U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of Securities
Exchange Act of 1934
For the quarterly period ended DECEMBER 31, 2002
[_] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from _______ to _______.
Commission File No. 000-32875
ALLOY STEEL INTERNATIONAL, INC.
-------------------------------
(Name of Small Business Issuer in Its Charter)
DELAWARE 98-0233941
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
ALLOY STEEL INTERNATIONAL, INC.
42 MERCANTILE WAY MALAGA
P.O. BOX 3087 MALAGA D C 6945
WESTERN AUSTRALIA
(Address of Principal Executive Offices)
61 (8) 9248 3188
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months, and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [_]
There were 16,950,000 shares of Common Stock outstanding as of December 31,
2002.
PART I
ITEM 1. FINANCIAL STATEMENTS
---------------------
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Balance Sheets
December 31, September 30,
2002 2002
(unaudited)
ASSETS
------
CURRENT ASSETS
Cash and cash equivalent $ 224,198 $ 288,448
Accounts receivable, less allowance for doubtful
accounts 147,542 131,316
Inventories 183,934 158,269
Prepaid expenses and other current assets 43,207 39,155
-------------- ---------------
TOTAL CURRENT ASSETS 598,881 617,188
PROPERTY AND EQUIPMENT, net 1,312,812 1,266,856
OTHER ASSETS
Intangibles 90,512 90,512
-------------- ---------------
TOTAL ASSETS $ 2,002,205 $ 1,974,556
============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
CURRENT LIABILITIES
Notes payable, current portion $ 34,695 $ 32,814
Accounts payable and other current liabilities 685,664 666,634
Income taxes payable 157,168 151,188
-------------- ---------------
TOTAL CURRENT LIABILITIES 877,527 850,636
LONG-TERM LIABILITIES
Notes payable, less current portion 103,059 107,602
-------------- ---------------
TOTAL LIABILITIES 980,586 958,238
-------------- ---------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred Stock: $0.01 par value; authorized 3,000,000 shares; issued
and outstanding - none
Common Stock: $0.01 par value; authorized 50,000,000 shares;
16,950,000 issued and outstanding 169,500 169,500
Additional paid-in-capital 1,773,382 1,773,382
Accumulated other comprehensive income 87,436 35,381
Accumulated deficit (1,008,699) (961,945)
-------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 1,021,619 1,016,318
-------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,002,205 $ 1,974,556
============== ===============
See accompanying notes to consolidated financial statements.
-1-
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Operations And Comprehensive Income (Loss)
THREE MONTHS ENDED
DECEMBER 31,
2002 2001
(UNAUDITED) (UNAUDITED)
SALES $ 357,398 $ 498,831
COST OF SALES 203,703 321,873
------------ ------------
GROSS PROFIT 153,695 176,958
OPERATING EXPENSES
Selling, general and administrative expenses 223,265 227,048
------------ ------------
LOSS FROM OPERATIONS (69,570) (50,090)
------------ ------------
OTHER INCOME
Interest income 3,054 2,612
Insurance recovery 2,290 -
Export grant received 17,475 -
Unrealized foreign exchange gain - 75
------------ ------------
22,819 2,687
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (46,751) (47,403)
Income taxes - -
------------ ------------
NET LOSS $ (46,751) $ (47,403)
============ ============
BASIC LOSS AND DILUTED LOSS PER COMMON SHARE $ (0.002) $ (0.003)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 16,950,000 16,950,000
============ ============
COMPREHENSIVE INCOME (LOSS)
NET LOSS $ (46,751) $ (47,403)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment 52,056 43,118
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ (5,305) $ (4,285)
============ ============
See accompanying notes to consolidated financial statements.
-2-
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
THREE MONTHS ENDED
DECEMBER 31,
2002 2001
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (46,751) $ (47,403)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation 20,981 20,216
Increase (Decrease) in cash attributable to changes in operating assets
and liabilities:
Accounts receivable (16,230) (15,636)
Inventories (25,666) 109,503
Prepaid expenses and other current assets (2,780) 12,871
Accounts payable and other current liabilities 19,128 (9,410)
Income taxes payable 5,981 -
------------ ------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (45,337) 70,141
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES,
purchase of property and equipment (16,873) (140,779)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings - 154,131
Repayment of borrowings (8,218) -
------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (8,218) 154,131
------------ ------------
Effect of foreign exchange rate on cash 6,178 469
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT (64,250) 83,962
CASH AND CASH EQUIVALENT AT BEGINNING OF PERIOD 288,448 185,596
------------ ------------
CASH AND CASH EQUIVALENT AT END OF PERIOD $ 224,198 $ 269,558
============ ============
See accompanying notes to consolidated financial statements.
