LEGAL DUE DILIGENCE REQUEST LIST
Proposed Series D Preferred Stock Investment in Verdana Software, Inc.
PRIVILEGED AND CONFIDENTIAL — PREPARED AT THE DIRECTION OF COUNSEL
Matter Number: 1002-00004 Date: May 14, 2022
PREPARED BY:
Calderwood & Harkness LLP 101 Montgomery Street, Suite 3500 San Francisco, California 94104
Harrison Wexford, Responsible Partner Andrew Fitzpatrick, Lead Associate Naomi Petersen, Working Associate
DELIVERED TO:
Langford Price & Associates LLP 1000 SW Broadway, Suite 1600 Portland, Oregon 97205
Jonathan Hale, Partner Rebecca Thornton, Associate
CLIENT: Pinnacle Venture Fund II LP
TARGET: Verdana Software, Inc.
This document and all information contained herein are privileged and confidential, prepared at the direction of counsel in connection with the proposed transaction described herein. This document is not to be disclosed, distributed, or reproduced, in whole or in part, to any person or entity other than the intended recipients and their authorized representatives without the prior written consent of Calderwood & Harkness LLP on behalf of Pinnacle Venture Fund II LP. Receipt of this document does not waive any applicable privileges or protections.
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INTRODUCTORY INSTRUCTIONS
Ladies and Gentlemen:
This Legal Due Diligence Request List (this "Request List") is delivered by Calderwood & Harkness LLP ("C&H"), counsel to Pinnacle Venture Fund II LP ("Pinnacle" or the "Investor"), in connection with the proposed Sixty Million Dollar ($60,000,000) Series D Preferred Stock investment by Pinnacle in Verdana Software, Inc. (the "Company" or "Verdana") (the "Proposed Transaction").
We respectfully request that all responsive documents, materials, agreements, correspondence, and other information requested below be uploaded to the virtual data room (the "VDR") that has been established for the purposes of this transaction. Please ensure that all documents uploaded to the VDR are organized by category number corresponding to the numbered sections and subsections set forth in this Request List. For the avoidance of doubt, each document should be placed in the folder corresponding to the primary category to which it relates, with cross-references noted where a document is responsive to multiple categories.
The following general instructions apply to the requests set forth herein:
1. Scope of Coverage. Unless otherwise specified, all documents requested herein should cover the period from Verdana's inception in 2016 to the present date. Where a more limited time period is specified in a particular request, that specific time period shall govern.
2. Null Responses. Where a particular category or subcategory yields no responsive documents, we request that counsel for the Company provide written confirmation of that fact (a "Null Response"). Null Responses should be provided in writing, uploaded to the VDR in the applicable category folder, and should affirmatively state that no responsive documents exist with respect to the applicable request.
3. Completeness. This Request List is not intended to be exhaustive, and Calderwood & Harkness expressly reserves the right to supplement this Request List with additional requests as the due diligence process progresses and as additional information becomes available. The omission of a request for any particular category of documents or information shall not be construed as a waiver of Pinnacle's right to request such documents or information at a later date.
4. Anticipated Timeline. Due diligence in connection with the Proposed Transaction is expected to commence on May 16, 2022. We anticipate that the initial review will be substantially completed within sixty (60) days of commencement, which falls within the exclusivity period running through July 11, 2022 pursuant to the term sheet executed between the parties. To facilitate timely completion of the diligence process, we request that the initial population of the VDR be completed no later than May 23, 2022 — that is, within one (1) week of the commencement of diligence. We understand that certain categories of information may require additional time to compile, and we are prepared to work cooperatively with Company counsel to establish a reasonable schedule for production of such materials; however, we request that any anticipated delays be communicated promptly.
5. Point of Contact. We request that the Company identify a single point of contact for follow-up questions and supplemental requests arising during the due diligence process. We understand that Sandra Mikkelsen, General Counsel of Verdana, or her designee, will serve in this capacity. Please confirm.
