Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the federal income tax classification of SkyLend Receivables Trust 2024-1 (EIN: 93-4201855) (the "Trust" or "SRT 2024-1"), a Delaware statutory trust formed on February 14, 2024, which serves as the issuing entity in a proposed $200,000,000 consumer-receivables securitization transaction sponsored by Skybridge Fintech Ltd. ("SBF"). This analysis is pre

II. Background and Transaction Structure A. The Parties The following entities are parties to, or otherwise relevant to, the proposed securitization transaction: Skybridge Fintech Ltd. ("SBF"). SBF is a Delaware corporation headquartered at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801 (EIN: 84-3291076). SBF serves as the originator, sponsor, and master servicer of the proposed securitization. SBF is a c

III. Legal Framework — Trust Classification Under the Internal Revenue Code A. Overview of Entity Classification Rules The federal income tax classification of SRT 2024-1 is governed by the entity-classification provisions of the Code and the Treasury Regulations promulgated thereunder. The relevant framework is set forth in Treasury Regulation §§301.7701-1 through 301.7701-4. Under Treasury Regulation §301.7701-1(a)

IV. Analysis — Application to SRT 2024-1 A. Fixed-Pool Requirement A threshold requirement for grantor-trust classification is that the trust hold a fixed pool of assets. Under the draft Indenture (March 4, 2024), the receivables pool for SRT 2024-1 is determined as of the cut-off date, which is expected to be March 31, 2024. After the cut-off date, the pool is static: no new receivables may be added to the pool, and

Section 7701(i) of the Code provides that certain arrangements with multiple classes of debt obligations secured by real-property mortgages or interests therein are treated as "taxable mortgage pools" (TMPs). An entity classified as a TMP is taxed as a corporation, regardless of its classification under the general entity-classification rules or the grantor-trust provisions. Specifically, Section 7701(i)(2) defines a

V. Tax Reporting and Compliance Considerations A. Grantor Trust Reporting If SRT 2024-1 is treated as a grantor trust for federal income tax purposes, the Trust is not required to compute or pay federal income tax at the entity level. Instead, the Trust files on a "reporting" basis only. The specific reporting requirements are as follows: The Trust will file an annual federal income tax return on Form 1041 (U.S. Inco

VI. Assumptions and Qualifications The analysis set forth in this memorandum is subject to the following assumptions and qualifications:

1. Transaction documents. The analysis is based on our review of the following draft and executed transaction documents: (i) the Trust Agreement — SkyLend Receivables Trust 2024-1 (dated February 14, 2024); (ii) the draft Indenture — SRT 2024-1 and AFS (draft dated March 4, 2024); (iii) the draft Sale and Servicing Agreement (draft dated March 11, 2024); and (iv) the draft Receivables Purchase Agreement (draft dated

2. Final documents. We have assumed that the final transaction documents, had they been executed, would not have materially deviated from the drafts reviewed. To the extent that the final documents would have included terms or provisions materially different from those set forth in the drafts, the analysis set forth herein may need to be revised.

3. Conduct of the parties. We have assumed that no party will exercise any power or take any action inconsistent with the limited-purpose nature of the Trust as described in the transaction documents. If any party were to act in a manner inconsistent with the Trust's limited-purpose restrictions — for example, by directing the Trust to acquire new receivables, by exercising the substitution right in a manner that exc

4. Current law. The analysis is based on federal income tax law in effect as of the date of this memorandum (March 28, 2024), including the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, published revenue rulings, revenue procedures, IRS notices, and relevant case law. Federal income tax law is subject to change, and any change in the applicable statutes, regulations, or a

5. Matters not addressed. This memorandum does not address the following matters, which are outside the scope of this analysis: (a) The tax characterization of the transfer of receivables from SBF to SkyLend Funding LLC (i.e., whether the transfer constitutes a "true sale" or a "secured financing" for federal income tax purposes). This issue is addressed separately in the Draft True-Sal