-3-
ALLOY STEEL INTERNATIONAL, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
NOTE - 1 UNAUDITED STATEMENTS
The accompany condensed consolidated financial statements of the Company as of
December 31, 2002 and for the three-month periods ended December 31, 2002 and
2001 are unaudited and reflect all adjustments of a normal and recurring nature
to present fairly the financial position, results of operations and cash flows
for the interim periods. These unaudited condensed consolidated financial
statements have been prepared by the Company pursuant to instructions to Form
10-QSB. Pursuant to such instructions, certain financial information and
footnote disclosures normally included in such financial statements have been
omitted. It is suggested that these condensed consolidated financial statements
be read in conjunction with the financial statements and notes thereto included
in the Company's September 30, 2002 audited financial statements included in the
registrant's annual report on form 10-KSB. The results of operations for the
three-month period ended December 31, 2002 are not necessarily indicative of the
results that may occur for the year ending September 30, 2003.
NOTE - 2 NEW ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No's
141 and 142, "Business Combinations" and "Goodwill and Other Intangibles". SFAS
No. 141 requires all business combinations initiated after June 30, 2001 to be
accounted for using the purchase method. Under SFAS No. 142, goodwill is no
longer subject to amortization over its estimated useful life. Rather, goodwill
is subjected to at least an annual assessment for impairment applying a
fair-market value based test. Additionally, an acquired intangible asset should
be separately recognized if the benefit of the intangible asset is obtained
through contractual or other legal rights, or if the intangible asset can be
sold, transferred, licensed, rented, or exchanged, regardless of the acquirer's
intent to do so. SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"), addresses the impairment for all tangible
assets. In July 2002, FASB issued SFAS No. 146 "Accounting For Costs Associated
With Exit or Disposal Activities "SFAS No. 146", which addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred In a Restructuring)". SFAS 146 is effective for exit or disposal
activities that are initiated after December 31, 2002, with earlier application
encouraged. In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure an amendment of FASB
Statement No. 123" ("SFAS 148"), which amends FASB Statement No. 123, Accounting
for Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.
SFAS 148 is effective for voluntary changes to the fair value based method made
in fiscal years beginning after December 15, 2002. The Company does not
anticipate these pronouncements will have a significant impact on its
consolidated financial position and results of operations.
NOTE - 3 INVENTORIES
At December 31, 2002 (unaudited) and September 30, 2002 inventories consist of
the following:
Dec. 31, 2002 Sept. 30, 2002
Raw materials $ 64,561 $ 50,748
Finished goods 119,373 107,521
-------------- ---------------
$ 183,934 $ 158,269
-------------- ---------------
-4-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.
------------------------------------
You should read the following discussion and analysis of our financial
condition and results of operations in conjunction with our financial
statements, the notes to our financial statements and the other financial
information contained elsewhere in this filing.
OVERVIEW
We manufacture and distribute Arcoplate, a wear-resistant 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 are also developing, 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 pipefittings, where wear is most likely to
occur. In pipefittings, 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 pipefittings. 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.
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 February 2003. 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 $7,500,000-$10,000,000.
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. 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.
We intend to achieve market penetration through a multi-step process
consisting of:
- presentation of technical papers at industry related seminars;
- initial discussions of the application highlighting the advantages of
Arcoplate;
- an engineering and marketing evaluation by the prospective customer of
sample material and demonstration products; and
- 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.
-5-
RESULTS OF OPERATIONS
QUARTER ENDED DECEMBER 31, 2002 COMPARED WITH THE QUARTER ENDED DECEMBER
31, 2001
SALES
Alloy Steel had sales of $357,398 for the three months ended December 31,
2002, compared to $498,831 for the three months ended December 31, 2001. These
sales consist primarily of the sale of our Arcoplate product. Substantially all
of our sales during the periods were denominated in Australian dollars. Sales
were converted into U.S. dollars at the conversion rate of $0.55824,
representing the average foreign exchange rate for the three months ended
December 31, 2002. Sales have decreased compared with the three months ended
December 31, 2001 primarily due to a discount structure negotiated with
appointed distributors.
GROSS PROFIT AND COSTS OF SALES
Alloy Steel had cost of sales of $203,703 for the three months ended
December 31, 2002, compared to $321,873 for the three months ended December 31,
2001. The gross profit amounted to $153,695 compared to $176,958 for the three
months ended December 31, 2001. The gross profit percentage increased from 35%
to 43%. We attribute the decrease in cost of sales and increase in gross
profit primarily to cost efficiencies being introduced into the production
process.
OPERATING EXPENSES
Alloy Steel had selling, general and administrative expenses of $223,265
for the three months ended December 31, 2002, compared to $227,048 for the three
months ended December 31, 2001. The decrease was primarily due to a reduction of
employees involved in marketing of product in Australia as a result of the
exclusive distributor agreement.
INCOME BEFORE TAXES
Alloy Steel's loss before taxes was $46,751 for the three months ended
December 31, 2002, compared to a loss of $47,403 for the three months ended
December 31, 2001.
NET LOSS
Alloy Steel had a net loss of $46,751 or $0.0027 per share, for the three
months ended December 31, 2002, compared to a net loss of $47,403 or $0.0028 per
share for the three months ended December 31, 2001.
LIQUIDITY
For the three months ended December 31, 2002, the total cash used by
operating activities was $45,337, consisting of a net loss of $46,751, an
increase in accounts payable and other current liabilities of $19,128, an
increase in inventories of $25,666 and an increase of accounts receivable of
$16,230.
As of the three months ended December 31, 2002, we had a working capital
deficit of $278,646.
We anticipate that the funding of our working capital needs will come
primarily from the cash generated from our operations. To the extent that the
cash generated from our operations is insufficient to meet our working capital
needs or the purchase of machinery or equipment, then we will need to raise
capital from the sale of securities in private offerings or loans. We have no
commitments for capital. The sale of additional equity or convertible debt
securities could result in dilution to our stockholders. There can be no
assurance that financing will be available in amounts or on terms acceptable to
us, if at all.
-6-
SIGNIFICANT CHANGES IN NUMBERS OF EMPLOYEES
We anticipate hiring approximately four additional manufacturing employees
and one additional research and product development employee in the next 12
months.
PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT
We anticipate that the machinery to expand our capacity to produce
Arcoplate will be completed in February, 2003 and will cost approximately
$175,000. In addition, we anticipate that the cost of the machinery necessary
for the 3-D Pipe Fitting Cladder process will be approximately $500,000. This
machine is expected to be in operation by December 2003. 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
pipefittings. 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.
EFFECT OF RECENT ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No's
141 and 142, "Business Combinations" and "Goodwill and Other Intangibles". SFAS
No. 141 requires all business combinations initiated after June 30, 2001 to be
accounted for using the purchase method. Under SFAS No. 142, goodwill is no
longer subject to amortization over its estimated useful life. Rather, goodwill
is subjected to at least an annual assessment for impairment applying a
fair-market value based test. Additionally, an acquired intangible asset should
be separately recognized if the benefit of the intangible asset is obtained
through contractual or other legal rights, or if the intangible asset can be
sold, transferred, licensed, rented, or exchanged, regardless of the acquirer's
intent to do so. SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"), addresses the impairment for all tangible
assets. In July 2002, FASB issued SFAS No. 146 "Accounting For Costs Associated
With Exit or Disposal Activities "SFAS No. 146", which addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies EITF Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred In a Restructuring)". SFAS 146 is effective for exit or disposal
activities that are initiated after December 31, 2002, with earlier application
encouraged. In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure an amendment of FASB
Statement No. 123" ("SFAS 148"), which amends FASB Statement No. 123, Accounting
for Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.
SFAS 148 is effective for voluntary changes to the fair value based method made
in fiscal years beginning after December 15, 2002. The Company does not
anticipate these pronouncements will have a significant impact on its
consolidated financial position and results of operations.
ITEM 3. CONTROLS AND PROCEDURES
-----------------------
a) Evaluation of Disclosure Controls and Procedures
Based on their evaluation as of a date within 90 days of the filing date of
this report, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934 (the "Exchange
Act")) are effective to ensure that information we are required to disclose in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities
Exchange Commission rules and forms.
b) Changes in Internal Controls
There have been no significant changes in our internal controls or in other
factors that could significantly affect the disclosure controls subsequent to
the Chief Executive Officer's and Chief Financial Officer's most recent
evaluation, and there have been no corrective actions with regard to significant
deficiencies and material weaknesses in such controls.
-7-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: February 19, 2003 ALLOY STEEL INTERNATIONAL, INC.
By: /s/ Alan Winduss
-------------------------------------
Alan Winduss, Chief Financial Officer
CERTIFICATIONS
I, Gene Kostecki, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Alloy Steel
International, Inc. (the "registrant");
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of and for the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors:
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal control; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: February 19, 2003 /s/ Gene Kostecki
-------------------------------------
Gene Kostecki
Chief Executive Officer
-8-
I, Alan Winduss, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Alloy Steel
International, Inc. (the "registrant");
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of and for the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors:
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal control; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: February 19, 2003 /s/ Alan Winduss
-------------------------------------
Alan Winduss
Chief Financial Officer
-9-
SECTION 906 CERTIFICATIONS
In connection with the Quarterly Report of Alloy Steel International, Inc.
(the "Company") on Form 10-QSB for the period ended December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Gene Kostecki, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Gene Kostecki
-------------------------------------
Gene Kostecki
Chief Executive Officer
February 19, 2003
-------------------------------------
In connection with the Quarterly Report of Alloy Steel International, Inc.
(the "Company") on Form 10-QSB for the period ended December 31, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Alan Winduss, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Alan Winduss
-------------------------------------
Alan Winduss
Chief Financial Officer
February 19, 2003
-------------------------------------
-10-