 Opinion

10.1 Stock Option Plan(1)

10.2 License Agreement, dated May 4, 2000, between the Company and Kenside
Investments, Ltd.(1)

10.3 Employment Agreement, dated October 2, 2000, between the
Company and Gene Kostecki;(1)

10.4 Employment Agreement, dated October 2, 2000, between the Company and
Alan Winduss;(1)

10.5 Consulting Agreement, dated October 2, 2000, between the Company and
Berryhill Investments, Ltd.(1)

10.6 Consulting Agreement, dated October 2, 2000, between the Company and
Chartreuse Nominees Pty. Ltd.(1)

10.7 Amended and Restated Consulting Agreement, dated October 2, 2000,
between the Company and Persia Consultants, Inc(1)

10.8 Consulting Agreement, dated October 2, 2000, between the Company and
Ragstar Investments, Ltd.(1)

10.9 Consulting Agreement, dated October 2, 2000, between the Company and
Alan Winduss Pty. Ltd.(1)

10.10 Consulting Agreement, dated October 2, 2000, between the Company and
Ames Nominees Pty. Ltd.(1)

10.11 Lease Agreement, dated July 1, 2000, between the Company and Raglan
Securities Pty. Ltd.(1)

10.12 Asset Purchase Agreement, dated October 2, 2000 between the Company and
Collier Unit Trust;(1)

10.13 Equipment Purchase Agreement, dated October 2, 2000, between the
Company and Collier Unit Trust;(1)

10.14 Asset Purchase Agreement, dated October 2, 2000, by and among the
Company and Gene Kostecki and Alan Winduss;(1)

23.1 Consent of Feldman Sherb & Co.

23.2 Consent of Feldman Sherb & Co.

23.3 Consent of Kirkpatrick & Lockhart LLP

(1) Previously filed.

II-5

SIGNATURES

Pursuant to the requirements of the Act, the Registrant certifies that
it has reasonable grounds to believe that it meets all of the requirement for
filing on Amendment No. 4 to Form SB-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Perth, Australia on May 31, 2001.

ALLOY STEEL INTERNATIONAL INC.

By: /s/ GENE KOSTECKI
-----------------------------

Name: Gene Kostecki
Title: Chief Executive Officer

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.

We, the undersigned officers and directors of Alloy Steel
International, Inc. hereby severally constitute and appoint Gene Kostecki, our
true and lawful attorney-in-fact and agent with full power of substitution for
us and in our stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and all
documents relating thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing necessary or advisable
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

SIGNATURE TITLE DATE

/s/ Gene Kostecki Chairman, Chief Executive Officer and May 31, 2001
- ------------------------ Director

/s/ Alan Winduss Chief Financial Officer and Director May 31, 2001
- ------------------------

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EXHIBITS

3.1 Certificate of Incorporation(1)

3.2 By-laws(1)

4.1 Specimen Certificate

5.1 Opinion

10.1 Stock Option Plan(1)

10.2 License Agreement, dated May 4, 2000, between the Company and Kenside
Investments, Ltd.(1)

10.3 Employment Agreement, dated October 2, 2000, between the Company and
Gene Kostecki;(1)

10.4 Employment Agreement, dated October 2, 2000, between the Company and
Alan Winduss;(1)

10.5 Consulting Agreement, dated October 2, 2000, between the Company and
Berryhill Investments, Ltd.(1)

10.6 Consulting Agreement, dated October 2, 2000, between the Company and
Chartreuse Nominees Pty. Ltd.(1)

10.7 Amended and Restated Consulting Agreement, dated October 2, 2000,
between the Company and Persia Consultants, Inc(1)

10.8 Consulting Agreement, dated October 2, 2000, between the Company and
Ragstar Investments, Ltd.(1)

10.9 Consulting Agreement, dated October 2, 2000, between the Company and
Alan Winduss Pty. Ltd.(1);

10.10 Consulting Agreement, dated October 2, 2000, between the Company and
Ames Nominees Pty. Ltd.(1)

10.11 Lease Agreement, dated July 1, 2000, between the Company and Raglan
Securities Pty. Ltd.(1)

10.12 Asset Purchase Agreement, dated October 2, 2000 between the Company and
Collier Unit Trust;(1)

10.13 Equipment Purchase Agreement, dated October 2, 2000, between the
Company and Collier Unit Trust;(1)

10.14 Asset Purchase Agreement, dated October 2, 2000, by and among the
Company and Gene Kostecki and Alan Winduss;(1)

23.1 Consent of Feldman Sherb & Co.

23.2 Consent of Feldman Sherb & Co.

23.3 Consent of Kirkpatrick & Lockhart LLP

(1) Previously filed.

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