Broadway Financial Corporation Announces Terms Of 1-For-8 Reverse Stock Split

Author: Benzinga Newsdesk | October 31, 2023 11:08am

Broadway Financial Corporation ("Broadway," "we," or the "Company") (Nasdaq Capital Market: BYFC), parent company of City First Bank, National Association, announced today the terms of the Company's previously disclosed reverse stock split (the "Reverse Split").

Authorization for the Reverse Split was approved by stockholders at Broadway's Annual Meeting on June 21, 2023. On September 20, 2023, the Board of Directors selected a Reverse Split ratio of 1-for-8 shares (the "Split Ratio") pursuant to the authorization approved by stockholders. The Reverse Split will be effective at 12:01 a.m. Eastern Time on November 1, 2023 for all outstanding shares of Broadway's three classes of common stock: Class A common stock, Class B common stock, and Class C common stock. The Company's Class A common stock will continue to trade under the symbol "BYFC" and is expected to begin trading on the Nasdaq Capital Market on a split-adjusted basis on November 1, 2023.

The Class B common stock and Class C common stock are not registered for trading and will not be registered after the effective time for the Reverse Split. The new shares of Class B and Class C common stock will be issued with the same restrictive legends that existed on the old shares of Class B and Class C common stock, and will remain nonvoting shares.

As a result of the Reverse Split, every eight shares of the Company's issued and outstanding common stock will be automatically reclassified into one new share of common stock, which will remain fully paid and non-assessable. The Reverse Split will not modify any rights or preferences of any of Broadway's common stock, and will be applied uniformly and equally to stockholders, such that the percentage ownership interests in the Company's equity will not change, except to the extent that the Reverse Split results in a stockholder owning a fractional share. No fractional shares will be issued in connection with the Reverse Split, and in lieu thereof, stockholders who would otherwise be entitled to a fractional share will receive a proportional cash payment based on the closing trading price per share of the Class A common stock on the Nasdaq Capital Market on October 31, 2023, the trading day immediately preceding the effective time of the Reverse Split, as adjusted for the Split Ratio.

The Reverse Split will not change the number of authorized shares of each class of common stock, or the par value of the common stock. The Company's outstanding Non-Cumulative Redeemable Perpetual Preferred stock, Series C, will not be adjusted for the Reverse Split. The Company will proportionally adjust the exercise prices and the number of shares underlying the Company's outstanding equity awards, as well as the number of shares issued and issuable under Broadway's equity incentive plan.

The Reverse Split is intended to bring the Company into compliance with the minimum bid price requirements for maintaining its listing on the Nasdaq Capital Market. Broadway received a written notice from Nasdaq of its failure to comply on September 25, 2023.

Following the effectiveness of the Reverse Split the new CUSIP number for the Class A common stock will be 111444709, the new CUSIP number for the Class B common stock will be 111444808, and the new CUSIP number for the Class C common stock will be 111444881. Immediately following the Reverse Split there will be approximately 9,019,187 shares of common stock outstanding, comprised of 5,921,046 shares of Class A common stock, 1,425,577 shares of Class B common stock and 1,672,564 shares of Class C common stock.

Broadway has appointed its transfer agent, Computershare Inc., to act as exchange agent for the Reverse Split. Stockholders owning pre-split shares via a bank, broker, or other nominee will have their positions automatically adjusted to reflect the Reverse Split and will not be required to take further action in connection with the Reverse Split, subject to the nominees' particular procedures and policies. Similarly, registered stockholders holding pre-split shares of the Company's common stock electronically in book-entry form are also not required to take further action in connection with the Reverse Split. Holders of certificated shares will be contacted by the Company or its exchange agent with further details about how to surrender old certificates in exchange for new shares.

Additional information about the Reverse Split can be found in the Company's definitive proxy statement filed with the Securities and Exchange Commission (the "SEC") on May 1, 2023 and the Company's Form 8-K filed with the SEC on September 29, 2023, both of which are available free of charge at the SEC's website, www.sec.gov, and on the Company's website at http://www.cityfirstbank.com/.

Posted In: BYFC