Cited Brief System: Due Diligence Brief With Citations

Second pass: RUN in a fresh session on 2026-10-08, about 160 claims checked, 9 moved or corrected

Summary

Project Sentinel (a synthetic deal used for demonstration): Sentinel Fire & Safety, Inc., commercial fire and life-safety inspection and service. TTM revenue $6.21M, reported EBITDA $1.08M. The concentration claim fails against the CIM's own figures, all work runs under the founder's personal licence, no contract has been reviewed for change of control, and no strength survives the final pass.

The numbers that matter

Normalising both ways: no one-off income (asset sale, insurance payout, provision release) is named in the materials, so none is removed. That means none identified, not none exists.

Strengths

None survives the final pass. Each candidate failed for a stated reason:

• Revenue growth: the two prior years are not dated, so the trend depends on a reading of the periods.
• "Approximately 78% of revenue is recurring" (CIM p.7): no table behind it, and the Company's own definition (CIM p.22) counts repair and call-out work for contracted accounts.
• Code-driven demand, auto-renewal contracts, licensed technicians, 24/7 response: no figure. Now under Seller-asserted.
• Never strengths: the add-backs adding up (arithmetic) and the seller disclosing its own risks.

Cannot verify (every item in exactly one list)

Seller-asserted (10)

• "well diversified" (CIM p.8), beside the CIM's own top five at 48.8% and top ten at about 61% (CIM p.9).
• "exporting the data out is no problem at all" (call notes), beside "has not been tested" (CIM p.16). Untested is not failing, so this is a claim with no basis, not a contradiction.
• Owner pay "above market" by $210,000 (FS p.4): the benchmark and the officer compensation schedule are requested inside this item, not listed again under Missing.
• Also: the 78% recurring share, code-mandated demand, auto-renewal, the "one-time" legal settlement, and three more.

Contradicted (1)

• "no single customer representing more than 15% of revenue" (CIM p.8) vs Northgate at $1,366,000 (CIM p.9): 22.0%, $434,500 over the stated cap. No unstated fact can reconcile the two, so it is a contradiction, not a question.

Missing (14)

• TTM end date and a bridge from $6.21M to $5,950,000 gross receipts (Tax p.1). Gap $260,000; periods unstated, so a reconciliation to request.
• The legal settlement is "in the prior year" (CIM p.17), but its $65,000 is added back to an EBITDA whose period is not stated (FS p.4). Sensitivity, labelled as my arithmetic: if the settlement falls outside the EBITDA period, adjusted EBITDA would be $1.355M. Request both dates.
• Income statement and balance sheet in figures, the change-of-control review (CIM p.19), the licence transfer path (CIM p.14), and eight more.

Reviewer's aside (outside the documents)

• Contractor licences are often held by a named qualifying individual and not always assignable, so a buyer may need a qualifier in place before close.

Second pass

A separate reader in a fresh session checked about 160 claims against the four documents. No number, quote or page reference was wrong. 9 were moved or corrected: two overstatements fixed (a change-of-control clause the CIM only says "may" exist, and add-backs the documents never say will stop), and seven evidence requests removed from Missing because they already sit inside a Seller-asserted item.