Contract analysis

I. Executive Summary This memorandum summarizes the key findings from the initial phase of legal due diligence conducted on Coral Reef Hospitality Group, Inc. ("CRFH," the "Company," or the "Target") in connection with the proposed take-private acquisition of the Target by Ardent Capital Partners III LP ("Ardent," the "Sponsor," or the "Buyer"). This memorandum has been prepared by Calderwood & Harkness LLP ("C&H" or

II. Corporate Organization and Capitalization A. Organization and Good Standing The Target's full legal name is Coral Reef Hospitality Group, Inc. The Company was incorporated in the State of Delaware and is currently in good standing under the laws of that state. The Company's principal place of business is located at 2400 Bayshore Boulevard, Suite 300, Tampa, Florida 33629. The Company maintains a registered agent

III. Material Contracts A. Overview and Review Methodology We have reviewed the material contracts disclosed in the Company's SEC filings (including its Annual Report on Form 10-K for the fiscal year ended December 31, 2021, its Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) as well as those documents populated in the data room under the "Contracts" and "Commercial Agreements" folders. Our review fo

IV. Financial Overview A. Audited Financial Statements We have reviewed the Company's audited consolidated financial statements for the fiscal years ended December 31, 2021, 2020, and 2019, as filed with the SEC in the Company's Annual Reports on Form 10-K. The Company's independent auditor is Hargrove & Liddell CPAs LLP, a Tampa, Florida-based accounting firm. The key financial highlights for FY2021 are as follows:

V. Real Property and Leasehold Interests A. Property Portfolio Overview CRFH owns and/or leases 11 boutique resort and inn properties with an aggregate of 742 keys (rooms). The properties are geographically distributed as follows: A detailed property portfolio summary, including the name, location, number of keys, ownership structure (owned vs. leased), and key contract/lease terms for each property, is set forth in

VI. Intellectual Property A. Trademarks and Branding The Company operates its properties under the "Coral Reef Hospitality" brand and uses individual property names and logos for each of its 11 boutique resort and inn properties. We have reviewed available federal and state trademark registration records for the Company's principal marks. The Company holds federal trademark registrations with the United States Patent

VII. Employment and Benefits Matters A. Workforce Overview CRFH employs an estimated 460 individuals across its 11 properties and its corporate headquarters in Tampa, Florida. The workforce includes a mix of full-time salaried employees (primarily management and corporate staff), full-time hourly employees (front desk, housekeeping, food and beverage, maintenance), part-time employees, and seasonal employees. The hos

VIII. Litigation and Proceedings A. Pending Litigation We have reviewed the litigation disclosures in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as well as the documents populated in the "Litigation" folder of the data room. Based on our preliminary review, we have not identified any material pending litigation that would constitute a "showstopper" for the proposed transacti

IX. Regulatory and Licensing Matters A. Liquor Licenses Each of the Company's properties that operates food and beverage services holds a state or territorial liquor license. The transfer or reissuance of liquor licenses upon a change of control is a significant regulatory issue for the proposed transaction, as the hospitality properties' ability to serve alcoholic beverages is essential to their revenue generation a