Alloy Steel Inc. (fka AYSI)

[misterp]

I have a small position in this company. There is one major issue which is holding me back from adding to my position. That is a large related party transaction (acquisition of Matrix in 2016) of which I am not sure the purchase price paid was fair.

The acquisition of Matrix should have reduced cost of goods sold significantly as AYSI paid Matrix fees on goods purchased (3.3m USD in FY15 and 1.7m USD in FY16).

However, cost of goods sold (as % of revenue) increased by >60% compared to FY15. I asked the CFO for an explanation but haven't received an answer so far.