# Identify Pre Loi Issues Scenario 01 > Guides preparation of a pre-LOI issues memo identifying material risks, information gaps, and inconsistencies that should be resolved or addressed before signing a letter of intent in an acquisition setting. - Skill: `finchipaiorg/identify-pre-loi-issues-scenario-01` (Agent Skill) - Install (CLI): `npx skillmds@latest add finchipaiorg/identify-pre-loi-issues-scenario-01` - Raw SKILL.md: https://api.skillmd.com/api/skills/finchipaiorg/identify-pre-loi-issues-scenario-01/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Coding & Dev Tools - Author: FinchipAIOrg (https://skillmd.com/u/finchipaiorg) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/finchipaiorg/identify-pre-loi-issues-scenario-01 --- # Skill: Pre-LOI Issue Identification Memorandum ## 1. Subject-matter triage - Use this skill when the task is to review preliminary deal materials and flag what must be clarified before LOI signing. - Treat the work as issue-spotting from incomplete sell-side materials, not full diligence or definitive legal advice. - Separate true pre-LOI blockers from matters that can wait for confirmatory diligence or be managed in the definitive agreement. - If the materials cover multiple entities, periods, facilities, or transaction paths, enumerate each scope item first and analyze them separately rather than collapsing them into one pass. ## 2. Failure modes the skill is correcting - Issues are identified from preliminary materials without systematically identifying what is missing and therefore unknowable at LOI stage. - Financial summary figures are accepted at face value without checking for internal inconsistencies across decks, teasers, data room indexes, and process materials. - Regulatory and operational risks are described in generic terms instead of being tied to the business model and the specific pre-LOI clarification needed. - The memo blurs issues that should be solved before signing from issues that can be allocated by representations, covenants, indemnities, or closing conditions. - The output lists concerns without ranking them by seriousness, causing loss of triage value. - The output diagnoses problems without giving an actionable next step tied to the transaction timeline. ## 3. Legal frameworks / domain conventions that apply - Pre-LOI diligence is bounded by the materials actually available at the early bid stage; the task is to identify material risks, gaps, and inconsistencies that affect whether, how, and on what terms the buyer should proceed. - The LOI is typically where the buyer locks in economics, structure, diligence access, exclusivity, and any pre-signing conditions that are necessary to avoid a mispriced or unworkable bid. - For an environmental services business, focus on permitting, environmental compliance history, remediation or response obligations, site-specific liabilities, contract concentration, customer churn, subcontractor reliance, and any operational dependency that can change value or execution risk. - Preliminary financial summaries must be checked against supporting schedules and source materials for internal consistency; unexplained movement between summaries is itself a diligence flag. - A missing document category in the preliminary data room index is an information gap, not a neutral absence; the lack of production should be called out as a requested clarification. - When legal propositions are stated, identify the controlling authority or governing instrument if it appears in the materials; otherwise cite the relevant statutory, regulatory, or customary corporate/M&A convention by name rather than speaking in conclusory generalities. - Apply established environmental-law and transaction-diligence conventions where relevant, including permit compliance, disclosure obligations, and liability allocation principles under the applicable regulatory regime. ## 4. Analytical scaffolds - Start with the business model: what the target does, how it earns revenue, where operations occur, and what facts in the materials suggest concentration or dependency. - Cross-check the management presentation, CIM, teasers, and index for mismatched figures, dates, naming conventions, customer descriptions, margin data, or risk descriptions. - Review the document index category by category and note whether core diligence buckets are present or missing: corporate, financial, tax, employment, real estate, environmental, litigation, insurance, IT/cyber, and commercial. - Review process constraints: bid deadline, access limits, no-shop or exclusivity dynamics, Q&A timing, and any other restrictions that affect what can realistically be resolved before LOI. - For each issue, determine whether it is: - a fundamental business or valuation issue, - a deal-protection issue suitable for the LOI, or - a missing-information issue that requires follow-up before signing. - For each issue, record the source material that triggered it, the reason it matters now, and the practical consequence if it is not resolved. - When multiple facilities, permits, customer types, or risk periods appear in the materials, analyze each separately and do not assume one site or contract represents the rest. - Give every item an ordinal severity level from a fixed scale stated once in the memo, and keep the same scale throughout. ## 5. Vertical / structural / temporal relationships - Distinguish pre-LOI unknowns from post-LOI diligence items: - pre-LOI unknowns affect bid price, structure, go/no-go, or conditions to sign; - post-LOI items can be handled through confirmatory diligence and definitive documentation. - Track how an issue moves vertically through the deal stack: business fact → valuation effect → legal risk → LOI term or closing condition. - Tie each issue to the stage at which it becomes actionable: before LOI, at LOI, during exclusivity, or in definitive documents. - Where a risk depends on time, identify whether it is historic, current, or forward-looking, and whether the available materials cover the relevant period. - If the issue turns on a threshold, exposure, concentration, or duration, compare the disclosed information to that benchmark using the figures in the source set; if the source set does not provide the necessary numbers, say so expressly. ## 6. Output structure conventions - Produce a single issues memorandum, not a diligence report and not a transaction memo. - Use a conventional issue-memo shape: - brief executive overview, - prioritized issue list with severity labels, - financial and valuation concerns, - legal/regulatory concerns, - operational and commercial concerns, - missing information / diligence gaps, - recommended LOI or pre-LOI follow-up actions. - For each issue entry, include: - severity, - concise statement of the issue, - source or trigger in the preliminary materials, - why it matters before signing, - the likely consequence if unresolved, - the immediate action needed. - When the materials support a legal proposition, name the rule, statute, regulation, or customary M&A convention supporting it; do not leave legal conclusions ungrounded. - Use exact, operative language. Do not merely summarize the materials; state the risk, the gap, and the decision implication. - End with a Recommended Actions block that assigns each next step to a role likely to own it in the deal process and ties it to the bid, LOI, or diligence timeline. - Keep the memo focused on pre-LOI triage; do not drift into drafting definitive-agreement language unless the point is to identify what the LOI should reserve, condition, or exclude.