Contract analysis

I. PURPOSE AND EXECUTIVE SUMMARY The purpose of this memorandum is to request that the Board of Directors of Redstone Gaming Corp. ("RGC" or the "Company") grant settlement authority in advance of the mediation currently scheduled for December 3–4, 2024, before the Honorable Gerald K. Matsuda (Ret.) at Westside Mediation Center, 11601 Wilshire Boulevard, Suite 1200, Los Angeles, CA 90025. This mediation represents th

II. BACKGROUND — THE DEFAMATORY PUBLICATIONS AND THEIR IMPACT A. The Three GPR Reports Between February 7, 2024, and February 21, 2024, Grizzly Peak Research LLC ("GPR") published three lengthy research reports targeting RGC. Each report was published on GPR's website, grizzlypeakresearch.com, and simultaneously distributed via GPR's X account, @GrizzlyPeakRes, which had approximately 142,000 followers at the time of

III. CURRENT LITIGATION POSTURE AND ASSESSMENT OF TRIAL STRENGTHS A. Causes of Action RGC's First Amended Complaint asserts four causes of action against GPR, GPCP, and Tobias Fenchurch:

1. Trade Libel (Cal. Civ. Code § 46(3)) — alleging that the GPR reports constituted false and disparaging statements concerning the quality of RGC's business, products, and financial performance, published with knowledge of their falsity or reckless disregard for their truth, resulting in special damages.

2. Intentional Interference with Prospective Economic Advantage — alleging that defendants engaged in wrongful conduct (the publication of knowingly false reports) intended to interfere with RGC's economic relationships with investors, customers, regulators, and business counterparties.

3. Unfair Business Practices (Cal. Bus. & Prof. Code § 17200) — alleging that defendants' conduct constituted unfair, unlawful, and fraudulent business practices, including the short-and-distort scheme by which defendants profited from the publication of false information about RGC.

4. Negligent Misrepresentation (added via the First Amended Complaint filed March 18, 2024) — alleging that defendants published false statements of fact concerning RGC without reasonable grounds for believing them to be true, causing foreseeable economic harm to RGC. All four causes of action have survived dispositive challenges. The defendants' special motion to strike under California's anti-SLAPP statute (Cal. Co

IV. TRIAL COST ESTIMATE If this matter does not resolve at mediation and proceeds to trial — currently projected for mid-2025 — RGC will incur significant additional litigation costs. The following estimates are based on current case posture and Calderwood & Harkness's experience with comparable commercial litigation. Estimated Additional Litigation Costs Through Trial: Current Fees and Costs Incurred to Date. As of

V. DEFENDANTS' FINANCIAL CAPACITY AND INSURANCE COVERAGE A. GPR and GPCP Financial Profile An assessment of the defendants' financial capacity is critical to evaluating the realistic range of collectible recovery and, consequently, the appropriate settlement parameters. Grizzly Peak Research LLC. GPR is an operating limited liability company focused on short-seller research and analysis. Based on information obtained

VI. NON-MONETARY SETTLEMENT TERMS — STRATEGIC VALUE While the monetary component of any settlement is important, the non-monetary terms described below are of equal or greater strategic value to RGC. These terms directly address the Company's core objectives of public vindication, investor-confidence restoration, and prevention of future harm. Critically, several of these forms of relief — particularly the corrective

VII. RECOMMENDED SETTLEMENT PARAMETERS Based on the foregoing analysis, Calderwood & Harkness recommends that the Board grant settlement authority within the following parameters. A. Monetary Floor Minimum acceptable monetary payment: $12 million. Recommended target range: $14–16 million. The rationale for these parameters is as follows: (i) A settlement of $12 million or more exceeds or closely approximates GPR's es

VIII. COMPARISON: SETTLEMENT VS. TRIAL The following table provides a structured comparison of the expected outcomes under a settlement scenario versus continued litigation through trial and potential appeal. In sum, settlement provides a certain, efficient, and strategically superior outcome across virtually every dimension. While the monetary recovery at settlement is lower than the theoretical maximum recovery at

IX. MEDIATION LOGISTICS The mediation is scheduled for December 3–4, 2024, and the logistical details are as follows: Mediator: Hon. Gerald K. Matsuda (Ret.) Venue: Westside Mediation Center, 11601 Wilshire Boulevard, Suite 1200, Los Angeles, CA 90025 Defense Counsel: Raymond Caldwell and Natalie Orenstein of Caldwell, Tseng & Barrow LLP, 555 California Street, Suite 3100, San Francisco, CA 94104. We understand that

X. REQUEST FOR BOARD ACTION Calderwood & Harkness respectfully requests that the Board of Directors of Redstone Gaming Corp. adopt a resolution granting Derek Olafson, in his capacity as General Counsel, authority to approve a settlement of Redstone Gaming Corp. v. Grizzly Peak Research LLC, et al., Case No. 24STCV-01892, on terms consistent with the parameters set forth in Section VII of this memorandum. Specificall

XI. CONCLUSION Calderwood & Harkness strongly recommends settlement within the parameters described in this memorandum. RGC has built a strong case, and the evidence supports a substantial recovery. However, the realities of defendants' financial capacity, the costs and timeline of continued litigation through trial and appeal, and the inherent uncertainties of jury verdicts in defamation-adjacent cases all counsel i

1. Expert Report of Dr. Elena Vostrikova, Meridian Forensic Economics LLC (dated September 9, 2024) — Event-study analysis and damages quantification.

2. Summary of Key Deposition Testimony — Including deposition of Tobias Fenchurch (August 20, 2024) and deposition of Ava Lin (August 29, 2024), with excerpted transcript citations relevant to actual-malice evidence.

3. Summary of Ironclad Surety & Insurance Co. Policy Terms — Policy No. ML-2023-07714, including coverage provisions, policy limits, defense-cost erosion analysis, and assessment of expected insurance contribution range.

4. Litigation Cost Summary to Date — Prepared by Samuel Eklund, Billing Partner, Calderwood & Harkness LLP, reflecting all discounted fees and costs advanced through November 22, 2024. PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT This document and the information contained herein are protected by the attorney-client privilege and the work-product doctrine. This memorandum is int