PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 7 Times Square, 38th Floor New York, New York 10036
MEMORANDUM
TO: Vivienne St. Claire, Responsible Partner, Capital Markets
FROM: Brendan Walsh, Lead Associate, Capital Markets Natasha Forbes, Working Associate, Capital Markets
DATE: October 15, 2025
RE: Analysis of SEC Staff Comment Letter — Redstone Gaming Corp. Follow-On Equity Offering (File No. 333-278401)
CLIENT/MATTER: Redstone Gaming Corp. — $180,000,000 Follow-On Equity Offering; Engagement No. C&H-2025-CM-04187
I. Executive Summary
On October 14, 2025, the Staff of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the "SEC" or the "Commission"), through the Branch Chief of the Office of Real Estate & Construction, issued a comment letter containing six comments on the preliminary prospectus supplement filed by Redstone Gaming Corp. ("RGC" or the "Company") on October 6, 2025 under Rule 424(b)(5) of the Securities Act of 1933, as amended (the "Securities Act"), in connection with the Company's effective shelf registration statement on Form S-3 (File No. 333-278401; CIK No. 0001847293). A copy of the comment letter is included as Attachment A to this memorandum.
The comment letter relates to the Company's proposed underwritten follow-on public offering (the "Offering") of 6,557,377 shares of common stock, par value $0.001 per share (CUSIP 76134Q 108; NYSE: RDGM) at an anticipated public offering price of $27.45 per share, together with a 15% over-allotment option of 983,606 additional shares (the "Greenshoe"), for total gross proceeds of approximately $180,000,000 (or up to approximately $207,000,000 assuming full exercise of the Greenshoe). The Offering is being conducted on a firm commitment underwritten basis with Pinnacle Zanthor & Co. acting as lead bookrunning manager.
The six comments address the following topics:
1. Comment 1 — Specificity of use of proceeds disclosure, including the Staff's request for approximate dollar amounts allocated to each identified use of proceeds;
2. Comment 2 — Request for an additional risk factor addressing the concentration of the Company's gaming revenues in Nevada (approximately 58% of total gaming revenue) and the regulatory risks associated with multi-state expansion;
3. Comment 3 — Request for an updated dilution table reflecting the anticipated offering price of $27.45 per share and showing the increase in net tangible book value per share attributable to new investors;
4. Comment 4 — Request that the Company's Form 10-K/A filed July 15, 2025 (amending the original Form 10-K for fiscal year 2024) be specifically identified in the incorporation-by-reference section of the prospectus supplement;
5. Comment 5 — Request for clarification of the plan of distribution section regarding stabilization activities and the circumstances under which the underwriters may engage in passive market making under Regulation M promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
6. Comment 6 — Request that the legal opinion filed as Exhibit 5.1 to the registration statement be updated to cover the maximum number of shares issuable in the Offering, including the shares subject to the over-allotment option, and to reference the specific resolutions of the Company's Board of Directors authorizing the Offering.
This memorandum analyzes each comment in detail, assesses the level of effort required to respond, identifies the personnel responsible for each action item, and recommends response strategies designed to address the Staff's concerns while maintaining the Company's desired level of flexibility in its public disclosures. Our internal target date for filing the response letter with the SEC via EDGAR correspondence is October 21, 2025, in order to maintain the expected pricing date of October 28, 2025 and anticipated closing date of October 31, 2025.
Overall Assessment: None of the six comments raises substantive concerns that would delay the Offering timeline or require a fundamental restructuring of the transaction. All six comments are addressable through revised disclosure in the prospectus supplement and a revised Exhibit 5.1 legal opinion, without the need for new or updated financial data from Kaplan Feld & Associates LLP (the Company's independent registered public accounting firm) or material changes to the Offering structure. The comments are routine in nature and consistent with the type of comments typically issued by the Staff in connection with follow-on equity offerings by gaming companies. We anticipate that a single round of comments and responses will be sufficient to obtain Staff clearance, provided the response letter and revised disclosure are comprehensive and responsive.
II. Background
The following background information is provided for context and to facilitate review of the comment-by-comment analysis set forth in Section III below.
Shelf Registration Statement. The Company's universal shelf registration statement on Form S-3 (File No. 333-278401) was originally filed with the SEC on March 14, 2024, covering the offer and sale from time to time of an aggregate of up to $750,000,000 in securities, including common stock, preferred stock, debt securities, warrants, depositary shares, subscription rights, purchase contracts, and units. The registration statement was declared effective by the SEC on March 28, 2024. As of the date hereof, the registration statement remains in full force and effect and has not been the subject of any stop order, proceeding, or inquiry by the SEC Staff, other than the comment letter that is the subject of this memorandum.
Prior Takedowns. Since the shelf was declared effective, the Company has conducted one prior takedown: a $200,000,000 offering of 5.875% Senior Notes due 2031, which priced in September 2024 and closed without incident. The proceeds from that offering were used to refinance existing indebtedness and for general corporate purposes. No SEC Staff comments were issued in connection with that prior takedown.
Remaining Shelf Capacity. After giving effect to the prior debt takedown, the remaining shelf capacity was $550,000,000. The current Offering, assuming the base offering amount of approximately $180,000,000, will reduce the remaining shelf capacity to approximately $370,000,000. If the Greenshoe is exercised in full, the remaining shelf capacity would be reduced to approximately $343,000,000.
Preliminary Prospectus Supplement. The preliminary prospectus supplement for the current Offering was filed with the SEC on October 6, 2025 pursuant to Rule 424(b)(5) of the Securities Act. The preliminary prospectus supplement was prepared by Calderwood & Harkness LLP in coordination with the Company, the underwriting syndicate, and underwriters' counsel, and was reviewed by all parties prior to filing.
Offering Structure. The Offering is structured as a firm commitment underwritten public offering. The underwriting syndicate is as follows:
• Lead Bookrunning Manager: Pinnacle Zanthor & Co. (contact persons: Aisha Rowan, Managing Director; Colin Matsuda, Vice President)
• Joint Bookrunning Manager: Hargrove Williams Securities LLC
• Co-Manager: Clearwater Capital Markets Inc.
