4. SALE OF CONSUMER RECEIVABLES

On June 30, 2024 (the “Closing Date”), ML Plus LLC, an indirect, wholly-owned subsidiary of the Company (the “Seller”), entered into a Master Receivables Purchase Agreement (the “Purchase Agreement”) with Sound Point Capital Management LP, as purchaser agent (“Sound Point”), and SP Main Street Funding I LLC and each additional purchaser from time to time party thereto, as purchasers (the “Purchasers”). The Purchase Agreement provides for the purchase, subject to certain conditions precedent, by the Purchasers from time to time during the term of the Purchase Agreement, on a committed basis, of a majority of the Company’s eligible Instacash receivables, subject to certain concentration limits, up to an aggregate facility limit of $175,000, which amount may be increased by up to $75,000. The obligations of the Seller under the Purchase Agreement will be guaranteed by MoneyLion Technologies Inc., a direct, wholly-owned subsidiary of the Company. The Purchase Agreement terminates on the two-year anniversary of the Closing Date and may be extended for an additional one-year period upon mutual agreement of the Seller and Sound Point.

The initial price at which the Purchasers will purchase the eligible Instacash receivables with respect to each monthly cohort is based on the average loss rate at 360 days past the repayment date of the three most recent matured monthly cohorts and will be subject to adjustment for future monthly cohorts based on the performance of monthly cohorts at specified intervals past the repayment date compared to the expected loss rates of the reference matured monthly cohorts established at sale and a fixed discount percentage.

The Purchase Agreement contains customary representations and warranties; repurchase rights and obligations of the Seller upon the occurrence of certain events (subject to specified limitations); affirmative and negative covenants, including, among other things, financial reporting and notice requirements and restrictions on the ability of the Seller to incur liens on the purchased receivables; and events of default (subject to specified cure provisions), the occurrence of which will give Sound Point the right to terminate the Purchase Agreement.

In connection with the Seller’s entry into the Purchase Agreement, on the Closing Date, MoneyLion Technologies Inc. (in such capacity, the “Servicer”) entered into a Servicing Agreement (the “Servicing Agreement”) with Sound Point and the Purchasers pursuant to which the Purchasers appointed the Servicer to, among other things, service the purchased Instacash receivables in accordance with agreed upon servicing guidelines, collect and remit collections therefrom and provide certain reporting and other information relating to its servicing duties. The Seller will receive a fixed percentage of net collections.

The Seller will pay the Purchasers a non-refundable fee, payable monthly, in an amount equal to 2.00% per annum times the daily average available facility limit, subject to a maximum aggregate amount of $1,750. The expense related to the fee is presented within loss on sale of consumer receivables in the consolidated statements of operations.

The sales of eligible Instacash receivables are accounted for as a sale based on the Company’s determination that these receivables met all the necessary criteria for such accounting, including legal isolation for transferred assets, lack of constraint on the transferee to pledge or exchange the transferred assets that provides a benefit to the Company and the transfer of control. Therefore, the Company no longer records these receivables on the consolidated financial statements. The Company also concluded that continuing involvement in the arrangement does not invalidate this determination. The Company retains the servicing rights for all Instacash receivables sold and receives a market-based service fee for servicing the assets sold.

During the three and nine months ended September 30, 2024, the Company sold $41,949 of Instacash receivables under the Purchase Agreement and had $175,000 of unused capacity as of September 30, 2024.

Consumer receivables held for sale as of September 30, 2024 represent Instacash receivables that the Company originated and intends to sell under the Purchase Agreement. Consumer receivables held for sale are recorded at the lower of cost or fair value. If recorded at fair value, the difference between cost and fair value of consumer receivables held for sale is recorded as a component of loss on sale of consumer receivables in the consolidated statements of operations. If the Company no longer has the intent to sell consumer receivables held for sale, such receivables would be reclassified to Consumer receivables, net. When a consumer receivable is reclassified to held for investment, any amounts previously recorded in order to measure the consumer receivable at the lower of cost or fair value are reversed on the consolidated statements of operations and the consumer receivable is recorded consistent with Instacash originated as held for investment.

Servicing revenue is recognized as Instacash receivables are collected on behalf of the purchaser. Servicing revenue for the three and nine months ended September 30, 2024 was $335 and is presented within service and subscription revenue in the consolidated statements of operations.

As of September 30, 2024, the Company was responsible for servicing $19,643 of Instacash receivables sold and outstanding under the Purchase Agreement. The following is an assessment of the repayment performance of Instacash receivables sold and outstanding as of September 30, 2024 and presents the contractual delinquency of the Instacash receivables sold and outstanding: