10-Q 1 newt-33116x10q.htm 10-Q 10-Q

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________ 
FORM 10-Q
____________________________________________ 
(Mark One)    
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____
Commission file number: 814-01035
 
____________________________________________ 
NEWTEK BUSINESS SERVICES CORP.
 ____________________________________________ 

(Exact name of registrant as specified in its charter)
____________________________________________ 

  
Maryland
 
46-3755188
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
212 West 35th Street, 2nd Floor New York, New York
 
10001
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (212) 356-9500
 ____________________________________________  

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (all as defined in Rule 12b-2 of the Exchange Act).
 
Large accelerated filer
 
¨
Accelerated filer
 
x
 
 
 
 
 
 
Non-accelerated filer
 
¨
Smaller reporting company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x
As of May 9, 2016 there were 14,481,335 shares issued and outstanding of the registrant’s Common Stock, par value $0.02 per share.
 



TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.





NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(In Thousands, except for Per Share Data)
 
March 31, 2016
 
December 31, 2015
ASSETS
(Unaudited)
 
(Note 1)
Investments, at fair value
 
 
 
SBA unguaranteed non-affiliate investments (cost of $176,227 and $166,752, respectively; includes $142,997 and $146,463, respectively, related to securitization trusts)
$
166,786

 
$
158,355

SBA guaranteed non-affiliate investments (cost of $2,259 and $2,069, respectively)
2,536

 
2,284

Controlled investments (cost of $34,481 and $35,781, respectively)
107,201

 
104,376

Non-control/non-affiliate investments (cost of $1,486 and $1,847, respectively)
1,446

 
1,824

Investments in money market funds (cost of $35 and $35, respectively)
35

 
35

Total investments at fair value
278,004

 
266,874

Cash and cash equivalents
3,614

 
4,308

Restricted cash
18,971

 
22,869

Broker receivable
23,256

 
32,083

Due from related parties
2,819

 
3,056

Servicing assets, at fair value
13,644

 
13,042

Credits in lieu of cash, at fair value
646

 
860

Other assets
9,312

 
9,338

Total assets
$
350,266

 
$
352,430

LIABILITIES AND NET ASSETS
 
 
 
Liabilities:
 
 
 
Bank notes payable
$
32,329

 
$
29,100

Notes due 2022
7,745

 
7,770

Notes payable - Securitization trusts (net of $2,355 and $2,501 of debt issuance costs related to securitization trusts, respectively)
83,531

 
89,244

Dividends payable

 
5,802

Notes payable - related parties
10,817

 
5,647

Due to related parties
552

 
256

Notes payable in credits in lieu of cash, at fair value
646

 
860

Deferred tax liability
2,465

 
857

Accounts payable, accrued expenses and other liabilities
8,419

 
8,945

Total liabilities
146,504

 
148,481

Commitments and contingencies (Note 8)
 
 
 
Net Assets:
 
 
 
Preferred stock (par value $0.02 per share; authorized 1,000 shares, no shares issued and outstanding)

 

Common stock (par value $0.02 per share; authorized 200,000 shares, 14,452 and 14,509 issued and outstanding, respectively)
289

 
290

Additional paid-in capital
188,311

 
189,031

Undistributed net investment income
3,056

 
4,437

Net unrealized appreciation, net of deferred taxes
8,761

 
8,062

Net realized gains
3,345

 
2,129

Total net assets
203,762

 
203,949

Total liabilities and net assets
$
350,266

 
$
352,430

Net asset value per common share
$
14.10

 
$
14.06

See accompanying notes to unaudited condensed consolidated financial statements.

1


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, except for Per Share Data)
 
Three Months Ended March 31, 2016
 
Three Months Ended March 31, 2015
Investment income:
 
 
 
From non-affiliate investments:
 
 
 
Interest income
$
2,451

 
$
2,125

Servicing income
1,371

 
1,043

Other income
597

 
395

Total investment income from non-affiliate investments
4,419

 
3,563

From controlled investments:
 
 
 
Interest income
82

 
88

Dividend income
2,293

 
1,087

Other income

 
12

Total investment income from controlled investments
2,375

 
1,187

Total investment income
6,794

 
4,750

Expenses:
 
 
 
Salaries and benefits
3,344

 
3,023

Interest
1,488

 
1,356

Depreciation and amortization
40

 
85

Other general and administrative costs
3,302

 
2,762

Total expenses
8,174

 
7,226

Net investment loss
(1,380
)
 
(2,476
)
Net realized and unrealized gains (losses):
 
 
 
Net realized gain on non-affiliate investments
6,286

 
7,699

Net unrealized appreciation (depreciation) on SBA guaranteed non-affiliate investments
62

 
(1,698
)
Net unrealized depreciation on SBA unguaranteed non-affiliate investments
(1,027
)
 
(666
)
Net unrealized appreciation on controlled investments
3,690

 
7,500

Provision for deferred taxes on unrealized appreciation on controlled investments
(1,608
)
 

Net unrealized depreciation on non-control/non-affiliate investments
(16
)
 

Net unrealized depreciation on servicing assets
(403
)
 
(356
)
Net realized and unrealized gains
6,984

 
12,479

Net increase in net assets
$
5,604

 
$
10,003

Net increase in net assets per share
$
0.39

 
$
0.98

Net investment loss per share
$
(0.10
)
 
$
(0.24
)
Dividends and distributions declared per common share
$
0.35

 
$
0.39

Weighted average shares outstanding
14,509

 
10,206

See accompanying notes to unaudited condensed consolidated financial statements.

