[sheet: Cover]

Field	Value
Transaction	$35,000,000 Mezzanine Financing — Senior Subordinated Notes due 2028
Issuer / Borrower	Redstone Gaming Corp., a Nevada corporation (Nasdaq: RDGM)
Borrower Address	4250 South Decatur Boulevard, Suite 1100, Las Vegas, NV 89103
Purchaser	Pinnacle Bridge Mezzanine Opportunities Fund IV, LP, a Delaware limited partnership
Purchaser Address	280 Park Avenue, 22nd Floor, New York, NY 10017
Purchaser Parent	Pinnacle Bridge Capital Partners, LP
Existing Senior Agent	Cornerstone National Bank, N.A.
Borrower's Counsel	Calderwood & Harkness LLP, 300 South Fourth Street, Suite 2800, Las Vegas, NV 89101
Lender's Counsel	Wainwright Hess & Caldwell LLP, 1345 Avenue of the Americas, 30th Floor, New York, NY 10105
Placement Agent	Ashford Peak Advisory Group, LLC, 600 Lexington Avenue, Suite 1410, New York, NY 10022
Independent Auditor	Harmon & Grayling CPAs, LLP, 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169
Proposed Collateral Agent	Dralvecen Title & Escrow Co., 1980 Festival Plaza Drive, Suite 700, Las Vegas, NV 89135
C&H Matter Number	1033-00001
Prepared By	Marcus Leung, Lead Associate, Calderwood & Harkness LLP
Date Circulated	January 20, 2023
Principal Amount	$35,000,000
Instrument	13.50% Senior Subordinated Notes due 2028 (10.50% Cash / 3.00% PIK)
Warrant Coverage	3.00% of fully diluted equity — 1,650,000 shares at $9.24/share strike
Governing Law	State of Nevada
Note	All items shown as open/pending. Anticipated closing date TBD.

[sheet: Closing Checklist]

Item No.	Category	Description	Responsible Party	Status	Target Due Date	Notes
I.	TRANSACTION DOCUMENTS
1.1	Transaction Documents	Mezzanine Note Purchase Agreement among Redstone Gaming Corp. as Issuer and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP as Purchaser — $35,000,000 aggregate principal amount of 13.50% Senior Subordinated Notes due 2028	C&H / WHC	Open	TBD — Closing	Second revised draft circulated Feb. 17, 2023; incorporates WHC comments from Jan. 11, 2023 markup
1.2	Transaction Documents	Mezzanine Promissory Note — $35,000,000 (10.50% cash interest p.a., 3.00% PIK interest p.a., payable quarterly in arrears; maturity 5 years from funding)	C&H	Open	TBD — Closing	To be executed concurrently with Note Purchase Agreement
1.3	Transaction Documents	Warrant Agreement between Redstone Gaming Corp. and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP — warrants to purchase 1,650,000 shares of RGC common stock at $9.24/share (3.00% of fully diluted equity; 110% of 30-day VWAP of $8.40)	C&H	Open	TBD — Closing	First draft circulated Jan. 27, 2023; includes anti-dilution adjustments, cashless exercise, and registration rights
1.4	Transaction Documents	Pledge and Security Agreement between Redstone Gaming Corp. as Pledgor and Pinnacle Bridge Capital Partners, LP as Secured Party — second-priority pledge of equity interests in Redstone Digital Wagering, LLC (EIN 88-0587214) and Redstone Tribal Management, Inc. (EIN 88-0601889), plus IP assets related to RedBet wagering software	C&H	Open	TBD — Closing	Draft dated Feb. 17, 2023; no real property liens (restricted under Nevada gaming regulations without NGCB approval); Dralvecen Title & Escrow Co. (Karen Prescott) as proposed collateral agent
1.5	Transaction Documents	Intercreditor and Subordination Agreement among Cornerstone National Bank, N.A. as Senior Agent, Pinnacle Bridge Capital Partners, LP as Mezzanine Lender, and Redstone Gaming Corp. as Borrower	C&H / Cornerstone Counsel	Open	TBD — Closing	Draft circulated Dec. 19, 2022; Cornerstone (Neil Bradshaw) provided preliminary comments Feb. 10, 2023; required under §7.03(b) of Senior Credit Facility
1.6	Transaction Documents	Escrow Agreement with Dralvecen Title & Escrow Co. as Escrow and Collateral Agent	C&H	Open	TBD — Closing	Karen Prescott, VP — Commercial Escrow, designated contact
II.	CORPORATE AUTHORIZATIONS — BORROWER (REDSTONE GAMING CORP.)
2.1	Corporate Authorizations — Borrower	Certified copy of resolutions of the Board of Directors of Redstone Gaming Corp. authorizing the mezzanine financing, issuance of Notes, execution and delivery of all Transaction Documents, and issuance of warrants	RGC (Thomas Kierkegaard, GC)	Open	TBD — 5 business days prior to Closing
2.2	Corporate Authorizations — Borrower	Officer's Certificate of Redstone Gaming Corp. certifying (i) accuracy of representations and warranties, (ii) no default or Event of Default, (iii) material adverse change, and (iv) compliance with financial covenants	RGC (Priya Sandoval, CFO)	Open	TBD — Closing	To certify Min. FCCR ≥ 1.20x, Max. Total Net Leverage ≤ 4.50x, Min. Liquidity ≥ $15,000,000
2.3	Corporate Authorizations — Borrower	Secretary's Certificate of Redstone Gaming Corp. certifying (i) Articles of Incorporation, (ii) Bylaws, (iii) incumbency of officers executing documents (Gerald Navarro, CEO; Priya Sandoval, CFO; Thomas Kierkegaard, GC; Angela Fong, Treasurer)	RGC (Secretary)	Open	TBD — 5 business days prior to Closing
2.4	Corporate Authorizations — Borrower	Certificate of Good Standing — Redstone Gaming Corp. from the Nevada Secretary of State (dated within 10 business days of Closing)	RGC / C&H	Open	TBD — 10 business days prior to Closing	EIN: 88-0412376
2.5	Corporate Authorizations — Borrower	Certificate of Good Standing — Redstone Digital Wagering, LLC from the Nevada Secretary of State	RGC / C&H	Open	TBD — 10 business days prior to Closing	EIN: 88-0587214; pledged subsidiary
2.6	Corporate Authorizations — Borrower	Certificate of Good Standing — Redstone Tribal Management, Inc. from the Nevada Secretary of State	RGC / C&H	Open	TBD — 10 business days prior to Closing	EIN: 88-0601889; pledged subsidiary
III.	CORPORATE AUTHORIZATIONS — PURCHASER (PINNACLE BRIDGE)
3.1	Corporate Authorizations — Purchaser	Certificate of Limited Partnership and Certificate of Good Standing for Pinnacle Bridge Mezzanine Opportunities Fund IV, LP from the Delaware Secretary of State	WHC	Open	TBD — 10 business days prior to Closing	Fund vehicle for this investment
3.2	Corporate Authorizations — Purchaser	Certificate of Formation and Certificate of Good Standing for Pinnacle Bridge Capital Management, LLC (General Partner of Pinnacle Bridge Capital Partners, LP) from the Delaware Secretary of State	WHC	Open	TBD — 10 business days prior to Closing
3.3	Corporate Authorizations — Purchaser	Certified copy of authorizing resolutions of Pinnacle Bridge Capital Management, LLC authorizing Fund IV's investment and execution of Transaction Documents	WHC	Open	TBD — 5 business days prior to Closing	Victor Hargrove, Managing Partner; Danielle Okonkwo, Head of Credit Investments
3.4	Corporate Authorizations — Purchaser	Incumbency certificate for officers/authorized signatories of Pinnacle Bridge Capital Partners, LP and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP	WHC	Open	TBD — 5 business days prior to Closing	EIN (PBCP): 13-4298551
IV.	THIRD-PARTY CONSENTS AND REGULATORY APPROVALS
4.1	Third-Party Consents	Cornerstone National Bank, N.A. — Written consent of Administrative Agent (and Required Lenders, if applicable) under §7.03(b) of the Second Amended and Restated Credit Agreement dated March 15, 2021 to permit subordinated indebtedness in excess of $10,000,000	C&H / Cornerstone (Neil Bradshaw, Relationship Manager)	Open	TBD — Prior to Closing	Consent required because $35M mezzanine exceeds $10M threshold; $50,000 consent processing fee payable to Cornerstone at Closing
4.2	Third-Party Consents	Cornerstone National Bank, N.A. — Execution and delivery of Intercreditor and Subordination Agreement (see Item 1.5)	C&H / Cornerstone Counsel	Open	TBD — Closing	Cross-reference to Item 1.5
4.3	Third-Party Consents	Nevada Gaming Control Board — Confirmation that warrant coverage of 3.00% of fully diluted equity (1,650,000 shares) does not trigger a finding-of-suitability requirement for Pinnacle Bridge or its principals (5% threshold); or, if required, filing and approval of Key Employee & Lender disclosure form by Victor Hargrove and Danielle Okonkwo	C&H / RGC	Open	TBD — Prior to Closing	RGC Gaming License No. NGC-2019-00847; C&H regulatory memo dated Dec. 12, 2022 notes risk of crossing 5% threshold through PIK accrual over time
4.4	Third-Party Consents	Arizona Department of Gaming — Confirmation or notice, if required, regarding mezzanine indebtedness and pledge of Redstone Tribal Management, Inc. equity (tribal gaming management contracts in Arizona)	C&H / RGC	Open	TBD — Prior to Closing	RGC holds active Arizona gaming license

4.5	Third-Party Consents	New Mexico Gaming Control Board — Confirmation or notice, if required, regarding mezzanine indebtedness and pledge of Redstone Tribal Management, Inc. equity (tribal gaming management contracts in New Mexico)	C&H / RGC	Open	TBD — Prior to Closing	RGC holds active New Mexico gaming license
4.6	Third-Party Consents	UCC-1 Financing Statement filings (Nevada Secretary of State) — second-priority lien on equity interests in Redstone Digital Wagering, LLC and Redstone Tribal Management, Inc.	C&H / Dralvecen Escrow	Open	TBD — Closing
4.7	Third-Party Consents	USPTO — Recordation of security interest in RedBet proprietary wagering software IP (trademark application filed Aug. 2022, registration pending)	C&H	Open	TBD — Post-Closing
V.	LEGAL OPINIONS
