1009-00001 · Skybridge Fintech Ltd · Regulatory Filings

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT

TO: Priya Ramanathan, General Counsel, Skybridge Fintech Ltd.

CC: Leonard Ashford, Of Counsel, Calderwood & Harkness LLP Victoria Chambers, Partner, Calderwood & Harkness LLP

FROM: Nina Reyes, Senior Associate, Calderwood & Harkness LLP

DATE: January 18, 2024

RE: State Blue Sky / Notice Filings — $60,000,000 Convertible Note Bridge Financing

MATTER NO.: 1009-00001

I. Purpose and Summary

This memorandum identifies and tracks all required state securities ("blue sky") notice filings in connection with the issuance by Skybridge Fintech Ltd. ("Skybridge" or the "Company") of convertible promissory notes in the aggregate principal amount of $60,000,000 (the "Notes") pursuant to the Note Purchase Agreement dated January 15, 2024, by and among the Company and the purchasers named therein (the "NPA"). The purpose of this memorandum is to provide Skybridge's General Counsel with a comprehensive overview of the filing obligations triggered by the offering, the status of each filing, applicable deadlines, and associated costs, and to recommend a course of action to ensure full and timely compliance with all applicable state blue sky requirements.

The Notes were offered and sold in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506(b) of Regulation D promulgated thereunder ("Rule 506(b)"). As described in greater detail below, the offering involved no general solicitation or general advertising, and all purchasers were "accredited investors" as defined in Rule 501(a) of Regulation D. No broker-dealer was engaged in connection with the offering, and no commissions, placement agent fees, or finders' fees were paid.

In accordance with the requirements of Rule 503 of Regulation D, a federal Form D was filed with the U.S. Securities and Exchange Commission (the "SEC") on January 16, 2024, in connection with the Initial Closing of $45,000,000 that occurred on January 15, 2024. A Form D amendment was subsequently filed with the SEC on January 29, 2024, reflecting the Final Closing of $15,000,000 that occurred on January 26, 2024 and the addition of Northstar Innovation Fund II, L.P. as a purchaser of the Notes. Both filings were made within the time periods prescribed by Rule 503.

Under Rule 506(b), state blue sky laws governing the registration and qualification of securities are preempted by Section 18 of the Securities Act, as enacted by the National Securities Markets Improvement Act of 1996 ("NSMIA"). Securities issued in a Rule 506 offering are "covered securities" under Section 18(b)(4)(F) of the Securities Act, and as such, no state may require registration or qualification of such securities as a condition to their offer or sale. Notwithstanding this preemption, states retain the authority under Section 18(c)(2) of the Securities Act to require notice filings, collect filing fees, and require the issuer's consent to service of process in connection with offerings of covered securities conducted within their borders or involving investors domiciled in their jurisdictions.

This memorandum identifies the applicable states in which notice filings are required based on: (a) the state of incorporation of the Company (Delaware); (b) the principal office locations of each purchaser under the NPA (Massachusetts, Illinois, California, and Washington); and (c) any state in which offers were made or accepted. For each such state, the memorandum sets forth the applicable statutory and regulatory authority, the specific filing requirements, the applicable fees and deadlines, and the current status of each filing.

II. Identification of Applicable States

A. Basis for State Determination

The determination of which states require notice filings in connection with the offering of the Notes is based on the following factual analysis.

Issuer Domicile. The Company is a Delaware corporation with its principal place of business located at 1400 Market Street, Suite 2200, Wilmington, Delaware 19801. As the state of incorporation of the issuer, Delaware requires a notice filing in connection with Rule 506 offerings by issuers organized under its laws, irrespective of whether any sale of securities was made to a purchaser domiciled in Delaware.

Purchaser Domicile and Location. The four purchasers of the Notes under the NPA and their respective principal office locations are as follows:

(i) Ridgeline Ventures Fund IV, L.P. — 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199 (domiciled in the Commonwealth of Massachusetts);

(ii) Beacon Hill Capital Partners, LLC — 222 West Adams Street, Suite 3400, Chicago, Illinois 60606 (domiciled in the State of Illinois);

(iii) Northstar Innovation Fund II, L.P. — 555 California Street, Suite 4100, San Francisco, California 94104 (domiciled in the State of California); and

(iv) Halcyon Growth Equity, L.P. — 1201 Third Avenue, Suite 5600, Seattle, Washington 98101 (domiciled in the State of Washington).

For purposes of state blue sky compliance, sales of the Notes are deemed to have occurred in the states where the offers were accepted or where the purchasers are domiciled. Based on the representations made by each purchaser in the NPA and the related subscription documents, each purchaser accepted its respective offer at its principal office location identified above, and the sales are therefore deemed to have occurred in the states corresponding to those locations.

Conclusion. Based on the foregoing analysis, we have identified a total of five applicable states in which notice filings are required: Delaware (issuer domicile), Massachusetts (domicile of Ridgeline), Illinois (domicile of Beacon Hill), California (domicile of Northstar), and Washington (domicile of Halcyon). We are not aware of any offers having been made in, or any offerees or purchasers located in, any other state that would give rise to additional notice filing obligations. Should additional information come to our attention suggesting that offers were directed to persons in other jurisdictions, we will promptly reassess the filing requirements.

B. Transaction Details Relevant to Filings

The following transaction details are relevant to the preparation and submission of the required state notice filings:

Aggregate Offering Amount. The aggregate principal amount of Notes offered and sold pursuant to the NPA is $60,000,000. This amount was offered and sold in two closings, as described below.

Number of Purchasers. Four (4) purchasers acquired Notes under the NPA. All four purchasers are accredited investors within the meaning of Rule 501(a) of Regulation D. Specifically, each purchaser is either: (x) a limited partnership or limited liability company in which all equity owners are accredited investors, or (y) an entity with total assets in excess of $5,000,000 that was not formed for the specific purpose of acquiring the securities offered. Representations and warranties to this effect were made by each purchaser in the NPA and in the accredited investor questionnaires delivered at each closing.

Manner of Offering. No general solicitation or general advertising was used in connection with the offer or sale of the Notes, consistent with the requirements of Rule 502(c) of Regulation D. All communications regarding the offering were made on a direct, one-on-one basis between the Company's management and the principals of each purchaser fund, or through their respective legal counsel.

Commissions and Finders' Fees. No commissions, placement agent fees, finders' fees, or other transaction-based compensation were paid to any person in connection with the offer or sale of the Notes.

Closing Details. The Notes were issued in two closings under the NPA:

Initial Closing — January 15, 2024 — $45,000,000

• Ridgeline Ventures Fund IV, L.P.: $30,000,000

• Beacon Hill Capital Partners, LLC: $10,000,000

• Halcyon Growth Equity, L.P.: $5,000,000

Final Closing — January 26, 2024 — $15,000,000

• Beacon Hill Capital Partners, LLC: $5,000,000 (additional)

• Northstar Innovation Fund II, L.P.: $10,000,000

Instrument Terms. The Notes are convertible promissory notes bearing simple interest at a rate of 6.00% per annum, maturing on January 15, 2026 (24 months from the date of the Initial Closing). The Notes provide for automatic conversion upon the occurrence of a Qualified Financing, defined in the NPA as an equity financing in which the Company raises at least $80,000,000 in gross proceeds (exclusive of the conversion of the Notes). Upon such automatic conversion, the outstanding principal and accrued interest under the Notes will convert into shares of the series of preferred stock issued in the Qualified Financing at a per-share conversion price equal to the lower of: (A) a 20% discount to the per-share price paid by cash investors in the Qualified Financing (the "Series D price"), and (B) the price per share implied by a $750,000,000 pre-money valuation of the Company on a fully diluted basis (the "valuation cap"). The Notes may also be subject to optional conversion at the election of the holders in certain circumstances, as more fully described in the NPA and the form of Note attached thereto as Exhibit A.

III. State-by-State Filing Requirements and Status

This Part III provides a detailed, state-by-state analysis of the applicable notice filing requirements, deadlines, fees, required materials, and current filing status for each of the five jurisdictions identified in Part II above.

A. Delaware. Applicable Law. Delaware Securities Act, 6 Del. C. § 7309(b)(14); Delaware Blue Sky Regulation D exemption. Section 7309(b)(14) of the Delaware Securities Act provides an exemption from registration for any security that is a "covered security" under Section 18(b)(4) of the Securities Act, subject to the issuer's compliance with the notice filing requirements prescribed by the Delaware Department of Justice, Division of Securities (the "Delaware Division").

Filing Requirement. A notice filing is required for all Rule 506 offerings by issuers incorporated or organized in Delaware. The filing is made with the Delaware Division and consists of a copy of the federal Form D as filed with the SEC, together with a Consent to Service of Process and the applicable filing fee. Because Skybridge is a Delaware corporation, a notice filing is required in Delaware irrespective of whether any Notes were sold to purchasers domiciled in the state. Although no purchaser of the Notes is domiciled in Delaware, the state's blue sky regulations require issuers organized under Delaware law to file notice of Rule 506 offerings with the Delaware Division.