2


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
(In Thousands)
 
Three Months Ended March 31, 2016
Increase in net assets:
 
Net investment loss
$
(1,380
)
Net realized gain on investments
6,286

Net change in unrealized appreciation on investments
1,101

Net change in unrealized depreciation on servicing assets
(403
)
Net increase in net assets
5,604

Distributions to stockholders:
 
Distributions to stockholders from net realized gains
(5,070
)
Capital share transactions:
 
Issuance of common stock under dividend reinvestment plan
143

Repurchase of common stock under share repurchase plan
(866
)
Net decrease in net assets from capital share transactions
(723
)
Other transactions:
 
Return of dividends related to common stock issued in connection with litigation settlement
2

Total decrease in net assets
(187
)
Net assets at beginning of period
203,949

Net assets at end of period
$
203,762

Common shares outstanding at end of period
14,452

Capital share activity:
 
Shares issued under dividend reinvestment plan
13

Shares repurchased under share repurchase plan
(70
)
Net decrease in capital activity
(57
)

See accompanying notes to unaudited condensed consolidated financial statements.

3



NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
 
Three Months Ended March 31, 2016
 
Three Months Ended March 31, 2015
Cash flows from operating activities:
 
 
 
Net increase in net assets
$
5,604

 
$
10,003

Adjustments to reconcile net increase in net assets to net cash provided by (used in) operating activities:
 
 
 
Net unrealized appreciation on controlled investments
(3,690
)
 
(7,500
)
Net unrealized depreciation on non-affiliate investments
981

 
2,364

Net unrealized depreciation on servicing assets
403

 
356

Realized gains on non-affiliate investments
(6,286
)
 
(7,746
)
Realized losses on non-affiliate investments

 
47

Amortization of deferred financing costs
271

 
220

Deferred income taxes
1,608

 

Depreciation and amortization
40

 
85

Funding of controlled investments

 
(200
)
Originations of SBA guaranteed non-affiliate investments
(42,700
)
 
(37,288
)
Principal payments received from controlled investments
1,300

 
300

Principal payments received from non-control/non-affiliate investments
361

 

Proceeds from sale of SBA guaranteed non-affiliate investments
48,769

 
60,048

Originations of SBA unguaranteed non-affiliate investments
(13,358
)
 
(12,340
)
Payments received on SBA non-affiliate investments
3,836

 
4,193

Other, net
111

 
25

Changes in operating assets and liabilities:
 
 
 
Net increase in investments in money market funds

 
(3,000
)
Broker receivable
8,827

 
(12,959
)
Due to/from related parties
97

 
(1,006
)
Other assets
(52
)
 
1,673

Accounts payable, accrued expenses, other liabilities and deferred revenue
(379
)
 
(541
)
Change in restricted cash
4,016

 
(6,039
)
Capitalized servicing assets
(1,005
)
 
(1,236
)
Other, net
39

 
109

Net cash provided by (used in) operating activities
8,793

 
(10,432
)
Cash flows from investing activities:
 
 
 
Purchase of fixed assets
(76
)
 
(12
)
Cash flows from financing activities:
 
 
 
Net borrowings on bank lines of credit
3,229

 
91

Net borrowings from related party line of credit
5,170

 

Repurchase of common stock under share repurchase plan
(866
)
 

Payments on bank term note payable

 
(417
)
Dividends paid
(10,872
)
 

Payments on Notes Payable - Securitization Trusts
(5,891
)
 
(2,624
)
Change in restricted cash related to securitization
(118
)
 
4,182


4


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Thousands)
 
Three Months Ended March 31, 2016
 
Three Months Ended March 31, 2015
Additions to deferred financing costs
(61
)
 
(4
)
Other, net
(2
)
 
(4
)
Net cash (used in) provided by financing activities
(9,411
)
 
1,224

Net decrease in cash and cash equivalents
(694
)
 
(9,220
)
Cash and cash equivalents—beginning of period
4,308

 
17,813

Cash and cash equivalents—end of period
$
3,614

 
$
8,593

 
 
 
 
Supplemental disclosure of cash flow activities:
 
 
 
Non-cash operating, investing and financing activities:
 
 
 
Reduction of credits in lieu of cash and notes payable in credits in lieu of cash balances due to delivery of tax credits to Certified Investors
$
217

 
$
348

Foreclosed real estate acquired
$
83

 
$
409

Dividends declared but not paid
$

 
$
3,985

Reversal of deferred tax asset
$

 
$
2,870

Issuance of common stock under dividend reinvestment plan
$
143

 
$

            
See accompanying notes to unaudited condensed consolidated financial statements.

