Company: NEWTP
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001587987-25-000050
Chunk: 151

Company: NewtekOne, Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 151
---
 new or enhanced products and services or that any new or enhanced products and services, if developed, will achieve market acceptance or prove to be profitable.

Finally, we may also choose to divest certain businesses or product lines that no longer fit with our strategic objectives or whose divestiture are required by regulators. If we decide to sell assets or a business, we may have difficulty obtaining terms acceptable to us in a timely manner, or at all. Additionally, the terms of such potential transactions may expose us to ongoing obligations and liabilities. 

As a result of commitments made to the Federal Reserve, the Company divested of NTS on January 2, 2025. The divestiture of

NTS may negatively impact the Company’s revenue and income and our ability to effectively manage our information

technology systems and infrastructure and cybersecurity risk. See also “ITEM I.C Cybersecurity.”

In addition, pursuant to the terms of Agreement to sell NTS to IPM, we received $4.0 million in cash and 4.0 million shares of a

newly created series of IPM non-voting preferred stock, the Series A Non-Voting Common Equivalent Stock (the “Preferred

Stock”). Refer to “Subsequent Events - Sale of NTS.” We currently anticipate retaining the Preferred Stock and our

investment in the Preferred Stock will be reflected on our balance sheet and valued on a quarterly basis in accordance with ASC

321, beginning in the first quarter of 2025. IPM common shares have historically been thinly traded and may not be easily sold

or exchanged without a significant change in price, which can lead to volatile changes in the market price for IPM common

shares. Volatile changes in the market price for IPM common shares could have a material impact on the value of the Preferred

Stock, up or down, as reflected on our balance sheet on a quarter to quarter basis.

Also pursuant to the terms of the Agreement to sell NTS to IPM, we received the right to receive additional cash or shares of IPM in the future, provided that IPM earns certain levels of “Adjusted EBITDA” over a two to three year period following the sale (“IPM Earnout”). We will be required to recognize an estimate of value associated with the IPM Earnout in 2025 and

remeasure it value on a recurring basis, which could positively or negatively impact our earnings and further compound the

volatility associated with the value of IPM stock referenced above. Additionally, while we are IPM