5.1	Legal Opinions	Borrower's Counsel Opinion — Calderwood & Harkness LLP opinion letter addressed to Pinnacle Bridge Mezzanine Opportunities Fund IV, LP, covering (i) due authorization and enforceability, (ii) no conflicts, (iii) valid issuance of warrants, (iv) Nevada law matters, (v) securities law exemption (Section 4(a)(2) / Regulation D)	C&H (Claudia Merritt, Responsible Partner)	Open	TBD — Closing
5.2	Legal Opinions	Lender's Counsel Opinion — Wainwright Hess & Caldwell LLP opinion letter addressed to Redstone Gaming Corp., covering (i) due organization and authority of Pinnacle Bridge entities, (ii) enforceability, (iii) New York and Delaware law matters	WHC (Margaret Forsythe, Lead Partner)	Open	TBD — Closing
VI.	FINANCIAL DELIVERABLES
6.1	Financial Deliverables	Comfort Letter from Harmon & Grayling CPAs, LLP (Robert Chow, Engagement Partner) — cold comfort letter regarding RGC financial statements included in Purchaser's due diligence	RGC / Harmon & Grayling	Open	TBD — 3 business days prior to Closing
6.2	Financial Deliverables	Bring-Down Comfort Letter from Harmon & Grayling CPAs, LLP (bring-down to Closing date)	RGC / Harmon & Grayling	Open	TBD — Closing
6.3	Financial Deliverables	Financial Statement Consent from Harmon & Grayling CPAs, LLP — consent to use of audited financial statements (FYE June 30, 2022: LTM Revenue $387.6M, LTM EBITDA $58.1M)	RGC / Harmon & Grayling	Open	TBD — Closing
6.4	Financial Deliverables	Pro Forma Compliance Certificate — demonstrating pro forma compliance with proposed financial covenants: (i) Min. FCCR ≥ 1.20x, (ii) Max. Total Net Leverage ≤ 4.50x (pro forma total leverage: ($142M drawn + $35M mezz) ÷ $58.1M EBITDA = 3.05x), (iii) Min. Liquidity ≥ $15.0M	RGC (Priya Sandoval, CFO / Angela Fong, Treasurer)	Open	TBD — 5 business days prior to Closing	Net leverage as of 9/30/22: 2.44x ($142M ÷ $58.1M)
6.5	Financial Deliverables	Use of Proceeds Certificate — confirming application of proceeds: (i) $22,000,000 for Project Catalyst (digital wagering platform upgrade), (ii) $13,000,000 for tribal gaming management expansion (AZ/NM)	RGC (Priya Sandoval, CFO)	Open	TBD — Closing	Total: $35,000,000
6.6	Financial Deliverables	Bring-Down of Representations and Warranties Certificate	RGC (Thomas Kierkegaard, GC)	Open	TBD — Closing
6.7	Financial Deliverables	Solvency Certificate	RGC (Priya Sandoval, CFO)	Open	TBD — Closing
VII.	SECURITIES LAW DELIVERABLES
7.1	Securities Law Deliverables	Accredited Investor / Qualified Institutional Buyer Questionnaire completed by Pinnacle Bridge Mezzanine Opportunities Fund IV, LP	WHC / Pinnacle Bridge	Open	TBD — Prior to Closing	C&H Reg D analysis memo dated Jan. 25, 2023 confirms exemption availability
7.2	Securities Law Deliverables	Investor Representation Letter from Pinnacle Bridge Mezzanine Opportunities Fund IV, LP regarding investment intent, accredited investor status, and transfer restrictions	WHC / Pinnacle Bridge	Open	TBD — Closing
7.3	Securities Law Deliverables	Form D (SEC) — Notice of Exempt Offering of Securities (to be filed within 15 days after first sale)	C&H	Open	TBD — Post-Closing (within 15 days)	Section 4(a)(2) / Rule 506(b) exemption
7.4	Securities Law Deliverables	Restrictive Legend — Warrant certificates and underlying shares to bear customary restrictive legend	C&H	Open	TBD — Closing
VIII.	CLOSING PAYMENTS
8.1	Closing Payments	Placement Agent Fee — Ashford Peak Advisory Group, LLC (Jonathan Kuo, Managing Director): 1.50% × $35,000,000 = $525,000	RGC / Ashford Peak	Open	TBD — Closing	Per placement agent engagement dated Oct. 14, 2022; payable at Closing via wire to Ashford Peak, 600 Lexington Avenue, Suite 1410, New York, NY 10022
8.2	Closing Payments	Borrower's Counsel Fees — Calderwood & Harkness LLP: fees and disbursements through Closing (estimated ~$287,400 through dormancy; final amount TBD at Closing)	RGC	Open	TBD — Closing	C&H Matter No. 1033-00001; blended rate ~$785/hr
8.3	Closing Payments	Lender's Counsel Fees — Wainwright Hess & Caldwell LLP: fees and disbursements up to fee cap of $175,000 (estimated incurred ~$94,000 to date), to be borne by RGC	RGC	Open	TBD — Closing	Fee cap per executed term sheet dated Dec. 2, 2022
8.4	Closing Payments	Cornerstone National Bank, N.A. — Consent Processing Fee: $50,000 flat fee for intercreditor / subordination consent under §7.03(b)	RGC	Open	TBD — Closing	Wire to Cornerstone, 101 South Tryon Street, Charlotte, NC 28202
8.5	Closing Payments	Escrow / Collateral Agent Fee — Dralvecen Title & Escrow Co.: fees per engagement letter (TBD)	RGC	Open	TBD — Closing	Karen Prescott, VP — Commercial Escrow

8.6	Closing Payments	Wire Transfer Instructions — all parties to deliver wire transfer instructions at least 3 business days prior to Closing	All Parties	Open	TBD — 3 business days prior to Closing
IX.	MISCELLANEOUS / OTHER CONDITIONS PRECEDENT
9.1	Miscellaneous	No Material Adverse Effect — no Material Adverse Effect shall have occurred since Sept. 30, 2022	RGC	Open	TBD — Closing
9.2	Miscellaneous	No Litigation — no litigation or proceeding pending or threatened that could reasonably be expected to prevent consummation of the transactions	C&H / RGC	Open	TBD — Closing
9.3	Miscellaneous	Lien Search Results — UCC, tax lien, judgment, and litigation searches in Nevada (RGC, RDW, RTM) and Delaware (Pinnacle Bridge entities)	C&H	Open	TBD — 10 business days prior to Closing
9.4	Miscellaneous	Insurance Certificates — evidence of RGC's existing insurance coverage	RGC	Open	TBD — 5 business days prior to Closing
