1033-00006 · Redstone Gaming Corp · Discovery

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CALDERWOOD & HARKNESS LLP Attorneys at Law 1901 Avenue of the Stars, Suite 2800 Los Angeles, California 90067

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure under the work-product doctrine. Do not distribute outside the authorized distribution list without prior approval.

MEMORANDUM

TO: Francesca Morano, Partner Samuel Eklund, Partner Carlos Espinoza, Lead Associate

FROM: Hannah Brinkley, Associate

DATE: September 2, 2024

RE: Deposition Summary — Ava Lin, Senior Analyst, Grizzly Peak Research LLC

MATTER: Redstone Gaming Corp. v. Grizzly Peak Research LLC et al., Case No. 24STCV-01892, Superior Court of California, County of Los Angeles

CLIENT: Redstone Gaming Corp. (Nasdaq: RDGM)

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I. Overview and Deposition Logistics

The deposition of Ava Lin, Senior Analyst at Grizzly Peak Research LLC ("GPR"), was taken on August 29, 2024, at the offices of Caldwell, Tseng & Barrow LLP, located at 555 California Street, Suite 3100, San Francisco, California 94104. The deposition commenced at approximately 9:00 a.m. and concluded at approximately 5:15 p.m., with customary breaks for lunch and short recesses, for a total examination time of approximately seven hours.

Carlos Espinoza of Calderwood & Harkness LLP served as the examining attorney on behalf of plaintiff Redstone Gaming Corp. ("RGC" or "Redstone"). Natalie Orenstein of Caldwell, Tseng & Barrow LLP appeared as defending counsel on behalf of GPR and Lin. A certified court reporter was present throughout the proceedings, and the deposition was also recorded by a videographer pursuant to the parties' stipulation.

This deposition represents the sixth deposition taken in this matter out of the fourteen total depositions either planned or already completed. Lin appeared voluntarily pursuant to notice of deposition; no subpoena was required, as she is a party-affiliated witness employed by GPR, a named defendant in this action.

As discussed in greater detail below, Lin served as co-author of all three GPR reports at the center of this litigation. She is the second key GPR witness to be deposed, following the deposition of Tobias Fenchurch, GPR's Managing Member, which was conducted on August 20, 2024. The sequencing of the Fenchurch deposition before the Lin deposition proved strategically advantageous, as it allowed Mr. Espinoza to confront Lin with certain aspects of Fenchurch's prior testimony and to identify material inconsistencies between the two witnesses' accounts, as detailed in Section VII below.

II. Witness Background and Role at Grizzly Peak Research LLC

A. Professional Background

Ava Lin identified herself as a Senior Analyst at Grizzly Peak Research LLC, with offices located at 44 Maiden Lane, 7th Floor, San Francisco, California 94108. She holds the title of Senior Analyst and confirmed that she served as co-author of all three published GPR reports concerning Redstone Gaming Corp. that are at issue in this litigation.

Lin testified that she has been employed by GPR since approximately 2021. Prior to joining GPR, she was employed on the equity research desk at a mid-sized investment bank, where she covered the technology and consumer-discretionary sectors for approximately three years. She described her educational background as including undergraduate and graduate-level training in finance and economics, though she did not specify the awarding institutions in detail during the deposition.

Lin confirmed that she reports directly to Tobias "Toby" Fenchurch, the Managing Member of GPR, and that Fenchurch is her direct supervisor and the individual who assigns research targets, establishes editorial direction, and exercises final approval authority over all GPR publications.

B. Role in GPR Operations

Lin provided testimony regarding GPR's business model and her specific role within the firm's operations. She described GPR as a research firm that publishes short-seller research reports on publicly traded companies. Lin confirmed that GPR's principals and an affiliated investment fund — Grizzly Peak Capital Partners LP ("GPCP") — maintain short positions in the companies targeted by GPR's reports. Lin stated that she understood GPR's compensation model was, in part, dependent on the performance of the short positions held by GPCP, although she stated she was not privy to the specific financial arrangements between GPR and GPCP.

Lin confirmed that she was aware of the affiliated fund, GPCP, and testified that she understood its assets under management to be approximately $185 million as of early 2024. She acknowledged that GPCP held short positions in the securities of the companies targeted by GPR's reports, including Redstone Gaming Corp.

With respect to the distribution of GPR's research, Lin confirmed that GPR distributes its reports via its subscription website, grizzlypeakresearch.com, and through the firm's social-media account on the X platform (formerly Fenmore Solutions), @GrizzlyPeakRes. Lin testified that at the time of the Redstone publications in February 2024, the @GrizzlyPeakRes account had approximately 142,000 followers — a substantial audience that, in Lin's words, included "institutional investors, retail investors, journalists, and other market participants."

Regarding the division of labor between herself and Fenchurch, Lin stated clearly that she was the primary drafter of the analytical and data-driven sections of all three reports. Fenchurch, by contrast, served as editor and "directed the overall narrative and publication timing." Lin described her role as involving the development of financial models, the analysis of public filings and data, and the preparation of exhibits and charts, while Fenchurch focused on the editorial framing, the headline language, and the strategic sequencing of the three reports' release dates.

III. Report 1 — "House of Cards: Redstone Gaming's Manufactured Earnings" (February 7, 2024)

A. Genesis and Research Process

Lin testified that she began conducting research on Redstone Gaming Corp. in approximately late 2023 or early January 2024, at the direction of Fenchurch. She stated that Fenchurch identified RGC as a potential research target based on what he described as "anomalies" in the company's revenue growth trajectory relative to its competitors.

The central allegation of Report 1 was that RGC had fabricated approximately $410 million in revenue during fiscal year 2023 through fictitious intercompany transactions. The report, which totaled 48 pages, described a purported scheme in which RGC used subsidiary entities to generate circular revenue flows that lacked economic substance. Lin testified that this revenue-fabrication allegation was the "centerpiece" of Report 1 and was intended to be the foundational claim upon which the subsequent two reports would build.

When asked about her data sources, Lin described a multi-faceted research process. She stated that she relied on publicly available SEC filings, including RGC's Form 10-K for fiscal year 2023, quarterly filings on Form 10-Q, and proxy statements. She also described using third-party database analyses to identify and map RGC's subsidiary entities, including searches of state corporate registries and UCC filings. In addition, Lin acknowledged that GPR received "certain anonymous tips from purported former RGC employees" who claimed to have knowledge of the intercompany transactions.

Under questioning by Mr. Espinoza, Lin made a significant acknowledgment regarding the anonymous tips. She admitted that she did not independently verify the identity or reliability of any of the anonymous sources, could not recall how many such sources had provided information, and could not identify them by name or former position at RGC. Lin stated that she treated the tips as "leads" that directed her analysis of publicly available data rather than as primary evidence, but she conceded that the tips informed the direction and framing of her analytical work.

B. Awareness of Pinnacle Audit & Advisory's Clean Opinion

Mr. Espinoza devoted considerable time to questioning Lin about her awareness of the clean audit opinions issued by Pinnacle Audit & Advisory LLP, RGC's independent auditor. Lin confirmed that she was aware that Pinnacle (engagement partner Walter Ng, CPA) had issued unqualified audit opinions — commonly referred to as "clean opinions" — on RGC's consolidated financial statements for fiscal years 2021, 2022, and 2023. These audit opinions represented Pinnacle's professional conclusion that RGC's financial statements were presented fairly, in all material respects, in conformity with generally accepted accounting principles.

When asked how GPR reconciled its allegation of $410 million in fabricated revenue with the existence of three consecutive clean audit opinions, Lin stated that it was GPR's position that "auditor opinions don't guarantee the absence of fraud." Lin elaborated that GPR's reports were intended to identify "red flags" that warranted further investigation, and that the existence of a clean audit opinion did not, in her view, preclude the possibility of financial misstatement.

On follow-up examination, however, Lin conceded a critical point: she did not contact Pinnacle Audit & Advisory or any other auditor to discuss her concerns about RGC's revenue figures prior to the publication of Report 1. She did not request access to Pinnacle's work papers, did not inquire about the scope or methodology of Pinnacle's audit procedures with respect to intercompany transactions, and did not consult with any independent accounting expert to evaluate the plausibility of the revenue-fabrication theory. Lin stated that she "didn't think it was necessary" to contact the auditor, given the publicly available data she had analyzed.

This admission is significant for the actual-malice analysis, as it demonstrates a failure to undertake a readily available and obvious step to verify the accuracy of the most damaging allegation in Report 1 before publication.

