Contract analysis

I. Executive Summary On April 12, 2024, Defendants Grizzly Peak Research LLC ("GPR"), Grizzly Peak Capital Partners LP ("GPCP"), and Tobias Fenchurch ("Fenchurch") (collectively, "Defendants") filed a Special Motion to Strike pursuant to California Code of Civil Procedure Section 425.16 — the anti-SLAPP statute — seeking dismissal of all four causes of action asserted in Redstone Gaming Corporation's ("RGC" or "the C

II. Background: The Defamatory Publications and the Litigation A. The Three GPR Reports Between February 7, 2024, and February 21, 2024, GPR published three detailed research reports targeting RGC on its website, grizzlypeakresearch.com, and distributed notice of each publication via its X (formerly Fenmore Solutions) account, @GrizzlyPeakRes, which had approximately 142,000 followers at the time of publication. Each

III. The Anti-SLAPP Framework: Two-Prong Analysis A. Overview of Cal. Code Civ. Proc. § 425.16 California's anti-SLAPP statute, codified at Code of Civil Procedure Section 425.16, provides a procedural mechanism for the early dismissal of lawsuits that arise from a defendant's exercise of the constitutional rights of free speech and petition. The statute reflects a legislative determination that "there has been a dis

IV. Analysis of Defendants' Prong One Arguments A. Defendants' Claimed Basis for Protected Activity The Defendants' anti-SLAPP motion rests on the argument that GPR's short-seller research reports constitute statements made "in connection with a public issue or an issue of public interest" within the meaning of Section 425.16(e)(3) and (e)(4). Specifically, the Defendants argue that: First, the reports address a matt

1. Reports Were Commercially Motivated, Not Public-Interest Driven. The most fundamental weakness in the Defendants' Prong One argument is that the GPR reports were not principally motivated by any concern for the public interest. They were motivated by GPR's and GPCP's financial interests — specifically, the desire to profit from a substantial pre-existing short position in RDGM stock. This commercial motive is not

2. The Publications Are Not Contributions to Public Debate. The Defendants' characterization of the GPR reports as investigative journalism or civic engagement is contradicted by the manner in which the reports were prepared and distributed. Several features of the publications are inconsistent with genuine public-interest speech: Failure to refer concerns to regulators: If GPR genuinely believed that RGC was engaged

3. Distinguishing Cases. We anticipate that the Defendants will cite a number of cases in which short-seller speech or critical financial commentary was afforded anti-SLAPP protection. We should be prepared to distinguish those cases on several grounds. First, the present case is distinguishable because the GPR reports contained fabricated or materially misleading allegations — not merely unflattering opinions, aggre

V. Strategy for Prong Two: Demonstrating Probability of Prevailing A. Overview. Even if the court finds that the Defendants have satisfied their burden on Prong One — which we will vigorously contest — we are well-positioned to demonstrate a probability of prevailing on all four causes of action asserted in the FAC. As noted above, the Prong Two standard requires only a showing of "minimal merit" — a threshold that i

1. Pinnacle Audit & Advisory LLP — Declaration of Walter Ng, CPA. We will submit a declaration from Walter Ng, CPA, the engagement partner at Pinnacle Audit & Advisory LLP who supervised the audit of RGC's consolidated financial statements for fiscal years 2021 through 2023. Mr. Ng's firm is located at 400 South 4th Street, Suite 600, Las Vegas, Nevada 89101, and has served as RGC's independent external auditor since

2. Nevada Gaming Control Board RNG Audit. The Nevada Gaming Control Board completed its independent audit of RGC's random-number-generator systems on March 29, 2024. The audit was conducted by the Board's Technology Division, which has exclusive jurisdiction over the testing and certification of electronic gaming devices and their associated software in Nevada. The Board's audit involved a comprehensive examination o

3. Vermilion Holdings LLC / Related-Party Allegation. The related-party allegation in Report 3 ("Double Down on Fraud: Redstone's Related-Party Shell Game") was based on incomplete information and presented a materially misleading picture of the relationship between RGC and Vermilion Holdings LLC. While Vermilion Holdings LLC does exist and has had certain business dealings with RGC, the characterization of these dea

1. GPR Internal Meridian Solutions Messages. We have obtained, through informal channels — likely produced during early informal exchanges between the parties or available through a cooperating source with access to GPR's internal communications — a set of internal Meridian Solutions messages among GPR personnel that constitute powerful direct evidence of actual malice. These messages were exchanged in the period lea