9.5	Miscellaneous	Expiration of Exclusivity — 90-day exclusivity under executed term sheet dated Dec. 2, 2022 (expires Mar. 15, 2023); Closing must occur within exclusivity period or extension obtained	C&H / WHC	Open	TBD	Exclusivity commenced Dec. 2, 2022
9.6	Miscellaneous	Call Protection Schedule — confirmation of non-call period (24 months) and prepayment premium schedule embedded in final Note: 103% (months 25–36), 102% (months 37–48), 101% (months 49–54), par (months 55–60)	C&H / WHC	Open	TBD — Closing	Prepayment premium at month 25 = $35M × 3% = $1,050,000

[sheet: Party Contact Directory]

Party	Full Legal Name	Role	Contact Person	Title	Address	Entity Type / Jurisdiction
Borrower / Issuer	Redstone Gaming Corp.	Issuer of Notes and Warrants	Thomas Kierkegaard / Priya Sandoval	General Counsel / CFO	4250 South Decatur Boulevard, Suite 1100, Las Vegas, NV 89103	Nevada corporation (Nasdaq: RDGM)
Pledged Subsidiary	Redstone Digital Wagering, LLC	Wholly owned subsidiary — digital wagering platform	Thomas Kierkegaard	General Counsel (parent)	c/o Redstone Gaming Corp.	Nevada LLC (EIN: 88-0587214)
Pledged Subsidiary	Redstone Tribal Management, Inc.	Wholly owned subsidiary — tribal gaming management contracts (AZ/NM)	Thomas Kierkegaard	General Counsel (parent)	c/o Redstone Gaming Corp.	Nevada corporation (EIN: 88-0601889)
Purchaser	Pinnacle Bridge Mezzanine Opportunities Fund IV, LP	Mezzanine Note Purchaser	Victor Hargrove / Danielle Okonkwo	Managing Partner / Head of Credit Investments	280 Park Avenue, 22nd Floor, New York, NY 10017	Delaware LP
GP of Purchaser Parent	Pinnacle Bridge Capital Management, LLC	General Partner of Pinnacle Bridge Capital Partners, LP	Victor Hargrove	Managing Partner	280 Park Avenue, 22nd Floor, New York, NY 10017	Delaware LLC
Senior Agent / Lender	Cornerstone National Bank, N.A.	Administrative Agent under $200M Senior Secured Revolving Credit Facility (dated Mar. 15, 2021)	Neil Bradshaw	Relationship Manager	101 South Tryon Street, Charlotte, NC 28202	National Banking Association
Borrower's Counsel	Calderwood & Harkness LLP	Counsel to RGC	Claudia Merritt / Marcus Leung	Responsible Partner / Lead Associate	300 South Fourth Street, Suite 2800, Las Vegas, NV 89101	Nevada LLP
Lender's Counsel	Wainwright Hess & Caldwell LLP	Counsel to Pinnacle Bridge	Margaret Forsythe / Ryan Castellano	Lead Partner / Associate	1345 Avenue of the Americas, 30th Floor, New York, NY 10105	New York LLP
Placement Agent	Ashford Peak Advisory Group, LLC	Placement agent for RGC	Jonathan Kuo	Managing Director	600 Lexington Avenue, Suite 1410, New York, NY 10022	Delaware LLC; registered broker-dealer
Independent Auditor	Harmon & Grayling CPAs, LLP	Independent auditor of RGC	Robert Chow	Engagement Partner	3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169	Nevada LLP
Collateral / Escrow Agent	Dralvecen Title & Escrow Co.	Proposed escrow and collateral agent	Karen Prescott	VP, Commercial Escrow	1980 Festival Plaza Drive, Suite 700, Las Vegas, NV 89135	Nevada corporation

[sheet: Key Transaction Terms]

Term	Detail
Principal Amount	$35,000,000
Instrument	Senior Subordinated Notes due 2028
Cash Interest Rate	10.50% per annum, payable quarterly in arrears
PIK Interest Rate	3.00% per annum, compounding quarterly (borrower may elect cash-pay in lieu)
All-In Yield	13.50% per annum
Annual Cash Interest	$3,675,000 ($918,750/quarter)
Annual PIK Accrual (Year 1)	$1,050,000
Maturity	5 years from funding
Warrant Coverage	3.00% of fully diluted equity
Warrant Shares	1,650,000 shares of RGC common stock
Warrant Strike Price	$9.24/share (110% of 30-day VWAP of $8.40)
Call Protection	Non-callable for 24 months; 103% (months 25–36), 102% (37–48), 101% (49–54), par (55–60)
Subordination	Subordinated to all existing and permitted senior indebtedness, including $200M Cornerstone revolving facility
Collateral	Second-priority pledge of equity in RDW and RTM; assignment of RedBet IP (USPTO app. filed Aug. 2022); no real property liens
Financial Covenant — Min. FCCR	1.20x
Financial Covenant — Max. Total Net Leverage	4.50x
Financial Covenant — Min. Liquidity	$15,000,000 (unrestricted cash + available revolver)
Senior Facility Drawn (9/30/22)	$142,000,000 of $200,000,000
Senior Facility Rate	SOFR + 275 bps (+10 bps CSA)
Current Net Leverage (9/30/22)	2.44x
Pro Forma Total Leverage (with mezz)	3.05x
LTM Revenue (FYE 6/30/22)	$387,600,000
LTM EBITDA (FYE 6/30/22)	$58,100,000
Shares Outstanding	~55,000,000

Stock Price at Engagement (10/31/22)	$8.40/share
Market Cap at Engagement	~$462,000,000
RGC EIN	88-0412376
Pinnacle Bridge EIN	13-4298551
Nevada Gaming License	NGC-2019-00847
Senior Credit Facility Reference	Second Amended and Restated Credit Agreement, dated March 15, 2021, among RGC, CNB as Administrative Agent, and the lenders party thereto
Use of Proceeds — Project Catalyst	$22,000,000 (digital wagering platform upgrade)
Use of Proceeds — Tribal Gaming Expansion (AZ/NM)	$13,000,000
Governing Law	State of Nevada
Exclusivity	90 days from Dec. 2, 2022 (expires Mar. 15, 2023)
Term Sheet Date	Executed Dec. 2, 2022 (non-binding)

[sheet: Cover]
Field | Value
Transaction | $35,000,000 Mezzanine Financing — Senior Subordinated Notes due 2028
Issuer / Borrower | Redstone Gaming Corp., a Nevada corporation (Nasdaq: RDGM)
Borrower Address | 4250 South Decatur Boulevard, Suite 1100, Las Vegas, NV 89103
Purchaser | Pinnacle Bridge Mezzanine Opportunities Fund IV, LP, a Delaware limited partnership
Purchaser Address | 280 Park Avenue, 22nd Floor, New York, NY 10017
Purchaser Parent | Pinnacle Bridge Capital Partners, LP
Existing Senior Agent | Cornerstone National Bank, N.A.