C. Short Position Awareness

Lin confirmed under oath that she was aware at the time of Report 1's publication that GPR and its affiliated fund, GPCP, held a short position of approximately 680,000 shares in RDGM common stock. She stated that this short position was disclosed in a standard disclaimer appearing at the end of each GPR report, which stated in substance that GPR's principals and affiliated entities maintained short positions in the subject company's securities and stood to benefit from declines in the company's stock price.

Lin testified that she understood the notional value of the short position to be approximately $62.66 million, calculated based on 680,000 shares at the pre-publication closing price of $92.14 per share on February 6, 2024. When asked whether the existence of this substantial short position influenced the content or timing of the GPR reports, Lin denied any such influence. She stated that her research was "objective" and was conducted independently of trading considerations. However, Lin acknowledged that Fenchurch — not Lin — made the final decision on publication dates for all three reports, and that she was not involved in the trading decisions made by GPCP.

D. Stock-Price Impact

Mr. Espinoza presented Lin with stock-price data for RDGM common stock surrounding the publication of Report 1. Lin was shown that RDGM closed at $92.14 per share on February 6, 2024, the trading day immediately preceding the release of Report 1. On February 7, 2024 — the day of publication — RDGM closed at $84.37 per share, representing a single-day decline of $7.77 per share, or approximately 8.4%.

Lin stated that she was aware of the price decline on the day of publication and acknowledged that she monitored RDGM's stock price on a regular basis during the period when GPR was publishing its reports. She stated this monitoring was part of her "normal research process."

IV. Report 2 — "Rigged Reels: How Redstone's Slot Software Cheats the Regulators" (February 14, 2024)

A. The RNG-Manipulation Allegation

Report 2, published one week after Report 1, comprised 36 pages and advanced a separate and distinct category of allegations against RGC. The report alleged that RGC had manipulated its proprietary random-number-generator ("RNG") software used in its slot-machine gaming systems in order to inflate payout-percentage statistics reported to the Nevada Gaming Control Board ("NGCB"). If true, such manipulation would represent not only a fraud on investors but also a serious regulatory violation under Nevada gaming law, potentially jeopardizing RGC's gaming licenses.

Lin testified that she was the primary author of the technical analysis sections of Report 2. She described her methodology as consisting of three principal components: (1) an analysis of publicly available payout-percentage data reported by RGC to state gaming authorities; (2) a comparison of those reported payout percentages with industry norms and competitor data; and (3) a proprietary statistical model she developed internally to identify what she characterized as "statistically anomalous" deviations in RGC's reported figures.

B. Failure to Contact the Nevada Gaming Control Board

Perhaps the most consequential line of questioning during the entire deposition concerned Lin's failure to contact the Nevada Gaming Control Board before publishing Report 2's RNG-manipulation allegations.

Under direct and sustained questioning by Mr. Espinoza, Lin acknowledged that she did not contact the NGCB at any time before the publication of Report 2 to verify her allegations, to inquire about the Board's independent testing procedures, or to obtain the Board's own RNG audit data. This is a critical admission. Lin stated that she relied exclusively on publicly available data and her own internally developed statistical model.

When pressed further, Lin conceded that the NGCB conducts independent RNG audits of gaming equipment deployed on casino floors in Nevada. She acknowledged that the Board's independent testing data "could have been relevant" to her analysis, but stated that she did not believe the data was publicly accessible and did not attempt to obtain it through a records request or other means.

Mr. Espinoza then informed Lin — and Lin did not dispute — that the Nevada Gaming Control Board completed an independent RNG audit of RGC's gaming systems on March 29, 2024, and cleared RGC's systems entirely. The Board found no evidence of RNG manipulation, no evidence of irregular payout patterns, and no basis for any regulatory action against RGC related to its gaming software.

Lin stated that she became aware of the Board's clearance "sometime after it was published" but could not recall the precise date on which she learned of the clearance. She did not dispute the substance of the Board's findings.

C. Reliance on Incomplete Data

Mr. Espinoza conducted a thorough examination of the data underlying Lin's statistical model, eliciting a series of concessions that substantially undermine the reliability of the RNG-manipulation allegation.

First, Lin admitted that her statistical model was based on only two years of publicly available payout data — fiscal years 2022 and 2023 — rather than a longer historical sample. She acknowledged that a two-year dataset is a limited basis upon which to draw conclusions about systematic manipulation patterns and that a longer time series would have provided greater statistical reliability.

Second, Lin acknowledged under questioning that her model did not account for differences in game mix, volatility settings, or property-level variations across RGC's eleven casino-resort properties located in Nevada, New Jersey, and Mississippi. She conceded that these factors — particularly game mix, which refers to the proportion of different types of slot machines on a casino floor — can materially affect reported payout percentages and that failure to control for these variables weakens the conclusions that can be drawn from the data.

Third, Lin conceded that she had not consulted with any independent gaming-software expert or statistician before publishing her analysis. She stated that she prepared the model herself and that it was reviewed only by Fenchurch before publication.

When asked to characterize her confidence level in the RNG-manipulation allegation at the time of publication, Lin notably did not express high confidence. Instead, she described her findings as reflecting "patterns that warranted further investigation" — a characterization that falls significantly short of the definitive accusations contained in Report 2's text and headline.

Most damaging, however, was the confrontation with Lin's own internal notes. Mr. Espinoza presented Lin with documents produced in discovery from among the approximately 87,000 documents collected from GPR's systems. These documents included a draft analysis memorandum Lin had circulated to Fenchurch on February 10, 2024 — four days before the publication of Report 2. In that draft memorandum, Lin had flagged the payout data as "preliminary" and stated that the data was "insufficient for a definitive conclusion" regarding RNG manipulation. Lin confirmed the authenticity of the document and acknowledged that the language reflected her assessment of the data at that time.

When asked why the report was nonetheless published four days later notwithstanding her own characterization of the data as preliminary and insufficient, Lin stated that Fenchurch reviewed the draft, provided editorial comments, and made the decision to proceed with publication. Lin did not claim that additional data was obtained between February 10 and February 14 that would have changed her assessment.

D. Stock-Price Impact

Following the publication of Report 2 on February 14, 2024, RDGM common stock declined further, closing at $78.52 per share. This represented a cumulative decline of $13.62 per share, or approximately 14.8%, from the pre-publication closing price of $92.14 on February 6, 2024. Lin was shown these figures during the deposition and acknowledged awareness of the continued decline in RGC's stock price following the release of the second report.

V. Report 3 — "Double Down on Fraud: Redstone's Related-Party Shell Game" (February 21, 2024)

A. The Related-Party / Vermilion Holdings Allegation

Report 3, published on February 21, 2024, was the final of the three GPR reports on Redstone Gaming Corp. At 29 pages, it was the shortest of the three reports. Its central allegation was that RGC's Chief Executive Officer, Marcus J. Calloway, had engaged in undisclosed related-party dealings with a purported shell entity called "Vermilion Holdings LLC." The report alleged that Calloway used Vermilion Holdings to funnel company resources for personal benefit and that these transactions were not properly disclosed in RGC's SEC filings.

Lin testified that she was co-author of Report 3 with Fenchurch. Unlike Reports 1 and 2, where Lin served as the primary drafter of the substantive analytical sections, in Report 3 Fenchurch took primary drafting responsibility for the narrative sections while Lin prepared the financial-analysis exhibits, including charts and data tables purporting to show suspicious transaction flows between RGC and Vermilion Holdings.

B. Internal Meridian Solutions Messages Expressing Doubts

The most consequential evidence elicited during the entire Lin deposition — and potentially among the most significant evidence in the case — relates to a series of internal Meridian Solutions messages exchanged between Lin and Fenchurch in the days immediately preceding the publication of Report 3. These messages were produced in discovery and marked as deposition exhibits.

Mr. Espinoza presented Lin with the Meridian Solutions messages and asked her to review and authenticate them. Lin confirmed that the messages were authentic records of communications she exchanged with Fenchurch through GPR's internal Meridian Solutions workspace.

The first message in the sequence is dated February 18, 2024 — three days before Report 3 was published. Lin wrote to Fenchurch:

"I'm not comfortable with how thin the Vermilion connection is. We have corporate registry docs showing Calloway's name on an old filing, but nothing tying it to current RGC operations. This could blow up on us."

Fenchurch responded on the same date:

"The pattern speaks for itself. We publish Thursday. Clean it up."

In a follow-up message on February 19, 2024, Lin reiterated her concerns:

"I still think we need more before we go live with the related-party angle. What we have is circumstantial at best."

Fenchurch replied:

"We've got enough. Market will do the rest."

Lin confirmed the authenticity of each of these messages without reservation. She acknowledged under oath that she had expressed doubts about the evidentiary basis for the related-party allegation contained in Report 3 before its publication. She further acknowledged that her concerns, as documented in these messages, were that the connection between Calloway and Vermilion Holdings was "thin," that GPR had only "an old filing" showing Calloway's name on corporate registry documents, and that there was "nothing tying it to current RGC operations."

