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BROADWAY FINANCIAL CORPORATION

(BYFC)
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BROADWAY FINANCIAL CORP DE : Unregistered Sale of Equity Securities, Financial Statements and Exhibits (form 8-K)

04/08/2021 | 05:13pm EDT

Item 3.02 Unregistered Sales of Equity Securities.

Share Exchange

On April 5, 2021, Broadway Financial Corporation (the "Company") issued 681,300 shares of the Company's Class C Common Stock to J.P. Morgan Chase Community Development Corporation ("JPM") in exchange for 681,300 shares of the Company's Class A Common stock held by JPM in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended, and pursuant to a Share Exchange Agreement entered into by the Company and JPM on April 1, 2021. The Share Exchange Agreement contains customary representations and warranties of the Company and JPM.

Closing of Private Placement

As previously disclosed by the Company in Current Reports on Form 8-K dated November 25, 2020 and February 23, 2021, the Company entered into stock purchase agreements on November 23, 2020, November 24, 2020, February 19, 2021 and February 20, 2021 with various accredited investors pursuant to which the Company agreed to sell such investors, severally, shares of the Company's Class A Common Stock and Class C Common Stock at a price per share of $1.78.

On April 6, 2021, the Company completed sales of an aggregate of 18,474,000 shares of its common stock, consisting of 11,221,921 shares of its Class A Common Stock and 7,252,079 shares of its Class C Common Stock, for aggregate consideration of approximately $32.88 million, to such investors pursuant to the stock purchase agreements. The Company paid aggregate placement fees of approximately $1.264 million to Raymond James & Associates, Inc. and Keefe, Bruyette & Woods, Inc. in connection with the sales of common stock.

Class C Common Stock

The Company's 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 that are 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 an 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.

Item 9.01 Financial Statements and Exhibits.




(d) Exhibits



  99.1   Press Release dated April 7, 2021, announcing closing of sale of common
         stock.



                                       2

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