Alloy Steel Inc. (fka AYSI)

[Swick984]

Another point I'd like to make relates to information disclosure. This is a large transaction for AYSI ($5.8 million vs. $19 million market cap). Not only is it a large transaction for AYSI, it is a large related party transaction. That should mean extra scrutiny from us minority shareholders and a greater need for information disclosure from the company.

I think it is a good step by the board to be proactive and hire an independent firm to provide a "fair value assessment". But is that enough disclosure? A "fair value assessment" is different than a fairness opinion on the transaction. Given that the company is a Delaware corporation, why was an Australian firm selected to run the analysis? Why not get a fairness opinion from a US firm? I feel any time that you're dealing with a large related party, its better to be overly cautious. I think they tried to be mindful here, but did they do enough? It's hard to say without additional information disclosed.

I feel the company should have provided additional disclosure on the nature of the acquired business and some financial information of the acquired business so that minority holders could assess the impact of this large related party transaction.