DUE DILIGENCE CHECKLIST

FOR ACQUISITIONS

1. OVERVIEW OF BUSINESS

a. Names and addresses of all owners of business, and number of shares or percentage owned by
each, including a schedule of completed equity offerings/sales of securities and the prices thereof
b. List of officers and directors (or managers) of company
c. List of outstanding subscriptions for stock, options, warrants, convertible securities, or any other
agreements giving anyone the right to acquire ownership interests in the business
d. List of subsidiaries

2. CORPORATE AND ORGANIZATIONAL RECORDS

a. Articles of Incorporation (or Articles of Organization), with all amendments

b. Bylaws (or Operating Agreement), with all amendments
c. All board-of-director or manager resolutions and minutes of all meetings of shareholders, directors,
and/or managers
d. Copy of any shareholder, buy/sell, and voting agreements
e. Information regarding any subsidiaries

3. FINANCIAL INFORMATION

a. Name, address, and telephone number of company’s accountant, bookkeeper, and/or payroll service
b. Financial statements for company (balance sheet and income statement for each of last three full
years and for any interim period)
c. Federal income tax returns for the company (for last three tax years)
d. Depreciation schedule (showing original cost and acquisition date)
e. List of all liabilities and indebtedness, separated according to what is proposed to be assumed by
Buyer and what is not proposed to be assumed by Buyer
f. Copies of all promissory notes, security agreements, UCC-1 financing statements, equipment leases,
real property leases or rental agreements, and any other agreements or documents creating any
liability or evidencing any indebtedness
g. Current list of all payables, with an aging report
h. Current list of all receivables, with an aging report
i. Current list of all accrued liabilities

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4. PROPERTIES AND ASSETS

a. Detailed list of all personal property assets owned or leased by the Company (including specifically
all motor vehicles, equipment, and supplies), separated according to what assets will be acquired by
Buyer and what assets will not be acquired by Buyer, including details of any liens or encumbrances
on same
b. List of all real property owned or leased by the Company, including details of any liens or
encumbrances on same
c. Detailed list of all contracts or agreements to which the Company is a party, including a copy of any
such contracts or agreements
d. List of any inventory and supplies
e. List of all bank accounts for the company

5. CLAIMS, LITIGATION, AND JUDGMENTS

a. Details regarding any pending litigation against the Company or judgments against the Company
b. Details regarding any known or suspected claims, whether they have been asserted or not, against
the Company

6. EMPLOYEES AND INDEPENDENT CONTRACTORS

a. List of all current employees and independent contractors of the Company, including name, address,
position, and rate of pay (or commissions)
b. Details regarding any employee benefit plans or programs such as stock option plans, stock
appreciation plans, stock bonus plans, profit-sharing plans, pension plans, health/life/disability
insurance coverage for employees and contractors, tuition reimbursement plans, and so forth.
c. List of all employment agreements, sales representative agreements, independent contractor
agreements, consulting agreements, and so forth., with a copy of each such agreement

7. INTELLECTUAL PROPERTY

a. Details regarding any intellectual property owned by the company, including patents, patent
applications, trademarks, trade names, service marks, copyrights, license agreements, and similar or
related items (whether registered or unregistered)
b. Copies of any noncompete agreements or confidentiality agreements to which the company or any of
its employees or contractors is a party

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8. SALES/MARKETING

a. Customer list for past five years

b. List of the Company’s competitors
c. Pertinent market research or marketing studies (including any studies or reports relied on or
commissioned or prepared by the Company)
d. Copy of any government licenses, permits, permissions, approvals, and the like
e. Marketing and sales literature and forms, including price lists, catalogs, purchase orders, technical
manuals, user manuals, etc.
f. Marketing agreements and material agency and advertising contracts
g. All agreements or proposed agreements with distributors, dealers, and sales representatives
h. Description of warranty and return policies and procedures, including any related written materials
and any documents creating any express or implied warranties with respect to products
manufactured or distributed by the Company

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