Contract analysis

I. EXECUTIVE SUMMARY Calderwood & Harkness LLP has prepared this memorandum at the request of Patricia Nakamura, General Counsel and Corporate Secretary of Redstone Gaming Corp. ("RGC" or the "Company," Nasdaq: RGC, CIK: 0001847625, EIN: 82-4031976), and the Special Committee of the Board of Directors of RGC (the "Special Committee"), to provide a comprehensive analysis of the two Schedule 13D filings made by Pinnacl

II. BACKGROUND AND CHRONOLOGY A. Pinnacle Harbor's Share Accumulation Pinnacle Harbor Capital Partners, LP is a Delaware limited partnership organized and operating under the laws of the State of Delaware. Its general partner is Pinnacle Harbor Capital Management, LLC, also a Delaware limited liability company. Pinnacle Harbor's principal office is located at 590 Madison Avenue, 34th Floor, New York, New York 10022.

III. LEGAL FRAMEWORK: SECTION 13(d) OF THE EXCHANGE ACT A. Statutory and Regulatory Overview

Section 13(d)(1) of the Exchange Act, codified at 15 U.S.C. § 78m(d)(1), provides that any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a class which is registered pursuant to Section 12 of the Exchange Act, is directly or indirectly the beneficial owner of more than five percent of such class, shall, within ten days after such acquisition, send to the issuer o

Section 13(d)(3) of the Exchange Act and Rule 13d-5 promulgated thereunder provide that when two or more persons agree to act together for the purpose of acquiring, holding, voting, or disposing of equity securities of an issuer, the group so formed shall be deemed to be a "person" for purposes of Section 13(d). As a consequence, the beneficial ownership of all members of the group is aggregated for purposes of deter

IV. ANALYSIS OF PRELIMINARY SCHEDULE 13D (FILED NOVEMBER 10, 2022) The preliminary Schedule 13D filed by Pinnacle Harbor on November 10, 2022, consists of the completed Schedule 13D form, a cover page, and several exhibits. We address each item of the filing below. A. Item 1 — Security and Issuer Item 1 of the Schedule 13D identifies the issuer as Redstone Gaming Corp., a corporation organized under the laws of the S

1. Pinnacle Harbor Capital Partners, LP (EIN: 47-3928154), a Delaware limited partnership, with its principal office at 590 Madison Avenue, 34th Floor, New York, New York 10022. The filing states that the principal business of the partnership is investment management, with a focus on event-driven and activist equity strategies in the gaming, hospitality, and consumer-discretionary sectors.

2. Pinnacle Harbor Capital Management, LLC, a Delaware limited liability company, serving as the general partner of Pinnacle Harbor Capital Partners, LP. The principal office is the same as that of the fund. The filing identifies PHCM as the entity that exercises voting and investment power over the shares of RGC common stock held by the fund.

3. Viktor S. Kessler, age 47, a United States citizen, identified as the Managing Partner and Chief Investment Officer of PHCM and the controlling member thereof. Mr. Kessler's business address is the same as the fund's principal office. In addition, the filing identifies Nadia Johar, age 39, a United States citizen, as the Head of Activism and a Portfolio Manager at Pinnacle Harbor. Ms. Johar is listed as a "covered

V. ANALYSIS OF AMENDMENT NO. 1 TO SCHEDULE 13D (FILED JANUARY 6, 2023) A. Nature of the Amendment Amendment No. 1 to the Schedule 13D was filed with the SEC on January 6, 2023, pursuant to Rule 13d-2(a), which requires the filing of an amendment "promptly" upon any material change in the information set forth in the previously filed Schedule 13D. The principal purpose of the amendment is to update Item 4 (Purpose of

Section 14(a) Considerations. The reference in Amendment No. 1 to Pinnacle Harbor's preparation of a preliminary proxy statement raises important considerations under Section 14(a) and the proxy solicitation rules. Any communications by Pinnacle Harbor with other shareholders in connection with the planned solicitation — whether through direct outreach, public statements, media interviews, or other channels — must co

VI. GROUP FORMATION ANALYSIS A. Identified Reporting Persons As discussed above, the Schedule 13D identifies three reporting persons filing jointly: Pinnacle Harbor Capital Partners, LP; Pinnacle Harbor Capital Management, LLC; and Viktor S. Kessler. This is a standard group configuration for an activist hedge fund filing, consisting of the fund vehicle, the general partner that exercises voting and investment author