Core Viewpoint - NewtekOne, Inc. has entered into a definitive agreement to sell its subsidiary Newtek Technology Solutions, Inc. to Paltalk, Inc. as part of its transition to a financial holding company and compliance with Federal Reserve requirements [1][2]. Group 1: Transaction Details - Paltalk will pay NewtekOne $4 million in cash and issue 4 million shares of a new series of non-voting preferred stock as part of the sale [2]. - NewtekOne may receive an additional earn-out of up to $5 million based on achieving certain Adjusted EBITDA thresholds for the fiscal years 2025 and 2026 [2]. - The anticipated closing of the sale is expected in Q4 2024 or Q1 2025, pending stockholder and regulatory approvals [3]. Group 2: Company Strategy and Management - NewtekOne's CEO emphasized the importance of finding the right management team for NTS to ensure continued growth and service quality for its 17,000 customers [4]. - The current management team at NTS will remain intact post-sale, ensuring continuity in operations and client service [4]. - NewtekOne will retain its intellectual property and patented technology, maintaining a non-voting ownership interest in Paltalk [4]. Group 3: Financial Implications - NTS's revenue in 2023 was approximately three times greater than Paltalk's revenue for the same year, indicating a significant potential impact on Paltalk's financials post-acquisition [4]. - NewtekOne's equity interest in Paltalk is projected to be about 30.3% on a fully diluted basis at the time of closing [3].
NewtekOne Enters into Agreement to Sell Newtek Technology Solutions, Inc.