Cohen & Company Inc. Annual Report 2023

Plain-text annual report

Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K (Mark One)☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number: 001-32026 COHEN & COMPANY INC.(Exact name of registrant as specified in its charter)Maryland16-1685692(State or Other Jurisdiction ofIncorporation or Organization)(I.R.S. EmployerIdentification No.) Cira Centre 2929 Arch Street, Suite 1703Philadelphia, Pennsylvania19104(Address of principal executive offices)(Zip Code)Registrant’s telephone number, including area code: (215) 701-9555 Securities registered pursuant to Section 12(b) of the Act: Title of classTrading Symbol(s)Name of each exchange on which registered Common Stock, par value $0.01 per shareCOHNNYSE AMERICAN STOCK EXCHANGE Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files. Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See thedefinitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer☐Accelerated filer☐Non-accelerated filer☐Smaller Reporting Company☒ Emerging Growth Company☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting underSection 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of anerror to previously issued financial statements. ☒ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any ofthe registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of June 30, 2023, the aggregate market value of the Common Stock held by non-affiliates of the Registrant was approximately $5.3 million. As of March 1, 2024, there were1,928,172 shares of Common Stock of Cohen & Company Inc. outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Proxy Statement for the Registrant’s 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. Table of Contents COHEN & COMPANY INC. TABLE OF CONTENTS PagePART I Item 1.Business.5Item 1A.Risk Factors.16Item 1B.Unresolved Staff Comments.37Item 1C.Cybersecurity37Item 2.Properties.38Item 3.Legal Proceedings.38Item 4.Mine Safety Disclosures.38 PART II Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.39Item 6.Selected Financial Data.39Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations.40Item 7A.Quantitative and Qualitative Disclosures About Market Risk.80Item 8.Financial Statements and Supplementary Data.82Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.82Item 9A.Controls and Procedures.82Item 9B.Other Information.83Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections83 PART III Item 10.Directors, Executive Officers and Corporate Governance.84Item 11.Executive Compensation.84Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.84Item 13.Certain Relationships and Related Transactions, and Director Independence.84Item 14.Principal Accounting Fees and Services.84 PART IV Item 15.Exhibit and Financial Statement Schedules.85Item 16.Form 10-K Summary.90 1Table of Contents Forward Looking Statements This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of theSecurities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-lookingstatements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as“anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,”“continue,” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptionsand current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may causeour actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumedfuture results of our operations, including statements about the following subjects: •integration of operations; •business strategies; •growth opportunities; • competitive position; •market outlook; • expected financial position; •expected results of operations; •future cash flows; •financing plans; •plans and objectives of management; • tax treatment of the business combinations; •our investments in both SPACs and SPAC sponsor entities, including through our SPAC Series Funds; •our role as asset manager and sponsor in our SPAC franchise; •fair value of assets; and •any other statements regarding future growth, future cash needs, future operations, business plans, future financial results, and any other statements that are nothistorical facts. These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties, andother factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to adifferent extent or at a different time than we have described. You should consider the areas of risk and uncertainty described above and discussed under “Item 1A —Risk Factors.” Actual results may differ materially as a result of various factors, some of which are outside our control, including the following: • a decline in general economic conditions or the global financial markets; • continuation of the COVID-19 pandemic or future outbreaks of COVID-19, the timing and effectiveness of vaccine distribution, and uncertainty surrounding thelength and severity of future impacts on the global economy and on our business, liquidity, results of operations and financial condition; •economic uncertainty and capital markets disruption which has been significantly impacted by geopolitical instability; •losses and reduced transaction volumes as a result of increasing interest rates and inflation; •risks and liabilities due to our investments in the equity interests of SPACs and SPAC sponsor entities including the risk of increased regulation applicable toSPACs, risks regarding litigation in connection with the SPACs in which we invest and those which we sponsor, uncertainty of whether the SPACs in which weinvest and those we sponsor will consummate a business combination, significant competition for business opportunities in the SPAC industry, write-downs orwrite-offs with respect to the securities which we hold subsequent to the consummation of an initial business combination by the SPACs in which we investand those which we sponsor, and the target of a SPAC being an early-stage and financially unstable company; •losses caused by financial or other problems experienced by third parties; •losses due to unidentified or unanticipated risks; •losses (whether realized or unrealized) on our principal investments; • a lack of liquidity, i.e., ready access to funds for use in our businesses, or the availability of financing at prohibitive rates; •the ability to attract and retain personnel; •the ability to meet regulatory capital requirements administered by federal agencies; • the ability to pay dividends; • an inability to generate incremental income from acquired, newly established, or expanded businesses; • unanticipated market closures due to inclement weather or other disasters; •the volume of trading in securities including collateralized securities transactions; • the liquidity in capital markets; • the creditworthiness of our correspondents, trading counterparties, and banking and margin customers; •changing interest rates and their impacts on U.S. residential mortgage volumes;2Table of Contents •competitive conditions in each of our business segments; •the availability of borrowings under credit lines, credit agreements, warehouse agreements, and our credit facilities; •the potential misconduct or errors by our employees or by entities with whom we conduct business; and •the potential for litigation and other regulatory liability. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. Allsubsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any personacting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K. Except to theextent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change inevents, conditions, circumstances or assumptions underlying such statements, or otherwise. Our Internet website is www.cohenandcompany.com and we make available on our website our filings with the Securities and Exchange Commission (“SEC”), includingannual reports, quarterly reports, current reports and any amendments to those filings. The reference to our website address does not constitute incorporation byreference of the information contained therein into this Form 10-K. We also use our website to disseminate other material information to our investors (on the Home Pageand in the “Investor Relations” section of our website). We also post on our website our press releases and information about our public conference calls (including thescheduled dates, times and the methods by which investors and others can listen to those calls), and we make available for replay webcasts of those calls and otherpresentations for a limited time, if applicable. 3Table of Contents Certain Terms Used in this Annual Report on Form 10-K In this Annual Report on Form 10-K, unless otherwise noted or as the context otherwise requires, the “Company,” “we,” “us,” and “our” refer to Cohen & Company Inc.(formerly Institutional Financial Markets, Inc.), a Maryland corporation and its subsidiaries on a consolidated basis; and “Cohen & Company, LLC” (formerly IFMI, LLC)or the “Operating LLC” refer to the main operating subsidiary of the Company. “Cohen Brothers” refers to the pre-merger Cohen Brothers, LLC and its subsidiaries; “AFN” refers to the pre-merger Alesco Financial Inc. and its subsidiaries;“AFN Merger” refers to the December 16, 2009 closing of the merger of AFN, Alesco Financial Holdings, LLC, a wholly owned subsidiary of AFN, with and into CohenBrothers, which resulted in Cohen Brothers becoming a majority owned subsidiary of the Company. “JVB Holdings” refers to JVB Financial Holdings, L.P., a wholly owned subsidiary of the Operating LLC; “JVB” refers to J.V.B. Financial Group, LLC, a wholly ownedbroker-dealer subsidiary of JVB Holdings; "CCFESA" refers to Cohen & Company Financial (Europe) S.A., a majority owned subsidiary regulated by the Autorité deContrôle Prudentiel et de Résolution ("ACPR") in France; and “CCFEL” refers to Cohen & Company Financial (Europe) Limited, a wholly owned subsidiary of theOperating LLC formerly regulated by the Central Bank of Ireland (the “CBI”). “Securities Act” refers to the Securities Act of 1933, as amended; and “Exchange Act” refers to the Securities Exchange Act of 1934, as amended. 4Table of Contents PART IITEM 1. BUSINESS.INFORMATION REGARDING COHEN & COMPANY INC. Overview We are a Maryland corporation that incorporated on October 6, 2003. We are a financial services company specializing in an expanding range of capital markets andasset management services. Our business segments are Capital Markets, Asset Management, and Principal Investing. Our Capital Markets business segment consistsof fixed income sales, trading, and gestation repo financing as well as new issue placements in corporate and securitized products and advisory services, operatingprimarily through our subsidiaries, JVB in the United States (the “U.S.”) and CCFESA in Europe. A division of JVB, Cohen & Company Capital Markets (“CCM”) is ourfull-service boutique investment bank that focuses on mergers and acquisitions (“M&A”), capital markets, and SPAC advisory. Our Asset Management businesssegment manages assets through investment vehicles, such as collateralized debt obligations (“CDOs”), managed accounts, joint ventures, and investment funds(collectively, “Investment Vehicles”). As of December 31, 2023, we had approximately $2.4 billion of assets under management (“AUM”) in primarily fixed income assetsin a variety of asset classes including U.S. and European bank and insurance trust preferred securities (“TruPS”), debt issued by small and medium sized European, U.S.,and Bermudian insurance and reinsurance companies, equity interests of SPACs and their sponsor entities, and commercial real estate loans. Our Principal Investingbusiness segment is comprised primarily of investments we hold related to our SPAC franchise and investments that we have made for the purpose of earning aninvestment return rather than investments made to support our trading or other capital markets business activity. Our Principal Investing segment also includes otherinvestments that we have received as consideration for advisory services provided by our Capital Markets segment. Capital Markets Our Capital Markets business segment consists primarily of fixed income sales, trading, and gestation repo financing as well as new issue placements in corporate andsecuritized products and advisory services operating primarily through our subsidiaries, JVB in the U.S. and CCFESA in Europe. JVB is our sole operating U.S. broker-dealer, under our JVB Holdings subsidiary, and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Industry ProtectionCorporation (“SIPC”). CCFESA is regulated by the ACPR. CCM was established in 2021 as a division of JVB to address the coverage gaps and structural shortfalls at leading investment banks. CCM is a boutique investmentbank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory services. We have investment banking professionals withexperience in a number of emerging growth verticals and continue to expand our offerings for our clients. We are a lead advisor on the majority of the transactions weadvise, showcasing an ability to navigate complex transactions and volatile markets. To date, CCM has hired 24 professionals with substantial industry and capitalmarkets experience. Our fixed income sales and trading group provides trade execution to corporate investors, institutional investors, mortgage originators, and other smaller broker-dealers.We specialize in a variety of products, including but not limited to: corporate bonds and loans, asset-backed securities (“ABS”), mortgage backed securities (“MBS”),commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), CDOs, collateralized loan obligations (“CLOs”), collateralized bondobligations (“CBOs”), collateralized mortgage obligations (“CMOs”), municipal securities, to-be-announced securities (“TBAs”) and other forward agency MBScontracts, U.S. government bonds, U.S. government agency securities, brokered deposits and certificates of deposit (“CDs”) for small banks, and hybrid capital offinancial institutions including TruPS, whole loans, and other structured financial instruments. In 2012, we established a trading desk for “to-be-announced” securities, or TBAs, as part of our mortgage group. TBAs are forward mortgage-backed securities withexact collateral that remains unknown until just prior to the trade settlement, although the characteristics of the collateral are known. The forward collateral types areexclusively issued by U.S. government agencies, such as the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation(“Freddie Mac”), and the Government National Mortgage Association (“Ginnie Mae”). One objective of our mortgage group is to provide capital markets executionservices to small and middle market institutional mortgage originators that hedge their mortgage pipelines. In addition to providing credit for MBS trading lines andexecution services, our mortgage group offers trading of specified pools and financing for qualified originators. Our mortgage group offers a range of solutions forinstitutional clients seeking to enhance their mortgage pipeline execution and overall portfolio profitability. In addition, our mortgage group acts as an intermediarybetween borrowers and lenders of short-term funds and provides funding for various inventory positions using repurchase agreements. For several years, JVB has operated a gestation repo financing program. In general, JVB lends money to a counterparty after obtaining collateral securities from thatcounterparty via a reverse repurchase agreement. JVB also borrows money from another counterparty using the same collateral securities via a repurchase agreement.JVB seeks to earn net interest margin on these transactions. Gestation repo involves entering into repurchase and reverse repurchase agreements where the underlyingcollateral security represents a pool of newly issued mortgage loans. The borrowers (the reverse repurchase agreement counterparties) are generally mortgageoriginators. The lenders (the repurchase agreement counterparties) are a diverse group of counterparties comprised of banks, insurance companies, and other financialinstitutions. Gestation trades can be structured in two ways: (i) on balance sheet trades and (ii) agency trades. For on balance sheet trades, JVB borrows from onecounterparty and lends to another on a principal basis and earns net interest margin. For agency repo trades, JVB gets paid a fee (which is paid by the borrower and is afunction of the reverse repo notional amount), while the borrower and lender transact with each other directly. From 2017 through 2021, we also operated a matched book general collateral funding (“GCF”) repo business as a full netting member of the Fixed Income ClearingCorporation’s (“FICC”) Government Services Division. Primarily due to reduced spreads in the repo market for GCF collateral, we exited the GCF business in 2021. Our Capital Markets business segment generates revenue through the following activities: (1) trading activities, which include execution and brokerage services,gestation repo, riskless trading activities as well as gains and losses (unrealized and realized), and income and expense earned on securities classified as trading, and(2) new issue and advisory revenue comprised of (a) origination fees for newly created financial instruments originated by us, (b) revenue from advisory services, and(c) new issue revenue associated with arranging and placing the issuance of newly created financial instruments. Our Capital Markets business segment has offices inBoca Raton (Florida), Jupiter (Florida), Locust Valley (New York), Menlo Park (California), New York City (New York), Paris (France), and Philadelphia (Pennsylvania). Trades in our Capital Markets business segment can be either “riskless” or risk-based. Riskless trades are transacted with a customer order in hand, resulting in limitedrisk to us. Risk-based trades involve us owning the securities and thus placing our capital at risk. Such risk-based trading activity may include the use of leverage. Inrecent years, we began to utilize more leverage in our Capital Markets business segment. We believe that the prudent use of capital to facilitate client orders increasestrading volume and profitability. Any gains or losses on trading securities that we have classified as investments-trading are recorded in our Capital Markets businesssegment, whereas any gains or losses on securities that we classified as other investments, at fair value are recorded in our Principal Investing business segment. 5Table of Contents From time to time CCM will receive financial instruments as consideration for services. We will generally record the fair value of the investment consideration as CapitalMarkets segment revenue at the time it is received, then reclassify the investment to the Principal Investing segment and record subsequent gains and losses, includingperiodic mark-to-market unrealized gains and losses, as components of the Principal Investing segment. Our commercial real estate lending platform (“CRE Opportunities”), which operates outside of JVB, was created in 2021 with a primary focus on multi-family transitionalloans and a team of professionals with extensive origination, underwriting, and securitization experience in the commercial real estate market. Asset Management Our Asset Management business segment manages and services assets within a variety of Investment Vehicles. We earn management fees for our ongoing assetmanagement services provided to these Investment Vehicles, which may include fees both senior and subordinate to the securities issued by the Investment Vehicles.Management fees are based on the value of the AUM or the investment performance of the vehicle, or both. As of December 31, 2023, we had $2.4 billion in AUM.AUM equals the sum of the net asset value (“NAV”) or gross assets of the Investment Vehicles we manage based on whichever measurement serves as the basis for thecalculation of our management fees. Beginning in November 2023, we earn an annual servicing fee on the notional amount of the loans owned by the CREO JV and, fromthat point, the notional amount of these loans have been included in our AUM. Our calculation of AUM may differ from the calculations of other asset managers and, asa result, this measure may not be comparable to similar measures presented by other asset managers. This definition of AUM is not necessarily identical to anydefinition of AUM that may be used in our management agreements. We do not receive management fees for assets managed within our SPAC Series Funds. Seediscussion below. As of December 31, 2023, we had four subsidiaries that act as managers to our Investment Vehicles. Two of these subsidiaries, Cohen & Company FinancialManagement, LLC (“CCFM”) and Dekania Capital Management, LLC (“DCM”), are registered investment advisors under the Investment Advisers Act of 1940 (the“Investment Advisers Act”). CCFESA is based in France and regulated by the ACPR. Cohen CREO LLC, which is not a registered investment advisor, provides servicesfor the assets of the CREO JV. SubsidiaryProduct Line CCFMSPAC Fund, SPAC Series Funds, Alesco CDOs DCMU.S. Insurance JV, Dekania Europe CDOs CCFESAPriDe Funds and other managed accounts. Cohen CREO LLCCREO JV The table below shows changes in our AUM by product line for the last five years. ASSETS UNDER MANAGEMENT(Dollars in Millions) As of December 31, 2023 2022 2021 2020 2019 PriDe Funds and Other Managed Accounts $865 $813 $721 $587 $492 U.S. Insurance JV 166 122 142 48 49 CREO JV 296 - - - - SPAC Fund - 81 125 53 18 SPAC Series Funds 35 47 130 24 - Non-CDO Investment Vehicles 1,362 1,063 1,118 712 559 Alesco CDOs 884 946 1,099 1,890 2,044 Dekania Europe CDOs. 111 107 141 167 153 Total CDO AUM 995 1,053 1,240 2,057 2,197 Total AUM $2,357 $2,116 $2,358 $2,769 $2,756 6Table of Contents A description of Investment Vehicles that were under management as of December 31, 2023 is set forth below. PriDe Funds and Other Managed Accounts. In July 2014, we became the investment advisor of a newly created French investment fund with total commitments of€238 million, an initial investment period of two years (which was later extended by two years), and a maturity date of July 2026 (which was later extended until July2028). This fund was fully invested in December 2017. In January 2017, the second vintage fund in the series of these funds closed with total commitments of€203.5 million, an initial investment period of three years (which was later extended by two years), and a maturity date of January 2032. These funds were fully investedin July 2021. In July 2020, the third vintage fund in the series of these funds closed with total commitments of €375.5 million, an initial investment period of three years(which was later extended by one year), and a maturity date of July 2034. This series of funds is referred to in this Annual Report on Form 10-K as the “PriDeFunds.” The PriDe Funds earn investment returns by investing in a diversified portfolio of debt securities issued by small and medium sized European and Bermudianinsurance companies that have limited access to capital markets. CCFESA earns investment advisor regular fees and investment advisor performance fees depending onthe level of returns achieved. We have not made an investment, nor do we expect to make any investment, in the PriDe Funds. In addition, we provide investmentmanagement services to a number of separately managed accounts. Part of our European CDO team has transitioned to providing investment management or advisoryservices primarily to European family offices, high net worth individuals, and asset managers. The investment focus is on CDO and CLO notes and debt instrumentswhere the investment managers have relevant expertise. For these services, we are paid gross annual base management or advisory fees of approximately 1.5% plus agross annual performance fee of 20% of cash-on-cash returns in excess of an 8% hurdle. There is also an early redemption fee if any of the clients were to terminate theirarrangement within the first five years of the relationship. AUM of the PriDe Funds and other managed accounts was $865.3 million as of December 31, 2023. U.S. Insurance JV. In May 2018, we committed to invest up to $3.0 million in a newly formed joint venture (the “U.S. Insurance JV”) with an outside investor. The U.S.Insurance JV was formed for the purposes of investing in debt issued by small and medium sized U.S. and Bermudian insurance and reinsurance companies and ismanaged by DCM. We were required to invest 4.5% of the total equity of the U.S. Insurance JV with an absolute limit of $3.0 million. As of December 31, 2023, the NAVof the U.S. Insurance JV was $166.7 million, we had fulfilled our investment commitment, and our investment in the U.S. Insurance JV was valued at $3.1 million. Inaddition, the insurance company debt that will be funded by the U.S. Insurance JV may be originated by us and there may be origination fees earned in connection withsuch transactions. We also earn management fees as manager of the U.S. Insurance JV. We are entitled to a quarterly base management fee, an annual incentive fee (ifcertain return hurdles are met), and an additional incentive fee upon the liquidation of the portfolio (if certain return hurdles are met). CREO JV. In September 2021, we committed to invest up to $15.0 million of equity into a newly formed joint venture (the “CREO JV”) with an outside investor thatcommitted to invest approximately $435.0 million of equity into the CREO JV. We are required to invest 7.5% of the total equity of the CREO JV with a maximuminvestment of $15.0 million. As of December 31, 2023, the NAV of the CREO JV was $64.0 million, we had invested $4.6 million of our $15.0 million investmentcommitment, and our investment in the CREO JV was valued at $4.8 million. The CREO JV is managed by us. The CREO JV was formed for the purposes of investing inprimarily multi-family commercial real estate mortgage-backed loans and below-investment-grade rated tranches in CRE CLOs collateralized by mostly transitionalcommercial real estate mortgage-backed loans. “CRE CLO” means any pooling of commercial real estate mortgage-backed loans into a collateralized loan obligation. Thecommercial real estate loans that are funded by the CREO JV may be originated by us and we may earn origination fees in connection with such transactions. Inaddition, we may earn structuring fees in connection with structuring and consummating a CRE CLO consisting of a pooling of commercial real estate loans. Anyorigination fees or structuring fees earned by us will be in our Capital Markets segment. We will also earn management fees as manager of any CRE CLOs based on thevalue of the assets consolidated into a CRE CLO (calculated in accordance with the terms of such CRE CLO), payable from the proceeds generated by and in accordancewith the distribution waterfall of such CRE CLO. The CREO JV has a repurchase facility to finance its assets until they can be securitized into CRE CLOs. ThroughDecember 31, 2023, we had not yet structured or consummated a CRE CLO and, accordingly, had not earned any management fees as manager of any CRECLO. Beginning in November 2023, we began earning an annual portfolio servicing fee on the notional amount of loans owned by the CREO JV, which is equal to 0.25%.Once we have earned aggregate portfolio servicing fees of $1.5 million, the annual percentage will drop to 0.10%. SPAC Fund. In 2018, we invested in and became the investment manager and general partner of a newly formed fund structure that was created for the purpose ofinvesting primarily in the equity interests of SPACs and, in certain circumstances, SPAC sponsor entities including SPACs sponsored by us, our affiliates, and thirdparties (the “SPAC Fund”). Prior to March 31, 2023, the general partner of the SPAC Fund (“Vellar GP”) had an investment in the SPAC Fund, had the potential to earnincentive fees, and had not consolidated the SPAC Fund. Effective April 1, 2023, all of the investors in the SPAC Fund, other than the Vellar GP, redeemed all of theirinterests in the SPAC Fund. As a result, effective April 1, 2023, the Vellar GP became the sole owner of, and began consolidating, the SPAC Fund. We own a one-thirdinterest in the Vellar GP. Effective April 1, 2023, we began consolidating the SPAC Fund as well. CCFM was the manager of the SPAC Fund and was entitled to a quarterlybase management fee based on a percentage of the NAV of the SPAC Fund until April 1, 2023. SPAC Series Funds. As a complement to the SPAC Fund, we established and became the managing member and investment manager to two newly formed umbrellalimited liability companies (the “SPAC Series Funds”) that issue a separate series for each investment portfolio, which typically consists of investments in the sponsorentities of individual SPACs. The investing activity of the SPAC Series Funds includes purchasing interests in the placement units of certain SPAC sponsor entities that,in addition to placement units, entitle the SPAC Series Funds to certain amounts of founder shares, for a nominal purchase price. The number of founder sharesallocated to the SPAC Series Funds is not finally determined until the related business combination (if any) is completed by the applicable SPAC. The amount of foundershares allocable to each SPAC Series Fund is subject to change for two main reasons. First, if a business combination is not completed by the applicable SPAC withinthe allowed timeframe, the SPAC Series Funds will forfeit all the founder shares allocated to them for that particular SPAC. Second, even if a business combination by theapplicable SPAC is completed, the economic terms of the combination are subject to negotiation between the target company and that SPAC. In many cases, the totalamount of founder shares to which the sponsor entities are entitled will be reduced as part of these negotiations. In these cases, any allocation to the SPAC SeriesFunds will also be reduced. Although we do not charge a management fee for most of the SPAC Series Funds, nor do we earn a performance fee from most of the SPACSeries Funds, we and certain of our employees receive a portion of the allocations of founder shares, for a nominal purchase price, from the SPAC sponsor entities inwhich the SPAC Series Funds invest. As of December 31, 2023, the SPAC Series Funds had issued limited liability company interests and invested in 43 SPAC sponsorentities, and the aggregated total net asset carrying value of the remaining SPAC Series Funds was $35.3 million. As of December 31, 2023, our investment in the SPACSeries Funds was carried at $1.1 million. As of December 31, 2023, in our capacity as the asset manager of the SPAC Series Funds, we received and still hold an allocationof 7.6 million founder shares, for a nominal purchase price, from 13 different SPAC sponsor entities that have not completed any business combinations. Theseallocations will be worthless if the underlying SPACs fail to complete their business combination and liquidate. Furthermore, even if a business combination iscompleted, the founder shares allocable to us may be adjusted significantly downward based on final negotiation with the business combination counterparty. Seebelow for a description of our Principal Investments as of December 31, 2023. 7Table of Contents CDOs. As of December 31, 2023, we managed five Alesco CDOs and two Dekania Europe CDOs, which were initially securitized during 2004 to 2007. A CDO is a form ofborrowing secured by different types of fixed income assets such as corporate or mortgage loans or bonds. The borrowing is in the form of a securitization, which meansthat the lenders are actually investing in notes secured by the assets. In the event of a default, the lender will have recourse only to the assets securing the loan. Thesestructures can hold different types of securities, but as of December 31, 2023, our only remaining CDOs under management were backed by U.S. and European bank andinsurance TruPS and subordinated debt. In general, our Alesco and Dekania Europe deals have the following terms. We receive senior and subordinate managementfees. On the Alesco CDOs, we can be removed as manager without cause if 66.7% of the rated note holders voting separately by class and 66.7% of the equity holdersvote to remove us, or if 75% of the most senior note holders vote to remove us when certain over-collateralization ratios fall below 100%. We can be removed as managerfor cause if a majority of the controlling class of note holders or a majority of equity holders vote to remove us. “Cause” includes unremedied violations of the collateralmanagement agreement or indenture, defaults attributable to certain actions of the manager, misrepresentations or fraud, criminal activity, bankruptcy, insolvency ordissolution. There was a non-call period for the equity holders, which ranged from three to six years. Once this non-call period expires, a majority of the equity holderscan trigger an optional redemption as long as the liquidation of the collateral generates sufficient proceeds to pay all principal and accrued interest on the rated notesand all expenses. In ten years after the closing, an auction call will be triggered if the rated notes have not been redeemed in full. In an auction call redemption, anappointee will conduct an auction of the collateral, which will only be executed if the highest bid results in sufficient proceeds to pay all principal and accrued intereston the rated notes and all expenses. If the auction is not successfully completed, all residual interest that would normally be distributed to equity holders will besequentially applied to reduce the principal of the rated notes. Any failure of an over-collateralization coverage test redirects interest to paying down notes untilcompliance is restored. The securities mature up to 30 years from closing. An event of default will occur if certain over-collateralization ratios drop below 100%. While anevent of default exists, a majority of the senior note holders can declare the principal and accrued and unpaid interest immediately due and payable. All of the Alescoand Dekania Europe CDOs that we manage have reached their auction call redemption features, which means the portfolio of collateral for each CDO is subject to anauction on either a quarterly or bi-annual basis. If an auction is successful, the management contract related to such CDO will be terminated in connection with theliquidation of the CDO and we will lose the related management fees. In addition, we have historically received revenue shares from certain asset management businesses that we initially sponsored or owned, and subsequently sold orspun-off. A description of our only remaining asset management revenue share as of December 31, 2023 is set forth below. Infrastructure Finance Business. On March 12, 2012, we entered into an agreement with unrelated third parties whereby we agreed to assist in the establishment of aninternational infrastructure finance business (“IIFC”). As consideration for our assistance in establishing IIFC, we received 8.0% of certain revenues of the manager ofIIFC through October 31, 2021, and effective November 1, 2021, we receive 7.35% of certain revenues of the manager of IIFC. The IIFC revenue share arrangementexpires when we have earned a cumulative $20 million in revenue share payments or with the dissolution of IIFC’s management company. Also, in any particular year,the revenue share earned by us cannot exceed $2.0 million. In 2023, we earned $1.1 million from the IIFC revenue share. From inception through 2023, we have earned$5.6 million. 8Table of Contents Principal Investing Our Principal Investing business segment has historically been comprised of investments in the Investment Vehicles we manage, as well as investments in certain otherstructured products, and the related gains and losses that they generate. In 2014, we refocused our Principal Investing portfolio on products that we do not manage forthe purpose of earning an investment return. More recently, capitalizing on our SPAC expertise, we have become active in multiple aspects of the SPAC market, includingas a sponsor, asset manager, and investor, and as a result we hold various investments related to our SPAC franchise. In addition, we have received securities asconsideration for advisory services provided by our Capital Markets segment. A SPAC is a shell corporation formed for the sole purpose of raising investment capital through an initial public offering (“IPO”), which is then used to acquire or mergewith one or more unspecified businesses to be identified after the IPO. SPACs are formed and sponsored by experienced business executives who are confident thattheir reputation and experience will help them identify a profitable company to acquire or with which to merge. The sponsors of the applicable SPAC generally providethe starting capital for that SPAC and such sponsors stand to benefit from a sizeable stake in the post-business combination acquired or merged company (assuming abusiness combination is consummated by the SPAC that they sponsor). The capital raised in the SPAC’s IPO is placed in an interest-bearing trust account and cannotbe disbursed except to complete a business combination or to return the money to investors (if the SPAC does not complete a business combination within the requiredtime period and must be liquidated.) A SPAC generally has approximately two years to complete a deal. In return for the capital invested by investors in the SPAC IPO,investors typically receive units in the SPAC, with each unit often comprising a share of common stock and a warrant (or fraction thereof) to purchase more stock at alater date. The purchase price per unit of the securities is typically $10.00. After a SPAC’s IPO, the pre-IPO units of the SPAC become separable into shares of commonstock and warrants. The purpose of the warrant is to provide investors with additional compensation for investing in the SPAC. The warrants generally becomeexercisable either 30 days after the completion of a business combination or twelve months after the IPO. The fair market value of the target company must be at least80% (but generally much more) of the SPAC’s trust assets. Upon successful completion of a business combination, the sponsors will profit from their stake in the post-business combination acquired or merged company, while the investors receive an equity interest according to their respective investment amounts The founders of theSPAC generally purchase founder shares at the initiation of the SPAC, paying nominal consideration for the number of shares that, based on recent transactions, resultsin or around a 20% to 25% ownership stake in the outstanding shares after the completion of the IPO. Since 2018, we have sponsored three SPACs. Our first sponsored SPAC, Insurance Acquisition Corp. (“Insurance SPAC”), completed its $150.7 million IPO in March2019, entered into a merger agreement in June 2020, and completed its business combination in October 2020 with Shift Technologies, Inc. (“Shift”), a car-buying e-commerce platform. Our second sponsored SPAC, INSU Acquisition Corp. II (“Insurance SPAC II”), completed its $250 million IPO in September 2020 and entered into amerger agreement in November 2020 with Metromile, Inc., a digital insurance platform and pay-by-mile auto insurer (“MetroMile”), which closed on February9, 2021. Subsequently, MetroMile was acquired by Lemonade, Inc. (NASDAQ:LMND) (“Lemonade”). Our third sponsored SPAC, INSU Acquisition Corp. III(“Insurance SPAC III”), completed its $218 million IPO in December 2020 and was liquidated in December 2022 without completing a business combination within therequired timeframe. See note 4 to our consolidated financial statements included in this Annual Report on Form 10-K. Subject to changes in the overall SPAC market, which are evolving rapidly, we may continue to grow our SPAC franchise and capitalize on opportunities in the space. Inaddition to our sponsored SPACs, we receive founder shares and purchase placement units and IPO units in various SPACs sponsored by third parties and affiliates,through our SPAC Series Funds and our Principal Investing portfolio. The amount of founder shares allocated to us is not finally determined until the related businesscombination is completed. The amount of founder shares allocable to us is subject to change for two main reasons. First, if a business combination is not completed bythe applicable SPAC within the allowed time frame, we will forfeit all the founder shares allocated to us for that particular SPAC. Second, even if a business combinationis completed by the applicable SPAC, the economic terms of the combination are subject to negotiation between the target company and that SPAC. In many cases, thetotal amount of founder shares to which the sponsor entities are entitled will be reduced as part of these negotiations. In these cases, any allocation of founder sharesto us will also be reduced. We invest in SPAC sponsor entities that we do not consolidate because we are not the managing member of such sponsor entity or otherwise do not have the power todirect the sponsor entity's most important activities. In these cases, we treat our investment in the SPAC sponsor entity as an equity method investment. Furthermore,because of the difficulty of determining the fair value of such an investment during the applicable SPAC's pre-business combination period, we generally have notelected the fair value option. If a SPAC completes a business combination and we have an equity method investment in the associated sponsor entity, the sponsorentity will record income equal to the difference between the fair value of the restricted and unrestricted shares it receives and the carrying value of its equity methodinvestment in the SPAC. We will recognize our share of this gain as income from equity method affiliates. The sponsor entity will continue to mark its investment in theSPAC to market after the business combination and we will recognize our share of the change in fair value as income or loss from equity method affiliates. Once thesponsor entity distributes to us our share of the SPAC shares it owns, we will reclassify our investment from investment in equity method affiliate to other investments,at fair value as we will then hold the SPAC shares directly (rather than through an equity method investee). We will then record principal transactions income and lossuntil the SPAC shares themselves are liquidated. We have also engaged in several transactions known as “share forward arrangements” (“SFAs”). In a typical SFA transaction, we acquire an interest in a publicly tradedcompany (referred to as the “SFA Counterparty”) through open market purchases, direct acquisitions from the SFA Counterparty, or a combination thereof. Theseinterests can take the form of unrestricted common shares, restricted common shares, equity derivatives, or fair value receivables. Upon acquiring these interests, weenter into an SFA derivative arrangement with the SFA Counterparty. In cases where we acquire our interests in the SFA Counterparty through open market purchases,the SFA generally requires an up-front payment to us from the SFA Counterparty. The amount of this up-front payment equals the cost we paid for our interests in theSFA Counterparty, less a shortfall amount in certain cases. To fund the shortfall portion of the initial investment, we will utilize available cash on hand or availablefinancing. The SFA stipulates that we must make a payment to the SFA Counterparty on or subsequent to a certain maturity date. Depending on the terms of the SFA,this payment may be made in cash, by returning the interests we acquire in the SFA Counterparty, or through a combination of both. In some cases, the SFA requires thepayment to be made exclusively in cash. Importantly, the SFA does not obligate us to hold the interests which we acquired in the SFA Counterparty. Following theexecution of the SFA, we are free to sell the interests we acquired in the SFA Counterparty (assuming the interests themselves are not restricted from transfer).Additionally, SFAs generally include a feature whereby if we hold the interests we acquired in the SFA Counterparty until maturity or another agreed-upon date, webecome eligible to receive an additional payment from the SFA Counterparty, either in cash or in additional interests in the SFA Counterparty. Such a payment is knownas the “Maturity Consideration.” Furthermore, SFAs usually include a provision allowing us to terminate the SFA, either in whole or in part, before its maturity by makingan agreed-upon payment based on an amount defined in the SFA (the “Reset Price”). The Reset Price may either remain fixed throughout the term of the SFA, or fluctuatebased on certain calculations within the SFA. SFAs also impose various obligations on the SFA Counterparty, which may include registering a predetermined number ofthe interests in the SFA Counterparty (subject to the SFA) with the SEC, maintaining the listing of the SFA Counterparty securities on a national exchange, and/or thatthe closing price of the SFA Counterparty’s shares on the public exchange does not fall below a predetermined price for a specific period of time. If any of these SFACounterparty obligations are breached or not satisfied, we may have the right to terminate the SFA and accelerate the payment of the Maturity Consideration upontermination. The SFAs provide the right of set off in the case of Maturity Consideration, thereby allowing us to keep the interests we hold in the SFA Counterparty andoffset the Maturity Consideration we are owed following termination of the applicable SFA. 9Table of Contents As of December 31, 2023, our Principal Investing portfolio included other investments, at fair value, which were valued at $72.2 million, and investments in equitymethod affiliates, which were carried at $14.2 million, net of other investments sold, not yet purchased, which were valued at $24.7 million, and non-convertible non-controlling interests, which were valued at $9.6 million. A description of our Principal Investments as of December 31, 2023 is set forth below. OtherInvestments, Investmentsin Equity OtherInvestments NonConvertible Net InvestmentTicker at Fair Value MethodAffiliates Sold, Not YetPurchased NonControllingInterest InvestmentValue Non-Sponsored SPACs: Post-Business Combination African Agriculture Holdings Inc.AAGR $- $2,357 $- $(850) $1,507 Captivision Inc.CAPT 3,791 - - - 3,791 Next.e.GO NVEGOX 7,854 281 - (130) 8,005 Payoneer Global Inc.PAYO 1,475 - - - 1,475 Perella Weinberg PartnersPWP 317 163 (97) - 383 Syntec Optics Holdings, Inc.OPTX 1,317 - (249) - 1,068 Zoomcar Holdings, Inc.ZCAR 13,137 3,365 - (1,822) 14,680 SFAs 33,804 - (24,396) (6,802) 2,606 Other 1,747 83 - - 1,830 63,442 6,249 (24,742) (9,604) 35,345 Other Investments: CREO JV 4,783 - - - 4,783 U.S. Insurance JV 3,107 - - - 3,107 Dutch Real Estate - 5,864 - - 5,864 SPAC Series Funds - 1,128 - - 1,128 Other 885 1,000 - - 1,885 8,775 7,992 - - 16,767 Total Principal Investing Portfolio $72,217 $14,241 $(24,742) $(9,604) $52,112 Investment in Non-Sponsored SPACs, Post-Business Combination. An investment in non-sponsored SPACs, post-business combination is classified as otherinvestments, at fair value after we receive our allocation of the post-business combination publicly traded company shares. During the period between the closing of thebusiness combination and receiving our allocation of shares in the post-business combination publicly traded company, an investment in non-sponsored SPACs, post-business combination is classified as an investment in equity method affiliates, representing an investment in the sponsor of the SPAC, entitling us to an eventualallocation of post-business combination public company shares. As of December 31, 2023, our investment in the public equity of non-sponsored SPACs, post-businesscombination was valued at $63.4 million as a component of other investments, at fair value and our investment in the sponsors entitling us to public equity of non-sponsored SPACs, post-business combination had a carrying value of $6.2 million as a component of investment in equity method affiliates. As of December 31, 2023,these investments had offsetting liabilities that were valued at $24.7 million as a component of other investments sold, not yet purchased, and $9.6 million as acomponent of non-convertible non-controlling interests, representing the portion of the investment that we do not ultimately own. These investments are primarily aresult of allocations of founder shares to us and certain of our employees, for a nominal purchase price, from the SPAC sponsor entities in which the SPAC Series Fundsinvest. Certain of the shares are subject to restrictions on transfer until threshold trading prices are met. See notes 4 and 9 to our consolidated financial statementsincluded in this Annual Report on Form 10-K. Investment in CREO JV. In September 2021, we co-established and committed to invest up to $15.0 million in the CREO JV. As of December 31, 2023, we had invested$4.5 million of our $15.0 million investment commitment, our investment in the CREO JV was valued at $4.8 million, which was included as a component of otherinvestments, at fair value in our consolidated balance sheet, and the NAV of the CREO JV was $64.0 million. Investment in U.S. Insurance JV. During 2018, we co-established and committed to invest up to $3.0 million in the U.S. Insurance JV. As of December 31, 2023, we hadfulfilled our investment commitment, our investment in the U.S. Insurance JV was valued at $3.1 million, which was included as a component of other investments, at fairvalue in our consolidated balance sheet, and the NAV of the U.S. Insurance JV was $166.7 million.10Table of Contents Investment in Dutch Real Estate. In December 2019, we acquired a 45% interest in CK Capital Partners B.V. (“CK Capital”), a private company incorporated in theNetherlands, which provides asset and investment advisory services relating to real estate holdings, as well as a 10% interest in a related real estate holding company. InDecember 2021, we invested an additional $2.4 million in the related real estate holding company. As of December 31, 2023, our investment in these Dutch real estateentities was carried at $5.9 million, $0.4 million in CK Capital and $5.5 million in the real estate holding company, which was included as a component of investment inequity method affiliates in our consolidated balance sheet. Investment in the SPAC Series Funds. In 2020, we established and became the managing member and investment manager to the SPAC Series Funds that issue aseparate series for each investment portfolio, which typically consists of investments in the sponsor entities of individual SPACs. As of December 31, 2023, ourinvestment in the SPAC Series Funds was carried at $1.1 million, which was included as a component of investment in equity method affiliates in our consolidatedbalance sheet. Investment in Other Securities. We have invested in various original issuance securities that we have originated and certain other securities that we have notoriginated including private equity, public equity, and real estate loans. As of December 31, 2023, our investments in these other securities were valued at $0.9 million,which was included as a component of other investments, at fair value, and $1.0 million, which was included as a component of investment in equity method affiliates, inour consolidated balance sheet. 