Lin testified that she ultimately deferred to Fenchurch's editorial judgment as Managing Member of GPR. She stated that Fenchurch had the final decision-making authority over publication and that she did not have the ability to unilaterally prevent a report from being published.

On further examination, Lin made an additional critical concession: she acknowledged that the related-party allegation in Report 3 was "based on incomplete information" and that at the time of publication, she did not possess evidence of any current, active related-party transactions between Marcus J. Calloway and Vermilion Holdings LLC. The only documentary basis for the allegation was a historical corporate registry filing that listed Calloway's name in connection with Vermilion Holdings — a filing that Lin conceded she could not tie to any ongoing business relationship or any specific transaction involving RGC.

C. Lin's Characterization of the Publication Decision

Lin provided additional testimony regarding the decision-making process that led to the publication of all three reports. She testified consistently that Fenchurch made the final decision on whether and when to publish each of the three reports. Lin stated that she raised her concerns about the evidentiary basis for the related-party allegation both in writing — as reflected in the Meridian Solutions messages — and verbally during in-person conversations with Fenchurch at GPR's offices. Despite these objections, Fenchurch overruled her and directed publication on the originally planned date.

Lin also noted the short position held by GPCP and the "timing pressure" Fenchurch expressed in connection with the sequential release of the three reports over a three-week period. However, Lin denied that she understood the precise trading strategy employed by GPCP or the specific financial implications of the publication schedule for the fund's short position. She characterized her understanding as general rather than detailed.

D. Stock-Price Impact at Trough

Following the publication of Report 3 on February 21, 2024, RDGM common stock reached its trough closing price of $72.80 per share. This represented a cumulative decline of $19.34 per share, or approximately 21.0%, from the pre-publication closing price of $92.14 on February 6, 2024.

Based on RGC's approximately 73.8 million shares of common stock outstanding, the aggregate market-capitalization loss at the trough was approximately $1.427 billion ($19.34 × 73.8 million shares).

Mr. Espinoza presented these figures to Lin during the deposition. Lin acknowledged that she was generally aware of the significant decline in RGC's stock price following the publication of each of the three reports and that the cumulative impact of the reports on the company's market capitalization was substantial. She stated she monitored RDGM's stock price as part of her ongoing research responsibilities.

VI. Post-Publication Events and Lin's Awareness

A. Regulatory Investigations

Mr. Espinoza questioned Lin regarding her awareness of regulatory developments that followed the publication of the three GPR reports.

Lin confirmed that she became aware the U.S. Securities and Exchange Commission ("SEC") opened an informal inquiry into RGC's financial reporting in March 2024, following the publication of the GPR reports. Significantly, Lin also confirmed that she was aware the SEC's inquiry was closed with no enforcement action on August 16, 2024 — approximately two weeks before her deposition. The SEC's decision to close the inquiry without action is consistent with RGC's position that GPR's revenue-fabrication allegations lacked merit.

Lin further confirmed her awareness that the Nevada Gaming Control Board cleared RGC's RNG systems entirely on March 29, 2024, following an independent audit. As discussed in Section IV.B above, this clearance directly contradicted the central allegation of Report 2.

When asked whether these regulatory outcomes were relevant to the accuracy of GPR's reports, Lin acknowledged that they were "relevant" but added the qualification that she "did not believe they were necessarily dispositive." Nonetheless, the fact that both regulatory inquiries resulted in complete exoneration of RGC materially undermines the factual predicates of Reports 1 and 2.

B. GPR's Short-Position Closure

Lin testified that she was aware the GPCP short position of 680,000 shares in RDGM was closed by approximately mid-March 2024. She stated that Fenchurch informed her generally that the position had been closed but did not share specific details regarding the average closing price or the profit realized on the trades.

When Mr. Espinoza informed Lin that the estimated gross profit on the short position was approximately $13.15 million — calculated based on entry at an average price of $92.14 per share and an average exit price of approximately $72.80 per share — Lin stated she "had no reason to dispute that figure." She did not offer any alternative calculation or suggest that the estimate was inaccurate.

Lin testified that she did not personally trade in RDGM securities at any time and did not hold any direct financial interest in the GPCP short position. She stated that her compensation from GPR consisted of a salary and an annual discretionary bonus, but she did not provide details regarding whether her bonus was linked to the performance of GPCP's trading positions.

C. No Corrective Action by GPR

A particularly notable aspect of Lin's testimony concerned GPR's failure to issue any correction, retraction, or update to the three reports following the regulatory outcomes that contradicted their central allegations.

Lin testified that as of the date of her deposition — August 29, 2024 — GPR had not published any correction, retraction, or update to any of the three reports concerning Redstone Gaming Corp. The reports remained available on GPR's website in their original form. Lin stated that the decision on whether to issue a correction or retraction rested with Fenchurch as Managing Member and that she did not have the authority to unilaterally publish a correction.

When asked whether she had recommended to Fenchurch that GPR issue a correction or update following the NGCB clearance or the SEC's closure of its inquiry, Lin stated that she had "discussed the topic" with Fenchurch but declined to provide further details, citing attorney-client privilege on the advice of defending counsel.

The failure to issue any corrective statement in the six months following the publication of the reports, and in particular following the definitive regulatory clearances obtained by RGC, is significant for purposes of establishing ongoing harm to RGC's reputation and supports the argument that GPR acted with deliberate indifference to the truth or falsity of its allegations.

VII. Impeachment and Credibility Observations

A. Inconsistencies with Fenchurch Testimony

Lin's deposition testimony is materially inconsistent with the testimony provided by Tobias Fenchurch during his deposition on August 20, 2024. Specifically, Fenchurch testified that he relied on Lin's analysis and professional judgment in deciding to publish the three reports and that Lin did not raise any significant objections to publication. Fenchurch characterized the publication process as collaborative and consensual.

Lin's testimony directly contradicts this account. Lin testified that she raised substantive concerns about the evidentiary basis for Report 3's related-party allegation — concerns that are corroborated by the contemporaneous Meridian Solutions messages dated February 18–19, 2024 — and that Fenchurch overruled her objections. Lin also testified that she flagged the RNG data underlying Report 2 as "preliminary" and "insufficient for a definitive conclusion" in a draft memorandum circulated to Fenchurch on February 10, 2024.

This inconsistency between the two witnesses is highly significant for purposes of establishing actual malice under New York Times Co. v. Sullivan, 376 U.S. 254 (1964), and its California progeny. At a minimum, the conflicting accounts demonstrate that one of the two principals of GPR's research team was not truthful in their deposition testimony. More importantly, regardless of which account is credited, the evidence supports a finding of actual malice: if Lin's account is credited, then Fenchurch knowingly overruled his own analyst's documented objections and published allegations he knew to be unsupported; if Fenchurch's account is credited, then Lin's contemporaneous Meridian Solutions messages and internal notes — which cannot be disavowed — demonstrate that GPR published the reports with knowledge of serious doubts about their accuracy. Either way, the evidence strongly supports reckless disregard for truth or falsity.

B. Lin's Demeanor and Credibility

Lin was generally composed and professional throughout the deposition. She answered questions directly for the most part and did not engage in evasive or combative behavior. However, she became noticeably less confident and more halting in her responses when confronted with her own Meridian Solutions messages and internal notes. Her demeanor shifted from self-assured to visibly uncomfortable during the segments of the examination dealing with the Vermilion Holdings allegation and the "preliminary" data characterization.

Throughout the deposition, Lin frequently deferred responsibility to Fenchurch, consistently characterizing him as the final decision-maker and emphasizing her subordinate role within GPR's organizational hierarchy. While this pattern of deflection could be viewed as self-serving, Lin appeared credible on the specific point that she did in fact raise objections to publication. Her Meridian Solutions messages provide contemporaneous documentary corroboration of this claim, and her testimony was internally consistent on this point.

Paradoxically, Lin's credibility on the question of her objections strengthens the actual-malice case against Fenchurch individually and, vicariously, against GPR and GPCP. If the factfinder credits Lin's testimony that she warned Fenchurch the evidence was "thin," "circumstantial at best," and "insufficient for a definitive conclusion" — and that Fenchurch responded by directing publication with the comment "We've got enough. Market will do the rest" — the case for actual malice on Fenchurch's part approaches its strongest possible formulation.

C. Objections and Privilege Assertions

Natalie Orenstein of Caldwell, Tseng & Barrow LLP, serving as defending counsel, lodged approximately thirty-seven objections throughout the course of the deposition. The objections were primarily asserted on the grounds of form, relevance, and attorney-client privilege. The majority of the form objections were preserved on the record without further elaboration, consistent with standard California deposition practice.

