Contract analysis

I. Executive Summary This Monthly Litigation Status Report covers the reporting period of May 1, 2025 through June 30, 2025, and provides an update on all material activity in Delano v. Stonefield Logistics Group Inc., Case No. 3:25-cv-01847-RBC, pending before the Honorable Rebecca Chen, United States District Judge for the Northern District of Texas, Dallas Division, with the Honorable Timothy Farrell, United State

II. Case Background Named plaintiff Marcus Delano, a former delivery driver at SLG's Fort Worth distribution hub (designated internally as HUB-01), filed the above-referenced action on April 30, 2025, in the United States District Court for the Northern District of Texas, Dallas Division. Delano alleges that SLG misclassified him and approximately 1,200 similarly situated delivery drivers as independent contractors i

III. Activity Report — June 2025 This section provides a detailed summary of all material litigation activity during the reporting period. A. Answer and Affirmative Defenses (Filed June 2, 2025) Calderwood & Harkness filed Stonefield Logistics Group Inc.'s Answer to Plaintiff's Original Complaint on June 2, 2025, within the time permitted by Federal Rule of Civil Procedure 12(a)(1)(A)(i), as extended by stipulation o

1. Independent Contractor Status. Drivers are bona fide independent contractors under the FLSA economic reality test, considering the totality of the circumstances, including their ownership of delivery vehicles, ability to accept or decline delivery assignments, per-delivery compensation structure, execution of ICOAs expressly designating the relationship as one of independent contractor, and opportunity for profit

2. Arbitration Clause and Collective Action Waiver (ICOA v3.0). Approximately 640 of the 1,187 putative collective members signed ICOA v3.0 (January 2023 revision), which contains a binding mutual arbitration clause and a collective action waiver enforceable under the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and controlling precedent. SLG reserves the right to move to compel individual arbitration as to these d

3. Statute of Limitations. Claims arising more than two years prior to the filing of the Complaint (i.e., before April 30, 2023) are time-barred under FLSA § 255(a), absent a showing of willful violation, which SLG denies. This defense may limit the recoverable period for a significant number of opt-in plaintiffs.

4. Good-Faith Defense. SLG acted in good faith and in conformity with, and in reliance on, the advice of its prior outside counsel, Pennfield & Daye LLP, which provided written legal opinions regarding the propriety of SLG's independent contractor classification of delivery drivers. This advice was rendered in connection with the drafting and revision of the ICOA in 2018, 2020, and 2023 and in connection with ongoing

5. Failure to State a Claim. Plaintiff fails to state a claim upon which relief can be granted with respect to certain of his claims. Additional affirmative defenses include, inter alia, the defense of estoppel, waiver, laches, failure to mitigate, and offset for earnings from other delivery platforms during the relevant period. The full roster of affirmative defenses is set forth in the Answer filed with the Court.

I. Insurance Coverage Update Formal notice of the Delano claim was provided to Broadleaf Insurance Company ("Broadleaf") under Employment Practices Liability Insurance ("EPLI") Policy No. BIC-EPL-2024-07831 via letter dated May 5, 2025. The key terms of the policy are as follows: • Policy Period: January 1, 2025 through January 1, 2026. • Self-Insured Retention (SIR): $2,000,000. • Policy Limit: $10,000,000 (aggregat

IV. Work Product and Internal Memoranda Completed During Period During the reporting period, Calderwood & Harkness prepared the following internal memoranda and work product in connection with this matter. All such documents are protected by the attorney-client privilege and the attorney work product doctrine and have been distributed only to authorized recipients.

1. ICOA Version Comparison Chart (May 12, 2025). A comprehensive comparison of material terms across the three versions of the Independent Contractor Operating Agreement: ICOA v1.0 (2018), ICOA v2.0 (August 2020), and ICOA v3.0 (January 2023). The chart addresses the following terms across all three versions: arbitration clause (absent in v1.0 and v2.0; present in v3.0), collective action waiver (absent in v1.0 and v

2. Memorandum re: Enforceability of ICOA v3.0 Arbitration and Collective Action Waiver (May 15, 2025). An analysis of the enforceability of the arbitration clause and collective action waiver contained in ICOA v3.0 under the Federal Arbitration Act and controlling Supreme Court and Fifth Circuit precedent. The memorandum concludes that the clause is likely enforceable under Granite Harbor Systems. v. Lewis, 584 U.S.