5




NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
Performing SBA Unguaranteed Investments (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gill Express Inc and Blue Speed LLC
 
Repair and Maintenance
 
Term Loan
 
Prime plus 2.75%
 
3/31/2041

 
$
518.0

 
$
518.0

 
$
504.3

 
0.25
%
Men of Steel Enterprises LLC and Vogelbacher Properties LLC
 
Fabricated Metal Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/31/2041

 
393.5

 
393.5

 
362.3

 
0.18
%
Cameo Carter, MD A Professional Corporation dba The Garden Pediatric
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
3/31/2026

 
75.0

 
75.0

 
63.3

 
0.03
%
Dana A. Farley dba Independent Cabinets
 
Furniture and Related Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/31/2041

 
67.5

 
67.5

 
68.8

 
0.03
%
Farhad Brothers LLC dba Lulu's Pizzeria & Family Restaurant and Marvin
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
3/31/2026

 
66.8

 
66.8

 
56.3

 
0.03
%
Christian Soderquist dba Soderquist Plumbing and Heating LLC
 
Specialty Trade Contractors
 
Term Loan
 
Prime plus 2.75%
 
3/31/2041

 
56.8

 
56.8

 
57.5

 
0.03
%
Duke's Cleaners Inc
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
3/31/2026

 
47.0

 
47.0

 
42.9

 
0.02
%
Vehicle Safety Supply LLC
 
Motor Vehicle and Parts Dealers
 
Term Loan
 
Prime plus 2.75%
 
3/31/2026

 
22.5

 
22.5

 
19.0

 
0.01
%
Wyldewood Cellars, Inc.
 
Beverage and Tobacco Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/30/2041

 
986.8

 
986.8

 
927.3

 
0.46
%
Tom Sawyer Country Restaurant LLC and AM 3208 LLC
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
3/30/2041

 
257.5

 
257.5

 
251.1

 
0.12
%
NOSO Development, LLC
 
Real Estate
 
Term Loan
 
Prime plus 2.75%
 
3/30/2026

 
187.5

 
187.5

 
158.2

 
0.08
%
Beale Street Blues Company-West Palm Beach, LLC dba Lafayette’s-West P
 
Performing Arts, Spectator Sports, and Related Industries
 
Term Loan
 
Prime plus 2.75%
 
3/30/2026

 
93.8

 
93.8

 
81.2

 
0.04
%
Gordon Rogers and Heidi Rogers dba Stone House Motor Inn
 
Accommodation
 
Term Loan
 
Prime plus 2.75%
 
3/30/2026

 
22.5

 
22.5

 
22.5

 
0.01
%
MTS Car Service LLC
 
Transit and Ground Passenger Transportation
 
Term Loan
 
Prime plus 2.75%
 
3/30/2026

 
10.5

 
10.5

 
8.9

 
%
Atlantis of Daytona LLC and Pierre Mamane and Eva Mamane
 
Clothing and Clothing Accessories Stores
 
Term Loan
 
Prime plus 2%
 
3/29/2041

 
525.0

 
525.0

 
506.8

 
0.25
%
Lust for Life Footwear, LLC
 
Leather and Allied Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/29/2026

 
375.0

 
375.0

 
316.4

 
0.16
%
Vinmar Inc. dba Locanda Portofino
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
3/29/2026

 
81.3

 
81.3

 
68.6

 
0.03
%
Barrocas Gym LLC dba Snap Fitness
 
Amusement, Gambling, and Recreation Industries
 
Term Loan
 
Prime plus 2.75%
 
3/29/2026

 
22.5

 
22.5

 
20.3

 
0.01
%

6


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
PHCDC1 LLC dba Quarter + Glory and Public House Collective, Corp.
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
3/28/2026

 
50.0

 
50.0

 
44.6

 
0.02
%
Marathon Engineering Corporation
 
Miscellaneous Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/28/2041

 
45.0

 
45.0

 
44.6

 
0.02
%
ReNew Interior Surface Cleaning LLC dba Randy's Carpet Care and Upholstry
 
Administrative and Support Services
 
Term Loan
 
Prime plus 2.75%
 
3/28/2026

 
12.4

 
12.4

 
12.0

 
0.01
%
Excel RP Inc
 
Machinery Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/25/2026

 
125.0

 
125.0

 
112.0

 
0.05
%
RCB Enterprises, Inc.
 
