1---2name: due-diligence-report3description: >-4 Produces U.S. corporate/M&A due diligence reports summarizing legal risks5 across corporate records, contracts, liabilities, regulatory compliance, and6 IP. Use when drafting a diligence report, red flags memo, or legal risk7 summary for acquisitions, asset purchases, minority investments, or8 financing. Trigger keywords: due diligence, diligence report, red flags,9 M&A, acquisition, target review, HSR, CFIUS, reps and warranties, indemnity.10---1112# Due Diligence Report1314Deliver a structured legal risk report that supports deal decisions and negotiation strategy.1516## Prerequisites17181. **Transaction overview** — structure, parties, valuation, timeline, governing law, closing conditions.192. **Data room index** — document list with dates, versions, and confidentiality labels.203. **Diligence scope** — materiality thresholds (revenue %, dollar threshold, key customers).214. **Deal sensitivities** — regulatory approvals, IP dependencies, key contracts, employee retention.225. **Prior work product** — existing diligence memos or red-flag lists, if any.2324## Output Structure / Process2526### 1) Report Sections27281. Executive summary — top 5–10 risks, required approvals, open items.292. Risk rating framework.303. Findings matrix (issue-level table).314. Area analyses: Corporate/Cap Table, Material Contracts, Litigation/Claims, Regulatory/Compliance, IP/Technology, Employment/Benefits, Real Estate/Leases, Taxes, Data Privacy/Cybersecurity, Environmental, Insurance, Other as applicable.325. Open items and follow-up requests.336. Deal protections and drafting recommendations.3435### 2) Risk Ratings3637| Rating | Definition | Deal Impact |38|---|---|---|39| Critical | Likely deal-breaker or closing condition | Resolve pre-close or terminate |40| Significant | Material value/operations impact | Address with price, reps, indemnity, escrow |41| Moderate | Manageable risk | Address with covenants or post-close plan |42| Minor | Low impact | Note for awareness |4344### 3) Findings Matrix Template4546| Area | Issue | Source (Doc/§/Date) | Risk | Exposure/Impact | Recommendation | Proposed Deal Protection |47|---|---|---|---|---|---|---|4849### 4) Area Checklist5051| Area | Required Checks |52|---|---|53| Corporate/Cap Table | Formation docs; charter/bylaws; equity issuances; options/RSUs; board/stockholder approvals; subsidiaries; liens |54| Material Contracts | Change-of-control; assignment; exclusivity; MFN; termination; renewals; pricing; SLAs; non-compete; key customer/supplier concentration |55| Litigation/Claims | Pending/threatened claims; settlements; subpoenas; arbitration; investigations |56| Regulatory/Compliance | Licenses/permits; sanctions/export; antitrust/HSR; CFIUS; industry regulators; SEC/FINRA if applicable |57| IP/Technology | Chain of title; employee/contractor assignment; OSS compliance; licenses in/out; infringement claims; domains |58| Employment/Benefits | Key employee agreements; non-solicit; wage/hour claims; benefits plans; 401(k); union matters |59| Taxes | Returns; audits; NOLs; sales/use tax; transfer pricing; tax sharing agreements |60| Privacy/Cybersecurity | Privacy policies; DPAs; breach history; security audits; data localization; HIPAA/GLBA/FERPA if applicable |61| Real Estate | Leases; environmental reports; zoning; landlord consent |62| Environmental | Permits; contamination; remediation obligations; indemnities |63| Insurance | Coverage types; exclusions; claims history; tail coverage |6465### 5) Executive Summary Template6667```text68Executive Summary69- Critical risks: [Issue | Impact | Required action]70- Significant risks: [Issue | Impact | Proposed deal protection]71- Required approvals: [HSR/CFIUS/Industry/Other]72- Open items: [Missing docs or confirmations]73```7475### 6) Deal Protections Mapping7677| Risk Type | Drafting Lever |78|---|---|79| Known liability | Specific indemnity; escrow; special rep |80| Compliance gap | Pre-close covenant; condition to close |81| Contract consent | Closing condition; bring-down |82| IP ownership gap | Assignment; rep; escrow holdback |83| Litigation exposure | Litigation rep; cap; survival term |8485### 7) Citation Format8687- Quote only material clauses; cite as `DocName §X (Date)`.88- Flag missing or inconsistent documents in the open items section.8990## Guidelines9192- Maintain neutral, risk-focused tone; avoid advocacy.93- Tie each issue to evidence and transaction impact.94- Use `[VERIFY]` for any legal citation or regulatory threshold not confirmed.95- Assume U.S. transaction unless specified; call out non-U.S. jurisdictions explicitly.96- Separate factual findings from recommendations.97- Do not invent documents or confirm approvals without evidence.
lev-os