[sheet: Cover]

Field	Value
Matter Name	Verimark Hospitality Group Inc. — Pre-Litigation Wage-and-Hour Audit (Scoping Phase)
Matter Number	1021-00005
Client	Verimark Hospitality Group Inc. (Nasdaq: VMHG)
Client EIN	84-3291076
Client Address	2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629
Client General Counsel	Devin K. Arroyo
Engagement Firm	Calderwood & Harkness LLP
Firm Address	100 Southeast Second Street, Suite 3400, Miami, FL 33131
Responsible Partner	Bernard Crawford
Billing Partner	Renata Vasquez
Prepared By	Renata Vasquez / Nadia Petrov
Date Prepared	February 3, 2026
Board Authorization Date	January 29, 2026 (Audit Committee)
Board-Authorized Budget Cap	$350,000
Billing Arrangement	Hourly — standard rates with 10% courtesy discount
C&H Estimated Budget Range	$175,000 – $225,000
Ridgepoint Advisory Estimated Budget Range	$85,000 – $120,000
Combined Estimated Range	$260,000 – $345,000
Status — Ridgepoint Engagement	Not yet engaged; pending VHG approval
Demand Letter Date	January 14, 2026 (Garza, Linden & Okafor LLP)
Demand Response Deadline	February 28, 2026
EPL Insurance Tender Deadline	March 15, 2026

[sheet: Timekeeper Rates]

Timekeeper	Role	Title	Standard Rate ($/hr)	Discount %	Discounted Rate ($/hr)
Bernard Crawford	Responsible Partner	Partner, Labor & Employment	1050	10%	945
Renata Vasquez	Billing Partner	Partner, Labor & Employment	995	10%	895.5
Nadia Petrov	Lead Associate	Senior Associate, Labor & Employment	675	10%	607.5
James Underwood	Working Associate	Associate, Labor & Employment	525	10%	472.5

[sheet: C&H Budget Detail]

