1033-00006 · Redstone Gaming Corp · Settlement Documents

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EXHIBIT A

to Settlement Agreement and Mutual Release dated January 6, 2025

among Redstone Gaming Corp., Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Tobias Fenchurch

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

Publication Instructions. This Corrective Publication shall be posted on grizzlypeakresearch.com within five (5) business days of the Effective Date of the Settlement Agreement (target posting date: January 13, 2025) and shall remain continuously posted and publicly accessible for not less than twenty-four (24) months from the date of initial posting (through no earlier than January 2027). The text set forth below constitutes the complete and final version of the Corrective Publication and has been mutually reviewed, negotiated, and approved by the parties to the Settlement Agreement. No modification, redaction, or alteration of this text is permitted without the prior written consent of all parties. The Corrective Publication shall be posted in its entirety, without editorial comment, preamble, or postscript by Grizzly Peak Research LLC or any of its affiliates, principals, or agents.

CORRECTIVE STATEMENT REGARDING PREVIOUSLY PUBLISHED REPORTS ON REDSTONE GAMING CORP.

Published by: Grizzly Peak Research LLC Date of Publication: January 13, 2025

I. Introduction and Purpose

Grizzly Peak Research LLC ("Grizzly Peak" or "GPR") is issuing this Corrective Publication in connection with the settlement of litigation brought by Redstone Gaming Corp. ("RGC") in the Superior Court of California, County of Los Angeles, Case No. 24STCV-01892. This Corrective Publication is required by the terms of the Settlement Agreement and Mutual Release dated January 6, 2025, entered into by and among RGC, GPR, Grizzly Peak Capital Partners LP, and Tobias Fenchurch (collectively, the "Settling Parties").

Between February 7, 2024, and February 21, 2024, GPR published three research reports concerning RGC, a Nevada corporation whose common stock is publicly traded on the Nasdaq Stock Market under the ticker symbol RDGM. The three reports are identified as follows:

Report 1: "House of Cards: Redstone Gaming's Manufactured Earnings" — published February 7, 2024 (approximately 48 pages).

Report 2: "Rigged Reels: How Redstone's Slot Software Cheats the Regulators" — published February 14, 2024 (approximately 36 pages).

Report 3: "Double Down on Fraud: Redstone's Related-Party Shell Game" — published February 21, 2024 (approximately 29 pages).

All three reports (collectively, the "Reports") were published on the GPR website at grizzlypeakresearch.com and were simultaneously distributed via GPR's social media account @GrizzlyPeakRes on the X platform (formerly known as Fenmore Solutions). The Reports attracted significant attention from the financial media, the investing public, and securities regulators.

GPR acknowledges that the Reports contained material inaccuracies and that certain of the principal allegations set forth therein were unfounded, disproven by independent governmental and regulatory investigation, or based on incomplete information and were misleading. GPR further acknowledges that the publication and widespread dissemination of the Reports caused significant harm to RGC, its shareholders, and the integrity of the public market for RDGM securities.

The purpose of this Corrective Publication is to set the record straight with respect to each of the principal allegations made in the three Reports and to inform the investing public, securities regulators, gaming regulators, and all other readers of the material inaccuracies contained in the Reports. This Corrective Publication is intended to correct the public record and to ensure that readers who may have read or relied upon the original Reports have access to accurate and complete information regarding the matters addressed therein.

II. Background on Redstone Gaming Corp.

RGC is a publicly traded gaming and media-entertainment company incorporated in the State of Nevada and headquartered at 8800 Crimson Ridge Parkway, Suite 1200, Las Vegas, Nevada 89113. RGC is a reporting company under the Securities Exchange Act of 1934, as amended, and files periodic and current reports with the United States Securities and Exchange Commission (the "SEC").

RGC owns and operates eleven casino-resort properties located across three states: Nevada, New Jersey, and Mississippi. In addition to its brick-and-mortar gaming operations, RGC develops and licenses proprietary electronic gaming platforms to third-party casino operators. RGC also operates a regulated interactive gaming division, Redstone Digital, which offers online casino and sports-wagering products in jurisdictions where such activities are lawfully permitted, as well as a media-entertainment production arm, Crimson Studios, which produces original programming and live entertainment content for distribution through RGC's resort properties and third-party streaming platforms.

For its fiscal year ended December 31, 2023, RGC reported consolidated net revenue of approximately $3.42 billion and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $812 million, reflecting an EBITDA margin of approximately 23.7%. These financial results were prepared in accordance with United States generally accepted accounting principles ("GAAP") and were included in RGC's Annual Report on Form 10-K filed with the SEC.

RGC's consolidated financial statements for each of its fiscal years ended December 31, 2021, December 31, 2022, and December 31, 2023, were audited by Pinnacle Audit & Advisory LLP ("Pinnacle"), an independent registered public accounting firm. Pinnacle issued unqualified (i.e., clean) audit opinions for each of those fiscal years, indicating that RGC's consolidated financial statements were presented fairly, in all material respects, in conformity with GAAP.

