Risk Factors Update Summary

• The company could be adversely affected by weakness in residential and commercial real estate markets.
• Increased use of mobile and cloud technologies heightens operational risks due to remote work.
• Risks related to operation as a financial holding company were significantly expanded, including regulatory violations and loss of pass-through tax treatment.
• The Federal Reserve raised interest rates in 2022 and 2023. Future changes in monetary policy are uncertain.
• The company funded approximately 10,570 PPP loans totaling $1.19 billion during the PPP duration.
• SEC rules now require disclosure of material cybersecurity incidents within four business days.
• Risks related to the economy were detailed, including impacts of global conditions, inflation, and terrorist attacks.
• Inflation may adversely impact the fair value of investments. Future inflation could negatively affect operations.
• Risks related to regulation, supervision, and compliance structure were emphasized, highlighting dependence on key personnel.
• Climate change poses physical and financial risks, affecting energy use and financial conditions.
• Failure to raise the U.S. federal debt limit could lead to default, market volatility, and increased borrowing costs.
• The company agreed to repurchase outstanding principal and interest under PPP loans in certain circumstances.
• The company faces risks and challenges related to the development and use of Artificial Intelligence (AI).
• Changes to SBA Section 7(a) Program may impact loan origination volume. Recent SOP revisions may negatively affect business.
• Loss of SBA 7(a) lending licenses could impact loan origination fees and profitability.
• The company may experience negative impacts due to the termination of activities conducted by Newtek Technology Solutions.
• Changes in SBA regulations could impact loan origination, servicing, and liquidation, affecting financial results.
• The company's CEO beneficially owns approximately 5.3% of the company's common stock.
• Failure to comply with SBA regulations may result in the transfer of liability on SBA guaranty, impacting operations.
• The company's ability to generate gains from the sale of loans may decrease due to future issuances of common stock.