// methodology
How We Analyze
A systematic, repeatable framework built on publicly available data and independent verification.
PILLAR 01
Management Integrity
What we examine
- ›Executive background checks
- ›Prior litigation & regulatory history
- ›Conflict mapping (related-party roles)
- ›Track record at prior issuers
Data sources
- ›SEC EDGAR (DEF 14A, S-1)
- ›Court records (PACER, state)
- ›FINRA BrokerCheck
- ›LinkedIn / professional verification
Scoring criteria
1 = undisclosed prior frauds. 10 = clean, verified, decade+ public-company experience.
Common red flags
- !Undisclosed prior public companies
- !Family members in vendor roles
- !Address overlap with shell entities
PILLAR 02
Financial Integrity
What we examine
- ›XBRL validation against filed statements
- ›Liquidity & solvency ratios
- ›Going concern footnote analysis
- ›Revenue quality (cash vs. accrual)
Data sources
- ›SEC EDGAR (10-K, 10-Q)
- ›OTC Markets disclosure
- ›Auditor PCAOB status
Scoring criteria
1 = material misstatements or qualified opinion. 10 = clean Big-4 audit, positive operating cash flow.
Common red flags
- !Recurring restatements
- !Auditor turnover
- !Cash flow / earnings divergence
PILLAR 03
Operational Verification
What we examine
- ›Customer existence confirmation
- ›Facility / address verification
- ›Revenue source traceability
- ›Supplier relationships
Data sources
- ›State corporate registries
- ›UCC filings
- ›Physical / satellite verification
- ›Customer outreach
Scoring criteria
1 = phantom operations. 10 = verified facilities, named customers, recurring revenue.
Common red flags
- !Virtual-office HQs
- !Customer concentration >50% one buyer
- !Revenue spikes without staffing
PILLAR 04
Governance
What we examine
- ›Board independence ratio
- ›Related-party transactions
- ›Voting structure & dual-class shares
- ›Committee composition
Data sources
- ›DEF 14A proxy statements
- ›Bylaws / charter filings
Scoring criteria
1 = single-insider control, no independent board. 10 = majority-independent board, clean RPT log.
Common red flags
- !Sub-50% independent board
- !Insider voting supermajority
- !Undisclosed compensation arrangements
PILLAR 05
Disclosure Compliance
What we examine
- ›Filing timeliness (NT filings, lateness)
- ›Completeness scoring
- ›Amendment history
- ›Material event responsiveness
Data sources
- ›SEC EDGAR filing index
- ›OTC Markets tier history
Scoring criteria
1 = chronic delinquency. 10 = on-time, complete, no amendments in 3 yrs.
Common red flags
- !Recurring NT 10-K/Q
- !Late 8-K disclosures
- !Material amendments to recent filings
PILLAR 06
Market Position
What we examine
- ›Competitive landscape analysis
- ›TAM validation against public data
- ›Customer concentration
- ›Pricing power
Data sources
- ›Industry trade data
- ›Patent / trademark databases
- ›Public competitor filings
Scoring criteria
1 = unsupported TAM claims. 10 = defensible niche, verified pipeline, low concentration.
Common red flags
- !TAM claims with no methodology
- !Competitor revenue inversion
- !Press-release-driven 'partnerships'
PILLAR 07
Red Flag Register
What we examine
- ›Pattern matching against 40+ indicators
- ›Promoter network analysis
- ›Share structure manipulation signals
- ›Reverse merger residue
Data sources
- ›Historical issuer database
- ›Promoter disclosure filings
- ›Trading pattern analysis
Scoring criteria
1 = 5+ critical red flags. 10 = zero indicators triggered.
Common red flags
- !Recent reverse splits + name changes
- !Toxic convertible structures
- !Known promoter networks
// data sources
Primary filings. Verified records. Nothing second-hand.
- SEC EDGAR filings (10-K, 10-Q, 8-K, DEF 14A) ✓
- OTC Markets disclosure statements ✓
- State corporate registries ✓
- Court records (PACER, state courts) ✓
- UCC filings ✓
- Patent / trademark databases ✓
- LinkedIn and professional verification ✓
- Physical address and facility verification ✓
// independence standards
Conflicts disclosed. Compensation in cash. Period.
No equity compensation from covered companies
No promotional relationships
No advisory roles with covered entities
All fees disclosed in report appendix
Analyst rotation policy