At the time of GPR's initial publication on February 7, 2024, RGC had approximately 73.8 million shares of common stock outstanding and a pre-publication market capitalization of approximately $6.8 billion, based on a closing price of $92.14 per share on February 6, 2024, the last trading day prior to the publication of Report 1.

III. GPR's Short Position Disclosure

GPR disclosed in each of the three Reports that GPR and its principals maintained short positions in RDGM securities at the time of publication. Specifically, at the time of publication, GPR's affiliated investment fund, Grizzly Peak Capital Partners LP ("GPCP"), held a short position of approximately 680,000 shares of RDGM common stock. Based on the pre-publication closing price of $92.14 per share on February 6, 2024, this short position had a notional value of approximately $62.66 million.

GPR acknowledges that its financial interest in a decline in the market price of RDGM securities was a material factor in the context of the allegations made in the Reports. GPCP and its principals stood to profit directly and substantially from any decline in RDGM's stock price that might result from the publication and dissemination of the Reports. GPR further acknowledges that investors and other readers of the Reports were entitled to weigh this financial interest when evaluating the credibility and objectivity of the allegations contained therein.

IV. Correction Regarding Report 1: Revenue Fabrication Allegation

IV.A. Summary of Original Allegation

In Report 1, entitled "House of Cards: Redstone Gaming's Manufactured Earnings," published on February 7, 2024, GPR alleged that RGC had fabricated approximately $410 million in fiscal year 2023 revenue through purportedly fictitious intercompany transactions among RGC's operating subsidiaries. The report asserted that these transactions lacked economic substance and were designed to artificially inflate RGC's reported consolidated net revenue, thereby misrepresenting RGC's financial performance to investors, securities analysts, and regulators. Report 1 characterized this alleged conduct as a deliberate scheme to "manufacture" earnings and mislead the capital markets.

IV.B. Corrective Statement

GPR acknowledges that the revenue-fabrication allegation set forth in Report 1 was unfounded.

Following the publication of Report 1, RGC's independent auditor, Pinnacle Audit & Advisory LLP, conducted a supplemental review of RGC's intercompany transactions and consolidation procedures for fiscal year 2023 at the request of RGC's Audit Committee. That supplemental review confirmed the accuracy and completeness of RGC's reported fiscal year 2023 consolidated net revenue of approximately $3.42 billion. Pinnacle identified no fictitious intercompany transactions of the type described in Report 1, and Pinnacle reaffirmed the validity of the intercompany elimination entries reflected in RGC's consolidated financial statements.

In addition, in March 2024, the staff of the Division of Enforcement of the SEC opened an informal inquiry into RGC's financial reporting practices in connection with the allegations contained in GPR's Reports. On August 16, 2024, the SEC closed its informal inquiry with no enforcement action taken, no formal order of investigation issued, and no findings adverse to RGC. The closure of the SEC's inquiry without action is a matter of public record.

GPR's analysis underlying the $410 million revenue-fabrication allegation contained significant errors in its interpretation of RGC's segment reporting disclosures, its treatment of intercompany eliminations in the consolidation process, and its reading of the consolidation entries set forth in RGC's public filings. These analytical errors led GPR to draw a materially misleading conclusion regarding the existence of fictitious revenue. GPR did not contact RGC, RGC's auditor, or any regulatory body to verify the accuracy of its analysis prior to publishing Report 1.

GPR hereby retracts the revenue-fabrication allegation in its entirety and acknowledges that the allegation was not supported by the facts. Readers who relied upon Report 1's characterization of RGC's revenue as fabricated or manufactured should disregard that characterization.

V. Correction Regarding Report 2: RNG Manipulation Allegation

V.A. Summary of Original Allegation

In Report 2, entitled "Rigged Reels: How Redstone's Slot Software Cheats the Regulators," published on February 14, 2024, GPR alleged that RGC had manipulated the random-number-generator ("RNG") software embedded in its proprietary electronic gaming platforms to inflate the payout statistics reported to the Nevada Gaming Control Board (the "NGCB"). Report 2 asserted that this purported manipulation constituted regulatory fraud and called into question the fundamental integrity of RGC's gaming operations. The report suggested that RGC's gaming licenses could be subject to revocation and that the company faced potential criminal liability arising from the alleged manipulation.

V.B. Corrective Statement

GPR acknowledges that the RNG-manipulation allegation set forth in Report 2 was disproven by the Nevada Gaming Control Board.

