What a finding looks like.

The examples below are illustrative. They are built from common patterns in private deals, not from client data, and the figures are invented. Findings 1, 3, and 4 come from one illustrative consumer brand acquisition, Project Atlas, which also appears in the charts on this site. Finding 2 comes from a separate software deal.

Finding 1: Channel inventory supporting reported growth

Consumer brandReconciliation and sector moduleSeverity: high

Issue.: Shipments to the two largest retailers grew 34% in the last twelve months. Point-of-sale data for the same retailers shows sell-through growth of 9%. Weeks of supply at those retailers roughly doubled over the period.
Evidence.: Sales by customer, management accounts, tab "Revenue by account"; retailer point-of-sale report, folder 4.2, p. 3; retailer scorecards, folder 4.2, pp. 7 to 12.
Reviewer's note.: Confirmed against shipment detail. No disclosed promotion or new-door launch explains the gap.
Estimated impact.: $0.8M to $1.4M reduction in run-rate EBITDA from expected returns and markdowns. At the LOI multiple of 10.0x, $8M to $14M of enterprise value.
Candidate remedies.: Price adjustment, or a holdback tied to sell-through over the next two quarters.
Next step.: Request retailer weeks-of-supply reports and all correspondence on returns authorizations for the last two quarters.

Finding 2: Recurring revenue includes one-time fees

SoftwareQoE pre-read and sector moduleSeverity: high

Issue.: ARR in the CIM is $14.2M. Rebuilt from active subscriptions in the billing system, recurring revenue is $12.6M. The difference is implementation fees and two pilots counted as recurring.
Evidence.: CIM, p. 18; billing system export, folder 6.1, tab "Active subscriptions"; pilot agreements, folder 7.3, p. 2 of each agreement (term and conversion clauses).
Reviewer's note.: Confirmed. The pilots have no committed conversion terms.
Estimated impact.: $1.6M lower ARR. At the 6.0x ARR multiple implied in the LOI, $9.6M of enterprise value, of which $4.2M depends on whether the two pilots convert.
Candidate remedies.: Price adjustment, or an earnout tied to conversion of the pilots.
Next step.: Ask management for the ARR definition used in the CIM and the pilot conversion forecast.

Finding 3: Retailer rebates accrued below contract rates

Consumer brandReconciliation and QoE pre-readSeverity: high

Issue.: Volume rebates owed under the three largest retailer agreements are accrued at a flat 1.5% of sales. The agreements specify tiered rates of 2.5% to 4% above volume thresholds that each retailer exceeded in both of the last two years. Reported gross margin is overstated as a result.
Evidence.: Retailer agreements, folder 3.4, schedule B, pp. 14 to 16; rebate accrual account 2140 in the general ledger export, folder 5.1; sales by customer, management accounts, tab "Revenue by account".
Reviewer's note.: Confirmed against contract terms and retailer volumes. No amendment or side letter in the data room reduces the rates.
Estimated impact.: $0.7M to $1.0M reduction in run-rate EBITDA, plus a catch-up liability of roughly $1.5M for prior periods. At the LOI multiple of 10.0x, $7M to $10M of enterprise value. The catch-up is a one-time cash item and is not multiplied.
Candidate remedies.: Price adjustment, a specific indemnity for prior-period rebates, or a working capital adjustment at closing.
Next step.: Request the rebate statements issued to the three retailers and any correspondence on rebate disputes or credits.

Finding 4: Disclosed litigation schedule is incomplete

Any sectorOutside-in verificationSeverity: medium

Issue.: The litigation schedule lists two matters. Court records show a third: a wage-and-hour class action filed against the company eleven months ago and still pending.
Evidence.: Disclosure schedule 3.9, p. 2; state court docket (case reference cited in the report).
Reviewer's note.: Confirmed the defendant is the target entity, not an affiliate with a similar name.
Estimated impact.: Exposure depends on class size. Referred to counsel for assessment. Payroll records suggest roughly 140 current and former hourly employees in the class period.
Candidate remedies.: Specific indemnity and escrow sized by counsel.
Next step.: Request the complaint, correspondence with plaintiffs' counsel, and the insurer's coverage position.

Request a briefing on a live deal