Contract analysis

I. Executive Summary This memorandum analyzes whether the proposed mezzanine financing from Pinnacle Bridge Capital Partners, LP (together with its affiliated fund vehicle, "Pinnacle Bridge") and the associated issuance of equity warrants to Pinnacle Bridge triggers regulatory suitability or licensing requirements under Nevada gaming law. In addition, this memorandum addresses whether parallel considerations arise un

II. Background A. Redstone Gaming Corp. — Regulatory Profile Redstone Gaming Corp. is a Nevada corporation incorporated in 2015 and publicly traded on the Nasdaq Global Select Market under the ticker symbol "RDGM." The Company is headquartered at 4250 South Decatur Boulevard, Suite 1100, Las Vegas, Nevada 89103. RGC's executive management team includes Gerald "Gerry" Navarro (Chief Executive Officer), Priya Sandoval

III. Nevada Gaming Regulatory Framework A. Overview of NRS Chapter 463 and NGCB Regulations Nevada's gaming regulatory framework is widely regarded as the most comprehensive in the United States and serves as the model upon which many other states have based their own gaming regulatory statutes. The cornerstone of Nevada's regulatory scheme is NRS Chapter 463, which establishes the licensing, regulation, and control

IV. Analysis of Current Warrant Coverage A. Calculation of Warrant Ownership Percentage The fundamental question presented by the proposed mezzanine financing is whether the issuance of Warrants to Pinnacle Bridge results in the Fund acquiring beneficial ownership of 5% or more of RGC's outstanding voting securities, thereby triggering the suitability filing requirements under NRS 463.643 and NGCB Regulation 15.585.

V. PIK Accrual and Threshold Creep Risk A. Mechanics of PIK Interest Compounding As described in Section II.B, the Mezzanine Note provides for a PIK interest component of 3.00% per annum, compounding quarterly. Under the PIK mechanism, the 3.00% per annum interest is not paid in cash but is instead added to the outstanding principal balance of the Mezzanine Note at the end of each quarterly interest period. The PIK i

VI. Multi-Jurisdictional Considerations A. Arizona Department of Gaming RGC holds gaming licenses issued by the Arizona Department of Gaming in connection with the Company's tribal gaming management operations conducted through RTM. Arizona's gaming regulatory framework is established by A.R.S. § 5-601 et seq. and is supplemented by the tribal-state gaming compacts entered into between the State of Arizona and the va

VII. Collateral and Real Property Lien Restrictions The proposed mezzanine security structure includes a second-priority pledge of 100% of the equity interests in RDW and RTM, together with an assignment of certain intellectual property assets related to the RedBet proprietary wagering software. Importantly, the collateral package does not include any lien on real property associated with RGC's gaming operations. Thi

VIII. Interaction with Existing Senior Credit Facility The gaming regulatory analysis set forth in this memorandum is independent of, and in addition to, the consent and intercreditor requirements arising under RGC's existing senior credit facility. For completeness, we note the relevant cross-reference. RGC is party to a Second Amended and Restated Credit Agreement, dated March 15, 2021 (as amended, the "Senior Cred

Section 7.03(b) of the Senior Credit Agreement contains a negative covenant prohibiting RGC from incurring subordinated indebtedness in excess of $10,000,000 without the prior written consent of the Administrative Agent and the Required Lenders (defined as lenders holding more than 50% of the aggregate commitments and outstanding loans under the facility). The proposed $35,000,000 Mezzanine Note exceeds this threshol

IX. Conclusions and Recommendations Based on the foregoing analysis, C&H provides the following conclusions and recommendations:

1. No current suitability filing required. The proposed 3.00% warrant coverage (1,650,000 shares of RGC common stock) is below the 5% beneficial ownership threshold under NRS 463.643 and NGCB Regulation 15.585. Accordingly, neither Pinnacle Bridge Capital Partners, LP, Pinnacle Bridge Mezzanine Opportunities Fund IV, LP, Pinnacle Bridge Capital Management, LLC, nor the individual principals of the General Partner (Vi

2. PIK accrual and threshold creep risk flagged. Although the 3.00% PIK interest component does not directly increase the number of Warrant Shares, the compounding effect on the outstanding principal balance of the Mezzanine Note, combined with (a) potential anti-dilution adjustments under the Warrant Agreement, (b) possible future share repurchases by RGC that would reduce the total outstanding share count, and (c)

3. Multi-jurisdictional notice. RGC should make informational filings or inquiries with the Arizona Department of Gaming and the New Mexico Gaming Control Board to confirm that no separate suitability or disclosure requirements apply in connection with the mezzanine financing, particularly given the proposed use of approximately $13,000,000 of the proceeds for the expansion of tribal gaming management contracts in th

4. No real property lien approval needed. The exclusion of real property from the mezzanine collateral package avoids triggering NGCB real property pledge approval requirements under Regulation 8.110. This collateral structure is consistent with C&H's advice and Pinnacle Bridge's acceptance of the limited collateral package.

5. Warrant agreement drafting. C&H will incorporate the following protective provisions in the Warrant Agreement to minimize the risk of threshold creep and ensure ongoing compliance with Nevada gaming regulations: (a) A fixed Warrant Share count of 1,650,000, not subject to recalculation based on a floating percentage of fully diluted equity. (b) A regulatory cap providing that the aggregate number of Warrant Shares