Administrative and Support Services
 
Term Loan
 
Prime plus 2.75%
 
3/25/2026

 
56.3

 
56.3

 
47.5

 
0.02
%
Revolution Physical Therapy LLC dba Apex Network Physical Therapy
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
3/25/2026

 
22.5

 
22.5

 
19.5

 
0.01
%
Acton Hardware LLC and Mark Allgood & Jamie Allgood
 
Building Material and Garden Equipment and Supplies Dealers
 
Term Loan
 
Prime plus 2.75%
 
3/24/2041

 
498.6

 
498.6

 
472.2

 
0.23
%
Lowgap Grocery & Grill LLC
 
General Merchandise Stores
 
Term Loan
 
Prime plus 2.75%
 
3/24/2041

 
167.5

 
167.5

 
170.7

 
0.08
%
ActKnowledge, Inc.
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
3/24/2026

 
125.0

 
125.0

 
124.9

 
0.06
%
International Construction Inc
 
Heavy and Civil Engineering Construction
 
Term Loan
 
Prime plus 2.75%
 
3/24/2041

 
50.0

 
50.0

 
51.0

 
0.03
%
Flooring Liquidators Inc and Premier Flooring Yonkers Inc and Flooring
 
Wood Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/24/2026

 
50.0

 
50.0

 
48.1

 
0.02
%
Logmet LLC
 
Support Activities for Transportation
 
Term Loan
 
Prime plus 2.75%
 
3/23/2026

 
75.0

 
75.0

 
68.1

 
0.03
%
The Youth Fountain LLC
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
3/23/2026

 
47.5

 
47.5

 
40.1

 
0.02
%
Magnation Corporation and Misha Family Trust
 
Merchant Wholesalers, Durable Goods
 
Term Loan
 
Prime plus 2.75%
 
3/22/2041

 
101.3

 
101.3

 
103.2

 
0.05
%
Precious Care LLC and Precious Care Management LLC
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
3/21/2026

 
557.5

 
557.5

 
473.5

 
0.23
%
growth.period LLC and Potomac Recruiting LLC
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
3/21/2026

 
156.3

 
156.3

 
131.8

 
0.06
%
Media Capital Partners, Inc
 
Securities, Commodity Contracts, and Other Financial Investments and Related Activities
 
Term Loan
 
Prime plus 2.75%
 
3/21/2026

 
22.5

 
22.5

 
19.0

 
0.01
%
ERT Group Inc and Curt's Tools Inspection Inc
 
Support Activities for Mining
 
Term Loan
 
Prime plus 2.75%
 
3/18/2041

 
1,250.0

 
1,250.0

 
1,212.5

 
0.60
%
Taylors Zinn Enterprises Inc dba Eons Auto Care Inc
 
Repair and Maintenance
 
Term Loan
 
Prime plus 2.75%
 
3/18/2041

 
80.8

 
80.8

 
81.2

 
0.04
%

7


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
Mariam Diner Inc dba Country Kitchen Restaurant
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
3/18/2026

 
52.5

 
52.5

 
44.3

 
0.02
%
Kekoa Enterprises Inc dba Signarama Sandy
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
3/18/2026

 
49.5

 
49.5

 
41.8

 
0.02
%
Clean Way Service LLC
 
Administrative and Support Services
 
Term Loan
 
Prime plus 2.75%
 
3/18/2026

 
22.5

 
22.5

 
19.0

 
0.01
%
Pro Tech Technology LLC
 
Support Activities for Transportation
 
Term Loan
 
Prime plus 2.75%
 
3/18/2026

 
7.5

 
7.5

 
6.3

 
%
Brian T Rice dba BD Logging
 
Forestry and Logging
 
Term Loan
 
Prime plus 2.75%
 
3/17/2026

 
15.8

 
15.8

 
14.1

 
0.01
%
Evergreen Pallet LLC and Evergreen Recycle LLC
 
Wood Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/16/2026

 
1,039.3

 
1,039.3

 
926.0

 
0.45
%
LAN Doctors Inc
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
3/16/2026

 
55.0

 
55.0

 
54.8

 
0.03
%
K Soles Corp dba Max Collections
 
Merchant Wholesalers, Nondurable Goods
 
Term Loan
 
Prime plus 2.75%
 
3/16/2026

 
22.5

 
22.5

 
19.0

 
0.01
%
Demand Printing Solutions Inc.
 
Printing and Related Support Activities
 
Term Loan
 
Prime plus 2.75%
 
3/16/2026

 
21.8

 
21.8

 
20.4

 
0.01
%
Auto and Property Insurance Solutions dba Taylor Company Insurance
 
Insurance Carriers and Related Activities
 
Term Loan
 
Prime plus 2.75%
 
3/16/2026

 
16.4

 
16.4

 
13.8

 
0.01
%
R & D Enterprises Inc dba My Pool Man
 
Administrative and Support Services
 
Term Loan
 
Prime plus 2.75%
 
3/15/2026

 
50.0

 
50.0

 
42.2

 
0.02
%
Mustafa Inc and Raouf Properties LLC
 
Food and Beverage Stores
 
Term Loan
 
Prime plus 2.75%
 
3/14/2041

 
75.0

 
75.0

 
75.2

 
0.04
%
HEWZ, LLC dba Hard Exercise Works
 
Amusement, Gambling, and Recreation Industries
 
Term Loan
 
Prime plus 2.75%
 
3/14/2026

 
22.5

 
22.5

 
19.0

 
0.01
%
Magill Truck Line LLC and Jeff J. Ralls
 
Truck Transportation
 
Term Loan
 
Prime plus 2.75%
 
3/11/2029

 
210.8

 
210.8

 
188.7

 
0.09
%
Accuair Control Systems LLC dba Accuair Suspension
 
Transportation Equipment Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/11/2026

