FOUNDER STOCK
No proof of the CEO's 83(b) election.
Only an unsigned form is in the data room. The 30-day window on Sarah Okafor's 3,900,000 founder shares closed September 25, 2024.
Go to the findingPROPOSED INVESTMENT$12 million Series A Preferred at a $48 million pre-money valuation · Harbor Lane Ventures
Foxhill Energy Analytics, Inc.
Legal due diligence on the data room, prepared for Harbor Lane Ventures.
Three findings decide the Series A terms.
Legal due diligence on Foxhill Energy Analytics, Inc., prepared for Harbor Lane Ventures.
INCORPORATEDDelaware, August 20, 2024
HEADQUARTERSSan Mateo, California
BUSINESSEnergy-analytics software
TEAM19 people: 14 employees and 5 contractors
PRIOR ROUNDSeries Seed, April 2025
DATA ROOMAs provided August 21, 2026
KEY ISSUES
FORMATION
The good standing certificate is 24 months old.
The only certificate is dated August 23, 2024. Two Delaware annual reports have come due since, with no filing evidence on file.
Go to the findingFORMATION
The founders' raises have no board approval on file.
$185,000 each from May 1, 2025, approved by stockholders in a consent tied to a different subject.
Go to the findingAreaFindingAsk at closing
Founder stockNo 83(b) proof for the CEO's 3,900,000 sharesA search, then an indemnity if nothing surfacesFormationGood standing certificate dated August 23, 2024A current certificate, dated within ten days of closingFormation$185,000 founder raises with no board approval on fileA ratifying board consent and a compensation representationALL FINDINGS · SIX AREAS
01FORMATIONFormation and corporate records14 checked · 3 need attention02FOUNDER STOCKFounder stock and 83(b) elections8 checked · 2 need attention
03EQUITY PLANEquity plan and option grants14 checked · 8 need attentionNot in this sample
04SECURITIESFinancings and securities filings21 checked · 8 need attentionNot in this sample
05PEOPLEEmployees, contractors and advisors15 checked · 8 need attentionNot in this sample
06TAX AND FILINGSTax, financial and state filings8 checked · 8 need attentionNot in this sample
SECTION 1 OF 6 · FOURTEEN DOCUMENTS CHECKED
Formation and corporate records.
Fourteen documents checked: eleven in order, two incomplete, one missing.
Two formation records are incomplete and one is missing.
Eleven of fourteen are in order.
Certificate of incorporationThe current charter is the restated certificate filed April 14, 2025, located and read in this review.RESOLVED
BylawsAdopted and certified August 22, 2024.IN ORDER
Action of sole incorporatorAppoints Sarah Okafor and James Whitfield as the initial board.IN ORDER
Initial board consentRatifies the bylaws, elects officers, authorizes the founder stock, sets the fiscal year, authorizes bank accounts.IN ORDER
EIN confirmation (IRS CP 575)Issued August 27, 2024.IN ORDER
Delaware certificate of good standingThe only certificate is dated August 23, 2024.Open the findingINCOMPLETE
Bank accountsTwo accounts documented.IN ORDER
California foreign qualificationRegistered September 4, 2024.IN ORDER
Stock issuance recordsUncertificated shares by board election; issuance notices on file.IN ORDER
Minute book indexA running index of every board and stockholder action from August 20, 2024 to July 14, 2026.IN ORDER
Officer and director listBoth founder directors, Marcus Levin in the preferred seat, and the officers elected August 22, 2024.IN ORDER
Indemnification agreementsNone on file for any director or officer. The bylaws' indemnification article is the only cover, and Harbor Lane Ventures will designate a director.MISSING
Cap tableThe August 19, 2026 export, read and reconciled in this review.RESOLVED
Board and stockholder consents since inceptionA substantial set is on file. Marcus Levin's board seat is confirmed; the founders' salary increases have no board approval on file.Open the findingINCOMPLETE
In orderNeeds attention
FORMATION AND CORPORATE RECORDS · INCOMPLETE
The Delaware good standing certificate is nearly two years old.
Foxhill cannot give a good standing representation at closing off a 2024 certificate.
1What we found
The only certificate in the file is dated August 23, 2024, three days after incorporation. Nothing more recent appears, and no Delaware annual report or franchise tax confirmation appears in the file either.
2Why it matters
Good standing lapses when the annual report and franchise tax stop being filed, and Delaware's March 1 deadline has now passed twice. A 24-month-old certificate says nothing about the status today, and the company cannot give a good standing representation at closing off this document.
3Recommendation
Make a current Delaware certificate of good standing, dated within ten days of closing, a closing deliverable. If it does not issue cleanly, an annual report is outstanding: require the overdue reports filed and the tax paid before the certificate is reordered.
1What we found
One certificate, dated August 23, 2024. No annual report and no franchise tax confirmation since.
2Why it matters
Two March 1 deadlines have passed. The certificate proves nothing about today, and no closing representation can rest on it.
3Recommendation
A current certificate, dated within ten days of closing, as a closing deliverable. If it will not issue, the overdue reports and tax come first.
Expected: a current certificate of good standing from Delaware, dated within ten days of closing.
The certificate is dated August 23, 2024. Annual reports came due on March 1, 2025 and March 1, 2026, and the file holds no evidence of either. Today the certificate is 24 months old.
Data room, formation folder, as provided August 21, 2026.
FORMATION AND CORPORATE RECORDS · INCOMPLETE
The founders' salary increases have stockholder approval but no board approval on file.