Filing Fee. The filing fee for a Rule 506 notice filing in Delaware is $250.00, which is a flat fee and does not vary based on the amount of the offering or the number of investors.

Deadline. The notice filing must be submitted within 15 days after the first sale of securities in or from Delaware. Because the Company is a Delaware corporation and the first closing under the NPA occurred on January 15, 2024, the filing deadline is January 30, 2024. While there is some ambiguity in the Delaware regulations as to whether the trigger date for the 15-day period is the date of the first sale or the date of the Form D filing with the SEC, we have calculated the deadline conservatively from the date of the first sale (i.e., the Initial Closing date), which is the approach generally recommended by practitioners and consistent with informal guidance received from the Delaware Division.

Required Materials. The following materials must be submitted to the Delaware Division:

(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;

(ii) A completed Consent to Service of Process (Form U-2), executed by an authorized officer of the Company and appointing the Attorney General of the State of Delaware as agent for service of process in connection with the offering; and

(iii) A check or wire transfer in the amount of $250.00 payable to the State of Delaware.

Status. The Delaware notice filing has been prepared and is awaiting final review and execution of the Form U-2 by an authorized officer of the Company. The filing is scheduled to be submitted to the Delaware Division no later than January 28, 2024, which is two business days in advance of the January 30, 2024 deadline, in order to allow for any administrative or mailing delays.

Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.

B. Massachusetts. Applicable Law. Massachusetts Uniform Securities Act, M.G.L. c. 110A, § 402(b)(9); 950 CMR 14.402. Section 402(b)(9) of the Massachusetts Uniform Securities Act provides that securities that are "covered securities" under Section 18(b)(4)(F) of the Securities Act are exempt from registration in the Commonwealth, provided that the issuer files a notice with the Massachusetts Securities Division and pays the prescribed filing fee.

Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in Massachusetts. The notice filing is made with the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth. Massachusetts requires the submission of a copy of the federal Form D, a completed Consent to Service of Process, and the applicable filing fee. The Massachusetts Securities Division maintains an electronic filing system, and filings may be submitted either electronically or by mail.

Filing Fee. The filing fee in Massachusetts is calculated as one-third of one percent (1/3 of 1%) of the aggregate offering price of securities sold or offered to persons in the Commonwealth, subject to a minimum fee of $250.00 and a maximum fee of $500.00. In this case, the aggregate amount of Notes sold to the Massachusetts-domiciled purchaser (Ridgeline Ventures Fund IV, L.P.) is $30,000,000. One-third of one percent of $30,000,000 equals $100,000, which significantly exceeds the statutory maximum. Accordingly, the filing fee for Massachusetts is $500.00 (the maximum).

Applicable Purchaser(s). Ridgeline Ventures Fund IV, L.P., which committed to purchase $30,000,000 in aggregate principal amount of Notes at the Initial Closing on January 15, 2024. Ridgeline's principal office is located at 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199.

Deadline. The notice filing must be submitted within 15 days after the first sale in Massachusetts. The first sale to Ridgeline occurred at the Initial Closing on January 15, 2024. Accordingly, the filing deadline is January 30, 2024.

Required Materials. The following materials must be submitted to the Massachusetts Securities Division:

(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;

(ii) A completed Consent to Service of Process (Form U-2), executed by an authorized officer of the Company; and

(iii) A check or wire transfer in the amount of $500.00 payable to the Commonwealth of Massachusetts.

Status. The Massachusetts notice filing has been prepared and is awaiting final review and execution. The filing is scheduled to be submitted no later than January 28, 2024, consistent with our recommendation to batch-submit all filings sharing the January 30, 2024 deadline in advance of that date.

Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.

C. Illinois. Applicable Law. Illinois Securities Law of 1953, 815 ILCS 5/4(R); Section 130.520 of the Illinois Administrative Code (14 Ill. Admin. Code 130.520). Section 4(R) of the Illinois Securities Law provides that securities that are "covered securities" under NSMIA are exempt from the registration requirements of the Illinois Securities Law, subject to the issuer's compliance with the notice filing and fee payment obligations prescribed by the Illinois Secretary of State, Securities Department.

Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in Illinois. The filing is made with the Illinois Secretary of State, Securities Department, and consists of a copy of the federal Form D, a Consent to Service of Process, and the applicable filing fee. Illinois uses Form U-2C (Uniform Consent to Service of Process — Corporation) for corporate issuers, rather than the standard Form U-2 used by most other states.

Filing Fee. The filing fee in Illinois is calculated as one-tenth of one percent (1/10 of 1%) of the aggregate offering price of securities sold in Illinois, subject to a minimum fee of $100.00 and a maximum fee of $500.00. The aggregate amount of Notes sold to the Illinois-domiciled purchaser (Beacon Hill Capital Partners, LLC) is $15,000,000 (consisting of $10,000,000 at the Initial Closing and $5,000,000 at the Final Closing). One-tenth of one percent of $15,000,000 equals $15,000, which exceeds the statutory maximum. Accordingly, the filing fee for Illinois is $500.00 (the maximum).

Applicable Purchaser(s). Beacon Hill Capital Partners, LLC, which committed to purchase an aggregate of $15,000,000 in principal amount of Notes — $10,000,000 at the Initial Closing on January 15, 2024, and an additional $5,000,000 at the Final Closing on January 26, 2024. Beacon Hill's principal office is located at 222 West Adams Street, Suite 3400, Chicago, Illinois 60606.

Deadline. The notice filing must be submitted within 15 days after the first sale in Illinois. The first sale to Beacon Hill occurred at the Initial Closing on January 15, 2024. Accordingly, the filing deadline is January 30, 2024. It should be noted that the additional sale to Beacon Hill at the Final Closing on January 26, 2024 may necessitate a supplemental or amended filing, as discussed below.

Required Materials. The following materials must be submitted to the Illinois Secretary of State, Securities Department:

(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;

(ii) A completed Consent to Service of Process (Form U-2C), executed by an authorized officer of the Company; and

(iii) A check or wire transfer in the amount of $500.00 payable to the Illinois Secretary of State.

Note Regarding Amendment. Because the initial Form D filed with the SEC on January 16, 2024 reported only the $10,000,000 in Notes sold to Beacon Hill at the Initial Closing, and the Form D amendment filed on January 29, 2024 updated the total amount sold to Beacon Hill to $15,000,000 (reflecting the additional $5,000,000 purchased at the Final Closing), an updated or amended notice filing may be required in Illinois to reflect the full amount of securities sold in the state. We intend to confirm with the Illinois Secretary of State's office whether a separate amended filing is required or whether the initial filing, accompanied by the amended Form D, will be deemed sufficient. In our experience, most states treat the initial notice filing as covering the entire offering (including subsequent closings), provided that the filing fee is calculated based on the total amount sold in the state. However, Illinois has at times imposed a more formalistic approach, and we will seek clarification on this point.

Status. The Illinois notice filing has been prepared based on the initial Form D and is awaiting final review and execution. The filing is scheduled to be submitted no later than January 28, 2024. We will assess the need for an amendment following the January 30, 2024 filing deadline and upon receipt of confirmation from the Illinois Secretary of State's office.

Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.

D. California. Applicable Law. California Corporations Code § 25102.1; the California Corporate Securities Law of 1968; Title 10, California Code of Regulations § 260.102.14. Section 25102.1 of the California Corporations Code provides an exemption from the qualification requirements of the California Corporate Securities Law for securities that are "covered securities" under NSMIA, subject to the issuer's compliance with the notice filing requirements prescribed by the California Department of Financial Protection and Innovation ("DFPI"), formerly known as the Department of Business Oversight (the "DBO"). The DFPI administers all blue sky notice filings for Rule 506 offerings involving California-domiciled purchasers.

Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in California. The filing is made with the DFPI and consists of a notice filing form (the California Form D-notice), a copy of the federal Form D (as amended), a Consent to Service of Process, and the applicable filing fee. California's notice filing requirements are set forth in Section 260.102.14 of the California Code of Regulations, which prescribes the specific form and content requirements for such filings.

Filing Fee. The filing fee in California is $300.00 for offerings with an aggregate offering amount of up to $499,999,999. Because the aggregate amount of the offering under the NPA is $60,000,000, which falls below the $500,000,000 threshold, the applicable filing fee is $300.00.

Applicable Purchaser(s). Northstar Innovation Fund II, L.P., which committed to purchase $10,000,000 in aggregate principal amount of Notes at the Final Closing on January 26, 2024. Northstar's principal office is located at 555 California Street, Suite 4100, San Francisco, California 94104. Northstar was not a party to the Initial Closing and did not execute the NPA until January 25, 2024, when it executed a joinder agreement and delivered its subscription documents in advance of the Final Closing.

Deadline. The notice filing must be submitted within 15 calendar days after the first sale of securities in California. Because the first (and only) sale to a California-domiciled purchaser (Northstar) occurred at the Final Closing on January 26, 2024, the filing deadline is February 10, 2024. This is a later deadline than the January 30, 2024 deadline applicable to the Delaware, Massachusetts, Illinois, and Washington filings, reflecting the fact that no sale of Notes was made to a California-domiciled purchaser at the Initial Closing.