 
150.0

 
150.0

 
129.4

 
0.06
%
Wilban LLC
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
3/11/2026

 
105.0

 
105.0

 
98.7

 
0.05
%
Country Paint and Hardware Inc
 
Building Material and Garden Equipment and Supplies Dealers
 
Term Loan
 
Prime plus 2.75%
 
3/11/2026

 
87.4

 
87.4

 
75.3

 
0.04
%
Dupre Capital LLC dba Fastsigns
 
Miscellaneous Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
3/11/2026

 
58.4

 
58.4

 
49.3

 
0.02
%
ABCs & 123s Infant and Child Care Center LP
 
Social Assistance
 
Term Loan
 
Prime plus 2.75%
 
3/11/2026

 
11.3

 
11.3

 
9.5

 
%

8


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
State Painting & Decorating Co., Inc.
 
Specialty Trade Contractors
 
Term Loan
 
Prime plus 2.75%
 
3/10/2026

 
103.8

 
103.8

 
87.5

 
0.04
%
Fayette Computer Consulting Company
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
3/10/2026

 
22.5

 
22.5

 
19.9

 
0.01
%
B.P.T.M. of NV LLC and Agentis Bros., LLC
 
Repair and Maintenance
 
Term Loan
 
Prime plus 2.75%
 
3/9/2041

 
525.0

 
525.0

 
512.4

 
0.25
%
Faith Summit Supply Inc dba Summit Supply and Summit True Value
 
Building Material and Garden Equipment and Supplies Dealers
 
Term Loan
 
Prime plus 2.75%
 
3/9/2026

 
22.5

 
22.5

 
20.3

 
0.01
%
A & A Auto Care LLC
 
Repair and Maintenance
 
Term Loan
 
Prime plus 2.75%
 
3/9/2026

 
12.2

 
12.2

 
11.5

 
0.01
%
Step Up Academy of the Arts LLC
 
Educational Services
 
Term Loan
 
Prime plus 2.75%
 
3/9/2026

 
8.0

 
8.0

 
6.8

 
%
Swerve Salon LLC
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
3/8/2026

 
79.0

 
79.0

 
66.7

 
0.03
%
J & W Hardwood Flooring Inc
 
Specialty Trade Contractors
 
Term Loan
 
Prime plus 2.75%
 
3/7/2026

 
7.5

 
7.5

 
6.3

 
%
Labmates LLC and POV Holdings LLC
 
Miscellaneous Store Retailers
 
Term Loan
 
Prime plus 2.75%
 
3/4/2041

 
109.3

 
109.3

 
111.4

 
0.05
%
Hueston and Company CPA LLC
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
3/4/2026

 
8.3

 
8.3

 
7.1

 
%
Almost Home Daycare LLC
 
Social Assistance
 
Term Loan
 
Prime plus 2.75%
 
3/3/2026

 
50.0

 
50.0

 
48.3

 
0.02
%
Miles of Smiles Inc
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
3/2/2026

 
93.5

 
55.2

 
48.3

 
0.02
%
The River Beas, LLC dba Subway and Punam Singh
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
2/28/2041

 
135.9

 
135.9

 
136.5

 
0.07
%
Johnson & Dugan Insurance Services Corp
 
Insurance Carriers and Related Activities
 
Term Loan
 
Prime plus 2.75%
 
2/28/2026

 
62.5

 
62.5

 
52.7

 
0.03
%
Doxa Deo Inc dba Luv 2 Play
 
Amusement, Gambling, and Recreation Industries
 
Term Loan
 
Prime plus 2.75%
 
2/28/2026

 
105.0

 
57.0

 
51.2

 
0.03
%
Drug Detection Laboratories, Inc. and Minh Tran
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
2/28/2026

 
19.8

 
19.8

 
17.0

 
0.01
%
Powerpits CS1, LLC dba Pita Pit
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
2/28/2026

 
18.8

 
18.8

 
16.7

 
0.01
%
Living Essentials HVAC Corp
 
Specialty Trade Contractors
 
Term Loan
 
Prime plus 2.75%
 
2/28/2026

 
15.0

 
15.0

 
12.8

 
0.01
%
Consulting Solutions, Inc. and Mark Luciani
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
2/28/2026

 
11.3

 
11.3

 
10.9

 
0.01
%

9


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
Aaradhya LLC dba Market Square Laundry
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
2/23/2026

