{"id":31,"date":"2013-01-29T07:34:19","date_gmt":"2013-01-29T07:34:19","guid":{"rendered":"http:\/\/test.terrastonefinance.com\/?page_id=31"},"modified":"2019-08-20T23:29:18","modified_gmt":"2019-08-20T22:29:18","slug":"due-diligence-documentation","status":"publish","type":"page","link":"https:\/\/terrastoneholdings.com\/?page_id=31","title":{"rendered":"Due Diligence Documentation"},"content":{"rendered":"\t\t
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Due Diligence Documentation<\/h2>\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t
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\n\t\t\t\tDue Diligence is the process of evaluating a prospective business decision by getting information about the financial, legal, and other material (important) state of the other party.\n\t\t\t<\/p>\n

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Page 1<\/h2>\n\n\n
Due Diligence Category<\/td>\nDocumentation Task<\/td>\nOwner<\/td>\nStatus<\/td>\n<\/tr>\n<\/table>\n\n\n
Business Plan, Corporate Structure, Financing<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Business plan<\/td>\nCurrent five-year business plan<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPrior business plan<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Corporate organization<\/td>\nArticles of incorporation<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nBylaws<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nRecent changes in corporate structure<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nParent, subsidiaries, and affiliates<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nShareholders\u2019 agreements<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Shareholders<\/td>\nNumber of outstanding shares<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nStock option plan<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nSamples of common and preferred stock certificates, debentures, and other outstanding securities<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nWarrants, options, and other rights to acquire equity securities<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCurrent shareholders, including number of shares owned, dates that shares were acquired, considerations received, and contact information<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nRelevant private placement memoranda and other offering circulars<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Lenders<\/td>\nConvertible, senior, or other debt financing<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nBank lines of credit, loan agreements, or guarantees<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nLoan defaults or expected defaults<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Recent corporate transactions<\/td>\nDescription and rationale for each transaction<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPurchase and sale agreements<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Regulations<\/td>\nBusiness licenses<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nEnvironmental permits<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nWorkers\u2019 health and safety permits<\/td>\n <\/td>\n <\/td>\n<\/tr>\n<\/table><\/div>\n

\t\t\t\t<\/p>\n

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Page 2<\/h2>\n\n\n
Due Diligence Category<\/td>\nDocumentation Task<\/td>\nOwner<\/td>\nStatus<\/td>\n<\/tr>\n<\/table>\n\n\n
Marketing, Products, Sales, Service<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Market analysis<\/td>\nCompetition by product line (include contact details, market size, market share, and competitive advantages and disadvantages)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nIndustry and market research<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nTrade publications and contact information<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Marketing, products, sales, and service<\/td>\nFeatures and benefits of product offerings<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nProduct rollout schedule and product life cycle<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCopies of patents and trademarks filed or obtained<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPricing strategy of product or service<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nDescriptions of existing partners and joint ventures<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nDistribution channels<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPromotion tactics<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nTop-10 customers by product line and total installed base<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nSales and marketing presentations<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nProduct catalogs and brochures<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPress releases or articles written about the organization<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nProfessional affiliations<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCustomer service strategy<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Contracts<\/td>\nMajor contracts by product line<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nSupport\/maintenance contracts<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nWarranties and guarantees<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nOther customer-related contracts<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nSupplier contracts<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Technology<\/td>\nTechnology strategy<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nOverall technical capabilities<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nTechnical competitive advantages and weaknesses<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCopies of user documentation by product (current and historical)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCopies of technical requirements, code strategy by product (current and historical)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nDevelopment process<\/td>\n <\/td>\n <\/td>\n<\/tr>\n<\/table><\/div>\n