Lin was instructed not to answer approximately five questions relating to communications with defense counsel Raymond Caldwell of Caldwell, Tseng & Barrow LLP. These instructions were asserted on attorney-client privilege grounds. Mr. Espinoza noted his objections to the privilege assertions on the record but did not press the issue during the deposition itself.

No questions were taken under advisement for later ruling by the court, and no discovery motion is anticipated to arise from this deposition. The privilege assertions, while noted, did not prevent the examination from covering the full scope of substantive topics outlined in the deposition preparation memorandum.

VIII. Key Takeaways and Litigation Implications

A. Evidentiary Value for Actual Malice

Lin's deposition testimony provides powerful evidentiary support for RGC's claim that GPR published its reports with actual malice — that is, with knowledge that the allegations were false or with reckless disregard for their truth or falsity. Three categories of evidence merit particular emphasis:

First, the Meridian Solutions messages exchanged between Lin and Fenchurch on February 18–19, 2024, are among the strongest pieces of actual-malice evidence in this case. These messages constitute contemporaneous, authenticated written admissions by GPR's own Senior Analyst that the factual basis for the related-party allegation in Report 3 was "thin," "circumstantial at best," and that there was "nothing tying [the Vermilion Holdings connection] to current RGC operations." Fenchurch's responses — "The pattern speaks for itself. We publish Thursday. Clean it up" and "We've got enough. Market will do the rest" — demonstrate that Fenchurch was aware of Lin's doubts and consciously chose to disregard them. The phrase "Market will do the rest" is particularly damaging, as it suggests that Fenchurch was relying on market reaction — i.e., the stock-price impact — rather than on the underlying truth of the allegations.

Second, Lin's admission that she did not contact the Nevada Gaming Control Board before publishing the RNG-manipulation allegation in Report 2 supports a finding of reckless disregard. The NGCB was the most obvious and readily accessible source of information to verify or refute the allegation, and Lin conceded that the Board's independent testing data "could have been relevant." The failure to take this basic verification step, particularly in the context of an allegation of regulatory fraud, is indicative of purposeful avoidance of the truth.

Third, Lin's acknowledgment that her statistical model was based on incomplete data, did not control for material variables, and was flagged in her own internal notes as "preliminary" and "insufficient for a definitive conclusion" further supports the recklessness element. These internal notes demonstrate that Lin herself did not believe the data supported definitive conclusions at the time of publication — yet the report was published four days later with no additional data collection.

B. Implications for Damages

Lin's testimony confirms her awareness of the stock-price impact following each of the three reports, reinforcing the causal chain between GPR's publications and the decline in RDGM's market value. This testimony will support the admissibility and weight of the event-study-adjusted damages estimate prepared by our retained expert, Dr. Elena Vostrikova of Meridian Forensic Economics LLC. Dr. Vostrikova's current damages estimate, based on her event-study methodology isolating the stock-price decline attributable to the GPR reports from broader market movements, is $327.6 million.

Additionally, GPR's short-sale profit of approximately $13.15 million provides powerful evidence of financial motive. While financial motive alone does not establish actual malice, it is a relevant and probative factor that the factfinder may consider in evaluating whether GPR's publications were driven by legitimate journalistic or research purposes or were, instead, instrumentalities of a profit-driven scheme to manipulate RGC's stock price. The combination of the documented internal doubts, the failure to conduct basic verification, and the substantial financial profit realized from the stock-price decline creates a compelling narrative for trial.

C. Implications for Settlement Posture

Lin's deposition significantly strengthens RGC's trial position and should be leveraged in the upcoming mediation before the Honorable Gerald K. Matsuda (Ret.) at Westside Mediation Center, currently scheduled for December 3–4, 2024.

The Meridian Solutions messages should be prominently featured in the mediation brief to demonstrate the strength of RGC's actual-malice evidence. These messages are the type of "smoking gun" evidence that is difficult for defendants to explain away and that will resonate with a mediator assessing the likely outcome at trial.

Additionally, it is recommended that Lin's testimony regarding the corrective-statement vacuum — i.e., GPR's failure to issue any correction, retraction, or update to any of the three reports as of the deposition date — be used to support RGC's demand for negotiated corrective statements as a component of any settlement. The absence of any corrective action by GPR, even after the SEC closed its inquiry and the NGCB cleared RGC's gaming systems, aggravates the ongoing reputational harm to RGC and provides a strong basis for demanding both monetary relief and non-monetary remedial measures.

D. Use at Trial and in Opposition to Motion for Summary Judgment

Lin's testimony and the documentary exhibits introduced during her deposition should be central to RGC's opposition to any motion for summary judgment filed by defendants. Defendants' motion for summary judgment is anticipated and was subsequently filed on October 22, 2024. The evidence elicited during Lin's deposition creates, at minimum, triable issues of material fact on the element of actual malice that preclude summary adjudication.

The following exhibits should be attached to any opposition brief:

(i) Lin's Meridian Solutions messages with Fenchurch dated February 18–19, 2024, demonstrating Lin's documented doubts about the Vermilion Holdings allegation and Fenchurch's directive to publish notwithstanding those doubts;

(ii) Lin's internal draft notes/analysis memorandum circulated to Fenchurch on February 10, 2024, flagging the RNG payout data as "preliminary" and "insufficient for a definitive conclusion";

(iii) A timeline exhibit correlating GPR's short position, the sequential publication of the three reports, and the corresponding RDGM stock-price decline.

These exhibits, combined with Lin's deposition testimony, provide ample evidence to defeat summary judgment and to present a compelling case for trial.

IX. Exhibit List — Deposition Exhibits Referenced

The following deposition exhibits were marked and used during the examination of Ava Lin on August 29, 2024:

X. Distribution and Confidentiality Notice

This memorandum constitutes privileged attorney work product prepared in anticipation of litigation within the meaning of California Code of Civil Procedure § 2018.030 and the federal work-product doctrine established in Hickman v. Taylor, 329 U.S. 495 (1947). It reflects the mental impressions, conclusions, opinions, and legal theories of counsel and is entitled to the highest level of work-product protection.

Distribution of this memorandum is strictly limited to the following members of the Calderwood & Harkness LLP engagement team:

• Francesca Morano, Partner

• Samuel Eklund, Partner

• Carlos Espinoza, Lead Associate

• Hannah Brinkley, Associate

A copy of this memorandum will be provided to the client contact, Derek Olafson, General Counsel of Redstone Gaming Corp., at 8800 Crimson Ridge Parkway, Suite 1200, Las Vegas, Nevada 89113, subject to the protections of the attorney-client privilege and the common-interest doctrine.

The full certified transcript of the deposition of Ava Lin, taken August 29, 2024, has been ordered from the court reporter. A rough draft of the transcript is expected to be available within ten business days. Upon receipt, the transcript will be reviewed for accuracy, cross-referenced against this summary, and circulated to the team. Any material corrections or supplemental observations will be addressed in a follow-up memorandum.

This memorandum should not be reproduced, distributed, or disclosed to any person or entity outside the authorized distribution list without the prior written approval of Francesca Morano.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Calderwood & Harkness LLP	Redstone Gaming Corp. v. Grizzly Peak Research LLC et al.	Case No. 24STCV-01892
Exhibit No.	Description
Exhibit 14	Meridian Solutions messages between Ava Lin and Tobias Fenchurch, dated February 18–19, 2024
Exhibit 15	Lin's internal draft notes/analysis memorandum circulated to Fenchurch, dated February 10, 2024 (flagging RNG data as "preliminary" and "insufficient for a definitive conclusion")
Exhibit 16	GPR Report 1 — "House of Cards: Redstone Gaming's Manufactured Earnings" (February 7, 2024, 48 pages)
Exhibit 17	GPR Report 2 — "Rigged Reels: How Redstone's Slot Software Cheats the Regulators" (February 14, 2024, 36 pages)
Exhibit 18	GPR Report 3 — "Double Down on Fraud: Redstone's Related-Party Shell Game" (February 21, 2024, 29 pages)
Exhibit 19	RDGM stock-price chart, February 6–21, 2024, showing closing prices of $92.14, $84.37, $78.52, and $72.80
Exhibit 20	Short-position disclosure excerpts from each of the three GPR reports (680,000 shares)
Exhibit 21	Nevada Gaming Control Board clearance notice, dated March 29, 2024
Exhibit 22	Pinnacle Audit & Advisory LLP clean audit opinion for RGC fiscal year 2023

