Would you have any thoughts on customer(Order backlog) contracts not requiring a deposit? There seems to be no mention of damages in the event of cancelation on the part of a customer.

Where, subsequently, a PO is cut to a manufacturer(unfilled purchase orders) for the production of the customer contracts. For this process, there is a mention of partial damages. "Purchase commitments for product and components are generally subject to modifications as to timing, quantities and scheduling and in certain instances may be cancelable without penalty."

We seem to have, "in certain instances", a degree of being held harmless with regard to the manufacturing process and "cancelable", where there is still a liability issue beyond this.

My problem is with a customer and not requiring a deposit and cancelation.

IMO...the ASI note is for a customer without deposit. This note is secured with the IP.

I may be splitting hairs here. However, if in the SEC filings they go to the extent of noting "in certain instances" with regard to the manufactures's PO and "cancelable".

IMO.. they should do the same for the customer with regard to "cancellation" and make note of penalty issue. Especially if the contract does not require a deposit and points back to a "short-term purchase order and working capital financing arrangement" where the note is secured with the IP

Why bother to make mention of one side of the issue(manfacturing) and not the other(customer)?

There's a chain of liability here that points back to the IP not seeming to have protection with regard to customer cancellation.

doni