Borrower's Counsel | Calderwood & Harkness LLP, 300 South Fourth Street, Suite 2800, Las Vegas, NV 89101
Lender's Counsel | Wainwright Hess & Caldwell LLP, 1345 Avenue of the Americas, 30th Floor, New York, NY 10105
Placement Agent | Ashford Peak Advisory Group, LLC, 600 Lexington Avenue, Suite 1410, New York, NY 10022
Independent Auditor | Harmon & Grayling CPAs, LLP, 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169
Proposed Collateral Agent | Dralvecen Title & Escrow Co., 1980 Festival Plaza Drive, Suite 700, Las Vegas, NV 89135
C&H Matter Number | 1033-00001
Prepared By | Marcus Leung, Lead Associate, Calderwood & Harkness LLP
Date Circulated | January 20, 2023
Principal Amount | $35,000,000
Instrument | 13.50% Senior Subordinated Notes due 2028 (10.50% Cash / 3.00% PIK)
Warrant Coverage | 3.00% of fully diluted equity — 1,650,000 shares at $9.24/share strike
Governing Law | State of Nevada
Note | All items shown as open/pending. Anticipated closing date TBD.
[sheet: Closing Checklist]
Item No. | Category | Description | Responsible Party | Status | Target Due Date | Notes
I. | TRANSACTION DOCUMENTS
1.1 | Transaction Documents | Mezzanine Note Purchase Agreement among Redstone Gaming Corp. as Issuer and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP as Purchaser — $35,000,000 aggregate principal amount of 13.50% Senior Subordinated Notes due 2028 | C&H / WHC | Open | TBD — Closing | Second revised draft circulated Feb. 17, 2023; incorporates WHC comments from Jan. 11, 2023 markup
1.2 | Transaction Documents | Mezzanine Promissory Note — $35,000,000 (10.50% cash interest p.a., 3.00% PIK interest p.a., payable quarterly in arrears; maturity 5 years from funding) | C&H | Open | TBD — Closing | To be executed concurrently with Note Purchase Agreement
1.3 | Transaction Documents | Warrant Agreement between Redstone Gaming Corp. and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP — warrants to purchase 1,650,000 shares of RGC common stock at $9.24/share (3.00% of fully diluted equity; 110% of 30-day VWAP of $8.40) | C&H | Open | TBD — Closing | First draft circulated Jan. 27, 2023; includes anti-dilution adjustments, cashless exercise, and registration rights
1.4 | Transaction Documents | Pledge and Security Agreement between Redstone Gaming Corp. as Pledgor and Pinnacle Bridge Capital Partners, LP as Secured Party — second-priority pledge of equity interests in Redstone Digital Wagering, LLC (EIN 88-0587214) and Redstone Tribal Management, Inc. (EIN 88-0601889), plus IP assets related to RedBet wagering software | C&H | Open | TBD — Closing | Draft dated Feb. 17, 2023; no real property liens (restricted under Nevada gaming regulations without NGCB approval); Dralvecen Title & Escrow Co. (Karen Prescott) as proposed collateral agent
1.5 | Transaction Documents | Intercreditor and Subordination Agreement among Cornerstone National Bank, N.A. as Senior Agent, Pinnacle Bridge Capital Partners, LP as Mezzanine Lender, and Redstone Gaming Corp. as Borrower | C&H / Cornerstone Counsel | Open | TBD — Closing | Draft circulated Dec. 19, 2022; Cornerstone (Neil Bradshaw) provided preliminary comments Feb. 10, 2023; required under §7.03(b) of Senior Credit Facility
1.6 | Transaction Documents | Escrow Agreement with Dralvecen Title & Escrow Co. as Escrow and Collateral Agent | C&H | Open | TBD — Closing | Karen Prescott, VP — Commercial Escrow, designated contact