Required Materials. The following materials must be submitted to the DFPI:

(i) A copy of the SEC Form D, as amended on January 29, 2024 (the amended Form D is the appropriate filing document because it reflects the sale to Northstar and the updated total offering amount);

(ii) A completed California Form D-notice;

(iii) A Consent to Service of Process, executed by an authorized officer of the Company, appointing the Commissioner of the DFPI as agent for service of process; and

(iv) A check or wire transfer in the amount of $300.00 payable to the California Department of Financial Protection and Innovation.

Status. The California notice filing is currently in preparation. We are awaiting confirmation that the Form D amendment has been accepted and processed by the SEC (which confirmation is expected by January 31, 2024) before finalizing the California filing. The filing is scheduled to be submitted no later than February 7, 2024, which is three calendar days in advance of the February 10, 2024 deadline.

Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.

E. Washington. Applicable Law. Washington Securities Act, RCW 21.20.327; WAC 460-44A-506. Section 21.20.327 of the Revised Code of Washington provides that covered securities under NSMIA are exempt from the registration requirements of the Washington Securities Act, subject to the issuer's compliance with the notice filing and fee payment requirements established by the Washington State Department of Financial Institutions, Securities Division (the "Washington Division").

Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in Washington. The filing is made with the Washington Division and consists of a copy of the federal Form D, a Consent to Service of Process, and the applicable filing fee. Washington accepts both electronic and paper filings and generally processes notice filings within five to ten business days of receipt.

Filing Fee. The filing fee in Washington is $300.00, which is a flat fee and does not vary based on the amount of the offering or the number of investors in the state.

Applicable Purchaser(s). Halcyon Growth Equity, L.P., which committed to purchase $5,000,000 in aggregate principal amount of Notes at the Initial Closing on January 15, 2024. Halcyon's principal office is located at 1201 Third Avenue, Suite 5600, Seattle, Washington 98101.

Deadline. The notice filing must be submitted within 15 days after the first sale of securities in Washington. The first (and only) sale to a Washington-domiciled purchaser (Halcyon) occurred at the Initial Closing on January 15, 2024. Accordingly, the filing deadline is January 30, 2024.

Required Materials. The following materials must be submitted to the Washington Division:

(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;

(ii) A completed Consent to Service of Process (Form U-2), executed by an authorized officer of the Company; and

(iii) A check or wire transfer in the amount of $300.00 payable to the Washington State Department of Financial Institutions.

Status. The Washington notice filing has been prepared and is awaiting final review and execution. The filing is scheduled to be submitted no later than January 28, 2024, consistent with our recommendation to batch-submit all filings sharing the January 30, 2024 deadline.

Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.

IV. Filing Tracker — Summary Table

The following table summarizes the state notice filing requirements, deadlines, fees, and current status for each of the five applicable jurisdictions:

Total Estimated State Filing Fees: Approximately $1,850 (aggregate of all five states, assuming maximum applicable fees in Massachusetts and Illinois).

Fee Allocation. All state filing fees are to be borne by Skybridge Fintech Ltd. as disbursements under the Calderwood & Harkness engagement letter dated November 20, 2023. Filing fees are classified as disbursements and are separate from the $275,000 fee cap applicable to legal fees for the bridge financing transaction. Disbursements, including filing fees, regulatory costs, and out-of-pocket expenses, are billed at cost and are not subject to the fee cap. The Company will be invoiced for the aggregate filing fees in connection with our next regularly scheduled billing cycle, or upon request by the Company's Chief Financial Officer.

V. Federal Form D Filing Status

For completeness and to provide context for the state notice filings discussed herein, the following summarizes the status of the Company's federal Form D filings with the SEC.

Initial Form D Filing. The Company filed a Form D with the SEC on January 16, 2024, one day after the Initial Closing on January 15, 2024. Rule 503(a) of Regulation D requires the filing of a Form D with the SEC no later than 15 calendar days after the first sale of securities in the offering. The Company's initial Form D filing was therefore timely. The initial Form D reported the following information:

• Total amount sold as of the date of filing: $45,000,000

• Number of investors who have already invested: Three (3) — Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, and Halcyon Growth Equity, L.P.

• Exemption relied upon: Rule 506(b) of Regulation D

• Type of securities offered: Convertible promissory notes (debt)

• Total offering amount: $60,000,000 (reflecting the aggregate commitment amount under the NPA, inclusive of the anticipated Final Closing)

• Sales commissions and finders' fees: None

• Use of proceeds: General corporate purposes, working capital, and product development

Form D Amendment. The Company filed a Form D amendment with the SEC on January 29, 2024, three days after the Final Closing on January 26, 2024. While Rule 503 does not expressly require the filing of an amendment following subsequent closings in a multi-tranche offering, it is best practice and consistent with SEC staff guidance to file an amendment to update the total amount sold and to add any new purchasers. The Form D amendment reported the following updated information:

• Updated total amount sold: $60,000,000 (reflecting both the Initial Closing and the Final Closing)

• Number of investors who have already invested: Four (4) — the three investors from the Initial Closing, plus Northstar Innovation Fund II, L.P.

• Updated sales commission and finders' fee information: None paid (confirmed)

• All other information remained unchanged from the initial Form D filing

The Form D amendment serves as the basis document for the California state notice filing, which is the only state filing for which the first sale occurred at the Final Closing rather than the Initial Closing. For the remaining four state filings (Delaware, Massachusetts, Illinois, and Washington), the initial Form D as filed on January 16, 2024 serves as the basis document, as the first sale in each of those states occurred at the Initial Closing on January 15, 2024.

We have retained copies of both the initial Form D and the Form D amendment in the transaction files and will include them in the closing binder. Copies are attached hereto as Appendix A and Appendix B, respectively.

VI. Observations and Recommendations

A. Timing Considerations

Four of the five state notice filings — Delaware, Massachusetts, Illinois, and Washington — share a common filing deadline of January 30, 2024, which is 15 days after the first sale of Notes at the Initial Closing on January 15, 2024. We recommend that all four of these filings be batch-submitted no later than January 28, 2024, which is two business days prior to the deadline, in order to allow a reasonable margin for any administrative delays, mailing issues, or the need for corrections or re-submissions. Where electronic filing is available, we will file electronically to ensure contemporaneous delivery and confirmation of receipt.

The California notice filing has a later deadline of February 10, 2024, because the first sale to a California-domiciled purchaser (Northstar Innovation Fund II, L.P.) did not occur until the Final Closing on January 26, 2024. The California filing is therefore subject to a separate timeline and does not need to be included in the January 28, 2024 batch submission. We recommend filing the California notice promptly upon confirmation that the Form D amendment has been accepted and processed by the SEC, and in no event later than February 7, 2024, which would provide a three-calendar-day cushion before the February 10, 2024 deadline.

B. Amendment Filings

If additional sales of Notes are made after the Final Closing — which is not currently anticipated under the terms of the NPA — supplemental or amended notice filings may be required in the applicable states. The NPA does not currently contemplate any additional closings beyond the Final Closing on January 26, 2024, and Section 2.3 of the NPA expressly provides that no additional Notes may be issued under the NPA after the Final Closing without the prior written consent of the Required Holders (as defined therein). Accordingly, we do not anticipate that any additional state notice filings will be required in connection with the Notes.

However, as noted in Part III.C above, Illinois may require an amended notice filing to reflect the total $15,000,000 in Notes sold to Beacon Hill Capital Partners, LLC, which was split across two closings ($10,000,000 at the Initial Closing and $5,000,000 at the Final Closing). The initial notice filing in Illinois will be based on the Form D as filed on January 16, 2024, which reported only $10,000,000 sold to Beacon Hill. We will confirm with the Illinois Secretary of State's office whether a separate amended filing is required following the filing of the Form D amendment, or whether the initial notice filing is deemed to cover the entire offering. We will report our findings to the Company promptly upon receiving guidance from Illinois.

C. Consequences of Late or Non-Filing

It is important to note that the failure to make timely state notice filings does not invalidate the federal preemption under NSMIA or the Rule 506(b) exemption itself. The Rule 506(b) exemption is a federal exemption from registration under the Securities Act, and its availability is determined exclusively by reference to federal law and the conditions set forth in Regulation D. State notice filings are administrative requirements imposed by the states under the limited authority retained by Section 18(c)(2) of the Securities Act, and noncompliance with such requirements does not affect the validity of the federal exemption.

That said, late or delinquent state notice filings may result in a number of adverse consequences at the state level, including:

(i) Administrative penalties. Certain states impose monetary penalties or late fees for notice filings that are submitted after the prescribed deadline. The amount of such penalties varies by state and may be nominal or significant depending on the jurisdiction and the length of the delay.

(ii) Loss of state notice-filing exemption. In some states, the failure to make a timely notice filing may result in the loss of the state notice-filing exemption, which could technically give rise to a claim under state law that the securities were offered or sold in violation of the state's registration or qualification requirements. While this risk is generally regarded as low in the context of Rule 506 offerings (because the federal preemption under NSMIA limits the ability of states to require registration of covered securities), it is not entirely without consequence, as certain states have taken the position that the notice-filing exemption is a separate state-law exemption that must be independently satisfied.