Work Stream	Description	Crawford Hrs (Low)	Crawford Hrs (High)	Vasquez Hrs (Low)	Vasquez Hrs (High)	Petrov Hrs (Low)	Petrov Hrs (High)	Underwood Hrs (Low)	Underwood Hrs (High)	Total Hrs (Low)	Total Hrs (High)	Total Fees (Low)	Total Fees (High)
1. Demand-Letter Analysis	Review and analysis of GLO demand letter (5 allegations: overtime, auto meal-break deductions, pre-/post-shift off-the-clock work, tipped-employee minimum wage, FLSA administrative exemption misclassification); preparation of internal analysis memorandum	3	5	2	3	12	16	10	14	27	38	17752.5	24975
2. Exposure Modeling	Build quantitative exposure model covering Scenario A (narrow — overtime only, 2-year lookback, 1,895 hourly employees, $8,147,700), mid-range ($22M–$38M), and Scenario B (broad — all claims, 3-year willful lookback, 5,900 putative collective, ~$202.4M theoretical ceiling); property-level breakdowns; liquidated damages calculations; preparation of preliminary exposure assessment memorandum for General Counsel	5	8	3	5	15	20	12	16	35	49	22807.5	31972.5
3. Legal Research	Research memos on: (a) FLSA/Florida statutes of limitations (2-yr non-willful, 3-yr willful, 5-yr Florida minimum wage under Fla. Stat. § 95.11(2)(b)); (b) FLSA administrative exemption (29 C.F.R. § 541.200) for lead/senior roles; (c) auto meal-break deduction legality (29 C.F.R. § 785.19); (d) tipped-employee minimum wage compliance (Art. X, § 24, Fla. Const.; $14.00 − $3.02 tip credit = $10.98/hr); (e) pre-/post-shift compensability (Portal-to-Portal Act, continuous-workday doctrine); (f) FLSA collective-action conditional certification (29 U.S.C. § 216(b)); (g) Palomar joint-employer analysis (FLSA economic-reality test, HMA-2021-0601-PC)	4	6	2	3	20	28	22	30	48	67	29190	40912.5
4. Data Collection Coordination	Preparation and transmission of document/data collection request list to VHG and Luminos Payroll Solutions Inc. (account LTT-VHG-2022-0041); coordinate retrieval of Luminos TimeTrack punch data, auto-deduction config (rule AR-MEAL-030), payroll registers, wage statements, scheduling records, tip-pool records, employee handbooks (v.7.2), job descriptions, exemption classifications; specify date ranges (Jan. 2021–present for longest lookback); interface with Enrique J. Fuentes (VHG Payroll) and Shannon D. Prewitt (Luminos)	2	3	1	2	10	14	14	20	27	39	15727.5	22657.5
5. Litigation Hold & Preservation	Review and supplement VHG internal litigation-hold memo (issued Jan. 17, 2026); prepare advisory letter to General Counsel; draft litigation-hold notice for 23 custodians (7 property HR managers, 7 GMs, Whitfield, Fuentes, Arroyo, Jefferson, 5 department heads); prepare and transmit data-preservation letter to Luminos Payroll Solutions Inc.; custodian identification memorandum	3	4	1	2	8	10	10	14	22	30	13110	18045
6. Audit-Scope Design	Develop proposed scope and methodology for pre-litigation wage-and-hour audit across 7 at-issue properties (Regency Tampa, Grand Orlando, Shores Clearwater, Bayfront St. Petersburg, Resort & Spa Boca Raton, Oceanview Fort Lauderdale, Key West Collection); property-level audit matrix; phased approach (document collection, statistical sampling, employee interviews, remediation recommendations); coordinate with Ridgepoint Advisory Group (Dr. Alicia Tran) on forensic payroll analytics scope	5	7	2	3	12	16	8	12	27	38	17347.5	24570
7. Insurance Coverage Analysis & Tender	Analyze EPL coverage under Pinnacle Indemnity Corp. policy PIN-EPL-2025-44781 ($10M per occurrence / $25M aggregate, $500K SIR per claim; policy period July 1, 2025 – June 30, 2026); assess wage-and-hour exclusion applicability and defense-cost advancement; prepare and transmit notice of claim / tender letter to Lydia C. Bowman by Mar. 15, 2026 deadline	3	5	1	2	6	8	6	8	16	23	10170	14715
8. Board / Audit Committee Presentations	Prepare Northgate Services Inc. presentation for VHG Audit Committee summarizing demand-letter allegations, preliminary exposure ($8.1M narrow to $202.4M ceiling, $22–$38M mid-range), proposed audit scope, budget overview, recommended next steps and timeline; attend presentation meeting; prepare follow-up memoranda	6	8	4	6	6	8	2	4	18	26	14580	20940
9. Correspondence & Negotiation	Draft response to GLO demand letter (Marco A. Garza); request extension of Feb. 28, 2026 deadline; manage redline comments from Devin K. Arroyo; general correspondence with VHG management (CEO Langford, CFO Dunning, GC Arroyo, VP HR Whitfield); coordination with Palomar Realty Partners LLC (Ricardo E. Montalvo) re: common interest / joint defense agreement for Verimark Shores Clearwater property	5	7	2	3	6	8	6	8	19	26	13072.5	18045
10. Ridgepoint Engagement Coordination	Evaluate Ridgepoint Advisory Group LLC engagement proposal; draft engagement letter for forensic payroll analytics under attorney-client privilege / work-product protection; coordinate privilege protocols; review deliverable specifications (statistical sampling, damages reconstruction); pending VHG approval	2	3	1	2	4	6	4	6	11	17	6997.5	10912.5
11. Project Management & Administration	Internal team coordination; matter administration; conflict checks; time entry review; budget monitoring against $350,000 board-authorized cap; status reporting	2	3	2	3	4	6	4	6	12	18	7245	10942.5
TOTALS	40	59	21	34	103	140	98	138	262	371	168000	238687.5
Blended Effective Rate	641.22	643.36

[sheet: C&H Timekeeper Summary]