Counsel. The following counsel are engaged in connection with the Offering:
• Issuer's Counsel: Calderwood & Harkness LLP (Vivienne St. Claire, Responsible Partner; Robert Adeyemi, Of Counsel; Brendan Walsh, Lead Associate; Natasha Forbes, Working Associate)
• Underwriters' Counsel: Whitmore & Pratt LLP (Thomas Beaumont, Partner; Rebecca Ling, Associate)
Key Issuer Contacts. The principal Company contacts for the Offering are as follows:
• Marcus Hale, Chief Executive Officer
• Lena Okafor, Chief Financial Officer
• Darren Whitfield, Executive Vice President and General Counsel
Independent Auditor. Kaplan Feld & Associates LLP (contact person: Sandra Meyers, Engagement Partner).
Net Proceeds and Use of Proceeds. Based on the anticipated public offering price of $27.45 per share, gross proceeds from the base offering are expected to be approximately $180,000,000. After deducting estimated underwriting discounts and commissions (approximately 5.0% or $9,000,000, subject to final negotiation) and estimated offering expenses (approximately $550,000), estimated net proceeds from the base offering are approximately $171,450,000. As discussed further in connection with Comment 1 below, the Company has allocated these net proceeds approximately as follows: approximately $115,000,000 to fund the Company's expansion into Louisiana and Indiana (including the acquisition of development rights and initial construction of a casino-resort in Bossier City, Louisiana and the renovation and rebranding of a leased gaming facility in Gary, Indiana); approximately $50,000,000 to partial retirement of the Company's outstanding 6.25% Senior Secured Notes due June 15, 2028 (CUSIP 76134Q 206; Fidelitas Trust Company, N.A., as indenture trustee); and approximately $6,450,000 to general corporate purposes.
III. Comment-by-Comment Analysis
A. Comment 1 — Use of Proceeds
1. Staff Comment Summary. The Staff's first comment requests more specific disclosure regarding the allocation of net proceeds between the Company's planned Louisiana and Indiana expansion and the partial retirement of the 6.25% Senior Secured Notes due 2028. Specifically, the Staff notes that the preliminary prospectus supplement describes the use of proceeds in general terms, referencing the Company's intention to use net proceeds for "expansion into new gaming markets" and "debt reduction," without specifying approximate dollar amounts for each use. The Staff requests that the Company revise the "Use of Proceeds" section to include approximate dollar amounts allocated to each identified use so that investors may understand the relative priority and magnitude of each intended application of proceeds.
This type of comment is among the most common issued by the Staff in connection with follow-on offerings where multiple uses of proceeds have been identified but not quantified. The Staff's position, grounded in Item 504 of Regulation S-K, is that investors are entitled to understand not merely the categories of intended uses but also the approximate allocation among those categories.
2. Analysis. The comment is routine and entirely expected. In our experience, the Staff will issue this comment in virtually every case where the use of proceeds section identifies two or more material uses without specifying approximate dollar amounts. The Company's preliminary prospectus supplement was intentionally drafted with some degree of generality in the use of proceeds section, consistent with the Company's initial preference for maximum flexibility. However, the Staff's request is reasonable and consistent with applicable SEC guidance, and we do not believe it would be productive to resist providing the requested specificity.
The Company has confirmed internally, through discussions between the C&H deal team and Lena Okafor (CFO) and Darren Whitfield (EVP and General Counsel) conducted during the week of September 22, 2025 and updated on October 10, 2025, the following allocation of the estimated net proceeds of approximately $171,450,000:
• Louisiana Expansion (acquisition of development rights and initial construction costs for a casino-resort in Bossier City, Louisiana): approximately $70,000,000
• Indiana Expansion (renovation and rebranding of an existing leased gaming facility in Gary, Indiana): approximately $45,000,000
• Subtotal — Louisiana and Indiana Expansion: approximately $115,000,000 (representing approximately 67.1% of estimated net proceeds)
• Partial Retirement of 6.25% Senior Secured Notes due June 15, 2028 (CUSIP 76134Q 206): approximately $50,000,000 at par (representing approximately 29.2% of estimated net proceeds), which would reduce the outstanding aggregate principal amount of the 6.25% Senior Secured Notes from $325,000,000 to $275,000,000. The indenture governing the 6.25% Senior Secured Notes, dated as of June 15, 2023, between RGC and Fidelitas Trust Company, N.A., as trustee, permits optional redemption at par plus accrued and unpaid interest on or after June 15, 2026. The Company intends to effect the partial retirement through an optional redemption following the applicable call date or, if market conditions warrant, through open-market purchases or privately negotiated transactions.
• General Corporate Purposes: approximately $6,450,000 (representing approximately 3.8% of estimated net proceeds), which may include working capital, capital expenditures at existing properties, and potential strategic opportunities that may arise from time to time.
We need to confirm with Darren Whitfield and Lena Okafor that they are comfortable with this level of specificity in public disclosure, particularly as to the individual state-level breakdowns between Louisiana and Indiana. The Company may prefer to disclose the expansion proceeds as a single combined figure (i.e., approximately $115,000,000 for the Louisiana and Indiana expansion collectively) rather than breaking out the individual state-level allocations, as the relative allocation between the two states may shift depending on timing, regulatory approvals, and construction costs. We should discuss this point with the client and determine the appropriate level of granularity.
An important consideration in drafting the revised disclosure is that the Company's gaming license applications in both Louisiana and Indiana remain pending. Specifically:
• The Louisiana Gaming Control Board license application was submitted on August 12, 2025, and remains under review. No hearing date has been set as of the date hereof.
• The Indiana Gaming Commission license application was submitted on September 5, 2025, and is also pending. The Company expects initial review to take approximately four to six months.