6. Format of Production. All documents should be provided in native electronic format where available (e.g., Word, Excel, PDF). Scanned copies should be provided only where native electronic versions are not available. Please see the Closing Instructions at the end of this Request List for additional guidance regarding format and production requirements.
7. Privilege. We acknowledge that certain responsive materials may be subject to attorney-client privilege, work product protection, or other applicable privileges. Where the Company withholds responsive documents on the basis of privilege, we request that a privilege log be provided identifying each withheld document with sufficient specificity to permit evaluation of the privilege claim. Redacted versions of documents are not acceptable as a substitute for complete production unless accompanied by a privilege log identifying the basis for each redaction.
We appreciate your cooperation and look forward to working efficiently with you and your client throughout this process.
SECTION 1: CORPORATE ORGANIZATION AND GOOD STANDING
1.1. Certificate of Incorporation of Verdana Software, Inc., as originally filed with the Secretary of State of the State of Delaware, together with all amendments, restatements, and certificates of designation filed thereafter, including the current Restated Certificate of Incorporation (as amended through the date hereof). We understand that the Company's Delaware Secretary of State File Number is 6274913. Please provide all filed instruments in chronological order, together with evidence of acceptance by the Delaware Secretary of State.
1.2. Bylaws of Verdana Software, Inc., as currently in effect, together with all prior versions thereof and all amendments thereto adopted since inception. Please include copies of any board or stockholder resolutions approving such amendments.
1.3. Certificates of good standing (or certificates of status, as applicable) issued by the Secretary of State of the State of Delaware and by the applicable governmental authority in each other state or jurisdiction in which Verdana is qualified or authorized to do business. We understand that the Company's principal offices are located at 1175 NW Couch Street, Suite 800, Portland, Oregon 97209, and accordingly we expect that the Company is qualified to do business in the State of Oregon at a minimum. Please provide certificates of good standing dated no earlier than thirty (30) days prior to the date of this Request List.
1.4. All foreign qualification filings, certificates of authority, and similar filings or registrations in each state or jurisdiction (other than Delaware) where Verdana is qualified or authorized to transact business or where it has employees, offices, or significant operations. Please also provide a schedule identifying each such jurisdiction.
1.5. Documentation of the Company's registered agent designation in Delaware and in each other jurisdiction in which it is qualified to do business. We understand that the Company's current registered agent in Delaware is Cascade Systems, located at 1209 Orange Street, Wilmington, Delaware 19801. Please confirm and provide any applicable agency agreements.
1.6. Minutes (or written consents in lieu of meetings) of all meetings of the Board of Directors of Verdana and all committees thereof (including, without limitation, any audit committee, compensation committee, nominating and governance committee, and any special committees) from inception to the present. Please organize chronologically.
1.7. Minutes of all meetings of the stockholders of Verdana and records of all actions taken by written consent of the stockholders from inception to the present. Please organize chronologically.
1.8. A current list of all directors and officers of Verdana, including dates of initial appointment and, where applicable, dates of reappointment or changes in position. We understand the current Board of Directors to be composed of the following individuals:
(a) Raj Anand — Chief Executive Officer and Co-Founder;
(b) Lena Kovac — Chief Technology Officer and Co-Founder;
(c) Priya Dasgupta — Board designee of Ridgeline Ventures Fund III LP;
(d) Elliott Margolis — Board designee of Northgate Growth Partners Fund II LP; and
(e) Diana Chen — Board designee of Brindoval Capital Group LLC.
Please confirm the accuracy of the foregoing and provide a complete list of all officers, including the Chief Financial Officer (Thomas Brightwell), General Counsel (Sandra Mikkelsen), and any other officers or persons holding officer-level titles.
1.9. A current organizational chart showing all subsidiaries (whether wholly owned or partially owned), parent entities, joint ventures, partnerships, and other affiliated entities of Verdana, including the jurisdiction of organization, ownership percentages, and intercompany relationships for each such entity.
1.10. Copies of any operating agreements, stockholder agreements, investor rights agreements, or similar agreements among stockholders of Verdana or between Verdana and any of its stockholders (to the extent not produced in response to Section 2 below).
1.11. All powers of attorney, agency agreements, or similar instruments currently in effect, pursuant to which any person or entity is authorized to act on behalf of Verdana.
1.12. Any agreements, resolutions, plans, or correspondence relating to the formation, dissolution, liquidation, restructuring, reorganization, or recapitalization of Verdana or any of its subsidiaries or affiliated entities, whether consummated or contemplated.
SECTION 2: CAPITALIZATION
2.1. The Company's current capitalization table on a fully-diluted basis, reflecting all classes and series of equity securities (including common stock, Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock), together with all outstanding warrants, stock options (whether vested or unvested), convertible instruments, and any other rights to acquire equity securities of the Company. We understand the Company has approximately 80,000,000 shares outstanding on a fully-diluted basis. Please confirm and provide a detailed capitalization table as of the most recent practicable date.
2.2. A detailed breakdown of equity holders by class and series, including the identity of each holder, the number of shares held, the percentage of total equity represented, and the purchase price per share. Based on information provided to date, we understand the current capitalization to be approximately as follows:
(a) Founders (Common Stock): Raj Anand and Lena Kovac collectively hold 28,000,000 shares of Common Stock, representing approximately 35.0% of shares outstanding on a fully-diluted basis;
(b) Series A Preferred Stock: Ridgeline Ventures Fund III LP holds 12,000,000 shares of Series A Preferred Stock, issued at a price per share of $0.80 (aggregate investment of $9,600,000), in a financing round closed in 2018;
(c) Series B Preferred Stock: Northgate Growth Partners Fund II LP holds 16,000,000 shares of Series B Preferred Stock, issued at a price per share of $2.00 (aggregate investment of $32,000,000), in a financing round closed in 2019;
(d) Series C Preferred Stock: Brindoval Capital Group LLC holds 12,000,000 shares of Series C Preferred Stock, issued at a price per share of $3.00 (aggregate investment of $36,000,000), in a financing round closed in 2021; and
(e) Employee Stock Option Pool (ESOP): 12,000,000 shares of Common Stock reserved under the Company's equity incentive plan(s), representing approximately 15.0% of fully-diluted shares, inclusive of both issued (granted) options and the unissued (available) pool.
Please confirm the accuracy of the foregoing and provide any corrections or supplemental detail.
2.3. The Company's stock ledger and all transfer records for all classes of equity securities, reflecting all issuances, transfers, repurchases, cancellations, and other changes in ownership from inception to the present.
2.4. Copies of all stock purchase agreements, subscription agreements, investment agreements, and related transaction documents for each of the Company's prior equity financing rounds, including the Series A round (2018), the Series B round (2019), and the Series C round (2021). Please include all exhibits, schedules, side letters, and amendments thereto.
2.5. The Investors' Rights Agreement currently in effect among Verdana, Ridgeline Ventures Fund III LP, Northgate Growth Partners Fund II LP, and Brindoval Capital Group LLC, together with all amendments, waivers, and restatements thereof.
2.6. The Right of First Refusal and Co-Sale Agreement currently in effect among Verdana, its founders, and the preferred stockholders, together with all amendments, waivers, and restatements thereof.
2.7. The Voting Agreement currently in effect among Verdana, its founders, and the preferred stockholders, together with all amendments, waivers, and restatements thereof.
2.8. Any registration rights agreements (whether included within the Investors' Rights Agreement or set forth in a separate instrument) granting demand registration rights, piggyback registration rights, S-3 registration rights, or similar rights to any holder of Company securities.
2.9. All equity incentive plans of the Company, including the ESOP plan documents, forms of award agreements (including stock option agreements, restricted stock agreements, restricted stock unit agreements, and any other award types), board resolutions and stockholder approvals authorizing such plans, and any amendments thereto. In addition, please provide a complete schedule of all stock option and equity awards granted under such plans, including for each award:
(a) the name of the grantee;
(b) the date of grant;
(c) the type of award (incentive stock option, nonqualified stock option, restricted stock, restricted stock unit, or other);
(d) the number of shares subject to the award;
(e) the exercise price or purchase price per share (as applicable);
(f) the vesting commencement date and vesting schedule (including any cliff vesting provisions);
(g) the number of shares vested and unvested as of the most recent practicable date;
(h) the number of shares exercised (and, if applicable, the date(s) of exercise);
(i) the number of shares cancelled, forfeited, or expired; and
(j) the expiration date of the award.
Please also provide detail on the 12,000,000-share ESOP pool allocation, distinguishing between shares that have been issued pursuant to exercised options or other awards, shares that are subject to outstanding unexercised awards, and shares that remain available for future grant.
2.10. Any proposals, board resolutions, memoranda, or discussions relating to the expansion of the Company's ESOP pool, including the proposed increase from 12,000,000 shares to 17,000,000 shares (an increase of 5,000,000 shares). Please include any materials presented to the Board or stockholders in connection with such proposal, any valuation analyses, and any correspondence among management, the Board, or investors regarding the proposed increase.
2.11. All outstanding warrants, convertible promissory notes, Simple Agreements for Future Equity (SAFEs), or any other instruments convertible into or exercisable for equity securities of the Company, together with all related agreements and amendments.
2.12. Documentation of any anti-dilution adjustments previously triggered under any series of the Company's Preferred Stock, including the triggering event, the applicable anti-dilution formula (broad-based weighted average, narrow-based weighted average, full ratchet, or other), the conversion price before and after adjustment, and the number of additional shares issuable as a result.
2.13. All Section 409A valuation reports (also known as "fair market value" or "independent appraisal" reports) prepared by or on behalf of the Company, including the most recent report and all prior reports. Please identify the valuation firm engaged to prepare each report and the effective date of each valuation.
2.14. Any right of first refusal, preemptive right, tag-along right, drag-along right, or similar transfer restriction applicable to any class or series of Company securities, whether set forth in the Company's charter documents, bylaws, or any stockholder agreement (to the extent not previously produced in this Section 2).
2.15. Any stockholder agreements, voting trusts, irrevocable proxies, lock-up agreements, or similar arrangements not otherwise described or requested above.
SECTION 3: MATERIAL CONTRACTS
3.1. A complete schedule of all contracts, agreements, and commitments to which Verdana is a party or by which it is bound having an annualized revenue or expense value in excess of $500,000, including a brief description of each contract, the counterparty, the term, and the annualized value.
3.2. Complete copies of all customer contracts (including master subscription agreements, order forms, statements of work, service level agreements, and amendments) with annualized recurring revenue ("ARR") exceeding $1,000,000. Based on information provided to date, we understand the Company's top five customers by ARR to include the following:
(a) Meridian Logistics Corp. — Enterprise license agreement with ARR of approximately $11,800,000, representing approximately 24.9% of the Company's total ARR of $47,300,000. We understand this agreement has a three-year initial term expiring December 31, 2023, and provides for automatic renewal for successive one-year terms unless terminated by either party upon 180 days' prior written notice. Given the concentration of revenue represented by this customer and the proximity of the initial term expiration, we request all documents relating to this agreement, including all amendments, renewals, side letters, and correspondence;
(b) Caldera Manufacturing Inc. — ARR of approximately $5,200,000, representing approximately 11.0% of total ARR;
(c) Atlas Freight Holdings LLC — ARR of approximately $4,100,000, representing approximately 8.7% of total ARR;
(d) Brannock Industrial Group — ARR of approximately $3,400,000, representing approximately 7.2% of total ARR; and
(e) Solaris Warehousing Co. — ARR of approximately $2,700,000, representing approximately 5.7% of total ARR.