Timekeeper	Discounted Rate ($/hr)	Total Hrs (Low)	Total Hrs (High)	Total Fees (Low)	Total Fees (High)	% of Total Fees (Low)	% of Total Fees (High)
Bernard Crawford	945	40	59	37800	55755	22.5%	23.4%
Renata Vasquez	895.5	21	34	18805.5	30447	11.2%	12.8%
Nadia Petrov	607.5	103	140	62572.5	85050	37.3%	35.6%
James Underwood	472.5	98	138	46305	65205	27.6%	27.3%
TOTAL (C&H)	262	371	165483	236457	100.0%	100.0%

[sheet: Ridgepoint Advisory Budget]

Task / Deliverable	Description	Estimated Fee (Low)	Estimated Fee (High)	Notes
A. Data Ingestion & Validation	Ingest and validate Luminos TimeTrack exports (account LTT-VHG-2022-0041) for 7 properties; reconcile punch data against payroll registers; identify data gaps from Jan. 2022 to present	15000	20000	Coordinated with Enrique J. Fuentes and Shannon D. Prewitt (Luminos)
B. Statistical Sampling Design	Design statistically valid sampling methodology for time-punch records across 7 properties and ~1,895 current hourly employees (up to 5,900 putative collective members over lookback period)	10000	15000	Sample design to support both litigation defense and remediation analysis
C. Auto-Deduction Analysis	Analyze Luminos TimeTrack auto-deduction rule AR-MEAL-030 (30-min auto-deduct for shifts ≥ 6 hrs); identify frequency and pattern of missed exception/correction entries; quantify uncompensated meal-break time	15000	22000	Key to meal-break deduction allegation
D. Overtime & Off-the-Clock Analysis	Reconstruct overtime calculations; analyze pre-/post-shift time patterns (alleged 15–25 min/shift for donning/doffing, system boot-up, shift handovers); compare recorded vs. estimated actual hours; assess avg. weekly hours (42.5 hrs/wk) and overtime (2.5 hrs/wk)	18000	25000	Blended avg. hourly rate of $16.50 used for preliminary modeling
E. Tipped-Employee Wage Analysis	Review tip-pool records and tipped-employee pay data for front-desk and concierge roles; verify compliance with $10.98/hr tipped minimum wage ($14.00 − $3.02 tip credit)	8000	12000	Applicable to subset of employees at select properties
F. Damages Modeling & Report	Build damages model by property, claim category, and lookback period; produce preliminary forensic report for use by Calderwood & Harkness in exposure assessment and settlement analysis	15000	22000	Report prepared under attorney-client privilege / work-product protection
G. Project Management & Testimony Prep Reserve	Project management, team coordination, quality review; reserve for potential expert report or testimony preparation if matter proceeds to litigation	4000	4000	Flat estimate
TOTAL (Ridgepoint Advisory Group LLC)	85000	120000	Principal: Dr. Alicia Tran, CPA, CFF; 500 East Broward Boulevard, Suite 1050, Fort Lauderdale, FL 33394; Status: not yet engaged — pending VHG approval

[sheet: Combined Budget Summary]

Budget Component	Provider	Estimated Low	Estimated High	Status
Outside Counsel — Scoping Phase	Calderwood & Harkness LLP	175000	225000	Engaged (Jan. 30, 2026)
Forensic Payroll Analytics	Ridgepoint Advisory Group LLC	85000	120000	Not yet engaged — pending VHG approval
COMBINED ESTIMATED TOTAL	260000	345000
Board-Authorized Budget Cap	VHG Audit Committee (Jan. 29, 2026)	350000	350000	Authorized
Budget Headroom / (Overage)	90000	5000
Headroom as % of Cap	25.7%	1.4%

[sheet: Cover]
Field | Value
Matter Name | Verimark Hospitality Group Inc. — Pre-Litigation Wage-and-Hour Audit (Scoping Phase)
Matter Number | 1021-00005
Client | Verimark Hospitality Group Inc. (Nasdaq: VMHG)
Client EIN | 84-3291076
Client Address | 2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629
Client General Counsel | Devin K. Arroyo
Engagement Firm | Calderwood & Harkness LLP
Firm Address | 100 Southeast Second Street, Suite 3400, Miami, FL 33131
Responsible Partner | Bernard Crawford
Billing Partner | Renata Vasquez
Prepared By | Renata Vasquez / Nadia Petrov
Date Prepared | February 3, 2026
Board Authorization Date | January 29, 2026 (Audit Committee)
Board-Authorized Budget Cap | $350,000
Billing Arrangement | Hourly — standard rates with 10% courtesy discount
C&H Estimated Budget Range | $175,000 – $225,000
Ridgepoint Advisory Estimated Budget Range | $85,000 – $120,000
Combined Estimated Range | $260,000 – $345,000
Status — Ridgepoint Engagement | Not yet engaged; pending VHG approval
Demand Letter Date | January 14, 2026 (Garza, Linden & Okafor LLP)
Demand Response Deadline | February 28, 2026
EPL Insurance Tender Deadline | March 15, 2026
[sheet: Timekeeper Rates]
Timekeeper | Role | Title | Standard Rate ($/hr) | Discount % | Discounted Rate ($/hr)
Bernard Crawford | Responsible Partner | Partner, Labor & Employment | 1050 | 10% | 945
Renata Vasquez | Billing Partner | Partner, Labor & Employment | 995 | 10% | 895.5
Nadia Petrov | Lead Associate | Senior Associate, Labor & Employment | 675 | 10% | 607.5
James Underwood | Working Associate | Associate, Labor & Employment | 525 | 10% | 472.5
[sheet: C&H Budget Detail]
Work Stream | Description | Crawford Hrs (Low) | Crawford Hrs (High) | Vasquez Hrs (Low) | Vasquez Hrs (High) | Petrov Hrs (Low) | Petrov Hrs (High) | Underwood Hrs (Low) | Underwood Hrs (High) | Total Hrs (Low) | Total Hrs (High) | Total Fees (Low) | Total Fees (High)
1. Demand-Letter Analysis | Review and analysis of GLO demand letter (5 allegations: overtime, auto meal-break deductions, pre-/post-shift off-the-clock work, tipped-employee minimum wage, FLSA administrative exemption misclassification); preparation of internal analysis memorandum | 3 | 5 | 2 | 3 | 12 | 16 | 10 | 14 | 27 | 38 | 17752.5 | 24975
2. Exposure Modeling | Build quantitative exposure model covering Scenario A (narrow — overtime only, 2-year lookback, 1,895 hourly employees, $8,147,700), mid-range ($22M–$38M), and Scenario B (broad — all claims, 3-year willful lookback, 5,900 putative collective, ~$202.4M theoretical ceiling); property-level breakdowns; liquidated damages calculations; preparation of preliminary exposure assessment memorandum for General Counsel | 5 | 8 | 3 | 5 | 15 | 20 | 12 | 16 | 35 | 49 | 22807.5 | 31972.5
3. Legal Research | Research memos on: (a) FLSA/Florida statutes of limitations (2-yr non-willful, 3-yr willful, 5-yr Florida minimum wage under Fla. Stat. § 95.11(2)(b)); (b) FLSA administrative exemption (29 C.F.R. § 541.200) for lead/senior roles; (c) auto meal-break deduction legality (29 C.F.R. § 785.19); (d) tipped-employee minimum wage compliance (Art. X, § 24, Fla. Const.; $14.00 − $3.02 tip credit = $10.98/hr); (e) pre-/post-shift compensability (Portal-to-Portal Act, continuous-workday doctrine); (f) FLSA collective-action conditional certification (29 U.S.C. § 216(b)); (g) Palomar joint-employer analysis (FLSA economic-reality test, HMA-2021-0601-PC) | 4 | 6 | 2 | 3 | 20 | 28 | 22 | 30 | 48 | 67 | 29190 | 40912.5
