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Broadway Financial Corporation Achieves Key Component Of Capital Raise Initiative

Broadway Financial Corporation (the “Company”) (NASDAQ Capital Market: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today announced that the U.S. Department of the Treasury (the “Treasury”) has consented to exchange (the “Exchange”) its Series D and E preferred stock (the “Preferred Stock”) in the Company for new common stock valued at a 50% discount to the Preferred Stock aggregate liquidation amount of $15 million. In addition, the Treasury has consented to exchange the accumulated, unpaid dividends on the Preferred Stock at 100% of the accrued amount.

The Exchange is subject to various conditions, including execution of a definitive exchange agreement with the Treasury, the exchange of the Company’s other outstanding series of preferred stock at 50% of the aggregate liquidation values, the placement of at least $5 million of new common equity capital, and other terms and conditions. The Exchange is expected to close contemporaneously with the closing of the private placement and the other exchange transactions.

The Preferred Stock and accumulated, unpaid dividends will initially be exchanged for a new series of Common Stock Equivalents that will automatically convert into the Company’s common stock upon receipt of shareholder approval, as required by NASDAQ Listing Rule 5635(d). The Common Stock Equivalents will be issued at a price per share equal to the price of new shares of common stock that the Company plans to issue in connection with a private placement of capital pursuant to its recapitalization plan. As previously disclosed, the Company has engaged PGP Capital Advisors, LLC to assist it in raising equity capital.

The Company also announced that is has an agreement in principle with the holder of its Series B Perpetual Preferred Stock (“Series B Preferred”) to exchange the shares of Series B Preferred for Common Stock Equivalents with a value equal to 50% of the aggregate liquidation value of $1 million, subject to execution of a definitive exchange agreement and certain other terms and conditions.

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