\t\t\t\t<\/p>\n

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Page 3<\/h2>\n\n\n
Due Diligence Category<\/td>\nDocumentation Task<\/td>\nOwner<\/td>\nStatus<\/td>\n<\/tr>\n<\/table>\n\n\n
Financial and Operations<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Financial statements<\/td>\nThree years of historical statements:<\/p>\n
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  • Income statement (P&L)<\/li>\n
  • Balance sheet<\/li>\n
  • Statement of cash flows<\/li>\n
  • Statement of shareholders\u2019 equity<\/li>\n<\/ul>\n<\/td>\n
 <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCYTD statements<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nMost recent five-year projections (pro formas)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nMonthly sales projections and sales pipeline over next 18 months, including assumptions<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Key financial ratios<\/td>\nLiquidity<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nLeverage<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nOperating efficiency<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nProfitability<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nReturn to investors<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Taxes and audits<\/td>\nHistorical tax rate<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nFederal and state net operating loss carryforwards<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nTax returns<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Receivables<\/td>\nAccounts receivable turnover<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAccounts receivable aging schedule<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAccounts receivable control and credit policy<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAccounts receivable seasonality<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nMost recent five-year projections (pro formas)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Capital expenditures<\/td>\nLast five years<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nFive-year gross projection<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nDetailed priority list<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Equipment<\/td>\nList<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nDepreciation method<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAge<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nLiquidation value<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nReplacement value<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nList<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Leases<\/td>\nLenders<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nTerms<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nInterest rate<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPayment schedule<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Litigation<\/td>\nCurrent litigation and potential damages<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPotential litigation and potential damages<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Insurance<\/td>\nProperty<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nLiability<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nWorkers\u2019 compensation<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nOther<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Information systems<\/td>\nDescription of infrastructure<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nSecurity layers<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nBackup strategy<\/td>\n <\/td>\n <\/td>\n<\/tr>\n<\/table><\/div>\n

\t\t\t\t<\/p>\n

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Page 4<\/h2>\n\n\n
Due Diligence Category<\/td>\nDocumentation Task<\/td>\nOwner<\/td>\nStatus<\/td>\n<\/tr>\n<\/table>\n\n\n
Human Resources<\/td>\n<\/tr>\n<\/table>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Management<\/td>\nOrganizational chart (including number of employees by department)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nResumes for key managers and key employees<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nManagement stock incentives<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Compensation and benefits<\/td>\nCash compensation per employee (including salary, bonuses, commissions)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nSummary of standard employee benefits (such as medical insurance, disability insurance, vacation)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCopies of 401(k) and other qualified pension and profit-sharing plans<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
Other<\/td>\nOwnership interest<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nEmployment contracts<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nPerformance evaluation criteria<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nHistorical tax rate<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nMaterial transactions with insiders or associates of insiders<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
References<\/td>\nExecutives: Three references for each<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAttorney: All legal relationships<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAll directors and significant affiliates; include brief biographies<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nInvestors: List all individuals and institutional investors<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nCustomers: List of top 10<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nStrategic partners<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nConsultants, freelance workers (current and historical)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAccountants (current and historical)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nBankers and creditors (current and historical)<\/td>\n <\/td>\n <\/td>\n<\/tr>\n
 <\/td>\nAssociations: All industry associations in which company and management are affiliated or active<\/td>\n <\/td>\n <\/td>\n<\/tr>\n<\/table><\/div>\n<\/p><\/div>\n<\/p><\/div><\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t<\/div>\r\n\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t\t\t\t<\/div>\r\n\t\t\t<\/div>\r\n\t\t<\/section>\r\n\t\t\t\t
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Learn more about Terrastone Due Diligence Documentation service<\/h4>\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t
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\r\n\t\t\t\r\n\t\t\t\t\t\t\r\n\t\t\t\t\t\tDownload PDF<\/span>\r\n\t\t<\/span>\r\n\t\t\t\t\t<\/a>\r\n\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t<\/div>\r\n\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t\t\t\t<\/div>\r\n\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t\t\t\t<\/div>\r\n\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t","protected":false},"excerpt":{"rendered":"

Due Diligence Documentation Due Diligence is the process of evaluating a prospective business decision by getting information about the financial, legal, and other material (important) state of the other party. Page 1 Due Diligence Category Documentation Task Owner Status Business Plan, Corporate Structure, Financing Business plan Current five-year business plan       Prior business …<\/p>\n

Due Diligence Documentation<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":131,"parent":14,"menu_order":5,"comment_status":"open","ping_status":"open","template":"elementor_header_footer","meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false},"uagb_author_info":{"display_name":"admin","author_link":"https:\/\/terrastoneholdings.com\/?author=1"},"uagb_comment_info":0,"uagb_excerpt":"Due Diligence Documentation Due Diligence is the process of evaluating a prospective business decision by getting information about the financial, legal, and other material (important) state of the other party. Page 1 Due Diligence Category Documentation Task Owner Status Business Plan, Corporate Structure, Financing Business plan Current five-year business plan       Prior business…","_links":{"self":[{"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/wp\/v2\/pages\/31"}],"collection":[{"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31"}],"version-history":[{"count":4,"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/wp\/v2\/pages\/31\/revisions"}],"predecessor-version":[{"id":1385,"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/wp\/v2\/pages\/31\/revisions\/1385"}],"up":[{"embeddable":true,"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/wp\/v2\/pages\/14"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=\/"}],"wp:attachment":[{"href":"https:\/\/terrastoneholdings.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}