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This Royalty Financing Agreement is designed for use in Hong Kong when a company seeks alternative financing without diluting equity or taking on traditional debt. It is particularly suitable for companies with strong growth potential and predictable revenue streams but who may not qualify for conventional bank financing or prefer not to raise equity. The document structures a financing arrangement where the company receives upfront capital in exchange for agreeing to make ongoing royalty payments based on its financial performance, typically calculated as a percentage of revenue or profits. The agreement includes comprehensive provisions for payment calculations, reporting requirements, company obligations, and investor protections, all aligned with Hong Kong's legal and regulatory requirements. This financing structure is commonly used in sectors such as technology, healthcare, and consumer products, where traditional financing metrics may not adequately capture the company's potential.