11Table of Contents Employees As of December 31, 2023, we employed a total of 118 full-time professionals and support staff. This number includes 70 employees of our JVB subsidiary, 7 employees ofour CRE Opportunities group, 15 employees of our Principal Investing business segment, 8 employees of our U.S. Asset Management business segment, 6 employeesof our European Asset Management business segment, and 12 employees of our executive and support services group. We consider our employee relations to be goodand believe that our compensation and employee benefits are competitive with those offered by other financial services firms that we compete with for personnel. Noneof our employees is subject to any collective bargaining agreements. Our core asset is our professionals, their intellectual capital, and their dedication to providing thehighest quality services to our clients. Prior to joining us, members of our management team held positions with other leading financial services firms, accounting firms,law firms, investment firms, or other public companies. Lester R. Brafman, Daniel G. Cohen, and Joseph W. Pooler, Jr. are our executive operating officers, andbiographical information relating to each of these officers is incorporated by reference in “Part III — Item 10 — Directors, Executive Officers and Corporate Governance”to the Company’s Proxy Statement, to be filed in connection with the Company’s 2024 Annual Meeting of Stockholders. Competition All areas of our business are intensely competitive, and we expect them to remain so. We believe that the principal factors affecting competition in our business includethe economic environment, the quality and price of our products and services, our client relationships, our reputation, our market focus, and the ability of ourprofessionals. Our competitors are other public and private asset managers, investment banks, brokerage firms, merchant banks, and financial advisory firms. We compete globally andon a regional, product, and niche basis. Many of our competitors have substantially greater capital and resources than we do and offer a broader range of financialproducts and services. Certain of these competitors continue to raise additional amounts of capital to pursue business strategies that may be similar to ours. Some ofthese competitors may also have access to liquidity sources that are not available to us, which may pose challenges for us with respect to investment opportunities. Inaddition, some of these competitors may have higher risk tolerances or make different risk assessments than we do, allowing them to consider a wider variety ofinvestments and establish broader business relationships. In recent years, there has been substantial consolidation and convergence among companies in the financial services industry, including among many of our formercompetitors. In particular, a number of large commercial banks have established or acquired broker-dealers or have merged with other financial institutions. Many ofthese firms have the ability to offer a wider range of products than we offer, including loans, deposit taking, and insurance. Many of these firms also offer morecomprehensive investment banking services, which may enhance their competitive position. They also have the ability to support investment banking and securitiesproducts with commercial banking and other financial services revenue in an effort to gain market share, which could result in pricing pressure in our business. Thistrend toward consolidation and convergence has significantly increased the capital base and geographic reach of our competitors. Competition is intense for the recruitment and retention of experienced and qualified professionals. The success of our business and our ability to continue to competeeffectively will depend significantly upon our continued ability to retain and motivate our existing professionals and attract new professionals. We compete, amongother factors, on the level and nature of compensation and long-term incentives, workplace culture, and opportunities for professional and personal development for ouremployees. Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existingemployees, in each case, at appropriate compensation levels. See “Item 1A — Risk Factors." Regulation Certain of our subsidiaries, in the ordinary course of their business, are subject to extensive regulation by government and self-regulatory organizations both in the U.S.and abroad. As a matter of public policy, these regulatory bodies are responsible for safeguarding the integrity of the securities and other financial markets. Theregulations promulgated by these regulatory bodies are designed primarily to protect the interests of the investing public generally, and thus cannot be expected toprotect or further the interests of our company or our stockholders and may have the effect of limiting or curtailing our activities, including activities that might beprofitable. As of December 31, 2023, our regulated subsidiaries include: JVB, a U.S. registered broker-dealer regulated by FINRA and subject to oversight by the U.S. Securities andExchange Commission (the “SEC”); CCFESA, a French company regulated by the French Prudential Supervision and Resolution Authority (Autorité de ContrôlePrudentiel et de Résolution, the “ACPR”); and CCFM and DCM, each of which is a registered investment adviser regulated by the SEC under the Investment AdvisersAct. Since our inception, our businesses have been operated within a legal and regulatory framework that is constantly developing and changing, requiring us to beable to monitor and comply with a broad range of legal and regulatory developments that affect our activities. Certain of our businesses are also subject to compliance with laws and regulations of U.S. federal and state governments, foreign governments, their respectiveagencies and/or various self-regulatory organizations or exchanges relating to, among other things, the privacy of client information and any failure to comply withthese regulations could expose us to liability and/or reputational damage. Additional legislation, changes in rules promulgated by financial authorities and self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the U.S. or abroad, may directly affect our mode of operationand profitability. The U.S. and foreign government agencies and self-regulatory organizations, as well as state securities commissions in the U.S., are empowered to conduct periodicexaminations and initiate administrative proceedings that can result in censures, fines, the issuances of cease-and-desist orders, and/or the suspension or expulsion of abroker-dealers or their directors, officers, or employees. See “Item 1A — Risk Factors” beginning on page 16. 12Table of Contents U.S. Regulation. As of December 31, 2023, JVB was registered as a broker-dealer with the SEC and was a member of and regulated by FINRA. JVB is subject to theregulations of FINRA and industry standards of practice that cover many aspects of its business, including initial licensing requirements, sales and trading practices,relationships with customers (including the handling of cash and margin accounts), capital structure, capital requirements, record-keeping and reporting procedures,experience and training requirements for certain employees, and supervision of the conduct of affiliated persons, including JVB's directors, officers, and employees.FINRA has the power to expel, fine, and otherwise discipline member firms and their employees for violations of these rules and regulations. JVB is also registered as abroker-dealer in certain U.S. states, requiring it to comply with the laws, rules, and regulations of each state in which JVB is registered. Each state may revoke theregistration to conduct a securities business in that state and may fine or otherwise discipline broker-dealers and their employees for failure to comply with such state’slaws, rules, and regulations. The SEC, FINRA, and various other regulatory agencies within and outside of the U.S. have stringent rules and regulations with respect to the maintenance of specificlevels of net capital by regulated entities. Generally, a broker-dealer’s net capital is net worth plus qualified subordinated debt less deductions for certain types ofassets. The net capital rule under the Exchange Act requires that at least a minimum part of a broker-dealer’s assets be maintained in a relatively liquid form. The SECand FINRA impose rules that require notification when net capital falls below certain predefined criteria. These rules also dictate the ratio of debt to equity in theregulatory capital composition of a broker-dealer and constrain the ability of a broker-dealer to expand its business under certain circumstances. If a firm fails to maintainthe required net capital, it may be subject to suspension or revocation of registration by the applicable regulatory agency, and suspension or expulsion by theseregulators could ultimately lead to a firm’s liquidation. Additionally, the net capital rule under the Exchange Act and certain FINRA rules impose requirements that mayhave the effect of prohibiting a broker-dealer from distributing or withdrawing capital and requiring prior notice to the SEC and FINRA for certain capital withdrawals. If these net capital rules are changed or expanded, or if there is an unusually large charge against our net capital, our operations that require the intensive use of capitalwould be limited. A large operating loss or charge against our net capital could adversely affect our ability to expand or even maintain current levels of business, whichcould have a material adverse effect on our business and financial condition. Our investment adviser subsidiaries, CCFM and DCM, are registered with the SEC as investment advisers and are subject to the rules and regulations of the InvestmentAdvisers Act. The Investment Advisers Act imposes numerous obligations on registered investment advisers including record-keeping, operational and marketingrequirements, disclosure obligations, limitations on principal transactions between an adviser and its affiliates and advisory clients, and prohibitions on fraudulentactivities. The SEC is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act, ranging from fines and censure totermination of an investment adviser’s registration. Investment advisers are also subject to certain state securities laws and regulations. We are also subject to the USA PATRIOT Act of 2001 (the “Patriot Act”), which imposes obligations regarding the prevention and detection of money-launderingactivities, including the establishment of customer due diligence, customer verification, and other compliance policies and procedures. These regulations require certaindisclosures by, and restrict the activities of, broker-dealers, among others. Failure to comply with these new requirements may result in monetary, regulatory and, in thecase of the Patriot Act, criminal penalties. In July 2010, the federal government passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The Dodd-Frank Act hassignificantly restructured and intensified regulation in the financial services industry, with provisions that have created a systemic risk oversight body (i.e., theFinancial Stability Oversight Council), expanded the authority of existing regulators, increased regulation of and restrictions on OTC derivatives markets andtransactions, broadened the reporting and regulation of executive compensation, expanded the standards for market participants in dealing with clients and customers,and provided for the regulation of fiduciary duties owed by municipal advisors or conduit borrowers of municipal securities. In addition, Section 619 of the Dodd-FrankAct (known as the “Volker Rule”) and section 716 of the Dodd-Frank Act (known as the “swaps push-out rule”) limit proprietary trading of certain securities and swapsby certain banking entities. Although we are not a banking entity and are not otherwise subject to these rules, some of our clients and many of our counterparties arebanks or entities affiliated with banks and will be subject to these restrictions. These sections of the Dodd-Frank Act and the regulations that are adopted to implementthem could negatively affect the swaps and securities markets by reducing their depth and liquidity and thereby affect pricing in these markets. To date, wehave adapted successfully to the applicable legislative and regulatory requirements of Dodd-Frank. However, the Dodd-Frank Act as a whole and the intensifiedregulatory environment will likely alter certain business practices and change the competitive landscape of the financial services industry, which may have an adverseeffect on our business, financial condition, and results of operations. In June 2018, in response to the uncertainty surrounding Brexit, we created a new subsidiary, Cohen & Company Financial (Europe) Limited (“CCFEL”) in Ireland, for thepurpose of seeking to become regulated to perform asset management and capital markets activities in Ireland and the European Union. In April 2019, CCFEL receivedauthorization from the CBI under the European Union (Markets in Financial Instruments) Regulations 2017 to provide Financial Instruments. The services for whichCCFEL received authorization include the receipt and transmission of orders in relation to Financial Instruments, the execution of orders on behalf of clients, portfoliomanagement, investment advice and investment research, and financial analysis. In addition, CCFEL applied for approval of a French branch, which approval wasgranted by the CBI and the branch was authorized by the French regulators in April 2019. Following authorization of the French branch of CCFEL, various contractsoriginally entered into by Cohen & Company Financial Limited (“CCFL”), formerly regulated by the Financial Conduct Authority in the United Kingdom, were novatedto the French branch of CCFEL. The novation of contracts was completed on July 1, 2019. In order to finalize our Brexit plans and to increase the efficiency of ouractivity in Europe (and as all the regulated activity of CCFEL was carried out by its French branch), we created a new subsidiary, CCFESA, in France in 2021, for thepurpose of taking over our regulated European activities under one regulated entity. In October 2021, CCFESA received authorization from the ACPR to act as anInvestment Firm under the European Union (Markets in Financial Instruments) Regulations 2017 to provide Financial Instruments. The services for which CCFESAreceived authorization include the receipt and transmission of orders in relation to Financial Instruments, the execution of orders on behalf of clients, portfoliomanagement, investment advice and investment research, and financial analysis. Following authorization of CCFESA, various contracts originally entered into by CCFLand CCFEL were novated to CCFESA. The novation of contracts was completed on November 1, 2021. Further to such novation, both CCFL and CCFEL stoppedcarrying out any regulated activity and have been liquidated. 13Table of Contents French Regulation. Our French subsidiary, Cohen & Company Financial (Europe) S.A. (“CCFESA”) is an investment services provider authorized and regulated by theFrench Prudential Supervision and Resolution Authority (Autorité de Contrôle Prudentiel et de Résolution, the “ACPR”). CCFESA is subject to the ACPR’s rules andguidance, but also to the rules of the French Financial Markets Authority (Autorité des Marchés Financiers, the “AMF”) and the relevant provisions of the FrenchMonetary and Financial Code and the AMF’s general regulations. CCFESA’s license by the ACPR covers the following activities: (1) order reception and transmissionfor third parties; (2) order execution for third parties; (3) investment advice; and (4) portfolio management for third parties; it can also carry out research and financialanalysis. An overview of key aspects of France’s regulatory regime, which apply to CCFESA, is set out below. Ongoing regulatory obligations. As a French regulated entity, CCFESA is subject to ongoing regulatory obligations, which cover the following wide-ranging aspects ofits business. The ACPR sets conditions that all French authorized investment firms, including CCFESA, must satisfy in order to become and remain authorized by theACPR. These relate to the firm’s initial capital and appropriate financial resources for the proposed activities, the identity and status of direct and indirect shareholders,a management that has the knowledge, experience and fitness of investment firms and is located in France and has a program of operations for each of the proposedservices approved by the AMF. CCFESA is expected to comply with the ACPR’s regulatory frameworks. Consequently, the ACPR imposes overarching responsibilities on the directors and seniormanagement of a regulated firm. Key requirements in this context include the need to have adequate systems and controls in relation to: (1) senior managementarrangements and general organizational requirements; (2) compliance, internal audit, and financial crime prevention; (3) outsourcing; (4) record keeping; (5) riskmanagement; and (6) managing conflicts of interest. CCFESA permitted activity is to deal only with eligible counterparties and professional clients as defined under Schedule 2 of the MIFID II Regulations in relation to theregulated activities it conducts. The level with which CCFESA must comply is dependent on the categorization of its clients, which should be considered in the contextof the regulated activity being performed. These rules include requirements relating to the type and level of information that must be provided to clients before businessis conducted with or for them, the regulation of financial promotions, procedures for entering into client agreements, obligations relating to the suitability andappropriateness of investments, and rules about managing investments and reporting to clients. Reporting. All authorized firms in France are required to report to the ACPR and to the AMF on a periodic basis. CCFESA’s reporting requirements are based on thescope of its license. The ACPR will use the information submitted by CCFESA to monitor it on an ongoing basis. There are also high-level reporting obligations,whereby CCFESA is required to engage with the AMF in an open and co-operative way and to disclose appropriately anything relating to its activity and which wouldaffect its business plan, activity or any relevant information submitted to the regulators in the context of its license application. Enforcement powers. The ACPR has a wide range of disciplinary and enforcement tools that it can use should a regulated firm fail to comply with its regulatoryobligations. However, this primary jurisdiction does not exclude that of the AMF with regard more specifically to any failure by persons placed under its supervision(and therefore within investment firms) to fulfill their professional obligations. In addition, the AMF has the option of delegating its power of control, in particular tomarket operators and clearing houses and to the ACPR. For its part, the ACPR can also delegate its power of control, in particular to the AMF. A wide range of tools can be used to take action against regulated entities and/or individuals which fall short of our expected standards of behavior including: ● issuance of a warning;● issuance of a rebuke;● prohibition, for a maximum period of 10 years, from carrying out certain operations and any other limitations in the exercise of its activity;● temporary suspension or compulsory resignation, for a maximum period of 10 years, of one or more managers, with or without the appointment of a provisionaladministrator;● partial or total withdrawal of approval or removal from the list of authorized persons, with or without the appointment of a liquidator;● temporary or definitive withdrawal of the professional card, temporary ban on trading for their own account, temporary or definitive ban on the exercise of all or partof the activities or the exercise of management functions within the relevant entity; and● imposition of a fine. With regard to the pecuniary sanctions which may be imposed by the ACPR and/or the AMF instead of or in addition to the aforementioned sanctions, such finescannot exceed 100 million euros (or ten times the amount of the benefit derived from such breach if this can be determined) or 15% of net annual turnover for breachesspecifically referred to in the French Monetary and Financial Code (article L621-9). Fines issued against individuals under the authority or acting on behalf of aninvestment firm cannot exceed 15 million euros (or ten times the amount of the benefit derived from the breach if this can be determined). In addition to the general sanctions regime as described above, a specific regime is provided for breaches of the provisions of the Capital Requirement (CRR) Regulationand the Capital Requirement Directive IV (CRD), which establish in particular the capital and liquidity requirements, as well as the rules of governance to whichinvestment firms are subject. Financial Resources. As part of the firm regulatory requirements under the ACPR it must maintain adequate financial resources as set out in the European UnionRegulation (EU) 2019/2033, also known as the Investment Firms Regulation (IFR), and Directive (EU) 2019/2034, also known as the Investment Firms Directive (IFD). CCFESA is classified as a class 2 firm. This means that CCFESA shall at all times have own funds as the highest of the following: (a) their fixed overhead requirement, that is to say one quarter of the fixed overhead of the preceding year, calculated in accordance with Article 13 of the IFD;(b) their permanent minimum capital requirement (€75,000) in accordance with Article 14 of the IFD; or(c) their K‐factor requirement calculated in accordance with Article 15 of the IFD. In addition, this base capital will be reviewed on an annual basis. The Company's capital will also be reviewed in the event of a material change in the Company'sbusiness since the preceding year. Anti-money Laundering Requirements. A French financial institution is subject to additional client acceptance requirements, which stem from anti-money launderingand terrorist financing legislation that requires a firm to identify its clients before conducting business with or for them and to retain appropriate documentary evidenceof this process. Relevant anti-money laundering legislation in France is derived from EU Directives and more particularly EU Directive 2015/849 of 20 May 2015 (alsoknown as the “Fourth Directive”) and EU Directive 2018/843 of 30 May 2018 (also known as the “Fifth Directive”). The fight against money laundering and terroristfinancing (AML-CFT) is one of the AMF’s main supervisory priorities. The ACPR is also responsible for protecting the customers of the supervised institutions andensuring the fight against money laundering and the financing of terrorism. It also has resolution powers. 14Table of Contents The obligations derived from the Fourth Directive were implemented into the French Monetary and Financial Code (refer to articles L561-1 and L561-50) and include: ● Risk assessment;● Identification and verification of the identity of clients and their beneficial owners;● Due diligence measures upon entry and throughout the business relation;● Obligation to file suspicious transaction reports to TRACFIN;● Internal audit and reporting to the AMF; and● Implementation of asset freezing measures. The Fifth Directive was implemented into French law at the beginning of 2020. It sets out a series of measures to fight against terrorist financing more effectively andguarantee improved transparency of financial transactions. Changes in Existing Laws and Rules. Additional legislation and regulations, changes in rules promulgated by the government regulatory bodies, or changes in theinterpretation or enforcement of laws and regulations may directly affect the manner of our operation, our net capital requirements, or our profitability. In addition, anyexpansion of our activities into new areas may subject us to additional regulatory requirements that could adversely affect our business, reputation, and results ofoperations. A new Anti-Money Laundering legislative package is under discussion between the European Parliament and Council. The package includes a proposal forthe creation of a new EU authority to fight money laundering (EU AML Authority). Available Information On our internet website address at www.cohenandcompany.com, we make available, free of charge, our Annual Reports on Form 10-K, our Quarterly Reports on Form10-Q, our Current Reports on Form 8-K, and any amendments to those reports that we file or furnish pursuant to Section 13(a) or 15(d) of the Exchange Act as soon asreasonably practicable after we electronically file such information with, or furnish such information to, the SEC. Copies of such reports and other information are alsoavailable at no charge to any person who requests them at Cohen & Company, Attention: Investor Relations, 2929 Arch Street, Suite 1703, Philadelphia, PA 19104-2870(Telephone: (215) 701-8952). Our filings can also be obtained for free on the SEC’s Internet site at http://www.sec.gov. The reference to our website address does not constitute incorporation byreference of the information contained on our website in this filing or in other filings with the SEC, and the information contained on our website is not part of this filing. 15Table of Contents ITEM 1A. RISK FACTORS. You should carefully consider the risks and uncertainties described below and elsewhere in this Annual Report on Form 10-K. If any of these risks actually occur, ourbusiness, financial condition, liquidity and results of operations could be adversely affected. The risks and uncertainties described below constitute all of the materialrisks of the Company of which we are currently aware; however, the risks and uncertainties described below may not be the only risks the Company will face. Additionalrisks and uncertainties of which we are presently unaware, or that we do not currently deem to be material, may become important factors that affect us and couldmaterially and adversely affect our business, financial condition, results of operations and the trading price of our securities. Investing in the Company’s securitiesinvolves risk and the following risk factors, together with the other information contained in this report and the other reports and documents filed by us with the SEC,including Forms ADV filed by CCFM and DCM, should be considered carefully. Summary of Risk Factors The following summary highlights some of the principal risks that could adversely affect our business, financial condition or results of operations. This summary isnot complete and the risks summarized below are not the only risks we face. Risks Related to Our Business and Our Industry: ●Difficult market conditions have adversely affected our business and may continue to do so. ●Economic slowdown, market volatility, a recession and increasing interest rates may impair investments and operating results. ●We may experience write downs of financial instruments and other losses due to the volatile and illiquid market conditions. ●We have incurred losses for certain periods covered by this report and in the recent past and may incur losses in the future. ●Continued difficulties in our Capital Markets segment due to intense competition has resulted in significant strain on our administrative, operationaland financial resources and these difficulties may continue in the future. ●The incurrence of additional debt could adversely effect on our financial condition and results of operation. ●Our gestation repo business serves a narrow market and is likely subject to highly volatile demand. ●Our mortgage group’s revenue is highly dependent on the U.S. housing market, generally. ●Our Capital Markets segment depends significantly on a limited group of customers. ●Failure to retain senior management and qualified personnel may result in our not being able to execute our business strategy. ●Payment of severance could strain our cash flow. ●If additional cash is not available, our business and financial performance will be significantly harmed. ●Failure to obtain or maintain adequate capital and funding would adversely affect the growth and results of our operations. ●The lack of liquidity in certain investments may adversely affect our business, financial condition and results of operations. ●If we are unable to manage the risks of international operations effectively, our business could be adversely affected. ●The securities settlement process exposes us to risks that may adversely affect our business. ●We are exposed to the risk that third parties that are indebted to us will not perform their obligations. ●We are exposed to various risks related to margin requirements under repurchase agreements and securities financing arrangements and are highlydependent on our clearing relationships. ●We have market risk exposure from unmatched principal transactions entered into by our brokerage desks. ●Pricing and other competitive pressures may impair the revenues and profitability of our brokerage business. ●Increase in capital commitments in our trading business increases the potential for significant losses. ●Our principal trading and investments expose us to risk of loss. ●Our principal investments are subject to various risks and expose us to a significant risk of capital loss. ●Transition away from LIBOR may adversely affect our business. ●Historical returns of our funds and managed accounts may not be indicative of their future results. ●There is increasing regulatory supervision of alternative asset management companies. ●Asset management clients generally may redeem their investments, which could reduce our asset management fee revenues. ●The investment management business is intensely competitive, which could have a material adverse impact on our business. ●Poor performance of our investment funds’ and separately managed accounts’ investments could result in a decline in our asset management revenueand earnings and investors terminating our management agreements. ●If the investments we have made on behalf of our CDOs perform poorly, we will suffer a decline in our asset management revenue and earnings and theinvestors in our CDOs may seek to terminate our management agreements. ●Our investments in SPAC Sponsor Entities are speculative, subject to total loss, and illiquid prior to business combination. ●Our investments in post-business combination SPACs are carried at fair value but are subject to sale restrictions which could result in significantlosses to our business. ●Our strategic relationship with Cohen Circle, LLC ("Cohen Circle"), formerly Fintech Masala, LLC could result in conflicts of interest and a terminationof such relationship could result in losses to our business. ●Our management may allocate some portion of their time to the business of the SPAC, which may create conflicts of interest. ●Any agreement to indemnify a SPAC against certain claims could negatively affect our financial results. ●We may make future loans to SPACs which may not be repaid. ●If our risk management systems for our businesses are ineffective, we may be exposed to material unanticipated losses. ●Failures in our information and communications systems could significantly disrupt our business. ●We may not be able to keep pace with continuing changes in technology. ●Failure to protect client data or prevent breaches of our information systems could expose us to liability/reputational damage. ●We are largely dependent on Pershing LLC to provide clearing services and margin financing. ●Our substantial level of indebtedness could adversely affect our financial health and ability to compete. ●Changes in accounting interpretations or assumptions could adversely impact our financial statements. ●Any change of our investment strategy, hedging strategy, asset allocation and operational policies may result in riskier investments and adverselyaffect the market value of our Common Stock. ●Maintenance of our Investment Company Act exemption imposes limits on our operations. ●The soundness of other financial institutions and intermediaries affects us. 16Table of Contents ●We operate in a highly regulated industry and may face increasing restrictions on, and examination of, the conduct of our operations. ●Substantial legal liability or significant regulatory action could materially affect our business. ●Highly competitive markets could have a material effect on our business. ●Employee misconduct or error could harm our business. ●We receive financial instruments instead of cash as consideration for some of our services, which may be illiquid, and the price we ultimately realizemay be materially lower than current fair value. ●SFA transactions may obligate us to make payments on certain payments upon or subsequent to maturity which may adversely impact our liquidity. Risks Related to Our Organizational Structure and Ownership of Our Common Stock: ●We are dependent on distributions from the Operating LLC as a holding company. ●Daniel G. Cohen’s significant ownership interests in the Operating LLC and other entities could create conflicts of interest. ●As a “controlled company,” our other stockholders may lose certain corporate governance protections. ●Redemptions of our outstanding LLC Units may cause substantial dilution to our existing stockholders. ●We may not fully realize our deferred tax asset. ●The Maryland General Corporation Law and our charter and bylaws may prevent potentially beneficial takeover attempts. Risks Related to General and Global Factors: ●The COVID-19 pandemic has caused severe disruptions in the U.S. and global economy and is expected to continue to impact our business, financialcondition and results of operations. ●We may incur losses as a result of unforeseen events, including further spread of the COVID-19 pandemic, cybersecurity incidents and events, terroristattacks, climate-related incidents, or other natural disasters. ●We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopoliticalinstability due to the ongoing military conflicts in Ukraine and in Israel and the surrounding areas. Our business, financial condition and results ofoperations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflicts in Ukraine,Israel, or any other geopolitical tensions. ●If we fail to maintain effective internal control over financial reporting and disclosure controls and procedures in the future, we may not be able toaccurately report our financial results, which could have an adverse effect on our business. ●Future sales of our Common Stock could lower the price of our Common Stock and harm our future securities offerings. ●Our stockholders’ percentage ownership in the Company may be diluted in the future. ●If we fail to control our costs effectively, our business could be disrupted and adversely affected. ●We may need to offer new investment strategies and products in order to continue to generate revenue. ●Our failure to deal appropriately with conflicts of interest could damage our reputation and adversely affect our business. ●Insurance may be inadequate to cover risks facing the Company. ●We depend on third-party software licenses and the loss of key licenses could adversely affect our brokerage services. ●Failure to maintain effective internal control over financial reporting and disclosure controls could harm our business. ●The market price of our Common Stock may be volatile and may be affected by market conditions beyond our control. ●Our Common Stock may be delisted, which may have a material adverse effect on the liquidity and our Common Stock value. 