2. Fenchurch's Instructions to Publish Before Verification. Beyond the general import of the Meridian Solutions messages discussed above, specific communications within the message set indicate that Fenchurch instructed the GPR team to publish the Vermilion Holdings allegations in Report 3 before completing verification of the underlying factual claims. Specifically, the messages indicate that Fenchurch set a publica

3. The Short Position as Circumstantial Evidence of Malice. GPR's 680,000-share short position in RDGM, with a notional value of approximately $62.66 million at the pre-publication closing price, and the estimated gross profit of approximately $13.15 million realized from the stock-price decline, constitute powerful circumstantial evidence of malice and motive. While financial motive alone does not prove actual malic

4. Declaration of CFO Priya Ramaswaran. We will submit a declaration from Priya Ramaswaran, Chief Financial Officer of Redstone Gaming Corp., addressing several topics relevant to the Prong Two analysis. Ms. Ramaswaran's declaration will attest to the following: Accuracy of Financial Statements: Ms. Ramaswaran will confirm the accuracy of RGC's consolidated financial statements for FY 2023, including the reported rev

VI. Proposed Structure of the Opposition Brief Based on the foregoing analysis, we propose the following structure for our opposition brief, which will be filed on or before May 10, 2024: A. Introduction. The introduction will frame the case in terms most favorable to our position: GPR is not a journalist, civic watchdog, or public-interest advocate. It is a profit-driven short seller that published fabricated allega

1. Trade Libel (Cal. Civ. Code § 46(3)): We will demonstrate minimal merit on each element: (a) the publication of false statements of fact concerning RGC's business (the three reports); (b) publication with actual malice — knowledge of falsity or reckless disregard for truth (the Meridian Solutions messages, the short-position profit motive, and the failure to verify); and (c) special damages (the stock-price declin

2. Intentional Interference with Prospective Economic Advantage: We will demonstrate minimal merit on each element: (a) an economic relationship between RGC and its investors, business partners, and regulators; (b) Defendants' knowledge of this relationship; (c) wrongful conduct — the publication of fabricated allegations — designed and intended to interfere with these relationships; (d) actual disruption of RGC's bu

3. Unfair Business Practices (Cal. Bus. & Prof. Code § 17200): We will demonstrate that the Defendants' conduct constitutes unlawful, unfair, and fraudulent business acts within the meaning of Section 17200. The unlawful prong is satisfied by the underlying torts (trade libel and intentional interference); the unfair prong is satisfied by the Defendants' systematic campaign to profit from the dissemination of false i

4. Negligent Misrepresentation (added in FAC): We will demonstrate minimal merit on the elements of negligent misrepresentation: (a) Defendants owed a duty to exercise reasonable care in the research and dissemination of financial information about a publicly traded company; (b) Defendants breached this duty by publishing allegations that they had not adequately verified and that were, in fact, false; (c) the market

1. Declaration of Walter Ng, CPA (Pinnacle Audit & Advisory LLP) — Establishing the accuracy of RGC's FY 2023 financial statements and the absence of fabricated revenue, and describing the audit procedures employed.

2. Declaration of Priya Ramaswaran (CFO, Redstone Gaming Corp.) — Establishing the accuracy of RGC's financial statements, the failure of GPR to contact RGC before publication, and the damages suffered by RGC, including out-of-pocket costs of $4.627 million.

3. Certified copy of Nevada Gaming Control Board RNG audit clearance (dated March 29, 2024) — Establishing that the NGCB cleared RGC of any RNG irregularity and that the allegations in Report 2 are false.

4. GPR internal Meridian Solutions messages (authenticated via declaration) — Establishing that Fenchurch was aware of contradictory evidence and directed publication regardless, and that Lin expressed doubts about the factual basis for the related-party allegations.

5. Exhibits: • Copies of the three GPR reports (Reports 1, 2, and 3), with key passages highlighted. • RDGM stock-price charts showing the correlation between publication dates and stock-price declines. • GPR's short-position disclosures from each report. • Public filings and disclosures demonstrating the information available to GPR about Pinnacle's audit opinions and RGC's financial reporting. We may also consider

VII. Potential Defendants' Reply Arguments and Our Counter-Strategies We must anticipate the arguments that the Defendants are likely to raise in their reply brief and prepare responsive strategies for each. A. First Amendment Defense Anticipated argument: The Defendants will argue that short-seller research is core protected speech under the First Amendment and that the anti-SLAPP statute reflects California's commi