Contract analysis

I. Executive Summary The purpose of this memorandum is to report on the outcome of the two-day mediation conducted on December 3–4, 2024, and to provide a comprehensive summary of the binding Mediator's Term Sheet signed by all parties and their respective counsel on December 4, 2024. This memorandum also sets forth our assessment of the settlement terms, identifies next steps required to finalize the settlement, and

II. Mediation Background A. Mediation Logistics The mediation was conducted over two full days on December 3 and December 4, 2024, at the Westside Mediation Center, located at 11601 Wilshire Boulevard, Suite 1200, Los Angeles, California 90025. The mediation was facilitated by the Honorable Gerald K. Matsuda (Ret.), a highly respected former justice of the California Court of Appeal, Second Appellate District, who ha

1. Denial of Defendants' Anti-SLAPP Motion. On June 7, 2024, Judge Patricia Yamamoto denied defendants' special motion to strike under California Code of Civil Procedure § 425.16 (the anti-SLAPP statute), finding that RGC had demonstrated a probability of prevailing on its claims. The court's ruling was significant because it rejected defendants' contention that the three research reports constituted protected speech

2. Denial of Defendants' Motion for Summary Judgment. On November 15, 2024 — less than three weeks before the mediation — Judge Yamamoto denied defendants' motion for summary judgment in its entirety. The court found triable issues of material fact on every element of RGC's trade libel claim, including falsity, knowledge of falsity, and causation. This ruling was a critical development that significantly altered the

3. Expert Damages Evidence. RGC's retained damages expert, Dr. Elena Vostrikova, Ph.D. (Department of Economics, Columbia University), prepared an event-study analysis estimating total damages attributable to the three reports at $327.6 million. Dr. Vostrikova's methodology isolated the abnormal returns in RDGM stock on the three publication dates and the subsequent trading days, controlling for market-wide and indus

4. RGC's Documented Out-of-Pocket Costs. RGC incurred aggregate out-of-pocket costs of $4.627 million in direct response to the defamatory reports, including $2.18 million in crisis communications and public relations expenses, $1.46 million in internal investigation and forensic audit costs incurred through Pinnacle Audit & Advisory LLC, and $987,000 in regulatory-response costs incurred through Hargrove & Sato LLP

5. GPR's Short-Sale Profits. Documentary evidence obtained in discovery established that Grizzly Peak Capital Partners LP maintained short positions of approximately 680,000 shares of RDGM stock prior to and during the publication of the three reports and realized estimated trading profits of approximately $13.15 million from the decline in RDGM's stock price following the publications. This evidence was central to o

6. Regulatory Exoneration. The Nevada Gaming Control Board completed an independent audit of RGC's random number generator ("RNG") systems and cleared RGC on March 29, 2024, finding no evidence of the RNG manipulation alleged in the second GPR report. Similarly, the SEC's Division of Enforcement closed its informal inquiry into RGC's financial reporting on August 16, 2024, with no enforcement action, no comment lette

III. Summary of Mediator's Term Sheet (Signed December 4, 2024) The following is a detailed summary of the binding Mediator's Term Sheet executed by all parties and counsel on December 4, 2024. This term sheet governs the parties' obligations pending execution of the formal Settlement Agreement and Mutual Release. A. Monetary Payment The Term Sheet provides for a total settlement payment of $14,750,000.00 (Fourteen M

1. Corrective Publication (Full Text). Grizzly Peak Research LLC is required to publish a corrective statement (the "Corrective Publication") on its official website, grizzlypeakresearch.com, which is the same platform on which the three original defamatory reports were published and which remains a primary destination for short-seller research within the financial-services community. Timing: The Corrective Publicati

2. Social Media Corrective Statement. In addition to the full Corrective Publication on its website, GPR is required to post a summary corrective statement on its social media account, @GrizzlyPeakRes, which is maintained on the X (formerly Fenmore Solutions) platform and which had approximately 142,000 followers at the time of the original publications in February 2024. This social media account was a primary vector

IV. Assessment of Settlement Terms A. Monetary Recovery The $14.75 million monetary recovery must be evaluated in context. While the total is a fraction of Dr. Vostrikova's event-study-adjusted damages estimate of $327.6 million and an even smaller fraction of the approximately $1.427 billion aggregate market-capitalization loss at trough (calculated as the difference between RDGM's pre-publication market capitalizat