Accordingly, the revised use of proceeds disclosure should include appropriate caveats that the allocation of net proceeds is subject to the receipt of requisite gaming approvals in the relevant jurisdictions and could change materially depending on the timing and outcome of those approval processes. Additionally, the disclosure should note that, pending the application of net proceeds to the identified uses, the Company intends to invest the net proceeds in short-term, investment-grade, interest-bearing instruments or deposit them in interest-bearing accounts, consistent with the Company's existing investment policy.
3. Recommended Response Strategy. We recommend the following approach to responding to Comment 1:
(a) Revise the "Use of Proceeds" section of the prospectus supplement to include approximate dollar amounts for each identified use, broken down as follows: approximately $70,000,000 for the Louisiana expansion; approximately $45,000,000 for the Indiana expansion; approximately $50,000,000 for partial retirement of the 6.25% Senior Secured Notes due 2028; and approximately $6,450,000 for general corporate purposes. If the client prefers not to disclose the individual state-level breakdowns, an alternative formulation would disclose the combined expansion figure of approximately $115,000,000 and provide a general description of the intended uses in Louisiana and Indiana without specifying dollar amounts for each state.
(b) Add appropriate qualifier language to the use of proceeds section to preserve flexibility for the Company. Suggested language: "We currently intend to use the net proceeds from this offering as described below; however, as of the date of this prospectus supplement, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon completion of this offering or the amounts that we will actually spend on the uses set forth below. Accordingly, our management will have significant flexibility in applying the net proceeds of this offering. The amounts and timing of our actual expenditures will depend upon numerous factors, including the progress and costs of our expansion activities, the timing and outcome of pending gaming license applications, and general market and competitive conditions."
(c) Include a specific caveat regarding the pending gaming license applications in Louisiana and Indiana, noting that receipt of regulatory approval is a precondition to the Company's ability to deploy the allocated proceeds for those expansion activities and that there can be no assurance as to the timing or outcome of such applications.
(d) Provide the Staff with the revised proposed language in the body of the response letter, with blackline markups showing the changes from the preliminary prospectus supplement, as is customary practice.
Effort Level: Low. This comment requires client confirmation of the allocation amounts and comfort with the level of specificity, followed by straightforward drafting of revised disclosure language. No new financial data from the Company's auditors is required.
B. Comment 2 — Risk Factors (Nevada Revenue Concentration)
1. Staff Comment Summary. The Staff's second comment requests an additional risk factor addressing the concentration of RGC's gaming revenues in the state of Nevada (approximately 58% of total gaming revenue for the fiscal year ended December 31, 2024) and the regulatory risks associated with the Company's planned multi-state expansion. The Staff notes that while the preliminary prospectus supplement includes general risk factors regarding regulatory risks and competition, it does not specifically address the Company's significant dependence on Nevada-sourced revenues or the risks arising from that concentration.
2. Analysis. The Staff's comment is well-founded and reflects a reasonable reading of the Company's existing disclosures. RGC currently operates eight casino-resort properties across three states — Nevada (five properties, including the flagship Redstone Grand Las Vegas), New Jersey (two properties), and Mississippi (one property) — in addition to the RedBet Digital online gaming platform, which is licensed and operational in twelve states. According to the Company's Form 10-K for the fiscal year ended December 31, 2024 (as amended by Form 10-K/A filed July 15, 2025), approximately 58% of the Company's total gaming revenue was generated by its Nevada operations. This level of geographic concentration is material from an investment perspective and warrants specific risk factor disclosure, particularly in the context of an offering in which a substantial portion of the net proceeds will be used to fund expansion into new states.
The preliminary prospectus supplement included general risk factors regarding (i) the highly regulated nature of the gaming industry and the risks associated with changes in gaming laws and regulations, (ii) competition from other gaming companies and alternative forms of entertainment, and (iii) the Company's dependence on consumer spending and general economic conditions. However, the preliminary prospectus supplement did not include a risk factor specifically addressing the Nevada revenue concentration or the incremental risks associated with operating in a single dominant jurisdiction.
We recommend that the new risk factor address the following specific risk elements:
(a) Dependence on Nevada economic conditions and tourism trends. The Company's Nevada properties are concentrated in the Las Vegas metropolitan area, and their performance is closely tied to tourism levels, convention activity, and discretionary consumer spending in that market. A sustained downturn in Las Vegas tourism or adverse economic conditions in Nevada could disproportionately affect the Company's financial results.
(b) Exposure to Nevada Gaming Commission regulatory actions. The Company operates in Nevada under License No. NGC-2019-04172 issued by the Nevada Gaming Commission. The Nevada Gaming Commission has broad discretion to impose conditions, limitations, and restrictions on gaming licensees, and to take disciplinary action (including fines, license suspension, or revocation) for violations of the Nevada Revised Statutes and the regulations of the Nevada Gaming Control Board. An adverse regulatory action in Nevada could have a material adverse effect on the Company's operations and financial condition.
(c) Adverse regulatory changes in Nevada. Changes in Nevada gaming tax rates, licensing requirements, or other regulatory requirements could disproportionately affect the Company given its significant revenue concentration in that state. While Nevada has historically maintained a regulatory environment favorable to the gaming industry, there can be no assurance that this will continue.
(d) Multi-state expansion risks. The Company's planned expansion into Louisiana and Indiana is intended, in part, to diversify its geographic revenue base. However, the expansion is subject to receipt of gaming licenses from the Louisiana Gaming Control Board and the Indiana Gaming Commission, respectively, and there can be no assurance that such licenses will be granted or that the expansion activities will generate revenues sufficient to materially reduce the Company's Nevada revenue concentration in the near term.
(e) Multi-state regulatory complexity. RGC currently holds gaming licenses from three state gaming commissions (Nevada Gaming Commission, License No. NGC-2019-04172; New Jersey Division of Gaming Enforcement, License No. NJDGE-2020-1138; Mississippi Gaming Commission, License No. MGC-2018-0623) and has pending applications in two additional states. Each jurisdiction has distinct licensing requirements, regulatory standards, and enforcement practices. Operating in multiple jurisdictions subjects the Company to overlapping and potentially conflicting regulatory requirements, increases compliance costs, and exposes the Company to the risk that an adverse regulatory action in one jurisdiction could have consequences in other jurisdictions, including the potential triggering of suitability reviews or license revocations under reciprocal reporting requirements.