4. Data Collection Coordination | Preparation and transmission of document/data collection request list to VHG and Luminos Payroll Solutions Inc. (account LTT-VHG-2022-0041); coordinate retrieval of Luminos TimeTrack punch data, auto-deduction config (rule AR-MEAL-030), payroll registers, wage statements, scheduling records, tip-pool records, employee handbooks (v.7.2), job descriptions, exemption classifications; specify date ranges (Jan. 2021–present for longest lookback); interface with Enrique J. Fuentes (VHG Payroll) and Shannon D. Prewitt (Luminos) | 2 | 3 | 1 | 2 | 10 | 14 | 14 | 20 | 27 | 39 | 15727.5 | 22657.5
5. Litigation Hold & Preservation | Review and supplement VHG internal litigation-hold memo (issued Jan. 17, 2026); prepare advisory letter to General Counsel; draft litigation-hold notice for 23 custodians (7 property HR managers, 7 GMs, Whitfield, Fuentes, Arroyo, Jefferson, 5 department heads); prepare and transmit data-preservation letter to Luminos Payroll Solutions Inc.; custodian identification memorandum | 3 | 4 | 1 | 2 | 8 | 10 | 10 | 14 | 22 | 30 | 13110 | 18045
6. Audit-Scope Design | Develop proposed scope and methodology for pre-litigation wage-and-hour audit across 7 at-issue properties (Regency Tampa, Grand Orlando, Shores Clearwater, Bayfront St. Petersburg, Resort & Spa Boca Raton, Oceanview Fort Lauderdale, Key West Collection); property-level audit matrix; phased approach (document collection, statistical sampling, employee interviews, remediation recommendations); coordinate with Ridgepoint Advisory Group (Dr. Alicia Tran) on forensic payroll analytics scope | 5 | 7 | 2 | 3 | 12 | 16 | 8 | 12 | 27 | 38 | 17347.5 | 24570
7. Insurance Coverage Analysis & Tender | Analyze EPL coverage under Pinnacle Indemnity Corp. policy PIN-EPL-2025-44781 ($10M per occurrence / $25M aggregate, $500K SIR per claim; policy period July 1, 2025 – June 30, 2026); assess wage-and-hour exclusion applicability and defense-cost advancement; prepare and transmit notice of claim / tender letter to Lydia C. Bowman by Mar. 15, 2026 deadline | 3 | 5 | 1 | 2 | 6 | 8 | 6 | 8 | 16 | 23 | 10170 | 14715
8. Board / Audit Committee Presentations | Prepare Northgate Services Inc. presentation for VHG Audit Committee summarizing demand-letter allegations, preliminary exposure ($8.1M narrow to $202.4M ceiling, $22–$38M mid-range), proposed audit scope, budget overview, recommended next steps and timeline; attend presentation meeting; prepare follow-up memoranda | 6 | 8 | 4 | 6 | 6 | 8 | 2 | 4 | 18 | 26 | 14580 | 20940
9. Correspondence & Negotiation | Draft response to GLO demand letter (Marco A. Garza); request extension of Feb. 28, 2026 deadline; manage redline comments from Devin K. Arroyo; general correspondence with VHG management (CEO Langford, CFO Dunning, GC Arroyo, VP HR Whitfield); coordination with Palomar Realty Partners LLC (Ricardo E. Montalvo) re: common interest / joint defense agreement for Verimark Shores Clearwater property | 5 | 7 | 2 | 3 | 6 | 8 | 6 | 8 | 19 | 26 | 13072.5 | 18045
10. Ridgepoint Engagement Coordination | Evaluate Ridgepoint Advisory Group LLC engagement proposal; draft engagement letter for forensic payroll analytics under attorney-client privilege / work-product protection; coordinate privilege protocols; review deliverable specifications (statistical sampling, damages reconstruction); pending VHG approval | 2 | 3 | 1 | 2 | 4 | 6 | 4 | 6 | 11 | 17 | 6997.5 | 10912.5
11. Project Management & Administration | Internal team coordination; matter administration; conflict checks; time entry review; budget monitoring against $350,000 board-authorized cap; status reporting | 2 | 3 | 2 | 3 | 4 | 6 | 4 | 6 | 12 | 18 | 7245 | 10942.5