II. | CORPORATE AUTHORIZATIONS — BORROWER (REDSTONE GAMING CORP.)
2.1 | Corporate Authorizations — Borrower | Certified copy of resolutions of the Board of Directors of Redstone Gaming Corp. authorizing the mezzanine financing, issuance of Notes, execution and delivery of all Transaction Documents, and issuance of warrants | RGC (Thomas Kierkegaard, GC) | Open | TBD — 5 business days prior to Closing
2.2 | Corporate Authorizations — Borrower | Officer's Certificate of Redstone Gaming Corp. certifying (i) accuracy of representations and warranties, (ii) no default or Event of Default, (iii) material adverse change, and (iv) compliance with financial covenants | RGC (Priya Sandoval, CFO) | Open | TBD — Closing | To certify Min. FCCR ≥ 1.20x, Max. Total Net Leverage ≤ 4.50x, Min. Liquidity ≥ $15,000,000
2.3 | Corporate Authorizations — Borrower | Secretary's Certificate of Redstone Gaming Corp. certifying (i) Articles of Incorporation, (ii) Bylaws, (iii) incumbency of officers executing documents (Gerald Navarro, CEO; Priya Sandoval, CFO; Thomas Kierkegaard, GC; Angela Fong, Treasurer) | RGC (Secretary) | Open | TBD — 5 business days prior to Closing
2.4 | Corporate Authorizations — Borrower | Certificate of Good Standing — Redstone Gaming Corp. from the Nevada Secretary of State (dated within 10 business days of Closing) | RGC / C&H | Open | TBD — 10 business days prior to Closing | EIN: 88-0412376
2.5 | Corporate Authorizations — Borrower | Certificate of Good Standing — Redstone Digital Wagering, LLC from the Nevada Secretary of State | RGC / C&H | Open | TBD — 10 business days prior to Closing | EIN: 88-0587214; pledged subsidiary
2.6 | Corporate Authorizations — Borrower | Certificate of Good Standing — Redstone Tribal Management, Inc. from the Nevada Secretary of State | RGC / C&H | Open | TBD — 10 business days prior to Closing | EIN: 88-0601889; pledged subsidiary
III. | CORPORATE AUTHORIZATIONS — PURCHASER (PINNACLE BRIDGE)
3.1 | Corporate Authorizations — Purchaser | Certificate of Limited Partnership and Certificate of Good Standing for Pinnacle Bridge Mezzanine Opportunities Fund IV, LP from the Delaware Secretary of State | WHC | Open | TBD — 10 business days prior to Closing | Fund vehicle for this investment
3.2 | Corporate Authorizations — Purchaser | Certificate of Formation and Certificate of Good Standing for Pinnacle Bridge Capital Management, LLC (General Partner of Pinnacle Bridge Capital Partners, LP) from the Delaware Secretary of State | WHC | Open | TBD — 10 business days prior to Closing
3.3 | Corporate Authorizations — Purchaser | Certified copy of authorizing resolutions of Pinnacle Bridge Capital Management, LLC authorizing Fund IV's investment and execution of Transaction Documents | WHC | Open | TBD — 5 business days prior to Closing | Victor Hargrove, Managing Partner; Danielle Okonkwo, Head of Credit Investments
3.4 | Corporate Authorizations — Purchaser | Incumbency certificate for officers/authorized signatories of Pinnacle Bridge Capital Partners, LP and Pinnacle Bridge Mezzanine Opportunities Fund IV, LP | WHC | Open | TBD — 5 business days prior to Closing | EIN (PBCP): 13-4298551
IV. | THIRD-PARTY CONSENTS AND REGULATORY APPROVALS
4.1 | Third-Party Consents | Cornerstone National Bank, N.A. — Written consent of Administrative Agent (and Required Lenders, if applicable) under §7.03(b) of the Second Amended and Restated Credit Agreement dated March 15, 2021 to permit subordinated indebtedness in excess of $10,000,000 | C&H / Cornerstone (Neil Bradshaw, Relationship Manager) | Open | TBD — Prior to Closing | Consent required because $35M mezzanine exceeds $10M threshold; $50,000 consent processing fee payable to Cornerstone at Closing
4.2 | Third-Party Consents | Cornerstone National Bank, N.A. — Execution and delivery of Intercreditor and Subordination Agreement (see Item 1.5) | C&H / Cornerstone Counsel | Open | TBD — Closing | Cross-reference to Item 1.5
4.3 | Third-Party Consents | Nevada Gaming Control Board — Confirmation that warrant coverage of 3.00% of fully diluted equity (1,650,000 shares) does not trigger a finding-of-suitability requirement for Pinnacle Bridge or its principals (5% threshold); or, if required, filing and approval of Key Employee & Lender disclosure form by Victor Hargrove and Danielle Okonkwo | C&H / RGC | Open | TBD — Prior to Closing | RGC Gaming License No. NGC-2019-00847; C&H regulatory memo dated Dec. 12, 2022 notes risk of crossing 5% threshold through PIK accrual over time
4.4 | Third-Party Consents | Arizona Department of Gaming — Confirmation or notice, if required, regarding mezzanine indebtedness and pledge of Redstone Tribal Management, Inc. equity (tribal gaming management contracts in Arizona) | C&H / RGC | Open | TBD — Prior to Closing | RGC holds active Arizona gaming license
4.5 | Third-Party Consents | New Mexico Gaming Control Board — Confirmation or notice, if required, regarding mezzanine indebtedness and pledge of Redstone Tribal Management, Inc. equity (tribal gaming management contracts in New Mexico) | C&H / RGC | Open | TBD — Prior to Closing | RGC holds active New Mexico gaming license
4.6 | Third-Party Consents | UCC-1 Financing Statement filings (Nevada Secretary of State) — second-priority lien on equity interests in Redstone Digital Wagering, LLC and Redstone Tribal Management, Inc. | C&H / Dralvecen Escrow | Open | TBD — Closing
4.7 | Third-Party Consents | USPTO — Recordation of security interest in RedBet proprietary wagering software IP (trademark application filed Aug. 2022, registration pending) | C&H | Open | TBD — Post-Closing