The new risk factor should cross-reference the Company's existing risk factors regarding regulatory matters and competition, which are incorporated by reference from the Company's most recent Form 10-K/A. The cross-reference will help investors understand how the new risk factor fits within the broader risk framework and avoid unnecessary duplication.
3. Recommended Response Strategy. We recommend the following approach to responding to Comment 2:
(a) Draft a new risk factor to be added to the "Risk Factors" section of the prospectus supplement, with a title along the lines of: "A significant portion of our gaming revenues is concentrated in Nevada, and our expansion into new jurisdictions is subject to regulatory approval and other risks." The risk factor should quantify the approximately 58% Nevada revenue concentration, identify the specific regulatory risks described above, and discuss the pending Louisiana and Indiana gaming license applications. It should also address the multi-state regulatory complexity risks arising from the Company's operations across multiple gaming jurisdictions.
(b) Cross-reference existing risk factors incorporated by reference from the Company's Form 10-K/A regarding regulatory matters, competition, and general economic conditions.
(c) Provide the proposed language for the new risk factor in the body of the response letter for the Staff's review.
(d) Circulate the draft risk factor to Darren Whitfield for review and approval prior to inclusion in the response letter, as the Company's General Counsel is best positioned to confirm the accuracy of the regulatory license information and the status of the pending applications.
Effort Level: Low to Moderate. This comment requires drafting a new risk factor and obtaining client review and approval. No new financial data is required. The risk factor is substantive in nature but draws on information already available in the Company's public filings and known to the deal team. We anticipate that Darren Whitfield will want to review the risk factor carefully to ensure that the disclosure accurately reflects the Company's regulatory posture and does not inadvertently create adverse inferences regarding the likelihood of obtaining the pending gaming licenses.
C. Comment 3 — Dilution Table
1. Staff Comment Summary. The Staff's third comment requests an updated dilution table reflecting the anticipated public offering price of $27.45 per share and showing the increase in net tangible book value per share attributable to new investors, as well as the dilution per share that new investors will experience.
2. Analysis. The preliminary prospectus supplement included a dilution section with a narrative discussion and a table, but the table was presented using placeholder figures and did not reflect the specific offering price of $27.45 per share or the precise number of shares being offered (6,557,377 shares in the base offering). The Staff's comment is standard and requires the Company to present a complete dilution table using the actual offering parameters.
The key inputs for the updated dilution table are as follows:
• Shares of common stock outstanding pre-offering: 152,400,000 shares
• Base shares offered in the Offering: 6,557,377 shares
• Shares of common stock outstanding post-offering (base offering only): 158,957,377 shares
• Par value per share: $0.001
• Public offering price per share: $27.45
• Net tangible book value per share before the Offering: To be calculated from the most recent balance sheet data. The Company's most recently filed quarterly report on Form 10-Q contains the relevant balance sheet data as of June 30, 2025. We will need to coordinate with Lena Okafor and her team, and potentially with Kaplan Feld, to confirm the net tangible book value figure. Based on preliminary internal calculations using the June 30, 2025 balance sheet data, we estimate the pre-offering net tangible book value at approximately $12.85 per share, but this figure must be confirmed.
• Net proceeds from the Offering (base, post-expenses): $171,450,000
• Net tangible book value per share after the Offering: To be calculated as [(pre-offering net tangible book value + $171,450,000) ÷ 158,957,377]
• Increase in net tangible book value per share attributable to new investors: Post-offering NTBV per share minus pre-offering NTBV per share
• Dilution per share to new investors: $27.45 minus post-offering NTBV per share
We will need to coordinate with Lena Okafor's team to confirm the net tangible book value figure from the most recent quarterly financial statements. In our preliminary estimation, the pre-offering net tangible book value is approximately $1,957,740,000 (based on total equity of approximately $2,490,000,000 less intangible assets and goodwill of approximately $532,260,000 as reported on the June 30, 2025 balance sheet), resulting in a pre-offering NTBV per share of approximately $12.85. After giving effect to the Offering (base shares only), the pro forma net tangible book value would be approximately $2,129,190,000, or approximately $13.39 per share, representing an increase of approximately $0.54 per share attributable to new investors and dilution to new investors of approximately $14.06 per share ($27.45 minus $13.39). These figures are preliminary and must be confirmed with the Company's financial team and, if necessary, with Kaplan Feld.
In addition to the base dilution table, we should consider whether the table should also address the following items:
(a) Full exercise of the Greenshoe. While the Staff's comment does not specifically request presentation of dilution on a fully exercised basis (7,540,983 total shares; 159,940,983 shares outstanding post-offering with Greenshoe), best practice in our experience is to include either a footnote or a supplemental column showing dilution assuming full exercise of the over-allotment option. This provides investors with a complete picture and reduces the risk of a follow-up comment from the Staff.
(b) Outstanding stock options. The Company has 3,850,000 options outstanding under its 2021 Equity Incentive Plan at a weighted-average exercise price of $19.72 per share. While these options are not being offered in the Offering, they represent potential dilution to both existing and new investors and should be addressed in a footnote to the dilution table. We should disclose the number of options outstanding, the weighted-average exercise price, and the additional dilution that would result from exercise of all outstanding options.
(c) Treasury stock. The Company holds 4,200,000 shares of common stock in treasury. Treasury shares are excluded from shares outstanding for purposes of the dilution calculation, and a footnote should clarify this treatment.
3. Recommended Response Strategy. We recommend the following approach to responding to Comment 3:
(a) Update the dilution table with the specific figures reflecting the $27.45 offering price and 6,557,377 base shares, using confirmed net tangible book value data from the Company's most recent quarterly financial statements.