17Table of Contents Risks Related to Our Business and Our Industry Difficult market conditions have adversely affected our business in many ways and may continue to adversely affect our business in a manner which couldmaterially reduce our revenues. Our business has been and may continue to be materially affected by conditions in the global financial markets and economic conditions. The financial markets continueto be volatile and continue to present many challenges such as the level and volatility of interest rates, investor sentiment, the availability and cost of credit, the statusof the U.S. mortgage and real estate markets, consumer confidence, unemployment and geopolitical issues. Global economic conditions and global financial markets remain vulnerable to the potential risks posed by certain events, which could include, among other things, leveland volatility of interest rates, economic growth or its sustainability, unforeseen changes to gross domestic product, inflation, fluctuations or other changes in bothdebt and equity capital markets and currencies, political and financial uncertainty in the United States and the European Union, ongoing concern about Asia’seconomies, global supply disruptions, complications involving terrorism and armed conflicts around the world (including the conflict between Russia and Ukraine and inIsrael and the surrounding areas), or other challenges to global trade or travel, such as those that have occurred due to the COVID-19 pandemic. More generally,because our business is closely correlated to the general economic outlook, a significant deterioration in that outlook or realization of certain events would likely havean immediate and significant negative impact on our business and overall results of operations. A prolonged economic slowdown, volatility in the markets, a recession, and increasing interest rates could impair our investments and harm our operating results. Our investments are, and will continue to be, susceptible to economic slowdowns, recessions and rising interest rates, which may lead to financial losses in ourinvestments and a decrease in revenues, net income and asset values. These events may reduce the value of our investments, reduce the number of attractiveinvestment opportunities available to us and harm our operating results, which, in turn, may adversely affect our cash flow from operations. Our ability to raise capital in the long-term or short-term debt capital markets or the equity markets, or to access secured lending markets, has been and could continue tobe adversely affected by conditions in the U.S. and international markets and the economy. Global market and economic conditions have been, and continue to be,disrupted and volatile. In particular, the cost and availability of funding have been and may continue to be adversely affected by illiquid credit markets and wider creditspreads and volatility of interest rates (including overnight repo). As a result of concern about the stability of the markets generally and the strength of counterpartiesspecifically, many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers. Continued turbulence in the U.S. andinternational markets and economy may adversely affect our liquidity and financial condition and the willingness of certain counterparties to do business with us. In addition, global macroeconomic conditions and U.S. financial markets remain vulnerable to the potential risks posed by exogenous shocks, which could include,among other things, political and financial uncertainty in the U.S. and the European Union (the “EU”), continued spread of the global novel coronavirus (“COVID-19”)pandemic, renewed concern about China’s economy, cybersecurity incidents and events, climate-related incidents, complications involving terrorism and armed conflictsaround the world, or other challenges to global trade or travel. More generally, because our business is closely correlated to the macroeconomic outlook, a significantdeterioration in that outlook or an exogenous shock would likely have an immediate negative impact on our overall results of operations. We may experience write downs of financial instruments and other losses related to the volatile and illiquid market conditions. The credit markets in the U.S. experienced significant disruption and volatility from mid-2007 through early 2009, and challenging conditions have continued since thattime. Although financial markets have become more stable, there remains a certain degree of uncertainty about a global economic recovery. Available liquidity alsodeclined precipitously during the credit crisis and remains significantly depressed. The disruption in these markets generally, and in the U.S. and European markets inparticular, impacted and may continue to impact our business. We have exposure to these markets and products, and if market conditions continue to worsen, the fairvalue of our investments and our management fees could further deteriorate. In addition, market volatility, illiquid market conditions and disruptions in the global creditmarkets have made it extremely difficult to value certain of our securities. Subsequent valuations, in light of factors then prevailing, may result in significant changes inthe values of these securities, and when such securities are sold, it may be at a price materially lower than the current fair value. Any of these factors could require us totake further write downs in the fair value of our investment portfolio or cause our management fees to decline, which may have an adverse effect on our results ofoperations in future periods. We have incurred losses for certain periods covered by this report and in the recent past and may incur losses in the future. Although the Company recorded net income of $10.4 million for the year ended December 31, 2023, it recorded net loss of $58.7 million for the year ended December 31,2022. We may incur additional losses in future periods. If we are unable to finance future losses, those losses may have a significant effect on our liquidity as well as ourability to operate our business. In addition, the Company has incurred and may continue to incur significant expenses in connection with initiating new business activities or in connection with anyexpansion or reorganization of our businesses. We may also engage in strategic acquisitions and investments for which we may incur significant expenses. Accordingly,we may need to increase our revenue at a rate greater than our expenses in order to achieve and maintain our profitability. If our revenue does not increase sufficiently,or even if our revenue does increase but we are unable to manage our expenses, we will not achieve and maintain profitability in future periods. We have experienced difficulties in our Capital Markets segment over the past several years due to intense competition in our industry, which has resulted insignificant strain on our administrative, operational and financial resources. These difficulties may continue in the future. The financial services industry and all of our businesses are intensely competitive, and we expect them to remain so. We compete with commercial banks, brokeragefirms, insurance companies, sponsors of mutual funds, hedge funds and other companies offering financial services in the U.S., globally, and through the internet. Wecompete on the basis of several factors, including transaction execution, capital or access to capital, products and services, innovation, reputation, risk appetite andprice. Over time, certain sectors of the financial services industry have become more concentrated as institutions involved in a broad range of financial services havebeen acquired by or merged into other firms or have declared bankruptcy. These developments could result in our competitors gaining greater capital and otherresources such as a broader range of products and services and geographic diversity. We have experienced and may continue to experience pricing pressures in ourCapital Markets segment as a result of these factors and as some of our competitors may seek to increase market share by reducing prices. Both margins and volumes in certain products and markets within the fixed income brokerage business have decreased materially as competition has increased andgeneral market activity has declined. Further, we expect that competition will increase over time, resulting in continued margin pressure. These challenges have materiallyadversely affected our Capital Markets segment’s results of operations and may continue to do so. 18Table of Contents We intend to focus on improving the performance of our Capital Markets segment, which could place additional demands on our resources and increase our expenses.Improving the performance of our Capital Markets segment will depend on, among other things, our ability to successfully identify groups and individuals to join ourfirm and our ability to successfully grow our existing business lines and platforms and opportunistically expand into other complementary business areas. It may takemore than a year for us to determine whether we have successfully integrated new individuals, and lines of business and capabilities into our operations. During thattime, we may incur significant expenses and expend significant time and resources toward training, integration and business development. If we are unable to hire andretain senior management or other qualified personnel, such as salespeople and traders, we will not be able to grow our business and our financial results may bematerially and adversely affected. There can be no assurance that we will be able to successfully improve the operations of our Capital Markets segment, and any failure to do so could have a materialadverse effect on our ability to generate revenue and control expenses. Our gestation repo business serves a narrow market and is likely subject to highly volatile demand. We operate a matched gestation repo program. Gestation repo involves entering into repo and reverse repo transactions where the underlying collateral securityrepresents a pool of newly issued mortgages. Our reverse repo counterparties are mortgage originators. This type of financing would only be of interest to mortgageoriginators. Therefore, demand for gestation repo financing is narrow and volumes will therefore be more volatile. Mortgage and U.S. Housing Market-Related Risks In recent years, our mortgage group has become an increasingly important component of our Capital Markets segment and the Company overall. The mortgage groupprimarily earns revenue by providing hedging execution, securities financing, and trade execution services to mortgage originators and other investors in mortgagebacked securities. Therefore, this group’s revenue is highly dependent on the volume of mortgage originations in the U.S. Origination activity is highly sensitive tointerest rates, the U.S. job market, housing starts, sale activity of existing housing stock, as well as the general health of the U.S. economy. In addition, any newregulation that impacts U.S. government agency mortgage backed security issuance activity, residential mortgage underwriting standards, or otherwise impactsmortgage originators will impact our business. We have no control over these external factors and there is no effective way for us to hedge against these risks. Ourmortgage group’s volumes and profitability will be highly impacted by these external factors. Our Capital Markets segment depends significantly on a limited group of customers. From time to time, based on market conditions, a small number of our customers may account for a significant portion of the revenues earned in our Capital Marketssegment. None of our customers are obligated contractually to use our services. Accordingly, these customers may direct their activities to other firms at any time. Theloss of or a significant reduction in demand for our services from any of these customers could have a material adverse effect on our business, financial condition andoperating results. 19Table of Contents If we do not retain our senior management and continue to attract and retain qualified personnel, we may not be able to execute our business strategy. The members of our senior management team have extensive experience in the financial services industry. Their reputations and relationships with investors, financingsources and members of the business community in our industry, among others, are critical elements in operating and expanding our business. As a result, the loss ofthe services of one or more members of our senior management team could impair our ability to execute our business strategies, which could hinder our ability to achieveand sustain profitability. The Company has various employment arrangements with the members of its senior management team, but there can be no assurance that theterms of these employment arrangements will provide sufficient incentives for each of the members of the senior management team to continue employment with us. We depend on the diligence, experience, skill and network of business contacts of our senior management team and our employees in connection with (1) our CapitalMarkets segment, (2) our asset management operations, (3) our investment activities, (4) the evaluation, negotiation, structuring and management of new businessopportunities, and (5) our SPAC franchise, including our investments in SPACs and SPAC sponsors and our serving as the asset manager for certain SPAC Funds. Ourbusiness depends on the expertise of our personnel and their ability to work together as an effective team and our success depends substantially on our ability toattract and retain qualified personnel. Competition for employees with the necessary qualifications is intense, and we may not be successful in our efforts to recruit andretain the required personnel. The inability to recruit and retain qualified personnel could affect our ability to provide an acceptable level of service to our clients andfunds, attract new clients, and develop new lines of business, each of which could have a material adverse effect on our business. Payment of severance could strain our cash flow. Certain members of our senior management team have agreements that provide for substantial severance payments. Should several of these senior managers leave ouremploy under circumstances entitling them to severance, or become disabled or die, the need to pay these severance benefits could put a strain on our cash flow. Our business will require a significant amount of cash, and if it is not available, our business and financial performance will be significantly harmed. We require a substantial amount of cash to fund our investments, pay our expenses and hold our assets. More specifically, we require cash to: •meet our working capital requirements and debt service obligations; •make incremental investments in our Capital Markets segment; •make investments in our growing asset management business; •make investments supporting our SPAC franchise, including in pre- and post-business combination SPAC public companies and in SPACsponsor entities; •hire new employees; and •meet other needs. Our primary sources of working capital and cash are expected to consist of: •revenue from operations, including net trading revenue, asset management revenue, new issue and advisory revenue, interest income anddividends from our investment portfolio and potential monetization of principal investments; •interest income from temporary investments and cash equivalents; •sales of assets; and •proceeds from future borrowings or any offerings of our equity or debt securities. We may not be able to generate a sufficient amount of cash from operations and investing and financing activities in order to successfully execute our businessstrategy. Failure to obtain or maintain adequate capital and funding would adversely affect the growth and results of our operations and may, in turn, negatively affect themarket price of our Common Stock. Liquidity is essential to our businesses. We depend upon the availability of adequate funding and capital for our operations. In particular, we may need to raiseadditional capital in order to significantly grow our business. In recent years, we have engaged in a number of capital raising transactions with Daniel G. Cohen, theExecutive Chairman of the Board, and/or persons or entities controlled by or close to Mr. Cohen because the terms of such transactions have been more favorable thanterms available from unrelated third parties. Our liquidity could be substantially adversely affected by our inability to raise funding in the long-term or short-term debtcapital markets or the equity capital markets or our inability to access the secured lending markets. Factors that we cannot control, such as continued or additionaldisruption of the financial markets, or negative views about the financial services industry generally, have limited and may continue to limit our ability to raise capital. Inaddition, our ability to raise capital could be impaired if lenders develop a negative perception of our long-term or short-term financial prospects or if Mr. Cohen becomesunwilling to continue to fund the Company’s operations. Lenders could develop negative perceptions if we incur large trading losses, we suffer a decline in the level ofour business activity, we suffer material litigation losses, regulatory authorities take significant action against us, or we discover significant employee misconduct orillegal activity, among other reasons. Sufficient funding or capital may not be available to us in the future on terms that are acceptable, or at all. If we are unable to raisefunding using the methods described above, we would likely need to finance or liquidate unencumbered assets, such as our investment and trading portfolios, in orderto meet our maturing liabilities. We may be unable to sell some of our assets, or we may have to sell assets at a discount from market value, either of which couldadversely affect our results of operations and cash flows. If we are unable to meet our funding needs on a timely basis, our business would be adversely affected andthere may be a negative impact on the market price of our Common Stock. 20Table of Contents Our investments in the equity interests of SPACs and SPAC Sponsor Entities may expose us to increased risks and liabilities. We have and may continue to invest in the equity interests of SPACs and SPAC sponsor entities, including SPACs sponsored by us, our affiliates, and third parties.There are numerous risks associated with investing in the equity interests of SPACs and SPAC sponsor entities, including: (i) because a SPAC is raised without aspecifically-identified acquisition target, it may never, or only after an extended period of time, be able to find and execute a suitable business combination, during whichperiod the capital which we have invested in or committed to the SPAC will not be available to us for other uses; (ii) investments made by us in a SPAC and SPACsponsor entities may be entirely lost or otherwise decline in value if the SPAC does not timely execute a business combination; (iii) SPACs typically invest in singleassets and not diversified portfolios, and investments therein are therefore subject to significant concentration risk; (iv) SPACs incur substantial fees, costs andexpenses related to their initial public offerings, being a public company and in connection with pursuing a business combination (in some cases, regardless of whether,or when, the SPAC ultimately consummates a business transaction); and (v) there remains substantial uncertainty regarding the viability of SPAC investing on a largescale, the supply of desirable transactions and whether regulatory, tax or other authorities will implement additional or adverse policies relating to SPACs and SPACinvesting. We expect regulatory scrutiny of SPACs and other blank check companies to continue to increase and the regulations regarding SPACs may change. Ourinvestments in the equity interests of SPACs and SPAC sponsor entities may also subject us to the risk of litigation by third parties, including fund investorsdissatisfied with the performance or management of SPAC Funds, public investors in SPACs and a variety of other potential litigants. Any losses relating to thesedevelopments could adversely impact our business, results of operations and financial condition, as well as harm our professional reputation. Our investments in SPAC Sponsor Entities are highly speculative, subject to total loss, and completely illiquid prior to business combination. The Company has invested in the sponsor entities of SPACs and these investments are highly speculative. Generally, SPAC sponsor entities are LLC’s that pool theirmembers’ interests and invest in the private placement of a SPAC. The SPAC will also raise funds in a public offering and seek to complete a business combinationwithin an agreed upon timeframe. The SPAC will use the proceeds of the private placement to pay transaction and operating expenses during the period it is seeking abusiness combination. The proceeds of the public offering are placed in an interest-bearing trust and can only be used to complete the business combination. Typically, the public investors must approve any business combination prior to its effectiveness. If a business combination is not completed within the agreed upontimeframe, the SPAC will liquidate and return the funds to the public investors. If there are funds remaining after liquidation, the sponsor entities may receive someportion of their investment back, but will likely suffer a total loss of investment. Accordingly, our investments in SPAC sponsor entities is subject to a total loss of ourinvestment and such losses may adversely affect our business, financial condition and results of operations. During the period prior to the distribution of our interests in the SPAC sponsor entity, the Company includes its investment as a component of investment in equitymethod affiliates. As of December 31, 2023, of the Company’s $14.2 million balance of investment in equity method affiliates, $8.4 million represents direct or indirectinvestments in SPAC sponsor entities. These investments are subject to transfer restrictions (as described in greater detail below), are completely illiquid and could beworthless if the underlying sponsor entities liquidate without completing a business combination. Our investments in post-business combination SPACs are carried at fair value but are subject to sale restrictions which could result in significant losses to ourbusiness. We hold securities in public companies that were merger partners with the SPACs in which we invested or sponsored and we intend to continue to invest in SPACs andSPAC sponsor entities in the future. A significant portion of the securities in the post-business combination SPACs are and will be restricted for sale and may requirethe securities to trade above a certain price level for a certain period of time prior to becoming transferable. It is possible that the securities which we hold in post-business combination SPACs never trade at the applicable price levels for the requisite period of time and, in turn, the transfer restrictions thereon are never lifted. Insuch event, such restricted securities may be completely illiquid and this could significantly reduce their value, if not render them completely worthless. Further,investments in post-business combination SPAC securities may not be transferable until such securities are registered for sale with the SEC. The Company could suffersignificant mark-to-market losses on these restricted securities prior to being able to sell them. In some cases, we hedge these positions by entering into short optionstrades on the underlying unrestricted equity. However, we are limited in our ability to enter into these because of capital and financing requirements associated withsuch trades. As of December 31, 2023, of our $72.2 million reported as other investments, at fair value, $12.5 million represented restricted shares of post-business combinationSPACs that were subject to transfer restrictions and could not be sold and $23.6 million related to interest in SPVs and other receivables which have no ready market. Ifthese securities do not trade at the applicable per share price levels for the requisite periods of time and, in turn, the transfer restrictions thereon are never lifted, wecould suffer significant losses and these securities could be rendered illiquid and even worthless, which could result in significant harm to our business and results ofoperations. Our strategic relationship with Cohen Circle, LLC (“Cohen Circle”) could terminate, which could adversely affect the growth and viability of our SPAC franchise,which, in turn would negatively affect our results of our operations, and our strategic relationship with Cohen Circle could also result in conflicts of interest whichcould negatively affect our SPAC franchise and our business. Cohen Circle, an entity of which Daniel G. Cohen and his mother, Betsy Cohen, are members, is a fintech investing platform and the sponsor of third party SPACs. Wehave entered into consulting agreements with Cohen Circle pursuant to which Betsy Cohen and other Cohen Circle representatives have provided and will continue toprovide consulting services to us regarding our SPAC franchise and the SPAC entities of which we are sponsors. We anticipate that we will continue to enter intoconsulting arrangements with Cohen Circle in connection with the SPACs which we sponsor in the future. In the event that our strategic relationship with Cohen Circleis terminated, the loss of the services of Cohen Circle’s personnel could significantly impair our SPAC franchise's ability to continue to succeed, which could hinder ourability to achieve and sustain profitability. 21Table of Contents In addition, certain of our employees also provide consulting and other SPAC-related services to Cohen Circle pursuant to contractual arrangements with the SPACs ofwhich Cohen Circle is a sponsor. Pursuant to these contractual relationships, our employees may be incentivized to identify and consummate potential SPAC businesscombinations on behalf of Cohen Circle rather than for us. Further, these contractual relationships could result in our competing with Cohen Circle for potential SPACbusiness combination targets and other opportunities. All of the foregoing could result in lost opportunities for our SPAC franchise, which could have negative impactson our SPAC franchise and business as a whole. If we are unable to manage the risks of international operations effectively, our business could be adversely affected. We currently provide services and products to clients in Europe, through offices in Dublin and Paris. There are certain additional risks inherent in doing business ininternational markets, particularly in the regulated brokerage and asset management industries. These risks include: •additional regulatory requirements; •difficulties in recruiting and retaining personnel and managing the international operations; •potentially adverse tax consequences, tariffs and other trade barriers; • adverse labor laws; and •reduced protection for intellectual property rights. If we are unable to manage any of these risks effectively, our business could be adversely affected. In addition, our current international operations expose us to the risk of fluctuations in currency exchange rates generally and fluctuations in the exchange rates for theEuro in particular. Although we may hedge our foreign currency risk, we may not be able to do so successfully and may incur losses that could adversely affect ourfinancial condition or results of operations. The securities settlement process exposes us to risks that may adversely affect our business, financial condition and results of operations. We provide brokerage services to our clients in the form of “matched principal transactions” or by providing liquidity by purchasing securities from them on a principalbasis. In “matched principal transactions” we act as a “middleman” by serving as a counterparty to both a buyer and a seller in matching reciprocal back-to-back trades.These transactions, which generally involve bonds, are then settled through clearing institutions with which we have a contractual relationship. There is no guaranteethat we will be able to maintain existing contractual relationships with clearing institutions on favorable terms or that we will be able to establish relationships with newclearing institutions on favorable terms, or at all. In executing matched principal transactions, we are exposed to the risk that one of the counterparties to a transaction may fail to fulfill its obligations, either because it isnot matched immediately or, even if matched, one party fails to deliver the cash or securities it is obligated to deliver upon settlement. In addition, some of the productswe trade or may trade in the future are in less commoditized markets which may exacerbate this risk because transactions in such markets may not settle on a timelybasis. Adverse movements in the prices of securities that are the subject of these transactions can increase our risk. In addition, widespread technological orcommunication failures, as well as actual or perceived credit difficulties, or the insolvency of one or more large or visible market participants, could cause market-widecredit difficulties or other market disruptions. These failures, difficulties or disruptions could result in a large number of market participants not settling transactions orotherwise not performing their obligations. We are subject to financing risk in these circumstances because if a transaction does not settle on a timely basis, the resulting unmatched position may need to befinanced, either directly by us or through one of our clearing organizations at our expense. These charges may not be recoverable from the failing counterparty. Finally,in instances where the unmatched position or failure to deliver is prolonged or widespread due to rapid or widespread declines in liquidity for an instrument, there mayalso be regulatory capital charges required to be taken by us which, depending on their size and duration, could limit our business flexibility or even force thecurtailment of those portions of our business requiring higher levels of capital. Credit or settlement losses of this nature could adversely affect our financial condition orresults of operations. In the process of executing matched principal transactions, miscommunications and other errors by our clients or by us can arise whereby a transaction is not completedwith one or more counterparties to the transaction, leaving us with either a long or short unmatched position. If the unmatched position is promptly discovered andthere is a prompt disposition of the unmatched position, the risk to us is usually limited. If the discovery of an out trade is delayed, the risk is heightened by theincreased possibility of intervening market movements prior to disposition. Although out trades usually become known at the time of, or later on the day of, the trade, itis possible that they may not be discovered until later in the settlement process. When out trades are discovered, our policy will generally be to have the unmatchedposition disposed of promptly, whether or not this disposition would result in a loss to us. The occurrence of unmatched positions generally rises with increases in thevolatility of the market and, depending on their number and amount, such out trades have the potential to have a material adverse effect on our financial condition andresults of operations. From time to time, we may also provide brokerage services in the form of agency transactions. In agency transactions, we charge a commission for connecting buyersand sellers and assisting in the negotiation of the price and other material terms of the transaction. After all material terms of a transaction are agreed upon, we identifythe buyer and seller to each other and leave them to settle the trade directly. We are exposed to credit risk for commissions we bill to clients for agency brokerageservices. Participation in matched principal, principal, or agency transactions subjects us to disputes, counterparty credit risk, lack of liquidity, operational failure or other marketwide or counterparty specific risks. Any losses arising from such risks could adversely affect our financial condition or results of operations. In addition, the failure of asignificant number of counterparties or a counterparty that holds a significant amount of derivatives exposure, or that has significant financial exposure to, or relianceon, the mortgage, asset-backed or related markets, could have a material adverse effect on the trading volume and liquidity in a particular market for which we providebrokerage services or on the broader financial markets. We have policies and procedures to identify, monitor and manage these risks, through reporting and control procedures and by monitoring credit standards applicableto our clients. These policies and procedures, however, may not be fully effective. Some of our risk management methods will depend upon the evaluation of informationregarding markets, clients or other matters that are publicly available or otherwise accessible by us. That information may not, in all cases, be accurate, complete, up-to-date or properly evaluated. If our policies and procedures are not fully effective or we are not always successful in monitoring or evaluating the risks to which we maybe exposed, our financial condition or results of operations could be adversely affected. In addition, we may not be able to obtain insurance to cover all of the types ofrisks we face and any insurance policies we do obtain may not provide adequate coverage for covered risks. 22Table of Contents We are exposed to the risk that third parties that are indebted to us will not perform their obligations. Credit risk refers to the risk of loss arising from borrower, counterparty or obligor default when a borrower, counterparty or obligor does not meet its obligations. Weincur significant credit risk exposure through our Capital Markets segment. This risk may arise from a variety of business activities, including but not limited toextending credit to clients through various lending commitments; providing short or long-term funding that is secured by physical or financial collateral whose valuemay at times be insufficient to fully cover the loan repayment amount; entering into swap or other derivative contracts under which counterparties have obligations tomake payments to us; and posting margin and/or collateral to clearing houses, clearing agencies, exchanges, banks, securities firms and other financial counterparties.We incur credit risk in traded securities and loan pools whereby the value of these assets may fluctuate based on realized or expected defaults on the underlyingobligations or loans. There is a possibility that continued difficult economic conditions may further negatively impact our clients and our current credit exposures. Although we regularlyreview our credit exposures, default risk may arise from events or circumstances that are difficult to detect or foresee. We are exposed to various risks related to margin requirements under repurchase agreements and securities financing arrangements and are highly dependent onour clearing relationships. We maintain repurchase agreements with various third-party financial institutions and other counterparties. Under those repurchase agreements we act as both a buyerand a seller of the subject securities. Our business related to these repurchase agreements is predominantly matched, meaning that we do not purchase or sell securitiesunless there is another institution prepared to simultaneously purchase or sell securities to or from us, as applicable. There are limits to the amount of securities that maybe transferred pursuant to these agreements, and available lines both for us and our counterparties for whom we purchase securities are approved on a case-by-casebasis after each counterparty has gone through a credit review process. The repurchase agreements we execute with our counterparties include substantive provisionsother than those covenants and other customary provisions contained in standard master repurchase agreements. However, while these additional provisions may workto mitigate some of the risks related to repurchase agreement transactions, these additional substantive provisions do not guarantee the performance of a counterpartyor alleviate all of the potential risks we could face from entering into repurchase agreement transactions. The repurchase agreements generally require a seller under a repurchase agreement to transfer additional securities to the counterparty who is acting as the buyer underthe repurchase agreement in the event that the value of the securities then held by the buyer falls below specified levels. Each repurchase agreement contains events ofdefault in cases where a counterparty breaches its obligations under the agreement. When we are acting in the capacity of a seller under these agreements, we receivemargin calls from time to time in the ordinary course of business, and no assurance can be given that we will be able to satisfy requests from our counterparties to postadditional collateral in the future. Similarly, when we are acting in the capacity of a buyer under these agreements,we make margin calls from time to time to our sellercounterparties in the ordinary course of business and no assurance can be given that our counterparties will have adequate funds or collateral to satisfy such margincall requirements. Generally, if there was an event of default under a repurchase agreement, such event of default would provide the non-defaulting counterparty withthe option to terminate all outstanding repurchase transactions with us and make all amounts due from the defaulting counterparty immediately payable. However, therecan be no assurance that any such defaulting counterparty will have the funds or collateral needed to fully satisfy any such margin call or other amount due. Generally,repurchase obligations are full recourse obligations and if we were to default under a repurchase obligation, the counterparty would have recourse to our other assets ifthe collateral was insufficient to satisfy our obligation in full. In addition, our clearing brokers provide securities financing arrangements including margin arrangements and securities borrowing and lending arrangements. Thesearrangements generally require us to (i) transfer additional securities or cash to the clearing broker in the event that the value of the securities then held by the clearingbroker in the margin account falls below specified levels and (ii) contain events of default that would be triggered if we were to breach our obligations under suchagreements. An event of default under a clearing agreement would give the clearing broker the option to terminate the clearing arrangement and any amounts owed tothe clearing broker would be immediately due and payable. These obligations are full recourse to us. Furthermore, we are highly dependent on our relationships with our clearing brokers. Any termination of our clearing arrangements whether due to a breach of theagreement by us or a default, bankruptcy or reorganization of a clearing broker would result in a significant disruption to our business as we clear all trades throughthese entities. Any such termination would have a significant negative impact on our dealings and relationships with our customers and there is no guarantee we wouldbe able to replace any such clearing broker on similar terms. We have market risk exposure from unmatched principal transactions entered into by our brokerage desks, which could result in substantial losses to us andadversely affect our financial condition and results of operations. We allow certain of our brokerage desks access to limited amounts of capital to enter into unmatched principal transactions in the ordinary course of business for thepurpose of facilitating clients’ execution needs for transactions initiated by such clients or to add liquidity to certain illiquid markets. As a result, we have market riskexposure on these unmatched principal transactions. Our exposure will vary based on the size of the overall positions, the terms and liquidity of the instrumentsbrokered, and the amount of time the positions will be held before we dispose of the positions. We do not track our exposure to unmatched positions on an intra-day basis. These unmatched positions are intended to be held short-term, however, due to a number offactors, including the nature of a position and access to the market on which we trade, we may not be able to match each position or effectively hedge our exposure andoften may be forced to hold a position overnight that has not been hedged. To the extent any unmatched positions are not disposed of intra-day, we mark thosepositions to market. Adverse movements in the securities underlying the positions or a downturn or disruption in the markets for the positions could result in oursustaining a substantial loss. In addition, any principal gains and losses resulting from these positions could, from time to time, have a disproportionate positive ornegative effect on our financial condition and results of operations for a particular reporting period. Pricing and other competitive pressures may impair the revenues and profitability of our brokerage business. In recent years, we have experienced significant pricing pressures on trading margins and commissions, primarily in debt trading. In the fixed income market, regulatoryrequirements have resulted in greater price transparency, leading to increased price competition and decreased trading margins. The trend toward using alternativetrading systems is continuing to grow, which may result in decreased commission and trading revenue, reduce our participation in the trading markets and our ability toaccess market information, and lead to the creation of new and stronger competitors. Additional pressure on sales and trading revenue may impair the profitability of ourbrokerage business. We believe that price competition and pricing pressures in these and other areas will continue as institutional investors continue to reduce theamounts they are willing to pay, including reducing the number of brokerage firms they use, and some of our competitors seek to obtain market share by reducing fees,commissions or margins. 23Table of Contents Increase in capital commitments in our trading business increases the potential for significant losses. We may enter into transactions in which we commit our own capital as part of our trading business. The number and size of these transactions may materially affect ourresults of operations in a given period. We may also incur significant losses from our trading activities due to market fluctuations and volatility from quarter to quarter.We maintain trading positions in the fixed income markets to facilitate client trading activities. To the extent that we own security positions, in any of those markets, adownturn in the value of those securities or in those markets could result in losses from a decline in value. Conversely, to the extent that we have sold securities we donot own in any of those markets, an upturn in those markets could expose us to potentially unlimited losses as we attempt to acquire the securities in a rising market.Moreover, taking such positions in times of significant volatility can lead to significant unrealized losses, which further impact our ability to borrow to finance suchactivities. Our principal trading and investments expose us to risk of loss. A significant portion of our revenue is derived from trading in which we act as principal. The Company may incur trading losses relating to the purchase, sale or shortsale of corporate and asset-backed fixed income securities and other securities for our own account and from other principal trading. In any period, we may experiencelosses as a result of price declines, lack of trading volume, general market conditions, employee inexperience, errors or misconduct, or illiquidity. From time to time, wemay engage in a large block trade in a single security or maintain large position concentrations in a single security, securities of a single issuer, or securities of issuersengaged in a specific industry. In general, any downward price movement in these securities could result in a reduction of our revenues and profits. In addition, we may engage in hedging transactions and strategies that may not properly mitigate losses in our principal positions. If the transactions and strategies arenot successful, we could suffer significant losses. Our principal investments are subject to various risks and expose us to a significant risk of capital loss, which may materially and adversely affect our results ofoperations and cash flows. We use a portion of our own capital in a variety of principal investment activities, each of which involves risks of illiquidity, loss of principal and revaluation of assets.As of December 31, 2023, we had $72.2 million in other investments, at fair value. We may use our capital, including on a leveraged basis, for principal investments in both private and public company securities that may be illiquid and volatile. Theequity securities of any privately held entity in which we make a principal investment are likely to be restricted as to resale and may otherwise be highly illiquid. In thecase of SPAC-related or similar investments, our investments may be illiquid until such investment vehicles are liquidated. We expect that there will be restrictions onour ability to resell any such securities that we acquire for a period of time after we acquire such securities. Thereafter, a public market sale may be subject to volumelimitations or be dependent upon securing a registration statement for an initial, and potentially secondary, public offering of the securities. Even if we make anappropriate investment decision, we cannot be assured that general market conditions will not cause the market value of our investments to decline. For example, anincrease in interest rates, a general decline in the equity markets, or other market and industry conditions adverse to the type of investments we make and intend to makecould result in a decline in the value of our investments or a total loss of our investment. There are no regularly quoted market prices for some of the investments we make. The value of our investments is determined using fair value methodologies describedin our valuation policies, which may take into consideration, among other things, the nature of the investment, the expected cash flows from the investment, bid or askprices provided by third parties for the investment, the trading price of recent sales of securities (in the case of publicly traded securities), restrictions on transfer, andother recognized valuation methodologies. The methodologies we use in valuing individual investments are based on estimates and assumptions specific to theparticular investments. Therefore, the value of our investments does not necessarily reflect the prices that would actually be obtained by us when such investments aresold. Realizations at values significantly lower than the values at which investments have been previously held would result in losses of potential incentive income andprincipal investments. In addition, in our principal investment activities, our concentrated holdings, illiquidity and market volatility may make it difficult to value certain of our investmentsecurities. Subsequent valuations, in light of factors then prevailing, may result in significant changes in the values of these securities in future periods. In addition, atthe time of any sales and settlements of these securities, the price we ultimately realize will depend on the demand and liquidity in the market at that time and may bematerially lower than current fair value of such securities. Any of these factors could require us to take write-downs in the value of our investment and securitiesportfolio, which may have an adverse effect on our results of operations in future periods. If we are unable to manage any of these risks effectively, our results ofoperations and cash flows could be materially and adversely affected. 