V. | LEGAL OPINIONS
5.1 | Legal Opinions | Borrower's Counsel Opinion — Calderwood & Harkness LLP opinion letter addressed to Pinnacle Bridge Mezzanine Opportunities Fund IV, LP, covering (i) due authorization and enforceability, (ii) no conflicts, (iii) valid issuance of warrants, (iv) Nevada law matters, (v) securities law exemption (Section 4(a)(2) / Regulation D) | C&H (Claudia Merritt, Responsible Partner) | Open | TBD — Closing
5.2 | Legal Opinions | Lender's Counsel Opinion — Wainwright Hess & Caldwell LLP opinion letter addressed to Redstone Gaming Corp., covering (i) due organization and authority of Pinnacle Bridge entities, (ii) enforceability, (iii) New York and Delaware law matters | WHC (Margaret Forsythe, Lead Partner) | Open | TBD — Closing
VI. | FINANCIAL DELIVERABLES
6.1 | Financial Deliverables | Comfort Letter from Harmon & Grayling CPAs, LLP (Robert Chow, Engagement Partner) — cold comfort letter regarding RGC financial statements included in Purchaser's due diligence | RGC / Harmon & Grayling | Open | TBD — 3 business days prior to Closing
6.2 | Financial Deliverables | Bring-Down Comfort Letter from Harmon & Grayling CPAs, LLP (bring-down to Closing date) | RGC / Harmon & Grayling | Open | TBD — Closing
6.3 | Financial Deliverables | Financial Statement Consent from Harmon & Grayling CPAs, LLP — consent to use of audited financial statements (FYE June 30, 2022: LTM Revenue $387.6M, LTM EBITDA $58.1M) | RGC / Harmon & Grayling | Open | TBD — Closing
6.4 | Financial Deliverables | Pro Forma Compliance Certificate — demonstrating pro forma compliance with proposed financial covenants: (i) Min. FCCR ≥ 1.20x, (ii) Max. Total Net Leverage ≤ 4.50x (pro forma total leverage: ($142M drawn + $35M mezz) ÷ $58.1M EBITDA = 3.05x), (iii) Min. Liquidity ≥ $15.0M | RGC (Priya Sandoval, CFO / Angela Fong, Treasurer) | Open | TBD — 5 business days prior to Closing | Net leverage as of 9/30/22: 2.44x ($142M ÷ $58.1M)
6.5 | Financial Deliverables | Use of Proceeds Certificate — confirming application of proceeds: (i) $22,000,000 for Project Catalyst (digital wagering platform upgrade), (ii) $13,000,000 for tribal gaming management expansion (AZ/NM) | RGC (Priya Sandoval, CFO) | Open | TBD — Closing | Total: $35,000,000
6.6 | Financial Deliverables | Bring-Down of Representations and Warranties Certificate | RGC (Thomas Kierkegaard, GC) | Open | TBD — Closing
6.7 | Financial Deliverables | Solvency Certificate | RGC (Priya Sandoval, CFO) | Open | TBD — Closing
VII. | SECURITIES LAW DELIVERABLES
7.1 | Securities Law Deliverables | Accredited Investor / Qualified Institutional Buyer Questionnaire completed by Pinnacle Bridge Mezzanine Opportunities Fund IV, LP | WHC / Pinnacle Bridge | Open | TBD — Prior to Closing | C&H Reg D analysis memo dated Jan. 25, 2023 confirms exemption availability
7.2 | Securities Law Deliverables | Investor Representation Letter from Pinnacle Bridge Mezzanine Opportunities Fund IV, LP regarding investment intent, accredited investor status, and transfer restrictions | WHC / Pinnacle Bridge | Open | TBD — Closing
7.3 | Securities Law Deliverables | Form D (SEC) — Notice of Exempt Offering of Securities (to be filed within 15 days after first sale) | C&H | Open | TBD — Post-Closing (within 15 days) | Section 4(a)(2) / Rule 506(b) exemption
7.4 | Securities Law Deliverables | Restrictive Legend — Warrant certificates and underlying shares to bear customary restrictive legend | C&H | Open | TBD — Closing
VIII. | CLOSING PAYMENTS
8.1 | Closing Payments | Placement Agent Fee — Ashford Peak Advisory Group, LLC (Jonathan Kuo, Managing Director): 1.50% × $35,000,000 = $525,000 | RGC / Ashford Peak | Open | TBD — Closing | Per placement agent engagement dated Oct. 14, 2022; payable at Closing via wire to Ashford Peak, 600 Lexington Avenue, Suite 1410, New York, NY 10022
8.2 | Closing Payments | Borrower's Counsel Fees — Calderwood & Harkness LLP: fees and disbursements through Closing (estimated ~$287,400 through dormancy; final amount TBD at Closing) | RGC | Open | TBD — Closing | C&H Matter No. 1033-00001; blended rate ~$785/hr
8.3 | Closing Payments | Lender's Counsel Fees — Wainwright Hess & Caldwell LLP: fees and disbursements up to fee cap of $175,000 (estimated incurred ~$94,000 to date), to be borne by RGC | RGC | Open | TBD — Closing | Fee cap per executed term sheet dated Dec. 2, 2022
8.4 | Closing Payments | Cornerstone National Bank, N.A. — Consent Processing Fee: $50,000 flat fee for intercreditor / subordination consent under §7.03(b) | RGC | Open | TBD — Closing | Wire to Cornerstone, 101 South Tryon Street, Charlotte, NC 28202
8.5 | Closing Payments | Escrow / Collateral Agent Fee — Dralvecen Title & Escrow Co.: fees per engagement letter (TBD) | RGC | Open | TBD — Closing | Karen Prescott, VP — Commercial Escrow
8.6 | Closing Payments | Wire Transfer Instructions — all parties to deliver wire transfer instructions at least 3 business days prior to Closing | All Parties | Open | TBD — 3 business days prior to Closing
IX. | MISCELLANEOUS / OTHER CONDITIONS PRECEDENT
9.1 | Miscellaneous | No Material Adverse Effect — no Material Adverse Effect shall have occurred since Sept. 30, 2022 | RGC | Open | TBD — Closing
9.2 | Miscellaneous | No Litigation — no litigation or proceeding pending or threatened that could reasonably be expected to prevent consummation of the transactions | C&H / RGC | Open | TBD — Closing
9.3 | Miscellaneous | Lien Search Results — UCC, tax lien, judgment, and litigation searches in Nevada (RGC, RDW, RTM) and Delaware (Pinnacle Bridge entities) | C&H | Open | TBD — 10 business days prior to Closing