TOTALS | 40 | 59 | 21 | 34 | 103 | 140 | 98 | 138 | 262 | 371 | 168000 | 238687.5
Blended Effective Rate | 641.22 | 643.36
[sheet: C&H Timekeeper Summary]
Timekeeper | Discounted Rate ($/hr) | Total Hrs (Low) | Total Hrs (High) | Total Fees (Low) | Total Fees (High) | % of Total Fees (Low) | % of Total Fees (High)
Bernard Crawford | 945 | 40 | 59 | 37800 | 55755 | 22.5% | 23.4%
Renata Vasquez | 895.5 | 21 | 34 | 18805.5 | 30447 | 11.2% | 12.8%
Nadia Petrov | 607.5 | 103 | 140 | 62572.5 | 85050 | 37.3% | 35.6%
James Underwood | 472.5 | 98 | 138 | 46305 | 65205 | 27.6% | 27.3%
TOTAL (C&H) | 262 | 371 | 165483 | 236457 | 100.0% | 100.0%
[sheet: Ridgepoint Advisory Budget]
Task / Deliverable | Description | Estimated Fee (Low) | Estimated Fee (High) | Notes
A. Data Ingestion & Validation | Ingest and validate Luminos TimeTrack exports (account LTT-VHG-2022-0041) for 7 properties; reconcile punch data against payroll registers; identify data gaps from Jan. 2022 to present | 15000 | 20000 | Coordinated with Enrique J. Fuentes and Shannon D. Prewitt (Luminos)
B. Statistical Sampling Design | Design statistically valid sampling methodology for time-punch records across 7 properties and ~1,895 current hourly employees (up to 5,900 putative collective members over lookback period) | 10000 | 15000 | Sample design to support both litigation defense and remediation analysis
C. Auto-Deduction Analysis | Analyze Luminos TimeTrack auto-deduction rule AR-MEAL-030 (30-min auto-deduct for shifts ≥ 6 hrs); identify frequency and pattern of missed exception/correction entries; quantify uncompensated meal-break time | 15000 | 22000 | Key to meal-break deduction allegation
D. Overtime & Off-the-Clock Analysis | Reconstruct overtime calculations; analyze pre-/post-shift time patterns (alleged 15–25 min/shift for donning/doffing, system boot-up, shift handovers); compare recorded vs. estimated actual hours; assess avg. weekly hours (42.5 hrs/wk) and overtime (2.5 hrs/wk) | 18000 | 25000 | Blended avg. hourly rate of $16.50 used for preliminary modeling
E. Tipped-Employee Wage Analysis | Review tip-pool records and tipped-employee pay data for front-desk and concierge roles; verify compliance with $10.98/hr tipped minimum wage ($14.00 − $3.02 tip credit) | 8000 | 12000 | Applicable to subset of employees at select properties
F. Damages Modeling & Report | Build damages model by property, claim category, and lookback period; produce preliminary forensic report for use by Calderwood & Harkness in exposure assessment and settlement analysis | 15000 | 22000 | Report prepared under attorney-client privilege / work-product protection
G. Project Management & Testimony Prep Reserve | Project management, team coordination, quality review; reserve for potential expert report or testimony preparation if matter proceeds to litigation | 4000 | 4000 | Flat estimate
TOTAL (Ridgepoint Advisory Group LLC) | 85000 | 120000 | Principal: Dr. Alicia Tran, CPA, CFF; 500 East Broward Boulevard, Suite 1050, Fort Lauderdale, FL 33394; Status: not yet engaged — pending VHG approval
[sheet: Combined Budget Summary]
Budget Component | Provider | Estimated Low | Estimated High | Status
Outside Counsel — Scoping Phase | Calderwood & Harkness LLP | 175000 | 225000 | Engaged (Jan. 30, 2026)
Forensic Payroll Analytics | Ridgepoint Advisory Group LLC | 85000 | 120000 | Not yet engaged — pending VHG approval
COMBINED ESTIMATED TOTAL | 260000 | 345000
Board-Authorized Budget Cap | VHG Audit Committee (Jan. 29, 2026) | 350000 | 350000 | Authorized
Budget Headroom / (Overage) | 90000 | 5000
Headroom as % of Cap | 25.7% | 1.4%

[sheet: Cover]

Record

Parties

Dates

Amounts