UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): November 23,
2020
BROADWAY
FINANCIAL CORPORATION
(Exact name of registrant as
specified in its charter)
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001-39043
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95-4547287
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification
Number)
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5055 Wilshire
Boulevard Suite 500, Los Angeles, California
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90036
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(Address of principal executive
offices)
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(Zip Code)
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Registrant’s telephone number,
including area code: (323)
634-1700
NOT
APPLICABLE
(Former name or former address, if
changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions:
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Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the
Act:
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Title of each
class
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Trading
Symbol(s)
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Name of each
exchange on which registered
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Common Stock, par value $0.01 per
share (including attached preferred stock purchase rights)
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BYFC
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The Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant is an emerging
growth company as defined in as defined in Rule 405 of the
Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§ 240.12b-2 of this
chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 1.01
Entry Into a Material Definitive Agreement.
Broadway Financial Corporation (the “Company”) entered into
stock purchase agreements (the “Stock Purchase Agreements”) with
Cedars-Sinai Medical Center (“Cedars-Sinai”), Banc of America
Strategic Investments Corporation, a wholly owned subsidiary of
Bank of America Corporation (“BofA”) and Wells Fargo Central
Pacific Holdings, Inc., a wholly owned subsidiary of Wells Fargo
& Company (“Wells Fargo” and together with Cedars-Sinai and
BofA, the “Investors”) on November 23, 2020, November 23, 2020 and
November 24, 2020, respectively, pursuant to which the Company has
agreed to sell and such Investors have severally agreed to purchase
shares of the Company’s common stock in individual amounts that
aggregate to up to 4,639,888 shares of Class A Common Stock of the
Company, par value $0.01 per share (“Class A Common Stock”) and
1,587,162 shares of Class C Common Stock of the Company, par value
$0.01 per share (“Class C Common Stock”, and together with the
Class A Common Stock, the “Common Stock”), in each case, structured
as non-controlling equity investments and subject to adjustment in
certain circumstances, at a price of $1.78 per share payable in
cash at the closing of the sales of stock, for an aggregate
purchase price of $11,084,149.
The Company’s existing classes of voting common stock and
non-voting common stock will be renamed as Class A Common Stock and
Class C Common Stock, respectively, in connection with the
consummation of the merger of CFBanc Corporation with and into the
Company, in which the Company will be the surviving corporation,
pursuant to the previously reported Agreement and Plan of Merger,
dated August 25, 2020, entered into between the Company and CFBanc
Corporation (the “Merger”).
The consummation of each of the sales of shares of Common
Stock to the Investors under the respective Stock Purchase
Agreements is subject to the satisfaction of certain closing
conditions, including (i) the consummation of the Merger, which is
subject to the satisfactions of various conditions including
stockholder and regulatory approval, among others, (ii) receipt of
any stockholder approvals required under applicable law or the
NASDAQ Listing Rules and (iii) certain other customary closing
conditions. There can be no assurance that all of such conditions
will be satisfied. The respective stock purchase obligations of the
individual Investors are not conditioned on the completion of sales
of Common Stock to any other Investor.
The Stock Purchase Agreements contain customary
representations and warranties of the Company and the Investors.
The Stock Purchase Agreements also contain certain indemnification
obligations of each party with respect to breaches of
representations, warranties and covenants and certain other
specified matters.
The Company may enter into additional stock purchase
agreements with other investors for the sale of up to a maximum of
12,720,000 shares of Common Stock, including the 6,227,050 shares
covered by the Stock Purchase Agreements reported herein, for the
same price per share and on similar terms as the Stock Purchase
Agreements entered into with the Investors.
The above description of the Stock Purchase Agreements has
been included to provide investors and security holders with
information regarding the terms of the Stock Purchase Agreements.
It is not intended to provide any other factual information about
the Company, the Investors or their respective subsidiaries and
affiliates.
Item
3.02 Unregistered
Sales of Equity Securities.
As described in Item 1.01 above, on November 23, 2020 and
November 24, 2020, the Company entered into Stock Purchase
Agreements with the Investors pursuant to which the Company has
agreed to sell and such Investors have severally agreed to purchase
4,639,888 shares of Class A Common Stock and 1,587,162 shares of
Class C Common Stock, at a price of $1.78 per share, for an
aggregate purchase price of $11,084,149. Such Stock Purchase
Agreements were individually negotiated with the respective
Investors and the sales of shares of Common Stock pursuant thereto
will be made in private placement transactions that are exempt from
the registration requirements of the Securities Act of 1933, as
amended, pursuant to Section 4(a)(2) thereof or Rule 506 of
Regulation D promulgated thereunder.
The Company expects to pay placement fees of an aggregate
amount of approximately $221,683 to Raymond James & Associates,
Inc. and Keefe, Bruyette & Woods, Inc. in connection with the
transaction. The Class C Common Stock is subject to restrictions on
transfer (summarized below) and will convert automatically into an
equal number of shares of Class A Common Stock in the event of
permitted transfers in accordance with the same terms applicable to
the Company’s currently outstanding non-voting common stock, par
value $0.01 per share, as set forth in the Company’s certificate of
incorporation.
The Class C Common Stock is only transferrable by the initial
holder thereof or an affiliate of the initial holder (i) to an
affiliate of the initial holder, (ii) to the Company, (iii) in a
widespread public distribution, (iv) in a transfer in which no
transferee (or group of associated transferees) would receive 2% or
more of any class of voting securities of the Company, or (v) to a
transferee that would control more than 50% of the voting
securities of the Company without any transfer from the initial
holder or any affiliate of the initial holder. Pursuant to the
Company’s certificate of incorporation, the Class C Common Stock
may be made subject to additional restrictions on transfer imposed
by the Company if necessary to preserve the non-voting
classification of the Class C Common Stock for bank regulatory
purposes.
SIGNATURE
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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BROADWAY FINANCIAL
CORPORATION
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Name: Brenda J. Battey
Title: Chief Financial Officer
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