9.4 | Miscellaneous | Insurance Certificates — evidence of RGC's existing insurance coverage | RGC | Open | TBD — 5 business days prior to Closing
9.5 | Miscellaneous | Expiration of Exclusivity — 90-day exclusivity under executed term sheet dated Dec. 2, 2022 (expires Mar. 15, 2023); Closing must occur within exclusivity period or extension obtained | C&H / WHC | Open | TBD | Exclusivity commenced Dec. 2, 2022
9.6 | Miscellaneous | Call Protection Schedule — confirmation of non-call period (24 months) and prepayment premium schedule embedded in final Note: 103% (months 25–36), 102% (months 37–48), 101% (months 49–54), par (months 55–60) | C&H / WHC | Open | TBD — Closing | Prepayment premium at month 25 = $35M × 3% = $1,050,000
[sheet: Party Contact Directory]
Party | Full Legal Name | Role | Contact Person | Title | Address | Entity Type / Jurisdiction
Borrower / Issuer | Redstone Gaming Corp. | Issuer of Notes and Warrants | Thomas Kierkegaard / Priya Sandoval | General Counsel / CFO | 4250 South Decatur Boulevard, Suite 1100, Las Vegas, NV 89103 | Nevada corporation (Nasdaq: RDGM)
Pledged Subsidiary | Redstone Digital Wagering, LLC | Wholly owned subsidiary — digital wagering platform | Thomas Kierkegaard | General Counsel (parent) | c/o Redstone Gaming Corp. | Nevada LLC (EIN: 88-0587214)
Pledged Subsidiary | Redstone Tribal Management, Inc. | Wholly owned subsidiary — tribal gaming management contracts (AZ/NM) | Thomas Kierkegaard | General Counsel (parent) | c/o Redstone Gaming Corp. | Nevada corporation (EIN: 88-0601889)
Purchaser | Pinnacle Bridge Mezzanine Opportunities Fund IV, LP | Mezzanine Note Purchaser | Victor Hargrove / Danielle Okonkwo | Managing Partner / Head of Credit Investments | 280 Park Avenue, 22nd Floor, New York, NY 10017 | Delaware LP
GP of Purchaser Parent | Pinnacle Bridge Capital Management, LLC | General Partner of Pinnacle Bridge Capital Partners, LP | Victor Hargrove | Managing Partner | 280 Park Avenue, 22nd Floor, New York, NY 10017 | Delaware LLC
Senior Agent / Lender | Cornerstone National Bank, N.A. | Administrative Agent under $200M Senior Secured Revolving Credit Facility (dated Mar. 15, 2021) | Neil Bradshaw | Relationship Manager | 101 South Tryon Street, Charlotte, NC 28202 | National Banking Association
Borrower's Counsel | Calderwood & Harkness LLP | Counsel to RGC | Claudia Merritt / Marcus Leung | Responsible Partner / Lead Associate | 300 South Fourth Street, Suite 2800, Las Vegas, NV 89101 | Nevada LLP
Lender's Counsel | Wainwright Hess & Caldwell LLP | Counsel to Pinnacle Bridge | Margaret Forsythe / Ryan Castellano | Lead Partner / Associate | 1345 Avenue of the Americas, 30th Floor, New York, NY 10105 | New York LLP
Placement Agent | Ashford Peak Advisory Group, LLC | Placement agent for RGC | Jonathan Kuo | Managing Director | 600 Lexington Avenue, Suite 1410, New York, NY 10022 | Delaware LLC; registered broker-dealer
Independent Auditor | Harmon & Grayling CPAs, LLP | Independent auditor of RGC | Robert Chow | Engagement Partner | 3960 Howard Hughes Parkway, Suite 500, Las Vegas, NV 89169 | Nevada LLP
Collateral / Escrow Agent | Dralvecen Title & Escrow Co. | Proposed escrow and collateral agent | Karen Prescott | VP, Commercial Escrow | 1980 Festival Plaza Drive, Suite 700, Las Vegas, NV 89135 | Nevada corporation
[sheet: Key Transaction Terms]
Term | Detail
Principal Amount | $35,000,000
Instrument | Senior Subordinated Notes due 2028
Cash Interest Rate | 10.50% per annum, payable quarterly in arrears
PIK Interest Rate | 3.00% per annum, compounding quarterly (borrower may elect cash-pay in lieu)
All-In Yield | 13.50% per annum
Annual Cash Interest | $3,675,000 ($918,750/quarter)
Annual PIK Accrual (Year 1) | $1,050,000
Maturity | 5 years from funding
Warrant Coverage | 3.00% of fully diluted equity
Warrant Shares | 1,650,000 shares of RGC common stock
Warrant Strike Price | $9.24/share (110% of 30-day VWAP of $8.40)
Call Protection | Non-callable for 24 months; 103% (months 25–36), 102% (37–48), 101% (49–54), par (55–60)
Subordination | Subordinated to all existing and permitted senior indebtedness, including $200M Cornerstone revolving facility
Collateral | Second-priority pledge of equity in RDW and RTM; assignment of RedBet IP (USPTO app. filed Aug. 2022); no real property liens
Financial Covenant — Min. FCCR | 1.20x
Financial Covenant — Max. Total Net Leverage | 4.50x
Financial Covenant — Min. Liquidity | $15,000,000 (unrestricted cash + available revolver)
Senior Facility Drawn (9/30/22) | $142,000,000 of $200,000,000
Senior Facility Rate | SOFR + 275 bps (+10 bps CSA)
Current Net Leverage (9/30/22) | 2.44x
Pro Forma Total Leverage (with mezz) | 3.05x
LTM Revenue (FYE 6/30/22) | $387,600,000
LTM EBITDA (FYE 6/30/22) | $58,100,000
Shares Outstanding | ~55,000,000
Stock Price at Engagement (10/31/22) | $8.40/share
Market Cap at Engagement | ~$462,000,000
RGC EIN | 88-0412376
Pinnacle Bridge EIN | 13-4298551
Nevada Gaming License | NGC-2019-00847
Senior Credit Facility Reference | Second Amended and Restated Credit Agreement, dated March 15, 2021, among RGC, CNB as Administrative Agent, and the lenders party thereto
Use of Proceeds — Project Catalyst | $22,000,000 (digital wagering platform upgrade)
Use of Proceeds — Tribal Gaming Expansion (AZ/NM) | $13,000,000
Governing Law | State of Nevada
Exclusivity | 90 days from Dec. 2, 2022 (expires Mar. 15, 2023)
Term Sheet Date | Executed Dec. 2, 2022 (non-binding)

[sheet: Cover]

Record

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