24Table of Contents The historical returns of our funds and managed accounts may not be indicative of the future results of our funds and managed accounts. The historical returns of our funds and managed accounts should not be considered indicative of future results expected from such fund and managed accounts or fromany future funds we may raise or managed accounts we may open. Our rates of return reflect unrealized gains, as of the applicable measurement date, which may neverbe realized due to changes in market and other conditions not in our control that may adversely affect the ultimate valuation of the investments in a fund. The returns ofour funds may have also benefited from investment opportunities and general market conditions that may not repeat themselves, and there can be no assurance that ourcurrent or future funds will be able to avail themselves of profitable investment opportunities. Furthermore, the historical and potential future returns of the funds wemanage also may not necessarily bear any relationship to potential returns on our shares. There is increasing regulatory supervision of alternative asset management companies. In the past several years, the financial services industry has been the subject of heightened scrutiny by regulators around the globe. In particular, the SEC and its staffhave focused more narrowly on issues relevant to alternative asset management firms, forming specialized units devoted to examining such firms and, in certain cases,bringing enforcement actions against the firms, their principals and employees. In the last few years, there were a number of enforcement actions within the industry.The SEC announced that the 2020 examination priorities for the Office of Compliance Inspections and Examinations include such items as market infrastructure,information security, and anti-money laundering programs, but the SEC also signaled its intention to examine firms in emerging risk areas, such as robo-advice, digitalassets, cybersecurity, SPACs, and new rules under the Investment Advisers Act of 1940, as amended and interpretations on standards of care. It is unclear, however,whether the SEC and its staff will increase the level of enforcement if, in the future, there is an effort on the part of the federal government to increase restrictions onbusiness conduct, which could result in significant changes in, and uncertainty with respect to, legislation, regulation and government policy. Some of our asset management clients generally may redeem their investments, which could reduce our asset management fee revenues. Our asset management fund agreements generally permit investors to redeem their investments with us after an initial “lockup” period, during which redemptions arerestricted or penalized. However, any such restrictions may be waived by us. Thereafter, redemptions are permitted at quarterly or annual intervals. If the return on theassets under our management does not meet investors’ expectations, investors may elect to redeem their investments and invest their assets elsewhere, including withour competitors. Our management fee revenues correlate directly with the amount of assets under our management; therefore, redemptions may cause our fee revenuesto decrease. Investors may decide to reallocate their capital away from us and to other asset managers for a number of reasons, including poor relative investmentperformance, changes in prevailing interest rates that make other investments more attractive, changes in investor perception regarding our focus or alignment ofinterest, dissatisfaction with changes in or a broadening of a fund’s investment strategy, changes in our reputation, and departures or changes in responsibilities of keyinvestment professionals. For these and other reasons, the pace of redemptions and corresponding reduction in our assets under management could accelerate. In thefuture, redemptions could require us to liquidate assets under unfavorable circumstances, which would further harm our reputation and results of operations. The investment management business is intensely competitive, which could have a material adverse impact on our business. We have been working to grow our asset management business and we compete as an investment manager for both fund investors and investment opportunities. Theinvestment management business is highly fragmented, with our competitors consisting primarily of sponsors of public and private investment funds, real estatedevelopment companies, SPACs, business development companies, investment banks, commercial finance companies and operating companies acting as strategicbuyers of businesses. We believe that competition for fund investors is based primarily on: •investment performance; •investor liquidity and willingness to invest; • investor perception of investment managers’ drive, focus and alignment of interest; •business reputation; •the quality of services provided to fund investors; •pricing; • fund terms (including fees); and •the relative attractiveness of the types of investments that have been or will be made. 25Table of Contents We believe that competition for investment opportunities is based primarily on the pricing, terms and structure of a proposed investment and certainty of execution. Anumber of factors serve to increase our competitive risks: •our competitors may have greater financial, technical, marketing and other resources and more personnel than we do, and, in the case of someasset classes or geographic regions, longer operating histories, more established relationships, greater expertise or a better reputation; • fund investors may materially decrease their allocations in new funds due to their experiences following an economic downturn, the limitedavailability of capital, regulatory requirements or a desire to consolidate their relationships with investment firms; • certain of our competitors may have agreed to terms with respect to their investment funds or products that are more favorable to investorsthan our funds or products, such as lower management fees, greater fee sharing or higher performance hurdles for carried interest and,therefore, we may be forced to match or otherwise revise our terms to be less favorable to us than they have been in the past; •certain of our funds may not perform as well as competitors’ funds or other available investment products; •our competitors have raised or may raise significant amounts of capital, and many of them have similar investment objectives and strategies toour funds, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficienciesthat many alternative investment strategies seek to exploit; • certain of our competitors may have a lower cost of capital and access to funding sources that are not available to us, which may createcompetitive disadvantages for us with respect to investment opportunities; •certain of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them toconsider a wider variety of investments and to bid more aggressively than us for investments; •certain of our competitors may be subject to less regulation or less regulatory scrutiny and accordingly, may have more flexibility to undertakeand execute certain businesses or investments than we do and/or bear less expense to comply with such regulations than we do; •there are relatively few barriers to entry impeding the formation of new funds, including a relatively low cost of entering these businesses, andthe successful efforts of new entrants into our various lines of business, including major commercial and investment banks and other financialinstitutions, have resulted in increased competition; •certain fund investors may prefer to invest with an investment manager that is not publicly traded, is larger or manages more investmentproducts; and • other industry participants will from time to time seek to recruit our investment professionals and other employees away from us. We may lose investment opportunities in the future if we do not match investment prices, structures and terms offered by competitors. Our competitors that arecorporate buyers may be able to achieve synergistic cost savings in respect of an investment, which may provide them with a competitive advantage in bidding for aninvestment. Alternatively, we may experience decreased investment returns and increased risks of loss if we match investment prices, structures and terms offered bycompetitors. Moreover, as a result, if we are forced to compete with other investment firms on the basis of price, we may not be able to maintain our current fund fee,carried interest or other terms. There is a risk that fees and carried interest in the alternative investment management industry will decline, without regard to the historicalperformance of a manager. Fee or carried interest income reductions on existing or future funds, without corresponding decreases in our cost structure, could materiallyand adversely affect our revenues and profitability. In addition, if interest rates were to rise or if market conditions for competing investment products become or are more favorable and such products begin to offer ratesof return superior to those achieved by our funds, the attractiveness of our funds relative to investments in other investment products could decrease. This competitivepressure could materially and adversely affect our ability to make successful investments and limit our ability to raise future funds, either of which could adverselyimpact our business, results of operations and cash flow. If the investments we have made or make on behalf of our investment funds and separately managed accounts perform poorly, we will suffer a decline in our assetmanagement revenue and earnings because some of our fees are subject to the credit performance of the portfolios of assets. In addition, the investors in ourinvestment funds and our separately managed accounts may seek to terminate our management agreements based on poor performance. Any of these results couldadversely affect our results of operations and our ability to raise capital for future investment funds and separately managed accounts. Our revenue from our asset management business is partially derived from management fees paid by the investment funds and separate accounts we manage. In thecase of the investment funds and separately managed accounts, our management fees are based on the equity of and net income earned by the vehicles, which issubstantially based on the performance of the securities in which they invest. In addition, investment performance is one of the most important factors in retaining existing investors and competing for new asset management business. Investmentperformance may be poor as a result of current or future difficult market or economic conditions, including changes to interest rates or inflation, terrorism or politicaluncertainty, our investment style, the particular investments that we make, and other factors beyond our control. In the event that our investment funds or separatelymanaged accounts perform poorly, our asset management revenues and earnings will suffer a decline. We may be unable to raise capital for new investment funds orseparately managed accounts to offset any losses we may experience. In addition, our management contracts may be terminated for various reasons.26Table of Contents Any agreement to indemnify a SPAC against certain claims could negatively affect our financial results. In connection with our investments in SPACs in which we sponsor, we have agreed to and may continue to agree in the future to, indemnify a SPAC for all claims bythird parties for services rendered or products sold to the SPAC, or claims by any prospective target business with which the SPAC discusses entering into atransaction agreement, subject to certain limitations. Our indemnification of a SPAC with respect to any such claims could negatively affect our financial results. Inaddition, if the SPAC liquidates, we may be liable to a SPAC under these indemnification obligations. We may in the future make loans to the SPACs in which we sponsor, which may not be repaid, in which event our financial results could be adversely affected. We have made loans to the SPACs in which we have sponsored to fund the SPAC’s operating expenses following its IPO and may continue to do so in thefuture. These loans generally bear no interest and, if a SPAC consummates a business combination in the required time frame, we would expect the loan to be repaidfrom the funds held in the SPAC’s trust account. If a SPAC to which we have loaned funds does not consummate a business combination in the required time frame, nofunds from the SPAC’s trust account will be available to repay any loan we have made to such SPAC. If these loans are not repaid, our financial results could beadversely affected. Our executive officers and members of our senior management team may allocate some portion of their time to the business of the SPACs of which we are a sponsorand to the SPACs of third party entities, which may create conflicts of interest in their determination as to how much time to devote to our affairs and may have anegative impact on our business. Our executive officers and members of our senior management team have served key roles in the SPACs of which we are a sponsor. Our executive officers and membersof our senior management team may serve as key employees for future SPACs of which we are the sponsors. If our executive officers’ and members of our seniormanagement team’s involvement in the business affairs of the SPACs of which we are a sponsor require any of them to devote substantial amounts of time to suchaffairs, it could limit their ability to devote time to our business affairs, which may have a negative impact on our business. Daniel G. Cohen is a member of Cohen Circle, a fintech investing platform and the sponsor of third party SPACs. Mr. Cohen’s involvement in Cohen Circle could alsolimit his ability to devote time to our business affairs, which may have a negative impact on our business. In addition, Joseph Pooler, our Chief Financial Officer andDouglas Listman, our Chief Accounting Officer serve as Chief Financial Officer of certain SPACs sponsored by Cohen Circle. If our risk management systems for our businesses are ineffective, we may be exposed to material unanticipated losses. We seek to manage, monitor, and control our operational, legal and regulatory risk through operational and compliance reporting systems, internal controls, managementreview processes and other mechanisms, and may not fully mitigate the risk exposure of our businesses in all economic or market environments or protect against alltypes of risk. Further, our risk management methods may not effectively predict future risk exposures, which could be significantly greater than the historical measuresindicate. In addition, some of our risk management methods are based on an evaluation of information regarding markets, clients, and other matters that are based onassumptions that may no longer be accurate. A failure to adequately manage our growth, or to effectively manage our risk, could materially and adversely affect ourbusiness and financial condition. In addition, we are deploying our own capital in our funds and in principal investments, and limitations on our ability to withdraw someor all of our investments in these funds or liquidate our investment positions, whether for legal, reputational, illiquidity or other reasons, may make it more difficult for usto control the risk exposures relating to these investments. We are highly dependent on information and communications systems. Systems failures could significantly disrupt our business, which may, in turn, negativelyaffect our operating results. Our business will depend, to a substantial degree, on the proper functioning of our information and communications systems and our ability to retain the employees andconsultants who operate and maintain these systems. Any failure or interruption of our systems, due to systems failures, staff departures or otherwise, could result indelays, increased costs or other problems which could have a material adverse effect on our operating results. A disaster, such as water damage to an office, anexplosion or a prolonged loss of electrical power, could materially interrupt our business operations and cause material financial loss, regulatory actions, reputationalharm or legal liability. In addition, if security measures contained in our systems are breached as a result of third-party action, employee error, malfeasance or otherwise,our reputation may be damaged, and our business could suffer. We have developed a business continuity plan, however, there are no assurances that such plan will besuccessful in preventing, timely and adequately addressing, or mitigating the negative effects of any failure or interruption. There can be no assurance that our information systems and other technology will continue to be able to accommodate our operations, or that the cost of maintainingthe systems and technology will not materially increase from the current level. A failure to accommodate our operations, or a material increase in costs related toinformation systems and technology, could have a material adverse effect on our business. We may not be able to keep pace with continuing changes in technology. Our market is characterized by rapidly changing technology. To be successful, we must adapt to this rapidly changing environment by continually improving theperformance, features, and reliability of our services. We could incur substantial costs if we need to modify our services or infrastructure or adapt our technology torespond to these changes (including in response to artificial intelligence or other emerging technologies). A delay or failure to address technological advances anddevelopments or an increase in costs resulting from these changes could have a material and adverse effect on our business, financial condition and results ofoperations. Failure to protect client data or prevent breaches of our information systems could expose us to liability or reputational damage. The secure transmission of confidential information over public networks is a critical element of our operations. We are dependent on information technology networksand systems to securely process, transmit and store electronic information and to communicate among our locations and with our clients and vendors. As the breadthand complexity of this infrastructure continue to grow, the potential risk of security breaches and cyber-attacks increases. As a financial services company, we may besubject to cyber-attacks and phishing scams by third parties. In addition, vulnerabilities of our external service providers and other third parties could pose securityrisks to client information. Such breaches could lead to shutdowns or disruptions of our systems and potential unauthorized disclosure of confidential information andviolations of privacy laws and regulations. 27Table of Contents In providing services to clients, we manage, utilize and store sensitive and confidential client data, including personal data. As a result, we are subject to numerous lawsand regulations designed to protect this information, such as U.S. federal and state laws and foreign regulations governing the protection of personally identifiableinformation. These laws and regulations are increasing in complexity and number, change frequently and sometimes conflict. If any person, including any of ouremployees, negligently disregards or intentionally breaches our established controls with respect to client data, or otherwise mismanages or misappropriates that data,we could be subject to significant monetary damages, regulatory enforcement actions, fines and/or criminal prosecution in one or more jurisdictions. Unauthorizeddisclosure of sensitive or confidential client data, whether through systems failure, employee negligence, fraud or misappropriation, could damage our reputation andcause us to lose clients. Similarly, unauthorized access to or through our information systems, whether by our employees or third parties, including a cyber-attack bycomputer programmers and hackers who may deploy viruses, worms or other malicious software programs, could result in negative publicity, significant remediationcosts, legal liability, financial responsibility under our security guarantee to reimburse clients for losses resulting from unauthorized activity in their accounts anddamage to our reputation and could have a material adverse effect on our results of operations. Further, the General Data Protection Regulation (“GDPR”) requiresentities processing the personal data of individuals in the European Union to meet certain requirements regarding the handling of that data. Failure to meet GDPRrequirements could result in substantial penalties and materially adversely impact our financial results. The occurrence of any of these incidents could result inreputational damage, adverse publicity, loss of consumer confidence, reduced sales and profits, complications in executing our growth initiatives and regulatory andlegal risk, including criminal penalties or civil liabilities. In addition, our liability insurance might not be sufficient in type or amount to cover us against claims related tosecurity breaches, cyber-attacks, phishing scams and other related breaches. We are largely dependent on Pershing LLC to provide clearing services and margin financing. Our broker-dealer relies on Pershing LLC to provide clearing services, as well as other operational and support functions that cannot be provided for internally. Inaddition, currently all of our margin financing is obtained from Pershing LLC. As of December 31, 2023, our total margin loan payable to Pershing LLC is $111.1 million. Ifour relationship with Pershing LLC is terminated, there can be no assurance that the functions and margin loan financing previously provided could be replaced oncomparable economic terms. Our substantial level of indebtedness could adversely affect our financial health and ability to compete. In addition, our failure to satisfy the financial covenants inour debt agreements could result in a default and acceleration of repayment of the indebtedness thereunder. Our balance sheet includes approximately $52.6 million par value of recourse indebtedness. Our indebtedness could have important consequences to our stockholders.For example, our indebtedness could: •make it more difficult for us to pay our debts as they become due during general adverse economic and market industry conditions because anyrelated decrease in revenues could cause our cash flows from operations to decrease and make it difficult for us to make our scheduled debtpayments; •limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate and consequently, place us at acompetitive disadvantage to our competitors with less debt; •require a substantial portion of our cash flow from operations to be used for debt service payments, thereby reducing the availability of ourcash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes; •limit our ability to borrow additional funds to expand our business or alleviate liquidity constraints, as a result of financial and other restrictivecovenants in our indebtedness; and •result in higher interest expense in the event of increases in interest rates since some of our borrowings are and will continue to be, at variablerates of interest. Under the junior subordinated notes related to the Alesco Capital Trust, we are required to maintain a total debt to capitalization ratio of less than 0.95 to 1.0. Also,because the aggregate amount of our outstanding subordinated debt exceeds 25% of our net worth, we are unable to issue any further subordinated debt. As ofDecember 31, 2023, we have a substantial amount of debt with variable interest rates. We may experience material increases in our interest expense as a result ofincreases in general interest rate levels. In addition, our indebtedness imposes restrictions that limit our discretion with regard to certain business matters, including ourability to engage in consolidations and mergers and our ability to transfer and lease certain of our properties. Such restrictions could make it more difficult for us toexpand, finance our operations and engage in other business activities that may be in our interest. Our ability to comply with these and any other provisions of suchagreements will be affected by changes in our operating and financial performance, changes in business conditions or results of operations, adverse regulatorydevelopments or other events beyond our control. The breach of any of these covenants could result in a default, which could cause our indebtedness to become dueand payable. If the maturity of our indebtedness were accelerated, we may not have sufficient funds to pay such indebtedness. Any additional indebtedness we mayincur in the future may subject us to similar or even more restrictive conditions. Accounting rules for certain of our transactions are highly complex and involve significant judgment and assumptions. Changes in accounting interpretations orassumptions could adversely impact our financial statements. Accounting rules for transfers of financial assets, income taxes, compensation arrangements including share-based compensation, securitization transactions,consolidation of variable interest entities, determining the fair value of financial instruments and other aspects of our operations are highly complex and involvesignificant judgment and assumptions. These complexities could lead to delay in preparation of our financial information. Changes in accounting interpretations orassumptions could materially impact our financial statements. 28Table of Contents We may change our investment strategy, hedging strategy, asset allocation and operational policies without our stockholders’ consent, which may result in riskierinvestments and adversely affect the market value of our Common Stock. We may change our investment strategy, hedging strategy, asset allocation and/or operational policies at any time without the consent of our stockholders. A change inour investment or hedging strategy may increase our exposure to various risks including interest rate and exchange rate fluctuations. Furthermore, our board of directorswill determine our operational policies and may amend or revise our policies, including polices with respect to our acquisitions, growth, operations, indebtedness,capitalization and distributions, or our board may approve transactions that deviate from these policies without a vote of, or notice to, our stockholders. Operationalpolicy changes could adversely affect the market value of our Common Stock. Maintenance of our Investment Company Act exemption imposes limits on our operations, and loss of our Investment Company Act exemption would adverselyaffect our operations. We seek to conduct our operations so that we are not required to register as an investment company under the Investment Company Act. Section 3(a)(l)(C) of theInvestment Company Act of 1940, as amended (the “Investment Company Act”), defines an “investment company” as any issuer that is engaged or proposes to engagein the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40%of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Excluded from the term “investmentsecurities,” among other things, are securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exceptionfrom the definition of investment company set forth in Section 3(c)(l) or Section 3(c)(7) of the Investment Company Act. We are a holding company that conducts our business primarily through the Operating LLC as a voting-controlled subsidiary. Whether or not we qualify under the 40%test is primarily based on whether the securities we hold in the Operating LLC are investment securities. If we were required to register as an investment company underthe Investment Company Act, we would become subject to substantial regulation with respect to our capital structure (including our ability to use leverage),management, operations, transactions with affiliated persons (as defined in the Investment Company Act) and other matters. Such limitations could have a materialadverse effect on our business and operations. As of December 31, 2023, we are in compliance with and meet the Section 3(a)(1)(C) exclusion. The soundness of other financial institutions and intermediaries affects us. We face the risk of operational failure, termination or capacity constraints of any of the clearing agents, exchanges, clearing houses or other financial intermediaries thatwe use to facilitate our securities transactions. As a result of the consolidation over the years of clearing agents, exchanges and clearing houses, our exposure to certainfinancial intermediaries has increased and could affect our ability to find adequate and cost-effective alternatives should the need arise. Any failure, termination orconstraint of these intermediaries could adversely affect our ability to execute transactions, service our clients and manage our exposure to risk. Our ability to engage in routine trading and funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions.Financial services institutions are interrelated as a result of trading, clearing, funding, and counterparty or other relationships. We have exposure to many differentindustries and counterparties, and we routinely execute transactions with counterparties in the financial industry, including brokers and dealers, commercial banks,investment banks, mortgage originators and other institutional clients. As a result, defaults by, or even rumors or questions about the financial condition of, one or morefinancial services institutions, or the financial services industry generally, have historically led to market-wide liquidity problems and could lead to losses or defaults byus or by other institutions. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may beexacerbated when the collateral held by us cannot be realized or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure due us.Although we have not suffered any material or significant losses as a result of the failure of any financial counterparty, any such losses in the future may materiallyadversely affect our results of operations. We operate in a highly regulated industry and may face restrictions on, and examination of, the way we conduct certain of our operations. Our business is subject to extensive government and other regulation, and our relationship with our broker-dealer clients may subject us to increased regulatoryscrutiny. These regulations are designed to protect the interests of the investing public generally rather than our stockholders and may result in limitations on ouractivities. Governmental and self-regulatory organizations, including the SEC, FINRA, the Commodity Futures Trading Commission and other agencies and securitiesexchanges such as the NYSE and NYSE American regulate the U.S. financial services industry, and regulate certain of our operations in the U.S. Some of ourinternational operations are subject to similar regulations in their respective jurisdictions, including rules promulgated by the ACPR which apply to our operations inFrance. These regulatory bodies are responsible for safeguarding the integrity of the securities and other financial markets and protecting the interests of investors inthose markets. In addition, all records of registered investment advisors and broker-dealers are subject at any time, and from time to time, to examination by the SEC.Some aspects of the business that are subject to extensive regulation and/or examination by regulatory agencies, include: •sales methods, trading procedures and valuation practices; •investment decision making processes and compensation practices; •use and safekeeping of client funds and securities; •the manner in which we deal with clients; •the safeguarding of personally identifiable information; •capital requirements; •financial and reporting practices; •required record keeping and record retention procedures; •the licensing of employees; •the conduct of directors, officers, employees and affiliates; •systems and control requirements; •conflicts of interest including, but not limited to allocation of investment opportunities and targets for business combinations for SPACs; •restrictions on marketing, gifts and entertainment; and •client identification and anti-money laundering requirements. 29Table of Contents The SEC, FINRA, ACPR, and various other domestic and international regulatory agencies also have stringent rules and regulations with respect to the maintenance ofspecific levels of net capital by broker-dealers. Generally, in the U.S., a broker-dealer’s net capital is defined as its net worth, plus qualified subordinated debt, lessdeductions for certain types of assets. If these net capital rules are changed or expanded, or if there is an unusually large charge against net capital, our operations thatrequire the intensive use of capital would be limited. Also, our ability to withdraw capital from our regulated subsidiaries is subject to restrictions, which in turn couldlimit our ability or that of our subsidiaries to pay dividends, repay debt, make distributions, and redeem or purchase shares of our Common Stock or other equityinterests in our subsidiaries. A large operating loss or charge against net capital could adversely affect our ability to expand or even maintain our expected levels ofbusiness, which could have a material adverse effect on our business. In addition, we may become subject to net capital requirements in other foreign jurisdictions inwhich we operate. While we expect to maintain levels of capital in excess of regulatory minimums, we cannot predict our future capital needs or our ability to obtainadditional financing. If we or any of our subsidiaries fail to comply with any of these laws, rules, or regulations, we or such subsidiary may be subject to censure, significant fines, cease-and-desist orders, suspension of business, suspensions of personnel or other sanctions, including revocation of registrations with FINRA, withdrawal of authorizationsfrom or revocation of registrations with international agencies to whose regulation we are subject, which would have a material adverse effect on our business. Theadverse publicity arising from the imposition of sanctions against us by regulators, even if the amount of such sanctions is small, could harm our reputation and causeus to lose existing clients or fail to gain new clients. The authority to operate as a broker-dealer in a jurisdiction is dependent on the registration or authorization in that jurisdiction or the maintenance of a proper exemptionfrom such registration or authorization. Our ability to comply with all applicable laws and rules is largely dependent on our compliance, credit approval, audit andreporting systems and procedures, as well as our ability to attract and retain qualified personnel. Any growth or expansion of our business may create additional strainon our compliance, credit approval, audit and reporting systems and procedures and could result in increased costs to maintain and improve such systems andprocedures. In addition, new laws or regulations or changes in the enforcement of existing laws or regulations applicable to us and our clients may adversely affect our business,and our ability to function in this environment will depend on our ability to constantly monitor and react to these changes. Such changes may cause us to change theway we conduct our business, both in the U.S. and internationally. The government agencies that regulate us have broad powers to investigate and enforce complianceand punish noncompliance with their rules, regulations, and industry standards of practice. If we and our directors, officers and employees fail to comply with the rulesand regulations of these government agencies, we and they may be subject to claims or actions by such agencies. Substantial legal liability or significant regulatory action could have material adverse financial effects or cause significant reputational harm, either of whichcould seriously harm our business. We face substantial regulatory and litigation risks and conflicts of interests and may face legal liability and reduced revenues and profitability if our business is notregarded as compliant or for other reasons. We are subject to extensive regulation, and many aspects of our business will subject us to substantial risks of liability. Weengage in activities in connection with (1) the evaluation, negotiation, structuring, marketing, and sales and management of our investment funds and financialproducts, (2) our Capital Markets segment, (3) our asset management operations, and (4) our investment activities. Our activities may subject us to the risk of significantlegal liabilities under securities or other laws for material omissions or materially false or misleading statements made in connection with securities offerings and othertransactions. In addition, to the extent our clients, or investors in our investment funds and financial products, suffer losses, they may claim those losses resulting fromour or our officers’, directors’, employees’, agents’ or affiliates’ breach of contract, fraud, negligence, willful misconduct or other similar misconduct, and may bringactions against us under federal or state securities or other applicable laws. Dissatisfied clients may also make claims against us regarding quality of trade execution,improperly settled trades, or mismanagement. We may become subject to these claims as the result of failures or malfunctions of electronic trading platforms or otherbrokerage services, including failures or malfunctions of third-party providers’ systems which are beyond our control, and third parties may seek recourse against us forany losses. In addition, investors may claim breaches of collateral management agreements, which could lead to our termination as collateral manager under suchagreements. Following the start of the financial crisis in 2007, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial advisorsand asset managers increased. With respect to the asset management business, we make investment decisions on behalf of our clients that could result in, and in someinstances in the past have resulted in, substantial losses. In addition, as a manager, we are responsible for clients’ compliance with regulatory requirements. Investmentdecisions we make on behalf of clients could cause such clients to fail to comply with regulatory requirements and could result in substantial losses. Althoughour management agreements generally include broad indemnities and provisions designed to limit our exposure to legal claims relating to our services, these provisionsmay not protect us or may not be enforced in all cases. In addition, we are exposed to risks of litigation or investigation relating to transactions which present conflicts of interest that are not properly addressed. In suchactions, we could be obligated to bear legal, settlement and other costs (which may be in excess of available insurance coverage). Also, with a workforce consisting ofmany very highly paid professionals, we may face the risk of lawsuits relating to claims for compensation, which may individually or in the aggregate be significant inamount. Similarly, certain corporate events, such as a reduction in our workforce or employee separations, could also result in additional litigation or arbitration. Inaddition, as a public company, we are subject to the risk of investigation or litigation by regulators or our public stockholders arising from an array of possible claims,including investor dissatisfaction with the performance of our business or our share price, allegations of misconduct by our officers and directors or claims that weinappropriately dealt with conflicts of interest or investment allocations. In addition, we may incur significant expenses in defending claims, even those without merit. Ifany claims brought against us result in a finding of substantial legal liability and/or require us to incur all or a portion of the costs arising out of litigation orinvestigation, our business, financial condition, liquidity and results of operations could be materially and adversely affected. Such litigation or investigation, whetherresolved in our favor or not or ultimately settled, could cause significant reputational harm, which could seriously harm our business. The competitive pressures we face as a result of operating in highly competitive markets could have a material adverse effect on our business, financial condition,liquidity and results of operations. A number of entities conduct asset management, origination, investment, and broker-dealer activities. We compete with public and private funds, SPACs and SPACsponsors, REITs, commercial and investment banks, savings and loan institutions, mortgage bankers, insurance companies, institutional bankers, governmental bodies,commercial finance companies, traditional asset managers, brokerage firms and other entities. 30Table of Contents Many firms offer similar and/or additional products and services to the same types of clients that we target or may target in the future. Many of our competitors aresubstantially larger and have more relevant experience, have considerably greater financial, technical and marketing resources, and have more personnel than we have.There are few barriers to entry, including a relatively low cost of entering these lines of business, and the successful efforts of new entrants into our expected lines ofbusiness, including major banks and other financial institutions, may result in increased competition. Other industry participants may, from time to time, seek to recruitour investment professionals and other employees away from us. With respect to our asset management activities, our competitors may have more extensive distribution capabilities, more effective marketing strategies, more attractiveinvestment vehicle structures and broader name recognition than we do. Further, other investment managers may offer services at more competitive prices than we do,which could put downward pressure on our fee structure. With respect to our origination and investment activities, some competitors may have a lower cost of funds,enhanced operating efficiencies, and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances ordifferent risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than we can. The competitive pressureswe face, if not effectively managed, may have a material adverse effect on our business, financial condition, liquidity and results of operations. Also, as a result of this competition, we may not be able to take advantage of attractive asset management, origination and investment opportunities and, therefore, maynot be able to identify and pursue opportunities that are consistent with our business objectives. Competition may limit the number of suitable investment opportunitiesoffered to us. It may also result in higher prices, lower yields and a narrower spread of yields over our borrowing costs, making it more difficult for us to acquire newinvestments on attractive terms. In addition, competition for desirable investments could delay the investment in desirable assets, which may in turn reduce our earningsper share. With respect to our broker-dealer activities, our revenues could be adversely affected if large institutional clients that we have (i) increase the amount of trading they dodirectly with each other rather than through our broker-dealer, (ii) decrease the amount of trading they do with our broker-dealer because they decide to trade more withour competitors, (iii) decrease their trading of certain over-the-counter (“OTC”) products in favor of exchange-traded products, or (iv) hire in-house professionals tohandle trading that our broker-dealer would otherwise be engaged to do. We have experienced intense price competition in our fixed income brokerage business in recent years. Some competitors may offer brokerage services to clients at lowerprices than we offer, which may force us to reduce our prices or to lose market share and revenue. In addition, we intend to focus primarily on providing brokerageservices in markets for less commoditized financial instruments. As the markets for these instruments become more commoditized, we could lose market share to otherinter-dealer brokers, exchanges and electronic multi-dealer brokers who specialize in providing brokerage services in more commoditized markets. If a financial instrumentfor which we provide brokerage services becomes listed on an exchange or if an exchange introduces a competing product to the products, we broker in the OTC market,the need for our services in relation to that instrument could be significantly reduced. Further, the recent consolidation among exchange firms, and expansion by thesefirms into derivative and other non-equity trading markets, will increase competition for customer trades and place additional pricing pressure on commissions andspreads. Employee misconduct or error, which can be difficult to detect and deter, could harm us by impairing our ability to attract and retain clients and by subjecting usto significant legal liability and reputational harm. There have been a number of highly publicized cases involving fraud, trading on material non-public information, or other misconduct by employees and others in thefinancial services industry, and there is a risk that our employees could engage in misconduct that adversely affects our business. For example, we may be subject to therisk of significant legal liabilities under securities or other laws for our employees’ material omissions or materially false or misleading statements in connection withsecurities and other transactions. In addition, our advisory business requires that we deal with confidential matters of great significance to our clients. If our employeeswere to improperly use or disclose confidential information provided by our clients, we could be subject to regulatory sanctions and could suffer serious harm to ourreputation, financial position, current client relationships and ability to attract future clients. We are also subject to extensive regulation under securities laws and otherlaws in connection with our asset management business. Failure to comply with these legislative and regulatory requirements by any of our employees could adverselyaffect us and our clients. It is not always possible to deter employee misconduct, and any precautions taken by us to detect and prevent this activity may not beeffective in all cases. Furthermore, employee errors, including mistakes in executing, recording or reporting transactions for clients (such as entering into transactions that clients maydisavow and refuse to settle) could expose us to financial losses and could seriously harm our reputation and negatively affect our business. The risk of employee erroror miscommunication may be greater for products that are new or have non-standardized terms. We receive financial instruments instead of cash as consideration for some of our services, which may be illiquid, and the price we ultimately realize may bematerially lower than their current fair value. The value of the financial instruments which we receive as consideration for our services may be subject to transfer or other restrictions, which may render suchsecurities or financial instruments to be illiquid. Further, the financial instruments may be materially affected by market fluctuations. Market volatility, illiquid marketconditions and disruptions in the markets may make it difficult to value and monetize certain of our securities or financial instruments, particularly during periods ofmarket uncertainty. Subsequent valuations in future periods may result in significant changes in the value of these financial instruments. In addition, at the time of anysales and settlements of these financial instruments, the price we ultimately realize will depend on the demand and liquidity in the market at that time and may bematerially lower than the fair value at the time we receive them. Any of these factors could cause a decline in the value of financial instruments which we hold. SFA transactions may obligate the Company to make payments on a certain payments at, or subsequent to, maturity which may be made in cash, by returning theacquired interests in kind, or through a combination of both, which could affect our liquidity. A significant component of our principal investment revenue has come from SFAs. SFAs stipulate that we must make a payment to the SFA Counterparty on orsubsequent to a certain maturity date, which may be in cash, by returning the acquired assets in kind, or a combination of both. Payment to the SFA Counterpartypursuant to the SFAs may have an adverse impact on our liquidity. We may need to incur additional indebtedness to finance these payments to the extent our cashresources are insufficient to meet our obligations under the SFAs as a result of timing discrepancies or otherwise, and these obligations could negatively effect ourbusiness, financial condition, and results of operations. 