Two directors set their own pay, and the board never approved it on the record.
1What we found
A stockholder written consent signed by the two seed funds approves $185,000 salaries for both founders effective May 1, 2025. The consent takes effect only after board resolutions approving the restated charter, a different subject, and no board consent approving the salary increase itself appears anywhere in the file. The founders' own signature pages are not with the consent either.
2Why it matters
Both founders sit on the board and both benefit from the raise, so this is pay the directors set for themselves. Delaware treats that as a self-interested decision: it holds up when disinterested stockholders approve it on a clean record, and this record ties the approval to the wrong subject. The exposure sits with the company Harbor Lane Ventures is buying into, and it runs from May 1, 2025 forward.
3Recommendation
Require the board consent ratifying both salary increases from May 1, 2025, and the completed stockholder consent with the founders' signature pages, as pre-closing deliverables. Add a compensation representation to the Series A purchase agreement covering approval of all officer pay, and put officer compensation on the list of actions needing the preferred director's vote.
1What we found
$185,000 each from May 1, 2025, approved by the two seed funds in a consent that takes effect on a different subject. No board consent. No founder signature pages.
2Why it matters
Directors setting their own pay need a clean disinterested approval. This record does not give one, and the exposure runs from May 2025.
3Recommendation
A ratifying board consent and the completed stockholder consent before closing. A compensation representation in the purchase agreement. Officer pay on the preferred director's vote list.
Expected: for a transaction with directors on both sides, approval by the directors who do not benefit from it, or approval by the stockholders, normally with the board acting first.
Stockholder written consent, effective May 1, 2025; minute book index.
SECTION 2 OF 6 · EIGHT DOCUMENTS CHECKED
Founder stock and 83(b) elections.
Eight documents checked: six in order, one missing, one incomplete.
One founder's 83(b) proof is missing and the vesting amendments were never signed.
Six of eight are in order.
Okafor restricted stock purchase agreementSigned both sides, August 26, 2024. Sells 3,900,000 shares and assigns her IP to the company now, not as a future promise.IN ORDER
Whitfield restricted stock purchase agreementSigned both sides, August 26, 2024. Sells 3,820,000 shares with the same present-tense IP assignment.IN ORDER
Notices of stock issuanceOn file for both founders.IN ORDER
Founder IP assignmentEach purchase agreement assigns the founder's pre-incorporation work to the company in the present tense.IN ORDER
Founder vesting and repurchase scheduleOne schedule for both founders: 1/72 monthly from August 26, 2024, no cliff.IN ORDER
Okafor 83(b) electionOnly the unsigned form attached to her purchase agreement is on file. The filing window closed September 25, 2024.Open the findingMISSING
Whitfield 83(b) electionSigned August 26, mailed August 28, IRS-stamped received September 9, 2024.RESOLVED
Founder vesting amendmentsThe Series Seed purchase agreement required six-year vesting amendments; no signed amendment is on file for either founder.Finding not in this sampleINCOMPLETE
In orderNeeds attention
FOUNDER STOCK · MISSING
No 83(b) election proof is on file for Sarah Okafor's founder stock.
Until an 83(b) election surfaces, every vesting date on the CEO's founder stock is a taxable event.
1What we found
Okafor bought 3,900,000 shares of restricted stock on August 26, 2024, for $390.00 in total. Her purchase agreement, p. 9, recites that she has decided to make an 83(b) election and is submitting an executed form. The only election in the data room is the form at Exhibit B, p. 16: filled in, unsigned, and undated. No IRS-stamped copy, no certified-mail receipt, and no tracking appears anywhere in the file. The window closed Wednesday, September 25, 2024. James Whitfield's package is the contrast: signed, mailed, and IRS-stamped inside the window.
2Why it matters
Filed on time, the election would have taxed Okafor once, on zero: she paid exactly what the shares were worth. Without it, each vesting date is new pay, monthly, on 3,900,000 shares that finish vesting in August 2030. The company has to value its stock and withhold through payroll for every month already passed, and its own deduction depends on the W-2 reporting. The unpaid withholding, penalties, and interest sit inside the company Harbor Lane Ventures is investing in, and the CEO carries a personal tax bill that rises with the share price.
3Recommendation
Require the search before signing: Okafor's own records and email, formation counsel's file, a certified-mail receipt, an IRS-stamped copy. If the proof surfaces, it goes into the data room and this point closes. If it does not, seek a specific indemnity for the founder-level and company-level payroll tax exposure, escrowed, and make the payroll correction plan and the valuation record for each vesting date closing deliverables.
1What we found
3,900,000 shares bought August 26, 2024 for $390.00. The agreement recites an executed election; the file holds an unsigned, undated form and nothing from the IRS. The window closed September 25, 2024. Whitfield's package is complete.
2Why it matters
Without the election, every monthly vesting date through August 2030 is pay. The company owes withholding for each month already passed, and the CEO owes tax that grows with the share price.
3Recommendation
Search first: her records, formation counsel's file, a mail receipt, a stamped copy. If nothing surfaces, an escrowed specific indemnity, a payroll correction plan, and a valuation record for every vesting date.
Expected: a signed election plus proof it reached the IRS inside the 30-day window, an IRS-stamped copy or a certified-mail receipt. A recollection of mailing is not proof.
3,900,000shares bought August 26, 2024
$390paid, equal to their value
Sep 25, 2024the day the 30-day window closed
72monthly vesting dates through August 2030, each taxable without the election
Okafor restricted stock purchase agreement and Exhibit B; stock ledger.