CALDERWOOD & HARKNESS LLP Attorneys at Law 1901 Avenue of the Stars, Suite 2800 Los Angeles, California 90067
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure under the work-product doctrine. Do not distribute outside the authorized distribution list without prior approval.
MEMORANDUM
TO: Francesca Morano, Partner Samuel Eklund, Partner Carlos Espinoza, Lead Associate
FROM: Hannah Brinkley, Associate
DATE: September 2, 2024
RE: Deposition Summary — Ava Lin, Senior Analyst, Grizzly Peak Research LLC
MATTER: Redstone Gaming Corp. v. Grizzly Peak Research LLC et al., Case No. 24STCV-01892, Superior Court of California, County of Los Angeles
CLIENT: Redstone Gaming Corp. (Nasdaq: RDGM)
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I. Overview and Deposition Logistics
The deposition of Ava Lin, Senior Analyst at Grizzly Peak Research LLC ("GPR"), was taken on August 29, 2024, at the offices of Caldwell, Tseng & Barrow LLP, located at 555 California Street, Suite 3100, San Francisco, California 94104. The deposition commenced at approximately 9:00 a.m. and concluded at approximately 5:15 p.m., with customary breaks for lunch and short recesses, for a total examination time of approximately seven hours.
Carlos Espinoza of Calderwood & Harkness LLP served as the examining attorney on behalf of plaintiff Redstone Gaming Corp. ("RGC" or "Redstone"). Natalie Orenstein of Caldwell, Tseng & Barrow LLP appeared as defending counsel on behalf of GPR and Lin. A certified court reporter was present throughout the proceedings, and the deposition was also recorded by a videographer pursuant to the parties' stipulation.
This deposition represents the sixth deposition taken in this matter out of the fourteen total depositions either planned or already completed. Lin appeared voluntarily pursuant to notice of deposition; no subpoena was required, as she is a party-affiliated witness employed by GPR, a named defendant in this action.
As discussed in greater detail below, Lin served as co-author of all three GPR reports at the center of this litigation. She is the second key GPR witness to be deposed, following the deposition of Tobias Fenchurch, GPR's Managing Member, which was conducted on August 20, 2024. The sequencing of the Fenchurch deposition before the Lin deposition proved strategically advantageous, as it allowed Mr. Espinoza to confront Lin with certain aspects of Fenchurch's prior testimony and to identify material inconsistencies between the two witnesses' accounts, as detailed in Section VII below.
II. Witness Background and Role at Grizzly Peak Research LLC
A. Professional Background
Ava Lin identified herself as a Senior Analyst at Grizzly Peak Research LLC, with offices located at 44 Maiden Lane, 7th Floor, San Francisco, California 94108. She holds the title of Senior Analyst and confirmed that she served as co-author of all three published GPR reports concerning Redstone Gaming Corp. that are at issue in this litigation.
Lin testified that she has been employed by GPR since approximately 2021. Prior to joining GPR, she was employed on the equity research desk at a mid-sized investment bank, where she covered the technology and consumer-discretionary sectors for approximately three years. She described her educational background as including undergraduate and graduate-level training in finance and economics, though she did not specify the awarding institutions in detail during the deposition.
Lin confirmed that she reports directly to Tobias "Toby" Fenchurch, the Managing Member of GPR, and that Fenchurch is her direct supervisor and the individual who assigns research targets, establishes editorial direction, and exercises final approval authority over all GPR publications.
B. Role in GPR Operations
Lin provided testimony regarding GPR's business model and her specific role within the firm's operations. She described GPR as a research firm that publishes short-seller research reports on publicly traded companies. Lin confirmed that GPR's principals and an affiliated investment fund — Grizzly Peak Capital Partners LP ("GPCP") — maintain short positions in the companies targeted by GPR's reports. Lin stated that she understood GPR's compensation model was, in part, dependent on the performance of the short positions held by GPCP, although she stated she was not privy to the specific financial arrangements between GPR and GPCP.
Lin confirmed that she was aware of the affiliated fund, GPCP, and testified that she understood its assets under management to be approximately $185 million as of early 2024. She acknowledged that GPCP held short positions in the securities of the companies targeted by GPR's reports, including Redstone Gaming Corp.
With respect to the distribution of GPR's research, Lin confirmed that GPR distributes its reports via its subscription website, grizzlypeakresearch.com, and through the firm's social-media account on the X platform (formerly Fenmore Solutions), @GrizzlyPeakRes. Lin testified that at the time of the Redstone publications in February 2024, the @GrizzlyPeakRes account had approximately 142,000 followers — a substantial audience that, in Lin's words, included "institutional investors, retail investors, journalists, and other market participants."
Regarding the division of labor between herself and Fenchurch, Lin stated clearly that she was the primary drafter of the analytical and data-driven sections of all three reports. Fenchurch, by contrast, served as editor and "directed the overall narrative and publication timing." Lin described her role as involving the development of financial models, the analysis of public filings and data, and the preparation of exhibits and charts, while Fenchurch focused on the editorial framing, the headline language, and the strategic sequencing of the three reports' release dates.
III. Report 1 — "House of Cards: Redstone Gaming's Manufactured Earnings" (February 7, 2024)
A. Genesis and Research Process
Lin testified that she began conducting research on Redstone Gaming Corp. in approximately late 2023 or early January 2024, at the direction of Fenchurch. She stated that Fenchurch identified RGC as a potential research target based on what he described as "anomalies" in the company's revenue growth trajectory relative to its competitors.
The central allegation of Report 1 was that RGC had fabricated approximately $410 million in revenue during fiscal year 2023 through fictitious intercompany transactions. The report, which totaled 48 pages, described a purported scheme in which RGC used subsidiary entities to generate circular revenue flows that lacked economic substance. Lin testified that this revenue-fabrication allegation was the "centerpiece" of Report 1 and was intended to be the foundational claim upon which the subsequent two reports would build.
When asked about her data sources, Lin described a multi-faceted research process. She stated that she relied on publicly available SEC filings, including RGC's Form 10-K for fiscal year 2023, quarterly filings on Form 10-Q, and proxy statements. She also described using third-party database analyses to identify and map RGC's subsidiary entities, including searches of state corporate registries and UCC filings. In addition, Lin acknowledged that GPR received "certain anonymous tips from purported former RGC employees" who claimed to have knowledge of the intercompany transactions.
Under questioning by Mr. Espinoza, Lin made a significant acknowledgment regarding the anonymous tips. She admitted that she did not independently verify the identity or reliability of any of the anonymous sources, could not recall how many such sources had provided information, and could not identify them by name or former position at RGC. Lin stated that she treated the tips as "leads" that directed her analysis of publicly available data rather than as primary evidence, but she conceded that the tips informed the direction and framing of her analytical work.
B. Awareness of Pinnacle Audit & Advisory's Clean Opinion
Mr. Espinoza devoted considerable time to questioning Lin about her awareness of the clean audit opinions issued by Pinnacle Audit & Advisory LLP, RGC's independent auditor. Lin confirmed that she was aware that Pinnacle (engagement partner Walter Ng, CPA) had issued unqualified audit opinions — commonly referred to as "clean opinions" — on RGC's consolidated financial statements for fiscal years 2021, 2022, and 2023. These audit opinions represented Pinnacle's professional conclusion that RGC's financial statements were presented fairly, in all material respects, in conformity with generally accepted accounting principles.
When asked how GPR reconciled its allegation of $410 million in fabricated revenue with the existence of three consecutive clean audit opinions, Lin stated that it was GPR's position that "auditor opinions don't guarantee the absence of fraud." Lin elaborated that GPR's reports were intended to identify "red flags" that warranted further investigation, and that the existence of a clean audit opinion did not, in her view, preclude the possibility of financial misstatement.
On follow-up examination, however, Lin conceded a critical point: she did not contact Pinnacle Audit & Advisory or any other auditor to discuss her concerns about RGC's revenue figures prior to the publication of Report 1. She did not request access to Pinnacle's work papers, did not inquire about the scope or methodology of Pinnacle's audit procedures with respect to intercompany transactions, and did not consult with any independent accounting expert to evaluate the plausibility of the revenue-fabrication theory. Lin stated that she "didn't think it was necessary" to contact the auditor, given the publicly available data she had analyzed.
This admission is significant for the actual-malice analysis, as it demonstrates a failure to undertake a readily available and obvious step to verify the accuracy of the most damaging allegation in Report 1 before publication.
C. Short Position Awareness
Lin confirmed under oath that she was aware at the time of Report 1's publication that GPR and its affiliated fund, GPCP, held a short position of approximately 680,000 shares in RDGM common stock. She stated that this short position was disclosed in a standard disclaimer appearing at the end of each GPR report, which stated in substance that GPR's principals and affiliated entities maintained short positions in the subject company's securities and stood to benefit from declines in the company's stock price.