 
80.0

 
80.0

 
67.5

 
0.03
%
Blackstones Hairdressing LLC
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
2/23/2026

 
52.0

 
52.0

 
44.3

 
0.02
%
BER Enterprise 332 Inc dba Edible Arrangements
 
Food and Beverage Stores
 
Term Loan
 
Prime plus 2.75%
 
2/19/2026

 
22.5

 
22.5

 
19.2

 
0.01
%
R-No-Landscaping LLC
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
2/19/2026

 
8.3

 
8.3

 
7.1

 
%
R & K Contracting Inc
 
Specialty Trade Contractors
 
Term Loan
 
Prime plus 2.75%
 
2/18/2026

 
15.8

 
15.8

 
13.5

 
0.01
%
Pacific Coast Medical Group LLC dba Celebrity Laser Spa and Advanced
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
2/17/2026

 
245.0

 
245.0

 
244.8

 
0.12
%
Jersey Shore Marina & Boat Sales, Inc.
 
Amusement, Gambling, and Recreation Industries
 
Term Loan
 
Prime plus 2.75%
 
2/12/2041

 
625.0

 
625.0

 
637.1

 
0.31
%
Ei3 Corporation
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
2/12/2026

 
326.9

 
326.9

 
326.6

 
0.16
%
Gilmore Heights Dental Holdings, LTD and Chas Rob LLC
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
2/12/2029

 
310.3

 
310.3

 
281.9

 
0.14
%
B for Blonde, LLC dba Blo Blow Dry Bar
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
2/12/2026

 
62.0

 
62.0

 
52.4

 
0.03
%
Base USA, Inc.
 
Clothing and Clothing Accessories Stores
 
Term Loan
 
Prime plus 2.75%
 
2/2/2026

 
50.0

 
50.0

 
50.0

 
0.02
%
Nowatzke Service Center Inc dba Nowatzke Truck and Trailer
 
Repair and Maintenance
 
Term Loan
 
Prime plus 2.75%
 
1/29/2026

 
105.0

 
104.4

 
103.7

 
0.05
%
Zouk Ltd dba Palma
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
1/29/2026

 
22.5

 
22.4

 
22.3

 
0.01
%
Wildflour Bakery & Cafe LLC
 
Social Assistance
 
Term Loan
 
Prime plus 2.75%
 
1/28/2026

 
62.5

 
62.1

 
60.0

 
0.03
%
SuzyQue's LLC dba SuzyQue's
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
1/28/2026

 
22.5

 
22.4

 
22.4

 
0.01
%
Tammy Lavertue
 
Securities, Commodity Contracts, and Other Financial Investments and Related Activities
 
Term Loan
 
Prime plus 2.75%
 
1/28/2026

 
11.3

 
11.2

 
10.7

 
0.01
%
New Image Building Services, Inc.
 
Administrative and Support Services
 
Term Loan
 
Prime plus 2.75%
 
1/19/2026

 
83.1

 
82.6

 
73.1

 
0.04
%
Oak Tree Storage LLC
 
Other Information Services
 
Term Loan
 
Prime plus 2.75%
 
1/19/2026

 
78.8

 
78.3

 
67.3

 
0.03
%
Woody's Trucking LLC
 
Truck Transportation
 
Term Loan
 
Prime plus 2.75%
 
1/12/2026

 
12.0

 
11.9

 
10.1

 
%

10


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
Gendron Funeral and Cremation Services, Inc.
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
1/11/2041

 
112.5

 
110.8

 
113.0

 
0.06
%
Dolarian Realty LLC and OV's Restaurant Inc
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
1/5/2041

 
67.8

 
67.7

 
69.0

 
0.03
%
Lemonberry Food Stores Inc dba Lemonberry Frozen Yogurt
 
Food and Beverage Stores
 
Term Loan
 
Prime plus 2.75%
 
12/29/2025

 
112.5

 
111.1

 
97.3

 
0.05
%
MCF Forte LLC
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/29/2025

 
18.8

 
18.5

 
15.8

 
0.01
%
Bright Dialysis LLC and Ft Pierce Kidney Care LLC
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
12/28/2025

 
1,250.0

 
1,234.8

 
1,045.2

 
0.51
%
Panditos LLC dba White Lotus Home
 
Miscellaneous Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
12/28/2025

 
15.9

 
15.7

 
13.2

 
0.01
%
V2 Tango LLC dba Palette 22
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/23/2025

 
250.0

 
247.0

 
214.8

 
0.11
%
800 on the Trax LLC and Matrix Z LLC
 
Nonmetallic Mineral Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
12/23/2040

 
240.0

 
240.0

 
234.7

 
0.12
%
Ridge Road Equestrian LLC dba Ricochet Ridge Ranch Inc
 
Amusement, Gambling, and Recreation Industries
 
Term Loan
 
Prime plus 2.75%
 
12/23/2040

 
102.5

 
102.2

 
102.1

 
0.05
%
Optima Health Care Inc
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
12/23/2025

