AJX may become capital constrained as it ramps up production, page-39

With $10m in the kitty at the end of last year, what's the rush to recapitalise? Why is the boss concerned about the balance sheet? I'm am also.......

Anyhow I loved these parts:

1. Weaknesses
   
   Partnerships potentially diminishes AJX’s control of its IP
   
   
   •   A potential weakness with AJX’s partnership system is that it loses
     
     control of its formulation once the chemicals are delivered to the toll
     
     manufacturer.
     
     
   •   Havingsaidthis,assoonasthe“know-how”i.e.theformulationandhow
     
     to apply it to the product is sold to the customer, AJX transfers the liability. For instance, if the toll manufacturer and/or the finisher make a mistake in the mixing or application and as a result the product is not flame retardant, the customer should not be able to sue AJX.
     1. Threats
        
        Expansion overseas (especially into Asia) may pose risks for AJX’s IP
        
        
        •   AJX has plans to expand into new geographic markets including parts of
          
          Asia.
          
          
        •   Expanding into China may be risky in terms of protecting AJX’s IP.
          
          Having said this, management have said that they are targeting specific opportunities that are “customer pull” rather than “product led”. They have yet to experience a patent infringement.