Contract analysis

I. Executive Summary and Recommendation Calderwood & Harkness LLP ("C&H" or "the Firm") respectfully submits this memorandum to the Board of Directors (the "Board") of Skybridge Fintech Ltd. ("SBF" or the "Company") to recommend that the Board authorize the immediate formal termination of the proposed $200,000,000 consumer-receivables securitization through SkyLend Receivables Trust 2024-1 (the "Transaction" or the "

2. Withdrawal and Downgrade Watch of Preliminary Credit Ratings. On May 1, 2024, Meridian Credit Ratings, Inc. ("Meridian") formally withdrew its preliminary ratings (Aaa(sf) for the Class A Notes and A2(sf) for the Class B Notes). Two days earlier, on April 29, 2024, Carrollton Ratings Group LLC ("Carrollton") placed its expected ratings (AA+(sf) for the Class A Notes and A(sf) for the Class B Notes) on "developing"

3. Suspension of Marketing by the Lead Underwriter. On April 26, 2024, Halcyon Securities LLC ("Halcyon"), the lead underwriter and initial purchaser, formally notified SBF that it was suspending all marketing activities for the Transaction and delivered a force-majeure / material-change notice under the Preliminary Purchase Agreement (the "PPA"). Halcyon has indicated that it will not proceed to pricing absent a com

4. Unviable Remediation Timeline. Halcyon has estimated that a full data remediation, pool reconstitution, renewed due diligence, and re-engagement of rating agencies would require a minimum of eight to twelve weeks. This timeline would push any potential pricing into the third quarter of 2024 at the earliest, well past the current favorable market window and into a period of substantial macroeconomic uncertainty. Th

II. Background of the Transaction A. Transaction Overview Skybridge Fintech Ltd. is a Delaware corporation headquartered at 1400 Market Street, Suite 1210, Wilmington, Delaware 19801 (EIN: 84-3291076). SBF is a consumer financial technology lender that develops, operates, and maintains the SkyLend direct-to-consumer digital lending platform. Through SkyLend, SBF originates unsecured consumer installment loans ranging

III. The Servicing-Data Discrepancy A. Discovery On April 22, 2024, Broadleaf Analytics Group LLC, the independent third-party due diligence provider engaged by Halcyon pursuant to customary market practice for asset-backed securities transactions, identified material discrepancies between the static-pool performance data provided in the Preliminary Offering Memorandum and the actual underlying loan-tape records. The

IV. Post-discovery Events A. Halcyon's Response On April 26, 2024, three business days after receiving the Broadleaf findings, Halcyon Securities LLC formally notified SBF and C&H in writing that it was suspending all marketing activities for the Transaction. Concurrently, Halcyon delivered a force-majeure / material-change notice under Article V of the Preliminary Purchase Agreement, citing the servicing-data discre

V. Analysis of Alternatives to Termination C&H has evaluated three principal alternatives available to the Board in responding to the current situation. Each alternative is analyzed below in terms of feasibility, cost, timeline, and risk profile. A. Option 1: Full Remediation and Re-Launch Under this option, SBF would undertake a comprehensive remediation of the servicing data, reconstitute the receivables pool, and

VI. Securities-Law Exposure Analysis A. Overview As noted throughout this memorandum, the Preliminary Offering Memorandum dated April 5, 2024, containing materially inaccurate static-pool performance data, was distributed to 28 institutional investors during the investor roadshow conducted from April 15 through April 19, 2024. Although no securities were sold in connection with the Transaction — the Transaction was i

Section 12(a)(2) of the Securities Act. Section 12(a)(2) provides a cause of action for material misstatements or omissions in a "prospectus or oral communication" made in connection with an offering of securities, available to any person who purchases a security from the offeror. The remedy under Section 12(a)(2) is rescission — return of the purchase price — which necessarily requires that a sale have occurred. Sin

Section 17(a) of the Securities Act. Section 17(a) is a broader anti-fraud provision that prohibits fraud in the "offer or sale" of securities. Unlike Rule 10b-5, Section 17(a)(2) and (3) do not require scienter and can be established through a showing of negligence. Importantly, Section 17(a) applies to "offers" as well as sales, meaning that the distribution of the Preliminary OM during the roadshow could potential

1. Formal Investor Notification. C&H will prepare and deliver, on behalf of SBF, a formal written notification to all 28 institutional investors who received the Preliminary OM during the April 15–19 roadshow. The notification will inform investors of the servicing-data discrepancy, describe its nature and magnitude, disclose that the Transaction has been terminated, and request that investors return or destroy all c

2. Document Preservation. SBF must implement a comprehensive litigation hold requiring the preservation and retention of all communications with investors, rating agencies, Clearview, Halcyon, and other Transaction parties, as well as all drafts, work papers, servicing data, loan tapes, Broadleaf due diligence reports, and rating-agency correspondence. The litigation hold should cover all SBF personnel involved in th

3. Evaluation of Proactive SEC Engagement. C&H will continue to evaluate whether proactive engagement with SEC staff — either through the Division of Corporation Finance or the Division of Enforcement — is advisable under the circumstances. A proactive approach may be warranted if there is any indication that the SEC has become aware of the data discrepancy through other channels (e.g., rating-agency notifications, i

VII. Financial Exposure: Sunk Transaction Costs A. Itemized Cost Reconciliation The following table sets forth the estimated total sunk transaction costs incurred in connection with the Transaction through the date of this memorandum: B. Notes on Specific Cost Items Several items in the cost reconciliation merit additional explanation: Halcyon Underwriting discount. The underwriting discount of $2,000,000 (1.00% of t

VIII. Potential Claims and Dispute Exposure A. Claim Against Clearview Loan Servicing, Inc. C&H intends, upon authorization by the Board, to pursue indemnification and damages from Clearview under the provisions of the Master Servicing Agreement dated October 1, 2022. The legal basis, potential recovery, and anticipated defenses are summarized below. Legal Basis. Section 9.02 of the MSA provides that Clearview shall