Mergers and acquisitions, IPO, audit scenarios must be selected: Filez VDR virtual data room makes confidential file management compliant and efficient

I. The "Confidentiality Management dilemma" in highly sensitive scenarios: not "storing good files", but "controlling risks and maintaining compliance"

Mergers and acquisitions (M&A), IPOs, and audits are the three most sensitive, highly compliant, and collaborative scenarios in corporate operations. The management of confidential documents—including due diligence reports, financial data, equity agreements, and audit working papers—directly determines project success. Yet 85% of companies still rely on the outdated "email + cloud storage + physical USB drives" approach, trapped in four critical pain points:

· Security: confidential documents "flow naked"

During M&A due diligence, buyers and sellers typically exchange over 1,000 core documents (including client lists and patent certificates). Traditional email attachments are often intercepted or forwarded during transmission. In a manufacturing industry merger case, the target company's "core technical specifications" were compromised when emails containing sensitive data were mistakenly sent to third parties, resulting in valuation negotiations being hindered and losses exceeding 20 million yuan. During IPO filing stages, companies must submit "draft prospectuses and historical financial statements" to securities firms, law firms, and the China Securities Regulatory Commission (CSRC). When storing these documents through standard cloud storage services with lax access controls, external personnel could download complete files, posing risks of "data leakage to competitors".

· Lack of compliance: audit trail "no trace"

In audit scenarios, accounting firms need to retrieve historical vouchers and contract documents from 3-5 years prior. Under traditional management models, document modification records and access trails are scattered across different systems (such as OA approval logs and local file attributes), making it impossible to establish a complete traceability chain. During an audit of a listed company, the loss of modification records for the "2022 Q3 Sales Contract" prevented verification of data authenticity, resulting in delayed submission of the audit report and a regulatory warning letter from authorities. During IPO processes, regulators require "full documentation of all file operations." Traditional tools fail to meet the "full lifecycle traceability" requirements stipulated by the Securities Law and the Measures for the Administration of Information Disclosure by Listed Companies. Companies had to deploy an additional three-person team to manually organize logs, a process that took one month.

· Collaboration is inefficient: cross-party linkage is "severely stuck"

M&A due diligence requires collaboration among five key parties: buyers, sellers, investment banks, law firms, and accounting firms. In a typical internet company acquisition case, the due diligence report underwent 12 versions due to asynchronous revisions among these parties, with the merging process taking three days – extending the entire due diligence cycle from 45 to 60 days. In audit scenarios, obtaining supporting documents for accounts receivable typically requires two days of offline communication and couriered files. According to a statistical analysis by an accounting firm, 30% of audit project time is wasted in the ineffective cycle of "document retrieval, transmission, and confirmation".

· The confusion of power: "You can't see what you should see, but you see too much of what you shouldn' t."

During an IPO process, securities firms must access "financial data," while law firms only need to review "legal documents." However, traditional permission management systems operate on a "folder" basis, allowing brokers to view irrelevant legal contracts and permitting law firms to access sensitive financial data. A tech company's IPO filing encountered regulatory inquiries when law firm staff accidentally downloaded "non-public earnings forecasts" due to misconfigured permissions. In M&A scenarios, closing due diligence requires partial document sharing with investors. Traditional tools lack time/number-of-pages-based permission controls, enabling investors to prematurely obtain complete due diligence reports and undermine negotiation leverage.

II. Filez VDR Virtual Data Room: "Confidentiality Management Solution" for Three Major Scenarios —— Security as the Foundation, Compliance as the Guideline, Efficiency as the Priority

Filez VDR (Virtual Data Room), Lenovo's confidential document management platform specifically designed for high-security scenarios, is not merely an "upgraded version of ordinary cloud storage services." Instead, it has become a "must-have tool" for mergers and acquisitions, IPOs, and audits through its "scenario-based security controls, end-to-end compliance traceability, and cross-party collaboration optimization." Its core value lies in precisely addressing three major pain points across different scenarios:

1. Security protection: from "passive storage" to "active insurance control", guard the "first line of defense" for confidential documents

Filez VDR builds a secure closed loop with "military-grade encryption + refined permissions" to address the risk of "data leakage" in highly sensitive scenarios:

· Full link encryption: files are locked from upload to view

The system employs AES-256 encryption for comprehensive protection across all stages including file upload, storage, transmission, and preview. Even if the server is compromised, hackers cannot decrypt the data. It supports "private cloud deployment" where all file data remains securely stored on enterprise-owned servers, complying with the "Data Security Law" requirement for "localization of core data". In a financial institution's acquisition case, Filez VDR's private cloud deployment ensured due diligence files never left the corporate network, effectively eliminating data leakage risks associated with "third-party server storage".

