Final Valuation: The Offer to Purchase should provide the Sale Price to be subject to final valuation as at ‘Adjustment Date’ and provide that final valuation be calculated on the same formula as that calculating the Sale Price as at the Offer to Purchase.

Adjustment Date, typically scheduled for the last day of the month prior to the Closing Date, will ‘effectively’ become the last business date under the seller’s ownership. Of course the business will not actually change hands until the sale closes at Closing Date, but closing documents will effect the change to be as at Adjustment Date.

Assuming the business is a going concern, conducting business, generating revenues, incurring costs and expenses, and generating earnings or losses that will accrue to balance sheet, the balance sheet component of the valuation and Sale Price will change with every transaction.

The selling process should begin with an initial valuation based on latest financials available at that time, and then update monthly or quarterly thereafter. The valuation should be updated to the latest month-end preceding the Offer to Purchase date, providing the Offer Price and then again based on the same formula, on Adjustment Date, providing the Closing Price.