Frequently Asked Questions
The writings will be of interest and helpful to those who are studying investing in royalties and the business of managing royalty income funds. Arthur Lipper, the author of the writings, is Chairman of British Far Est Holdings Ltd., the holder of the U.S. patent covering approaches to using royalties in financing companies.
The company receives an annual patent license fee from royalty issuers.
The writings have been prepared over the course of several years as issues have been raised in the course of advising those using royalties.
It is a contractual agreement made by the company making the assurance to the investor. The level of priority, possible securing of the obligation and other means of providing comfort to the investor are subject to negotiation with the royalty issuer.
No, they are the opinions of Arthur Lipper, as Chairman of British Far East Holdings Ltd. and should be confirmed where relevant with reader’s counsel.
Intelliversity provides financial support for the development and maintenance of this site. As a concept, Intelliversity is a strong supporter of royalties as a means to finance business. However, Intelliversity does not endorse or own the specific content of the articles on this site.
That depends on the terms of the agreement as negotiated between the royalty issuer and the investor.
The following can be modified: the amount paid for the royalty, the royalty rate paid in the selected years and the number of years in which the royalty issuer’s assured amount is to be paid.
Yes it is possible but the amount assured will be considerably less as the risk has been dramatically reduced. Also the royalty issuer will have to compensate the guarantor of the obligation as the primary risk taker.
Yes, the obligation of the royalty issuer remains constant. However, the obligation will be reduced by the amount of royalties already paid by the issuer to the investor.
No, as many, if not most, will feel the upside potential based upon their projected revenues is sufficient to attract investment.
Because, the approach has merit and we seek to provide calculation and analytical tools, which facilitate negotiation and understanding of impact of the terms. The basic investment principle of greater returns requiring greater risk and business owner benefit of non-equity dilutive financing will allow for fair and reasonable transactions with both parties winning.