· Dynamic permission control: "who can see, what to see, how to see" is fully controllable

Supports three-tier permission segmentation of "Role-File-Operation": In M&A scenarios, "Buy-side Analysts" can be granted "View only the first 10 pages of financial statements, no downloads allowed" permissions, while "Buy-side Lawyers" receive "View legal contracts, allow annotations but prohibit screenshots." For IPO scenarios, "CSRC reviewers" are granted "72-hour access to prospectuses with real-time operational tracking reporting." During a listed company's IPO, this feature enabled "different institutions to view only corresponding domain-specific documents," achieving a 90% improvement in permission precision.

· Anti-traceability: Every operation is "traceable and traceable"

The "Dynamic Watermark" feature automatically overlays the viewer's name, timestamp, and IP address when previewing files, enabling source tracing even if screenshots are captured. The system-level protection against screenshot/record restrictions prevents unauthorized file copying. In a merger case where investors leaked due diligence data, Filez VDR's watermark technology traced the specific individual, allowing timely legal action to prevent further losses.

2. Compliance traceability: from "manual recording" to "automatic trace", to meet the requirements of "full link audit"

Filez VDR has a built-in "compliance base" that automatically generates regulatory-compliant traceability records and solves the "compliance proof" problem in three scenarios:

· Full operation log: every step is "written in the open"

Automatically records "file uploaders, modification times, view counts, download history, and annotation content". The logs are tamper-proof and permanently retained, supporting multi-dimensional filtering for export by "time, role, or file type". In audit scenarios, accounting firms can directly retrieve Filez VDR logs without manual organization by enterprises. After implementation, a specific accounting firm reduced audit trail traceability time from 5 days to just 1 hour.

· Industry compliance adaptation: "Out of the box" compliance with scenario regulations

Automatically monitor compliance with regulatory frameworks for mergers and acquisitions (e.g., FCPA), IPOs (e.g., CSRC's "Q&A on Initial Public Offering Business"), and audits (e.g., PCAOB audit standards). The system automatically verifies regulatory compliance through document operations, such as requiring "revision notes + approval records" when modifying IPO documents. A company preparing for an IPO successfully passed the CSRC's first-round inquiry by using Filez VDR to automatically complete compliance documentation for prospectus revisions.

· File life cycle management: "Automatic disposal when expired" is not a violation

The system supports configuring "validity periods" for files, automatically triggering the "archiving/disposal" process upon expiration while maintaining disposal records. After audit completion, users can instantly "freeze audit working papers" to prevent any modifications, complying with the requirements of the "Management Measures for Audit Archives of Accounting Firms". A company successfully archived over 1,000 audit working papers through Filez VDR's automated archiving system post-audit, achieving a 100% compliance rate in archival standards.

3. Collaboration efficiency: From "cross-platform折腾" to "one-stop linkage", accelerate project progress

Filez VDR deeply integrates "file management and scenario collaboration" to solve the "efficiency black hole" of cross-party linkage:

· Multi-terminal collaborative editing: multiple modifications "real-time synchronization without fighting"

The platform enables collaborative editing of M&A due diligence reports, IPO prospectuses, and related documents through a "multi-user online editing system," ensuring real-time synchronization of revisions with clear annotations like "Editor + Revised Content" to prevent version conflicts. In an IPO project, a leading investment bank collaborated with four partners—including corporate counsel, law firms, and accounting firms—to collaboratively revise the prospectus using Filez VDR. This initiative reduced version conflicts from 80% to 5%, while cutting the finalization time for the prospectus from 20 days to just 8 days.

· Intelligent retrieval and classification: find files "1 second location"

The system provides predefined document classification templates for various scenarios including mergers and acquisitions (such as "financial due diligence/legal due diligence/business due diligence"), IPOs (like "prospectus/financial statements/legal opinions"), and audits (e.g., "certificates/contracts/bank statements"). Its natural language search feature (e.g., searching for "Q22023 accounts receivable contracts") boosts retrieval efficiency by 90%. In audit scenarios, auditors can locate supporting documents for specific transactions in just 10 seconds – a dramatic reduction from the traditional 30-minute process.

