Sandra,
I hope you're doing well. I'm writing in connection with the planned $180,000,000 underwritten follow-on public offering of shares of common stock by Redstone Gaming Corp. (NYSE: RDGM). As you know, Calderwood & Harkness LLP serves as issuer's counsel on this transaction, and Kaplan Feld & Associates LLP serves as RGC's independent registered public accounting firm. I wanted to reach out now to lay out the comfort letter procedures and circle-up requirements so we can stay ahead of what is a fairly compressed timeline.
By way of background, the offering is being conducted off the existing shelf registration statement on Form S-3 (SEC File No. 333-278401), which was originally filed on March 14, 2024 and declared effective on March 28, 2024. A preliminary prospectus supplement was filed on October 6, 2025 under Rule 424(b)(5). We received an SEC comment letter on October 14, 2025; the response is currently in process and we are targeting filing by October 21, 2025. The expected pricing date is October 28, 2025, with closing expected on October 31, 2025.
**1. Comfort Letter Requirements Under the Underwriting Agreement**
The underwriting agreement among RGC and the underwriters — Pinnacle Zanthor & Co. (lead bookrunning manager), Hargrove Williams Securities LLC (joint bookrunning manager), and Clearwater Capital Markets Inc. (co-manager) — will require delivery of the following:
(a) **Initial comfort letter** — to be delivered at the time of execution of the underwriting agreement (expected October 28, 2025, upon pricing); and
(b) **Bring-down comfort letter** — to be delivered at closing on October 31, 2025.
Both letters should be addressed to Redstone Gaming Corp. and to the underwriters (Pinnacle Zanthor & Co., Hargrove Williams Securities LLC, and Clearwater Capital Markets Inc.) and their counsel, Whitmore & Pratt LLP. The letters should be in customary SAS 72 / AU-C Section 920 form.
Please note that a formal comfort letter request has been separately prepared and will be sent under cover from Brendan Walsh. This email is intended to give you advance visibility into the scope and timeline so your team can begin planning.
**2. Financial Statements to Be Covered**
The comfort letter should cover the following financial statements incorporated by reference into the registration statement and prospectus supplement:
- Audited consolidated financial statements of RGC for the fiscal year ended December 31, 2024, as included in the Annual Report on Form 10-K (as amended by Form 10-K/A filed July 15, 2025); and
- Unaudited interim consolidated financial statements for the six months ended June 30, 2025, from the Form 10-Q, incorporated by reference.
One item to flag: we need to confirm whether the Form 10-Q for the quarter ended September 30, 2025 will be filed before pricing on October 28, 2025. If so, the comfort letter will need to cover that period as well. Lena — could you please confirm the expected filing date for the Q3 10-Q so we can plan accordingly?
**3. Circle-Up Items / Specific Data Points**
We are requesting that the comfort letter cover circle-up procedures on the following categories of financial and statistical data appearing in the prospectus supplement and the documents incorporated by reference:
1. **Revenue and earnings data** — Total revenues of $2.47 billion, Adjusted EBITDA of $612 million, and net income of $187 million for FY 2024.
2. **Capitalization table** — Shares of common stock outstanding (152,400,000 shares pre-offering), par value ($0.001), authorized shares (300,000,000 common; 10,000,000 preferred, none outstanding), and treasury stock (4,200,000 shares).
3. **Dilution table** — Net tangible book value per share calculations, both before and after giving effect to the offering, as updated in response to SEC Comment 3.
4. **Indebtedness data** — Outstanding principal amounts of the 6.25% Senior Secured Notes due 2028 ($325,000,000), the 5.875% Senior Notes due 2031 ($200,000,000), and the Revolving Credit Facility ($135,000,000 drawn against $400,000,000 capacity under Meridian National Bank, N.A. as administrative agent).
