NEWTEK BUSINESS SERVICES CORP. (NASDAQ:NEWT) Files An 8-K Other Events
Item 8.01 Other Events.
Newtek Business Services Corp. (the “Company”) learned today that five former employees of its portfolio company ADR Partners, LLC dba banc-serv Partners, LLC (“banc-serv”), were taken into custody in connection with the previously disclosed federal investigation of what the Company believes to be pre-acquisition conduct of certain former banc-serv employees. As previously disclosed, subsequent to the Company closing on its $5.4 million investment in banc-serv, banc-serv was served with a search warrant by the Federal Bureau of Investigation at banc-serv offices in Westfield, Indiana. Banc-serv has cooperated fully with the authorities during the investigation. Moreover, following the execution of the FBI search warrant, outside counsel was retained to conduct an investigation and as a result of that investigation, the Company believes that the alleged conduct pre-dated the Company’s investment in banc-serv. As of December 31, 2018, the fair valuation of banc-serv was $0.00 and presently, banc-serv has no employees. Beginning in 2018, banc-serv’s customers were provided with the opportunity of contracting the services of another lender service provider portfolio company of the Company. As of March 15, 2019, the majority of banc-serv’s active customers had availed themselves of this option. While the outcome of this situation cannot at this time be predicted with certainty, the Company does not expect that the matter will materially affect the Company’s financial condition or results of operations.
The information in this report, including all exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement to the Securities Act of 1933, as amended.
About NEWTEK BUSINESS SERVICES CORP. (NASDAQ:NEWT)
Newtek Business Services Corp. is a non-diversified closed-end management investment company. The Company is engaged in non-bank lending providing a range of business services and financial products under the Newtek brand to the small- and medium-sized business (SMB) market. Its products and services consist of Business Lending, Electronic Payment Processing, Managed Technology Solutions (Cloud Computing), e-commerce, Accounts Receivable Financing, The Secure Gateway, The Newtek Advantage, personal and commercial Insurance Services, Web Services, Data Backup, Storage and Retrieval, and Payroll Solutions. The Company offers services along with its controlled portfolio companies. The Company’s portfolio consists of guaranteed and unguaranteed non-affiliate loan investments that are through its small business finance platform.
