Contract analysis

I. EXECUTIVE SUMMARY You have asked us to analyze the principal requirements and considerations under the Delaware General Corporation Law (Title 8 of the Delaware Code, as amended, the "DGCL") governing the proposed issuance by Skybridge Fintech Ltd. ("Skybridge" or the "Company"), a Delaware corporation organized as a C-corporation, of convertible promissory notes (the "Notes") in the aggregate principal amount of

II. BACKGROUND AND TRANSACTION OVERVIEW A. The Company Skybridge Fintech Ltd. is a corporation organized under the laws of the State of Delaware, having been originally incorporated on or about March 22, 2017. The Company's Delaware file number is 6384291, and its federal Employer Identification Number is 83-2147605. The Company's principal executive offices are located at 1400 Market Street, Suite 2200, Wilmington,

III. BOARD AUTHORIZATION UNDER THE DGCL This Section III addresses the statutory authority of the Board to authorize the issuance of the Notes and the Conversion Shares without obtaining stockholder approval. As set forth below, the DGCL vests the Board with broad authority to approve the proposed transaction. A. Authority to Issue Debt Instruments — DGCL § 122(13)

Section 122 of the DGCL enumerates the general powers of every Delaware corporation. Subsection (13) provides, in relevant part, that every corporation incorporated under the DGCL has the power to: "[M]ake contracts, including contracts of guaranty and suretyship, incur liabilities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds and other obligations, and secure any of

1. DGCL § 152 — Issuance of Stock; Lawful Consideration. Section 152 of the DGCL addresses the issuance of stock and the nature of permissible consideration. Section 152 provides, in pertinent part: "The consideration, as determined pursuant to § 153(a) and (b) of this title, for subscriptions to, or the purchase of, the capital stock to be issued by a corporation shall be paid in such form and in such manner as the

2. DGCL § 153 — Consideration for Stock. Section 153 of the DGCL grants the Board discretion to fix the consideration for shares to be issued by the Company. Section 153(a) provides: "Shares of stock with par value may be issued for such consideration, having a value not less than the par value thereof, as determined from time to time by the board of directors, or by the stockholders if the certificate of incorporati

Section 157(b) further provides that the terms upon which, the time or times at or within which, and the consideration for which any such shares may be acquired from the corporation upon the exercise of any such right or option shall be fixed by the board of directors. The Board's authority under Section 157 is broad and encompasses the types of conversion rights contemplated by the proposed Notes, including: (i) aut

IV. SUFFICIENCY OF AUTHORIZED BUT UNISSUED SHARES A. Authorized Share Analysis A critical prerequisite to the issuance of the Notes (and the associated conversion rights) is confirmation that the Company has a sufficient number of authorized but unissued and unreserved shares of capital stock to cover the maximum number of Conversion Shares that may be issued upon conversion. This analysis requires a review of the fo

V. STOCKHOLDER APPROVAL REQUIREMENTS A. No Statutory Stockholder Approval Required for Note Issuance As discussed in Sections III.A through III.C above, the DGCL does not require stockholder approval for the issuance of convertible debt instruments or for the reservation of shares for issuance upon conversion thereof. The Board has full statutory authority to approve these actions, subject only to the authorized shar

VI. FIDUCIARY DUTY CONSIDERATIONS A. Board Fiduciary Duties In authorizing the proposed convertible note issuance, the members of the Board owe fiduciary duties of care and loyalty to the Company and its stockholders. These duties require directors to act on an informed basis, in good faith, and in the honest belief that the action taken is in the best interest of the corporation and its stockholders. Under the well-

VII. SUBORDINATION AND INTERCREDITOR MATTERS A. Subordination of Notes to the Kelvantis Facility As described in Section II.D above, the convertible Notes will be expressly subordinated in right of payment to the Company's existing obligations under the $15,000,000 venture debt facility with Kelvantis Lending Corp. This subordination will be documented in a Subordination Agreement to be executed at closing among Kelv

VIII. SECURITIES LAW INTERACTION (BRIEF NOTE) While the focus of this memorandum is on the corporate law requirements under the DGCL, we note briefly that the convertible Notes constitute "securities" under both federal and state securities laws and that the offering must comply with applicable registration or exemption requirements. Federal Securities Laws. The offering of the Notes will rely on the private placemen

IX. RECOMMENDED ACTIONS AND NEXT STEPS Based on the analysis set forth in this memorandum, we recommend that the Company and its counsel take the following actions in the near term to advance the proposed convertible note financing:

1. Confirm authorized share count. As a first priority, the Company should provide Calderwood & Harkness with (a) the current Amended and Restated Certificate of Incorporation (including all certificates of amendment and certificates of designation), (b) a current, fully detailed capitalization table showing all authorized, issued, outstanding, and reserved shares by class and series, including the option pool, outst

2. Prepare board consent. We will prepare a draft Unanimous Written Consent of the Board of Directors authorizing (a) the issuance of the convertible Notes in the aggregate principal amount of up to $60,000,000, (b) the material terms of the Notes as set forth in the Note Purchase Agreement, (c) the reservation of shares for issuance upon conversion, (d) the execution and delivery of the Note Purchase Agreement, the

3. Prepare stockholder consent. We will prepare a draft Written Consent of Stockholders in Lieu of Special Meeting, to be circulated to holders of the requisite number of shares for execution. The stockholder consent will approve (a) the convertible note issuance and the reservation of shares for conversion, (b) any charter amendment required to increase authorized shares (if applicable), and (c) the amendments to th

4. Prepare Section 228(e) notice. Following receipt of the executed stockholder consent, we will prepare and distribute the notice required by DGCL § 228(e) to all stockholders who did not execute the consent.

5. Review protective provisions. We will complete our detailed analysis of the contractual consent and waiver requirements under the Charter, the Amended and Restated Investors' Rights Agreement, the Right of First Refusal and Co-Sale Agreement, and the Voting Agreement. This analysis will be the subject of a separate memorandum, which we anticipate circulating on or about December 1, 2023.

6. Board presentation. We recommend that the Company's management prepare a board presentation summarizing the material terms of the proposed financing, the Company's current financial condition and runway analysis, a comparison of the proposed terms to market terms for comparable transactions, and an identification of any conflicts of interest. Calderwood & Harkness is available to assist in the preparation of this

7. Coordinate with Kelvantis consent process. The Company must obtain Kelvantis's prior written consent and waiver under the Kelvantis LSA before the convertible Notes may be issued. We will coordinate with the Company and Kelvantis's counsel to ensure that the lender consent is obtained prior to or concurrently with the closing of the offering. The Kelvantis covenant analysis and consent process are addressed in our

X. CONCLUSION Based on our preliminary analysis of the applicable provisions of the Delaware General Corporation Law, we conclude as follows: The Board of Directors of Skybridge Fintech Ltd. has full statutory authority under the DGCL — specifically, under Sections 122(13), 141(a), 152, 153, and 157 — to authorize the issuance of convertible promissory notes in the aggregate principal amount of $60,000,000 and the re

§ 122(13) | Corporate Power to Issue Debt | Every corporation has the power to "issue its notes, bonds and other obligations, and secure any of its obligations by mortgage, pledge or other encumbrance of all or any part of its property, franchises and income." | Authorizes the Company to issue the $60,000,000 convertible promissory Notes as debt obligations. No stockholder approval required for the issuance of debt i

§ 141(a) | Management by Board of Directors | "The business and affairs of every corporation organized under