AI Due Diligence Report Generator
Due diligence reports synthesize financial data, legal documents, market analysis, and operational assessments into a single investment narrative. Vespper connects your data room to your report, with every finding traced to its source.
1. Corporate Due Diligence Standards
Corporate diligence establishes the legal foundation of the transaction by verifying the target's organizational integrity and contractual obligations.
ABA Model Stock Purchase Agreement Framework
- Organizational document verification including articles, bylaws, and good standing certificates
- Capitalization review including option pools, convertible instruments, and anti-dilution provisions
- Material contract identification per SEC materiality thresholds and change-of-control provisions
SEC Disclosure Requirements (Regulation S-K)
- Material contract disclosure obligations under Item 601(b)(10)
- Risk factor assessment aligned with SEC guidance on specificity requirements
- Management discussion and analysis of known trends and uncertainties
- Incomplete organizational document review can result in post-closing discovery of undisclosed encumbrances or restrictions
- Material contract review must identify change-of-control consent requirements before transaction signing
2. Financial Due Diligence
Financial diligence must verify the accuracy of reported financials and identify adjustments that affect transaction value.
GAAP/IFRS Financial Statement Review
- Revenue recognition policy review for compliance with ASC 606 or IFRS 15
- Lease accounting treatment verification under ASC 842 or IFRS 16
- Related party transaction identification and arm's-length assessment
Quality of Earnings Analysis
- Normalization adjustments for non-recurring, non-operating, and owner-related expenses
- Working capital analysis and peg calculation methodology
- EBITDA adjustment validation including add-backs and pro forma adjustments
- Inadequate quality of earnings analysis can lead to purchase price disputes and post-closing adjustment claims
- Unidentified contingent liabilities become the buyer's responsibility absent specific indemnification provisions
3. Regulatory & Compliance Review
Regulatory diligence confirms the target operates within applicable legal frameworks and the transaction complies with approval requirements.
Antitrust and Competition Law
- Hart-Scott-Rodino (HSR) Act filing threshold analysis and notification requirements
- Market concentration assessment and potential antitrust objections
- Foreign competition authority filing requirements for cross-border transactions
Anti-Corruption and Environmental
- FCPA and UK Bribery Act compliance program assessment and violation history
- Environmental liability review under CERCLA/Superfund for contaminated site exposure
- Industry-specific licensing and permit transferability assessment
- Failure to identify HSR filing requirements can result in significant civil penalties for gun-jumping violations
- Undiscovered environmental liabilities can create successor liability exposure exceeding deal value
4. Intellectual Property Due Diligence
IP diligence must establish clear ownership, freedom to operate, and adequate protection of the target's intellectual property assets.
Patent and Trademark Review
- Patent validity assessment including prosecution history and freedom-to-operate analysis
- Trademark clearance and registration status verification in relevant jurisdictions
- Trade secret identification and assessment of protection measures
IP Assignment and Encumbrance
- Chain of title verification from inventors and creators to the target entity
- IP license, cross-license, and encumbrance identification affecting transferability
- Open source software usage audit and license compatibility assessment
- Broken IP assignment chains can render key patents unenforceable by the acquiring entity
- Undisclosed open source obligations may require disclosure of proprietary source code under copyleft licenses
5. Employment & Litigation Review
Employment and litigation diligence identifies workforce risks and pending legal exposures affecting transaction value.
Employment and Labor Review
- Key employee agreement review for change-of-control provisions and retention risk
- FLSA classification audit for exempt and non-exempt employee status
- WARN Act analysis for potential plant closing or mass layoff notification requirements
Litigation Assessment
- Pending and threatened litigation catalogue with exposure assessment
- ERISA compliance review for benefit plans
- Insurance coverage adequacy assessment for identified litigation risks
- Unidentified WARN Act obligations can create immediate post-closing back pay liability
- ERISA plan compliance failures may result in excise taxes and disqualification of tax-advantaged status
What happens when documentation falls short
- Undisclosed material liabilities discovered post-closing exceeding indemnification caps
- Purchase price disputes from inadequate quality of earnings or working capital analysis
- Regulatory approval delays or deal termination from unidentified compliance gaps
- IP ownership disputes materially reducing the value of acquired technology assets
- Post-acquisition employment litigation from unidentified classification or benefit issues
What this means for your team
How Vespper helps with due diligence reports
Data room integration
Upload financial statements, contracts, organizational charts, and other data room documents. Vespper connects findings to sources.
Structured DD output
Generate reports organized by workstream (financial, legal, tax, commercial, operational) with consistent formatting and risk flagging.
Finding-to-source traceability
Every finding, risk flag, and recommendation in your DD report links to the specific document and page it was derived from.
Iterative deal process support
As new documents enter the data room, update your DD report incrementally and review only the new additions.
Generate your due diligence report in 3 steps
Connect your data room
Upload or connect financial statements, contracts, HR records, IP documents, and other due diligence materials.
Generate DD report draft
Vespper drafts your report by workstream, flagging key findings and risks with citations to source documents.
Review and finalize
Review findings, verify source citations, add expert commentary, and export the complete DD report.
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