31Table of Contents Risks Related to Our Organizational Structure and Ownership of Our Common Stock We could repurchase shares of our Common Stock at price levels considered excessive, the amount of our Common Stock we repurchase may decrease fromhistorical levels, or we may not repurchase any additional shares of our Common Stock in the future. We could repurchase shares of our Common Stock at price levels considered excessive, thereby spending more cash on such repurchases then deemed reasonable andeffectively retiring fewer shares than would be retired if repurchases were effected at lower prices. Further, our future repurchases of shares of our Common Stock, ifany, and the number of shares of Common Stock we may repurchase will depend upon our financial condition, results of operations and other factors deemed relevantby our board of directors. There can be no assurance that we will continue our practice of repurchasing shares of our Common Stock or that we will have the financialresources to repurchase shares of our Common Stock in the future. We are a holding company whose primary asset is units of membership interests in the Operating LLC, and we are dependent on distributions from the OperatingLLC to pay taxes and other obligations. We are a holding company whose primary assets are units of membership interests in the Operating LLC. Since the Operating LLC is a limited liability company taxed asa partnership, we, as a member of the Operating LLC, could incur tax obligations as a result of our allocable share of the income from the operations of the OperatingLLC. In addition, we have convertible senior debt and junior subordinated notes outstanding. The Operating LLC will pay distributions to us in amounts necessary tosatisfy our tax obligations and regularly scheduled payments of interest in connection with our convertible senior debt and our junior subordinated notes, and we aredependent on these distributions from the Operating LLC in order to generate the funds necessary to meet these obligations and liabilities. Industry conditions andfinancial, business and other factors will affect our ability to generate the cash flows we need to make these distributions. There may be circumstances under which theOperating LLC may be restricted from paying dividends to us under applicable law or regulation (for example due to Delaware Limited Liability Company Act limitationson the Operating LLC’s ability to make distributions if liabilities of the Operating LLC after the distribution would exceed the value of the Operating LLC’s assets). As a holding company that does not conduct business operations in its own right, substantially all of the assets of the Company are comprised of our minorityeconomic ownership interest in the Operating LLC. The Company’s ability to pay any dividends to our stockholders will be dependent on any distributions we receivefrom the Operating LLC and subject to the Operating LLC’s operating agreement (the “Operating LLC Agreement”). The amount and timing of distributions by theOperating LLC will be at the discretion of the Operating LLC’s board of managers, which is comprised of Daniel G. Cohen, our Executive Chairman and the majorityowner of the Operating LLC, Lester Brafman, our Chief Executive Officer and Joseph W. Pooler, Jr., our Chief Financial Officer. Certain subsidiaries of the Operating LLC have restrictions on the withdrawal of capital and otherwise in making distributions and loans. JVB is subject to net capitalrestrictions imposed by the SEC and FINRA, which require certain minimum levels of net capital to remain in JVB. In addition, these restrictions could potentially imposenotice requirements or limit the Company’s ability to withdraw capital above the required minimum amounts (excess capital) whether through distribution or loan. CCFELis regulated by the CBI in Ireland and must maintain certain minimum levels of capital. CCFESSA is regulated by the ACPR and must maintain certain minimum levels ofcapital. Daniel G. Cohen, our Executive Chairman, has significant ownership interests in the Operating LLC and competing duties to other entities (including CohenCircle) that could create potential conflicts of interest and may result in decisions that are not in the best interests of other Cohen & Company Inc. stockholders. As of December 31, 2023, Daniel G. Cohen, our Executive Chairman, individually and through an entity he wholly owns, Cohen Bros. Financial, LLC (“CBF”), owns23,207,975 units of membership interests (including both unrestricted and restricted units), or 38.1% of the membership interests in the Operating LLC. In addition, as ofDecember 31, 2023, the DGC Trust owns 20,225,095 or 33.2% units of the membership interests in the Operating LLC. The DGC Trust was formed by Daniel G. Cohen. Although Daniel G. Cohen is neither a trustee nor a named beneficiary of the DGC Trust and does not have any voting or dispositive control of securities held by thetrust, he may be deemed to be a beneficial owner of all securities held by the DGC Trust as a result of his ability to acquire any of the DGC Trust’s assets, including anysecurities held by the DGC Trust (and, in turn, the sole voting and sole dispositive power with respect to such securities), by substituting other property of anequivalent value without the approval or consent of any person, including any trustee or beneficiary of the DGC Trust. Cohen & Company, Inc. also holds units of membership interests in the Operating LLC and has the majority voting power of the LLC through a proxy granted to it byMr. Cohen and the DGC Trust. On September 25, 2020, the Securities Purchase Agreement (the "SPA") dated December 30, 2019, by and among the Company, theOperating LLC, Daniel Cohen, and DGC Trust and the Amended and Restated Limited Liability Company Agreement of the Operating LLC were amended to provide thatthe voting proxy shall be revoked in the event that Daniel G. Cohen and/or his affiliates cease to beneficially own a majority of the voting securities of the Company. Seenotes 21 and 31. Additionally, as of December 31, 2023, Daniel G. Cohen owns 5.4% of our Common Stock. Further, as of such date, Mr. Cohen could be deemed to be the beneficialowner of additional shares of our Common Stock representing 4.2%, which is owned by EBC 2013 Family Trust (“EBC”) as the result of Mr. Cohen’s position as trusteeof the trust and as a result of the fact that Mr. Cohen has sole voting power with respect to all securities held by EBC. As noted above, Daniel G. Cohen may controlcertain actions of the Company. As an owner of interests in the Operating LLC, Daniel G. Cohen may have interests that differ from the stockholders of the Company,including in circumstances in which there may be tax consequence to the members of the Operating LLC. Further, Daniel G. Cohen’s ownership interests in third partyentities, including Cohen Circle, may result in his interests differing from the stockholders of the Company. As a result of his ownership in both the Company, theOperating LLC and third party entities, including Cohen Circle, it is possible that Daniel G. Cohen as a shareholder of the Company could approve or reject actionsbased on his own interests as a stockholder that may or may not be in the best interests of the other the Company’s stockholders. 32Table of Contents We are controlled by Daniel G. Cohen, whose interests in our business may be different than our other stockholders, and, as a “controlled company” within themeaning of the rules of NYSE American, our other stockholders will not have the same protections afforded to stockholders of companies that are subject to certaincorporate governance requirements. Mr. Cohen currently owns approximately 41.8% of the voting power of the Company as a result of his ownership of Common Stock, Series E Preferred Stock and Series FPreferred Stock. Further, the DGC Family Fintech Trust (the “DGC Trust”), a trust formed by Mr. Cohen, owns 9,880,268 shares of our Series F Preferred Stock. Our Series F PreferredStock votes together with the holders of our Common Stock on all matters, entitling the holders thereof to one vote for every ten shares of Series F Preferred StockStock votes together with the holders of our Common Stock on all matters, entitling the holders thereof to one vote for every ten shares of Series F Preferred Stockheld. Accordingly, the shares of Series F Preferred Stock held by the DGC Trust entitle the DGC Trust to 988,027 votes on matters presented to holders of our CommonStock. Although Daniel G. Cohen is neither a trustee nor a named beneficiary of the DGC Trust and does not have any voting or dispositive control of securities held bythe DGC Trust, pursuant to the terms of the DGC Trust, Mr. Cohen has the ability to acquire any of the DGC Trust’s assets, including the 9,880,268 units of themembership interests in the Operating LLC held by the DGC Trust (at any time and without the consent of the trustees or beneficiaries of the DGC Trust) by substitutingsuch assets with other property of equivalent value. Accordingly, Mr. Cohen, at any time, could become the owner of the membership interests in the OperatingLLC currently held by the DGC Trust and, in turn, an additional 21.3% of the voting power of the Company. As a result of Mr. Cohen’s voting control of the Company, Mr. Cohen has the right to designate all members of our board of directors and his nominees to our board ofdirectors will have the ability to control the appointment of our management, the entering into of mergers, material acquisitions and dispositions and other extraordinarytransactions and to influence amendments to our charter, bylaws and other corporate governance documents. So long as Mr. Cohen continues to own a majority of ourvoting stock, he will have the ability to control the vote in any election of directors and will have the ability to approve or prevent any transaction that requiresstockholder approval regardless of whether others believe the transaction are or are not in our best interests. In any of these matters, the interests of Mr. Cohen maydiffer from or conflict with the interests of our other stockholders. Moreover, this concentration of voting stock ownership may also adversely affect the trading price forour Common Stock to the extent investors perceive disadvantages in owning stock of a company with a controlling stockholder. In addition, because Mr. Cohen controls a majority of our voting stock, we are a “controlled company” within the meaning of the corporate governance standards ofNYSE American. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlledcompany” and may elect not to comply with certain corporate governance requirements, including the requirements that a majority of the board of directors consist ofindependent directors and the requirements that the executive compensation committee and nominating and corporate governance committee each be comprised entirelyof independent directors. We may take advantage of certain of these exemptions for as long as we continue to qualify as a “controlled company.” Accordingly, ourstockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of NYSEAmerican. Any future distributions to our stockholders will depend upon certain factors affecting our operating results, some of which are beyond our control. Any futuredistributions to our stockholders will depend upon certain factors affecting our operating results, some of which are beyond our control. Our ability to make cash distributions is based on many factors, including the return on our investments, operating expense levels and certain restrictions imposed byMaryland law. Some of these factors are beyond our control and a change in any such factor could affect our ability to make distributions in the future. We may not beable to make distributions. Our stockholders should rely on increases, if any, in the price of our Common Stock for any return on their investment. Furthermore, we aredependent on distributions from the Operating LLC to be able to make distributions. See the risk factor above titled “We are a holding company whose primary asset isunits of membership interest in the Operating LLC and we are dependent on distributions from the Operating LLC to pay taxes and other obligations.” Future sales of our Common Stock in the public market could lower the price of our Common Stock and impair our ability to raise funds in future securitiesofferings. Future sales of a substantial number of shares of our Common Stock in the public market, or the perception that such sales may occur, could adversely affect the thenprevailing market price of our Common Stock and could make it more difficult for us to raise funds in the future through a public offering of our securities. Your percentage ownership in the Company may be diluted in the future. Your percentage ownership in the Company may be diluted in the future because of equity awards that have been, or may be, granted to our directors, officers, andemployees. We have adopted equity compensation plans that provide for the grant of equity-based awards, including restricted stock, stock options and other equity-based awards to our directors, officers and other employees, advisors and consultants. At December 31, 2023, we had 367,491 shares of restricted stock outstanding toemployees and directors of the Company and there were 579,391 shares available for future awards under our equity compensation plans. The Operating LLC also hasissued 5,525,330 units that are restricted. Vesting of restricted stock, Operating LLC units, and stock option grants is generally contingent upon performance conditionsand/or service conditions. Vesting of those shares of restricted units and stock would dilute the ownership interest of existing stockholders. Equity awards will continueto be a source of compensation for employees and directors. If we raise additional capital, we expect it will be necessary for us to issue additional equity or convertible debt securities. If we issue equity or convertible debtsecurities, the price at which we offer such securities may not bear any relationship to our value, the net tangible book value per share may decrease, the percentageownership of our current stockholders would be diluted, and any equity securities we may issue in such offering or upon conversion of convertible debt securitiesissued in such offering, may have rights, preferences or privileges with respect to liquidation, dividends, redemption, voting and other matters that are senior to or moreadvantageous than our Common Stock. If we finance acquisitions by issuing equity securities or securities convertible into equity securities, our existing stockholderswill also be diluted. 33Table of Contents The issuance of the shares of Common Stock upon the redemption, if any, of the issued and outstanding LLC Units may cause substantial dilution to our existingstockholders and may cause the price of our Common Stock to decline. There are 60,930,382 units of membership interests in the Operating LLC issued and outstanding, including 23,207,975 units of membership interests in the OperatingLLC beneficially owned by Daniel G. Cohen. Subject to certain restrictions, pursuant to the Operating LLC Agreement, a holder of unrestricted units of membershipinterests in the Operating LLC may cause the Operating LLC to redeem such units at any time for, at the Company’s option, (A) cash or (B) one share of the Company’sCommon Stock for every ten units of membership interests in the Operating LLC. If the outstanding units of membership interests in the Operating LLC are redeemed bythe Company for Common Stock, our existing stockholders could be significantly diluted and the price of our Common Stock may decline. See note 21 to ourconsolidated financial statements included in this Annual Report on Form 10-K. We may not be able to generate sufficient taxable income to fully realize our deferred tax asset, which would also have to be reduced if U.S. federal income taxrates are lowered. As of December 31, 2023, we have recorded a deferred tax asset of $1.6 million. If we are unable to generate sufficient taxable income prior to the expiration of our NOLs,the NOLs would expire unused. Our projections of future taxable income required to fully realize the recorded amount of the net deferred tax asset reflect numerousassumptions about our operating businesses and investments and are subject to change as conditions change specific to our business units, investments or generaleconomic conditions. Changes that are adverse to us could result in the need to increase our deferred tax asset valuation allowance resulting in a charge to results ofoperations and a decrease to total stockholders’ equity. In addition, any decrease in the federal statutory tax rate, or other changes in federal tax statutes, could alsocause a reduction in the economic benefit of the NOL currently available to us. The Maryland General Corporation Law (the “MGCL”), and provisions in our charter and bylaws may prevent takeover attempts that could be beneficial to ourstockholders. Provisions of the MGCL and our charter and bylaws could discourage a takeover of us even if a change of control would be beneficial to the interests of ourstockholders. These statutory, charter and bylaw provisions include the following: •the MGCL generally requires the affirmative vote of two-thirds of all votes entitled to be cast on the matter to approve a merger, consolidation,or share exchange involving us or the transfer of all or substantially all of our assets; •our board of directors has the power to classify and reclassify authorized and unissued shares of our Common Stock or preferred stock and,subject to certain restrictions in the Operating LLC Agreement, authorize the issuance of a class or series of Common Stock or preferred stockwithout stockholder approval; •our charter may be amended only if the amendment is declared advisable by our board of directors and approved by the affirmative vote of theholders of our Common Stock entitled to cast at least two-thirds of all of the votes entitled to be cast on the matter; •a director may be removed from office at any time with or without cause by the affirmative vote of the holders of our Common Stock entitled tocast at least two-thirds of the votes of the stock entitled to be cast in the election of directors; •an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders and nominations ofpersons for election to our board of directors at an annual or special meeting of our stockholders; •no stockholder is entitled to cumulate votes at any election of directors; and •our stockholders may take action in lieu of a meeting with respect to any actions that are required or permitted to be taken by our stockholdersat any annual or special meeting of stockholders only by unanimous consent. 34Table of Contents Risks Related to General and Global Factors The COVID-19 pandemic has caused severe disruptions in the U.S. and global economy and is expected to continue to impact our business, financial condition andresults of operations. Our business operations are and will continue to be susceptible to impacts of the COVID-19 pandemic. There is substantial uncertainty regarding the continuation of theCOVID-19 pandemic and whether future, more widespread outbreaks will occur. The impact that the COVID-19 pandemic continues to have on our business and willhave on our business in the future will depend on numerous factors that we cannot reliably predict, including the duration and scope of the COVID-19 pandemic; theeffectiveness of vaccinations; the implications as a result of the emerging variants of COVID-19; governmental, business, and individuals’ actions in response to thepandemic; and the impact on economic activity including the possibility of recession or financial market instability. These factors may adversely impact global financialmarket, as well as our businesses, including our SPAC franchise business, TBA trading and mortgage-related operations. This uncertainty may also affect ourmanagement’s accounting estimates and assumptions. We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instabilitydue to the ongoing military conflict between Russia and Ukraine. Our business, financial condition and results of operations may be materially adversely affectedby any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions. U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russiaand Ukraine. On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops was reported. Although the length and impact of the ongoing militaryconflict is highly unpredictable, the conflict in Ukraine has lead to market disruptions, including significant volatility in credit and capital markets. Additionally, Russia’s prior annexation of Crimea, the recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent militaryinterventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, theCrimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including the removal of certain Russian financialinstitutions from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system. Additional potential sanctions and penalties have alsobeen proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets. Any of the above-mentioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action,sanctions and resulting market disruptions are difficult to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described inthis Annual Report on Form 10-K. Climate change concerns and incidents could disrupt our business, adversely affect the profitability of certain of our investments, adversely affect customer activitylevels, adversely affect the creditworthiness of our counterparties, and damage our reputation. Climate change may cause extreme weather events that disrupt our business operations, which may negatively affect our ability to service and interact with ourcustomers, and also may adversely affect the value of certain of our investments, including those in the real estate markets. Climate change may also have a negativeimpact on the financial condition of our customers, which may decrease revenues from those customers and increase the credit risk associated with loans and othercredit exposures to those customers. Additionally, our reputation and customer relationships may be damaged as a result of our involvement, or our customers’involvement, in certain industries or projects associated with causing or exacerbating climate change, as well as any decisions we make to continue to conduct orchange our activities in response to considerations relating to climate change. New regulations or guidance relating to climate change, as well as the perspectives ofshareholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offercertain products. If we fail to implement our control our costs effectively, our business could be disrupted, and our financial results could be adversely affected. The Company continues to look for ways to reduce infrastructure costs and reposition itself in the financial services industry. Beginning in 2010 and continuing to thepresent, the Company executed initiatives that created efficiencies within its business and decreased operating expenses through the realignment of operating facilities,a merger of its two registered U.S. broker-dealer subsidiaries, and a restructuring of operating systems and systems support. Our cost management initiatives have included reducing our workforce, which has placed increased burdens on our management, systems and resources, and generallyincreased our dependence on key persons and reduced functional back-ups. As a result, our ability to respond to unexpected challenges may be impaired, and we maybe unable to take advantage of new opportunities. In addition, if these and other initiatives do not have the desired effects or result in the projected increasedefficiencies, the Company may incur additional or unexpected expenses, reputational damage, or loss of customers which would adversely affect the Company’soperations and revenues. In response to changes in industry and market conditions, the Company may be required to further strategically realign its resources and consider restructuring,disposing of, or otherwise exiting businesses. We cannot assure you that we will be able to: •Expand our capabilities or systems effectively; •Successfully develop new products or services; •Allocate our human resources optimally; •Identify, hire or retain qualified employees or vendors; •Incorporate effectively the components of any business that we may acquire in our effort to achieve growth; •Sell businesses or assets at their fair market value; or •Effectively manage the costs associated with developing, growing, acquiring or exiting a business. 35Table of Contents We may need to offer new investment strategies and products in order to continue to generate revenue. The asset management industry is subject to rapid change. Strategies and products that had historically been attractive may lose their appeal for various reasons. Thus,strategies and products that have generated fee revenue for us in the past may fail to do so in the future, in which case we would have to develop new strategies andproducts. It could be both expensive and difficult for us to develop new strategies and products, and we may not be successful in this regard. Since the disruptions inthe global financial markets, we have had difficulty expanding our offerings which has inhibited our growth and harmed our competitive position in the assetmanagement industry, and this may continue in the future. Our failure to deal appropriately with conflicts of interest could damage our reputation and adversely affect our business. Appropriately dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one ormore potential or actual conflicts of interest. It is possible that potential or perceived conflicts could give rise to investor dissatisfaction or litigation or regulatoryenforcement actions. In addition, regulatory scrutiny of, or litigation in connection with, conflicts of interest would have a material adverse effect on our reputation,which could materially and adversely affect our business in a number of ways, including an inability to raise additional funds, a reluctance of counterparties to dobusiness with us and the costs of defending litigation. Our Insurance coverage may be inadequate to cover the risks facing the Company Our operations and financial results are subject to risks and uncertainties related to our use of a combination of insurance, self-insured retention and self-insurance for anumber of risks, including most significantly: property and casualty, workers’ compensation, errors and omissions liability, general liability and the portion of employee-related health care benefits plans we fund, among others. While we endeavor to purchase insurance coverage that is appropriate to our assessment of risk, we are unable to predict with certainty the frequency, nature ormagnitude of claims for direct or consequential damages. Our business may be negatively affected in the future if our insurance proves to be inadequate or unavailable.In addition, insurance claims may harm our reputation or divert management attention and resources away from operating our business. We depend on third-party software licenses and the loss of any of our key licenses could adversely affect our ability to provide our brokerage services. We license software from third parties, some of which is integral to our electronic brokerage systems and our business. Such licenses are generally terminable if webreach our obligations under the licenses or if the licensor gives us notice in advance of the termination. If any of these relationships were terminated, or if any of thesethird parties were to cease doing business, we may be forced to spend significant time and money to replace the licensed software. These replacements may not beavailable on reasonable terms, or at all. A termination of any of these relationships could have a material adverse effect on our financial condition and results ofoperations. If we fail to maintain effective internal control over financial reporting and disclosure controls and procedures in the future, we may not be able to accuratelyreport our financial results, which could have an adverse effect on our business. If our internal controls over financial reporting and disclosure controls and procedures are not effective, we may not be able to provide reliable financial information.Because we are a smaller reporting company, we are not required to obtain, nor have we voluntarily obtained, an auditor attestation regarding the effectiveness of ourcontrols as of December 31, 2023. Therefore, as of December 31, 2023, we have only performed management’s assessment of the effectiveness of our internal controlsand management has determined that our internal controls are effective as of December 31, 2023. Any failure to maintain effective controls in the future could adverselyaffect our business or cause us to fail to meet our reporting obligations. Such non-compliance could also result in an adverse reaction in the financial marketplace due toa loss of investor confidence in the reliability of our financial statements. In addition, perceptions of our business among customers, suppliers, rating agencies, lenders,investors, securities analysts and others could be adversely affected. The market price of our Common Stock may be volatile and may be affected by market conditions beyond our control. The market price of our Common Stock is subject to significant fluctuations in response to, among other factors: •variations in our operating results and market conditions specific to our business; •changes in financial estimates or recommendations by securities analysts; •the emergence of new competitors or new technologies; •operating and market price performance of other companies that investors deem comparable; •changes in our board or management; •sales or purchases of our Common Stock by insiders; •commencement of, or involvement in, litigation; •changes in governmental regulations; •the relatively low trading volumes of our Common Stock; and •general economic conditions and slow or negative growth of related markets. In addition, if the market for stocks in our industry, or the stock market in general, experience a loss of investor confidence, the market price of our Common Stock coulddecline for reasons unrelated to our business, financial condition, or results of operations. If any of the foregoing occurs, it could cause the price of our Common Stockto fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to the board of directors and management. Our Common Stock may be delisted, which may have a material adverse effect on the liquidity and value of our Common Stock. To maintain our listing on the NYSE American, we must meet certain financial and liquidity criteria. The market price of our Common Stock has been and may continue tobe subject to significant fluctuation as a result of periodic variations in our revenues and results of operations. If we violate the NYSE American listing requirements, ourCommon Stock may be delisted. If we fail to meet any of the NYSE American’s listing standards, our Common Stock may be delisted. In addition, our board maydetermine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our Common Stock fromthe NYSE American may materially impair our stockholders’ ability to buy and sell our Common Stock and could have an adverse effect on the market price of, and theefficiency of the trading market for, our Common Stock. In addition, the delisting of our Common Stock could significantly impair our ability to raise capital. 36Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS. None. ITEM 1C. CYBERSECURITY Risk Management and Strategy The Company has processes in place to identify, assess and monitor material risks from cybersecurity threats, which are part of the Company’s overall enterprise riskmanagement process and have been embedded in the Company’s operating procedures, internal controls and information systems. The Company’s comprehensive cybersecurity and information security framework includes risk assessment and mitigation through a threat intelligence-driven approach,application controls, and enhanced security with ransomware defense. The framework leverages the National Institute of Standards and Technology Cyber SecurityFramework (“NIST CSF”) for measuring overall readiness to respond to cyber threats, and Sarbanes-Oxley for assessment of internal controls. The Company contracts with external firms to assess the Company’s cybersecurity controls relative to its peers using the NIST CSF. The Company also has a third-partyrisk management program that assesses risks from vendors and suppliers. In addition, the Company maintains business continuity and disaster recovery plans as well asa cybersecurity insurance policy. The Company has established cybersecurity and information security awareness training programs. Formal training on topics relating to the Company’s cybersecurity,data privacy and information security policies and procedures is mandatory at least annually for all employees. Training topics include how to escalate suspiciousactivities including phishing, viruses, spams, insider threats, suspect human behaviors or safety issues. Based on role and location, some employees receive additionalin-depth training to provide more comprehensive knowledge on potential risks related to their individual job responsibilities. Training is supplemented through regularCompany communications with frequent updates to educate on the latest adversary trends and social engineering techniques. Certain employees also obtain industrycertifications, such as Certified Information Systems Security Professional or Certified Information Security Manager. The Company engages in cyber crisis response simulations to assess the Company’s ability to adapt to information and operational technology threats. Improper orillegitimate use of the Company’s information system resources or violation of the Company’s information security policies and procedures is subject to disciplinaryaction. The Company’s security posture is supported by a comprehensive defense-in-depth strategy that relies on layers of technology including Multi-FactorAuthentication and principles of Zero Trust to ensure that access to information and communication is vetted and secure. The Company also utilizes internal and external audits and assessments, vulnerability testing, governance processes over outsourced service providers, active riskmanagement and benchmarking against peers in the industry to validate the Company’s security posture. The Company also engages external firms to measure theCompany’s NIST CSF maturity level. No risks from cybersecurity threats, including those resulting from any previous cybersecurity incidents, have materially affected, or are reasonably likely to materiallyaffect, the Company, including its business strategy, results of operations or financial condition. Governance Role of the Board and Management The Company’s Board recognizes the importance of cybersecurity in safeguarding the Company’s sensitive data. The Board is responsible for overseeing overall riskmanagement for the Company, including review and approval of the enterprise risk management approach and processes implemented by management to identify,assess, manage and mitigate risk, at least annually. The Board has delegated responsibility for oversight of the Company’s cybersecurity and information securityframework and risk management to the Company’s Management Cybersecurity Committee (the “Cybersecurity Committee”). Pursuant to its charter, The Cybersecurity Committee must consist at least four (4) members of Company’s executive management team, which shall include theCompany’s Director of Technology, Chief Operating Officer, Chief Compliance Officer and Chief Financial Officer, each of whom is required to have working familiarity,knowledge and competencies in relevant areas, including data privacy, public policy, information technology (“IT”) strategy, IT development and deployment, or IT riskassessment and management, including information security management. In addition, the Company’s Director of Technology has formal education in informationtechnology and extensive experience working in and leading the Company’s information systems and technology function. The principal responsibilities and duties of the Cybersecurity Committee, pursuant to its written charter, are to: ●Review and provide oversight on the effectiveness of the Company’s information security and privacy policies and procedures with respect toits products and services and internal-use information technology systems; ●Review and provide oversight on the policies and procedures of the Company in preparation for responding to any material information securityor privacy incidents; ●Review and provide oversight on the Company’s disaster recovery, business continuity, and business resiliency capabilities, includingescalation protocols, relating its customer-facing products and services and internal-use information technology systems; ●Review annually the appropriateness and adequacy of the Company’s cyber-insurance coverage; ●Review and provide oversight on the policies and procedures of the Company with respect to data privacy, and oversee the Company’scompliance with applicable data privacy and cybersecurity laws and regulations; ●Evaluate the Cybersecurity Committee’s composition and performance on an annual basis; ●Review and reassess the adequacy of the Cybersecurity Committee’s written charter annually and recommend to the Board any changes theCybersecurity Committee determines are appropriate; ●Perform any other activities required by applicable law, rules or regulations (including the Securities Exchange Act of 1934 and The NYSEAmerican Stock Exchange regarding reporting and disclosure obligations related to cybersecurity risks, costs, and incidents), and take suchother actions and perform and carry out any other responsibilities and duties delegated to it by the Board or as the Cybersecurity Committeedeems necessary or appropriate consistent with its purpose. The Cybersecurity Committee, including the Company’s Director of Technology, receive regular updates from the Company’s management on cybersecurity matters,results of mitigation efforts and cybersecurity incident response and remediation. 37Table of Contents ITEM 2. PROPERTIES. The following table lists our current leases as of December 31, 2023. CityDescription Square Feet Expiration DateStatus (1)New York, NY3 Columbus Circle- 24th Floor 21,390 4/30/2035Partially Occupied / Partially SubleasedNew York, NY3 Columbus Circle- 17th Floor 8,409 3/31/2024OccupiedPhiladelphia, PA2929 Arch Street 9,501 11/30/2029Partially Occupied / Partially SubleasedBoca Raton, FL1825 NW Corporate Blvd 5,208 6/30/2024OccupiedParis, France17 avenue de l'Opera 1,830 5/31/2030OccupiedLocust Valley, NY63 Forest Avenue 288 9/30/2025OccupiedMenlo Park, CA2727 Sandy Hill Road 2,735 8/31/2025OccupiedJupiter, FL601 Heritage Drive 290 9/30/2024Occupied (1)For purposes of this table, the term “Partially Occupied / Partially Subleased” means we occupy a portion of the space and sublease the remaining portion to athird-party or third parties; and “Occupied” means we fully utilize the space for our operations. The properties that we occupy are used either by the Company’s Capital Markets, Asset Management, or Principal Investing segments or all three. We believe that thefacilities we occupy are suitable and adequate for our current operations. ITEM 3. LEGAL PROCEEDINGS. From time to time, the Company is a party to various routine legal proceedings, claims, and regulatory inquiries arising out of the ordinary course of the Company’sbusiness. Management believes that the results of these routine legal proceedings, claims, and regulatory matters will not have a material adverse effect on theCompany’s financial condition, or on the Company’s operations and cash flows. However, the Company cannot estimate the legal fees and expenses to be incurred inconnection with these routine matters and, therefore, is unable to determine whether these future legal fees and expenses will have a material impact on the Company’soperations and cash flows. It is the Company’s policy to expense legal and other fees as incurred. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 38Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information for Our Common Stock and Dividends Our Common Stock trades under the symbol "COHN" on the NYSE American Stock Exchange. The closing price of our Common Stock was $6.90 on March 1, 2024. Wehad 1,928,172 shares of Common Stock outstanding held by 39 holders of record as of March 6, 2023. Commencing on March 22, 2004, our Common Stock began trading on the NYSE under the symbol “SFO.” On October 6, 2006, upon completion of our merger withAlesco Financial Trust and our name change from Sunset Financial Resources, Inc. to Alesco Financial Inc., our NYSE symbol was changed to “AFN.” On December 16, 2009, we effectuated a 1-for-10 reverse stock split. Also, our name changed from Alesco Financial Inc. to Cohen & Company Inc., we moved our listingof Common Stock from the NYSE to the NYSE American Stock Exchange (formerly known as the NYSE MKT LLC) and our trading symbol was changed to “COHN.” Effective January 21, 2011, we changed our name to Institutional Financial Markets, Inc. and our Common Stock began trading on the NYSE American Stock Exchangeunder the symbol “IFMI.” On September 1, 2017, we effectuated a second 1-for-10 reverse stock split and changed our name to Cohen & Company Inc. Our trading symbol was changed to“COHN.”During the third quarter of 2010, our board of directors initiated a dividend of $0.50 per quarter, which was paid regularly through December 31, 2011. Beginning in 2012,our board of directors declared a dividend of $0.20 per quarter, which was paid regularly through the first quarter of 2019. Each time a cash dividend was declared by ourboard of directors, a pro rata distribution was made to the other members of the Operating LLC upon payment of dividends to our stockholders. On August 2, 2019, weannounced that our board of directors decided to suspend our quarterly cash dividend. On July 29, 2021, our board of directors reinstated our quarterly dividend declaring a cash dividend of $0.25 per share. We have paid a cash dividend of $0.25 regularlysince then. In addition to our routine quarterly distribution, on March 8, 2022, our board of directors declared a special dividend of $0.75 per share. Any futuredetermination to declare and pay dividends will be made at the discretion of our board of directors, after taking into account a variety of factors, including business,financial, and regulatory considerations as well as any limitations under Maryland law or imposed by any agreements governing our indebtedness. Unregistered Sales of Equity Securities None Issuer Purchases of Equity Securities Period Total Number ofShares Purchased Average Price PaidPer Share Total Number ofShares Purchased asPart of PubliclyAnnounced Plans orPrograms Maximum DollarValue of Shares thatMay Yet bePurchased under thePlans or Programs (1) October 1, 2023 - October 31, 2023 - $- - $- November 1, 2023 - November 30, 2023 - $- - $- December 1, 2023 - December 31, 2023 - $- - $- Total - - (1)Dollar amounts in thousands. On August 3, 2007, our board of directors authorized us to repurchase up to $50 million of our Common Stock from time to time inopen market purchases or privately negotiated transactions. The repurchase plan was publicly announced on August 7, 2007. See note 21 to our consolidatedfinancial statements in this Annual Report on Form 10-K. Equity Compensation Plans Information on certain of our equity compensation plans, for which shares of our common stock are authorized for issuance, is included in the section of our ProxyStatement captioned “Cash and Equity Plan Compensation” and is incorporated herein by reference. ITEM 6. [Reserved] 39Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on our consolidated financial statements, which have beenprepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amountsof assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On a regular basis, we evaluate these estimates, including fairvalue of financial instruments. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under thecircumstances. Actual results may differ from these estimates. All amounts in this disclosure are in thousands (except share, unit, per share, and per unit data) except where otherwise noted. Overview We are a financial services company specializing in an expanding range of capital markets and asset management services. We are organized into three businesssegments: Capital Markets, Asset Management, and Principal Investing. •Capital Markets: Our Capital Markets business segment consists primarily of fixed income sales, trading, gestation repo financing, new issue placements incorporate and securitized products, and advisory services. Our fixed income sales and trading group provides trade execution to corporate investors,institutional investors, mortgage originators, and other smaller broker-dealers. We specialize in a variety of products, including but not limited to: corporatebonds, ABS, MBS, RMBS, CDOs, CLOs, CBOs, CMOs, municipal securities, TBAs and other forward agency MBS contracts, U.S. government bonds, U.S.government agency securities, brokered deposits and CDs for small banks, and hybrid capital of financial institutions including TruPS, whole loans, and otherstructured financial instruments. We carry out our capital markets activities primarily through our subsidiaries: JVB in the United States and CCFESA inEurope. A division of JVB, Cohen & Company Capital Markets ("CCM") is our full-service boutique investment bank that provides innovative strategic andfinancial advice in M&A, capital markets, and SPAC advisory. •Asset Management: Our Asset Management business segment manages assets within CDOs, managed accounts, joint ventures, and investment funds(collectively, “Investment Vehicles”). A CDO is a form of secured borrowing. The borrowing is secured by different types of fixed income assets such ascorporate or mortgage loans or bonds. The borrowing is in the form of a securitization, which means that the lenders are actually investing in notes backed bythe assets. In the event of default, the lenders will have recourse only to the assets securing the loan. Our Asset Management business segment includes ourfee-based asset management operations, which include on-going base and incentive management fees. As of December 31, 2023, we had approximately $2.4billion in assets under management (“AUM”) of which 42% was in CDOs. A significant portion of our asset management revenue is earned from themanagement of CDOs. We have not completed a new securitization since 2008. As a result, our asset management revenue has declined from its historicalhighs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions, liquidations, and defaults. Our ability to completesecuritizations in the future will depend upon, among other things, our asset origination capacity and success, our ability to arrange warehouse financing tooriginate assets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitized financings, and the demand in themarkets for such securitizations. The remaining portion of our AUM is from a diversified mix of other Investment Vehicles that were more recently formed. •Principal Investing: Our Principal Investing business segment is comprised of investments that we hold related to our SPAC franchise and other investmentswe have made for the purpose of earning an investment return rather than investments to support our Capital Markets business segment activities. Theseinvestments are a component of our other investments, at fair value, other investments sold, not yet purchased, and investments in equity method affiliates inour consolidated balance sheet. We generate our revenue by business segment primarily through the following activities. Capital Markets: •Our trading activities, which include execution and brokerage services, riskless trading activities, as well as gains and losses (unrealized and realized) andincome and expense earned on securities classified as trading; •Revenue earned on our gestation repo financing activities; and •New issue and advisory revenue comprised of (a) origination fees for newly created financial instruments originated by us, (b) revenue from advisory services,and (c) new issue revenue associated with originating, arranging, or placing newly created financial instruments. Asset Management: •Asset management fees for our on-going asset management services provided to certain Investment Vehicles, which may include fees both senior andsubordinate to the securities issued in the Investment Vehicle; and • Incentive management fees earned based on the performance of Investment Vehicles. Principal Investing: •Gains and losses (unrealized and realized) and income and expense earned on securities classified as other investments, at fair value and other investmentssold, not yet purchased; and •Income and loss earned on equity method investments. 40Table of Contents Business Environment Our business in general and our Capital Markets business segment in particular do not produce predictable earnings. Our results can vary dramatically from year-to-year and quarter-to-quarter. Our business is materially affected by economic conditions in the financial markets, political conditions, broad trends in business andfinance, the housing and mortgage markets, changes in volume and price levels of securities transactions, and changes in interest rates, including overnight fundingrates, all of which can affect our profitability and are unpredictable and beyond our control. These factors may affect the financial decisions made by investors andcompanies, including their level of participation in the financial markets and their willingness to participate in corporate transactions. Severe market fluctuations or weakeconomic conditions could reduce our trading volume and revenues, negatively affect our ability to generate new issue and advisory revenue, and adversely affect ourprofitability. As a general rule, our trading business benefits from increased market volatility. Increased volatility usually results in increased activity from our clients andcounterparties. However, periods of extreme volatility may at times result in clients reducing their trading volumes, which would negatively impact our results. Also,periods of extreme volatility may result in large fluctuations in securities valuations and we may incur losses on our holdings. Also, our mortgage group’s businessbenefits when mortgage volumes increase, and may suffer when mortgage volumes decrease. Among other things, mortgage volumes are significantly impacted bychanges in interest rates. In addition, as a smaller firm, we are exposed to intense competition. Although we provide financing to our customers, larger firms have amuch greater capability to provide their clients with financing, giving them a competitive advantage. We are much more reliant upon our employees’ relationships,networks, and abilities to identify and capitalize on market opportunities. Therefore, our business may be significantly impacted by the addition or loss of keypersonnel. We try to address these challenges by (i) focusing our business on clients and asset classes that are underserved by the large firms, (ii) continuing to monitor our fixedcosts to enhance operating leverage and limit our losses during periods of low volumes, and (iii) attempting to hire and retain entrepreneurial and effective traders,investment bankers, and salespeople. Our business environment is rapidly changing. New risks and uncertainties emerge continuously and it is not possible for us topredict all the risks we will face. This may negatively impact our operating performance. A portion of our revenue is generated from net trading activity. We engage in proprietary trading for our own account, provide securities financing for our customers,and execute “riskless” trades with a customer order in hand resulting in limited market risk to us. The inventory of securities held for our own account, as well as held tofacilitate customer trades, and our market making activities are sensitive to market movements. A portion of our revenue is generated from new issue and advisory engagements. The fees charged and volume of these engagements are sensitive to the overallbusiness environment. We provide origination services in Europe through our subsidiary CCFESA, and new issue and advisory services in the U.S. through oursubsidiary JVB. A division of JVB, CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets,and SPAC advisory. Currently, our primary source of new issue and advisory revenue is from investment banking and advisory services through CCM, as well asoriginating assets for our U.S. and European insurance asset management business including our U.S. Insurance JV and for our CREO JV. A portion of our revenue is generated from management fees. Our ability to charge management fees and the amount of those fees is dependent upon the underlyinginvestment performance and stability of the Investment Vehicles. If these types of investments do not provide attractive returns to investors, the demand for suchinstruments will likely fall, thereby reducing our opportunity to earn new management fees or maintain existing management fees. As of December 31, 2023, 42% of ourexisting AUM were in CDOs. The creation of CDOs has depended upon a vibrant securitization market. Since 2008, volumes within the securitization market havedropped significantly and have not fully recovered since that time. We have not completed a new securitization since 2008. The remaining portion of our AUM is from adiversified mix of other Investment Vehicles most of which were more recently formed. A significant portion of our asset management revenue is earned from the management of CDOs. As a result, our asset management revenue has declined from itshistorical highs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions, liquidations, and defaults. Our ability to completesecuritizations in the future will depend upon, among other things, our asset origination capacity and success, our ability to arrange warehouse financing to originateassets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitized financings, and the demand in the markets for suchsecuritizations. A portion of our revenues is generated from our principal investing activities. Therefore, our revenues are impacted by the overall market supply and demand of theseinvestments as well as the individual performance of each investment. Our principal investments are included within other investments, at fair value; other investmentssold, not yet purchased; and investments in equity method affiliates in our consolidated balance sheets. More recently, a significant component of our principalinvestment revenue has come from SPAC related equity investments, primarily in entities that have been the result of sponsored SPAC business combinations, shareforward arrangements ("SFAs"), or related party sponsored SPAC business combinations. Access to these investments is reliant on a robust SPAC market. Performance of the resulting principal investments can be materially impacted by overall performance of the equity markets. See note 8 to our consolidated financialstatements included in this Annual Report on Form 10-K. The SPAC Market In 2018, we began sponsoring a series of SPACs. Each sponsored SPAC either completed or was seeking to complete a business combination with a company involvedin the insurance market. In addition, we invest in other SPACs at various stages of their business life cycle. Beginning in 2019, these SPAC activities have become asignificant portion of our Principal Investing business segment. In August 2018, we invested in and became the general partner of a newly formed investment fund (the“SPAC Fund”), which was created for the purpose of investing in the equity interests of SPACs and SPAC sponsor entities including SPACs sponsored by us, ouraffiliates, and third parties. Effective April 1, 2023, all of the investors in the SPAC Fund, other than the Vellar GP, redeemed all of their interests in the SPAC Fund. Seerecent events below for additional information regarding the consolidation of the SPAC Fund. As a complement to the SPAC Fund, we established and became manager of two newly formed umbrella limited liability companies (the “SPAC Series Funds”) that issuea separate series of interest for each investment portfolio, which typically consist of investments in the sponsor entities of individual SPACs. Generally, when a SPACacquires or merges with a privately held target company, the target company winds up owning a majority of the resulting outstanding equity of the SPAC so thetransaction is accounted for as a reverse merger. Private companies utilize reverse mergers with SPACs as a method of going public as an alternative to a traditionalIPO. All of our business activity related to SPACs is highly sensitive to the volume of activity in the SPAC market. Volumes could be negatively impacted if targetcompanies no longer see SPACs as an attractive alternative thereby reducing the number of suitable potential business combination targets. Also, investor demand forSPACs would be negatively impacted if the stock of SPACs that successfully complete a business combination underperform the market. If volumes of SPAC activitydecline, our results of operations will likely be significantly negatively impacted. 41Table of Contents Equity prices of SPACs and post business combination SPACs declined significantly during 2022 and 2023. We are exposed to public equity prices of SPACs and postbusiness combination SPACs both through our other investments, at fair value and investments in equity method affiliates as well as our other investments sold, not yetpurchased. As a result, we recorded significant principal transaction losses and equity method losses during the years ended December 31, 2022 and 2023 in certainSPAC related investments. Continued declines in the equity prices of these companies will result in further losses for us. Margin Pressures in Fixed Income Brokerage Business Performance in the financial services industry in which we operate is highly correlated to the overall strength of the economy and financial market activity. Overallmarket conditions are a product of many factors beyond our control and can be unpredictable. These factors may affect the financial decisions made by investors,including their level of participation in the financial markets. In turn, these decisions may affect our business results. With respect to financial market activity, ourprofitability is sensitive to a variety of factors including the volatility of the equity and fixed income markets, the level and shape of the various yield curves, and thevolume and value of trading in securities. Margins and volumes in certain products and markets within the fixed income brokerage business continue to decrease materially as competition has increased andgeneral market activity has declined. Further, we continue to expect that competition will increase over time, resulting in continued margin pressure. Our response to this margin compression has included: (i) building a diversified fixed income trading platform; (ii) acquiring or building out new product lines andexpanding existing product lines; (iii) building a hedging execution and funding operation to service mortgage originators; (iv) building out CCM, and (v) monitoring ourfixed costs. Our cost management initiatives are ongoing. However, there can be no certainty that these efforts will be sufficient. If insufficient, we will likely see adecline in profitability. U.S. Housing Market In recent years, our mortgage group has grown in significance to our Capital Markets segment and our company overall. The mortgage group primarily earns revenueby providing hedging execution, securities financing, and trade execution services to mortgage originators and other investors in mortgage-backed securities. Therefore, this group’s revenue is highly dependent on the volume of mortgage originations in the U.S. Origination activity is highly sensitive to interest rates, the U.S.job market, housing starts, sale activity of existing housing stock, as well as the general health of the U.S. economy. In addition, any new regulation that impacts U.S.government agency mortgage-backed security issuance activity, residential mortgage underwriting standards, or otherwise impacts mortgage originators will impact ourbusiness. We have no control over these external factors and there is no effective way for us to hedge against these risks. Our mortgage group’s volumes andprofitability will be highly impacted by these external factors. Rising Interest Rates and Inflation During 2022 and 2023, the U.S. Federal Reserve began a process of raising the federal funds rate and quantitative tightening to address rising inflation. These actionshave the effect of increasing interest rates, which negatively impacts our business in several ways: 1.Rising rates reduce the fair value of the fixed income securities we hold on our balance sheet.2.Rising rates create instability in the equity markets, which has reduced equity financing and business combination volumes and negatively impacted CCM.3.Rising rates reduced the volumes of new issue fixed income instruments, which has negatively impacted our CREO JV.4.Rising rates significantly reduce mortgage activity. Our mortgage group's profitability is mainly impacted by the volume of mortgage activity in the U.S. (bothmortgages for new home purchases as well as refinancing). Furthermore, our mortgage group engages in repo lending to mortgage originators. Reducedmortgage volumes impose financial pressures on mortgage originators and may increase the risk that originators default on their repo obligations to us. Seenote 11 to our consolidated financial statements included in Item 1 of this Annual Report on Form 10-K.5.Rising rates may ultimately push the U.S. into recession, which may further reduce overall transaction volumes in the financial markets negatively impacting ourbusiness generally. 42Table of Contents Recent Events and Transactions Consolidation of the SPAC Fund Prior to March 31, 2023, the Vellar GP had an investment in the SPAC Fund, the potential to earn incentive fees, and did not consolidate the SPAC Fund. Effective April 1,2023, all of the investors in the SPAC Fund, other than the Vellar GP, redeemed all of their interests in the SPAC Fund. As a result, effective April 1, 2023, the Vellar GPbecame the sole owner of the SPAC Fund and began consolidating it. We own an interest in and consolidates the Vellar GP. Effective April 1, 2023, we beganconsolidating the SPAC Fund as well. We recorded the following entry upon consolidation: Asset/(Liability) Cash and cash equivalents $257 Receivables from brokers, dealers, and clearing agencies 68,066 Other investments, at fair value 40,388 Other assets 108 Accounts payable and other liabilities (82,968)Other investments sold, not yet purchased (25,806)Vellar GP's remaining investment in the SPAC Fund $45 As of December 31, 2023, all amounts due to the redeeming investors in the SPAC Fund were paid in full. The 2020 Senior Notes On January 31, 2020, the Operating LLC entered into a note purchase agreement (the “Original Purchase Agreement”) with JKD Capital Partners I LTD, a New Yorkcorporation (“JKD Investor”), and RN Capital Solutions LLC, a Delaware limited liability company (“RNCS”). The JKD Investor is owned by Jack DiMaio, Jr., the vicechairman of our board of directors, and his spouse. The note purchased by the JKD Investor is herein referred to as the “JKD Note.” Pursuant to the Original Purchase Agreement, JKD Investor and RNCS each purchased a senior promissory note in the principal amount of $2,250 (for an aggregateinvestment of $4,500). The senior promissory notes bore interest at a fixed rate of 12% per annum and matured on January 31, 2022. On January 31, 2022, the OperatingLLC and JKD Investor entered into a note purchase agreement (the "2022 Purchase Agreement"), pursuant to which, among other things, on such date, (i) JKD Investorpaid to the Operating LLC an additional $2,250 and (ii) in consideration for such funds, the Operating LLC issued to JKD Investor an amended and restated seniorpromissory note in the aggregate principal amount of $4,500 (the “Amended and Restated Note”), which Amended and Restated Note amended and restated the JKDNote in its entirety. The 2022 Purchase Agreement contains customary representations and warranties on the part of each of JKD Investor and the Operating LLC. Weused these proceeds to retire the $2,250 of 2020 Senior Notes held by RNCS. See note 20 and 31. On January 5, 2024, the Operating LLC and JKD Investor entered into an amendment to the Amended and Restated Note, pursuant to which the Amended and RestatedNote was amended to (a) extend (i) the maturity date thereof from January 31, 2024 to January 31, 2026, (ii) the date following which the Amended and Restated Note maybe redeemed by JKD Investor from January 31, 2023 to January 31, 2025, and (iii) the date following which the Amended and Restated Note may be prepaid by theOperating LLC from January 31, 2023 to January 31, 2025; and (b) increase the interest rate payable under the Amended and Restated Note from 10% per annum to 12% perannum effective as of January 31, 2024. 43Table of Contents Consolidated Results of Operations The following section provides a comparative discussion of our consolidated results of operations for the specified periods. The period-to-period comparisons offinancial results are not necessarily indicative of future results. Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 The following table sets forth information regarding our consolidated results of operations for the years ended December 31, 2023 and 2022. COHEN & COMPANY INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in Thousands) Year Ended December 31, Favorable / (Unfavorable) 2023 2022 $ Change % Change Revenues Net trading $30,926 $40,009 $(9,083) (23)%Asset management 7,337 9,004 (1,667) (19)%New issue and advisory 28,264 24,721 3,543 14%Principal transactions and other income 16,454 (29,347) 45,801 (156)%Total revenues 82,981 44,387 38,594 87% Operating expenses Compensation and benefits 52,092 50,290 (1,802) (4)%Business development, occupancy, equipment 5,204 5,076 (128) (3)%Subscriptions, clearing, and execution 8,965 8,274 (691) (8)%Professional fee and other operating 9,296 8,153 (1,143) (14)%Depreciation and amortization 563 557 (6) (1)%Total operating expenses 76,120 72,350 (3,770) (5)% Operating income / (loss) 6,861 (27,963) 34,824 (125)% Non-operating income / (expense) Interest expense, net (6,526) (4,982) (1,544) (31)%Income / (loss) from equity method affiliates 15,609 (20,931) 36,540 175%Other non operating income - - - NM Income / (loss) before income taxes 15,944 (53,876) 69,820 130%Income tax expense / (benefit) 5,545 4,794 (751) (16)%Net income / (loss) 10,399 (58,670) 69,069 118%Less: Net income (loss) attributable to the non-convertible non-controlling interest 19,590 (23,203) (42,793) (184)%Enterprise net income (loss) (9,191) (35,467) 26,276 74%Less: Net income (loss) attributable to the convertible non-controlling interest (4,078) (22,078) (18,000) (82)%Net income / (loss) attributable to Cohen & Company Inc. $(5,113) $(13,389) $8,276 62% Revenues Revenues increased by $38,594, or 87%, to $82,981 for the year ended December 31, 2023, as compared to $44,387 for the year ended December 31, 2022. As discussed inmore detail below, the change was comprised of (i) a decrease of $9,083 in net trading revenue; (ii) a decrease of $1,667 in asset management revenue; (iii) an increase of$3,543 in new issue and advisory revenue; and (iv) an increase of $45,801 in principal transactions and other income. 44Table of Contents Net Trading Net trading revenue decreased by $9,083, or 23%, to $30,926 for the year ended December 31, 2023, as compared to $40,009 for the year ended December 31, 2022. Thefollowing table shows the detail by trading group. NET TRADING(Dollars in Thousands) Year Ended December 31, 2023 2022 Change Mortgage $(1,523) $1,143 $(2,666)Matched book repo 16,315 30,595 (14,280)High yield corporate 4,768 4,694 74 Investment grade corporate (420) 1,197 (1,617)Wholesale and other 11,786 2,380 9,406 Total $30,926 $40,009 $(9,083) Our net trading revenue includes unrealized gains on our trading investments, as of the applicable measurement date, which may never be realized due to changes inmarket or other conditions not in our control. This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue alsoincludes realized gains on certain proprietary trading positions. Our ability to derive trading gains from such trading positions is subject to overall market conditions.Due to the volatility and uncertainty in the capital markets generally, the net trading revenue recognized during the year may not be indicative of future results.Furthermore, from time to time, some of the assets included in the Investments-trading line of our consolidated balance sheets represent level 3 valuations within theFASB valuation hierarchy. Level 3 assets are carried at fair value based on estimates derived using internal valuation models and other estimates. See notes 9 and 10 toour consolidated financial statements included in this Annual Report on Form 10-K. The fair value estimates made by us may not be indicative of the final sale price atwhich these assets may be sold. We consider our matched book repo business to be subject to significant concentration risk. See note 11 to our consolidated financialstatements included in this Annual Report on Form 10-K. The Company recorded a gross loss of $1,752 and $5,454 in connection with the FGMC reverse repo for the years ended December 31, 2023 and 2022, respectively. Ofthe $1,752 loss in 2023, $1,748 was recorded as a reduction in net trading revenue and $4 was recorded in professional fees and other operating expense. Of the$5,454 loss in 2022, $5,244 was recorded as a reduction in net trading revenue and $210 was recorded in professional fees and other operating expense. Of the $1,748recorded in net trading revenue in 2023, $1,500 is included in the mortgage group and $248 is included in the matched book repo group in the table above. Of the $5,244recorded in net trading revenue in 2022, $4,330 is included in the mortgage group and $914 is included in the matched book repo group in the table above. See note 11 toour consolidated financial statements included in Item 1 of this Annual Report on Form 10-K. Asset Management Assets Under Management Our AUM equals the sum of the NAV or gross assets of the Investment Vehicles we manage based on whichever measurement serves as the basis for the calculation ofour management fees.Our calculation of AUM may differ from the calculations used by other asset managers and, as a result, this measure may not be comparable to similar measurespresented by other asset managers. This definition of AUM is not necessarily identical to the definitions of AUM that may be used in our management agreements. ASSETS UNDER MANAGEMENT(Dollars in Thousands) As of December 31, 2023 2022 2021 Company sponsored CDOs $995,191 $1,053,430 $1,239,988 Other Investment Vehicles (1) 1,362,484 1,061,250 1,118,162 Assets under management (2) $2,357,675 $2,114,680 $2,358,150 (1)Other Investment Vehicles include any Investment Vehicle that is not a Company-sponsored CDO.(2)The accounts we manage may employ leverage. In some cases, our fees are based on gross assets and in other cases on net assets. Finally, in the case of theSPAC Series Funds, there are no management fees earned. AUM included herein is calculated using either gross or net assets of each managed account or CDObased on whichever serves as the basis for our management fees. In the case where no management fees are earned, the net assets are included. 45Table of Contents Asset management fees decreased by $1,667, or 19%, to $7,337 for the year ended December 31, 2023, as compared to $9,004 for the year ended December 31, 2022, asdiscussed in more detail below. ASSET MANAGEMENT(Dollars in Thousands) Year Ended December 31, 2023 2022 Change CDOs $1,638 $3,454 $(1,816)Other 5,699 5,550 149 Total $7,337 $9,004 $(1,667) A significant portion of our asset management fees are earned from the management of CDOs. We have not completed a new securitization since 2008. As a result, ourasset management revenue from CDOs has declined from its historical highs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions,liquidations, and defaults. Our ability to complete securitizations in the future will depend upon, among other things, our asset origination capacity and success, ourability to arrange warehouse financing to originate assets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitizedfinancings, and the demand in the markets for such securitizations. Asset management fees from CDOs decreased primarily because the one of the securitizations we manage completed a successful auction during 2022. As a result, wereceived payment of deferred subordinated management fees of $1,600 in 2022. Otherwise, asset management fees from CDOs declined by $216 during 2023 mainly dueto a decline in AUM due to liquidations and principal paydowns of collateral. Asset management fees from other investment vehicles remained relatively flat. New Issue and Advisory Revenue New issue and advisory revenue increased by $3,543, or 14%, to $28,264 for the year ended December 31, 2023, as compared to $24,721 for the year ended December 31,2022. Year Ended December 31, 2023 2022 Change Cohen & Company Capital Markets $26,174 $16,880 $9,294 Commercial Real Estate Originations 47 1,897 (1,850)U.S. Insurance Originations 800 4,753 (3,953)European Insurance Originations 1,243 1,191 52 Total $28,264 $24,721 $3,543 46Table of Contents Our revenue earned from new issue and advisory has been, and we expect will continue to be, volatile. We earn revenue from a limited number of engagements.Therefore, a small change in the number of engagements can result in large fluctuations in the revenue recognized. Further, even if the number of engagements remainsconsistent, the average revenue per engagement can fluctuate considerably. Finally, our revenue is generally earned when an underlying transaction closes (rather thanon a monthly or quarterly basis). Therefore, the timing of underlying transactions increases the volatility of our revenue recognition. In addition, we often incur certaincosts related to new issue engagements. These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other. CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory. In addition, wegenerate new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and for our PriDe funds in Europe. In some cases, CCM will receive financial instruments in lieu of cash for its advisory transactions. In these cases, we record advisory revenue equal to the fair value ofthe instruments received. Subsequent to receipt, the instruments are carried at fair value as a component of other investments, at fair value in our consolidated balancesheets. Any future income or loss related to these instruments will be recorded as principal transactions gain or loss in the consolidated statement of operations. Principal Transactions and Other Income Principal transactions and other income increased by $45,801 to $16,454 for the year ended December 31, 2023, as compared to ($29,347) for the year ended December 31,2022. PRINCIPAL TRANSACTIONS & OTHER INCOME(Dollars in Thousands) Year Ended December 31, 2023 2022 Change SFT $(233) $(5,539) $5,306 LMND 97 (2,805) 2,902 REE (165) (4,755) 4,590 RBT (2,897) (1,576) (1,321)HLGN (324) (14,754) 14,430 PAYO (95) (511) 416 PWP 91 (418) 509 FOXO (230) (2,137) 1,907 BURU (485) - (485)OPTX (1,141) - (1,141)CAPT 376 - 376 EGOX (665) - (665)WEJO (157) (1,795) 1,638 SFA transactions 25,395 - 25,395 Bridge loan 1,050 - 1,050 US Insurance JV 463 11 452 CREO JV 901 32 869 Stoa / FlipOS (6,847) 4,196 (11,043)Other (185) (580) 395 Total principal transactions 14,949 (30,631) 45,580 IIFC revenue share 1,105 673 432 All other income / (loss) 400 611 (211)Other income 1,505 1,284 221 Total principal transactions and other income $16,454 $(29,347) $45,801 Principal Transactions For all investments discussed below, see note 9 to our consolidated financial statements included in this Annual Report on Form 10-K for information about how wedetermine the value of these instruments. For several of the investments described below, we also had an investment in the same company that was accounted for underthe equity method during the periods presented. See discussion of equity method income / (loss) below. SFT was a publicly traded company. As of December 31, 2023, the total carrying value of our investment in SFT was $13. LMND represents equity positions of Lemonade, Inc. (NYSE: LMND), a publicly traded company that acquired Metromile, Inc. As of December 31, 2023, the totalcarrying value of our investment in LMND was $0. REE represents equity positions of REE Automotive Ltd. (NASDAQ: REE), a publicly traded company that closed a business combination with 10X Capital VentureAcquisition Corp. As of December 31, 2023, we had a total investment in REE carried at fair value of $130, which was included as a component of other investments, atfair value. RBT represents equity positions of Rubicon Technologies, Inc. (NYSE: RBT), a publicly traded company that closed a business combination with Founder SPAC. As ofDecember 31, 2023, we had a total investment in RBT carried at fair value of $0, which was included as a component of other investments, at fair value. HLGN represents equity positions of Heliogen, Inc. (NYSE: HLGN), a publicly traded company that closed a business combination with Athena Technology AcquisitionCorp. As of December 31, 2023, we had a total investment in HLGN carried at fair value of $29, which was included as a component of other investments, at fair value. 47Table of Contents PAYO represents equity positions of Payoneer Global, Inc. (NASDAQ: PAYO), a publicly traded company that closed a business combination with FTAC OlympusAcquisition Corp. As of December 31, 2023, we had a total investment in PAYO carried at fair value of $1,443, which was included as a component of other investments,at fair value. PWP represents equity positions of Perella Weinberg Partners (NASDAQ: PWP), a publicly traded company that closed a business combination with FTAC IVAcquisition Corp. As of December 31, 2023, we had a total investment in PWP carried at fair value of $317, which was included as a component of other investments, atfair value. FOXO represents equity positions of FOXO Technologies Inc. (NASDAQ: FOXO), a publicly traded company that closed a business combination with DelwindsInsurance Acquisition Corp. As of December 31, 2023, we had a total investment in FOXO carried at fair value of $21, which was included as a component of otherinvestments, at fair value. BURU represents equity positions of Nuburu, Inc. (NYSE American: BURU), a publicly traded company that closed a business combination with Tailwind AcquisitionCorp. As of December 31, 2023, we had a total investment in BURU carried at fair value of $7, which was included as a component of other investments, at fair value. OPTX represents equity positions of Syntec Optics Holdings, Inc. (NASDAQ: OPTX), a publicly traded company that closed a business combination with OmniLitAcquisition Corp. As of December 31, 2023, we had a total investment in OPTX carried at fair value of $1,317, which was included as a component of other investments,at fair value. CAPT represents equity positions of Captivision, Inc. (NASDAQ: CAPT), a publicly traded company that closed a business combination with Jaguar Global GrowthCorp. I. As of December 31, 2023, we had a total investment in CAPT carried at fair value of $3,791, which was included as a component of other investments, at fairvalue. EGOX represents equity positions of Next.e.GO, BV (NASDAQ: EGOX), a publicly traded company that closed a business combination with Athena ConsumerAcquisition Corp. As of December 31, 2023, we had a total investment in EGOX carried at fair value of $7,854, which was included as a component of other investments,at fair value. WEJO represents equity positions of Wejo Group, Ltd. (NASDAQ: WEJO), a publicly traded company that closed a business combination with Virtuoso AcquisitionCorp. As of December 31, 2023, we had a total investment in WEJO carried at fair value of $0, which was included as a component of other investments, at fair value. We have engaged in several SFAs. In a typical SFA transaction, we acquire an interest in a publicly traded company and enter into an offsetting derivative with the samecompany. Both the interest in the public company and the offsetting derivative are carried at fair value. The amount shown in the table above represents the net changein fair value recorded during the period. The interests we hold in SFA Counterparties are included as a component of other investments, at fair value. The derivativesare included as a component of other investments sold, not yet purchased, at fair value. See note 10 to our consolidated financial statements included in Item 1 of thisAnnual Report on Form 10-K for more information regarding our SFAs. In 2022, we entered into a bridge loan arrangement with an early stage growth company. The principal of the bridge loan was repaid in full during 2023. We earned agross exit fee, initially valued at $3,040, comprised of a cash component of $1,050 and a share component of $1,990. The cash component was paid in full. The sharecomponent remains outstanding and is carried at fair value and included in the SFA amounts shown in the table. The U.S. Insurance JV invests in insurance company debt. We carry our investment in the U.S. Insurance JV at its reported NAV. As of December 31, 2023, we had atotal investment in the U.S. Insurance JV carried at fair value of $3,107, which was included as a component of other investments, at fair value. The CREO JV invests in commercial real estate debt. We carry our investment in the CREO JV at its reported NAV. As of December 31, 2023, we had a total investmentin the CREO JV carried at fair value of $4,783, which was included as a component of other investments, at fair value. Stoa USA Inc. / FlipOS was a private company in which we owned common equity. During 2023, Stoa USA Inc. / FlipOS announced that it had ceased operations. Wewrote off our investment during 2023 and recorded a principal transactions loss. We have no remaining investment in Stoa USA Inc. / FlipOS as of December 31, 2023. Other principal investments consist of realized and unrealized gains and losses from other investments reported at fair value. Other Income Other income / (loss) is comprised of an ongoing revenue share arrangement as well as other miscellaneous operating income items. The revenue sharearrangement noted in the table above entitles us to a percentage of revenue earned by IIFC. The IIFC revenue share arrangement expires at the earlier of (i) thedissolution of IIFC or (ii) when we have earned a cumulative $20,000 in revenue share payments. To date, we have earned $5,618. Also, in any particular year, therevenue share earned by us cannot exceed $2,000. 48Table of Contents Operating Expenses Operating expenses increased by $3,770, or 5%, to $76,120 for the year ended December 31, 2023, as compared to $72,350 for the year ended December 31, 2022. Asdiscussed in more detail below, the change was comprised of (i) an increase of $1,802 in compensation and benefits; (ii) an increase of $128 in business development,occupancy, and equipment; (iii) an increase of $691 in subscriptions, clearing, and execution; (iv) an increase of $1,143 in professional fee and other operating; and(v) an increase of $6 in depreciation and amortization. Compensation and Benefits Compensation and benefits increased by $1,802, or 4%, to $52,092 for the year ended December 31, 2023, as compared to $50,290 for the year ended December 31, 2022. COMPENSATION AND BENEFITS(Dollars in Thousands) Year Ended December 31, 2023 2022 Change Cash compensation and benefits $47,701 $45,900 $1,801 Equity-based compensation 4,391 4,390 1 Total $52,092 $50,290 $1,802 Cash compensation and benefits in the table above is primarily comprised of salary, incentive compensation, severance, employer portion of payroll taxes, andbenefits. Cash compensation and benefits increased by $1,801 to $47,701 for the year ended December 31, 2023, as compared to $45,900 for the year ended December 31,2022. Our headcount decreased to 118 as of December 31, 2023 from 121 as of December 31, 2022. Cash compensation increased primarily due to an increase in incentivecompensation related to the increase in overall revenue and income from equity method affiliates. Equity-based compensation remained relatively flat. Business Development, Occupancy, and Equipment Business development, occupancy, and equipment increased by $128, or 3%, to $5,204 for the year ended December 31, 2023, as compared to $5,076 for the year endedDecember 31, 2022. This increase was comprised of an increase in occupancy and equipment of $297, partially offset by a decrease in business development of $169. 49Table of Contents Subscriptions, Clearing, and Execution Subscriptions, clearing, and execution increased by $691, or 8%, to $8,965 for the year ended December 31, 2023, as compared to $8,274 for the year ended December 31,2022. The increase was comprised of an increase in subscriptions and dues of $573 and an increase in clearing and execution of $118. Professional Fee and Other Operating Expenses Professional fee and other operating expenses increased by $1,143, or 14%, to $9,296 for the year ended December 31, 2023, as compared to $8,153 for the year endedDecember 31, 2022. The increase was comprised of an increase in professional fees of $1,001 and an increase in other operating expenses of $142. Depreciation and Amortization Depreciation and amortization increased by $6, or 1%, to $563 for the year ended December 31, 2023, as compared to $557 for the year ended December 31, 2022. Non-Operating Income and Expense Interest Expense, net Interest expense, net increased by $1,544 to $6,526 for the year ended December 31, 2023, as compared to $4,982 for the year ended December 31, 2022. INTEREST EXPENSE(Dollars in Thousands) Year Ended December 31, 2023 2022 Change Junior subordinated notes $5,247 $3,442 $1,805 2020 Senior Notes 450 458 (8)2017 Convertible Note - 327 (327)Byline Bank 338 247 91 Redeemable Financial Instrument - JKD Capital Partners I LTD 491 508 (17) $6,526 $4,982 $1,544 See notes 19 and 20 to our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our redeemable financialinstruments and debt. 50Table of Contents Income / (loss) from Equity Method Affiliates Income / (loss) from equity method affiliates increased by $36,540 to $15,609 for the year ended December 31, 2023 , as compared to ($20,931) for the year endedDecember 31, 2022. See note 12 to our consolidated financial statements included in this Annual Report on Form 10-K. Year Ended December 31, 2023 2022 Change Insurance SPACs $- $(5,898) $5,898 SPAC Sponsor Entities 15,275 (14,963) 30,238 Dutch Real Estate Entities 334 (70) 404 $15,609 $(20,931) $36,540 SPAC Sponsor Entities includes both indirect and direct investments in SPAC Sponsor Entities. Several of these SPAC Sponsor Entities are invested in SPACs thathave completed their business combinations. Those SPAC Sponsor Entities hold restricted and unrestricted equity interests in the public post-merger entities. Weaccount for our investments in SPAC Sponsor Entities under the equity method of accounting. If the SPAC Sponsor Entity distributes SPAC shares to us, we accountfor those SPAC shares as a component of other investments, at fair value. The following table shows the equity method income or loss included in other SPAC SponsorEntities above broken out by the ultimate public company investee. For several of the investments described below, we also had an investment in the same companyaccounted for at fair value as a component of other investments, at fair value during the periods presented. See discussion of principal transactions above. Year Ended December 31, 2023 2022 Change HLGN $- $(10,625) $10,625 WEJO - (2,214) 2,214 DRTS (51) 374 (425)FOXO (3) 1,017 (1,020)OPTX 4,304 - 4,304 ZCAR 10,013 (837) 10,850 AAGR 2,358 (7) 2,365 Other (1,346) (2,671) 1,325 $15,275 $(14,963) $30,238 As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of HLGN was $0. As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of WEJO was $0. We held an equity method investment in the sponsor of the predecessor SPAC of Alpha Tau Medical, LTD (NASDAQ: DRTS). As of December 31, 2023, our equitymethod investment in the sponsor entity of the predecessor SPAC of DRTS was $0. As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of FOXO was $0. As of December 31, 2023, our equity method investment in the sponsor entity of the predecessor SPAC of OPTX was $0. We held an equity method investment in the sponsor of the predecessor SPAC of Zoomcar Holdings, Inc. (NASDAQ: ZCAR). As of December 31, 2023, our equitymethod investment in the sponsor entity of the predecessor SPAC of ZCAR was $0. We hold an equity method investment in the sponsor of the predecessor SPAC of African Agriculture Holdings Inc. (NASDAQ: AAGR). AAGR and its predecessorSPAC completed a business combination during 2023. Our remaining equity method investment as of December 31, 2023 of $2,357 represents the fair value of the equityinterests attributable to us that remain in the sponsor entity. These interests should be distributed to us in 2024. The remaining other investments in SPAC Sponsor Entities represent direct and indirect investments in sponsor entities that have not yet completed a businesscombination. See note 12 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-K. 51Table of Contents Income Tax Expense / (Benefit) We have significant carryforward tax assets. As of December 31, 2023, the Company had a federal net operating loss (“NOL”) of approximately $96,457, which will beavailable to offset future taxable income, subject to limitations described below. If not used, this NOL will begin to expire in 2028. The Company also had net capitallosses (“NCLs”) in excess of capital gains of $59,844 as of December 31, 2023, which can be carried forward to offset future capital gains. If not used, this carryforwardwill begin to expire in 2024. ASC 746 requires that we record a valuation allowance against these assets so that the net asset recognized is, in management's judgment,more likely than not to be realized. The income tax expense / (benefit) was $5,545 for the year ended December 31, 2023, as compared to $4,794 for the year ended December 31, 2022. See note 23 to ourconsolidated financial statements included in our Annual Report on Form 10-K. The tax expense recognized in 2023 was comprised of a deferred tax expense of $5,354 and current tax expense of $191. The current tax expense incurred was the result offoreign, state, and local income tax. The deferred tax expense was a U.S. federal, state, and local tax expense, which was the result of the increase in the valuationallowance applied against the Company's NOL and NCL tax assets. The tax expense recognized in 2022 was comprised of a deferred tax expense of $4,579 and current tax expense of $215. The current tax expense incurred was the result offoreign, state, and local income tax. The deferred tax expense was a U.S. federal, state, and local tax expense, which was the result of the increase in the valuationallowance applied against the Company's NOL and NCL tax assets. Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs. Managementthen schedules this income against each carryforward asset and determines what portion of the asset it believes is more likely than not to be realized. Thisdetermination is subjective and subject to many assumptions and factors including: profitability of our business in the future, the timing of that future income ascompared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction in which the income will be generated. To the extentmanagement's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit. We recorded deferred taxexpense in 2022 and 2023 because expectations of future income decreased and the Company increased the valuation allowance it had applied against carryforwardassets. Due to the magnitude of the Company's carryforward assets as well as the volatility of the Company's operating results, significant adjustments to the valuationallowance are likely going forward. These future adjustments may likewise result in material amounts of deferred tax benefit or expense going forward. Net Income/ (Loss) Attributable to the Non-Convertible Non-Controlling Interest Net income / (loss) attributable to the non-convertible non-controlling interest for the years ended December 31, 2023 and 2022 was comprised of the non-controllinginterest related to member interests in consolidated subsidiaries of the Operating LLC other than interests held by us for the relevant periods. These interests are notconvertible into Common Stock. Year Ended December 31, 2023 2022 Change Insurance SPAC III Sponsor Entities $- $(4,808) $4,808 Vellar GP 14,755 - 14,755 Other SPAC related 4,835 (18,395) 23,230 $19,590 $(23,203) $42,793 Insurance SPAC III Sponsor Entities are the sponsor entities formed by us for our sponsored SPACs. Prior to March 31, 2023, the Vellar GP was the general partner ofthe SPAC Fund but did not consolidate it. Effective April 1, 2023, the Vellar GP began consolidating the SPAC Fund. The Vellar GP primarily invests in share forwardarrangements. See notes 4, 10, and 21 to our consolidated financials included in this Annual Report on Form 10-K. Other SPAC related is mainly comprised of an entitythat we consolidated but do not wholly own that invests in other SPAC sponsor entities. 52Table of Contents Net Income / (Loss) Attributable to the Convertible Non-controlling Interest Net income / (loss) attributable to the convertible non-controlling interest for the years ended December 31, 2023 and 2022 was comprised of the non-controlling interestrelated to member interests in the Operating LLC other than interests held by us for the relevant periods. SUMMARY CALCULATION OF CONVERTIBLE NON-CONTROLLING INTERESTFor the Year Ended December 31, 2023 Wholly OwnedSubsidiaries OtherConsolidatedSubsidiaries Total OperatingLLCConsolidated Cohen &Company Inc. Consolidated Net income / (loss) before tax $(23,091) $39,035 $15,944 $- $15,944 Income tax expense / (benefit) 1,972 - 1,972 3,573 5,545 Net income / (loss) after tax (25,063) 39,035 13,972 (3,573) 10,399 Other consolidated subsidiary non-controlling interest - 19,590 19,590 Net income / (loss) attributable to the Operating LLC (25,063) 19,445 (5,618) Average effective Operating LLC non-controlling interest % (1) 72.59% Operating LLC non-controlling interest $(4,078) Summary Other consolidated subsidiary non-controlling interest $19,590 Operating LLC non-controlling interest (4,078) $15,512 SUMMARY CALCULATION OF CONVERTIBLE NON-CONTROLLING INTERESTFor the Year Ended December 31, 2022 Wholly OwnedSubsidiaries OtherConsolidatedSubsidiaries Total OperatingLLCConsolidated Cohen &Company Inc. Consolidated Net income / (loss) before tax $(20,287) $(33,589) $(53,876) $- $(53,876)Income tax expense / (benefit) (381) 182 (199) 4,993 4,794 Net income / (loss) after tax (19,906) (33,771) (53,677) (4,993) (58,670)Other consolidated subsidiary non-controlling interest (23,203) (23,203) Net income / (loss) attributable to the Operating LLC (19,906) (10,568) (30,474) Average effective Operating LLC non-controlling interest % (1) 72.45% Operating LLC non-controlling interest $(22,078) Summary Other consolidated subsidiary non-controlling interest $(23,203) Operating LLC non-controlling interest (22,078) $(45,281) (1)Non-controlling interest is recorded on a quarterly basis. Because earnings are recognized unevenly throughout the year and the non-controlling interestpercentage may change during the period, the average effective non-controlling interest percentage may not equal the percentage at the end of any period or thesimple average of the beginning and ending percentages. 53Table of Contents Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 The following table sets forth information regarding our consolidated results of operations for the years ended December 31, 2022 and 2021. COHEN & COMPANY INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in Thousands) Year Ended December 31, Favorable / (Unfavorable) 2022 2021 $ Change % Change Revenues Net trading $40,009 $69,385 $(29,376) (42)%Asset management 9,004 10,923 (1,919) (18)%New issue and advisory 24,721 28,736 (4,015) (14)%Principal transactions and other income (29,347) 37,324 (66,671) (179)%Total revenues 44,387 146,368 (101,981) (70)% Operating expenses Compensation and benefits 50,290 85,048 34,758 41%Business development, occupancy, equipment 5,076 3,365 (1,711) (51)%Subscriptions, clearing, and execution 8,274 10,307 2,033 20%Professional fee and other operating 8,153 7,684 (469) (6)%Depreciation and amortization 557 371 (186) (50)%Total operating expenses 72,350 106,775 34,425 32% Operating income / (loss) (27,963) 39,593 (67,556) (171)% Non-operating income / (expense) Interest expense, net (4,982) (7,233) 2,251 31%Income / (loss) from equity method affiliates (20,931) 36,010 (56,941) (158)%Other non-operating income - 2,127 (2,127) (100)%Income / (loss) before income taxes (53,876) 70,497 (124,373) (176)%Income tax expense / (benefit) 4,794 (3,541) (8,335) (235)%Net income / (loss) (58,670) 74,038 (132,708) (179)%Less: Net income (loss) attributable to the non-convertible non-controlling interest (23,203) 35,574 58,777 165%Enterprise net income (loss) (35,467) 38,464 (73,931) (192)%Less: Net income (loss) attributable to the convertible non-controlling interest (22,078) 26,656 48,734 183%Net income / (loss) attributable to Cohen & Company Inc. $(13,389) $11,808 $(25,197) (213)% Revenues Revenues decreased by $101,981, or 70%, to $44,387 for the year ended December 31, 2022, as compared to $146,368 for the year ended December 31, 2021. As discussedin more detail below, the change was comprised of (i) a decrease of $29,376 in net trading revenue; (ii) a decrease of $1,919 in asset management revenue; (iii) adecrease of $4,015 in new issue and advisory revenue; and (iv) a decrease of $66,671 in principal transactions and other income. 54Table of Contents Net Trading Net trading revenue decreased by $29,376, or 42%, to $40,009 for the year ended December 31, 2022, as compared to $69,385 for the year ended December 31, 2021. Thefollowing table shows the detail by trading group. NET TRADING(Dollars in Thousands) For the Year Ended December 31, 2022 2021 Change Mortgage $1,143 $7,451 $(6,308)Matched book repo 30,595 46,139 (15,544)High yield corporate 4,694 10,390 (5,696)Investment grade corporate 1,197 593 604 Wholesale and other 2,380 4,812 (2,432)Total $40,009 $69,385 $(29,376) Our net trading revenue includes unrealized gains on our trading investments, as of the applicable measurement date, which may never be realized due to changes inmarket or other conditions not in our control. This may adversely affect the ultimate value realized from these investments. In addition, our net trading revenue alsoincludes realized gains on certain proprietary trading positions. Our ability to derive trading gains from such trading positions is subject to overall market conditions.Due to volatility and uncertainty in the capital markets, the net trading revenue recognized during the year may not be indicative of future results. Furthermore, from timeto time, some of the assets included in the Investments-trading line of our consolidated balance sheets represent level 3 valuations within the FASB valuation hierarchy.Level 3 assets are carried at fair value based on estimates derived using internal valuation models and other estimates. See notes 9 and 10 to our consolidated financialstatements included in this Annual Report on Form 10-K. The fair value estimates made by us may not be indicative of the final sale price at which these assets may besold. We consider our matched book repo business to be subject to significant concentration risk. See note 11 to our consolidated financial statements included in thisAnnual Report on Form 10-K. The Company recorded a gross loss of $5,454 in connection with the FGMC reverse repo. Of the $5,454 loss, $5,244 was recorded as a reduction in net trading revenueand $210 was recorded in professional fees and other operating expenses. Of the $5,244 recorded in net trading revenue, $4,330 is included in the mortgage group and$914 is included in the matched book repo group in the table above. See note 11 to our consolidated financial statements included in Item 1 of this Annual Report onForm 10-K. Asset Management Asset management fees decreased by $1,919, or 18%, to $9,004 for the year ended December 31, 2022, as compared to $10,923 for the year ended December 31, 2021, asdiscussed in more detail below. ASSET MANAGEMENT(Dollars in Thousands) For the Year Ended December 31, 2022 2021 Change CDOs $3,454 $2,484 $970 Other 5,550 8,439 (2,889)Total $9,004 $10,923 $(1,919)A significant portion of our asset management fees are earned from the management of CDOs. We have not completed a new securitization since 2008. As a result, ourasset management revenue from CDOs has declined from its historical highs as the assets of the CDOs decline due to maturities, repayments, auction call redemptions,liquidations, and defaults. Our ability to complete securitizations in the future will depend upon, among other things, our asset origination capacity and success, ourability to arrange warehouse financing to originate assets, our willingness and capacity to fund required amounts to obtain warehouse financing and securitizedfinancings, and the demand in the markets for such securitizations. Asset management fees from CDOs increased because the one of the securitizations we manage completed a successful auction during 2022. As a result, we receivedpayment of deferred subordinated management fees of $1,600. Otherwise, asset management fees from CDOs declined by $630 during 2022 mainly due to a decline inAUM due to liquidations of collateral, our removal as manager of one CDO, and principal paydowns of collateral. Asset management fees from other investment vehicles decreased primarily due to a reduction of incentive fees earned on the SPAC Fund. 55Table of Contents New Issue and Advisory Revenue New issue and advisory revenue decreased by $4,015, or 14%, to $24,721 for the year ended December 31, 2022, as compared to $28,736 for the year ended December 31,2021. Year Ended December 31, 2022 2021 Change Cohen & Company Capital Markets $16,880 $22,676 $(5,796)Commercial Real Estate Originations 1,897 1,428 469 US Insurance Originations 4,753 1,940 2,813 Europe Insurance Originations 1,191 2,692 (1,501)Total $24,721 $28,736 $(4,015) Our revenue earned from new issue and advisory has been, and we expect will continue to be, volatile. We earn revenue from a limited number of engagements.Therefore, a small change in the number of engagements can result in large fluctuations in the revenue recognized. Further, even if the number of engagements remainsconsistent, the average revenue per engagement can fluctuate considerably. Finally, our revenue is generally earned when an underlying transaction closes (rather thanon a monthly or quarterly basis). Therefore, the timing of underlying transactions increases the volatility of our revenue recognition. In addition, we often incur certaincosts related to new issue engagements. These costs are included as a component of either subscriptions, clearing and execution, or professional fees and other andwill generally be recognized in the same period that the related revenue is recognized. CCM is our full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory. In addition, wegenerate new issue revenue by originating new assets for the U.S. Insurance JV, CREO JV, and our PriDe funds in Europe. 56Table of Contents Principal Transactions and Other Income Principal transactions and other income decreased by $66,671 to ($29,347) for the year ended December 31, 2022, as compared to $37,324 for the year ended December 31,2021. PRINCIPAL TRANSACTIONS & OTHER INCOME(Dollars in Thousands) For the Year Ended December 31, 2022 2021 Change SFT $(5,539) $(5,258) $(281)LMND (2,805) 43,655 (46,460)IMXI - 318 (318)WEJO (1,795) (3,160) 1,365 REE (4,755) (2,939) (1,816)ML (238) (988) 750 BKSY (78) (914) 836 FOXO (2,137) - (2,137)HLGN (14,754) - (14,754)RBT (1,576) - (1,576)PAYO (511) 189 (700)PWP (418) 366 (784)U.S. Insurance JV 11 142 (131)CREO JV 32 - 32 Stoa USA Inc. / FlipOs 4,196 1,805 2,391 SPAC Fund (43) 474 (517)Other SPAC equity (221) 2,494 (2,715)Total principal transactions (30,631) 36,184 (66,815) - IIFC revenue share 673 634 39 All other income / (loss) 611 506 105 Other income 1,284 1,140 144 Total principal transactions and other income $(29,347) $37,324 $(66,671) Principal Transactions For all investments discussed below, see note 9 to our consolidated financial statements included in this Annual Report on Form 10-K for information about how wedetermine the value of these instruments. For several of the investments described below, we also had an investment in the same company that was accounted for underthe equity method during the periods presented. See discussion of equity method income / (loss) below. SFT was a publicly traded company. In the periods presented, the shares of SFT we held were comprised of both unrestricted and restricted shares and were carried atfair value. For a portion of the period we held these shares, they were held in majority owned consolidated subsidiaries (the "Insurance SPAC Sponsor Entities"). Accordingly, there were significant non-controlling interest and equity compensation expenses associated with these shares. See discussion of non-convertible non-controlling interest and equity compensation expense below. As of December 31, 2022, the total carrying value of our investment in SFT was $231. LMND is a publicly traded company. In the periods presented, the shares of LMND we held were comprised of both unrestricted and restricted shares and were carriedat fair value. For a portion of the period we held these shares, they were held in majority owned consolidated subsidiaries (the "Insurance SPAC II Sponsor Entities"). Accordingly, there were significant non-controlling interest and equity compensation expenses associated with these shares. See discussion of non-convertible non-controlling interest and equity compensation expense below. As of December 31, 2022, the total carrying value of our investment in LMND was $561. IMXI represents equity positions of International Money Express, Inc. (NASDAQ: IMXI), a publicly traded company that resulted from the merger of Intermex Holdings,LLC and FinTech Acquisition Corp. II. These shares were carried at fair value. As of December 31, 2022, we hold no remaining investment in IMXI. WEJO represents equity positions of Wejo Group, Ltd. (NASDAQ: WEJO), a publicly traded company that closed its business combination with Virtuoso AcquisitionCorp. As of December 31, 2022, we had a total investment in WEJO carried at fair value of $175, which was included as a component of other investments, at fair value. REE represents equity positions of REE Automotive Ltd. (NASDAQ: REE), a publicly traded company that closed its business combination with 10X Capital VentureAcquisition Corp. As of December 31, 2022, we had a total investment in REE carried at fair value of $292, which was included as a component of other investments, atfair value. ML represents equity positions of MoneyLion, Inc. (NYSE: ML), a publicly traded company that closed its business combination with Fusion Acquisition Corp. As ofDecember 31, 2022, we had a total investment in ML carried at fair value of $25, which was included as a component of other investments, at fair value. BKSY represents equity positions of BlackSky Technology Inc. (NYSE: BKSY), a publicly traded company that closed its business combination with OspreyTechnologies Acquisition Corp. As of December 31, 2022, we had a total investment in BKSY carried at fair value of $28, which was included as a component of otherinvestments, at fair value. FOXO represents equity positions of FOXO Technologies Inc. (NASDAQ: FOXO), a publicly traded company that closed its business combination with DelwindsInsurance Acquisition Corp. As of December 31, 2022, we had a total investment in FOXO carried at fair value of $222, which was included as a component of otherinvestments, at fair value. 57Table of Contents HLGN represents equity positions of Heliogen, Inc. (NYSE: HLGN), a publicly traded company that closed its business combination with Athena TechnologyAcquisition Corp. As of December 31, 2022, we had a total investment in HLGN carried at fair value of $353, which was included as a component of other investments, atfair value. RBT represents equity positions of Rubicon Technologies, Inc. (NYSE: RBT), a publicly traded company that closed its business combination with Founder SPAC. Asof December 31, 2022, we had a total investment in RBT carried at fair value of $4,424, which was included as a component of other investments, at fair value. PAYO represents equity positions of Payoneer Global, Inc. (NASDAQ: PAYO), a publicly traded company that closed a business combination with FTAC OlympusAcquisition Corp. As of December 31, 2022, we had a total investment in PAYO carried at fair value of $1,633, which was included as a component of other investments,at fair value. PWP represents equity positions of Perella Weinberg Partners (NASDAQ: PWP), a publicly traded company that closed a business combination with FTAC IVAcquisition Corp. As of December 31, 2022, we had a total investment in PWP carried at fair value of $232, which was included as a component of other investments, atfair value. The U.S. Insurance JV invests in insurance company debt. We carry our investment in the U.S. Insurance JV at its reported NAV. As of December 31, 2022, we had atotal investment in the U.S. Insurance JV carried at fair value of $3,459, which was included as a component of other investments, at fair value. The CREO JV invests in commercial real estate debt. We carry our investment in the CREO JV at its reported NAV. As of December 31, 2022, we had a total investmentin the CREO JV carried at fair value of $6,568, which was included as a component of other investments, at fair value. Stoa USA Inc. / FlipOs was a private company in which we owned common equity. We carried our investment at fair value. As of December 31, 2022, we had a totalinvestment in Stoa USA Inc. / FlipOs carried at fair value of $6,693, which was included as a component of other investments, at fair value. See note 31 to ourconsolidated financial statements included in Item 1 of this Annual Report on Form 10-K. The SPAC Fund invested in the equity of SPACs. We carried our investment in the SPAC Fund at its reported NAV. As of December 31, 2022, we had a total investmentin the SPAC Fund carried at fair value of $527, which was included as a component of other investments, at fair value. Other SPAC equity represents equity investments in publicly traded SPACs or their successor public companies carried at fair value. 58Table of Contents Other Income Other income increased by $144 to $1,284 for the year ended December 31, 2022, as compared to $1,140 for the year ended December 31, 2021. The revenue sharearrangement noted in the table above entitles us to a percentage of revenue earned by IIFC. The IIFC revenue share arrangement expires at the earlier of (i) thedissolution of IIFC or (ii) when we have earned a cumulative $20,000 in revenue share payments. As of December 31, 2022, we had earned $4,513. In addition, in anyparticular year, the revenue share earned by us cannot exceed $2,000. Operating Expenses Operating expenses decreased by $34,425, or 32%, to $72,350 for the year ended December 31, 2022, as compared to $106,775 for the year ended December 31, 2021. Asdiscussed in more detail below, the change was comprised of (i) a decrease of $34,758 in compensation and benefits; (ii) an increase of $1,711 in business development,occupancy, and equipment; (iii) a decrease of $2,033 in subscriptions, clearing, and execution; (iv) an increase of $469 in professional fee and other operating; and (v) anincrease of $186 in depreciation and amortization. Compensation and Benefits Compensation and benefits decreased by $34,758, or 41%, to $50,290 for the year ended December 31, 2022, as compared to $85,048 for the year ended December 31,2021. COMPENSATION AND BENEFITS(Dollars in Thousands) For the Year Ended December 31, 2022 2021 Change Cash compensation and benefits $45,900 $69,330 $(23,430)Equity-based compensation 4,390 15,718 (11,328)Total $50,290 $85,048 $(34,758) Cash compensation and benefits in the table above is primarily comprised of salary, incentive compensation, severance, employer portion of payroll taxes, andbenefits. Cash compensation and benefits decreased by $23,430 to $45,900 for the year ended December 31, 2022, as compared to $69,330 for the year ended December31, 2021. Our headcount increased to 121 as of December 31, 2022 from 118 as of December 31, 2021. Cash compensation decreased primarily due to a decrease inincentive compensation related to the decrease in overall revenue and income from equity method affiliates. Equity-based compensation decreased by $11,328 to $4,390 for the year ended December 31, 2022, as compared to $15,718 for the year ended December 31, 2021. Of the$15,718 of equity compensation recognized in 2021, $13,068 was due to equity compensation related to the issuance of membership units of the Insurance SPAC IISponsor Entities to employees of the Company. The expense was recognized upon the completion of the merger between Insurance SPAC II and Metromile, Inc. onFebruary 9, 2021. No further equity-based compensation expense will be recognized related to membership units of the Insurance SPAC II Sponsor Entities in thefuture. The Insurance SPAC III Sponsor Entities issued membership units to employees of the Company. Insurance SPAC III was liquidated in 2022 and therefore these unitsbecame worthless. No equity compensation expense was recognized on these units in 2021 or 2022, and no compensation expense will be recognized in the future. The remaining equity-based compensation expense recognized during 2022 and 2021 relates to restricted grants of the Company's Common Stock and Operating LLCunits. This amount increased by $1,740 to $4,390 for the year ended December 31, 2022, as compared to $2,650 for the year ended December 31, 2021. This increase wasdue to increased share grants during 2022 as compared to 2021. Business Development, Occupancy, and Equipment Business development, occupancy, and equipment increased by $1,711, or 51%, to $5,076 for the year ended December 31, 2022, as compared to $3,365 for the yearended December 31, 2021. This increase was comprised of an increase in business development expense of $752 and an increase in occupancy and equipment of $959. Business development increased due to increased travel in 2022 due to a general reduction in pandemic restrictions. The increase in occupancy and equipment expensewas mainly due to additional rent for our California office. Subscriptions, Clearing, and Execution Subscriptions, clearing, and execution decreased by $2,033, or 20%, to $8,274 for the year ended December 31, 2022, as compared to $10,307 for the year ended December31, 2021. This was comprised of a decrease in clearing and execution costs of $2,342, partially offset by an increase in subscriptions and dues of $309. The increase insubscriptions and dues was due to normal fluctuations in the number of subscriptions. The decrease in clearing and execution was due to decreased trading volumes. 59Table of Contents Professional Fee and Other Operating Expenses Professional fee and other operating expenses increased by $469, or 6%, to $8,153 for the year ended December 31, 2022, as compared to $7,684 for the year endedDecember 31, 2021. This increase was comprised of an increase in professional fees of $673, partially offset by a decrease in other operating expenses of $204. Theincrease in professional fees was mainly attributable to increased consultant usage. The decrease in other operating expenses was mainly the result in a reduction inother (non-income-based) taxes. Depreciation and Amortization Depreciation and amortization increased by $186, or 50%, to $557 for the year ended December 31, 2022, as compared to $371 for the year ended December 31, 2021. Non-Operating Income and Expense Interest Expense, net Interest expense, net decreased by $2,251, or 31%, to $4,982 for the year ended December 31, 2022, as compared to $7,233 for the year ended December 31, 2021. INTEREST EXPENSE(Dollars in Thousands) For the Year Ended December 31, 2022 2021 Change Junior subordinated notes $3,442 $2,601 $841 2020 Senior Notes 458 540 (82)2013 Convertible Notes / 2019 Senior Notes - 211 (211)2017 Convertible Note 327 1,534 (1,207)Byline Bank 247 435 (188)Redeemable Financial Instrument - DGC Trust / CBF - 197 (197)Redeemable Financial Instrument - JKD Capital Partners I LTD 508 1,715 (1,207) $4,982 $7,233 $(2,251) See notes 19 and 20 to our consolidated financial statements included in this Annual Report on Form 10-K. 60Table of Contents Income / (loss) from Equity Method Affiliates Income / (loss) from equity method affiliates decreased by $56,941 to ($20,931) for the year ended December 31, 2022, as compared to $36,010 for the yearended December 31, 2021. See note 12 to our consolidated financial statements included in this Annual Report on Form 10-K. Year Ended December 31, 2022 2021 Change Insurance SPACs $(5,898) $(1,306) $(4,592)SPAC Sponsor Entities (14,963) 37,453 (52,416)Dutch Real Estate Entities (70) (137) 67 $(20,931) $36,010 $(56,941) SPAC Sponsor Entities includes both indirect and direct investments in SPAC Sponsor Entities. Several of these SPAC Sponsor Entities are invested in SPACs that havecompleted their business combinations. Those SPAC Sponsor Entities hold restricted and unrestricted equity interests in the public post-merger entities. We accountfor our investments in SPAC Sponsor Entities under the equity method of accounting. If the SPAC Sponsor Entity distributes SPAC shares to us, we account for thoseSPAC shares as a component of other investments, at fair value. The following table shows the equity method income or loss included in other SPAC Sponsor Entitiesabove broken out by the ultimate public company investee. For several of the investments described below, we also had an investment in the same company accountedfor at fair value as a component of other investments, at fair value during the periods presented. See discussion of principal transactions above. Year Ended December 31, 2022 2021 Change HLGN $(10,625) $28,511 $(39,136)WEJO (2,214) 2,404 (4,618)DRTS 374 (2) 376 REE - 2,528 (2,528)PAYO - 3,088 (3,088)PWP (74) 1,391 (1,465)ACHR (217) 747 (964)FOXO 1,017 (34) 1,051 Other (3,224) (1,180) (2,044) $(14,963) $37,453 $(52,416) As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of HLGN was $0. As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of WEJO was $0. As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of DRTS was $379. As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of REE was $0. As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of PAYO was $0. As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of PWP was $121. As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of ACHR was $0. As of December 31, 2022, our equity method investment in the sponsor entity of the predecessor SPAC of FOXO was $0. The remaining other investments in SPAC Sponsor Entities represent direct and indirect investments in sponsor entities that have not yet completed a businesscombination. See note 12 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-K. Other Non-Operating (Income) / Loss We recorded other non-operating income of $2,127 for the year ended December 31, 2021 as a result of the forgiveness of our PPP loan. See note 20 to our consolidatedfinancial statements included in this Annual Report on Form 10-K. 61Table of Contents Income Tax Expense / (Benefit) We have significant carryforward tax assets. As of December 31, 2022, the Company had a federal net operating loss (“NOL”) of approximately $96,002, which will beavailable to offset future taxable income, subject to limitations described below. If not used, this NOL will begin to expire in 2028. The Company also had net capitallosses (“NCLs”) in excess of capital gains of $70,457 as of December 31, 2022, which can be carried forward to offset future capital gains. If not used, this carryforwardwill begin to expire in 2023. ASC 746 requires that we record a valuation allowance against these assets so that the net asset recognized is, in management's judgment,more likely than not to be realized. The income tax expense / (benefit) was $4,794 for the year ended December 31, 2022, as compared to ($3,541) for the year ended December 31, 2021. See note 23 to ourconsolidated financial statements included in our Annual Report on Form 10-K. The tax expense recognized in 2022 was comprised of a deferred tax expense of $4,579 and current tax expense of $215. The current tax expense incurred was the result offoreign, state, and local income tax. The deferred tax expense was a U.S. federal, state, and local tax benefit, which was the result of the increase in the valuationallowance applied against the Company's NOL and NCL tax assets. The tax benefit recognized in 2021 was comprised of a deferred tax benefit of $4,116, partially offset by current tax expense of $575. The current tax expense incurred wasthe result of foreign, state, and local income tax. The deferred tax benefit was a U.S. federal, state, and local tax benefit, which was the result of the reduction in thevaluation allowance applied against the Company's NOL and NCL tax assets. Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs. Managementthen schedules this income against each carryforward asset and determines what portion of the asset it believes is more likely than not to be realized. Thisdetermination is subjective and subject to many assumptions and factors including: profitability of our business in the future, the timing of that future income ascompared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction in which the income will be generated. To the extentmanagement's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit. We recorded deferred taxbenefit in 2021 because expectations of future income increased and the Company reduced the valuation allowance it had applied against carryforward assets. TheCompany recorded deferred tax expense in 2022 because expectations of future income decreased and the Company increased the valuation allowance it had appliedagainst carryforward assets. Because of magnitude of the Company's carryforward assets as well as the volatility of the Company's operating results, significantadjustments to the valuation allowance are likely going forward. These future adjustments may likewise result in material amounts of deferred tax benefit or expensegoing forward. 62Table of Contents Net Income / (Loss) Attributable to the Non-Convertible Non-Controlling Interest Net income / (loss) attributable to the non-convertible non-controlling interest for the years ended December 31, 2022 and 2021 was comprised of the non-controllinginterest related to member interests in consolidated subsidiaries of the Operating LLC other than interests held by us for the relevant periods. These interests are notconvertible into Common Stock. Year Ended December 31, 2022 2021 Change Insurance SPAC Sponsor Entities $- $3,560 $(3,560)Insurance SPAC II Sponsor Entities - 17,644 (17,644)Insurance SPAC III Sponsor Entities (4,808) (615) (4,193)Other SPAC related (18,395) 14,985 (33,380) $(23,203) $35,574 $(58,777) Insurance SPAC Sponsor Entities, Insurance SPAC II Sponsor Entities, and Insurance SPAC III Sponsor Entities were the sponsor entities formed by us for oursponsored SPACs. Other SPAC related is comprised of our investments in certain SPAC PIPE entities that invest in PIPE's (Private Investment in Public Equity) of postbusiness combination SPACs as well as an entity that we consolidated but do not wholly own that invests in other SPAC sponsor entities. Net Income / (Loss) Attributable to the Convertible Non-Controlling Interest Net income / (loss) attributable to the convertible non-controlling interest for the years ended December 31, 2022 and 2021 was comprised of the non-controlling interestrelated to member interests in the Operating LLC other than interests held by us for the relevant periods. SUMMARY CALCULATION OF CONVERTIBLE NON-CONTROLLING INTERESTFor the Year Ended December 31, 2022 Wholly OwnedSubsidiaries OtherConsolidatedSubsidiaries Total OperatingLLCConsolidated Cohen &Company Inc. Consolidated Net income / (loss) before tax $(20,287) $(33,589) $(53,876) $- $(53,876)Income tax expense / (benefit) (381) 182 (199) 4,993 4,794 Net income / (loss) after tax (19,906) (33,771) (53,677) (4,993) (58,670)Other consolidated subsidiary non-controlling interest - (23,203) (23,203) Net income / (loss) attributable to the Operating LLC (19,906) (10,568) (30,474) Average effective Operating LLC non-controlling interest % (1) 72.45% Operating LLC non-controlling interest $(22,078) Summary Other consolidated subsidiary non-controlling interest $(23,203) Operating LLC non-controlling interest (22,078) $(45,281) SUMMARY CALCULATION OF CONVERTIBLE NON-CONTROLLING INTERESTFor the Year Ended December 31, 2021 Wholly OwnedSubsidiaries OtherConsolidatedSubsidiaries Total OperatingLLCConsolidated Cohen &Company Inc. Consolidated Net income / (loss) before tax $1,529 $68,968 $70,497 $- $70,497 Income tax expense / (benefit) (2,829) (2,829) (712) (3,541)Net income / (loss) after tax 4,358 68,968 73,326 712 74,038 Other consolidated subsidiary non-controlling interest - 35,574 35,574 Net income / (loss) attributable to the Operating LLC 4,358 33,394 37,752 Average effective Operating LLC non-controlling interest % (1) 70.61% Operating LLC non-controlling interest $26,656 Summary Other consolidated subsidiary non-controlling interest $35,574 Operating LLC non-controlling interest 26,656 $62,230 (1)Non-controlling interest is recorded on a quarterly basis. Because earnings are recognized unevenly throughout the year and the non-controlling interestpercentage may change during the period, the average effective non-controlling interest percentage may not equal the percentage at the end of any period or thesimple average of the beginning and ending percentages. 63Table of Contents Liquidity and Capital ResourcesLiquidity is a measurement of our ability to meet potential cash requirements including ongoing commitments to repay debt borrowings, make interest payments onoutstanding borrowings, fund investments, and support other general business purposes. In addition, our United States and European broker-dealer subsidiaries aresubject to certain regulatory requirements to maintain minimum levels of net capital. Historically, our primary sources of funds have been our operating activities andgeneral corporate borrowings. In addition, our trading operations have generally been financed by use of collateralized securities financing arrangements as well asmargin loans. Certain subsidiaries of the Operating LLC have restrictions on the withdrawal of capital and otherwise in making distributions and loans. JVB is subject to net capitalrestrictions imposed by the SEC and FINRA that require certain minimum levels of net capital to remain in this subsidiary. In addition, these restrictions could potentiallyimpose notice requirements or limit our ability to withdraw capital above the required minimum amounts (excess capital) whether through a distribution or a loan.CCFESA is subject to the regulations of the ACPR, which imposes minimum capital requirements. See note 25 to our consolidated financial statements included in thisAnnual Report on Form 10-K. Dividends and Distributions During the third quarter of 2010, our board of directors initiated a dividend of $0.50 per quarter, which was paid regularly through December 31, 2011. Beginning in 2012,our board of directors declared a dividend of $0.20 per quarter, which was paid regularly through the first quarter of 2019. Each time a cash dividend was declared by ourboard of directors, a pro rata distribution was made to the other members of the Operating LLC upon payment of dividends to our stockholders. On July 29, 2021, our board of directors reinstated our quarterly dividend declaring a cash dividend of $0.25 per share. We have paid a quarterly cash dividend of $0.25regularly since that date. In addition to our routine quarterly distribution, on March 8, 2022, our board of directors declared a special cash dividend of $0.75 per share. On March 5, 2024, our board of directors declared a quarterly dividend of $0.25 per share payable on April 5, 2024 to shareholders of record on March 22, 2024. Repurchases of Common Stock During the twelve months ended December 31, 2021, the Company repurchased 49,544 shares of Common Stock in the open market for a total purchase price of $857. The Company did not repurchase any shares of Common Stock in 2022 or 2023. Issuances of Common Stock On June 7, 2021, the Company entered into a letter agreement (the “Equity Distribution Letter Agreement”) with Northland Securities, Inc. (trade name Northland CapitalMarkets), as sales agent (the “Sales Agent”), relating to the issuance and sale from time to time by the Company (the “ATM Program”), through the Sales Agent, ofshares of the Company's Common Stock, having an aggregate offering price of up to $75,000 (collectively the “Shares”). Sales of the Shares, if any, under the EquityDistribution Letter Agreement would be made in sales deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act as agreed with the SalesAgent. In accordance with the applicable rules of the SEC, the Sales Agent agreed to use its best efforts to, commencing on June 5, 2021, sell on the Company’s behalfup to $7,966 of the Shares in the open market pursuant to the terms and conditions of the Equity Distribution Letter Agreement, and the Company agreed not to take anyaction that would cause the sales of the Shares under the Equity Distribution Letter Agreement not to comply with Rule 10b5-1 or Regulation M under the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”). The Equity Distribution Letter Agreement was entered into in connection with the ATM Program andwas designed to comply with Rule 10b5-1 under the Exchange Act. During 2021, we issued 300,859 shares of Common Stock for a total price of $9,076 under the ATMProgram. On October 5, 2023, we entered into an equity distribution agreement (the “2023 Equity Agreement”) with the Sales Agent, relating to the ATM Program, pursuant to whichwe are permitted to sell an aggregate of up to $4,712 in Shares, which represented one-third of the value of the Common Stock held by non-affiliates. As of December 31,2023, no Shares had been sold under the 2023 Equity Agreement. 64Table of Contents During the years ended December 31, 2023, 2022, and 2021, we had the following other significant financing transactions. This excludes non-cash transactions. Seenotes 19 and 20 in our consolidated financial statements included in this Annual Report on Form 10-K. During 2023: oWe drew and repaid $15,000 on a revolving line of credit. oWe paid dividends of $1,750 and distributions to the convertible non-controlling interest of $4,344. oWe paid distributions of $10,041 to the non-convertible non-controlling interest.During 2022: oWe issued a new 2020 Senior Note for $2,250 and used the proceeds to pay off an existing 2020 Senior Note oWe paid dividends of $2,258 and distributions to the convertible non-controlling interest of $6,485 oWe paid distributions of $2,236 to non-convertible non-controlling interest.During 2021: oWe drew and repaid $17,500 on a revolving line of credit. oWe repaid $2,400 of the 2019 Senior Note oWe repaid $4,000 of redeemable financial instruments. oWe paid dividends of $671 and distributions to the convertible non-controlling interest of $1,970 oWe raised $17,095 from investments by non-convertible non-controlling interest. oWe paid distributions of $2,735 to the non-convertible non-controlling interest. Cash Flows We have seven primary uses for capital: (1)To fund the operations of our Capital Markets business segment. Our Capital Markets business segment utilizes capital (i) to fund securities inventory tofacilitate client trading activities; (ii) for risk trading for our own account; (iii) to fund our collateralized securities lending activities; (iv) for temporary capitalneeds associated with underwriting activities; (v) to fund business expansion into existing or new product lines including additional capital dedicated to ourmortgage group as well as our matched book repo business; and (vi) to fund any operating losses incurred.(2)To fund the expansion of our Asset Management business segment. We generally grow our AUM by sponsoring new Investment Vehicles. The creation of anew Investment Vehicle often requires us to invest a certain amount of our own capital to attract outside capital to manage. Also, the new Investment Vehiclesoften require warehouse and other third-party financing to fund the acquisition of investments. Finally, we generally will hire employees to manage newInvestment Vehicles and will operate at a loss for a startup period.(3)To fund investments. We make principal investments (including sponsor and other investments in SPACs) to generate returns. We may need to raise additionaldebt or equity financing in order to ensure we have the capital necessary to take advantage of attractive investment opportunities.(4)To fund mergers or acquisitions. We may opportunistically use capital to acquire other asset managers, individual asset management contracts, or financialservices firms. To the extent our liquidity sources are insufficient to fund our future merger or acquisition activities, we may need to raise additional fundingthrough an equity or debt offering. No assurances can be given that additional financing will be available in the future, or that, if available, such financing willbe on favorable terms.(5)To fund potential dividends and distributions. We sometimes pay dividends. Each time a cash dividend was declared by our board of directors, a pro ratadistribution was made to the other members of the Operating LLC upon payment of dividends to our stockholders. (6)To fund potential repurchases of Common Stock. We have opportunistically repurchased Common Stock in private transactions. See note 21 to ourconsolidated financial statements included in this Annual Report on Form 10-K.(7)To pay off debt as it matures. We have indebtedness that must be repaid as it matures. See note 20 to our consolidated financial statements included in thisAnnual Report on Form 10-K. 65Table of Contents If we are unable to raise sufficient capital on economically favorable terms, we may need to reduce the amount of capital invested for the uses described above, whichmay adversely impact earnings and our ability to pay dividends. As of December 31, 2023 and December 31, 2022, we maintained cash and cash equivalents of $10,650 and $29,101, respectively. We generated cash from or used cashfor the activities described below. SUMMARY CASH FLOW INFORMATION(Dollars in Thousands) Year Ended December 31, 2023 2022 2021 Cash flow from operating activities $(39,660) $(23,488) $18,321 Cash flow from investing activities 38,123 13,798 (22,534)Cash flow from financing activities (17,105) (11,504) 13,161 Effect of exchange rate on cash 191 (272) (377)Net cash flow (18,451) (21,466) 8,571 Cash and cash equivalents, beginning 29,101 50,567 41,996 Cash and cash equivalents, ending $10,650 $29,101 $50,567 See the statements of cash flows in our consolidated financial statements. We believe our available cash and cash equivalents, as well as our investment in our tradingportfolio and related borrowing capacity, will provide sufficient liquidity to meet the cash needs of our ongoing operations in the near term. 2023 Cash Flows As of December 31, 2023, our cash and cash equivalents were $10,650, representing a decrease of $18,451 from December 31, 2022. The decrease was attributable to cashused in operating activities of $39,660, cash provided by investing activities of $38,123, cash used in financing activities of $17,105, and the increase in cash resultingfrom a change in exchange rates of $191. The cash used in operating activities of $39,660 was comprised of (a) net cash outflows of $77,599 related to working capital fluctuations; (b) net cash inflows of $65,282from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, securities sold under agreement to repurchase, receivablesunder resale agreements, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses on theinvestments-trading and trading securities sold, not yet purchased; and (c) net cash outflows from other earnings items of $27,343 (which represents net income or lossadjusted for the following non-cash operating items: deferred taxes, other income / (expense), non-cash advisory revenue, realized and unrealized gains and losses onother investments, at fair value, other investments sold, not yet purchased, income / (loss) from equity method affiliates, equity-based compensation, depreciation, andamortization). The cash provided investing activities of $38,123 was comprised of (a) $75,906 in proceeds from sales of other investments, at fair value; (b) $53,928 in proceeds fromsales of other investments sold, not yet purchased, at fair value; and (c) $2,091 in proceeds from distributions from equity method affiliates; partially offset by (d)$86,021 in cash used to purchase other investments, at fair value; (e) $5,512 in cash used to purchase other investments sold, not yet purchased, at fair value; (f) $1,896of cash used to invest in equity method affiliates; and (g) $373 in purchases of furniture, equipment, and leasehold improvements. The cash used in financing activities of $17,105 was comprised of (a) $15,000 of cash used to repay debt; (b) $175 of cash used to settle equity awards; (c) $1,750 of cashused to pay dividends on Common Stock; (d) $4,344 in cash used for distributions to the convertible non-controlling interest; and (e) $10,041 in cash used fordistributions to the non-convertible non-controlling interests; partially offset by (f) $15,000 in proceeds from the issuance of debt ;(g) $39 in cash proceeds frominvestments in the non-convertible non-controlling interests; and (h) $834 of cash used for the redemption of convertible non-controlling interest units. 