SCHEDULE: Patriot Financial Boosts NEWTEKONE Stake to 8.06%

Patriot Financial Partners converted $20M preferred stock and added $10M cash for an 8.06% common stock stake in NEWTEKONE, INC.

Summary

• Patriot Financial Partners IV, L.P. and Patriot Financial Partners Parallel IV, L.P. (collectively "Patriot") reported beneficial ownership of 2,307,692 shares of NEWTEKONE, INC. Common Stock.
• This represents 8.06% of the Issuer's outstanding Common Stock.
• The ownership was established through a Securities Purchase and Exchange Agreement on September 16, 2025.
• Patriot exchanged 20,000 shares of Series A Convertible Preferred Stock (originally purchased for $20 million) and $10 million in cash for the common stock.
• The calculation of the percentage ownership is based on 26,317,000 shares outstanding as of June 30, 2025, plus the newly issued 2,307,692 shares.

Sentiment

Score: 7

Explanation: The conversion of preferred stock to common stock, coupled with a cash infusion, can be seen as a positive step for the company's capital structure and liquidity. However, the dilution for existing shareholders and the potential for future share dispositions by a significant holder introduce some caution.

Positives

• Patriot Financial Group, a private equity fund focused on financial services, has increased its investment in NEWTEKONE, indicating confidence in the company.
• The transaction involved the conversion of preferred stock, simplifying the capital structure by reducing preferred equity.
• NEWTEKONE received $10 million in cash as part of the exchange, which can be used for general corporate purposes.

Negatives

• The issuance of 2,307,692 new common shares results in dilution for existing common stockholders.

Risks

• Patriot Financial Group may dispose of its acquired shares from time to time, subject to market conditions, which could put downward pressure on the stock price.
• Future acquisitions of additional shares by Patriot could further dilute existing shareholders if new shares are issued.

Future Outlook

Patriot Financial Group acquired the shares for investment purposes and may dispose of them or acquire additional shares or related securities in the future, depending on market conditions and investment considerations.

Industry Context

Patriot Financial Partners is a private equity fund specializing in community banks and financial service-related companies. This investment aligns with their stated focus, suggesting a strategic interest in NEWTEKONE's position within the financial services sector.

Related Party Transactions

• The transaction itself, where NEWTEKONE issued common stock to Patriot Financial Partners in exchange for preferred stock and cash, could be considered a related party transaction given Patriot's significant prior investment and now substantial common stock ownership.

Stakeholder Impact

• Shareholders: Existing common shareholders experience dilution due to the issuance of new shares. The conversion of preferred stock removes a senior claim on assets/earnings.
• Company (NEWTEKONE): Receives $10 million in cash, improving liquidity. Simplifies capital structure by converting preferred stock.
• Patriot Financial Group: Increases its common equity stake, aligning its interests more directly with common shareholders, and potentially gaining more influence.

Next Steps

• Patriot Financial Group may dispose of the acquired shares from time to time.
• Patriot Financial Group may acquire additional shares of Common Stock or associated rights/securities.

Key Dates

Recommendation

The transaction involves a significant investor converting preferred stock and injecting additional cash, which is generally positive for the company's balance sheet and capital structure. However, the dilution from the new share issuance and the potential for future dispositions by Patriot warrant a 'hold' rather than a 'buy' until the market absorbs these changes and the strategic implications become clearer. The investment by a specialized financial services fund suggests underlying value, but the immediate impact on share price is uncertain due to dilution.

Keywords

NEWTEKONE, Patriot Financial Partners, Schedule 13D, Common Stock, Preferred Stock Conversion, Equity Investment, Financial Services, Beneficial Ownership, Capital Structure