3.3. A complete customer list identifying all of the Company's approximately 185 customers, together with the following information for each customer: contract terms (initial term and renewal provisions), annualized revenue, renewal date(s), termination notice provisions, and any material non-standard terms.
3.4. Copies of the Company's standard form customer subscription agreement and standard form order form for the Verdana SCX platform, as currently in use.
3.5. Copies of any customer contracts containing most-favored-nation ("MFN") pricing clauses, exclusivity arrangements, non-compete provisions, or change-of-control provisions (including provisions triggered by a change in the Company's ownership or capitalization structure).
3.6. Copies of all vendor, supplier, and service provider agreements (including cloud hosting, infrastructure, data center, third-party software, professional services, and consulting agreements) with annualized spend exceeding $250,000.
3.7. All distribution, reseller, referral, or channel partner agreements to which Verdana is a party.
3.8. All joint venture, strategic alliance, or partnership agreements to which Verdana is a party.
3.9. Any agreements containing non-compete, non-solicitation, or exclusivity covenants that are binding on Verdana or that restrict Verdana's ability to conduct its business, enter new markets, or engage with particular customers or suppliers.
3.10. Any agreements that require consent, provide for termination or acceleration of obligations, or result in a modification of terms upon (a) a change of control of Verdana, (b) the issuance of new equity securities (including the Series D Preferred Stock), or (c) any other change in the Company's capitalization.
3.11. All contracts, agreements, or arrangements between Verdana and any related party, affiliate, or insider, including any agreements between the Company and any of its founders (Raj Anand, Lena Kovac), officers, directors, or their respective family members, affiliates, or associated entities. Please include any consulting agreements, service agreements, lease arrangements, or other transactions.
3.12. Any agreements with Hargrove Securities LLC or any other financial advisor, investment banker, finder, placement agent, or broker engaged by the Company in connection with the Proposed Transaction or any other financing or strategic transaction. We understand that Hargrove Securities LLC has been engaged on terms that include a placement fee of 1.5% on capital raised, which would result in a fee of $900,000 on a $60,000,000 raise. Please provide a copy of the engagement letter and any amendments thereto.
3.13. A schedule of any contracts with material customers or suppliers that have been terminated, not renewed, or are currently subject to pending disputes within the past twenty-four (24) months, together with copies of any related termination notices, dispute correspondence, or demand letters.
3.14. Any and all correspondence, requests for proposals ("RFPs"), competitive solicitations, or indications from Meridian Logistics Corp. regarding potential non-renewal of its enterprise license agreement or competitive solicitation of alternative supply chain management solutions. Given the significance of the Meridian relationship to the Company's revenue base, we request full disclosure of any communications that may bear on the likelihood of renewal or the terms thereof.
SECTION 4: FINANCING AGREEMENTS AND INDEBTEDNESS
4.1. Complete copies of all credit agreements, loan agreements, promissory notes, indentures, and all other instruments of indebtedness to which Verdana is a party or by which it is bound. We understand that the Company maintains a revolving credit facility with Pacific Summit Bank, N.A., the material terms of which are as follows:
(a) Facility amount: $10,000,000;
(b) Amount drawn as of March 31, 2022: $6,200,000;
(c) Interest rate: Secured Overnight Financing Rate (SOFR) plus 3.50%;
(d) Maturity date: June 30, 2024;
(e) Security: All assets of Verdana Software, Inc.; and
(f) Financial covenants: Minimum liquidity of $10,000,000; ARR-based coverage ratio.
Please provide a complete copy of the credit agreement and all related documents, including any schedules, exhibits, and disclosure letters delivered in connection therewith.
4.2. All amendments, waivers, modifications, supplements, and restatements of the Pacific Summit Bank credit facility from the date of its original execution to the present.
4.3. All security agreements, pledge agreements, guarantees (whether by Verdana or any third party), mortgages, deeds of trust, UCC-1 financing statements, and any other documents creating, evidencing, or perfecting liens, security interests, or encumbrances on any assets of Verdana.
4.4. All intercreditor agreements, subordination agreements, and other agreements governing the relative priority of claims among creditors of Verdana.
4.5. A schedule identifying all negative covenants contained in the Pacific Summit Bank credit agreement (and any other financing agreement) that may restrict any of the following:
(a) Issuance of new equity securities (including preferred equity);
(b) Incurrence of additional indebtedness;
(c) Grant of liens on the Company's assets;
(d) Declaration or payment of dividends or other distributions to stockholders; and
(e) Change of control of the Company or any merger, consolidation, or sale of all or substantially all assets.
4.6. Copies of all compliance certificates delivered by the Company under the Pacific Summit Bank credit facility for the twelve (12) months preceding the date of this Request List.
4.7. Any notices of default, notices of events of default, reservation of rights letters, waiver letters, or forbearance agreements under any financing agreement to which Verdana is a party.
4.8. A schedule of all outstanding letters of credit, surety bonds, guaranty bonds, or similar instruments issued for the account of Verdana, together with copies of each such instrument.
4.9. Any correspondence between Verdana and Pacific Summit Bank, N.A. regarding the Proposed Transaction, including any discussions or requests for consent relating to the issuance of the Series D Preferred Stock, any potential impact on financial covenants, or any proposed amendment or waiver of the credit facility in connection therewith.
SECTION 5: FINANCIAL INFORMATION
5.1. Audited financial statements of Verdana for fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, including the independent auditor's reports issued by Whitfield & Greer LLP (engagement partner: Gerald Whitfield) in connection therewith. Whitfield & Greer LLP is located at 888 SW Fifth Avenue, Suite 1400, Portland, Oregon 97204. Please provide the complete audited financial statements, including all notes to the financial statements.
5.2. Unaudited financial statements for the first quarter of fiscal year 2022 (as of and for the period ended March 31, 2022), including the balance sheet, income statement (statement of operations), and statement of cash flows. Please also provide any internal management commentary or analysis prepared in connection with such financial statements.
5.3. Monthly management financial reports (including profit and loss statements, balance sheets, and cash flow statements, as well as any key performance indicator dashboards) for the trailing twelve (12) months (April 2021 through March 2022).
5.4. The Company's annual operating budgets and financial projections for fiscal years 2022 and 2023, as approved by the Board of Directors. Please also provide any interim updates or revisions to such budgets and projections.
5.5. Detailed revenue and operational data, including the following metrics:
(a) Annual Recurring Revenue (ARR) as of Q1 2022: $47,300,000 (up from $28,900,000 in Q1 2021, reflecting approximately 63.7% year-over-year growth);
(b) Net Revenue Retention Rate: 128%;
(c) Gross Margin: 74.2%;
(d) EBITDA (trailing twelve months as of March 31, 2022): negative $11,600,000; and
(e) Cash on balance sheet as of March 31, 2022: $22,400,000.
Please confirm the accuracy of the foregoing metrics and provide supporting documentation and calculations for each.
5.6. Cohort analysis, monthly and quarterly churn data, and customer retention metrics, broken down by quarter, for the period from January 1, 2020 to March 31, 2022. Please include gross revenue churn, net revenue churn, logo churn, and any expansion revenue analysis.
5.7. ARR breakdown by individual customer, including for each customer the contract execution date, current contract term, next renewal date, and total contract value (annualized).
5.8. A description of the Company's revenue recognition policies and practices, including any deferred revenue analysis, unbilled revenue analysis, and a reconciliation of deferred revenue balances. Please identify the applicable accounting standard (ASC 606 or other).
5.9. Any management letters, internal control deficiency reports, or communication of significant deficiencies or material weaknesses issued by Whitfield & Greer LLP in connection with any audit of the Company's financial statements.
5.10. Copies of all engagement letters between Verdana and Whitfield & Greer LLP, including any amendments or renewals thereof.
5.11. An accounts receivable aging report as of March 31, 2022, categorized by aging bucket (current, 1–30 days past due, 31–60 days past due, 61–90 days past due, and over 90 days past due), and identifying any receivables that have been written off or reserved for doubtful accounts.
5.12. A schedule of all bank accounts and cash equivalents maintained by the Company, including the financial institution, account type, account number (last four digits), and balance as of March 31, 2022.
5.13. A description of any off-balance-sheet arrangements, contingent liabilities, guarantees, or other obligations not reflected on the Company's balance sheet, together with any related documentation.
SECTION 6: INTELLECTUAL PROPERTY AND TECHNOLOGY
6.1. A schedule of all patents issued to or held by the Company, together with all pending patent applications (including provisional applications, continuation applications, divisional applications, and continuation-in-part applications). For each patent and application, please provide:
(a) the title and abstract;
(b) the patent number or application number (as applicable);
(c) the filing date;
(d) the issue date (for issued patents);
(e) the jurisdiction(s) of filing;
(f) the current status (issued, pending, abandoned, expired, or other);
(g) the named inventor(s); and
(h) the assignee.
6.2. A schedule of all registered and pending trademarks and service marks owned or claimed by the Company in any jurisdiction, including, without limitation, the "Verdana SCX" brand. For each mark, please provide the mark, the registration number or application number, the filing and registration dates, the jurisdiction, the class(es) of goods/services, and the current status (registered, pending, opposed, cancelled, or other).
6.3. A schedule of all registered and pending copyrights owned by the Company, including the title of the work, the registration number, the effective date of registration, and the nature of the work.
6.4. A schedule of all domain names owned, registered, or otherwise controlled by Verdana, including the registrar, registration date, and expiration date for each domain.
6.5. A description of all proprietary artificial intelligence and machine learning ("AI/ML") algorithms, trade secrets, and know-how material to the operation, functionality, and competitive differentiation of the Verdana SCX platform. This description need not disclose the algorithms themselves but should identify the general categories of proprietary technology, the measures taken to protect trade secret status, and the significance of each category to the Company's business.
6.6. Copies of all intellectual property assignment agreements executed by the Company's founders (Raj Anand and Lena Kovac), employees, and independent contractors, pursuant to which such individuals assigned to the Company all right, title, and interest in intellectual property created in the course of their employment or engagement. Please identify any individuals who have not executed such agreements.
6.7. Copies of all inbound intellectual property license agreements — that is, agreements pursuant to which third parties have licensed technology, software, data, or other intellectual property to Verdana for use in or in connection with the Verdana SCX platform or the Company's business operations.
6.8. Copies of all outbound intellectual property license agreements — that is, agreements pursuant to which Verdana has granted licenses of its technology, software, data, or other intellectual property to third parties.
6.9. A comprehensive inventory of all open-source software components incorporated into, linked with, or distributed as part of the Verdana SCX platform. For each open-source component, please identify:
(a) the component name and version;
(b) the applicable open-source license type (including, without limitation, GNU General Public License (GPL) (v2 or v3), GNU Lesser General Public License (LGPL), MIT License, Apache License 2.0, BSD License, Mozilla Public License, or other);
(c) the manner in which the component is used (e.g., incorporated into source code, dynamically linked, bundled with distribution);
(d) any compliance analysis or legal review conducted with respect to such component; and
(e) any known compliance issues or risks (including, without limitation, copyleft obligations that may require disclosure or licensing of proprietary source code).
6.10. Copies of any third-party claims, cease-and-desist letters, demand letters, or other communications alleging infringement, misappropriation, or other violation of any third party's intellectual property rights (including patents, trademarks, copyrights, and trade secrets) by Verdana or any of its products or services.
6.11. Copies of any intellectual property infringement claims, cease-and-desist letters, or demand letters asserted by Verdana against third parties.
6.12. Copies of all source code escrow agreements to which Verdana is a party, together with any amendments thereto and evidence of current deposits.
6.13. Any agreements with universities, research institutions, government entities, or other organizations relating to intellectual property developed with external funding, joint development arrangements, or sponsored research. Please include any applicable "march-in" rights or government use rights provisions.
6.14. Copies of the Company's data privacy and security policies (internal and customer-facing), together with all data processing agreements, data protection addenda, or similar agreements entered into with customers, vendors, or other third parties in connection with the processing of personal data.
6.15. A description of any material software bugs, security vulnerabilities, data breaches, or unauthorized access incidents affecting the Verdana SCX platform, the Company's internal systems, or customer data within the past three (3) years, including: (a) the nature and scope of the incident; (b) the number of individuals or customers affected; (c) the remediation actions taken; (d) any notifications provided to affected individuals, customers, or regulatory authorities; and (e) any resulting litigation, regulatory inquiry, or financial impact.
SECTION 7: EMPLOYMENT AND BENEFITS
7.1. Confirmation of the Company's total employee headcount as of the date hereof. We understand the Company employs approximately 310 individuals.
7.2. An employee census listing all current employees, including the following information for each:
(a) full name;
(b) title and position;
(c) department;
(d) date of hire;
(e) annual base compensation (salary or hourly rate, as applicable);
(f) target bonus or incentive compensation;
(g) work location;
(h) classification as exempt or non-exempt under the Fair Labor Standards Act and applicable state law; and
(i) full-time or part-time status.
7.3. The Company's current organizational chart, showing reporting relationships, departmental structure, and management hierarchy.
7.4. Copies of the employment agreements (or, if no formal employment agreement exists, the offer letters) for all executive officers of the Company, including:
(a) Raj Anand, Chief Executive Officer and Co-Founder;
(b) Lena Kovac, Chief Technology Officer and Co-Founder;
(c) Thomas Brightwell, Chief Financial Officer (hired 2021); and
(d) Sandra Mikkelsen, General Counsel.
Please include all amendments, addenda, and side letters to such agreements.
7.5. Copies of all offer letter templates and standard form employment agreements currently in use by the Company for new hires at various levels.
7.6. Written confirmation of the at-will employment status of the Company's employees, including any analysis of the applicability of Oregon employment law to the Company's workforce. Please identify any employees who are not employed on an at-will basis and provide copies of any fixed-term employment contracts.
7.7. Copies of all independent contractor and consulting agreements currently in effect, including any agreements with the Company's founders or their affiliates. Please also provide a schedule of all current independent contractors, including the nature of services provided, the term of engagement, and the annual compensation.
7.8. The Company's current employee handbook and all written personnel policies, including policies relating to equal employment opportunity, anti-harassment, anti-discrimination, leave of absence, remote work, and workplace conduct.
7.9. Copies of all non-competition, non-solicitation, confidentiality, and invention assignment agreements (including proprietary information and inventions assignment agreements, or "PIIAs") executed by current and former employees and independent contractors. Please identify any current employees or contractors who have not executed such agreements.
7.10. A description and copies of all employee benefit plans maintained, sponsored, or contributed to by the Company, including:
(a) 401(k) retirement savings plan — plan documents, summary plan descriptions, adoption agreements, and the three (3) most recent Form 5500 annual filings;
(b) Health insurance (medical, dental, and vision) — plan documents, summary plan descriptions, and current carrier information;
(c) Life insurance and accidental death and dismemberment insurance;
(d) Short-term and long-term disability insurance;
(e) Any deferred compensation arrangements under Section 409A of the Internal Revenue Code;