V. Next Steps — Settlement Papering Timeline The binding Term Sheet provides the framework for the formal settlement documents that must now be drafted, negotiated, and executed. The following outlines the documents to be prepared, the key procedural steps, and the proposed timeline for completing the papering phase. A. Documents to Be Drafted and Exchanged Calderwood & Harkness will take the lead in preparing the in

1. Settlement Agreement and Mutual Release. This is the master agreement governing all aspects of the settlement, including the monetary payment terms, corrective statement obligations, injunctive relief provisions, mutual releases, non-disparagement clause, confidentiality provisions, and dismissal mechanics. Calderwood & Harkness will prepare the initial draft and circulate it to CTB. Target first draft: December 1

2. Exhibit A: Corrective Publication (Full Text). Calderwood & Harkness will prepare the initial draft of the 1,500-word Corrective Publication, incorporating the required acknowledgments specified in the Term Sheet. The draft will be prepared in close coordination with Crestline Equity Partners Group Inc. (contact: Simone Arecchi) to ensure that the language is both legally sufficient and optimally crafted for maxim

3. Exhibit B: Social Media Corrective Statement. Calderwood & Harkness will prepare the initial draft of the summary corrective statement for posting on @GrizzlyPeakRes, again coordinating with Ashgrove Equity Partners on messaging strategy and format.

4. Exhibit C: Form of Stipulated Dismissal with Prejudice. Calderwood & Harkness will prepare the standard-form stipulated dismissal for Case No. 24STCV-01892, including the § 664.6 retention-of-jurisdiction provision.

5. Exhibit D: Form of Stipulated Permanent Injunction. Calderwood & Harkness will prepare the stipulated permanent injunction for submission to Judge Yamamoto, encompassing both the republication injunction and the five-year trading bar. This document will be styled as a Stipulation and [Proposed] Order for Entry of Permanent Injunction.

6. Escrow Agreement. A separate escrow agreement among Redstone Gaming Corp., Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Great Basin Trust Company, N.A., governing the deposit, holding, and disbursement of the $14.75 million settlement funds. Calderwood & Harkness will coordinate with Great Basin Trust Company regarding their standard form escrow agreement and will negotiate any necessary modifi

7. Stipulation and [Proposed] Order for Dismissal with Prejudice. This is the court-filing version of the dismissal stipulation, for filing with the Los Angeles Superior Court.

8. Stipulation and [Proposed] Order for Entry of Permanent Injunction. This is the court-filing version of the permanent injunction, for filing with the Los Angeles Superior Court. B. Court Notifications A letter will be sent to Judge Patricia Yamamoto notifying the court that the parties have reached a settlement-in-principle and requesting that all pending dates — including the trial date and any remaining pretrial

VI. Open Items and Action Requests In order to maintain the papering timeline set forth above, we respectfully request that Derek Olafson and the RGC team address the following open items at your earliest convenience:

1. Board Confirmation. Please confirm that RGC's Board of Directors is satisfied with the settlement terms as memorialized in the Mediator's Term Sheet and that no further board approval is required to proceed with the execution of the Settlement Agreement. If the board has any questions or concerns regarding specific terms, we are available to address them promptly.

2. Authorization to Proceed. Please confirm RGC's approval for Calderwood & Harkness to proceed with drafting all settlement documents in accordance with the timeline set forth in Section V above.

3. Identification of Signatory. Please identify the RGC signatory who will execute the Settlement Agreement on behalf of the company. We anticipate that the appropriate signatory would be either Derek Olafson, General Counsel, or Marcus J. Calloway, Chief Executive Officer, and request confirmation of the board's designation.

4. Crestline Equity Partnersordination Meeting. We recommend scheduling a coordination meeting with Crestline Equity Partners Group Inc. (Simone Arecchi) regarding the public announcement strategy and the drafting of the Corrective Publication text. We suggest scheduling this meeting during the week of December 9, 2024, to ensure that the communications strategy is aligned with the papering timeline.

5. Atlas National Insurance Group Notification. We advise that Atlas National Insurance Group, RGC's own directors and officers liability insurer, should be updated on the settlement outcome. Although no claim was triggered on RGC's side under its D&O policy, the company's prior notice to Atlas National regarding the Grizzly Peak litigation should be updated to reflect the resolution of the matter. This is a best-pra

VII. Conclusion The settlement achieved through the December 3–4, 2024, mediation before the Honorable Gerald K. Matsuda (Ret.) represents a strong result for Redstone Gaming Corp. on both monetary and non-monetary dimensions. The $14.75 million monetary recovery, combined with comprehensive corrective statements directly addressing all three defamatory reports and permanent injunctive relief prohibiting both republi