Contract analysis

1. Completion of Written discovery 1.1 Nexford's discovery Responses On January 9, 2023, Calderwood & Harkness served Nexford's Responses to Cardinal Peak's First Set of Interrogatories (Nos. 1 through 18) and Nexford's Responses to Cardinal Peak's First Request for Production of Documents (Nos. 1 through 24). These responses were prepared in close coordination with the Company's internal team and were verified under

1. Late Surcharge Notices ($2.18 million): Surcharge Notices for seven of the fourteen disputed months were delivered beyond the 15-business-day deadline mandated by MSA Section 7.4(a). Under the plain terms of the MSA, untimely Surcharge Notices do not create a payment obligation for Nexford.

2. Deviation from Exhibit C Surcharge Methodology ($1.47 million): Cardinal Peak computed surcharges using an internal "blended cost" metric rather than the published Ferrous Scrap Index (as reported by Platts/SPI) and the Industrial Energy Cost Index that are expressly prescribed in Exhibit C of the MSA. The resulting surcharge amounts diverge significantly from those that would have been calculated under the agreed

3. Surcharges Exceeding the 12% Cap Without Prior Written Consent ($1.08 million): For four months during the disputed period, the surcharges billed by Cardinal Peak exceeded 12% of the applicable Base Price. Under MSA Section 7.4(c), surcharges in excess of the 12% cap require Nexford's prior written consent. No such consent was given. We are satisfied that Nexford's discovery responses were thorough, accurate, and

2. Depositions Two key depositions were conducted during Q1 2023. Both depositions advanced Nexford's litigation position significantly and are summarized below. 2.1 Deposition of Natalie Gunderson — January 18, 2023 Natalie Gunderson, Vice President of Sales & Commercial at Cardinal Peak Industries, was deposed on January 18, 2023 at the offices of Calderwood & Harkness LLP. The examination was conducted by Simone L

3. Expert Work and Report Exchange 3.1 Dr. Anita Rosenthal — Damages Rebuttal Report (March 15, 2023) In accordance with the discovery schedule set by the Court, expert reports were exchanged on March 15, 2023. Dr. Anita Rosenthal, CPA, ABV, of Meridian Bridge Consulting LLC (311 South Michigan Avenue, Suite 1500, Chicago, Illinois 60604), submitted her damages rebuttal report on behalf of Nexford. As you will recall

4. Current Case Posture and Upcoming Milestones As a result of the substantial progress made during Q1 2023, the case is now well-positioned for the next phase. The current posture and key upcoming milestones are as follows: • Written discovery: Written discovery is now substantially complete. Both parties have served and responded to their initial sets of interrogatories and document requests. We do not anticipate a

5. Recommendation to Pursue Mediation Based on the strength of Nexford's defenses as confirmed through the discovery process and expert analysis conducted during Q1 2023, Calderwood & Harkness recommends that the parties move forward with mediation as contemplated by MSA Section 14.3. We believe the case is now ripe for mediation and that Nexford is in an exceptionally strong position to achieve a favorable resolutio

6. Budget and Billing Update We are pleased to report that the engagement remains within the expected budget parameters for the mediation track. As set forth in the engagement letter dated August 22, 2022, the estimated legal fees and costs for this matter through mediation were projected at $200,000 to $275,000. Current total fees and costs billed through the end of Q1 2023 are tracking within this range, reflecting

7. Lender and Sponsor Coordination Reminder We wish to remind you that Nexford's $45 million revolving credit facility with Ridgecrest National Bank, N.A. (dated March 12, 2021) contains a reporting covenant under Section 6.03(b) requiring Nexford to provide notice to the lender of any litigation settlement exceeding $1.0 million. While we believe Nexford's maximum additional exposure in this matter is significantly

8. Next Steps Looking ahead to Q2 2023, the following action items represent the principal next steps in the litigation:

1. Receive and Analyze Dr. Voss's Expert Report. Dr. Voss's damages expert report is due on April 12, 2023. Upon receipt, Calderwood & Harkness will conduct a thorough review and prepare a detailed internal analysis memorandum identifying methodological weaknesses, unsupported assumptions, and potential grounds for challenge.

2. Prepare Internal Analysis Memorandum. The Voss report analysis memorandum will be circulated to the litigation team and to Nexford's leadership promptly following its completion, along with our recommendations regarding any rebuttal expert work or evidentiary challenges.

3. Initiate Mediation Discussions. Subject to Nexford's authorization, we will contact Blackwood Stein & Associates LLP to initiate discussions regarding mediation scheduling and the joint selection of a mediator.

4. Prepare and File Joint Motion to Stay. If the parties reach agreement on mediation, we will prepare and file a joint motion to stay the litigation pending the completion of the mediation process.

5. Develop Mediation Strategy and Settlement Range Analysis. We will continue to develop the mediation strategy and prepare a detailed settlement range analysis for review and approval by Nexford's leadership and Marlowe Asset Management Bluff Capital Partners, LP. This analysis will incorporate the findings from Dr. Voss's report once received.

6. Schedule Mediation Preparation Call. We recommend scheduling a call with Deborah Whitfield, Martin Schaeffer, and Diana Calloway to discuss mediation preparation, settlement authority, and strategic considerations once Dr. Voss's report has been received and analyzed. We will propose dates for this call in early-to-mid April. Closing We are encouraged by the significant progress achieved during Q1 2023. The discov