(iii) State-law rescission claims. In the event that a state-law rescission claim were asserted by a purchaser, the absence of a timely notice filing could be cited as evidence of noncompliance with state blue sky requirements, even if the federal exemption remains intact. While the practical risk of such a claim is low — particularly given that all purchasers in this offering are sophisticated institutional investors who executed broad release and waiver provisions in the NPA — it is prudent to eliminate this risk through timely compliance.

We strongly recommend timely compliance in all jurisdictions to preserve a clean regulatory posture for the Company. This is particularly important in light of the Company's anticipated Series D equity round in Q3–Q4 2024, in connection with which prospective Series D investors and their counsel are likely to conduct thorough regulatory due diligence on the Company's prior securities issuances, including the bridge financing. Any gaps or deficiencies in the Company's blue sky compliance history could give rise to questions during that diligence process and could, in the worst case, require the Company to make corrective or remedial filings.

D. Ongoing Monitoring

Looking ahead, the Company should be aware that if it issues any additional securities — including, without limitation, Simple Agreements for Future Equity ("SAFEs"), additional convertible promissory notes, or equity securities under the most-favored-nation ("MFN") provision of the NPA — new state notice filings may be triggered in any state in which the offerees or purchasers of such securities are domiciled. The analysis of applicable states and filing requirements would need to be conducted anew for each such issuance, based on the specific facts and circumstances of the offering.

In particular, state blue sky compliance should be reassessed in connection with the Company's planned Series D equity round. A Rule 506 offering of Series D preferred stock will trigger its own set of state notice filing obligations, which may encompass a broader set of states depending on the number and domicile of the Series D investors. We recommend that the Company engage Calderwood & Harkness to handle blue sky compliance for the Series D round at the appropriate time, and that the Company's General Counsel maintain a current list of all jurisdictions in which the Company has made state notice filings in connection with prior offerings.

VII. Action Items

Based on the foregoing analysis, we recommend the following immediate action items:

1. Submit Delaware, Massachusetts, Illinois, and Washington notice filings by January 28, 2024. All four of these filings share a common deadline of January 30, 2024. Submitting two business days in advance of the deadline provides a reasonable margin for administrative delays. Each filing package should include the applicable Form D, Consent to Service of Process (executed by an authorized officer of the Company), and filing fee. Nina Reyes will coordinate the preparation and submission of all four filings.

2. Prepare and submit California notice filing by February 7, 2024. The California filing has a deadline of February 10, 2024. Submitting three calendar days in advance of the deadline provides adequate lead time. The California filing should be based on the Form D amendment filed January 29, 2024 and should include the California Form D-notice, Consent to Service of Process, and filing fee. Nina Reyes will coordinate the preparation and submission.

3. Confirm with Illinois Secretary of State's office whether an amended filing is needed to reflect Final Closing amounts. The initial Illinois notice filing will be based on the Form D as originally filed, which reported $10,000,000 sold to Beacon Hill. Because an additional $5,000,000 was sold to Beacon Hill at the Final Closing, we need to determine whether an amended filing is required. Nina Reyes will contact the Illinois Securities Department by telephone no later than January 29, 2024 and will report the results to the team.

4. Coordinate with David Lindstrom (CFO) to arrange payment of aggregate state filing fees (~$1,850). All filing fees should be paid by Skybridge Fintech Ltd. as disbursements under the engagement letter. Nina Reyes will coordinate with Mr. Lindstrom to arrange for the issuance of checks or wire transfers in the required amounts, payable to the appropriate state agencies. A schedule of payees and amounts will be provided to Mr. Lindstrom separately.

5. Calendar follow-up dates for each state to confirm receipt and processing of filings. For each state filing, we will calendar a follow-up date approximately 15 business days after submission to confirm that the filing has been received and processed by the applicable state agency. If any state agency notifies us of a deficiency or requests supplemental information, we will address such requests promptly.

6. Retain copies of all filed forms, fee receipts, and acknowledgments for inclusion in the closing binder. All original and copies of filed notice forms, Consent to Service of Process forms, filing fee checks or wire transfer confirmations, and any acknowledgment letters or processing confirmations received from state agencies should be retained and included in the closing binder for the bridge financing. The closing binder is being compiled as of January 30, 2024 (see Closing Binder — Table of Contents and Index), and the blue sky filings will be included as a dedicated section within the regulatory filings tab.

VIII. Appendices

The following appendices are attached hereto and incorporated by reference into this memorandum:

Appendix A — Form D (as filed January 16, 2024)

A copy of the initial Form D filing made with the SEC on January 16, 2024, in connection with the Initial Closing of $45,000,000. This filing reported three purchasers (Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, and Halcyon Growth Equity, L.P.) and an aggregate amount sold of $45,000,000. This document serves as the basis for the state notice filings in Delaware, Massachusetts, Illinois, and Washington.

[Form D attached separately]

Appendix B — Form D Amendment (as filed January 29, 2024)

A copy of the Form D amendment filed with the SEC on January 29, 2024, reflecting the Final Closing of $15,000,000 on January 26, 2024. This amended filing updated the total amount sold to $60,000,000, added Northstar Innovation Fund II, L.P. as a fourth purchaser, and confirmed that no sales commissions or finders' fees were paid. This document serves as the basis for the California state notice filing.

[Form D Amendment attached separately]

Appendix C — State Notice Filing Forms (Prepared)

Copies of the state notice filing forms prepared for each of the five applicable jurisdictions, as follows:

• Delaware: Form D notice filing cover letter, copy of Form D, and completed Form U-2 (Consent to Service of Process), awaiting execution

• Massachusetts: Notice filing cover letter, copy of Form D, and completed Form U-2 (Consent to Service of Process), awaiting execution

• Illinois: Notice filing cover letter, copy of Form D, and completed Form U-2C (Uniform Consent to Service of Process — Corporation), awaiting execution

• California: Form D-notice filing form, copy of Form D Amendment, and Consent to Service of Process (California form), awaiting execution

• Washington: Notice filing cover letter, copy of Form D, and completed Form U-2 (Consent to Service of Process), awaiting execution

[Filing forms attached separately]

Appendix D — Filing Fee Summary

The following table sets forth the filing fees payable in each state, together with payment instructions:

All checks should be drawn on the Company's operating account and delivered to Calderwood & Harkness LLP, attention Nina Reyes, no later than January 26, 2024, to allow sufficient time for assembly of the filing packages and submission by the January 28, 2024 target date (for the four filings with January 30 deadlines) and the February 7, 2024 target date (for the California filing).

This memorandum has been prepared by Calderwood & Harkness LLP for the exclusive use of Skybridge Fintech Ltd. and is protected by the attorney-client privilege and the work product doctrine. This memorandum should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. The analysis contained herein is based on the facts and circumstances as known to us as of the date of this memorandum and on applicable law as currently in effect. We express no opinion on the laws of any jurisdiction other than the five states specifically addressed herein. This memorandum does not constitute a legal opinion.

Calderwood & Harkness LLP 600 Lexington Avenue New York, NY 10022

Matter No. 1009-00001

State	Applicable Statute	Purchaser(s)	Amount Sold in State	First Sale Date	Filing Deadline	Filing Fee	Filing Status
Delaware	6 Del. C. § 7309(b)(14)	N/A (Issuer domicile)	—	Jan. 15, 2024	Jan. 30, 2024	$250	Prepared
Massachusetts	M.G.L. c. 110A, § 402(b)(9)	Ridgeline Ventures Fund IV, L.P.	$30,000,000	Jan. 15, 2024	Jan. 30, 2024	Up to $500	Prepared
Illinois	815 ILCS 5/4(R)	Beacon Hill Capital Partners, LLC	$15,000,000	Jan. 15, 2024	Jan. 30, 2024	Up to $500	Prepared
California	Cal. Corp. Code § 25102.1	Northstar Innovation Fund II, L.P.	$10,000,000	Jan. 26, 2024	Feb. 10, 2024	$300	In Preparation
Washington	RCW 21.20.327	Halcyon Growth Equity, L.P.	$5,000,000	Jan. 15, 2024	Jan. 30, 2024	$300	Prepared
State	Filing Fee	Payable To	Payment Method
Delaware	$250.00	State of Delaware	Check or wire transfer
Massachusetts	$500.00	Commonwealth of Massachusetts	Check or wire transfer
Illinois	$500.00	Illinois Secretary of State	Check or wire transfer
California	$300.00	Dept. of Financial Protection and Innovation	Check or wire transfer
Washington	$300.00	Washington State Dept. of Financial Institutions	Check or wire transfer
Total	$1,850.00

MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
TO: Priya Ramanathan, General Counsel, Skybridge Fintech Ltd.
CC: Leonard Ashford, Of Counsel, Calderwood & Harkness LLP Victoria Chambers, Partner, Calderwood & Harkness LLP
FROM: Nina Reyes, Senior Associate, Calderwood & Harkness LLP
DATE: January 18, 2024
RE: State Blue Sky / Notice Filings — $60,000,000 Convertible Note Bridge Financing
MATTER NO.: 1009-00001
I. Purpose and Summary
This memorandum identifies and tracks all required state securities ("blue sky") notice filings in connection with the issuance by Skybridge Fintech Ltd. ("Skybridge" or the "Company") of convertible promissory notes in the aggregate principal amount of $60,000,000 (the "Notes") pursuant to the Note Purchase Agreement dated January 15, 2024, by and among the Company and the purchasers named therein (the "NPA"). The purpose of this memorandum is to provide Skybridge's General Counsel with a comprehensive overview of the filing obligations triggered by the offering, the status of each filing, applicable deadlines, and associated costs, and to recommend a course of action to ensure full and timely compliance with all applicable state blue sky requirements.
The Notes were offered and sold in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506(b) of Regulation D promulgated thereunder ("Rule 506(b)"). As described in greater detail below, the offering involved no general solicitation or general advertising, and all purchasers were "accredited investors" as defined in Rule 501(a) of Regulation D. No broker-dealer was engaged in connection with the offering, and no commissions, placement agent fees, or finders' fees were paid.
In accordance with the requirements of Rule 503 of Regulation D, a federal Form D was filed with the U.S. Securities and Exchange Commission (the "SEC") on January 16, 2024, in connection with the Initial Closing of $45,000,000 that occurred on January 15, 2024. A Form D amendment was subsequently filed with the SEC on January 29, 2024, reflecting the Final Closing of $15,000,000 that occurred on January 26, 2024 and the addition of Northstar Innovation Fund II, L.P. as a purchaser of the Notes. Both filings were made within the time periods prescribed by Rule 503.
Under Rule 506(b), state blue sky laws governing the registration and qualification of securities are preempted by Section 18 of the Securities Act, as enacted by the National Securities Markets Improvement Act of 1996 ("NSMIA"). Securities issued in a Rule 506 offering are "covered securities" under Section 18(b)(4)(F) of the Securities Act, and as such, no state may require registration or qualification of such securities as a condition to their offer or sale. Notwithstanding this preemption, states retain the authority under Section 18(c)(2) of the Securities Act to require notice filings, collect filing fees, and require the issuer's consent to service of process in connection with offerings of covered securities conducted within their borders or involving investors domiciled in their jurisdictions.
This memorandum identifies the applicable states in which notice filings are required based on: (a) the state of incorporation of the Company (Delaware); (b) the principal office locations of each purchaser under the NPA (Massachusetts, Illinois, California, and Washington); and (c) any state in which offers were made or accepted. For each such state, the memorandum sets forth the applicable statutory and regulatory authority, the specific filing requirements, the applicable fees and deadlines, and the current status of each filing.
II. Identification of Applicable States
A. Basis for State Determination
The determination of which states require notice filings in connection with the offering of the Notes is based on the following factual analysis.
Issuer Domicile. The Company is a Delaware corporation with its principal place of business located at 1400 Market Street, Suite 2200, Wilmington, Delaware 19801. As the state of incorporation of the issuer, Delaware requires a notice filing in connection with Rule 506 offerings by issuers organized under its laws, irrespective of whether any sale of securities was made to a purchaser domiciled in Delaware.
Purchaser Domicile and Location. The four purchasers of the Notes under the NPA and their respective principal office locations are as follows:
(i) Ridgeline Ventures Fund IV, L.P. — 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199 (domiciled in the Commonwealth of Massachusetts);
(ii) Beacon Hill Capital Partners, LLC — 222 West Adams Street, Suite 3400, Chicago, Illinois 60606 (domiciled in the State of Illinois);
(iii) Northstar Innovation Fund II, L.P. — 555 California Street, Suite 4100, San Francisco, California 94104 (domiciled in the State of California); and
(iv) Halcyon Growth Equity, L.P. — 1201 Third Avenue, Suite 5600, Seattle, Washington 98101 (domiciled in the State of Washington).
For purposes of state blue sky compliance, sales of the Notes are deemed to have occurred in the states where the offers were accepted or where the purchasers are domiciled. Based on the representations made by each purchaser in the NPA and the related subscription documents, each purchaser accepted its respective offer at its principal office location identified above, and the sales are therefore deemed to have occurred in the states corresponding to those locations.
Conclusion. Based on the foregoing analysis, we have identified a total of five applicable states in which notice filings are required: Delaware (issuer domicile), Massachusetts (domicile of Ridgeline), Illinois (domicile of Beacon Hill), California (domicile of Northstar), and Washington (domicile of Halcyon). We are not aware of any offers having been made in, or any offerees or purchasers located in, any other state that would give rise to additional notice filing obligations. Should additional information come to our attention suggesting that offers were directed to persons in other jurisdictions, we will promptly reassess the filing requirements.
B. Transaction Details Relevant to Filings
The following transaction details are relevant to the preparation and submission of the required state notice filings:
Aggregate Offering Amount. The aggregate principal amount of Notes offered and sold pursuant to the NPA is $60,000,000. This amount was offered and sold in two closings, as described below.
Number of Purchasers. Four (4) purchasers acquired Notes under the NPA. All four purchasers are accredited investors within the meaning of Rule 501(a) of Regulation D. Specifically, each purchaser is either: (x) a limited partnership or limited liability company in which all equity owners are accredited investors, or (y) an entity with total assets in excess of $5,000,000 that was not formed for the specific purpose of acquiring the securities offered. Representations and warranties to this effect were made by each purchaser in the NPA and in the accredited investor questionnaires delivered at each closing.
Manner of Offering. No general solicitation or general advertising was used in connection with the offer or sale of the Notes, consistent with the requirements of Rule 502(c) of Regulation D. All communications regarding the offering were made on a direct, one-on-one basis between the Company's management and the principals of each purchaser fund, or through their respective legal counsel.
Commissions and Finders' Fees. No commissions, placement agent fees, finders' fees, or other transaction-based compensation were paid to any person in connection with the offer or sale of the Notes.
Closing Details. The Notes were issued in two closings under the NPA:
Initial Closing — January 15, 2024 — $45,000,000
• Ridgeline Ventures Fund IV, L.P.: $30,000,000
• Beacon Hill Capital Partners, LLC: $10,000,000
• Halcyon Growth Equity, L.P.: $5,000,000
Final Closing — January 26, 2024 — $15,000,000
• Beacon Hill Capital Partners, LLC: $5,000,000 (additional)
• Northstar Innovation Fund II, L.P.: $10,000,000
Instrument Terms. The Notes are convertible promissory notes bearing simple interest at a rate of 6.00% per annum, maturing on January 15, 2026 (24 months from the date of the Initial Closing). The Notes provide for automatic conversion upon the occurrence of a Qualified Financing, defined in the NPA as an equity financing in which the Company raises at least $80,000,000 in gross proceeds (exclusive of the conversion of the Notes). Upon such automatic conversion, the outstanding principal and accrued interest under the Notes will convert into shares of the series of preferred stock issued in the Qualified Financing at a per-share conversion price equal to the lower of: (A) a 20% discount to the per-share price paid by cash investors in the Qualified Financing (the "Series D price"), and (B) the price per share implied by a $750,000,000 pre-money valuation of the Company on a fully diluted basis (the "valuation cap"). The Notes may also be subject to optional conversion at the election of the holders in certain circumstances, as more fully described in the NPA and the form of Note attached thereto as Exhibit A.
III. State-by-State Filing Requirements and Status
This Part III provides a detailed, state-by-state analysis of the applicable notice filing requirements, deadlines, fees, required materials, and current filing status for each of the five jurisdictions identified in Part II above.
A. Delaware. Applicable Law. Delaware Securities Act, 6 Del. C. § 7309(b)(14); Delaware Blue Sky Regulation D exemption. Section 7309(b)(14) of the Delaware Securities Act provides an exemption from registration for any security that is a "covered security" under Section 18(b)(4) of the Securities Act, subject to the issuer's compliance with the notice filing requirements prescribed by the Delaware Department of Justice, Division of Securities (the "Delaware Division").
Filing Requirement. A notice filing is required for all Rule 506 offerings by issuers incorporated or organized in Delaware. The filing is made with the Delaware Division and consists of a copy of the federal Form D as filed with the SEC, together with a Consent to Service of Process and the applicable filing fee. Because Skybridge is a Delaware corporation, a notice filing is required in Delaware irrespective of whether any Notes were sold to purchasers domiciled in the state. Although no purchaser of the Notes is domiciled in Delaware, the state's blue sky regulations require issuers organized under Delaware law to file notice of Rule 506 offerings with the Delaware Division.
Filing Fee. The filing fee for a Rule 506 notice filing in Delaware is $250.00, which is a flat fee and does not vary based on the amount of the offering or the number of investors.
