Bad things which can occur when a company’s growth is financed by the sale of stock:

The investor can renege or change the terms of the deal before providing the promised investment.

Resist the terms of subsequent financings as being too dilutive of the investor’s equity.

The investor can seek to change the compensation and unilateral powers of the senior officers.

The investor can seek increasing influence in the management of the company.

The investor can seek to change the responsibilities of company executives.

The investor can decide to become involved in the relationship between the company and its customers.

The investor will seek to have actions of executives be approved by the investor prior to implementation.

The investor will seek to be involved in the selection and management of the relationship between the company and its attorneys and other advisors.

Actions the purchaser of a revenue royalty can take after the transaction has closed:

Express pleasure or disappointment as to levels of revenues generated.

Exercise agreed remedies in the event the company breaches royalty payment agreements.

Arthur Lipper, Chairman
British Far East Holdings Ltd.
chairman@REXRoyalties.com
+1 858 793 7100

Blog Management: Viktor Filiba
termic.publishing@gmail.com

Arthur Lipper