Broadway Financial Corporation Announces Notification from Nasdaq Regarding Late Filing of Form 10-Q and Form 10-K
Broadway Financial (BYFC), the parent company of City First Bank, received a Staff Delisting Determination letter from Nasdaq on May 14, 2024. The notification was due to the company's failure to timely file its Q3 2023 Form 10-Q and its 2023 Form 10-K with the SEC. Although Broadway submitted materials to Nasdaq earlier in the year and was granted an extension until May 13, 2024, it missed the deadline. The company has since filed the required reports as of May 20, 2024, except for its Q1 2024 Form 10-Q. Nasdaq acknowledged the company's compliance with its Q3 2023 and 2023 filings. Broadway intends to appeal the delisting decision before a Nasdaq Hearing Panel and is working to file the remaining delinquent report promptly to regain full compliance.
- Filed Q3 2023 Form 10-Q and 2023 Form 10-K as of May 20, 2024.
- Nasdaq acknowledged compliance with the Listing Rule for Q3 2023 and 2023 filings.
- Company is actively working to file the remaining delinquent report.
- Received Staff Delisting Determination letter from Nasdaq due to late filings.
- Missed the extended deadline of May 13, 2024, granted by Nasdaq.
- Has not yet filed Q1 2024 Form 10-Q as of May 20, 2024.
- Potential risk of delisting from Nasdaq pending appeal outcome.
Insights
The recent notification from Nasdaq regarding Broadway Financial Corporation’s delayed filings is a significant issue for investors. The delay in filing mandatory financial documents like the Q3 2023 Form 10-Q and the 2023 Form 10-K can raise concerns about the company's internal controls and financial transparency. When a company fails to provide timely financial reports, it creates uncertainty around its financial health and operational status, which can ultimately affect investor confidence.
Although Broadway Financial has since filed the required reports and is working towards filing the delinquent Q1 2024 Form 10-Q, this delay has already triggered a delisting notice, raising the possibility of the stock being removed from Nasdaq. Delisting could drastically reduce the stock’s liquidity, making it more challenging for shareholders to trade their shares easily. Furthermore, it could lead to a downward pressure on the stock price as institutional investors may be forced to sell their holdings due to investment guidelines that prohibit owning stocks not listed on a major exchange.
From a financial point of view, investors should consider both the short-term volatility and uncertainty due to potential delisting and the long-term implications on the company’s credibility and operational effectiveness. The cost implications of legal fees and resources to regain compliance may also impact the company's financials negatively.
The impact of Broadway Financial Corporation’s delayed filing on its market perception cannot be understated. Market perception is critical, especially for a publicly traded company. The fact that Broadway has been granted an exception but is still facing potential delisting suggests they are under significant operational stress. This situation could erode stakeholder trust, which is essential for maintaining a stable shareholder base and attracting new investment.
Filing delays can sometimes be symptomatic of deeper operational or financial challenges. Investors need to be cognizant that while the company is working towards full compliance, the underlying issues that caused the delay may still pose risks. It’s also worth noting that any future delays could result in further disciplinary actions from Nasdaq, which might exacerbate the already fragile situation.
On the positive side, if the company successfully navigates this challenge and regains full compliance, it could restore some investor confidence. However, the process and uncertainty during this period typically lead to higher volatility in stock prices.
The Staff Determination was issued because the Company had not filed its Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Q3 2023 Form 10-Q”), or its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Form 10-K”). In light of materials submitted by the Company to Nasdaq on January 11, 2024 and May 1, 2024, the Nasdaq Staff granted the Company an exception until May 13, 2024, to regain compliance with the Listing Rule.
The Company has been in communication with Nasdaq and intends to appeal the Staff Determination before a Nasdaq Hearing Panel and seek a further stay of any suspension or delisting action pending the hearing process in accordance with the procedures set forth in the Staff Determination letter.
As of the close of business on May 20, 2024, the Company had filed the Q3 2023 Form 10-Q and the 2023 Form 10-K, but had not yet filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. Following the filing of the Q3 2023 Form 10-Q and the 2023 Form 10-K, Nasdaq provided the Company with a letter stating that we had achieved compliance with the Listing Rule with respect to the Q3 2023 Form 10-Q and the 2023 Form 10-K. The Company is working diligently to file the delinquent periodic report as soon as possible to regain full compliance with the Listing Rule.
About Broadway Financial Corporation
Broadway Financial Corporation conducts its operations through its wholly-owned banking subsidiary, City First Bank, National Association, which is a leading community-oriented bank in
Stockholders, analysts, and others seeking information about the Company are invited to write to: Broadway Financial Corporation, Investor Relations, 4601 Wilshire Boulevard, Suite 150,
Cautionary Statement Regarding Forward-Looking Information
This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding the filing of our Q1 2024 Form 10-Q, our intention to appeal the Staff Determination, and the outcome of our appeal, are forward-looking statements. Forward‑looking statements typically include the words “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” “poised,” “optimistic,” “prospects,” “ability,” “looking,” “forward,” “invest,” “grow,” “improve,” “deliver” and similar expressions, but the absence of such words or expressions does not mean a statement is not forward-looking. These forward‑looking statements are subject to risks and uncertainties, including those identified below, which could cause actual future results to differ materially from historical results or from those anticipated or implied by such statements. Readers should not place undue reliance on these forward‑looking statements, which speak only as of their dates or, if no date is provided, then as of the date of this press release. We undertake no obligation to update or revise any forward‑looking statements, whether as a result of new information, future events, or otherwise, except to the extent required by law. The following factors, among others, could cause future results to differ materially from historical results or from those indicated by forward‑looking statements included in this press release: the possibility of unanticipated delays that will prevent the filing of the Company’s SEC filings, the risk that the work necessary to complete the filings is greater than anticipated or may involve the resolution of additional issues identified during the review process, the outcome of the Company’s appeal of the Staff Determination, the risk that the Company may not respond adequately to further inquiries from Nasdaq relating to the appeal, and the risk that Nasdaq will not accept any plan to regain compliance and will delist the Company's common stock. Other risks that could cause these differences include, but are not limited to: (1) the level of demand for mortgage and commercial loans, which is affected by such external factors as general economic conditions, market interest rate levels, tax laws, and the demographics of our lending markets; (2) the direction and magnitude of changes in interest rates and the relationship between market interest rates and the yield on our interest‑earning assets and the cost of our interest‑bearing liabilities; (3) the rate and amount of loan losses incurred and projected to be incurred by us, increases in the amounts of our nonperforming assets, the level of our loss reserves and management’s judgments regarding the collectability of loans; (4) changes in the regulation of lending and deposit operations or other regulatory actions, whether industry-wide or focused on our operations, including increases in capital requirements or directives to increase loan loss allowances or make other changes in our business operations; (5) legislative or regulatory changes, including those that may be implemented by the current administration in
Forward-looking statements in this press release speak only as of the date they are made, and we undertake no obligation, and do not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except to the extent required by law. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
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Investor Relations
Brenda J. Battey, Chief Financial Officer, (323) 556-3264
Investor.relations@cityfirstbroadway.com
Source: Broadway Financial Corporation
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