Contract analysis

I. Executive Summary This memorandum sets forth our analysis of the pre-merger notification requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a) (the "HSR Act"), and the implementing regulations promulgated thereunder (16 C.F.R. Parts 801–803), as applied to the proposed acquisition by Cascade Retail Holdings Inc. ("Cascade" or "CRH") of one hundred percent (100%)

II. Transaction Overview A. Parties to the Transaction

1. Buyer / Acquiring Person The acquiring person in the Transaction is Cascade Retail Holdings Inc., a corporation organized under the laws of the State of Delaware. Cascade is publicly traded on the Nasdaq Stock Market under the ticker symbol "CRHI." Cascade's principal executive offices are located at 4500 Elliott Avenue West, Suite 3200, Seattle, Washington 98119. Cascade's Employer Identification Number (EIN) is

2. Target / Acquired Entity The acquired entity is NovaMart Global Inc., a corporation organized under the laws of the State of Delaware. NovaMart is privately held and is not listed on any public securities exchange. NovaMart's principal executive offices are located at 1100 Congress Avenue, Suite 800, Austin, Texas 78701. NovaMart's Employer Identification Number (EIN) is 84-3291547. NovaMart was founded by Julian

3. Selling Stockholders (Principal) NovaMart's outstanding capital stock is held by the following principal stockholders (collectively, the "Selling Stockholders"): (a) Ridgeline Equity Partners, LP — Holds approximately 41.2% of NovaMart's outstanding common stock. Ridgeline is a private equity fund with its principal offices located at 200 Park Avenue South, 14th Floor, New York, New York 10003. Ridgeline's Managin

III. HSR Act Reportability Analysis A. Statutory Framework The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a) (the "HSR Act"), requires that parties to certain mergers, acquisitions, joint ventures, and other transactions that meet specified jurisdictional thresholds file pre-merger notification with the FTC and the Antitrust Division of the DOJ and observe a statutory waiting peri

IV. Filing Parties and Ultimate Parent Entities A. Acquiring Person The acquiring person for purposes of the HSR filing is Cascade Retail Holdings Inc. Because Cascade is a publicly traded corporation with no controlling stockholder, parent entity, or other entity that holds 50% or more of its outstanding voting securities, Cascade is its own Ultimate Parent Entity ("UPE") under 16 C.F.R. § 801.1(a)(3). Cascade has a

V. Filing Fee Calculation Under the HSR Act, as amended by the Merger Filing Fee Modernization Act of 2022 (Pub. L. No. 117-328, Division GG), filing fees are assessed on a tiered basis corresponding to the aggregate total amount of voting securities, non-corporate interests, and/or assets to be held by the acquiring person as a result of the transaction. The fee schedule is subject to annual adjustment by the FTC. T

VI. Notification and Report Form — Preparation Considerations A. Item 4(c) Documents Item 4(c) of the HSR Notification and Report Form requires the production of all documents that were prepared by or for any officer(s) or director(s) of the filing person for the purpose of evaluating or analyzing the Transaction with respect to market shares, competition, competitors, markets, potential for sales growth, or expansio

VII. Timing Strategy and Waiting Period Analysis A. Filing Date and Waiting Period We recommend that both parties file their respective HSR Notification and Report Forms on April 11, 2025. This date has been coordinated with Cascade's deal team and NovaMart's counsel, and all parties are aligned on this target. Under the HSR Act, the initial statutory waiting period for a transaction involving the acquisition of voti

1. Key Competitive Overlap The principal area of competitive overlap between Cascade and NovaMart is in the online marketplace for consumer goods, and more specifically, in the sub-segment that the reviewing agency may define as the "online marketplace for specialty consumer goods." Both Cascade (through its CascadeDirect.com platform) and NovaMart operate ecommerce platforms that facilitate the sale of specialty con

2. Estimated Market Shares Based on our internal analysis of publicly available data and proprietary estimates, the approximate market shares of the principal participants in U.S. online specialty consumer goods (measured by gross merchandise value) are as follows: The combined market share of approximately 14.0% is moderate by any standard and would not result in a presumptively anticompetitive level of market conce

3. Risk Assessment Notwithstanding the moderate combined market share, we assess the probability that the reviewing agency will issue a Second Request at approximately 50–65% (moderate to high). This assessment is based on the following factors: (a) Regulatory Scrutiny of Ecommerce and Marketplace Transactions. Both the FTC and DOJ have demonstrated heightened interest in transactions involving digital platforms, onl

4. Impact of a Second Request If a Second Request is issued, the initial thirty-day waiting period is extended, and the Transaction may not be consummated until thirty (30) days after both parties have substantially complied with the Second Request. See 15 U.S.C. § 18a(e)(1). Substantial compliance with a Second Request typically involves the production of voluminous documents (often millions of pages) and extensive

VIII. Strategic Recommendations for Filing A. Voluntary Narrative Submission We recommend including a voluntary narrative submission with the HSR filing. The voluntary narrative is not required by the HSR Act or its implementing regulations, but it is standard practice in significant transactions and is an effective tool for framing the competitive analysis for the reviewing agency. The narrative provides an opportun