Reverse Mergers Attract Foreign Companies – Part 9

Investment in a foreign company is treated in a much different manner. This is due the inherent risk factors. Investors are keenly aware they have little recourse if a foreign company does not perform. Most of these emerging growth companies are located in BRIC (Brazil, Russia, India, China) countries. Those countries do not have an SEC to protect investors so the investors have to mitigate the risk by including very strong terms and conditions in their funding agreements. Those terms can include how and when the funds are distributed along with “make good” on certain performance standards.