· Cross-facility communication embedded: "Look at the document + give comments" without disconnect

The system enables precise document annotation (e.g., marking "requires bank statement supplementation" next to specific data in audit working papers), with real-time synchronization to relevant parties. Users can initiate annotation discussions without switching between WeChat and email platforms. In a merger case, when the buyer's legal team annotated "requires patent validity certification" in the due diligence report, the seller promptly uploaded supplementary documents within one hour, achieving a 70% improvement in communication efficiency.

3. Scenario implementation: How does Filez VDR become the "must-have tool" for three major scenarios?

1. M&A scenario: 60 days due diligence cycle compressed to 40 days, confidential leakage risk reduced to 0

Pain points of a manufacturing enterprise (target party) merger and acquisition:

· More than 1500 due diligence documents need to be opened to 3 investors. Traditional email transmission is easy to leak and the permission cannot be controlled;

· The five parties collaborated to revise the due diligence report, but the version was chaotic and the merger took three days;

· After the end of the audit, there is no way to trace the file viewing track, and there is a hidden danger of data leakage.

Filez VDR solution:

· Upload documents according to the "financial/legal/business" classification, and assign "differentiated permissions" to the three investors (for example, investor A only looks at financial data, while investor B looks at business data);

· 4. Online collaborative modification of due diligence report, real-time synchronous modification of content, version conflict rate reduced to 3%;

· Enable dynamic watermark and operation log to trace the document viewing record.

Implementation effect: The due diligence cycle was shortened from 60 days to 40 days, no confidential leakage occurred, and investor satisfaction increased by 90%.

2. IPO scenario: Regulatory response time reduced by 50% and compliance costs reduced by 40%

Pain points of IPO application for a technology company:

· It is necessary to submit more than 2000 documents to securities brokers, law firms, accounting firms and China Securities Regulatory Commission. The authorization control is extensive and it is easy to access irrelevant data;

· The revised records of the prospectus are scattered, and it takes a team of three people to manually organize them for seven days during the regulatory inquiry;

· The retrieval of audit papers requires offline communication, and a single retrieval takes 2 days.

Filez VDR solution:

· According to the classification of "application materials/audit working papers/legal documents", four parties are assigned "scenario-based permissions" (for example, the CSRC only looks at application materials, and auditors only look at working papers);

· Automatically record the modification of prospectus and approval opinions, and export a complete retrospective report within 1 hour when regulatory inquiries are made;

· Auditors can access the audit notes online, which supports accurate annotation, and the retrieval time is reduced from 2 days to 10 minutes.

Implementation effect: IPO application cycle is shortened from 18 months to 15 months, regulatory inquiry response time is reduced by 50%, compliance labor cost is reduced by 40%.

3. Audit scenario: Audit efficiency increased by 60%, and compliance rate of audit paper filing was 100%

Pain points of annual audit of listed companies:

· The auditor is required to provide 8000+ certificates and contracts of 5 years, which are traditionally stored on local servers. The auditor needs to retrieve them on site, which takes 10 days;

· During the audit process, documents need to be supplemented, which is easy to be omitted through email transmission and high communication cost;

· At the end of the audit, the audit paper should be archived manually, which takes one week and is prone to errors.

Filez VDR solution:

· Upload the five-year documents in advance to VDR according to "year/month/credit type", and auditors can remotely access them without on-site office;

· The auditor annotated "additional information is needed" in the document, and the enterprise uploaded it in real time with zero delay;

· After the audit, the audit working paper is archived in one click and the archiving log is automatically generated to comply with the audit criteria.

Implementation effect: The audit cycle is shortened from 45 days to 18 days, the efficiency is increased by 60%, the compliance rate of working paper archiving is 100%, and no regulatory problems have occurred.

IV. Conclusion: Filez VDR—— "The Cornerstone of Confidentiality Management" in High-Sensitivity Scenarios

Confidential document management in M&A, IPO, and audit scenarios fundamentally requires "balancing security with efficiency while establishing closed-loop compliance." Traditional tools only address basic "file storage" needs, whereas Filez VDR has become the "essential solution" —— through "scenario-based security controls, full-chain compliance traceability, and one-stop collaborative optimization." It not only safeguards confidential documents but also accelerates project timelines and reduces compliance costs through efficiency improvements, enabling enterprises to "collaborate with confidence and advance smoothly" in high-risk scenarios.

In the current situation of intensified merger and acquisition competition, stricter IPO supervision and higher audit requirements, choosing Filez VDR means choosing "using professional tools to control risks, maintain compliance, improve efficiency and reduce costs", which is the core guarantee for enterprises to stand out in highly sensitive scenarios.