Lin testified that she understood the notional value of the short position to be approximately $62.66 million, calculated based on 680,000 shares at the pre-publication closing price of $92.14 per share on February 6, 2024. When asked whether the existence of this substantial short position influenced the content or timing of the GPR reports, Lin denied any such influence. She stated that her research was "objective" and was conducted independently of trading considerations. However, Lin acknowledged that Fenchurch — not Lin — made the final decision on publication dates for all three reports, and that she was not involved in the trading decisions made by GPCP.
D. Stock-Price Impact
Mr. Espinoza presented Lin with stock-price data for RDGM common stock surrounding the publication of Report 1. Lin was shown that RDGM closed at $92.14 per share on February 6, 2024, the trading day immediately preceding the release of Report 1. On February 7, 2024 — the day of publication — RDGM closed at $84.37 per share, representing a single-day decline of $7.77 per share, or approximately 8.4%.
Lin stated that she was aware of the price decline on the day of publication and acknowledged that she monitored RDGM's stock price on a regular basis during the period when GPR was publishing its reports. She stated this monitoring was part of her "normal research process."
IV. Report 2 — "Rigged Reels: How Redstone's Slot Software Cheats the Regulators" (February 14, 2024)
A. The RNG-Manipulation Allegation
Report 2, published one week after Report 1, comprised 36 pages and advanced a separate and distinct category of allegations against RGC. The report alleged that RGC had manipulated its proprietary random-number-generator ("RNG") software used in its slot-machine gaming systems in order to inflate payout-percentage statistics reported to the Nevada Gaming Control Board ("NGCB"). If true, such manipulation would represent not only a fraud on investors but also a serious regulatory violation under Nevada gaming law, potentially jeopardizing RGC's gaming licenses.
Lin testified that she was the primary author of the technical analysis sections of Report 2. She described her methodology as consisting of three principal components: (1) an analysis of publicly available payout-percentage data reported by RGC to state gaming authorities; (2) a comparison of those reported payout percentages with industry norms and competitor data; and (3) a proprietary statistical model she developed internally to identify what she characterized as "statistically anomalous" deviations in RGC's reported figures.
B. Failure to Contact the Nevada Gaming Control Board
Perhaps the most consequential line of questioning during the entire deposition concerned Lin's failure to contact the Nevada Gaming Control Board before publishing Report 2's RNG-manipulation allegations.
Under direct and sustained questioning by Mr. Espinoza, Lin acknowledged that she did not contact the NGCB at any time before the publication of Report 2 to verify her allegations, to inquire about the Board's independent testing procedures, or to obtain the Board's own RNG audit data. This is a critical admission. Lin stated that she relied exclusively on publicly available data and her own internally developed statistical model.
When pressed further, Lin conceded that the NGCB conducts independent RNG audits of gaming equipment deployed on casino floors in Nevada. She acknowledged that the Board's independent testing data "could have been relevant" to her analysis, but stated that she did not believe the data was publicly accessible and did not attempt to obtain it through a records request or other means.
Mr. Espinoza then informed Lin — and Lin did not dispute — that the Nevada Gaming Control Board completed an independent RNG audit of RGC's gaming systems on March 29, 2024, and cleared RGC's systems entirely. The Board found no evidence of RNG manipulation, no evidence of irregular payout patterns, and no basis for any regulatory action against RGC related to its gaming software.
Lin stated that she became aware of the Board's clearance "sometime after it was published" but could not recall the precise date on which she learned of the clearance. She did not dispute the substance of the Board's findings.
C. Reliance on Incomplete Data
Mr. Espinoza conducted a thorough examination of the data underlying Lin's statistical model, eliciting a series of concessions that substantially undermine the reliability of the RNG-manipulation allegation.
First, Lin admitted that her statistical model was based on only two years of publicly available payout data — fiscal years 2022 and 2023 — rather than a longer historical sample. She acknowledged that a two-year dataset is a limited basis upon which to draw conclusions about systematic manipulation patterns and that a longer time series would have provided greater statistical reliability.
Second, Lin acknowledged under questioning that her model did not account for differences in game mix, volatility settings, or property-level variations across RGC's eleven casino-resort properties located in Nevada, New Jersey, and Mississippi. She conceded that these factors — particularly game mix, which refers to the proportion of different types of slot machines on a casino floor — can materially affect reported payout percentages and that failure to control for these variables weakens the conclusions that can be drawn from the data.
Third, Lin conceded that she had not consulted with any independent gaming-software expert or statistician before publishing her analysis. She stated that she prepared the model herself and that it was reviewed only by Fenchurch before publication.
When asked to characterize her confidence level in the RNG-manipulation allegation at the time of publication, Lin notably did not express high confidence. Instead, she described her findings as reflecting "patterns that warranted further investigation" — a characterization that falls significantly short of the definitive accusations contained in Report 2's text and headline.
Most damaging, however, was the confrontation with Lin's own internal notes. Mr. Espinoza presented Lin with documents produced in discovery from among the approximately 87,000 documents collected from GPR's systems. These documents included a draft analysis memorandum Lin had circulated to Fenchurch on February 10, 2024 — four days before the publication of Report 2. In that draft memorandum, Lin had flagged the payout data as "preliminary" and stated that the data was "insufficient for a definitive conclusion" regarding RNG manipulation. Lin confirmed the authenticity of the document and acknowledged that the language reflected her assessment of the data at that time.
When asked why the report was nonetheless published four days later notwithstanding her own characterization of the data as preliminary and insufficient, Lin stated that Fenchurch reviewed the draft, provided editorial comments, and made the decision to proceed with publication. Lin did not claim that additional data was obtained between February 10 and February 14 that would have changed her assessment.
D. Stock-Price Impact
Following the publication of Report 2 on February 14, 2024, RDGM common stock declined further, closing at $78.52 per share. This represented a cumulative decline of $13.62 per share, or approximately 14.8%, from the pre-publication closing price of $92.14 on February 6, 2024. Lin was shown these figures during the deposition and acknowledged awareness of the continued decline in RGC's stock price following the release of the second report.
V. Report 3 — "Double Down on Fraud: Redstone's Related-Party Shell Game" (February 21, 2024)
A. The Related-Party / Vermilion Holdings Allegation
Report 3, published on February 21, 2024, was the final of the three GPR reports on Redstone Gaming Corp. At 29 pages, it was the shortest of the three reports. Its central allegation was that RGC's Chief Executive Officer, Marcus J. Calloway, had engaged in undisclosed related-party dealings with a purported shell entity called "Vermilion Holdings LLC." The report alleged that Calloway used Vermilion Holdings to funnel company resources for personal benefit and that these transactions were not properly disclosed in RGC's SEC filings.
Lin testified that she was co-author of Report 3 with Fenchurch. Unlike Reports 1 and 2, where Lin served as the primary drafter of the substantive analytical sections, in Report 3 Fenchurch took primary drafting responsibility for the narrative sections while Lin prepared the financial-analysis exhibits, including charts and data tables purporting to show suspicious transaction flows between RGC and Vermilion Holdings.
B. Internal Meridian Solutions Messages Expressing Doubts
The most consequential evidence elicited during the entire Lin deposition — and potentially among the most significant evidence in the case — relates to a series of internal Meridian Solutions messages exchanged between Lin and Fenchurch in the days immediately preceding the publication of Report 3. These messages were produced in discovery and marked as deposition exhibits.
Mr. Espinoza presented Lin with the Meridian Solutions messages and asked her to review and authenticate them. Lin confirmed that the messages were authentic records of communications she exchanged with Fenchurch through GPR's internal Meridian Solutions workspace.
The first message in the sequence is dated February 18, 2024 — three days before Report 3 was published. Lin wrote to Fenchurch:
"I'm not comfortable with how thin the Vermilion connection is. We have corporate registry docs showing Calloway's name on an old filing, but nothing tying it to current RGC operations. This could blow up on us."
Fenchurch responded on the same date:
"The pattern speaks for itself. We publish Thursday. Clean it up."
In a follow-up message on February 19, 2024, Lin reiterated her concerns:
"I still think we need more before we go live with the related-party angle. What we have is circumstantial at best."
Fenchurch replied:
"We've got enough. Market will do the rest."
Lin confirmed the authenticity of each of these messages without reservation. She acknowledged under oath that she had expressed doubts about the evidentiary basis for the related-party allegation contained in Report 3 before its publication. She further acknowledged that her concerns, as documented in these messages, were that the connection between Calloway and Vermilion Holdings was "thin," that GPR had only "an old filing" showing Calloway's name on corporate registry documents, and that there was "nothing tying it to current RGC operations."
