Contract analysis

I. Introduction and Purpose This memorandum sets forth the scope, methodology, work plan, and staffing for the internal investigation that Calderwood & Harkness LLP ("C&H") has been retained to conduct on behalf of the Audit Committee (the "Committee") of the Board of Directors of Verimark Hospitality Group Inc. ("VHG" or the "Company"), a Delaware corporation publicly traded on the Nasdaq Stock Market (ticker: VMRK)

II. Background and Origin of the Investigation A. HSA's Identification of Potential Material Weakness On June 19, 2023, William "Bill" Gentry, CPA, lead engagement partner at Hargrove, Steen & Aldrich LLP ("HSA"), VHG's independent registered public accounting firm (101 East Kennedy Boulevard, Suite 3200, Tampa, FL 33602), communicated to VHG Chief Financial Officer Thomas Rhett Griffith and Audit Committee Chair Dia

III. Scope of the Investigation A. Revenue-Recognition Irregularities (Workstream 1) The first principal workstream of the investigation will focus on whether VCR prematurely recognized revenue from timeshare-interest purchase deposits by recording such deposits as completed-sale revenue upon execution of purchase agreements rather than upon expiration of the statutory ten-day rescission period prescribed by Florida

IV. Investigation Methodology A. Document Collection and Review

1. Document Preservation Document-preservation notices are being issued today, July 24, 2023, to ensure the preservation of all potentially relevant documents and electronically stored information ("ESI"). Two categories of preservation notices are being issued: • Company-Wide Preservation Notice. A general preservation notice will be issued to all VHG officers and relevant corporate personnel, directing them to pres

2. Custodian Identification Eleven (11) custodians have been preliminarily identified for potential document collection. These custodians include:

1. Garrett W. Daskine — VCR Division President

2. Nicole Prescott — VCR VP of Finance

3. Ryan Mateo Serrano — VCR Controller

4. Thomas Rhett Griffith — VHG CFO

5. Patricia Navarro — VHG General Counsel

6. Six (6) additional VCR finance, operations, and sales personnel whose identities will be confirmed following initial scoping interviews and a review of VCR's organizational chart and reporting lines Based on our preliminary assessment, we anticipate collecting documents from eight (8) of the eleven (11) identified custodians. The remaining three (3) custodians will be subject to further assessment based on initial

3. Collection and Processing C&H will retain Triton discovery Solutions Inc. ("Triton"), located at 500 Seventh Avenue, 14th Floor, New York, NY 10018, as the e-discovery vendor for the investigation. Triton will provide hosting, processing, de-duplication, de-NISTing, and review-platform services. Triton is a nationally recognized e-discovery firm with extensive experience in complex internal investigations and SEC-

4. Document Review C&H will employ a TAR 2.0 (Technology-Assisted Review) predictive-coding workflow to prioritize and expedite the review of the collected documents. TAR 2.0 is a continuous active learning methodology in which a machine-learning algorithm is trained on the review team's coding decisions in real time, allowing the system to progressively prioritize the most likely responsive documents for human revie

1. Interview Protocols All witness interviews will be conducted by C&H attorneys using standardized protocols designed to protect the attorney-client privilege and to ensure the accuracy and completeness of the information obtained. Each interview of a VHG or VCR employee will begin with the administration of an Upjohn warning, advising the interviewee of the following: • C&H represents the Audit Committee of the Boa

2. Planned Interview Schedule The investigation will involve approximately 18 to 22 interviews covering an estimated 15 to 18 unique witnesses. The interview schedule is organized into three phases, designed to ensure that C&H has a sufficient evidentiary foundation before conducting subject interviews. Phase 1 Interviews (August 2023): Non-Subject, Foundational Interviews. The first phase of interviews will focus on

V. Investigation Phases and Timeline The investigation is organized into four phases, as summarized below. The timeline is preliminary and may be adjusted based on the volume and complexity of the evidence developed, the availability of witnesses, and any unforeseen developments. Phase 1: Engagement, Scoping, and Document Collection (July 24 – August 31, 2023) Phase 1 encompasses the initiation of the investigation,

VI. Staffing A. Calderwood & Harkness LLP Investigation Team The following C&H attorneys and professionals have been assigned to the investigation: Howard Quinn will serve as lead investigation counsel, with primary responsibility for all Audit Committee communications, strategic direction of the investigation, witness interviews of senior personnel and investigation subjects, and overall management of the investigat

VII. Coordination with Third Parties A. Hargrove, Steen & Aldrich LLP (Independent Auditor) C&H will establish protocols for coordination between the investigation and HSA's ongoing audit activities. The coordination is necessary because HSA's quarterly reviews and annual audit of VHG's financial statements will continue during the pendency of the investigation, and the investigation's findings will likely be relevan

VIII. Privilege and Confidentiality Protocols The maintenance of the attorney-client privilege and the work-product doctrine is of paramount importance to the investigation. The following protocols will be observed throughout the investigation to protect these privileges: All investigation work product — including memoranda, correspondence, notes, analyses, reports, and other documents prepared by C&H, Crestline, or