{"url_path":"/sec/byfc/10-k/2026/item-9a","section_key":"item-9a","section_title":"Item 9A CONTROLS AND PROCEDURES","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-03-31","source_url":"https://www.sec.gov/Archives/edgar/data/1001171/0001140361-26-012311-index.html","accession_number":"0001140361-26-012311","cik":"0001001171","ticker":"BYFC","issuer_name":"BROADWAY FINANCIAL CORP \\DE\\","edgar_url":"https://www.sec.gov/Archives/edgar/data/1001171/0001140361-26-012311-index.html","primary_entity_key":"0001001171","primary_entity_name":"BROADWAY FINANCIAL CORP \\DE\\"},"word_count":1091,"has_tables":true,"body_markdown":"ITEM 9A.\n\nCONTROLS AND PROCEDURES\n\nEvaluation of Disclosure Controls and Procedures\n\nAs of December 31, 2025, an evaluation was performed under the supervision of the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”)\nof the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective as of\nDecember 31, 2025 due to material weaknesses in the Company’s internal control over financial reporting, as further described below.\n\nManagement’s Annual Report on Internal Control Over Financial Reporting\n\nThe management of Broadway Financial Corporation is responsible for establishing and\nmaintaining adequate internal control over financial reporting for the Company as defined in Rule 13a 15(f) under the Exchange Act. This system, which management has chosen to base on the criteria for effective internal control over financial\nreporting established in “Internal Control — Integrated Framework (2013),” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and which is effected by the Company’s Board of Directors, management and other\npersonnel, is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.\n\nThe Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in\nreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in\naccordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the Directors of the Company; and (3) provide reasonable assurance\nregarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or\ndetect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time.\n\nWith the participation of the Company’s PEO and PFO, management has conducted an evaluation of the effectiveness of the Company’s system of internal\ncontrol over financial reporting. Based on this evaluation, management determined that the Company’s system of internal control over financial reporting was not effective as of December 31, 2025, due to the material weaknesses described below.\n\nA material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a\nreasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.\n\nThe following material weaknesses were identified:\n\nThe Company did not maintain effective components of the COSO framework in the areas of control activities, information and communication process and\nmonitoring activities that contributed to the following material weaknesses:\n\n•\n\nThe Company did not have controls in place to identify unusual or infrequent equity-related contracts entered into which could have a\nmaterial impact on accounting and financial reporting.\n\n•\n\nThe Company did not maintain controls to consider subsequent appraisals for collateral dependent loans.\n\nThis annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial\nreporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.\n\nRemediation Plan for Material Weaknesses\n\nIn response to the identified material weaknesses, our management, with the oversight of the Audit Committee of our Board of Directors, has begun to\ndedicate significant resources, including additional employee training, toward efforts to improve our internal control over financial reporting. Management is actively engaged in the planning for, and implementation of, remediation efforts to\naddress the material weaknesses.\n\n38\n\n[Table of Contents](#TABLEOFCONTENTS)\n\n•\n\nThorough discussion and review of all new unusual or infrequent equity-related contracts each quarter with documentation of accounting\ntreatment and disclosure with respect to such transactions that could have a potential impact on the Company’s financial statements, and\n\n•\n\nAn enhancement of the controls over the allowance for credit losses at each quarter end to evaluate that all appraisals for collateral\ndependent loans that are received prior to the date that the financial statements are issued have been evaluated by management and considered in the estimate of the allowance for credit losses. \n\nAdditional time is required to complete the design and test the operating effectiveness of the applicable controls to demonstrate the effectiveness of\nthe remediation efforts. The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating\neffectively.\n\nRemediation of Previously Identified Material Weakness\n\nManagement has concluded that the material weakness in internal control over financial reporting related to the accounting for loan participations\ninitially described in Part II, Item 9A “Controls and Procedures,” of our Annual Report on Form 10-K/A for the Year Ended December 31, 2024 (the “2024 Form 10-K/A”) has been remediated as of December 31, 2025. The Company has implemented additional\ncontrol procedures, including redesigning and enhancing control activities related to preparation and review of existing and new loan participation agreements. Management has evaluated these enhanced controls and has concluded they were designed\nand implemented and are operating effectively.\n\nChanges in Internal Control Over Financial Reporting\n\nThere were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)\nthat occurred during the fourth quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.\n\nInherent Limitations on Effectiveness of Controls\n\nOur disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. Management does\nnot expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions, and can provide only reasonable, not\nabsolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the\nCompany have been detected."}