Deadline. The notice filing must be submitted within 15 days after the first sale of securities in or from Delaware. Because the Company is a Delaware corporation and the first closing under the NPA occurred on January 15, 2024, the filing deadline is January 30, 2024. While there is some ambiguity in the Delaware regulations as to whether the trigger date for the 15-day period is the date of the first sale or the date of the Form D filing with the SEC, we have calculated the deadline conservatively from the date of the first sale (i.e., the Initial Closing date), which is the approach generally recommended by practitioners and consistent with informal guidance received from the Delaware Division.
Required Materials. The following materials must be submitted to the Delaware Division:
(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;
(ii) A completed Consent to Service of Process (Form U-2), executed by an authorized officer of the Company and appointing the Attorney General of the State of Delaware as agent for service of process in connection with the offering; and
(iii) A check or wire transfer in the amount of $250.00 payable to the State of Delaware.
Status. The Delaware notice filing has been prepared and is awaiting final review and execution of the Form U-2 by an authorized officer of the Company. The filing is scheduled to be submitted to the Delaware Division no later than January 28, 2024, which is two business days in advance of the January 30, 2024 deadline, in order to allow for any administrative or mailing delays.
Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.
B. Massachusetts. Applicable Law. Massachusetts Uniform Securities Act, M.G.L. c. 110A, § 402(b)(9); 950 CMR 14.402. Section 402(b)(9) of the Massachusetts Uniform Securities Act provides that securities that are "covered securities" under Section 18(b)(4)(F) of the Securities Act are exempt from registration in the Commonwealth, provided that the issuer files a notice with the Massachusetts Securities Division and pays the prescribed filing fee.
Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in Massachusetts. The notice filing is made with the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth. Massachusetts requires the submission of a copy of the federal Form D, a completed Consent to Service of Process, and the applicable filing fee. The Massachusetts Securities Division maintains an electronic filing system, and filings may be submitted either electronically or by mail.
Filing Fee. The filing fee in Massachusetts is calculated as one-third of one percent (1/3 of 1%) of the aggregate offering price of securities sold or offered to persons in the Commonwealth, subject to a minimum fee of $250.00 and a maximum fee of $500.00. In this case, the aggregate amount of Notes sold to the Massachusetts-domiciled purchaser (Ridgeline Ventures Fund IV, L.P.) is $30,000,000. One-third of one percent of $30,000,000 equals $100,000, which significantly exceeds the statutory maximum. Accordingly, the filing fee for Massachusetts is $500.00 (the maximum).
Applicable Purchaser(s). Ridgeline Ventures Fund IV, L.P., which committed to purchase $30,000,000 in aggregate principal amount of Notes at the Initial Closing on January 15, 2024. Ridgeline's principal office is located at 800 Boylston Street, 34th Floor, Boston, Massachusetts 02199.
Deadline. The notice filing must be submitted within 15 days after the first sale in Massachusetts. The first sale to Ridgeline occurred at the Initial Closing on January 15, 2024. Accordingly, the filing deadline is January 30, 2024.
Required Materials. The following materials must be submitted to the Massachusetts Securities Division:
(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;
(ii) A completed Consent to Service of Process (Form U-2), executed by an authorized officer of the Company; and
(iii) A check or wire transfer in the amount of $500.00 payable to the Commonwealth of Massachusetts.
Status. The Massachusetts notice filing has been prepared and is awaiting final review and execution. The filing is scheduled to be submitted no later than January 28, 2024, consistent with our recommendation to batch-submit all filings sharing the January 30, 2024 deadline in advance of that date.
Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.
C. Illinois. Applicable Law. Illinois Securities Law of 1953, 815 ILCS 5/4(R); Section 130.520 of the Illinois Administrative Code (14 Ill. Admin. Code 130.520). Section 4(R) of the Illinois Securities Law provides that securities that are "covered securities" under NSMIA are exempt from the registration requirements of the Illinois Securities Law, subject to the issuer's compliance with the notice filing and fee payment obligations prescribed by the Illinois Secretary of State, Securities Department.
Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in Illinois. The filing is made with the Illinois Secretary of State, Securities Department, and consists of a copy of the federal Form D, a Consent to Service of Process, and the applicable filing fee. Illinois uses Form U-2C (Uniform Consent to Service of Process — Corporation) for corporate issuers, rather than the standard Form U-2 used by most other states.
Filing Fee. The filing fee in Illinois is calculated as one-tenth of one percent (1/10 of 1%) of the aggregate offering price of securities sold in Illinois, subject to a minimum fee of $100.00 and a maximum fee of $500.00. The aggregate amount of Notes sold to the Illinois-domiciled purchaser (Beacon Hill Capital Partners, LLC) is $15,000,000 (consisting of $10,000,000 at the Initial Closing and $5,000,000 at the Final Closing). One-tenth of one percent of $15,000,000 equals $15,000, which exceeds the statutory maximum. Accordingly, the filing fee for Illinois is $500.00 (the maximum).
Applicable Purchaser(s). Beacon Hill Capital Partners, LLC, which committed to purchase an aggregate of $15,000,000 in principal amount of Notes — $10,000,000 at the Initial Closing on January 15, 2024, and an additional $5,000,000 at the Final Closing on January 26, 2024. Beacon Hill's principal office is located at 222 West Adams Street, Suite 3400, Chicago, Illinois 60606.
Deadline. The notice filing must be submitted within 15 days after the first sale in Illinois. The first sale to Beacon Hill occurred at the Initial Closing on January 15, 2024. Accordingly, the filing deadline is January 30, 2024. It should be noted that the additional sale to Beacon Hill at the Final Closing on January 26, 2024 may necessitate a supplemental or amended filing, as discussed below.
Required Materials. The following materials must be submitted to the Illinois Secretary of State, Securities Department:
(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;
(ii) A completed Consent to Service of Process (Form U-2C), executed by an authorized officer of the Company; and
(iii) A check or wire transfer in the amount of $500.00 payable to the Illinois Secretary of State.
Note Regarding Amendment. Because the initial Form D filed with the SEC on January 16, 2024 reported only the $10,000,000 in Notes sold to Beacon Hill at the Initial Closing, and the Form D amendment filed on January 29, 2024 updated the total amount sold to Beacon Hill to $15,000,000 (reflecting the additional $5,000,000 purchased at the Final Closing), an updated or amended notice filing may be required in Illinois to reflect the full amount of securities sold in the state. We intend to confirm with the Illinois Secretary of State's office whether a separate amended filing is required or whether the initial filing, accompanied by the amended Form D, will be deemed sufficient. In our experience, most states treat the initial notice filing as covering the entire offering (including subsequent closings), provided that the filing fee is calculated based on the total amount sold in the state. However, Illinois has at times imposed a more formalistic approach, and we will seek clarification on this point.
Status. The Illinois notice filing has been prepared based on the initial Form D and is awaiting final review and execution. The filing is scheduled to be submitted no later than January 28, 2024. We will assess the need for an amendment following the January 30, 2024 filing deadline and upon receipt of confirmation from the Illinois Secretary of State's office.
Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.
D. California. Applicable Law. California Corporations Code § 25102.1; the California Corporate Securities Law of 1968; Title 10, California Code of Regulations § 260.102.14. Section 25102.1 of the California Corporations Code provides an exemption from the qualification requirements of the California Corporate Securities Law for securities that are "covered securities" under NSMIA, subject to the issuer's compliance with the notice filing requirements prescribed by the California Department of Financial Protection and Innovation ("DFPI"), formerly known as the Department of Business Oversight (the "DBO"). The DFPI administers all blue sky notice filings for Rule 506 offerings involving California-domiciled purchasers.
Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in California. The filing is made with the DFPI and consists of a notice filing form (the California Form D-notice), a copy of the federal Form D (as amended), a Consent to Service of Process, and the applicable filing fee. California's notice filing requirements are set forth in Section 260.102.14 of the California Code of Regulations, which prescribes the specific form and content requirements for such filings.
Filing Fee. The filing fee in California is $300.00 for offerings with an aggregate offering amount of up to $499,999,999. Because the aggregate amount of the offering under the NPA is $60,000,000, which falls below the $500,000,000 threshold, the applicable filing fee is $300.00.
Applicable Purchaser(s). Northstar Innovation Fund II, L.P., which committed to purchase $10,000,000 in aggregate principal amount of Notes at the Final Closing on January 26, 2024. Northstar's principal office is located at 555 California Street, Suite 4100, San Francisco, California 94104. Northstar was not a party to the Initial Closing and did not execute the NPA until January 25, 2024, when it executed a joinder agreement and delivered its subscription documents in advance of the Final Closing.
Deadline. The notice filing must be submitted within 15 calendar days after the first sale of securities in California. Because the first (and only) sale to a California-domiciled purchaser (Northstar) occurred at the Final Closing on January 26, 2024, the filing deadline is February 10, 2024. This is a later deadline than the January 30, 2024 deadline applicable to the Delaware, Massachusetts, Illinois, and Washington filings, reflecting the fact that no sale of Notes was made to a California-domiciled purchaser at the Initial Closing.
Required Materials. The following materials must be submitted to the DFPI:
(i) A copy of the SEC Form D, as amended on January 29, 2024 (the amended Form D is the appropriate filing document because it reflects the sale to Northstar and the updated total offering amount);
(ii) A completed California Form D-notice;
(iii) A Consent to Service of Process, executed by an authorized officer of the Company, appointing the Commissioner of the DFPI as agent for service of process; and
(iv) A check or wire transfer in the amount of $300.00 payable to the California Department of Financial Protection and Innovation.
Status. The California notice filing is currently in preparation. We are awaiting confirmation that the Form D amendment has been accepted and processed by the SEC (which confirmation is expected by January 31, 2024) before finalizing the California filing. The filing is scheduled to be submitted no later than February 7, 2024, which is three calendar days in advance of the February 10, 2024 deadline.
Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.
E. Washington. Applicable Law. Washington Securities Act, RCW 21.20.327; WAC 460-44A-506. Section 21.20.327 of the Revised Code of Washington provides that covered securities under NSMIA are exempt from the registration requirements of the Washington Securities Act, subject to the issuer's compliance with the notice filing and fee payment requirements established by the Washington State Department of Financial Institutions, Securities Division (the "Washington Division").
Filing Requirement. A notice filing is required for all Rule 506 covered securities sold to persons in Washington. The filing is made with the Washington Division and consists of a copy of the federal Form D, a Consent to Service of Process, and the applicable filing fee. Washington accepts both electronic and paper filings and generally processes notice filings within five to ten business days of receipt.
Filing Fee. The filing fee in Washington is $300.00, which is a flat fee and does not vary based on the amount of the offering or the number of investors in the state.
Applicable Purchaser(s). Halcyon Growth Equity, L.P., which committed to purchase $5,000,000 in aggregate principal amount of Notes at the Initial Closing on January 15, 2024. Halcyon's principal office is located at 1201 Third Avenue, Suite 5600, Seattle, Washington 98101.
Deadline. The notice filing must be submitted within 15 days after the first sale of securities in Washington. The first (and only) sale to a Washington-domiciled purchaser (Halcyon) occurred at the Initial Closing on January 15, 2024. Accordingly, the filing deadline is January 30, 2024.
Required Materials. The following materials must be submitted to the Washington Division:
(i) A copy of the SEC Form D as filed with the SEC on January 16, 2024;
(ii) A completed Consent to Service of Process (Form U-2), executed by an authorized officer of the Company; and
(iii) A check or wire transfer in the amount of $300.00 payable to the Washington State Department of Financial Institutions.
Status. The Washington notice filing has been prepared and is awaiting final review and execution. The filing is scheduled to be submitted no later than January 28, 2024, consistent with our recommendation to batch-submit all filings sharing the January 30, 2024 deadline.
Responsible Attorney. Nina Reyes, Senior Associate, Calderwood & Harkness LLP.
IV. Filing Tracker — Summary Table
The following table summarizes the state notice filing requirements, deadlines, fees, and current status for each of the five applicable jurisdictions:
Total Estimated State Filing Fees: Approximately $1,850 (aggregate of all five states, assuming maximum applicable fees in Massachusetts and Illinois).
Fee Allocation. All state filing fees are to be borne by Skybridge Fintech Ltd. as disbursements under the Calderwood & Harkness engagement letter dated November 20, 2023. Filing fees are classified as disbursements and are separate from the $275,000 fee cap applicable to legal fees for the bridge financing transaction. Disbursements, including filing fees, regulatory costs, and out-of-pocket expenses, are billed at cost and are not subject to the fee cap. The Company will be invoiced for the aggregate filing fees in connection with our next regularly scheduled billing cycle, or upon request by the Company's Chief Financial Officer.
V. Federal Form D Filing Status
For completeness and to provide context for the state notice filings discussed herein, the following summarizes the status of the Company's federal Form D filings with the SEC.
Initial Form D Filing. The Company filed a Form D with the SEC on January 16, 2024, one day after the Initial Closing on January 15, 2024. Rule 503(a) of Regulation D requires the filing of a Form D with the SEC no later than 15 calendar days after the first sale of securities in the offering. The Company's initial Form D filing was therefore timely. The initial Form D reported the following information:
• Total amount sold as of the date of filing: $45,000,000
• Number of investors who have already invested: Three (3) — Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, and Halcyon Growth Equity, L.P.
• Exemption relied upon: Rule 506(b) of Regulation D
• Type of securities offered: Convertible promissory notes (debt)
• Total offering amount: $60,000,000 (reflecting the aggregate commitment amount under the NPA, inclusive of the anticipated Final Closing)
• Sales commissions and finders' fees: None
• Use of proceeds: General corporate purposes, working capital, and product development
Form D Amendment. The Company filed a Form D amendment with the SEC on January 29, 2024, three days after the Final Closing on January 26, 2024. While Rule 503 does not expressly require the filing of an amendment following subsequent closings in a multi-tranche offering, it is best practice and consistent with SEC staff guidance to file an amendment to update the total amount sold and to add any new purchasers. The Form D amendment reported the following updated information:
• Updated total amount sold: $60,000,000 (reflecting both the Initial Closing and the Final Closing)
• Number of investors who have already invested: Four (4) — the three investors from the Initial Closing, plus Northstar Innovation Fund II, L.P.
• Updated sales commission and finders' fee information: None paid (confirmed)
• All other information remained unchanged from the initial Form D filing
The Form D amendment serves as the basis document for the California state notice filing, which is the only state filing for which the first sale occurred at the Final Closing rather than the Initial Closing. For the remaining four state filings (Delaware, Massachusetts, Illinois, and Washington), the initial Form D as filed on January 16, 2024 serves as the basis document, as the first sale in each of those states occurred at the Initial Closing on January 15, 2024.
We have retained copies of both the initial Form D and the Form D amendment in the transaction files and will include them in the closing binder. Copies are attached hereto as Appendix A and Appendix B, respectively.
VI. Observations and Recommendations
A. Timing Considerations
Four of the five state notice filings — Delaware, Massachusetts, Illinois, and Washington — share a common filing deadline of January 30, 2024, which is 15 days after the first sale of Notes at the Initial Closing on January 15, 2024. We recommend that all four of these filings be batch-submitted no later than January 28, 2024, which is two business days prior to the deadline, in order to allow a reasonable margin for any administrative delays, mailing issues, or the need for corrections or re-submissions. Where electronic filing is available, we will file electronically to ensure contemporaneous delivery and confirmation of receipt.
The California notice filing has a later deadline of February 10, 2024, because the first sale to a California-domiciled purchaser (Northstar Innovation Fund II, L.P.) did not occur until the Final Closing on January 26, 2024. The California filing is therefore subject to a separate timeline and does not need to be included in the January 28, 2024 batch submission. We recommend filing the California notice promptly upon confirmation that the Form D amendment has been accepted and processed by the SEC, and in no event later than February 7, 2024, which would provide a three-calendar-day cushion before the February 10, 2024 deadline.
B. Amendment Filings
If additional sales of Notes are made after the Final Closing — which is not currently anticipated under the terms of the NPA — supplemental or amended notice filings may be required in the applicable states. The NPA does not currently contemplate any additional closings beyond the Final Closing on January 26, 2024, and Section 2.3 of the NPA expressly provides that no additional Notes may be issued under the NPA after the Final Closing without the prior written consent of the Required Holders (as defined therein). Accordingly, we do not anticipate that any additional state notice filings will be required in connection with the Notes.
However, as noted in Part III.C above, Illinois may require an amended notice filing to reflect the total $15,000,000 in Notes sold to Beacon Hill Capital Partners, LLC, which was split across two closings ($10,000,000 at the Initial Closing and $5,000,000 at the Final Closing). The initial notice filing in Illinois will be based on the Form D as filed on January 16, 2024, which reported only $10,000,000 sold to Beacon Hill. We will confirm with the Illinois Secretary of State's office whether a separate amended filing is required following the filing of the Form D amendment, or whether the initial notice filing is deemed to cover the entire offering. We will report our findings to the Company promptly upon receiving guidance from Illinois.
C. Consequences of Late or Non-Filing
It is important to note that the failure to make timely state notice filings does not invalidate the federal preemption under NSMIA or the Rule 506(b) exemption itself. The Rule 506(b) exemption is a federal exemption from registration under the Securities Act, and its availability is determined exclusively by reference to federal law and the conditions set forth in Regulation D. State notice filings are administrative requirements imposed by the states under the limited authority retained by Section 18(c)(2) of the Securities Act, and noncompliance with such requirements does not affect the validity of the federal exemption.
That said, late or delinquent state notice filings may result in a number of adverse consequences at the state level, including:
(i) Administrative penalties. Certain states impose monetary penalties or late fees for notice filings that are submitted after the prescribed deadline. The amount of such penalties varies by state and may be nominal or significant depending on the jurisdiction and the length of the delay.