 
62.5

 
61.7

 
61.7

 
0.03
%
Premier Athletic Center of Ohio Inc. and Gates Investments and Wade Gates
 
Amusement, Gambling, and Recreation Industries
 
Term Loan
 
Prime plus 2.75%
 
12/22/2028

 
882.0

 
874.5

 
877.7

 
0.43
%
B&B Organics LLC
 
Beverage and Tobacco Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
12/22/2040

 
375.0

 
373.9

 
381.1

 
0.19
%
Joyce Outdoor Advertising Chicago LLC
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
12/22/2040

 
300.0

 
300.0

 
284.7

 
0.14
%
The LAX Shop Inc
 
Sporting Goods, Hobby, Musical Instrument, and Book Stores
 
Term Loan
 
Prime plus 2.75%
 
12/22/2025

 
125.0

 
123.5

 
123.3

 
0.06
%
D.C. Group, Inc. dba Unique Setting of New York
 
Merchant Wholesalers, Durable Goods
 
Term Loan
 
Prime plus 2.75%
 
12/21/2025

 
750.0

 
740.9

 
658.6

 
0.32
%
Hattingh Incorporated dba Prosthetic Care Facility
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
12/21/2025

 
18.0

 
17.8

 
15.8

 
0.01
%
G.W. Fitness Centers, LLC and J.G. Fitness LLC and NP Gym LLC and ANA
 
Amusement, Gambling, and Recreation Industries
 
Term Loan
 
Prime plus 2.75%
 
12/18/2040

 
1,025.0

 
1,022.0

 
1,041.5

 
0.51
%
Accent Tag and Label Inc
 
Printing and Related Support Activities
 
Term Loan
 
Prime plus 2.75%
 
12/18/2040

 
665.8

 
663.9

 
651.3

 
0.32
%
Trip Consultants U.S.A. Inc.
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
12/18/2025

 
175.0

 
172.9

 
145.8

 
0.07
%

11


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
Labmates LLC
 
Miscellaneous Store Retailers
 
Term Loan
 
Prime plus 2.75%
 
12/18/2040

 
162.5

 
162.0

 
165.1

 
0.08
%
Jay Kevin Gremillion dba Dino Smiles Children's Cosmetic Dentistry
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
12/18/2025

 
73.0

 
73.0

 
63.9

 
0.03
%
Abbondanza Market LLC dba Hampton Falls Village Market
 
Food and Beverage Stores
 
Term Loan
 
Prime plus 2.75%
 
12/18/2025

 
73.8

 
72.2

 
62.7

 
0.03
%
Capital Scrap Metal LLC
 
Merchant Wholesalers, Nondurable Goods
 
Term Loan
 
Prime plus 2.75%
 
12/18/2025

 
36.0

 
35.6

 
30.3

 
0.01
%
Mustafa Inc dba Adiba Grocery
 
Food and Beverage Stores
 
Term Loan
 
Prime plus 2.75%
 
12/17/2025

 
103.8

 
102.5

 
100.8

 
0.05
%
Sourceco Limited Liability Company
 
Merchant Wholesalers, Nondurable Goods
 
Term Loan
 
Prime plus 2.75%
 
12/17/2025

 
62.5

 
61.8

 
54.0

 
0.03
%
Learning Skills LLC and Christopher Shrope
 
Educational Services
 
Term Loan
 
Prime plus 2.75%
 
12/17/2025

 
10.8

 
10.7

 
9.0

 
%
New York Home Health Care Equipment, LLC
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
12/16/2025

 
875.0

 
864.4

 
839.0

 
0.41
%
Swalm Sreet LLC and New York Home Health Care Equipment LLC
 
Ambulatory Health Care Services
 
Term Loan
 
Prime plus 2.75%
 
12/16/2040

 
375.0

 
373.9

 
370.1

 
0.18
%
JAG Unit 1, LLC
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/16/2025

 
250.0

 
247.0

 
208.3

 
0.10
%
Abitino's JFK LLC dba Abitino's
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/16/2022

 
125.0

 
125.0

 
110.6

 
0.05
%
D&G Capital LLC dba Miami Grill 277
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/16/2025

 
83.8

 
82.4

 
76.5

 
0.04
%
Moments to Remember USA LLC dba Retain Loyalty
 
Professional, Scientific, and Technical Services
 
Term Loan
 
Prime plus 2.75%
 
12/16/2025

 
75.0

 
74.2

 
67.6

 
0.03
%
SDA Holdings LLC and Les Cheveux Salon Inc
 
Personal and Laundry Services
 
Term Loan
 
Prime plus 2.75%
 
12/15/2040

 
428.8

 
427.4

 
412.9

 
0.20
%
Evans & Paul LLC and E&P Holdings I LLC
 
Nonmetallic Mineral Product Manufacturing
 
Term Loan
 
Prime plus 2.75%
 
12/15/2025

 
125.0

 
123.5

 
109.7

 
0.05
%
Basista Family Limited Partnership and UPE, Inc.
 
