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United States securities and exchange commission logo
June 2, 2023
Barry Sloane
Chief Executive Officer
NewtekOne, Inc.
4800 T Rex Avenue, Suite 120
Boca Raton, FL 33431
Re: NewtekOne, Inc.
Supplemental
Correspondence
Submitted May 18,
2023
File No. 333-269452
Dear Barry Sloane:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our May
4, 2023 letter.
Supplemental Correspondence submitted May 18, 2023
General
1. The staff remains
unable to determine the specific basis, if any, for your position that
you are now excluded
from the definition of an investment company under the
Investment Company Act
of 1940 (the Act ). We note that as recently as November 8,
2022, in your Form 10-Q
filed for the quarter ended September 30, 2022, you were
described in your
public reports as an internally managed non-diversified closed-end
management investment
company. We also note that, in your Form N-54C, you
represented that you
inten[d] to conduct [your] activities in such a way that [you] will be
excepted from the
definition of an investment company provided under the Act. Please
specifically describe
when and why you stopped being an internally managed non-
Barry Sloane
FirstName LastNameBarry Sloane
NewtekOne, Inc.
Comapany
June 2, 2023NameNewtekOne, Inc.
June 2,
Page 2 2023 Page 2
FirstName LastName
diversified closed-end management investment company and more fully
describe the
nature of the change in your business that caused you to no longer be
an investment
company and/or be able to rely on an exception from the definition of
an investment
company. To the extent that the change of your business was the
acquisition of Newtek
Bank, please specifically explain why this acquisition had this
effect, given (i) your
response appears to indicate that Newtek Bank represents only
approximately 17.46% of
your total assets on an unconsolidated basis and (ii) while you have
indicated that a
critical element of your strategic plan is the transitioning to Newtek
Bank of the SBA7(A)
lending activities , it does not appear that you have yet
effected such a transition.
Alternatively, to the extent you believe that your plans to operate
as a financial holding
company caused you to no longer be an investment company, please
explain why this
affects your legal analysis under section 3 of the Act.
2. Your Form S-3/A indicates that loans are transferred to special
purpose vehicles in order
to effect your securitizations, and goes on to note circumstances
under which
securitizations were accomplished by trusts, including by, for
example, Newtek Small
Business Loan Trust, Series 2022-1. Accordingly, it would appear that,
to the extent that
issuers are engaged in securitization activities described in rule
3a-7 under the Act, it
would be these securitization trusts. Please clarify whether, in
discussing NSBF s
securitization activities, including for example, the issuance of
securities as described in
rule 3a-7 and the appointment of trustees, you are actually describing
the activities of
specific securitization trusts. For example, with respect to the
September 2022
securitization, it appears that Newtek Small Business Loan Trust,
Series 2022-1 was the
issuer of securitization notes. Please revise your conclusion that
NSBF may rely on rule
3a-7 as necessary. Alternatively, to the extent you believe NSBF can
rely on rule 3a-7
notwithstanding that it is not, for example, itself an issuer of
securities described in rule
3a-7(a)(1), please explain. In addition, please also clarify the
relation of the securitization
trusts to NSBF, including whether these trusts are subsidiaries of
NSBF.
3. Please provide your calculation for determining that NSBF does not
meet the definition of
an investment company under Section 3(a)(1)(C), identifying each
constituent part of
the numerator and denominator. Please specifically identify (i) the
amounts, if any, held
by NSBF of debt securities available-for-sale, loans held for sale,
loans held for
investment at fair value, and loans held for investment, at amortized
cost; and (ii) the
assets representing NSBF s interests in its subsidiaries, as well as
their value. Please base
your response on the value of such issuer s assets as of the end of
the last preceding fiscal
quarter.
4. Please note that while In the Matter of Tonopah Mining Co., 26 S.E.C.
426 (July 21,
1947) was decided under section 3(b)(2) of the Act, the Commission and
staff use the
primary engagement standard set forth in that case when
evaluating the identical
standard in section 3(a)(1)(A) of the Act. See Certain Prima Facie
Investment Companies,
Release No. IC-10937 (Nov. 13, 1979) [44 FR 66608 (Nov. 20, 1979)] at
n.24.
Accordingly, an analysis of you, on a consolidated basis, using each
of the factors outlined
Barry Sloane
NewtekOne, Inc.
June 2, 2023
Page 3
in Tonopah is useful in evaluating whether you [are] or hol[d]
[your]self out as being
engaged primarily, or propos[e] to engage primarily, in the business of
investing,
reinvesting, or trading in securities. To that end, please revise your
analysis under
Tonopah to:
Describe the amount of time your officers, directors, and employees
spend managing
your portfolio of loans and the amount of time they devote to banking
activities. With
respect to your description of the amount of time devoted to managing
your portfolio
of loans, please specifically address the amount of time spent by
these personnel in
managing loans for investment purposes, as compared to those managed
for sale.
Clarify which assets on your consolidated balance sheet are included
in what you
have described as assets related to the guaranteed and
unguaranteed SBA 7(A) loan
portfolio.
To the extent not described in your response to question 3, explain
why your recent
conversion to a financial holding company and your operation as
a financial
holding company may affect the sources of your income, including
whether and how
such a designation may affect the operation of your business.
5. Your response was unclear as to whether you have relied on rule 3a-2 of
the Act in the
past, or whether you intend to presently. Please advise as to your
intention with respect to
reliance on rule 3a-2. To the extent you have relied or intend to rely on
rule 3a-2 of the
Act, please provide further information on your compliance with such
rule. In your
response, please include (i) a copy of the resolution made by your board
of directors
pursuant to rule 3a-2(a)(2), (ii) the date on which such resolution was
recorded
contemporaneously in your minute books, and (iii) the date on which the
one-year period
commenced pursuant to rule 3a-2(b), together with your analysis
supporting such a
conclusion. In addition, please provide your detailed legal analysis
supporting your
conclusion that an investment company may rely on rule 3a-2 as it
transitions into a non-
investment company business. In this regard, we note that you are neither
a start-up nor do
you have a history of operating a business affected by an extraordinary
event causing
you to suddenly meet the definition of an investment company under
section 3 of the Act.
You may contact William Schroeder at (202) 551-3294 or Ben Phippen at
(202) 551-
3697 if you have questions regarding comments on the financial statements and
related matters.
Please contact Madeleine Mateo at (202) 551-3465 or Tonya K. Aldave at (202)
551- 3601 with
any other questions.
Sincerely,
FirstName LastNameBarry Sloane
Division of
Corporation Finance
Comapany NameNewtekOne, Inc.
Office of Finance
June 2, 2023 Page 3
cc: Jared Fishman, Esq.
FirstName LastName