(ii) Loss of state notice-filing exemption. In some states, the failure to make a timely notice filing may result in the loss of the state notice-filing exemption, which could technically give rise to a claim under state law that the securities were offered or sold in violation of the state's registration or qualification requirements. While this risk is generally regarded as low in the context of Rule 506 offerings (because the federal preemption under NSMIA limits the ability of states to require registration of covered securities), it is not entirely without consequence, as certain states have taken the position that the notice-filing exemption is a separate state-law exemption that must be independently satisfied.
(iii) State-law rescission claims. In the event that a state-law rescission claim were asserted by a purchaser, the absence of a timely notice filing could be cited as evidence of noncompliance with state blue sky requirements, even if the federal exemption remains intact. While the practical risk of such a claim is low — particularly given that all purchasers in this offering are sophisticated institutional investors who executed broad release and waiver provisions in the NPA — it is prudent to eliminate this risk through timely compliance.
We strongly recommend timely compliance in all jurisdictions to preserve a clean regulatory posture for the Company. This is particularly important in light of the Company's anticipated Series D equity round in Q3–Q4 2024, in connection with which prospective Series D investors and their counsel are likely to conduct thorough regulatory due diligence on the Company's prior securities issuances, including the bridge financing. Any gaps or deficiencies in the Company's blue sky compliance history could give rise to questions during that diligence process and could, in the worst case, require the Company to make corrective or remedial filings.
D. Ongoing Monitoring
Looking ahead, the Company should be aware that if it issues any additional securities — including, without limitation, Simple Agreements for Future Equity ("SAFEs"), additional convertible promissory notes, or equity securities under the most-favored-nation ("MFN") provision of the NPA — new state notice filings may be triggered in any state in which the offerees or purchasers of such securities are domiciled. The analysis of applicable states and filing requirements would need to be conducted anew for each such issuance, based on the specific facts and circumstances of the offering.
In particular, state blue sky compliance should be reassessed in connection with the Company's planned Series D equity round. A Rule 506 offering of Series D preferred stock will trigger its own set of state notice filing obligations, which may encompass a broader set of states depending on the number and domicile of the Series D investors. We recommend that the Company engage Calderwood & Harkness to handle blue sky compliance for the Series D round at the appropriate time, and that the Company's General Counsel maintain a current list of all jurisdictions in which the Company has made state notice filings in connection with prior offerings.
VII. Action Items
Based on the foregoing analysis, we recommend the following immediate action items:
1. Submit Delaware, Massachusetts, Illinois, and Washington notice filings by January 28, 2024. All four of these filings share a common deadline of January 30, 2024. Submitting two business days in advance of the deadline provides a reasonable margin for administrative delays. Each filing package should include the applicable Form D, Consent to Service of Process (executed by an authorized officer of the Company), and filing fee. Nina Reyes will coordinate the preparation and submission of all four filings.
2. Prepare and submit California notice filing by February 7, 2024. The California filing has a deadline of February 10, 2024. Submitting three calendar days in advance of the deadline provides adequate lead time. The California filing should be based on the Form D amendment filed January 29, 2024 and should include the California Form D-notice, Consent to Service of Process, and filing fee. Nina Reyes will coordinate the preparation and submission.
3. Confirm with Illinois Secretary of State's office whether an amended filing is needed to reflect Final Closing amounts. The initial Illinois notice filing will be based on the Form D as originally filed, which reported $10,000,000 sold to Beacon Hill. Because an additional $5,000,000 was sold to Beacon Hill at the Final Closing, we need to determine whether an amended filing is required. Nina Reyes will contact the Illinois Securities Department by telephone no later than January 29, 2024 and will report the results to the team.
4. Coordinate with David Lindstrom (CFO) to arrange payment of aggregate state filing fees (~$1,850). All filing fees should be paid by Skybridge Fintech Ltd. as disbursements under the engagement letter. Nina Reyes will coordinate with Mr. Lindstrom to arrange for the issuance of checks or wire transfers in the required amounts, payable to the appropriate state agencies. A schedule of payees and amounts will be provided to Mr. Lindstrom separately.
5. Calendar follow-up dates for each state to confirm receipt and processing of filings. For each state filing, we will calendar a follow-up date approximately 15 business days after submission to confirm that the filing has been received and processed by the applicable state agency. If any state agency notifies us of a deficiency or requests supplemental information, we will address such requests promptly.
6. Retain copies of all filed forms, fee receipts, and acknowledgments for inclusion in the closing binder. All original and copies of filed notice forms, Consent to Service of Process forms, filing fee checks or wire transfer confirmations, and any acknowledgment letters or processing confirmations received from state agencies should be retained and included in the closing binder for the bridge financing. The closing binder is being compiled as of January 30, 2024 (see Closing Binder — Table of Contents and Index), and the blue sky filings will be included as a dedicated section within the regulatory filings tab.
VIII. Appendices
The following appendices are attached hereto and incorporated by reference into this memorandum:
Appendix A — Form D (as filed January 16, 2024)
A copy of the initial Form D filing made with the SEC on January 16, 2024, in connection with the Initial Closing of $45,000,000. This filing reported three purchasers (Ridgeline Ventures Fund IV, L.P., Beacon Hill Capital Partners, LLC, and Halcyon Growth Equity, L.P.) and an aggregate amount sold of $45,000,000. This document serves as the basis for the state notice filings in Delaware, Massachusetts, Illinois, and Washington.
[Form D attached separately]
Appendix B — Form D Amendment (as filed January 29, 2024)
A copy of the Form D amendment filed with the SEC on January 29, 2024, reflecting the Final Closing of $15,000,000 on January 26, 2024. This amended filing updated the total amount sold to $60,000,000, added Northstar Innovation Fund II, L.P. as a fourth purchaser, and confirmed that no sales commissions or finders' fees were paid. This document serves as the basis for the California state notice filing.
[Form D Amendment attached separately]
Appendix C — State Notice Filing Forms (Prepared)
Copies of the state notice filing forms prepared for each of the five applicable jurisdictions, as follows:
• Delaware: Form D notice filing cover letter, copy of Form D, and completed Form U-2 (Consent to Service of Process), awaiting execution
• Massachusetts: Notice filing cover letter, copy of Form D, and completed Form U-2 (Consent to Service of Process), awaiting execution
• Illinois: Notice filing cover letter, copy of Form D, and completed Form U-2C (Uniform Consent to Service of Process — Corporation), awaiting execution
• California: Form D-notice filing form, copy of Form D Amendment, and Consent to Service of Process (California form), awaiting execution
• Washington: Notice filing cover letter, copy of Form D, and completed Form U-2 (Consent to Service of Process), awaiting execution
[Filing forms attached separately]
Appendix D — Filing Fee Summary
The following table sets forth the filing fees payable in each state, together with payment instructions:
All checks should be drawn on the Company's operating account and delivered to Calderwood & Harkness LLP, attention Nina Reyes, no later than January 26, 2024, to allow sufficient time for assembly of the filing packages and submission by the January 28, 2024 target date (for the four filings with January 30 deadlines) and the February 7, 2024 target date (for the California filing).
This memorandum has been prepared by Calderwood & Harkness LLP for the exclusive use of Skybridge Fintech Ltd. and is protected by the attorney-client privilege and the work product doctrine. This memorandum should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP. The analysis contained herein is based on the facts and circumstances as known to us as of the date of this memorandum and on applicable law as currently in effect. We express no opinion on the laws of any jurisdiction other than the five states specifically addressed herein. This memorandum does not constitute a legal opinion.
Calderwood & Harkness LLP 600 Lexington Avenue New York, NY 10022
Matter No. 1009-00001
State | Applicable Statute | Purchaser(s) | Amount Sold in State | First Sale Date | Filing Deadline | Filing Fee | Filing Status
Delaware | 6 Del. C. § 7309(b)(14) | N/A (Issuer domicile) | — | Jan. 15, 2024 | Jan. 30, 2024 | $250 | Prepared
Massachusetts | M.G.L. c. 110A, § 402(b)(9) | Ridgeline Ventures Fund IV, L.P. | $30,000,000 | Jan. 15, 2024 | Jan. 30, 2024 | Up to $500 | Prepared
Illinois | 815 ILCS 5/4(R) | Beacon Hill Capital Partners, LLC | $15,000,000 | Jan. 15, 2024 | Jan. 30, 2024 | Up to $500 | Prepared
California | Cal. Corp. Code § 25102.1 | Northstar Innovation Fund II, L.P. | $10,000,000 | Jan. 26, 2024 | Feb. 10, 2024 | $300 | In Preparation
Washington | RCW 21.20.327 | Halcyon Growth Equity, L.P. | $5,000,000 | Jan. 15, 2024 | Jan. 30, 2024 | $300 | Prepared
State | Filing Fee | Payable To | Payment Method
Delaware | $250.00 | State of Delaware | Check or wire transfer
Massachusetts | $500.00 | Commonwealth of Massachusetts | Check or wire transfer
Illinois | $500.00 | Illinois Secretary of State | Check or wire transfer
California | $300.00 | Dept. of Financial Protection and Innovation | Check or wire transfer
Washington | $300.00 | Washington State Dept. of Financial Institutions | Check or wire transfer
Total | $1,850.00

MEMORANDUM

MATTER NO.: 1009-00001

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