Lin testified that she ultimately deferred to Fenchurch's editorial judgment as Managing Member of GPR. She stated that Fenchurch had the final decision-making authority over publication and that she did not have the ability to unilaterally prevent a report from being published.
On further examination, Lin made an additional critical concession: she acknowledged that the related-party allegation in Report 3 was "based on incomplete information" and that at the time of publication, she did not possess evidence of any current, active related-party transactions between Marcus J. Calloway and Vermilion Holdings LLC. The only documentary basis for the allegation was a historical corporate registry filing that listed Calloway's name in connection with Vermilion Holdings — a filing that Lin conceded she could not tie to any ongoing business relationship or any specific transaction involving RGC.
C. Lin's Characterization of the Publication Decision
Lin provided additional testimony regarding the decision-making process that led to the publication of all three reports. She testified consistently that Fenchurch made the final decision on whether and when to publish each of the three reports. Lin stated that she raised her concerns about the evidentiary basis for the related-party allegation both in writing — as reflected in the Meridian Solutions messages — and verbally during in-person conversations with Fenchurch at GPR's offices. Despite these objections, Fenchurch overruled her and directed publication on the originally planned date.
Lin also noted the short position held by GPCP and the "timing pressure" Fenchurch expressed in connection with the sequential release of the three reports over a three-week period. However, Lin denied that she understood the precise trading strategy employed by GPCP or the specific financial implications of the publication schedule for the fund's short position. She characterized her understanding as general rather than detailed.
D. Stock-Price Impact at Trough
Following the publication of Report 3 on February 21, 2024, RDGM common stock reached its trough closing price of $72.80 per share. This represented a cumulative decline of $19.34 per share, or approximately 21.0%, from the pre-publication closing price of $92.14 on February 6, 2024.
Based on RGC's approximately 73.8 million shares of common stock outstanding, the aggregate market-capitalization loss at the trough was approximately $1.427 billion ($19.34 × 73.8 million shares).
Mr. Espinoza presented these figures to Lin during the deposition. Lin acknowledged that she was generally aware of the significant decline in RGC's stock price following the publication of each of the three reports and that the cumulative impact of the reports on the company's market capitalization was substantial. She stated she monitored RDGM's stock price as part of her ongoing research responsibilities.
VI. Post-Publication Events and Lin's Awareness
A. Regulatory Investigations
Mr. Espinoza questioned Lin regarding her awareness of regulatory developments that followed the publication of the three GPR reports.
Lin confirmed that she became aware the U.S. Securities and Exchange Commission ("SEC") opened an informal inquiry into RGC's financial reporting in March 2024, following the publication of the GPR reports. Significantly, Lin also confirmed that she was aware the SEC's inquiry was closed with no enforcement action on August 16, 2024 — approximately two weeks before her deposition. The SEC's decision to close the inquiry without action is consistent with RGC's position that GPR's revenue-fabrication allegations lacked merit.
Lin further confirmed her awareness that the Nevada Gaming Control Board cleared RGC's RNG systems entirely on March 29, 2024, following an independent audit. As discussed in Section IV.B above, this clearance directly contradicted the central allegation of Report 2.
When asked whether these regulatory outcomes were relevant to the accuracy of GPR's reports, Lin acknowledged that they were "relevant" but added the qualification that she "did not believe they were necessarily dispositive." Nonetheless, the fact that both regulatory inquiries resulted in complete exoneration of RGC materially undermines the factual predicates of Reports 1 and 2.
B. GPR's Short-Position Closure
Lin testified that she was aware the GPCP short position of 680,000 shares in RDGM was closed by approximately mid-March 2024. She stated that Fenchurch informed her generally that the position had been closed but did not share specific details regarding the average closing price or the profit realized on the trades.
When Mr. Espinoza informed Lin that the estimated gross profit on the short position was approximately $13.15 million — calculated based on entry at an average price of $92.14 per share and an average exit price of approximately $72.80 per share — Lin stated she "had no reason to dispute that figure." She did not offer any alternative calculation or suggest that the estimate was inaccurate.
Lin testified that she did not personally trade in RDGM securities at any time and did not hold any direct financial interest in the GPCP short position. She stated that her compensation from GPR consisted of a salary and an annual discretionary bonus, but she did not provide details regarding whether her bonus was linked to the performance of GPCP's trading positions.
C. No Corrective Action by GPR
A particularly notable aspect of Lin's testimony concerned GPR's failure to issue any correction, retraction, or update to the three reports following the regulatory outcomes that contradicted their central allegations.
Lin testified that as of the date of her deposition — August 29, 2024 — GPR had not published any correction, retraction, or update to any of the three reports concerning Redstone Gaming Corp. The reports remained available on GPR's website in their original form. Lin stated that the decision on whether to issue a correction or retraction rested with Fenchurch as Managing Member and that she did not have the authority to unilaterally publish a correction.
When asked whether she had recommended to Fenchurch that GPR issue a correction or update following the NGCB clearance or the SEC's closure of its inquiry, Lin stated that she had "discussed the topic" with Fenchurch but declined to provide further details, citing attorney-client privilege on the advice of defending counsel.
The failure to issue any corrective statement in the six months following the publication of the reports, and in particular following the definitive regulatory clearances obtained by RGC, is significant for purposes of establishing ongoing harm to RGC's reputation and supports the argument that GPR acted with deliberate indifference to the truth or falsity of its allegations.
VII. Impeachment and Credibility Observations
A. Inconsistencies with Fenchurch Testimony
Lin's deposition testimony is materially inconsistent with the testimony provided by Tobias Fenchurch during his deposition on August 20, 2024. Specifically, Fenchurch testified that he relied on Lin's analysis and professional judgment in deciding to publish the three reports and that Lin did not raise any significant objections to publication. Fenchurch characterized the publication process as collaborative and consensual.
Lin's testimony directly contradicts this account. Lin testified that she raised substantive concerns about the evidentiary basis for Report 3's related-party allegation — concerns that are corroborated by the contemporaneous Meridian Solutions messages dated February 18–19, 2024 — and that Fenchurch overruled her objections. Lin also testified that she flagged the RNG data underlying Report 2 as "preliminary" and "insufficient for a definitive conclusion" in a draft memorandum circulated to Fenchurch on February 10, 2024.
This inconsistency between the two witnesses is highly significant for purposes of establishing actual malice under New York Times Co. v. Sullivan, 376 U.S. 254 (1964), and its California progeny. At a minimum, the conflicting accounts demonstrate that one of the two principals of GPR's research team was not truthful in their deposition testimony. More importantly, regardless of which account is credited, the evidence supports a finding of actual malice: if Lin's account is credited, then Fenchurch knowingly overruled his own analyst's documented objections and published allegations he knew to be unsupported; if Fenchurch's account is credited, then Lin's contemporaneous Meridian Solutions messages and internal notes — which cannot be disavowed — demonstrate that GPR published the reports with knowledge of serious doubts about their accuracy. Either way, the evidence strongly supports reckless disregard for truth or falsity.
B. Lin's Demeanor and Credibility
Lin was generally composed and professional throughout the deposition. She answered questions directly for the most part and did not engage in evasive or combative behavior. However, she became noticeably less confident and more halting in her responses when confronted with her own Meridian Solutions messages and internal notes. Her demeanor shifted from self-assured to visibly uncomfortable during the segments of the examination dealing with the Vermilion Holdings allegation and the "preliminary" data characterization.
Throughout the deposition, Lin frequently deferred responsibility to Fenchurch, consistently characterizing him as the final decision-maker and emphasizing her subordinate role within GPR's organizational hierarchy. While this pattern of deflection could be viewed as self-serving, Lin appeared credible on the specific point that she did in fact raise objections to publication. Her Meridian Solutions messages provide contemporaneous documentary corroboration of this claim, and her testimony was internally consistent on this point.
Paradoxically, Lin's credibility on the question of her objections strengthens the actual-malice case against Fenchurch individually and, vicariously, against GPR and GPCP. If the factfinder credits Lin's testimony that she warned Fenchurch the evidence was "thin," "circumstantial at best," and "insufficient for a definitive conclusion" — and that Fenchurch responded by directing publication with the comment "We've got enough. Market will do the rest" — the case for actual malice on Fenchurch's part approaches its strongest possible formulation.