3. Driver Classification Analysis Memorandum — FLSA Economic Reality Test (May 20, 2025). A factor-by-factor analysis of the six-factor economic reality test applied in the Fifth Circuit to determine whether workers are employees or independent contractors under the FLSA. The memorandum evaluates each factor — (i) degree of control exercised by the alleged employer, (ii) the worker's opportunity for profit or loss, (

4. Texas Payday Law Supplemental Analysis (May 22, 2025). A supplemental memorandum assessing Plaintiff's state-law claims under the Texas Payday Law (Texas Labor Code Chapter 61), including the threshold question of whether the Texas Payday Law applies to individuals classified as independent contractors, the measure of damages under state law, and the interaction between the state-law claims and the FLSA collective

5. Damages Exposure Analysis Memorandum (June 5, 2025). A detailed damages exposure analysis modeling three scenarios: • Scenario A — Full Collective (1,187 drivers): Total potential exposure of approximately $73,958,409, including liquidated damages for willful violation under FLSA § 216(b). This scenario assumes conditional certification of the full proposed collective, 100% opt-in, and a finding that all drivers w

6. Memorandum re: Strategic Considerations — Motion to Compel Arbitration Timing (June 10, 2025). An analysis of the strategic considerations involved in determining the optimal timing for filing a motion to compel individual arbitration as to ICOA v3.0 signatories. The memorandum evaluates three options: (a) filing the motion before the conditional certification ruling, (b) filing the motion concurrently with the op

7. RouteSync Data & GPS Log Analysis Memorandum (June 25, 2025). A memorandum analyzing dispatch records from the RouteSync platform and GPS telematics data for Marcus Delano and a sample of fifty (50) drivers across five (5) of SLG's fourteen distribution hubs. The analysis examines patterns of delivery assignment, acceptance, completion, and cancellation; route adherence versus deviation; daily start and end times;

8. Subcontracting and Multi-Platform Engagement Memorandum (June 30, 2025). A memorandum analyzing the extent to which SLG drivers engaged in subcontracting of delivery assignments (permitted under the ICOA, subject to procedural requirements) and worked simultaneously for competing delivery platforms during their engagement with SLG. The analysis draws on available internal records, including RouteSync login data an

V. Upcoming Activities — July 2025 The following activities are anticipated during the month of July 2025:

1. Plaintiff's Motion for Conditional Certification. Plaintiff's Motion for Conditional Certification is expected to be filed on or about July 14, 2025, in accordance with the Scheduling Order. Calderwood & Harkness anticipates that Plaintiff will submit declarations from Delano and a small number of other drivers, along with a legal memorandum arguing that the proposed collective satisfies the "similarly situated" s

2. Preparation of Defendant's Response in Opposition to Conditional Certification. SLG's Response in Opposition is due August 13, 2025. Calderwood & Harkness is preparing the opposition brief and supporting materials, including: • Finalization of supporting declarations from Trevor Sandoval (VP of Operations), Karen Lund (Director of Driver Relations), and Dennis Faulkner (Hub Manager, HUB-01). These declarations wil

3. Stonefield's Responses to Plaintiff's First Set of Interrogatories. SLG's Objections and Responses to Plaintiff's First Set of Interrogatories are due July 21, 2025. Calderwood & Harkness is coordinating with SLG personnel to gather the necessary information and prepare substantive responses, subject to appropriate objections.

4. Receipt and Review of Plaintiff's discovery Responses. Plaintiff's responses to SLG's First Set of Interrogatories and First Set of Requests for Production are due July 23, 2025. Calderwood & Harkness will review the responses upon receipt and assess whether follow-up discovery or motion practice (e.g., motion to compel) is warranted.

5. Arbitration Motion Timing. Calderwood & Harkness will continue to evaluate the optimal timing for filing a motion to compel individual arbitration as to ICOA v3.0 signatories. This strategic decision will be finalized in consultation with Margaret Hollis and Nathan Okonkwo, with consideration given to the impact on conditional certification proceedings, the risk of waiver arguments, and the broader defense strateg

6. Privilege Log Preparation (Phase 1). Calderwood & Harkness will prepare the Phase 1 Privilege Log covering pre-litigation classification advice and related communications from SLG's prior outside counsel, Pennfield & Daye LLP, spanning the period from 2018 through 2024. Target completion for the Phase 1 Privilege Log is July 31, 2025.