(b) Coordinate with Lena Okafor and her financial team to obtain the current net tangible book value figure and confirm the inputs for the dilution calculation. If Kaplan Feld's involvement is required (e.g., if the NTBV calculation requires auditor sign-off or if there are questions about the treatment of specific intangible assets or deferred items), coordinate with Sandra Meyers at Kaplan Feld as needed.
(c) Add footnotes to the dilution table addressing: (i) dilution assuming full exercise of the over-allotment option; (ii) outstanding stock options under the 2021 Equity Incentive Plan (3,850,000 options at a weighted-average exercise price of $19.72); and (iii) treasury shares (4,200,000 shares).
(d) Provide the revised dilution table in the body of the response letter with blackline markup showing changes from the preliminary prospectus supplement.
Effort Level: Moderate. This comment requires coordination with the Company's CFO and financial team to obtain and confirm the net tangible book value figures, careful arithmetic to ensure the accuracy of the dilution calculations, and preparation of a formatted table with appropriate footnotes. The substance is mechanical rather than judgmental, but accuracy is critical.
D. Comment 4 — Incorporation by Reference (Form 10-K/A)
1. Staff Comment Summary. The Staff's fourth comment notes that the Company's Form 10-K/A filed with the SEC on July 15, 2025 (amending the originally filed Form 10-K for the fiscal year ended December 31, 2024) should be specifically identified in the incorporation-by-reference section of the prospectus supplement. The Staff observes that the incorporation-by-reference section of the preliminary prospectus supplement lists only the "Annual Report on Form 10-K for the fiscal year ended December 31, 2024" without specifically identifying the Form 10-K/A as a separate filing or as an amendment to the original Form 10-K.
2. Analysis. This is a technical but important comment. Under SEC guidance and longstanding Staff practice, when a company files an amendment to a periodic report (such as a Form 10-K/A or a Form 10-Q/A), the amended report should be specifically referenced in the incorporation-by-reference section of any prospectus or prospectus supplement, particularly where the amended filing is the operative version of the report that supersedes the original. The purpose of this requirement is to ensure that investors are clearly directed to the correct, operative version of the incorporated document and are not left to determine on their own whether the original or amended filing is controlling.
The base prospectus (dated March 28, 2024) incorporated by reference the Company's periodic filings through the date of the base prospectus and automatically incorporates future filings made pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act. However, the prospectus supplement is expected to contain a specific listing of the key documents incorporated by reference, and that listing should accurately reflect the filing history, including any amendments.
In this case, the Form 10-K/A filed July 15, 2025 is the operative annual report for the fiscal year ended December 31, 2024. It supersedes the original Form 10-K for that period. The incorporation-by-reference section must clearly identify the 10-K/A so that investors understand which version of the annual report is being incorporated and are able to locate the correct filing on EDGAR.
We should confirm with Darren Whitfield the specific nature and scope of the amendments reflected in the Form 10-K/A. This information is relevant for two reasons. First, if the 10-K/A involved a restatement of financial statements, additional disclosure regarding the reasons for the restatement may be warranted in the prospectus supplement, and we should consider whether the existing risk factors adequately address restatement-related risks. Second, if the 10-K/A was a more limited amendment (e.g., to correct a non-financial error, to add an omitted exhibit, or to include an updated auditor's report), the required disclosure may be limited to the identification of the 10-K/A in the incorporation-by-reference section without additional narrative.
Based on our review of the Form 10-K/A on EDGAR, it appears that the amendment was filed to include an updated assessment of internal controls over financial reporting and to correct certain segment-level revenue disclosures, rather than to restate the Company's consolidated financial statements. However, this should be confirmed with the Company.
3. Recommended Response Strategy. We recommend the following approach to responding to Comment 4:
(a) Revise the incorporation-by-reference section of the prospectus supplement to specifically list the amended annual report as follows: "Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as amended by Form 10-K/A filed with the SEC on July 15, 2025 (File No. 001-39847)."
(b) Confirm with Darren Whitfield the SEC filing date, file number, and contents of the Form 10-K/A to ensure accuracy of the revised disclosure.
(c) Assess whether any additional disclosure or risk factor language is warranted in connection with the matters addressed in the 10-K/A. If the amendment was limited in scope (as we believe based on our preliminary review), no additional narrative disclosure should be necessary beyond the identification of the 10-K/A in the incorporation-by-reference section.
(d) Provide the revised language in the response letter.
Effort Level: Low. This is a straightforward drafting revision requiring confirmation of the filing details and insertion of the amended filing reference. No new financial data or substantive analysis is required.
E. Comment 5 — Plan of Distribution (Stabilization / Passive Market Making under Regulation M)
1. Staff Comment Summary. The Staff's fifth comment requests clarification of the plan of distribution section regarding stabilization activities and the circumstances under which the underwriters may engage in passive market making under Regulation M promulgated under the Exchange Act. The Staff notes that the preliminary prospectus supplement's plan of distribution section included standard disclosure regarding potential stabilization transactions, short sales, and syndicate covering transactions but did not specifically address passive market making under Rule 103 of Regulation M.
2. Analysis. Regulation M (Rules 101 through 105 under the Exchange Act) governs the trading activities of underwriters, issuers, selling securityholders, and other distribution participants during the period of a securities offering. The regulation is designed to prevent manipulation of the market for the securities being distributed. The key provisions relevant to the Staff's comment are as follows:
• Rule 101 prohibits distribution participants (including underwriters) from bidding for, purchasing, or attempting to induce any person to bid for or purchase a covered security during the applicable restricted period, subject to certain exceptions.
• Rule 103 provides an exception from Rule 101 for "passive market making" by underwriters that are also registered market makers in the security on the applicable exchange. Passive market making is subject to specific conditions and limitations, including: (i) the passive market maker's bid may not exceed the highest independent bid; (ii) net daily purchases are limited to the greater of the passive market maker's prescribed limit under applicable exchange rules or 200 shares; and (iii) the passive market maker must display a specific identifier on its bid on the exchange.
• Rule 104 addresses stabilization transactions, syndicate covering transactions, and penalty bids, and sets forth the conditions under which such activities are permissible.
The Company's common stock trades on the New York Stock Exchange under the ticker symbol RDGM. We need to confirm whether any of the underwriters in the syndicate — specifically Pinnacle Zanthor & Co., Hargrove Williams Securities LLC, or Clearwater Capital Markets Inc. — is a registered market maker in RDGM on the NYSE. If one or more of the underwriters is a registered market maker, disclosure of the potential for passive market making under Rule 103 is appropriate and should be included in the plan of distribution section. If none of the underwriters is a registered market maker, the response should state that the underwriters do not intend to engage in passive market making and that the reference to stabilization activities in the preliminary prospectus supplement was included as a precautionary matter, or alternatively, that the plan of distribution section will be revised to clarify that passive market making is not anticipated.
In either case, the plan of distribution disclosure should be revised to include the following clarifications:
(a) Nature of stabilization activities. The underwriters may engage in stabilizing transactions, which consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of the common stock while the Offering is in progress. Stabilizing bids may not exceed the public offering price of $27.45 per share.
(b) Over-allotment and short covering. In connection with the Offering, the underwriters may over-allot or effect transactions that stabilize, maintain, or otherwise affect the market price of the common stock at levels above those that might otherwise prevail in the open market. The underwriters may create a short position by selling more shares than they are obligated to purchase in the Offering (up to the 983,606 shares subject to the Greenshoe) and may cover such short position by exercising the over-allotment option or by purchasing shares in the open market. Syndicate covering transactions are purchases of shares in the open market after the distribution has been completed in order to cover short positions created by the underwriters.
(c) Penalty bids. The lead bookrunning manager may impose penalty bids, under which selling concessions allowed to syndicate members or other broker-dealers participating in the Offering are reclaimed if shares previously distributed in the Offering are repurchased in stabilizing or covering transactions.
(d) Effect of stabilization. Neither the Company nor any underwriter makes any representation or prediction as to the direction or magnitude of any effect that stabilizing transactions, syndicate covering transactions, or penalty bids may have on the price of the common stock. These activities, if commenced, may be discontinued at any time without notice.
(e) Passive market making (if applicable). If any underwriter is a registered market maker in RDGM, such underwriter may engage in passive market making in accordance with Rule 103 of Regulation M, subject to the conditions and limitations set forth therein, including the requirement that the passive market maker's bid not exceed the highest independent bid for the common stock and that net daily purchases not exceed the prescribed limit.
3. Recommended Response Strategy. We recommend the following approach to responding to Comment 5:
(a) Revise the "Plan of Distribution" section of the prospectus supplement to add specific disclosure regarding passive market making under Rule 103 of Regulation M, including a description of the conditions and limitations applicable to passive market making. If none of the underwriters is a registered market maker in RDGM, the disclosure should note that the underwriters are not registered market makers and do not intend to engage in passive market making, or alternatively, the passive market making disclosure can be included on a conditional basis (e.g., "In connection with the offering, underwriters and selling group members who are qualified market makers on the NYSE may engage in passive market making transactions in our common stock on the NYSE in accordance with Rule 103 of Regulation M...").
(b) Separately revise and expand the stabilization provisions to provide additional specificity regarding price limits on stabilizing bids, penalty bids, syndicate covering transactions, and the over-allotment mechanics, as described above.
(c) Coordinate with Whitmore & Pratt LLP (Thomas Beaumont and Rebecca Ling, as underwriters' counsel) and with the Pinnacle Zanthor deal team (Aisha Rowan and Colin Matsuda) to confirm whether any underwriter in the syndicate is a registered market maker in RDGM on the NYSE. This information is necessary to determine the appropriate scope of the passive market making disclosure.
(d) Provide the revised proposed plan of distribution language in the body of the response letter.
Effort Level: Low to Moderate. The substantive drafting is largely based on standard form disclosure used in comparable follow-on offerings and does not present novel legal issues. However, the comment requires coordination with underwriters' counsel and the syndicate to confirm market-making status, which may take one to two business days.
F. Comment 6 — Legal Opinion (Exhibit 5.1)
1. Staff Comment Summary. The Staff's sixth and final comment requests that the legal opinion filed as Exhibit 5.1 to the registration statement be updated to cover the maximum number of shares issuable in the Offering, including the shares subject to the over-allotment option, and to reference the specific resolutions of the Board of Directors authorizing the Offering.
2. Analysis. The draft Exhibit 5.1 opinion, prepared by Calderwood & Harkness LLP in our capacity as issuer's counsel, covered 6,557,377 shares of common stock — the base offering amount only — and did not expressly cover the 983,606 additional shares issuable upon exercise of the over-allotment option, for a total maximum of 7,540,983 shares. The SEC requires that the legal opinion filed as Exhibit 5.1 cover all shares registered and offered, including shares subject to an over-allotment option. The omission of the Greenshoe shares from the draft opinion was an oversight, and we will correct it in the revised opinion.
Additionally, the draft opinion referenced the Board's authorization of the Offering in general terms, stating that the shares were being issued "pursuant to resolutions of the Board of Directors of the Company" without identifying the specific date of the resolutions or the establishment and authority of the Pricing Committee to which the Board delegated certain pricing and structuring decisions. The Staff's request that the opinion reference the specific Board resolutions is consistent with the SEC's longstanding position that Exhibit 5.1 opinions should be based on, and should identify, specific corporate authorization.
The relevant Board actions are as follows:
• On September 30, 2025, the Board of Directors of Redstone Gaming Corp. adopted resolutions (the "Board Resolutions") authorizing the Offering, including the issuance and sale of up to 8,000,000 shares of common stock (inclusive of any shares subject to the over-allotment option) at a price of not less than $25.00 per share, subject to market conditions and the final determination of the Pricing Committee.
• The Board Resolutions established a Pricing Committee consisting of three members of the Board: Marcus Hale (Chairman and CEO), Lena Okafor (CFO and director), and Patricia Moynihan (independent director and Chair of the Audit Committee). The Pricing Committee was authorized to set the final offering price per share, the final number of shares to be issued, and the underwriting discount, commission, and other terms of the underwriting agreement, in each case within the parameters established by the Board Resolutions.