C. Objections and Privilege Assertions
Natalie Orenstein of Caldwell, Tseng & Barrow LLP, serving as defending counsel, lodged approximately thirty-seven objections throughout the course of the deposition. The objections were primarily asserted on the grounds of form, relevance, and attorney-client privilege. The majority of the form objections were preserved on the record without further elaboration, consistent with standard California deposition practice.
Lin was instructed not to answer approximately five questions relating to communications with defense counsel Raymond Caldwell of Caldwell, Tseng & Barrow LLP. These instructions were asserted on attorney-client privilege grounds. Mr. Espinoza noted his objections to the privilege assertions on the record but did not press the issue during the deposition itself.
No questions were taken under advisement for later ruling by the court, and no discovery motion is anticipated to arise from this deposition. The privilege assertions, while noted, did not prevent the examination from covering the full scope of substantive topics outlined in the deposition preparation memorandum.
VIII. Key Takeaways and Litigation Implications
A. Evidentiary Value for Actual Malice
Lin's deposition testimony provides powerful evidentiary support for RGC's claim that GPR published its reports with actual malice — that is, with knowledge that the allegations were false or with reckless disregard for their truth or falsity. Three categories of evidence merit particular emphasis:
First, the Meridian Solutions messages exchanged between Lin and Fenchurch on February 18–19, 2024, are among the strongest pieces of actual-malice evidence in this case. These messages constitute contemporaneous, authenticated written admissions by GPR's own Senior Analyst that the factual basis for the related-party allegation in Report 3 was "thin," "circumstantial at best," and that there was "nothing tying [the Vermilion Holdings connection] to current RGC operations." Fenchurch's responses — "The pattern speaks for itself. We publish Thursday. Clean it up" and "We've got enough. Market will do the rest" — demonstrate that Fenchurch was aware of Lin's doubts and consciously chose to disregard them. The phrase "Market will do the rest" is particularly damaging, as it suggests that Fenchurch was relying on market reaction — i.e., the stock-price impact — rather than on the underlying truth of the allegations.
Second, Lin's admission that she did not contact the Nevada Gaming Control Board before publishing the RNG-manipulation allegation in Report 2 supports a finding of reckless disregard. The NGCB was the most obvious and readily accessible source of information to verify or refute the allegation, and Lin conceded that the Board's independent testing data "could have been relevant." The failure to take this basic verification step, particularly in the context of an allegation of regulatory fraud, is indicative of purposeful avoidance of the truth.
Third, Lin's acknowledgment that her statistical model was based on incomplete data, did not control for material variables, and was flagged in her own internal notes as "preliminary" and "insufficient for a definitive conclusion" further supports the recklessness element. These internal notes demonstrate that Lin herself did not believe the data supported definitive conclusions at the time of publication — yet the report was published four days later with no additional data collection.
B. Implications for Damages
Lin's testimony confirms her awareness of the stock-price impact following each of the three reports, reinforcing the causal chain between GPR's publications and the decline in RDGM's market value. This testimony will support the admissibility and weight of the event-study-adjusted damages estimate prepared by our retained expert, Dr. Elena Vostrikova of Meridian Forensic Economics LLC. Dr. Vostrikova's current damages estimate, based on her event-study methodology isolating the stock-price decline attributable to the GPR reports from broader market movements, is $327.6 million.
Additionally, GPR's short-sale profit of approximately $13.15 million provides powerful evidence of financial motive. While financial motive alone does not establish actual malice, it is a relevant and probative factor that the factfinder may consider in evaluating whether GPR's publications were driven by legitimate journalistic or research purposes or were, instead, instrumentalities of a profit-driven scheme to manipulate RGC's stock price. The combination of the documented internal doubts, the failure to conduct basic verification, and the substantial financial profit realized from the stock-price decline creates a compelling narrative for trial.
C. Implications for Settlement Posture
Lin's deposition significantly strengthens RGC's trial position and should be leveraged in the upcoming mediation before the Honorable Gerald K. Matsuda (Ret.) at Westside Mediation Center, currently scheduled for December 3–4, 2024.
The Meridian Solutions messages should be prominently featured in the mediation brief to demonstrate the strength of RGC's actual-malice evidence. These messages are the type of "smoking gun" evidence that is difficult for defendants to explain away and that will resonate with a mediator assessing the likely outcome at trial.
Additionally, it is recommended that Lin's testimony regarding the corrective-statement vacuum — i.e., GPR's failure to issue any correction, retraction, or update to any of the three reports as of the deposition date — be used to support RGC's demand for negotiated corrective statements as a component of any settlement. The absence of any corrective action by GPR, even after the SEC closed its inquiry and the NGCB cleared RGC's gaming systems, aggravates the ongoing reputational harm to RGC and provides a strong basis for demanding both monetary relief and non-monetary remedial measures.
D. Use at Trial and in Opposition to Motion for Summary Judgment
Lin's testimony and the documentary exhibits introduced during her deposition should be central to RGC's opposition to any motion for summary judgment filed by defendants. Defendants' motion for summary judgment is anticipated and was subsequently filed on October 22, 2024. The evidence elicited during Lin's deposition creates, at minimum, triable issues of material fact on the element of actual malice that preclude summary adjudication.
The following exhibits should be attached to any opposition brief:
(i) Lin's Meridian Solutions messages with Fenchurch dated February 18–19, 2024, demonstrating Lin's documented doubts about the Vermilion Holdings allegation and Fenchurch's directive to publish notwithstanding those doubts;
(ii) Lin's internal draft notes/analysis memorandum circulated to Fenchurch on February 10, 2024, flagging the RNG payout data as "preliminary" and "insufficient for a definitive conclusion";
(iii) A timeline exhibit correlating GPR's short position, the sequential publication of the three reports, and the corresponding RDGM stock-price decline.
These exhibits, combined with Lin's deposition testimony, provide ample evidence to defeat summary judgment and to present a compelling case for trial.
IX. Exhibit List — Deposition Exhibits Referenced
The following deposition exhibits were marked and used during the examination of Ava Lin on August 29, 2024:
X. Distribution and Confidentiality Notice
This memorandum constitutes privileged attorney work product prepared in anticipation of litigation within the meaning of California Code of Civil Procedure § 2018.030 and the federal work-product doctrine established in Hickman v. Taylor, 329 U.S. 495 (1947). It reflects the mental impressions, conclusions, opinions, and legal theories of counsel and is entitled to the highest level of work-product protection.
Distribution of this memorandum is strictly limited to the following members of the Calderwood & Harkness LLP engagement team:
• Francesca Morano, Partner
• Samuel Eklund, Partner
• Carlos Espinoza, Lead Associate
• Hannah Brinkley, Associate
A copy of this memorandum will be provided to the client contact, Derek Olafson, General Counsel of Redstone Gaming Corp., at 8800 Crimson Ridge Parkway, Suite 1200, Las Vegas, Nevada 89113, subject to the protections of the attorney-client privilege and the common-interest doctrine.
The full certified transcript of the deposition of Ava Lin, taken August 29, 2024, has been ordered from the court reporter. A rough draft of the transcript is expected to be available within ten business days. Upon receipt, the transcript will be reviewed for accuracy, cross-referenced against this summary, and circulated to the team. Any material corrections or supplemental observations will be addressed in a follow-up memorandum.
This memorandum should not be reproduced, distributed, or disclosed to any person or entity outside the authorized distribution list without the prior written approval of Francesca Morano.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Calderwood & Harkness LLP | Redstone Gaming Corp. v. Grizzly Peak Research LLC et al. | Case No. 24STCV-01892
Exhibit No. | Description
Exhibit 14 | Meridian Solutions messages between Ava Lin and Tobias Fenchurch, dated February 18–19, 2024
Exhibit 15 | Lin's internal draft notes/analysis memorandum circulated to Fenchurch, dated February 10, 2024 (flagging RNG data as "preliminary" and "insufficient for a definitive conclusion")
Exhibit 16 | GPR Report 1 — "House of Cards: Redstone Gaming's Manufactured Earnings" (February 7, 2024, 48 pages)
Exhibit 17 | GPR Report 2 — "Rigged Reels: How Redstone's Slot Software Cheats the Regulators" (February 14, 2024, 36 pages)
Exhibit 18 | GPR Report 3 — "Double Down on Fraud: Redstone's Related-Party Shell Game" (February 21, 2024, 29 pages)
Exhibit 19 | RDGM stock-price chart, February 6–21, 2024, showing closing prices of $92.14, $84.37, $78.52, and $72.80
Exhibit 20 | Short-position disclosure excerpts from each of the three GPR reports (680,000 shares)
Exhibit 21 | Nevada Gaming Control Board clearance notice, dated March 29, 2024
Exhibit 22 | Pinnacle Audit & Advisory LLP clean audit opinion for RGC fiscal year 2023

CALDERWOOD & HARKNESS LLP Attorneys at Law 1901 Avenue of the Stars, Suite 2800 Los Angeles, California 90067

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