7. Broadleaf Insurance Coordination. Calderwood & Harkness will continue to monitor Broadleaf's coverage position and respond to any additional information requests from the insurer. Any material developments in coverage will be reported to the client team promptly.

8. Client Strategy Call. We recommend scheduling a call with the client team — including Margaret Hollis, Nathan Okonkwo, and Aaron Turcotte — during the week of July 7, 2025, to finalize the opposition strategy, discuss the arbitration motion timing, and address mediation timing considerations raised by Ridgepoint Capital Management LLC. A calendar invitation will follow under separate cover.

VI. Staffing The current matter staffing for Delano v. Stonefield Logistics Group Inc. is as follows: External Expert: No changes to the matter staffing are anticipated during the next reporting period. If additional staffing is required — for example, in connection with large-scale document review or deposition preparation — Calderwood & Harkness will advise the client team in advance and will ensure that any additi

VII. Budget and Billing Summary A. Fee Summary — Through June 30, 2025 The following table summarizes legal fees incurred by Calderwood & Harkness through June 30, 2025: Note: Total legal fees are rounded to $87,400 for reporting purposes. Billing rates are established pursuant to the Ridgepoint Capital portfolio company panel agreement. B. Expert Costs — Through June 30, 2025 Corbin Risk Advisors LLC has invoiced th

VIII. Risk Assessment Update The overall risk posture in Delano v. Stonefield Logistics Group Inc. remains consistent with the assessment set forth in the Initial Case Assessment Memorandum dated May 9, 2025. Calderwood & Harkness continues to evaluate the key risk factors as follows: Classification Risk. The core merits question in this case is whether SLG's delivery drivers are employees or independent contractors

IX. Recommended Next Steps / Action Items Based on the current status of the case and the anticipated activity in July 2025, Calderwood & Harkness recommends the following next steps and action items:

1. Opposition to Conditional Certification. Prepare and finalize SLG's Response in Opposition to Plaintiff's Motion for Conditional Certification, due August 13, 2025. This is the highest-priority deliverable for the next reporting period.

2. Supporting Declarations and Expert Declaration. Finalize supporting declarations from Trevor Sandoval, Karen Lund, and Dennis Faulkner, as well as the expert declaration of Dr. Priya Ramanathan, by July 25, 2025, to allow sufficient time for review and incorporation into the opposition brief.

3. Interrogatory Responses. Complete SLG's Objections and Responses to Plaintiff's First Set of Interrogatories by the July 21, 2025 deadline.

4. Privilege Log (Phase 1). Prepare the Phase 1 Privilege Log covering communications between SLG and its prior outside counsel, Pennfield & Daye LLP, relating to independent contractor classification advice during the period 2018 through 2024. Target completion: July 31, 2025.

5. Arbitration Motion Strategy. Continue strategic evaluation of the optimal timing for filing a motion to compel individual arbitration as to ICOA v3.0 signatories, with input from Margaret Hollis and Nathan Okonkwo. A recommendation will be presented during the client strategy call referenced below.

6. Client Strategy Call. Schedule a call with the client team — Margaret Hollis, Nathan Okonkwo, and Aaron Turcotte — during the week of July 7, 2025, to finalize the opposition strategy, discuss arbitration motion timing, and address mediation timing considerations raised by Ridgepoint Capital Management LLC.

7. Insurance Coverage Monitoring. Continue to monitor Broadleaf Insurance Company's coverage position and respond to any additional information requests from the insurer. Report any material developments to the client team promptly.

X. Confidentiality Notice This Monthly Litigation Status Report constitutes a privileged and confidential attorney-client communication and attorney work product prepared by Calderwood & Harkness LLP. It is prepared solely for Stonefield Logistics Group Inc. and its authorized representatives, including Ridgepoint Capital Management LLC in its capacity as equity sponsor of Stonefield Logistics Group Inc. The informat