On March 29, 2024, the NGCB completed an independent audit of RGC's RNG systems, including a comprehensive technical examination of the source code, algorithmic logic, and statistical output of the RNG software deployed across RGC's electronic gaming platforms. Following its audit, the NGCB issued a formal determination clearing RGC of any irregularity, tampering, or manipulation in its electronic gaming platforms. The NGCB's determination confirmed that RGC's RNG systems operated in full compliance with all applicable Nevada gaming regulations and that the payout statistics reported by RGC to the NGCB were accurate and consistent with the actual performance of RGC's gaming devices.

GPR did not contact the Nevada Gaming Control Board, the Nevada Gaming Commission, or any other gaming regulatory authority prior to publishing Report 2 to verify the accuracy of its allegations. GPR also did not conduct, commission, or obtain any independent technical testing or analysis of RGC's RNG systems. Instead, GPR's allegations were based entirely on circumstantial inferences drawn from publicly available payout data, including data published in periodic statistical reports by the NGCB. Standing alone, this publicly available data did not support the conclusions drawn in Report 2, and GPR's inferences were speculative and unsubstantiated.

GPR hereby retracts the RNG-manipulation allegation in its entirety and acknowledges that the allegation was materially inaccurate. Readers who relied upon Report 2's characterization of RGC's gaming software as manipulated or fraudulent should disregard that characterization.

VI. Correction Regarding Report 3: Related-Party / Vermilion Holdings Allegation

VI.A. Summary of Original Allegation

In Report 3, entitled "Double Down on Fraud: Redstone's Related-Party Shell Game," published on February 21, 2024, GPR alleged that RGC's Chief Executive Officer, Marcus J. Calloway, had engaged in undisclosed related-party transactions with a purported shell entity identified by GPR as "Vermilion Holdings LLC" ("Vermilion"). Report 3 asserted that these transactions involved the diversion of corporate assets from RGC to Vermilion for the personal benefit of Mr. Calloway and that the transactions had been deliberately concealed from RGC's board of directors, its Audit Committee, its independent auditor, and the investing public. The report characterized the alleged conduct as part of a scheme to misappropriate corporate resources and defraud RGC's shareholders.

VI.B. Corrective Statement

GPR acknowledges that the related-party allegation concerning Vermilion Holdings LLC set forth in Report 3 was based on incomplete information and was misleading.

GPR's investigation into the purported relationship between Mr. Calloway and Vermilion Holdings LLC was not completed prior to the publication of Report 3. An internal review conducted by GPR after the publication of Report 3 revealed that the information relied upon in drafting the report was fragmentary, drawn from incomplete public records, and did not substantiate the characterization of the transactions described in the report as either undisclosed or fraudulent. GPR's post-publication review further revealed that certain of the factual premises underlying the Vermilion Holdings allegation — including assertions regarding the ownership structure and beneficial control of Vermilion — were not adequately verified before publication.

GPR hereby retracts the characterization of the Vermilion Holdings allegation as presented in Report 3 and acknowledges that the report's conclusions regarding undisclosed related-party transactions involving Mr. Calloway were misleading. Readers who relied upon Report 3's characterization of RGC's related-party disclosures or of Mr. Calloway's conduct should disregard that characterization.

VII. Market Impact and Acknowledgment of Harm

GPR acknowledges that the publication of the three Reports had a significant adverse impact on the market price of RDGM common stock and on RGC's aggregate market capitalization.

Following the publication of Report 1 on February 7, 2024, RDGM's closing stock price declined from $92.14 per share (the closing price on February 6, 2024) to $84.37 per share, representing a single-day decline of $7.77 per share, or approximately 8.4%.

Following the publication of Report 2 on February 14, 2024, RDGM's closing stock price declined further to $78.52 per share, representing a cumulative decline of $13.62 per share, or approximately 14.8%, from the pre-publication closing price.

Following the publication of Report 3 on February 21, 2024, RDGM's closing stock price reached a trough of $72.80 per share, representing a cumulative decline of $19.34 per share, or approximately 21.0%, from the pre-publication closing price. Based on RGC's approximately 73.8 million shares of common stock outstanding, this cumulative decline in per-share price corresponded to an aggregate market-capitalization loss of approximately $1.427 billion.

GPR acknowledges that these stock-price declines and the associated destruction of shareholder value caused material harm to RGC and its shareholders. The harm extended beyond the immediate reduction in market capitalization to include damage to RGC's corporate reputation, disruption of RGC's business relationships with gaming regulators and commercial counterparties, and adverse effects on employee morale and retention.

GPR further acknowledges that RGC incurred substantial out-of-pocket costs in responding to the Reports and their aftermath, including but not limited to expenses for crisis communications and public relations, the engagement of forensic accounting professionals to conduct a supplemental forensic audit of the matters raised in the Reports, and legal fees incurred in connection with responding to the SEC's informal inquiry and the NGCB's audit, as well as the prosecution of the underlying litigation.

VIII. Regulatory and Investigative Outcomes

The regulatory and investigative outcomes arising from the allegations in GPR's Reports are summarized as follows:

(a) The Nevada Gaming Control Board completed an independent audit of RGC's random-number-generator systems on March 29, 2024, and issued a formal determination clearing RGC of any irregularity or manipulation in its electronic gaming platforms. No adverse findings were made.

(b) The SEC opened an informal inquiry into RGC's financial reporting in March 2024 in response to the allegations contained in GPR's Reports. The SEC closed its informal inquiry on August 16, 2024, with no enforcement action taken, no formal order of investigation issued, and no adverse findings.

(c) RGC's independent auditor, Pinnacle Audit & Advisory LLP, reaffirmed the accuracy of its unqualified (clean) audit opinions for RGC's consolidated financial statements for fiscal years 2021, 2022, and 2023. Pinnacle identified no material misstatements or irregularities of the type alleged in GPR's Reports.

(d) No governmental body, regulatory authority, or self-regulatory organization has found any merit to the allegations made in GPR's Reports. No enforcement action, disciplinary proceeding, or administrative sanction has been initiated against RGC or any of its officers or directors in connection with the matters described in the Reports.

IX. Permanent Injunction and Trading Bar

Pursuant to the terms of the Settlement Agreement and Mutual Release dated January 6, 2025, the following injunctive and restrictive provisions have been agreed to by the parties:

(a) GPR, Grizzly Peak Capital Partners LP, and Tobias Fenchurch have been permanently enjoined from republishing, redistributing, or otherwise disseminating the three Reports or any substantially similar statements, analyses, or allegations regarding RGC, its officers, its directors, or its business operations.

(b) GPR, Grizzly Peak Capital Partners LP, and Tobias Fenchurch have further been enjoined from trading, directly or indirectly, in RDGM securities (including common stock, options, warrants, and all other derivative instruments) for a period of five (5) years from the Effective Date of the Settlement Agreement — i.e., from January 6, 2025, through and including January 6, 2030.

(c) The three Reports have been permanently removed from grizzlypeakresearch.com and from all social media accounts controlled by GPR, GPCP, or Tobias Fenchurch. The Reports will not be republished, reposted, or otherwise made available by any of the foregoing parties.

X. Statement of Responsibility

GPR acknowledges its responsibility for the publication and dissemination of the three Reports and for the material inaccuracies contained therein. The Reports were authored by GPR's research team under the supervision and editorial direction of Tobias Fenchurch, Managing Member of GPR. The Reports were published on grizzlypeakresearch.com and were distributed to the public via GPR's social media account @GrizzlyPeakRes on the X platform (formerly Fenmore Solutions), which had approximately 142,000 followers at the time of publication. The Reports were widely covered by financial media outlets and were referenced in analyst notes, investor commentary, and regulatory correspondence.

GPR takes responsibility for the errors and omissions in the Reports as described in this Corrective Publication. This Corrective Publication is being issued to correct the public record and to provide accurate, complete, and non-misleading information to investors, securities regulators, gaming regulators, and members of the general public who may have read, relied upon, or otherwise been influenced by the original Reports.

XI. No Admission of Liability Beyond This Statement

This Corrective Publication is issued pursuant to, and in accordance with, the Settlement Agreement and Mutual Release dated January 6, 2025, entered into by and among Redstone Gaming Corp., Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Tobias Fenchurch in connection with Case No. 24STCV-01892 in the Superior Court of California, County of Los Angeles. The specific terms, language, and scope of this Corrective Publication have been mutually agreed upon by the parties to the Settlement Agreement. Except as expressly set forth in the Settlement Agreement and in this Corrective Publication, the parties have made no admissions or concessions regarding liability, damages, or any other matter, and all rights and defenses not expressly waived in the Settlement Agreement are preserved.

XII. Duration and Availability

This Corrective Publication shall remain posted on grizzlypeakresearch.com in a prominent location on the website's homepage, accessible to the general public without the requirement of a subscription, login, paywall, or any other access restriction, for a period of not less than twenty-four (24) months from the date of initial posting. Any removal, relocation, or diminution of the prominence of this Corrective Publication prior to the expiration of the twenty-four-month period shall constitute a material breach of the Settlement Agreement.

Any reader seeking additional information regarding Redstone Gaming Corp., its financial performance, or its regulatory standing may consult RGC's public filings with the SEC, which are available at www.sec.gov, or may contact RGC's Vice President of Investor Relations:

Janelle Hu Vice President, Investor Relations Redstone Gaming Corp. 8800 Crimson Ridge Parkway, Suite 1200 Las Vegas, NV 89113

— End of Corrective Publication —

Published by: GRIZZLY PEAK RESEARCH LLC 44 Maiden Lane, 7th Floor San Francisco, CA 94108

Date: January 13, 2025

Authorized by:

________________________________________

Tobias Fenchurch Managing Member Grizzly Peak Research LLC

EXHIBIT A
to Settlement Agreement and Mutual Release dated January 6, 2025
among Redstone Gaming Corp., Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Tobias Fenchurch
Redstone Gaming Corp. v. Grizzly Peak Research LLC et al. Superior Court of California, County of Los Angeles Case No. 24STCV-01892
Publication Instructions. This Corrective Publication shall be posted on grizzlypeakresearch.com within five (5) business days of the Effective Date of the Settlement Agreement (target posting date: January 13, 2025) and shall remain continuously posted and publicly accessible for not less than twenty-four (24) months from the date of initial posting (through no earlier than January 2027). The text set forth below constitutes the complete and final version of the Corrective Publication and has been mutually reviewed, negotiated, and approved by the parties to the Settlement Agreement. No modification, redaction, or alteration of this text is permitted without the prior written consent of all parties. The Corrective Publication shall be posted in its entirety, without editorial comment, preamble, or postscript by Grizzly Peak Research LLC or any of its affiliates, principals, or agents.
CORRECTIVE STATEMENT REGARDING PREVIOUSLY PUBLISHED REPORTS ON REDSTONE GAMING CORP.
Published by: Grizzly Peak Research LLC Date of Publication: January 13, 2025
I. Introduction and Purpose
Grizzly Peak Research LLC ("Grizzly Peak" or "GPR") is issuing this Corrective Publication in connection with the settlement of litigation brought by Redstone Gaming Corp. ("RGC") in the Superior Court of California, County of Los Angeles, Case No. 24STCV-01892. This Corrective Publication is required by the terms of the Settlement Agreement and Mutual Release dated January 6, 2025, entered into by and among RGC, GPR, Grizzly Peak Capital Partners LP, and Tobias Fenchurch (collectively, the "Settling Parties").
Between February 7, 2024, and February 21, 2024, GPR published three research reports concerning RGC, a Nevada corporation whose common stock is publicly traded on the Nasdaq Stock Market under the ticker symbol RDGM. The three reports are identified as follows:
Report 1: "House of Cards: Redstone Gaming's Manufactured Earnings" — published February 7, 2024 (approximately 48 pages).
Report 2: "Rigged Reels: How Redstone's Slot Software Cheats the Regulators" — published February 14, 2024 (approximately 36 pages).
Report 3: "Double Down on Fraud: Redstone's Related-Party Shell Game" — published February 21, 2024 (approximately 29 pages).
All three reports (collectively, the "Reports") were published on the GPR website at grizzlypeakresearch.com and were simultaneously distributed via GPR's social media account @GrizzlyPeakRes on the X platform (formerly known as Fenmore Solutions). The Reports attracted significant attention from the financial media, the investing public, and securities regulators.
GPR acknowledges that the Reports contained material inaccuracies and that certain of the principal allegations set forth therein were unfounded, disproven by independent governmental and regulatory investigation, or based on incomplete information and were misleading. GPR further acknowledges that the publication and widespread dissemination of the Reports caused significant harm to RGC, its shareholders, and the integrity of the public market for RDGM securities.
The purpose of this Corrective Publication is to set the record straight with respect to each of the principal allegations made in the three Reports and to inform the investing public, securities regulators, gaming regulators, and all other readers of the material inaccuracies contained in the Reports. This Corrective Publication is intended to correct the public record and to ensure that readers who may have read or relied upon the original Reports have access to accurate and complete information regarding the matters addressed therein.
II. Background on Redstone Gaming Corp.
RGC is a publicly traded gaming and media-entertainment company incorporated in the State of Nevada and headquartered at 8800 Crimson Ridge Parkway, Suite 1200, Las Vegas, Nevada 89113. RGC is a reporting company under the Securities Exchange Act of 1934, as amended, and files periodic and current reports with the United States Securities and Exchange Commission (the "SEC").
RGC owns and operates eleven casino-resort properties located across three states: Nevada, New Jersey, and Mississippi. In addition to its brick-and-mortar gaming operations, RGC develops and licenses proprietary electronic gaming platforms to third-party casino operators. RGC also operates a regulated interactive gaming division, Redstone Digital, which offers online casino and sports-wagering products in jurisdictions where such activities are lawfully permitted, as well as a media-entertainment production arm, Crimson Studios, which produces original programming and live entertainment content for distribution through RGC's resort properties and third-party streaming platforms.
For its fiscal year ended December 31, 2023, RGC reported consolidated net revenue of approximately $3.42 billion and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $812 million, reflecting an EBITDA margin of approximately 23.7%. These financial results were prepared in accordance with United States generally accepted accounting principles ("GAAP") and were included in RGC's Annual Report on Form 10-K filed with the SEC.
