Contract analysis

I. Interview Logistics Date and Time of Interview: August 15, 2023, 10:00 a.m. to approximately 12:45 p.m. EDT. Location: Calderwood & Harkness LLP, 200 South Biscayne Boulevard, Suite 4400, Miami, Florida 33131, Conference Room 44-B. Interviewee: William "Bill" Gentry, CPA, Lead Engagement Partner, Hargrove, Steen & Aldrich LLP ("HSA"), 101 East Kennedy Boulevard, Suite 3200, Tampa, Florida 33602. Interviewers: Howa

II. Background on HSA's Engagement with VHG Mr. Gentry provided background information regarding HSA's audit engagement with VHG and his own role within that engagement. Mr. Gentry stated that he has served as the lead engagement partner for the VHG audit relationship since the 2020 audit year, a period of approximately three years. Prior to assuming the lead engagement partner role, Mr. Gentry served as the concurri

III. HSA's Q1 2023 Interim Review — Identification of Revenue-Recognition Issue A. Scope of Interim Review Mr. Gentry described the work performed by HSA in connection with its interim review of VHG's first-quarter 2023 financial statements, covering the quarter ending March 31, 2023. He stated that HSA conducted its interim review in accordance with applicable standards of the Public Company Accounting Oversight Boa

IV. June 19, 2023 Communication to VHG Management and Audit Committee A. Nature and Recipients of the Communication Mr. Gentry described the communication he made to VHG management and the Audit Committee on June 19, 2023. On that date, Mr. Gentry communicated his findings to both Thomas Rhett Griffith, VHG's Chief Financial Officer, and Diane Kowalski, Chair of the Audit Committee of VHG's Board of Directors. The co

V. HSA's Prior Audit Work on VCR Revenue Recognition A. FY 2022 Annual Audit Mr. Gentry was asked about HSA's prior audit work on VCR's revenue recognition, with particular focus on whether the premature recognition of timeshare-interest deposits could have or should have been detected during earlier audit engagements. Mr. Gentry stated that during the fiscal year 2022 annual audit, HSA's substantive testing of VCR r

VI. HSA's Knowledge of Expense-Reporting Irregularities Mr. Gentry was asked about HSA's knowledge of the expense-reporting irregularities involving fictitious vendor invoices that are also a subject of this investigation. Mr. Gentry stated that HSA had not independently identified the expense-reporting irregularities involving fictitious vendor invoices prior to the commencement of the investigation. He confirmed th

VII. Mr. Gentry's Assessment of VCR Internal Controls Environment Mr. Gentry was asked to provide his overall assessment of the internal controls environment at VCR, based on his observations as lead engagement partner over the course of multiple audit cycles. Mr. Gentry characterized VCR's finance team as relatively lean for the volume of transactions that the division processed, particularly during the ramp-up of t

VIII. Post-June 19, 2023 Interactions Mr. Gentry described his interactions with VHG and its representatives following his June 19, 2023 communication to CFO Griffith and Audit Committee Chair Kowalski. Mr. Gentry confirmed that after his June 19, 2023 communication, his next substantive interaction regarding the revenue-recognition issue was with the Audit Committee and VHG General Counsel Patricia Navarro. Ms. Nava

IX. Potential Scope of Revenue Overstatement — Mr. Gentry's Preliminary View Mr. Gentry was asked to provide his preliminary assessment of the potential scope and duration of the revenue overstatement identified by HSA. Mr. Gentry stated that, based on HSA's preliminary analytical work, the revenue-recognition issue likely extended beyond Q1 2023. He indicated that the third quarter of 2022 (Q3 2022) appeared to be t

X. Documents Referenced or Provided by Mr. Gentry During the course of the interview, Mr. Gentry referenced the following documents:

1. HSA's Q1 2023 Interim Review Work Papers. Mr. Gentry referenced the work papers prepared by HSA's engagement team in connection with its interim review of VHG's Q1 2023 financial statements. These work papers are retained by HSA at its Tampa office. The work papers were not produced at the interview but are subject to potential request through the coordination protocol established by the August 9, 2023 letter from

2. June 19, 2023 Written Summary Email. Mr. Gentry referenced the written summary that he transmitted via email to CFO Thomas Rhett Griffith and Audit Committee Chair Diane Kowalski on June 19, 2023, following the telephone conference call on the same date. This email set forth the substance of HSA's findings regarding the $9.8 million in prematurely recognized timeshare-interest revenue and the associated potential

3. HSA's FY 2022 Management Letter. Mr. Gentry referenced the management letter issued by HSA to VHG's Audit Committee in connection with the fiscal year 2022 annual audit. The management letter included observations on the segregation of duties within VCR's finance function, among other matters. No documents were produced by Mr. Gentry at the interview. Document production from HSA to the investigation team is to be

XI. Conclusion and Follow-Up Items The interview concluded at approximately 12:45 p.m. EDT. Mr. Gentry indicated his willingness to make himself available for follow-up questions as the investigation progresses, subject to the scheduling requirements of his professional obligations. The following follow-up items were identified during or as a result of the interview:

1. Request HSA's Q1 2023 interim review work papers related to VCR revenue recognition through the coordination protocol established by the August 9, 2023 letter.

2. Request a copy of the June 19, 2023 email from Mr. Gentry to CFO Thomas Rhett Griffith and Audit Committee Chair Diane Kowalski, together with any attachments transmitted with that email.

3. Request HSA's fiscal year 2022 management letter addressed to VHG's Audit Committee, and any prior management letters (fiscal years 2020 and 2021) that include observations or recommendations referencing VCR's internal-control environment, segregation of duties, or revenue-recognition practices.

4. Consider whether additional members of HSA's VHG engagement team should be interviewed, including members of the audit team who performed field work at VCR's Destin office and who were directly involved in the substantive testing of VCR revenue transactions during the fiscal year 2022 annual audit and the Q1 2023 interim review. This memorandum is to be filed in the investigation matter file under Matter No. 1021-