ROCKWOOD CAPITAL PARTNERS LLC
DUE DILIGENCE CHECKLIST
In connection with a potential transaction, please provide us with the following materials or information. Upon review, we
may request additional documents. If you have already delivered any of the information, please so indicate and you need
not provide an additional copy.
(A) Corporate Documents of the Company and Subsidiaries
(1) Articles of Incorporation and all amendments thereto.
(2) Bylaws and all amendments thereto.
(3) Minutes of all Board of Directors, committee and shareholders meetings and all consents to actions
(5) Material information or documents furnished to shareholders and to directors during the last two years
(B) Previous Issuances of Securities
(1) Full capitalization table
(2) Stockholder information, indicating number of shares held, dates of issuance, and consideration paid.
(3) Any buy/sell, stockholder, warrant or right of first refusal agreements.
(4) Convertible debt instruments.
(5) Other contracts, arrangements, or public or private documents or commitments relating to the stock of the
(6) Any debt arrangements, guarantees or indemnification between officers, directors or the shareholder and
(C) Material Contracts and Agreements
(1) Copies of all material customer agreements
(2) Credit agreements, debt instruments, security agreements, mortgages, financial or performance
guaranties, indemnifications, liens, equipment leases or other agreements evidencing outstanding loans
to which the Company is a party or was a party within the past two years.
(3) Copies of all hardware and software purchase, lease and maintenance agreements.
(4) Any other material contracts.
(1) Copies of any pleadings for pending or prior lawsuits involving the Company or the Founders, settlement
documents or other correspondences.
(E) Employees and Related Parties
(1) A management organization chart and biographical information including resumes of officers.
(2) List of all personnel including, title, current base salary, current bonus target, previous year base salary,
previous year bonus, number of stock options with strike price, non-cash compensation and location
(3) All employment and consulting agreements, loan agreements and documents relating to other
transactions with officers, directors, key employees and related parties.
(4) Summary of employee benefits and copies of any pension, profit sharing, deferred compensation and
(5) Copy of personnel policies and procedures and/or employee handbook.
(6) Description of severance policy.
(7) Confidentiality agreements with employees.
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ROCKWOOD CAPITAL PARTNERS LLC
(8) Description of all related party transactions that have occurred during the last three years (and any
currently proposed transaction) and all agreements relating thereto.
(F) Financial Information
(1) Audited financial statements for the last 5 years (unaudited if audited financials are unavailable).
(2) Quarterly income statements for the last two years and the current year (to date).
(3) Financial or operating budgets or projections.
(4) Aging schedules for accounts receivable and payable/
(5) Detailed trial balance related to most recent reported period.
(6) Description of all contingent liabilities.
(7) Provide a list of the top 10 suppliers/subcontractors.
(8) Management letters or special reports by auditors and any corresponding responses for the last three
(9) A description of all changes in accounting methods or principles during the last three fiscal years.
(10) Letters of counsel to the Company delivered to auditors for the last three fiscal years.
(11) Revenue, gross margin and average selling price by product or service.
(12) Breakdown of G&A expenses for the last two years.
(13) List of unrecorded obligations (i.e. operating and facility leases).
(14) Any documents or schedules related to material write-downs or write-offs.
(15) Operating account bank reconciliations for the last three months and the last full fiscal year.
(16) List of software and related amortization periods, if any.
(17) List of other intangibles and related amortization periods, if any.
(18) Details of prepaid assets and their corresponding amortization schedules.
(19) Deferred revenue worksheet, if applicable.
(20) Maintenance and repair schedules for property and equipment.
(21) Copies of any valuations of the Company’s stock.
(22) List of Escrow accounts and reconciliations for the most recent 3 months, if any.
(23) Copy of Accounting / Periodic Closing schedule.
(24) Organizational/Functional structure of the Accounting Department.
(1) List of real and material personal property owned by the Company. Please include a summary sheet that
b. Leased or Owned
c. Square Footage
d. Lease Expiration
e. Number of Employees
(2) Documents of title, mortgages, deeds of trust and security agreements pertaining to the properties owned
by the Company.
(3) All outstanding leases with an original term greater than one year for real and personal property to which
the Company is either a lessor or lessee.
(4) Documents pertaining to proprietary technology developed/owned by the Company, including any
copyright or patent filings. This will also include information confirming that the Company's systems,
software and technology is owned solely by the Company and does not infringe on any other party's
(1) Federal and state income tax returns for the last five years.
(2) Evidence of Company being current on sales tax, unemployment, social security, and other tax payments.
(3) 3 years of tax work papers including all cumulative schedule M’s (tax accounting methods)
(4) Deferred Tax Work papers
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ROCKWOOD CAPITAL PARTNERS LLC
(I) Insurance and Liability
(1) Schedule and copies of all Property & Casualty insurance policies of the Company covering Workers’
Comp, Property, General Liability, BOP, Auto, other liabilities and operations, including product liabilities.
(2) Schedule and copies of any other “Professional” insurance policies in force such as Errors and Omissions
(Professional Liability); "key man" policies or Director and Officer (D&O) indemnification policies.
(3) All other relevant documents pertaining to the Company's insurance and liability exposure, including
special reserve funds and accounts.
(4) Contact information of all insurance agents used to place the Company’s policies.
(J) Acquisition, Partnership or Joint Venture Agreements
(1) All acquisition, partnership or joint venture agreements.
(2) Documents pertaining to potential acquisitions or alliances.
(3) Any agreements regarding divestiture or assets.
(K) Governmental Regulations and Filings
(1) Summary of OSHA inquiries for past three years.
(2) Summary of federal and state EPA, EEO, or other governmental agency inquiries during the past three
(3) Material reports to government agencies for past three years (e.g., OSHA, EPA).
(4) Copies of all permits and licenses necessary to conduct the Company's business.
(5) Summary of applicable federal, state and local laws, rules and regulations.
(L) Business Review
(1) Articles and other pertinent marketing studies or reports relating to the Company or the industry.
(2) Information regarding competitors, regulation, and market adoption rates, etc.
(3) Customer satisfaction surveys, if any.
(4) Description of any plans to expand into new markets and estimated projections of the opportunity.
(5) Provide statistics on the market size and the Company’s share of each of their respective markets.
(6) Provide any available statistics on the expected growth rates of each of the Company’s markets.
(7) Describe any differences from competition in strategy, marketing, products and services.
(1) List and describe any registered patents, copyrights, trademarks, trade names and service marks owned,
licensed, or pending applications of the same.
(2) List and describe all current technology developed to date and summarize all projects pending along with
expected dates of completion.
(3) Provide a list of key technology personnel in the Company and areas of expertise and or qualifications.
(4) Does any current technology infringe on existing patents or patents applications?
(5) List and describe the nature of all technology partners.
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