RGC's consolidated financial statements for each of its fiscal years ended December 31, 2021, December 31, 2022, and December 31, 2023, were audited by Pinnacle Audit & Advisory LLP ("Pinnacle"), an independent registered public accounting firm. Pinnacle issued unqualified (i.e., clean) audit opinions for each of those fiscal years, indicating that RGC's consolidated financial statements were presented fairly, in all material respects, in conformity with GAAP.
At the time of GPR's initial publication on February 7, 2024, RGC had approximately 73.8 million shares of common stock outstanding and a pre-publication market capitalization of approximately $6.8 billion, based on a closing price of $92.14 per share on February 6, 2024, the last trading day prior to the publication of Report 1.
III. GPR's Short Position Disclosure
GPR disclosed in each of the three Reports that GPR and its principals maintained short positions in RDGM securities at the time of publication. Specifically, at the time of publication, GPR's affiliated investment fund, Grizzly Peak Capital Partners LP ("GPCP"), held a short position of approximately 680,000 shares of RDGM common stock. Based on the pre-publication closing price of $92.14 per share on February 6, 2024, this short position had a notional value of approximately $62.66 million.
GPR acknowledges that its financial interest in a decline in the market price of RDGM securities was a material factor in the context of the allegations made in the Reports. GPCP and its principals stood to profit directly and substantially from any decline in RDGM's stock price that might result from the publication and dissemination of the Reports. GPR further acknowledges that investors and other readers of the Reports were entitled to weigh this financial interest when evaluating the credibility and objectivity of the allegations contained therein.
IV. Correction Regarding Report 1: Revenue Fabrication Allegation
IV.A. Summary of Original Allegation
In Report 1, entitled "House of Cards: Redstone Gaming's Manufactured Earnings," published on February 7, 2024, GPR alleged that RGC had fabricated approximately $410 million in fiscal year 2023 revenue through purportedly fictitious intercompany transactions among RGC's operating subsidiaries. The report asserted that these transactions lacked economic substance and were designed to artificially inflate RGC's reported consolidated net revenue, thereby misrepresenting RGC's financial performance to investors, securities analysts, and regulators. Report 1 characterized this alleged conduct as a deliberate scheme to "manufacture" earnings and mislead the capital markets.
IV.B. Corrective Statement
GPR acknowledges that the revenue-fabrication allegation set forth in Report 1 was unfounded.
Following the publication of Report 1, RGC's independent auditor, Pinnacle Audit & Advisory LLP, conducted a supplemental review of RGC's intercompany transactions and consolidation procedures for fiscal year 2023 at the request of RGC's Audit Committee. That supplemental review confirmed the accuracy and completeness of RGC's reported fiscal year 2023 consolidated net revenue of approximately $3.42 billion. Pinnacle identified no fictitious intercompany transactions of the type described in Report 1, and Pinnacle reaffirmed the validity of the intercompany elimination entries reflected in RGC's consolidated financial statements.
In addition, in March 2024, the staff of the Division of Enforcement of the SEC opened an informal inquiry into RGC's financial reporting practices in connection with the allegations contained in GPR's Reports. On August 16, 2024, the SEC closed its informal inquiry with no enforcement action taken, no formal order of investigation issued, and no findings adverse to RGC. The closure of the SEC's inquiry without action is a matter of public record.
GPR's analysis underlying the $410 million revenue-fabrication allegation contained significant errors in its interpretation of RGC's segment reporting disclosures, its treatment of intercompany eliminations in the consolidation process, and its reading of the consolidation entries set forth in RGC's public filings. These analytical errors led GPR to draw a materially misleading conclusion regarding the existence of fictitious revenue. GPR did not contact RGC, RGC's auditor, or any regulatory body to verify the accuracy of its analysis prior to publishing Report 1.
GPR hereby retracts the revenue-fabrication allegation in its entirety and acknowledges that the allegation was not supported by the facts. Readers who relied upon Report 1's characterization of RGC's revenue as fabricated or manufactured should disregard that characterization.
V. Correction Regarding Report 2: RNG Manipulation Allegation
V.A. Summary of Original Allegation
In Report 2, entitled "Rigged Reels: How Redstone's Slot Software Cheats the Regulators," published on February 14, 2024, GPR alleged that RGC had manipulated the random-number-generator ("RNG") software embedded in its proprietary electronic gaming platforms to inflate the payout statistics reported to the Nevada Gaming Control Board (the "NGCB"). Report 2 asserted that this purported manipulation constituted regulatory fraud and called into question the fundamental integrity of RGC's gaming operations. The report suggested that RGC's gaming licenses could be subject to revocation and that the company faced potential criminal liability arising from the alleged manipulation.
V.B. Corrective Statement
GPR acknowledges that the RNG-manipulation allegation set forth in Report 2 was disproven by the Nevada Gaming Control Board.