5. **Use of proceeds figures** — Allocation of approximately $115,000,000 to Louisiana/Indiana expansion (approximately $70,000,000 for the Bossier City, LA development and approximately $45,000,000 for the Gary, IN facility renovation), approximately $50,000,000 for partial retirement of the 6.25% Senior Secured Notes, and approximately $6,450,000 for general corporate purposes — to the extent these figures tie to financial data in the prospectus supplement.
6. **Options and equity compensation data** — 3,850,000 options outstanding under the 2021 Equity Incentive Plan at a weighted-average exercise price of $19.72.
7. **Offering economics** — Public offering price of $27.45 per share, underwriting discount of $1.098 per share (4.0%), net proceeds to issuer of $172,800,000 (base offering, before expenses), estimated offering expenses of $1,350,000, and net proceeds after expenses of $171,450,000.
8. **Pro forma data** — Any pro forma capitalization or indebtedness figures giving effect to the offering and the application of net proceeds, including the reduction of the 6.25% Senior Secured Notes from $325,000,000 to $275,000,000.
9. **Selected financial data** — Any selected financial data or supplementary financial information appearing in the prospectus supplement or incorporated documents.
10. **Market capitalization reference** — Market cap of approximately $4.18 billion based on 152,400,000 shares at $27.43 per share as of October 3, 2025.
**4. Cut-Off Date / Change Period**
- **Initial comfort letter:** The cut-off date should be no more than three business days prior to the date of the initial comfort letter (i.e., cut-off on or about October 23, 2025, if the initial letter is dated October 28, 2025).
- **Bring-down comfort letter:** The cut-off date should be no more than two business days prior to closing (i.e., cut-off on or about October 29, 2025, for the October 31, 2025 closing).
The change period covered by each letter should run from the date of the most recent balance sheet included in the financial statements incorporated by reference through the applicable cut-off date. During the change period, the comfort letter should address whether there have been any decreases in specified financial line items (revenue, net income, total stockholders' equity, etc.) compared to the corresponding period of the prior year.
**5. Form of Comfort Letter and Review Process**
We would ask that you provide a draft of the initial comfort letter for review by Calderwood & Harkness, Whitmore & Pratt LLP (underwriters' counsel), and the underwriters no later than **October 23, 2025** — five days before expected pricing. I expect that Whitmore & Pratt (Thomas Beaumont / Rebecca Ling) will likely have comments on the form; I will coordinate distribution of the draft and consolidation of comments on our end.
The bring-down letter should be in substantially the same form as the initial letter, updated to the later cut-off date and confirming no changes requiring disclosure.
**6. Coordination and Access**
For purposes of the circle-up, please coordinate directly with Lena Okafor (CFO, copied here) and RGC's accounting team to obtain any updated financial data you may need. As you'll recall, Kaplan Feld issued a comfort letter in connection with the September 2024 $200,000,000 debt takedown from this same shelf registration, and we think that letter can serve as a useful precedent for form and scope, with appropriate updates to reflect the current offering and financial data.
On our side, I will serve as the primary Calderwood & Harkness contact for comfort letter logistics and scheduling. Brendan Walsh is available for any substantive questions that may arise.
**7. Timeline Summary**
For ease of reference, below is a summary of the key dates:
| Date
**8. Action Items**
Sandra, at your earliest convenience, could you please confirm the following:
1. Kaplan Feld's availability to meet the timeline set out above; 2. Whether there are any preliminary concerns regarding any of the circle-up items or financial data described in Section 3; and 3. Whether Kaplan Feld will need any additional authorizations from RGC in order to address the comfort letter to the underwriters and their counsel.
As noted, the formal comfort letter request will follow separately from Brendan. In the meantime, I'd be happy to schedule a call early next week (week of October 20) to walk through the circle-up items in detail — please let me know what works for your schedule.
Thank you very much, Sandra. We appreciate Kaplan Feld's attention to this, and I look forward to working with you and your team again on this transaction.
Best regards,
Natasha Forbes Associate Calderwood & Harkness LLP 7 Times Square, 38th Floor New York, NY 10036 Tel: (212) 555-4718 Email: nforbes@calderwoodharkness.com
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