The maximum number of shares issuable in the Offering, including the full exercise of the Greenshoe, is 7,540,983 shares, which is within the Board-authorized maximum of 8,000,000 shares. The anticipated offering price of $27.45 per share exceeds the Board-authorized minimum price of $25.00 per share. Accordingly, the Offering is within the scope of the Board's authorization.
For purposes of confirming the Company's ability to issue the shares, the following capitalization data is relevant:
• Authorized shares of common stock: 300,000,000
• Shares outstanding pre-offering: 152,400,000
• Treasury stock: 4,200,000 shares
• Options outstanding under the 2021 Equity Incentive Plan: 3,850,000 shares (weighted-average exercise price: $19.72 per share)
• Maximum shares issuable in the Offering (with full Greenshoe): 7,540,983
• Total shares outstanding post-offering (with full Greenshoe, excluding treasury shares and unexercised options): 159,940,983
• Total shares potentially outstanding (including all outstanding options, excluding treasury): 163,790,983
The total shares potentially outstanding following the Offering, even assuming full exercise of the Greenshoe and all outstanding options, is 163,790,983, which is well within the 300,000,000 authorized shares of common stock. Accordingly, there is no authorized share limitation issue.
3. Recommended Response Strategy. We recommend the following approach to responding to Comment 6:
(a) Revise the Exhibit 5.1 legal opinion to cover the maximum number of shares issuable in the Offering, including the over-allotment option: 7,540,983 shares of common stock.
(b) Revise the opinion to specifically reference the Board Resolutions adopted on September 30, 2025, and the Pricing Committee established thereunder, consisting of Marcus Hale, Lena Okafor, and Patricia Moynihan, with authority to set the final offering price, number of shares, and underwriting terms within the parameters authorized by the Board.
(c) Confirm that the opinion states that the shares of common stock, when issued and delivered by the Company and paid for by the underwriters in accordance with the terms of the underwriting agreement, will be validly issued, fully paid, and non-assessable under the General Corporation Law of the State of Delaware (the Company's state of incorporation).
(d) Advise the Staff in the response letter that a revised Exhibit 5.1 will be filed with the final prospectus supplement or, if necessary, by post-effective amendment to the registration statement. In practice, the revised opinion is typically filed as an exhibit to the final prospectus supplement or as a Current Report on Form 8-K.
Effort Level: Low. This is an internal Calderwood & Harkness deliverable. We have full control over the drafting of the Exhibit 5.1 opinion, and the required revisions are mechanical in nature — updating the share count and inserting references to the specific Board Resolutions and Pricing Committee. Vivienne St. Claire, as the Responsible Partner and signatory of the opinion, will finalize and execute the revised opinion.
IV. Coordination and Action Items
The following coordination steps and action items are required to prepare and file the response letter by the target date of October 21, 2025.
A. Client Coordination
1. Summary Email to General Counsel. Send an email to Darren Whitfield (EVP and General Counsel) summarizing the six SEC Staff comments and our recommended response strategies. Request the Company's approval of the proposed approach, with particular attention to the following items: (a) the revised use of proceeds allocation, including whether the Company is comfortable with the individual state-level breakdowns (approximately $70 million for Louisiana and approximately $45 million for Indiana, or alternatively a combined figure of approximately $115 million); and (b) the new Nevada revenue concentration risk factor, which Darren should review for accuracy regarding the Company's regulatory licenses and the status of pending gaming applications. Target send date: October 15, 2025 (today).
2. CFO Coordination — Use of Proceeds and Dilution. Confirm with Lena Okafor (CFO) the following: (a) the precise allocation amounts for use of proceeds, as between the Louisiana expansion, Indiana expansion, partial debt retirement, and general corporate purposes; (b) the net tangible book value figures from the most recent quarterly financial statements (Form 10-Q for the quarter ended June 30, 2025) for purposes of the updated dilution table; and (c) whether the Company's financial team or Kaplan Feld needs to be involved in confirming the NTBV calculation. Target: October 15–16, 2025.
3. Form 10-K/A Confirmation. Confirm with Darren Whitfield the specific nature and scope of the amendments reflected in the Form 10-K/A filed July 15, 2025, including whether the amendment involved a restatement of financial statements, a correction of segment-level revenue disclosures, or other changes, and whether any additional disclosure in the prospectus supplement is warranted. Target: October 15–16, 2025.
B. Underwriters' Counsel Coordination
1. Draft Response Letter Review. Share the draft response letter with Whitmore & Pratt LLP (Thomas Beaumont and Rebecca Ling) for review, with particular attention to Comments 3 (dilution table) and 5 (plan of distribution / Regulation M). Underwriters' counsel will need to confirm that the revised plan of distribution language accurately reflects the underwriters' intended practices and is consistent with the underwriting agreement. Target: October 18, 2025.
2. Market Maker Status Confirmation. Coordinate with Whitmore & Pratt to confirm with the Pinnacle Zanthor syndicate desk (Aisha Rowan and Colin Matsuda) whether any underwriter in the syndicate — Pinnacle Zanthor & Co., Hargrove Williams Securities LLC, or Clearwater Capital Markets Inc. — is a registered market maker in RDGM on the NYSE, for purposes of the passive market making disclosure under Rule 103 of Regulation M. Target: October 16–17, 2025.
C. Auditor Coordination
1. Net Tangible Book Value Confirmation. Coordinate with Kaplan Feld & Associates LLP (Sandra Meyers, Engagement Partner) if updated or confirmed financial data is needed for the dilution table. We believe that the NTBV calculation can be derived from the Company's most recent Form 10-Q without the need for auditor involvement, but we should confirm this with Lena Okafor. If Kaplan Feld's involvement is required, we should engage Sandra Meyers promptly to avoid any delay. Target: October 16, 2025.