On March 29, 2024, the NGCB completed an independent audit of RGC's RNG systems, including a comprehensive technical examination of the source code, algorithmic logic, and statistical output of the RNG software deployed across RGC's electronic gaming platforms. Following its audit, the NGCB issued a formal determination clearing RGC of any irregularity, tampering, or manipulation in its electronic gaming platforms. The NGCB's determination confirmed that RGC's RNG systems operated in full compliance with all applicable Nevada gaming regulations and that the payout statistics reported by RGC to the NGCB were accurate and consistent with the actual performance of RGC's gaming devices.
GPR did not contact the Nevada Gaming Control Board, the Nevada Gaming Commission, or any other gaming regulatory authority prior to publishing Report 2 to verify the accuracy of its allegations. GPR also did not conduct, commission, or obtain any independent technical testing or analysis of RGC's RNG systems. Instead, GPR's allegations were based entirely on circumstantial inferences drawn from publicly available payout data, including data published in periodic statistical reports by the NGCB. Standing alone, this publicly available data did not support the conclusions drawn in Report 2, and GPR's inferences were speculative and unsubstantiated.
GPR hereby retracts the RNG-manipulation allegation in its entirety and acknowledges that the allegation was materially inaccurate. Readers who relied upon Report 2's characterization of RGC's gaming software as manipulated or fraudulent should disregard that characterization.
VI. Correction Regarding Report 3: Related-Party / Vermilion Holdings Allegation
VI.A. Summary of Original Allegation
In Report 3, entitled "Double Down on Fraud: Redstone's Related-Party Shell Game," published on February 21, 2024, GPR alleged that RGC's Chief Executive Officer, Marcus J. Calloway, had engaged in undisclosed related-party transactions with a purported shell entity identified by GPR as "Vermilion Holdings LLC" ("Vermilion"). Report 3 asserted that these transactions involved the diversion of corporate assets from RGC to Vermilion for the personal benefit of Mr. Calloway and that the transactions had been deliberately concealed from RGC's board of directors, its Audit Committee, its independent auditor, and the investing public. The report characterized the alleged conduct as part of a scheme to misappropriate corporate resources and defraud RGC's shareholders.
VI.B. Corrective Statement
GPR acknowledges that the related-party allegation concerning Vermilion Holdings LLC set forth in Report 3 was based on incomplete information and was misleading.
GPR's investigation into the purported relationship between Mr. Calloway and Vermilion Holdings LLC was not completed prior to the publication of Report 3. An internal review conducted by GPR after the publication of Report 3 revealed that the information relied upon in drafting the report was fragmentary, drawn from incomplete public records, and did not substantiate the characterization of the transactions described in the report as either undisclosed or fraudulent. GPR's post-publication review further revealed that certain of the factual premises underlying the Vermilion Holdings allegation — including assertions regarding the ownership structure and beneficial control of Vermilion — were not adequately verified before publication.
GPR hereby retracts the characterization of the Vermilion Holdings allegation as presented in Report 3 and acknowledges that the report's conclusions regarding undisclosed related-party transactions involving Mr. Calloway were misleading. Readers who relied upon Report 3's characterization of RGC's related-party disclosures or of Mr. Calloway's conduct should disregard that characterization.
VII. Market Impact and Acknowledgment of Harm
GPR acknowledges that the publication of the three Reports had a significant adverse impact on the market price of RDGM common stock and on RGC's aggregate market capitalization.
Following the publication of Report 1 on February 7, 2024, RDGM's closing stock price declined from $92.14 per share (the closing price on February 6, 2024) to $84.37 per share, representing a single-day decline of $7.77 per share, or approximately 8.4%.
Following the publication of Report 2 on February 14, 2024, RDGM's closing stock price declined further to $78.52 per share, representing a cumulative decline of $13.62 per share, or approximately 14.8%, from the pre-publication closing price.
Following the publication of Report 3 on February 21, 2024, RDGM's closing stock price reached a trough of $72.80 per share, representing a cumulative decline of $19.34 per share, or approximately 21.0%, from the pre-publication closing price. Based on RGC's approximately 73.8 million shares of common stock outstanding, this cumulative decline in per-share price corresponded to an aggregate market-capitalization loss of approximately $1.427 billion.
GPR acknowledges that these stock-price declines and the associated destruction of shareholder value caused material harm to RGC and its shareholders. The harm extended beyond the immediate reduction in market capitalization to include damage to RGC's corporate reputation, disruption of RGC's business relationships with gaming regulators and commercial counterparties, and adverse effects on employee morale and retention.
GPR further acknowledges that RGC incurred substantial out-of-pocket costs in responding to the Reports and their aftermath, including but not limited to expenses for crisis communications and public relations, the engagement of forensic accounting professionals to conduct a supplemental forensic audit of the matters raised in the Reports, and legal fees incurred in connection with responding to the SEC's informal inquiry and the NGCB's audit, as well as the prosecution of the underlying litigation.
VIII. Regulatory and Investigative Outcomes
The regulatory and investigative outcomes arising from the allegations in GPR's Reports are summarized as follows:
(a) The Nevada Gaming Control Board completed an independent audit of RGC's random-number-generator systems on March 29, 2024, and issued a formal determination clearing RGC of any irregularity or manipulation in its electronic gaming platforms. No adverse findings were made.
(b) The SEC opened an informal inquiry into RGC's financial reporting in March 2024 in response to the allegations contained in GPR's Reports. The SEC closed its informal inquiry on August 16, 2024, with no enforcement action taken, no formal order of investigation issued, and no adverse findings.
(c) RGC's independent auditor, Pinnacle Audit & Advisory LLP, reaffirmed the accuracy of its unqualified (clean) audit opinions for RGC's consolidated financial statements for fiscal years 2021, 2022, and 2023. Pinnacle identified no material misstatements or irregularities of the type alleged in GPR's Reports.
(d) No governmental body, regulatory authority, or self-regulatory organization has found any merit to the allegations made in GPR's Reports. No enforcement action, disciplinary proceeding, or administrative sanction has been initiated against RGC or any of its officers or directors in connection with the matters described in the Reports.
IX. Permanent Injunction and Trading Bar
Pursuant to the terms of the Settlement Agreement and Mutual Release dated January 6, 2025, the following injunctive and restrictive provisions have been agreed to by the parties:
(a) GPR, Grizzly Peak Capital Partners LP, and Tobias Fenchurch have been permanently enjoined from republishing, redistributing, or otherwise disseminating the three Reports or any substantially similar statements, analyses, or allegations regarding RGC, its officers, its directors, or its business operations.
(b) GPR, Grizzly Peak Capital Partners LP, and Tobias Fenchurch have further been enjoined from trading, directly or indirectly, in RDGM securities (including common stock, options, warrants, and all other derivative instruments) for a period of five (5) years from the Effective Date of the Settlement Agreement — i.e., from January 6, 2025, through and including January 6, 2030.
(c) The three Reports have been permanently removed from grizzlypeakresearch.com and from all social media accounts controlled by GPR, GPCP, or Tobias Fenchurch. The Reports will not be republished, reposted, or otherwise made available by any of the foregoing parties.
X. Statement of Responsibility
GPR acknowledges its responsibility for the publication and dissemination of the three Reports and for the material inaccuracies contained therein. The Reports were authored by GPR's research team under the supervision and editorial direction of Tobias Fenchurch, Managing Member of GPR. The Reports were published on grizzlypeakresearch.com and were distributed to the public via GPR's social media account @GrizzlyPeakRes on the X platform (formerly Fenmore Solutions), which had approximately 142,000 followers at the time of publication. The Reports were widely covered by financial media outlets and were referenced in analyst notes, investor commentary, and regulatory correspondence.
GPR takes responsibility for the errors and omissions in the Reports as described in this Corrective Publication. This Corrective Publication is being issued to correct the public record and to provide accurate, complete, and non-misleading information to investors, securities regulators, gaming regulators, and members of the general public who may have read, relied upon, or otherwise been influenced by the original Reports.
XI. No Admission of Liability Beyond This Statement
This Corrective Publication is issued pursuant to, and in accordance with, the Settlement Agreement and Mutual Release dated January 6, 2025, entered into by and among Redstone Gaming Corp., Grizzly Peak Research LLC, Grizzly Peak Capital Partners LP, and Tobias Fenchurch in connection with Case No. 24STCV-01892 in the Superior Court of California, County of Los Angeles. The specific terms, language, and scope of this Corrective Publication have been mutually agreed upon by the parties to the Settlement Agreement. Except as expressly set forth in the Settlement Agreement and in this Corrective Publication, the parties have made no admissions or concessions regarding liability, damages, or any other matter, and all rights and defenses not expressly waived in the Settlement Agreement are preserved.
XII. Duration and Availability
This Corrective Publication shall remain posted on grizzlypeakresearch.com in a prominent location on the website's homepage, accessible to the general public without the requirement of a subscription, login, paywall, or any other access restriction, for a period of not less than twenty-four (24) months from the date of initial posting. Any removal, relocation, or diminution of the prominence of this Corrective Publication prior to the expiration of the twenty-four-month period shall constitute a material breach of the Settlement Agreement.
Any reader seeking additional information regarding Redstone Gaming Corp., its financial performance, or its regulatory standing may consult RGC's public filings with the SEC, which are available at www.sec.gov, or may contact RGC's Vice President of Investor Relations:
Janelle Hu Vice President, Investor Relations Redstone Gaming Corp. 8800 Crimson Ridge Parkway, Suite 1200 Las Vegas, NV 89113
— End of Corrective Publication —
Published by: GRIZZLY PEAK RESEARCH LLC 44 Maiden Lane, 7th Floor San Francisco, CA 94108
Date: January 13, 2025
Authorized by:
________________________________________
Tobias Fenchurch Managing Member Grizzly Peak Research LLC

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