Merchant Wholesalers, Durable Goods
 
Term Loan
 
Prime plus 2.75%
 
12/14/2040

 
342.5

 
341.5

 
333.7

 
0.16
%
DC Enterprises Ltd. dba Lakeview True Value
 
Building Material and Garden Equipment and Supplies Dealers
 
Term Loan
 
Prime plus 2.75%
 
12/14/2025

 
22.5

 
22.2

 
20.9

 
0.01
%
Alexandra Afentoulides dba Vi's Pizza Restaurant
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/11/2040

 
46.3

 
46.1

 
47.0

 
0.02
%
ENI Inc. dba ENI Group, Inc
 
Other Information Services
 
Term Loan
 
Prime plus 2.75%
 
12/11/2025

 
36.0

 
35.6

 
31.4

 
0.02
%

12


NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS MARCH 31, 2016 (UNAUDITED)
(In Thousands)

Portfolio Company
 
Industry
 
Type of Investment
 
Interest Rate (2)
 
Maturity
 
Principal
 
Cost
 
Fair Value
 
% of Net Assets
AGR Foodmart Inc dba Nashua Road Mobil
 
Gasoline Stations
 
Term Loan
 
Prime plus 2.75%
 
12/11/2025

 
22.5

 
22.2

 
20.9

 
0.01
%
Tri-State Remodeling & Investments, LLC
 
Specialty Trade Contractors
 
Term Loan
 
Prime plus 2.75%
 
12/11/2025

 
15.9

 
15.7

 
15.1

 
0.01
%
Cares, Inc dba Dumpling Grounds Day Care Center
 
Social Assistance
 
Term Loan
 
Prime plus 2.75%
 
12/10/2025

 
7.5

 
7.4

 
7.3

 
%
Custom Exteriors, Inc.
 
Specialty Trade Contractors
 
Term Loan
 
Prime plus 2.75%
 
12/9/2025

 
100.0

 
98.8

 
86.3

 
0.04
%
Sushiya, Inc.
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/8/2025

 
108.8

 
107.4

 
96.1

 
0.05
%
My Jewels, LLC dba The UPS Store #6712
 
Administrative and Support Services
 
Term Loan
 
Prime plus 2.75%
 
12/7/2025

 
56.3

 
56.3

 
47.4

 
0.02
%
LC Blvd Holdings LLC and Mt Pleasant Wash & Wax LLC
 
Repair and Maintenance
 
Term Loan
 
Prime plus 2.75%
 
12/4/2040

 
502.5

 
501.1

 
496.7

 
0.24
%
American Campgrounds LLC dba Whit's End Campground
 
Accommodation
 
Term Loan
 
Prime plus 2.75%
 
12/4/2040

 
293.0

 
292.2

 
290.2

 
0.14
%
Food & Fuel Company LLC dba Lowery Food Mart
 
Food and Beverage Stores
 
Term Loan
 
Prime plus 2.75%
 
12/4/2040

 
122.5

 
122.1

 
124.0

 
0.06
%
Blue Ox Trucking Inc.
 
Truck Transportation
 
Term Loan
 
Prime plus 2.75%
 
12/4/2025

 
12.3

 
12.2

 
12.1

 
0.01
%
Tariq, LLC dba 76 Food Mart
 
Gasoline Stations
 
Term Loan
 
Prime plus 2.75%
 
12/2/2040

 
375.0

 
373.9

 
371.1

 
0.18
%
401 JJS, Corp and G. Randazzo's Trattoria Corporation
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
12/1/2040

 
52.8

 
52.8

 
51.6

 
0.03
%
All-Tag Corporation
 
Merchant Wholesalers, Durable Goods
 
Term Loan
 
Prime plus 2.75%
 
11/30/2025

 
250.4

 
245.8

 
214.4

 
0.11
%
Block and Grinder LLC
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
11/30/2025

 
200.0

 
198.8

 
195.5

 
0.10
%
Japp Business Inc dba Pick and Eat and Japp Drink Corp.
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
11/30/2025

 
125.0

 
122.7

 
108.8

 
0.05
%
Smokeyard Inc dba Smokeyard BBQ and Chop Shop
 
Food Services and Drinking Places
 
Term Loan
 
Prime plus 2.75%
 
11/30/2025

 
125.0

 
122.7

 
105.8

 
0.05
%
Delta Aggregate, LLC
 
Mining (except Oil and Gas)
 
Term Loan
 
Prime plus 2.75%
 
11/30/2025

 
100.0

 
98.2

 
98.1

 
0.05
%
Hurshell Leon Dutton dba High Jump Party Rentals
 
Rental and Leasing Services
 
Term Loan
 
Prime plus 2.75%
 
11/30/2025

 
17.6

 
17.2