Establish a single source of truth. We forensically audit and reconstruct your capitalization table to resolve historical discrepancies, support investor diligence, and prepare for institutional financing.
For a public or high-growth private company, the capitalization table is one of your core corporate records—it summarizes ownership, outstanding equity, and potential dilution. Over years of operations, convertible notes, employee stock options, and unrecorded share issuances can turn a clean spreadsheet into a chaotic liability. Discrepancies between your internal ledger, your Transfer Agent’s official records, and your SEC filings create material legal, accounting, and diligence issues. When an institutional investor or an acquirer discovers a messy cap table during due diligence, they may delay the process, seek valuation adjustments, or walk away from the deal.
At Ishimbayev Law Firm, we bring a forensic corporate-law approach. We do not just fix the math; we review the underlying legal documents to review whether shares, warrants, and options were properly authorized, issued, and recorded. We help deliver a cleaner, supportable cap table that can be used in financing, M&A, and diligence processes.
Cross-referencing your internal company ledgers against the official logs of your Transfer Agent and DTC to identify and help reconcile “phantom” shares, duplicate entries, or missing records.
Modeling the fully diluted impact of all outstanding convertible promissory notes, warrants, and toxic debt instruments to reveal your true equity structure.
Reviewing whether historical share issuances are supported by corporate approvals and a viable securities-law exemption (e.g., Rule 506, Section 4(a)(2)).
Transitioning your reconstructed cap table from error-prone Excel spreadsheets to institutional-grade equity management platforms (such as Carta or Pulley).
We collect all historical corporate records, including past Board minutes, executed term sheets, convertible notes, warrant agreements, and the Transfer Agent’s master ledger.
Our attorneys conduct a line-by-line forensic audit, identifying gaps between authorized shares, issued shares, and the legal documentation supporting them.
We do not just identify issues; we help address them. We draft retroactive Board and Shareholder Ratifications to ratify, validate, or otherwise remediate defective or undocumented share issuances where available and work with your Transfer Agent to correct their official books.
We provide a reconciled, supportable “Single Source of Truth” cap table, better prepared for review by auditors, regulators, investors, or acquirers.
Accountants can check the math, but they cannot fix the legal foundational errors. If shares were issued without proper corporate approval or without a valid securities-law exemption, they may be invalid, voidable, or create securities-law exposure, depending on the facts and applicable law. We identify these material legal issues and implement the corporate governance mechanisms to cure them.
Institutional investors and M&A buyers use a messy cap table as leverage to discount your company’s valuation. By proactively engaging our firm to reconcile your equity, you reduce diligence friction and show buyers that the equity record has been reviewed and organized.
Issuing more shares than your Articles of Incorporation authorize is a serious corporate law issue. Our forensic review checks whether outstanding shares and potential issuances fit within the company’s authorized share limits.
Predatory lenders rely on complex, floorless conversion formulas that confuse management teams. We reverse-engineer these formulas, checking whether lender conversions are consistent with the governing documents and applicable law.
Your Transfer Agent only tracks the issued common or preferred stock that they have been explicitly instructed to record. They do not track your unissued employee stock options, private warrants, or the potential dilution from outstanding convertible debt. A true cap table requires tracking all of these “fully diluted” elements.
Those shares may be invalid, voidable, or subject to ratification or validation depending on the governing law and the specific defect. During our remediation process, we may be able to prepare ratification or validation materials under applicable corporate law, such as Delaware Section 204 where available, to help remediate the issuance and clean up the corporate record.
The timeline depends heavily on the condition of your historical records. A company with 2 years of history might take 1 to 2 weeks. A company with 10 years of messy, undocumented history and multiple toxic lenders may require 3 to 6 weeks of forensic reconstruction.
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