D. Internal Drafting Assignments
The following internal drafting assignments are established for the C&H deal team:
Brendan Walsh (Lead Associate):
• Draft revised "Use of Proceeds" disclosure language (Comment 1), incorporating the quantified allocation and appropriate caveat language regarding pending gaming license applications
• Draft revised "Incorporation by Reference" language (Comment 4), specifically identifying the Form 10-K/A filed July 15, 2025
• Draft the response letter framework, including introductory language, comment-by-comment responses, and concluding paragraphs
• Coordinate with Whitmore & Pratt LLP on Comments 3 (dilution table) and 5 (plan of distribution / Regulation M)
• Overall project management of the response letter process
Natasha Forbes (Working Associate):
• Draft new Nevada revenue concentration risk factor (Comment 2), including quantification of the 58% Nevada revenue concentration, identification of specific regulatory risks, and discussion of the multi-state regulatory framework
• Prepare updated dilution table with placeholder for NTBV figures pending confirmation from the Company's CFO (Comment 3), including footnotes for the Greenshoe, outstanding stock options, and treasury shares
• Prepare revised plan of distribution language regarding Regulation M passive market making (Comment 5), including stabilization, syndicate covering, penalty bids, and passive market making conditions
Vivienne St. Claire (Responsible Partner):
• Revise Exhibit 5.1 legal opinion to cover 7,540,983 shares (including Greenshoe) and to reference the Board Resolutions adopted September 30, 2025 and the Pricing Committee (Comment 6)
• Final review of the complete response letter prior to filing
• Sign off on the revised Exhibit 5.1 opinion
E. Key Deadlines
The following timeline has been established to ensure that the response letter is filed by the target date and the Offering timeline is maintained:
V. Overall Assessment and Risk Evaluation
Based on our analysis of the six Staff comments, we provide the following overall assessment and risk evaluation for purposes of advising the client and managing the Offering timeline.
Nature of the Comments. The six comments are routine and typical for a follow-on equity offering by a gaming company using a shelf registration statement on Form S-3. The comments reflect the Staff's standard areas of focus for equity offerings — use of proceeds specificity, risk factor completeness, dilution disclosure, incorporation-by-reference accuracy, plan of distribution mechanics, and legal opinion scope. None of the comments raises a novel legal, accounting, or disclosure issue, and none suggests that the Staff has identified a material deficiency in the registration statement or the preliminary prospectus supplement that would require fundamental revisions to the Offering structure or documentation.
Form S-3 Eligibility. The comments do not suggest that the Staff has concerns about the Company's eligibility to use Form S-3 as the registration vehicle for the Offering. The Company satisfies all of the registrant requirements of General Instruction I.A of Form S-3 (including the requirement that the Company has been subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least twelve months, has timely filed all required reports during that period, and has an aggregate market value of voting and non-voting common equity held by non-affiliates in excess of $75 million). The Company's public float, based on its most recent proxy statement, exceeds $3.5 billion, which also satisfies the transaction requirements of General Instruction I.B.1 of Form S-3.
No Indication of Stop Order or Pre-Effective Amendment. There is no indication in the comment letter that the Staff intends to issue a stop order with respect to the registration statement or to require a post-effective amendment as a condition to clearance. The shelf registration statement was declared effective on March 28, 2024, has been used previously without incident (in connection with the September 2024 debt offering), and the Staff's comments are directed at the preliminary prospectus supplement rather than at the base registration statement. We anticipate that the comments can be fully resolved through revised disclosure in the prospectus supplement and a revised Exhibit 5.1, without the need for any amendment to the base registration statement.
Client-Relations Considerations. The most sensitive comment from a client-relations standpoint is Comment 1 (use of proceeds specificity). The Company's management — and in particular Darren Whitfield and Lena Okafor — may prefer to maintain flexibility in the allocation of net proceeds and may be reluctant to commit publicly to specific dollar amounts for the Louisiana and Indiana expansions, given that both projects remain subject to gaming license approvals and that construction timelines and costs are inherently uncertain. We should discuss with the client the appropriate level of specificity and the scope of qualifying language that can be included to preserve flexibility while satisfying the Staff's expectations. In our experience, the use of "approximately" language and the inclusion of robust caveats regarding the Company's ability to reallocate proceeds based on business judgment and changed circumstances provide adequate protection against undue rigidity, while still providing the level of specificity that the Staff expects.
Comment 2 (Nevada concentration risk factor) is also somewhat sensitive, as the Company may be concerned that highlighting its dependence on Nevada revenues could be viewed negatively by investors. However, the 58% revenue concentration is already publicly available information (disclosed in the Form 10-K/A), and the addition of a specific risk factor addressing this concentration is both appropriate from a disclosure standpoint and consistent with the Staff's reasonable expectations for a gaming company raising capital. We will work with Darren Whitfield to ensure that the risk factor is balanced and does not overstate the risks.
Concurrent Preparation of Revised Prospectus Supplement. The revised prospectus supplement reflecting all of the responses to the Staff's comments should be prepared concurrently with the response letter, so that both can be finalized promptly upon receipt of Staff clearance. This approach will allow the Company to file the final prospectus supplement immediately after clearance is received, minimizing any delay to the Offering timeline. Natasha Forbes will maintain a running redline of the prospectus supplement reflecting all proposed changes, and the final version will be circulated for review by all parties (C&H, Company, Whitmore & Pratt, and the underwriting syndicate) prior to filing.
Offering Timeline. Assuming the response letter is filed on October 21, 2025 and the Staff provides clearance within approximately two to three business days (by approximately October 23–24, 2025), the Offering timeline remains achievable:
• Pricing: October 28, 2025
• Filing of final prospectus supplement: October 27–28, 2025 (prior to or concurrently with pricing)
• Closing: October 31, 2025 (T+3 settlement)
If the Staff issues a second round of comments — which we consider unlikely given the routine nature of the initial comments — the timeline could slip by approximately three to five business days. We will monitor the Staff's response and communicate any developments to the client and the underwriting syndicate promptly.