Business Context and Reporting Period
Company: Broadway Financial Corporation (Parent of Broadway Federal Bank, f.s.b.)
Filing Type: Form 8-K (Current Report)
Date of Report: November 22, 2011 (Event Date)
Reporting Period: The filing addresses the failure to file the Quarterly Report on Form 10-Q for the quarter ended September 30, 2011.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The report explicitly states that the Company is unable to complete its financial statements for the quarter ended September 30, 2011.
Material Changes and Delisting Notice
Nasdaq Non-Compliance: The Company received a letter from the Nasdaq Listing Qualifications Department dated November 22, 2011, stating it is not in compliance with Nasdaq Listing Rule 5250(c)(1).
Reason for Non-Compliance: Failure to timely file the Form 10-Q for the third quarter of 2011.
Underlying Issue: The Company cannot finalize financial statements pending resolution of questions regarding a tax sharing agreement between the Company and the Bank. Specific unresolved items include:
- The timing of when a payment is due under the agreement.
- The required amount of such payment.
- The effect of the payment on the Company's cash position on a separate company basis.
Outlook, Risks, and Management Commentary
Compliance Plan: Under Nasdaq Small-Cap Market rules, the Company must submit a plan to regain compliance within 60 calendar days of receiving the deficiency letter.
Potential Extension: If Nasdaq accepts the plan, the Company may be granted an exception of up to 180 calendar days from the original Form 10-K due date (extending to May 14, 2012) to regain compliance.
Management Expectation: The Company expects to file its 2011 Form 10-Q in the near future.
Risk: Continued failure to comply with listing standards could result in delisting from the Nasdaq Stock Market.
Investor Verification Checklist
- Verify the status of the tax sharing agreement dispute between Broadway Financial Corporation and Broadway Federal Bank.
- Monitor the submission and acceptance of the Company's compliance plan by Nasdaq within the 60-day window.
- Confirm the filing date of the overdue Form 10-Q for the quarter ended September 30, 2011.
- Review the attached press release (Exhibit 99.1) for additional details on the deficiency notice.