66Table of Contents 2022 Cash Flows As of December 31, 2022, our cash and cash equivalents were $29,101, representing a decrease of $21,466 from December 31, 2021. The decrease was attributable to cashused in operating activities of $23,488, cash provided by investing activities of $13,798, cash used in financing activities of $11,504, and the decrease in cash resultingfrom a change in exchange rates of $272. The cash used in operating activities of $23,488 was comprised of (a) net cash outflows of $23,461 related to working capital fluctuations; (b) net cash inflows of$4,365 from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, securities sold under agreement to repurchase,receivables under resale agreements, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses onthe investments-trading and trading securities sold, not yet purchased; and (c) net cash outflows from other earnings items of $4,392 (which represents net income orloss adjusted for the following non-cash operating items: deferred taxes, other income / (expense), non-cash advisory revenue, realized and unrealized gains and losseson other investments, at fair value, other investments sold, not yet purchased, income / (loss) from equity method affiliates, equity-based compensation, depreciation,impairment of goodwill, and amortization). The cash provided investing activities of $13,798 was comprised of (a) $27,091 in proceeds from sales of other investments, at fair value; (b) $3,054 in proceeds fromsales of other investments sold, not yet purchased, at fair value; and (c) $77 in proceeds from distributions from equity method affiliates; partially offset by (d) $7,236 incash used to purchase other investments, at fair value; (e) $6,001 in cash used to purchase other investments sold, not yet purchased, at fair value; (f) $2,614 of cashused to invest in equity method affiliates; and (g) $573 in purchases of furniture, equipment, and leasehold improvements. The cash used in financing activities of $11,504 was comprised of (a) $2,250 of cash used to repay debt; (b) $234 of cash used to settle equity awards; (c) $2,558 of cashused to pay dividends on Common Stock; (d) $6,485 in cash used for distributions to the convertible non-controlling interest; and (e) $2,236 in cash used fordistributions to the non-convertible non-controlling interests; partially offset by (f) $2,250 in proceeds from the issuance of debt and (g) $9 in cash proceeds frominvestments in the non-convertible non-controlling interests. 67Table of Contents 2021 Cash Flows As of December 31, 2021, our cash and cash equivalents were $50,567, representing an increase of $8,571 from December 31, 2020. The increase was attributable to cashprovided by operating activities of $18,321, cash used in investing activities of $22,534, cash provided by financing activities of $13,161, and the decrease in cashresulting from a change in exchange rates of $377. The cash provided by operating activities of $18,321 was comprised of (a) net cash outflows of $19,093 related to working capital fluctuations; (b) net cash inflows of$24,813 from trading activities comprised of our investments-trading, trading securities sold, not yet purchased, securities sold under agreement to repurchase,receivables under resale agreements, and receivables and payables from brokers, dealers, and clearing agencies, as well as the changes in unrealized gains and losses onthe investments-trading and trading securities sold, not yet purchased; and (c) net cash inflows from other earnings items of $12,601 (which represents net income orloss adjusted for the following non-cash operating items: deferred taxes, other income / (expense), realized and unrealized gains and losses on other investments at fairvalue, other investments sold, not yet purchased, income / (loss) from equity method affiliates, equity-based compensation, depreciation, impairment of goodwill, andamortization). The cash used in investing activities of $22,534 was comprised of (a) $123,098 in purchases of other investments at fair value; (b) $59,098 in purchase of otherinvestments sold, not yet purchased; (c) $8,392 in investments in equity method affiliates; (d) $1,028 in purchase of furniture, equipment, and leasehold improvements;partially offset by (e) $112,013 in sales and returns of principal of other investments, at fair value; (f) $56,820 in sales and returns of principal of other investments sold,not yet purchased; and (g) $249 in distributions from equity method affiliates. The cash provided by financing activities of $13,161 was comprised of (a) $17,500 in proceeds from draws on a revolving credit facility; (b) $9,076 in proceeds from saleof Common Stock; (c) $17,095 in proceeds from non-controlling interest investments; partially offset by (d) $17,500 in repayments on a revolving credit facility; (e) $2,400of repayment of debt; (f) $378 in cash used to net settle equity awards; (g) $857 of cash used to repurchase and retire Common Stock; (h) $2,734 in non-controllinginterest distributions; (i) $1,970 in Operating LLC non-controlling interest distributions; (j) $4,000 in repayment of redeemable financial instrument; and (k) $671 in cashused for dividend payments on Common Stock. 68Table of Contents Regulatory Capital Requirements We have two subsidiaries that are licensed securities dealers: JVB in the U.S. and CCFESA in France. As a U.S. broker-dealer, JVB is subject to the Uniform Net CapitalRule in Rule 15c3-1 under the Exchange Act. CCFESA is subject to the regulations of the ACPR. The amount of net assets that these subsidiaries may distribute issubject to restrictions under these applicable net capital rules. These subsidiaries have historically operated in excess of minimum net capital requirements. Our minimumcapital requirements at December 31, 2023 were as follows. MINIMUM NET CAPITAL REQUIREMENTS(Dollars in Thousands) U.S. $250 France 685 Total $935 We operate with more than the minimum regulatory capital requirement in our licensed broker-dealers and at December 31, 2023 total net capital, or the equivalent asdefined by the relevant statutory regulations, in our licensed broker-dealers was $51,639. See note 25 to our consolidated financial statements included in this AnnualReport on Form 10-K. In addition, our licensed broker-dealers are generally subject to capital withdrawal notification requirements and restrictions. Restrictions of Distributions of Capital from JVB As of December 31, 2023, our total equity on a consolidated basis was $91,797. However, the total equity of JVB was $91,451. Therefore, only $346 of equity existsoutside of JVB. During certain periods of time, we have generated losses or negative cash flow outside of JVB. We are dependent on taking distributions of income(and potentially returns of capital) from JVB to satisfy the cash needs outside of JVB, such as to cover losses incurred outside of JVB, to satisfy other obligationsthat come due outside of JVB, and to make investments outside of JVB. However, we are subject to significant limitations on our ability to make distributions fromJVB. These limitations include limitations imposed by FINRA under rule 15c3-1 (described immediately above) and limitations under our line of credit with BylineBank (see note 20 to our consolidated financial statements included in this Annual Report on Form 10-K). Furthermore, counterparties to JVB have their own internalcounterparty credit requirements. The specific requirements are not generally shared with us. However, if we take too much in capital distributions from JVB (beyondits net income), we may not be able to trade with certain counterparties, which may cause JVB’s operations to deteriorate. Securities Financing We maintain repurchase agreements with various third-party financial institutions. There is no maximum limit as to the amount of securities that may be transferredpursuant to these agreements, and transactions are approved on a case-by-case basis. The repurchase agreements do not include substantive provisions other thanthose covenants and other customary provisions contained in standard master repurchase agreements. The repurchase agreements generally require us to transferadditional securities to the counterparty in the event the value of the securities then held by the counterparty in the margin account falls below specified levels andcontain events of default were we to breach our obligations under the agreement. We receive margin calls from our repurchase agreement counterparties from time totime in the ordinary course of business. To date, we have maintained sufficient liquidity to meet margin calls, and we have never been unable to satisfy a margin call,however, no assurance can be given that we will be able to satisfy requests from our counterparties to post additional collateral in the future. See note 11 to ourconsolidated financial statements included in this Annual Report on Form 10-K. If there were an event of default under a repurchase agreement, the counterparty would have the option to terminate all repurchase transactions existing with us andmake any amount due from us to the counterparty payable immediately. Repurchase obligations are full recourse obligations to us. If we were to default under arepurchase obligation, the counterparty would have recourse to our other assets if the collateral was not sufficient to satisfy our obligations in full. Most of ourrepurchase agreements are entered into as part of our gestation repo business. Our clearing brokers provide securities financing arrangements including margin arrangements and securities borrowing and lending arrangements. These arrangementsgenerally require us to transfer additional securities or cash to the clearing broker in the event the value of the securities then held by the clearing broker in the marginaccount falls below specified levels and contain events of default were we to breach our obligations under such agreements. An event of default under the clearing agreement would give the counterparty the option to terminate the clearing arrangement. Any amounts owed to the clearingbroker would be immediately due and payable. These obligations are recourse to us. Furthermore, a termination of any of our clearing arrangements would result in asignificant disruption to our business and would have a significant negative impact on our dealings and relationship with our customers. 69Table of Contents The following table presents our period end balance, average monthly balance, and maximum balance at any month end for receivables under resale agreements andsecurities sold under agreements to repurchase. For the TwelveMonths EndedDecember 31, 2023 For the TwelveMonths EndedDecember 31, 2022 Receivables under resale agreements Period end $408,408 $437,692 Monthly average $430,672 $1,628,141 Maximum month end $564,527 $3,006,658 Securities sold under agreements to repurchase Period end $408,203 $452,797 Monthly average $438,576 $1,649,310 Maximum month end $563,542 $3,002,514 Fluctuations in the balance of our repurchase agreements from period-to-period and intra-period are dependent on business activity in those periods. The fluctuationsin the balances of our receivables under resale agreements over the periods presented were impacted by our clients’ desires to execute collateralized financingarrangements through the repurchase market or other financing products. Average balances and period end balances will fluctuate based on market and liquidity conditions and we consider such intra-period fluctuations as typical for therepurchase market. Month-end balances may be higher or lower than average period balances. Debt Financing The following table summarizes our long-term indebtedness and other financing outstanding. See note 20 to our consolidated financial statements in our Annual Reporton Form 10-K for more information. DETAIL OF DEBT(Dollars in Thousands) Description December 31, 2023 December 31, 2022 Interest RateTerms Interest (2) MaturityNon-convertible debt: 10.00% senior note (the "2020 Senior Notes") $4,500 $4,500 Fixed 10.00%January 2026 Junior subordinated notes (1): Alesco Capital Trust I 28,125 28,125 Variable 9.65%July 2037Sunset Financial Statutory Trust I 20,000 20,000 Variable 9.74%March 2035Less unamortized discount (22,909) (23,601) 25,216 24,524 Byline Bank - - Variable N/A June 2024Total $29,716 $29,024 70Table of Contents (1)The junior subordinated notes represent debt the Company owes to the two trusts noted above. The total par amount owed by the Company to the trusts is$49,614. However, the Company owns the common stock of the trusts in a total par amount of $1,489. The Company pays interest (and at maturity, principal) tothe trusts on the entire $49,614 junior notes outstanding. However, the Company receives back from the trusts the pro rata share of interest and principal on thecommon stock held by the Company. These trusts are variable interest entities (“VIEs”) and the Company does not consolidate them even though theCompany holds the common stock. The Company carries the common stock on its balance sheet at a value of $0. The junior subordinated notes are recordedat a discount to par. When factoring in the discount, the yield to maturity of the junior subordinated notes as of December 31, 2023 on a combined basis was21.66% assuming the variable rate in effect on the last day of the reporting period remains in effect until maturity. (2)Represents the interest rate in effect as of the last day of the reporting period. Redeemable Financial Instruments As of December 31, 2023, we have the following sources of financing, which we account for as redeemable financial instruments. See note 19 to our consolidatedfinancial statements included in this Annual Report on Form 10-K. REDEEMABLE FINANCIAL INSTRUMENTS(Dollars in thousands) December 31, 2023 December 31, 2022 JKD Investor $7,868 $7,868 $7,868 $7,868 Off-Balance Sheet Arrangements Other than as described in note 10 (derivative financial instruments) and note 18 (variable interest entities) to our consolidated financial statements included in thisAnnual Report on Form 10-K, there were no material off balance sheet arrangements as of December 31, 2023. 71Table of Contents Contractual Obligations The table below summarizes our significant contractual obligations as of December 31, 2023 and the future periods in which such obligations are expected to be settledin cash. Our junior subordinated notes are assumed to be repaid on their respective maturity dates. Excluded from the table are obligations that are short-term in nature,including trading liabilities and repurchase agreements. In addition, amortization of discount on debt is excluded. CONTRACTUAL OBLIGATIONSDecember 31, 2023(Dollars in Thousands) Payment Due by Period Total Less than 1 Year 1 - 3 Years 3 - 5 Years More than 5Years Operating lease arrangements $18,314 $2,562 $4,990 $4,723 $6,039 Maturity of 2020 Senior Notes 4,500 - 4,500 - - Interest on 2020 Senior Notes 1,120 534 586 - - Maturities on junior subordinated notes 48,125 - - - 48,125 Interest on junior subordinated notes (1) 58,757 4,176 9,326 9,326 35,929 Redeemable Financial Instrument - JKD Investor (2) 7,868 7,868 - - - Other Operating Obligations (3) 1,870 1,225 645 - - $140,554 $16,365 $20,047 $14,049 $90,093 (1)The interest on the junior subordinated notes related to Alesco Capital Trust I is variable. The interest rate of 9.65% (based on a 90-day SOFR rate in effect asof December 31, 2023 plus 4.26%) was used to compute the contractual interest payment in each period noted. The interest on the junior subordinated notesrelated to Sunset Financial Statutory Trust I is variable. The interest rate of 9.74% (based on a 90-day SOFR rate in effect as of December 31, 2023 plus 4.41%)was used to compute the contractual interest payment in each period noted. (2)Represents redemption value of the redeemable financial instruments as of the reporting period. The redeemable financial instruments do not have a fixedmaturity date. The period shown above represents the first period the holder of these instruments has the ability to require redemption by us. (3)Represents material operating contracts for various services. We believe that we will be able to continue to fund our current operations and meet our contractual obligations through a combination of existing cash resources andother sources of credit. Due to the uncertainties that exist in the economy, we cannot be certain that we will be able to replace existing financing or find sources ofadditional financing in the future. Critical Accounting Policies and Estimates Our accounting policies are essential to understanding and interpreting the financial results in our consolidated financial statements. Our industry is subject to a numberof highly complex accounting rules and requirements, many of which place heavy burdens on management to make judgments relating to our business. We encouragereaders of this Form 10-K to read all of our critical accounting policies, which are included in note 3 to our consolidated financial statements included herein for a fullunderstanding of these issues and how the financial statements are impacted by these judgments. Certain of these policies are considered to be particularly important tothe presentation of our financial results because they require us to make assumptions and estimates about future events and apply judgments that affect the reportedamounts of assets, liabilities, revenues, expenses, and the related disclosures. We base our assumptions, estimates, and judgments on historical experience, currenttrends, and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, managementreviews the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP.However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and suchdifferences could be material. 72Table of Contents We consider the accounting policies discussed below to be the policies that are the most impactful to our financial statements and also subject to significantmanagement judgment. Valuation of Financial Instruments How fair value determinations impact our financial statements All of the securities we own that are classified as investments-trading, securities sold, not yet purchased, other investments, at fair value, or other investments sold, notyet purchased are recorded at fair value with changes in fair value (both unrealized and realized) recorded in earnings. Unrealized and realized gains and losses on securities classified as investments-trading and securities sold, not yet purchased in the consolidated balance sheets arerecorded as a component of net trading revenue in the consolidated statements of operations. Unrealized and realized gains and losses on securities classified as otherinvestments, at fair value, and other investments sold, not yet purchased in the consolidated balance sheets are recorded as a component of principal transactions andother income in the consolidated statements of operations. How we determine fair value for securities We account for our investment securities at fair value under various accounting literature, including Financial Accounting Standards Board (“FASB”) AccountingStandards Codification (“ASC”) 320, Investments — Debt and Equity Securities (“ASC 320”), pertaining to investments in debt and equity securities and the fair valueoption of financial instruments in ASC 825, Financial Instruments (“ASC 825”). We also account for certain assets at fair value under applicable industry guidance suchas: (a) FASB ASC 946, Financial Services-Investment Companies (“ASC 946”) and (b) FASB ASC 940-320, Proprietary Trading Securities (“ASC 940-320"). The determination of fair value is based on quoted market prices of an active exchange, independent broker market quotations, market price quotations from third-partypricing services, or, when independent broker quotations or market price quotations from third-party pricing services are unavailable, valuation models prepared bymanagement. These models include estimates and the valuations derived from them could differ materially from amounts realizable in an open market exchange. We adopted the fair value measurement provisions in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), applicable to financial assets and financialliabilities effective January 1, 2008. ASC 820 defines fair value as the price that would be received to sell the asset or paid to transfer the liability between marketparticipants at the measurement date (“exit price”). An exit price valuation will include margins for risk even if they are not observable. In accordance with ASC 820, wecategorize our financial instruments, based on the priority of the inputs to the valuation technique, into a three-level valuation hierarchy. The hierarchy gives the highestpriority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3measurements). The three levels of the hierarchy under ASC 820 are described below. Level 1Financial assets and liabilities with values that are based on unadjusted quoted prices in active markets that are accessible at the measurement date foridentical, unrestricted assets or liabilities. Level 2Financial assets and liabilities with values that are based on one or more of the following: (a) quoted prices for similar assets or liabilities in active markets; (b)quoted prices for identical or similar assets or liabilities in non-active markets; (c) pricing models with inputs that are derived, other than quoted prices, and areobservable for substantially the full term of the asset or liability; or (d) pricing models with inputs that are derived principally from or corroborated byobservable market data through correlation or other means for substantially the full term of the asset or liability. Level 3Financial assets and liabilities with values that are based on prices or valuation techniques that require inputs that are both significant to the fair valuemeasurement and unobservable. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing theasset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the valuation hierarchy. In such cases, the level of the valuation hierarchy withinwhich the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset orliability. 73Table of Contents Financial instruments carried at contract amounts with short-term maturities (one year or less) are repriced frequently or bear market interest rates. Accordingly, thosecontracts are carried at amounts approximating fair value. Financial instruments carried at contract amounts on our consolidated balance sheets include receivables fromand payables to brokers, securities purchased under agreements to resell (“reverse repurchase agreements” or “receivables under resale agreements”), and sales ofsecurities under agreements to repurchase (“repurchase agreements”). How we determine fair value for investments in investment funds and similar vehicles A portion of our other investments, at fair value represents investments in investment funds and other non-publicly traded entities that have the attributes ofinvestment companies as described in ASC 946-15-2. We estimate the fair value of these entities using the reported net asset value per share as of the reporting date inaccordance with the “practical expedient” provisions related to investments in certain entities that calculated net asset value per share (or its equivalent) included inASC 820. Derivative Financial Instruments We do not utilize hedge accounting for our derivatives. Accordingly, all derivatives are carried at fair value with unrealized and realized gains recognized in earnings. If the derivative is expected to be managed by employees of our Capital Markets business segment or is a hedge for an investment classified as investments-trading, thederivative will be carried as a component of investments-trading if it is an asset or securities sold, not yet purchased if it is a liability. If the derivative is a hedge for aninvestment carried as a component of other investments, at fair value, the derivative will be recorded in other investments, at fair value if it is an asset or otherinvestments sold, not yet purchased if it is a liability. We may, from time to time, enter into derivatives as investments or to manage our risk exposures arising from (i) fluctuations in foreign currency rates with respect to ourinvestments in foreign currency denominated investments; (ii) our investments in interest sensitive investments; (iii) our investments in various equity instruments; and(iv) our facilitation of mortgage-backed trading. Derivatives entered into by us, from time to time, may include (i) foreign currency forward contracts; (ii) purchase andsale agreements of TBAs and other forward agency MBS contracts; (iii) other extended settlement trades; (iv) equity options such as calls and puts; and (v) SFAs. In addition to the derivatives noted above, we may from time to time enter into other securities or loan trades that do not settle within the normal securities settlementperiod. In those cases, the purchase or sale of the security or loan is not recorded until the settlement date. However, from the trade date until the settlement date, ourinterest in the security is accounted for as a derivative as either a forward purchase commitment or a forward sale commitment. Derivatives involve varying degrees of off-balance sheet risk, whereby changes in the level or volatility of interest rates or market values of the underlying financialinstruments may result in changes in the value of a particular financial instrument in excess of its carrying amount. Depending on our investment strategy, realized andunrealized gains and losses are recognized in principal transactions and other income or in net trading in our consolidated statements of operations on a trade datebasis. Accounting for Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future taxconsequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on thedifferences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected toreverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all availablepositive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financialoperations. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, wewould make an adjustment to the valuation allowance, which would reduce the provision for income taxes. Our policy is to record penalties and interest as a component of provision for income taxes in our consolidated statements of operations. 74Table of Contents Our voting-controlled subsidiary, the Operating LLC, is treated as a pass-through entity for U.S. federal income tax purposes and in most of the states in which we dobusiness. The Operating LLC is subject to entity level taxes in certain state and foreign jurisdictions. However, as a result of the AFN Merger, we acquired significantdeferred tax assets and liabilities and now have significant tax attributes. Effective as of January 1, 2010, we began to be treated as a C corporation for U.S. federal andstate income tax purposes. As shown in note 23 to the consolidated financial statements contained herein, we currently have significant recognized as well as unrecognized deferred tax assets.Deferred tax assets should only be recognized to the extent that we determine we can benefit in the future from the asset. Generally, this determination is based on ourestimates of our ability to generate future taxable income. This determination is complex and subject to judgment. The determination is ongoing and subject to change.If we were to change this determination in the future, a significant deferred tax benefit or deferred tax expense would be recognized as a component of earnings. Revenue Recognition Net trading Net trading includes: (i) all gains, losses, interest income, dividend income, and interest expense from securities classified as investments-trading and trading securitiessold, not yet purchased; (ii) interest income and expense from collateralized securities transactions; and (iii) commissions and riskless trading profits. Net trading isreduced by margin interest, which is recorded on an accrual basis. We refer to investments included as a component of investments - trading and trading securitiessold, not yet purchased as trading assets. Riskless trades are transacted through our proprietary account with a customer order in hand, resulting in little or no market risk to us. Transactions that settle in theregular way are recognized on a trade date basis. Extended settlement transactions are recognized on a settlement date basis (although in cases of extended settlementtrades, the unsettled trade is accounted for as a derivative between trade and settlement date). See notes 3 and 10 to our consolidated financial statements included inthis Annual Report on Form 10-K. The investments classified as trading are carried at fair value. The determination of fair value is based on quoted market prices of anactive exchange, independent broker market quotations, market price quotations from third-party pricing services or, when independent broker quotations or marketprice quotations from third-party pricing services are unavailable, valuation models prepared by our management. The models include estimates, and the valuationsderived from them could differ materially from amounts realizable in an open market exchange. See note 9 to our consolidated financial statements included in thisAnnual Report on Form 10-K. Asset management Asset management revenue consists of management fees earned from Investment Vehicles. In the case of CDOs, the fees earned by us generally consist of senior,subordinated, and incentive fees. The senior asset management fee is generally senior to all the securities in the CDO capital structure and is recognized on a monthly basis as services are performed.The senior asset management fee is generally paid on a quarterly basis. The subordinated asset management fee is an additional payment for the same services but has a lower priority in the CDO cash flows. If the CDO experiences a certainlevel of asset defaults and deferrals, these fees may not be paid. There is no recovery by the CDO of previously paid subordinated asset management fees. It is ourpolicy to recognize these fees on a monthly basis as services are performed. The subordinated asset management fee is generally paid on a quarterly basis. However, ifwe determine that the subordinated asset management fee will not be paid (which generally occurs on the quarterly payment date), we will stop recognizing additionalsubordinated asset management fees on that particular CDO and will reverse any subordinated asset management fees that are accrued and unpaid. We will beginaccruing the subordinated asset management fee again if payment resumes and, in management’s estimate, continued payment is reasonably assured. If payment wereto resume but we were unsure of continued payment, we would recognize the subordinated asset management fee as payments were received and would not accruesuch fees on a monthly basis. The incentive management fee is an additional payment, made typically after five to seven years of the life of a CDO, which is based on the clearance of an accumulatedcash return on investment (“Hurdle Return”) received by the most junior CDO securities holders. It is an incentive for us to perform in our role as asset manager byminimizing defaults and maximizing recoveries. The incentive management fee is not ultimately determined or payable until the achievement of the Hurdle Return by themost junior CDO securities holders. We recognize incentive fee revenue when it is probable and there is not a significant chance of reversal in the future. In the case of Investment Vehicles other than CDOs, generally we earn a base fee and, in some cases, also earns an incentive fee. Base fees will generally be recognizedmonthly as services are performed and will be paid monthly or quarterly. The contractual terms of each arrangement will determine our revenue recognition policy forincentive fees in each case. However, in all cases, we recognize the incentive fees when they are probable and there is not a significant chance of reversal in the future. 75Table of Contents New issue and advisory New issue and advisory revenue includes: (i) new issue revenue associated with origination fees for newly created financial instruments originated by us; (ii) revenuefrom advisory services; and (iii) new issue revenue associated with arranging the issuance of and placing newly created financial instruments. New issue and advisoryrevenue is recognized when the Company’s performance obligations have been satisfied and collectability is reasonably assured. Principal transactions and other income Principal transactions include all gains, losses, and income (interest and dividend) from financial instruments classified as other investments, at fair value and otherinvestments sold, not yet purchased in the consolidated balance sheets. We refer to investments included as a component of other investments, at fair value and otherinvestments sold, not yet purchased as our principal investing assets. The investments classified as other investments, at fair value and other investments sold, not yet purchased are carried at fair value. The determination of fair value isbased on quoted market prices of an active exchange, independent broker market quotations, market price quotations or models from third-party pricing services, or,when independent broker quotations or market price quotations or models from third-party pricing services are unavailable, valuation models prepared by management.These models include estimates, and the valuations derived from them could differ materially from amounts realizable in an open market exchange. Dividend income isrecognized on the ex-dividend date. Other income / (loss) includes foreign currency gains and losses, interest earned on cash and cash equivalents, interest earned and losses incurred on notes receivable,and other miscellaneous income including revenue from revenue sharing arrangements. Variable Interest Entities FASB ASC 810, Consolidation (“ASC 810”) contains the guidance surrounding the definition of VIEs, the definition of variable interests, and the consolidation rulessurrounding VIEs. In general, VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at riskfor the entity to finance its activities without additional subordinated financial support. As a general matter, a reporting entity must consolidate a VIE when it is deemedto be the primary beneficiary. The primary beneficiary is the entity that has both (a) the power to direct the matters that most significantly impact the VIE’s financialperformance and (b) a significant variable interest in the VIE. We can potentially become involved with a VIE in three main ways: Our Principal Investing Portfolio For each investment made within the principal investing portfolio, we assess whether the investee is a VIE and if we are the primary beneficiary. If we determine theentity is a VIE and we are the primary beneficiary, we will consolidate it. Our Asset Management Activities For each investment management contract we enter into, we will assess whether the entity being managed is a VIE and if we are the primary beneficiary. If we determinethe entity is a VIE and we are the primary beneficiary, we will consolidate it. Our Trading Portfolio From time to time, we may have an interest in a VIE through the investments we make as part of our trading activities. Because of the high volume of trading activity inwhich we engage, we do not perform a formal assessment of each individual investment within our trading portfolio to determine if the investee is a VIE and if we are theprimary beneficiary. Even if we were to obtain a variable interest in a VIE through our trading portfolio, we would not be deemed to be the primary beneficiary for twomain reasons: (a) we do not usually obtain the power to direct activities that most significantly impact any investee’s financial performance and (b) a scope exceptionexists within the consolidation guidance for cases where the reporting entity is a broker-dealer and any control (either as the primary beneficiary of a VIE or through acontrolling interest in a voting interest entity) was deemed to be temporary. In the unlikely case that we obtained the power to direct activities and obtained a significantvariable interest in an investee in our trading portfolio that was a VIE, any such control would be deemed to be temporary due to the rapid turnover within the tradingportfolio. Stock Compensation We account for stock compensation according to FASB ASC 718, Stock Compensation (“ASC 718”). In the periods presented herein, we had three different types ofgrants that fall under ASC 718. First, we sometimes grant restricted common stock in Cohen & Company Inc. to employees and directors. These grants vest over a period of time and only have servicebased vesting criteria. In these cases, we determine the fair value of the grants by taking the closing stock price of Cohen & Company Inc. on the grant date andmultiplying it by the number of restricted shares granted. We recognize the expense over the service period on a straight-line basis. We assume no forfeitures up frontand record forfeitures as they occur by reducing expense. The recipient is entitled to dividends that are declared and paid during the vesting period but they are paidonly if (and to the extent) the restricted share grant ultimately vests. Second, we sometimes grant operating units of the Operating LLC to employees. These grants also vest over a period of time and only have service based vestingcriteria. Because there is a fixed exchange ratio between units of the Operating LLC and shares of Cohen & Company Inc., the fair value of the grant is calculated bytaking the closing stock price of Cohen & Company Inc. on the grant date, adjusting for the exchange ratio, and then multiplying by the number of units of theOperating LLC granted. We recognize the expense over the service period on a straight-line basis. We assume no forfeitures up front and record forfeitures as theyoccur by reducing expense. The recipient is entitled to distributions that are declared and paid during the vesting period but they are paid only if (and to the extent) theunit grant ultimately vests. 76Table of Contents Third, employees sometimes invest in the membership interests of consolidated SPAC sponsor entities (the Insurance SPAC Sponsor Entities, the Insurance SPACII Sponsor Entities, and the Insurance SPAC III Sponsor Entities). Because these entities are consolidated and the employees are investing in the consolidatedcompany's non-controlling interest, these equity interests fall under ASC 718. Generally, the employee invests a de minimis amount and receives an allocation of thefounder shares held by the sponsor entity. The investment does not have any explicit vesting criteria associated with it. Generally, the employee's investment will beworthless if the SPAC is liquidated and it will become worth something if the SPAC completes its business combination. Therefore, we treat these grants as having aperformance condition (i.e. the completion of the SPAC business combination). Further, at the time of the investments, we treat this performance condition as beingnon-probable. The effect of this is that we record no expense related to these investments until (and only if) the business combination is completed. Upon completionof the business combination, we record compensation expense in an amount equal to the fair value of the grant. The fair value of the grant is equal to the public tradingprice of the SPAC on the date of the grant adjusted for certain sale restrictions imposed on the shares the employee receives (generally, they are restricted for sale forsome time period and subject to certain hurdle prices before they become freely tradeable). We use a Monte Carlo simulation model to determine the appropriatediscount to place on shares that are subject to hurdle prices. The compensation amount is recorded with an offsetting credit to non-controlling interest. From that pointforward, the shares received by the employee are treated as part of the non-controlling interest and allocated income, expense, gains, and losses accordingly until theapplicable sponsor entity is liquidated or otherwise de-consolidated. Investments in Special Purpose Acquisition Companies ("SPACs") Sponsor Entities We invest in the sponsor entities of SPACs. The sponsor entities are limited liability companies (each an "LLC") that pool their members' interests and invest in theprivate placement and founder shares (together, sponsor shares) of a SPAC. The SPAC will also raise funds in a public offering and seek to complete a businesscombination within an agreed upon time frame. The SPAC will use the proceeds raised from the sponsor shares to pay transaction and operating expenses during theperiod it is seeking a business combination. The proceeds of the public offering are placed in an interest bearing trust and can only be used to complete the businesscombination and pay taxes on the interest earned. Generally, the public investors must approve any business combination prior to its effectiveness. If a businesscombination is not completed within the agreed upon time frame, the SPAC will liquidate and return the public investors' investment to them. If there are fundsremaining after liquidation, the sponsor entities may receive some portion of their investment back, but it is likely they will suffer a total loss of their investment. If thebusiness combination is completed, the sponsor entities' private placement in the SPAC will entitle them to a combination of unrestricted common, restricted common,and (in some cases) warrants of the post-business combination SPAC (which is a publicly traded company). The following summarizes our accounting policies relatedto our investments in these entities: •The sponsor entities are LLCs that give all important decision making rights to their respective managing member. Furthermore, the other members of the LLC cannotreplace the managing member. Accordingly, we concluded that the sponsor entities are VIEs and the managing member has the power to direct its most importanteconomic activities. In all cases where we are the managing member of a sponsor entity, we also have had a significant economic interest in such sponsor entity andtherefore consolidate such sponsor entity. •In all cases where we consolidated a sponsor entity, we determined that the sponsor entity's private placement investment in the SPAC that it sponsors should betreated as an equity method investment during the SPAC's pre-business combination period. Furthermore, due to the difficulty of determining the fair value of suchan investment in the SPAC's pre-business combination period, we have chosen to not elect the fair value option.•If a SPAC completes its business combination, the sponsor entity's investment in the SPAC will be converted to a combination of unrestricted and restricted sharesin the post-business combination SPAC. At this point (assuming we consolidate the sponsor entity), we will account for the shares received at fair value. We willreclassify any remaining equity method investment balance to other investments, at fair value and record principal transactions income for the difference. We willrecord non-controlling interest expense for the SPAC shares that are distributable to the non-controlling interest holders of the sponsor entity. The fair value of theunrestricted shares received is equal to the public trading price of the SPAC on the date of the business combination. The fair value of the restricted shares receivedis adjusted downwards from the public trading price for certain sale restrictions imposed (generally, they are restricted for sale for some time period and subject tocertain hurdle prices before they become freely tradeable). We use a Monte Carlo simulation model to determine the appropriate discount to place on shares that aresubject to hurdle prices. In the case of a SPAC business combination where we consolidate the sponsor entity, generally there is also an equity-based compensationentry to be recorded at the date of the business combination. See equity-based compensation section above. We will continue to mark the sponsor entity'sinvestment in the SPAC to market and record principal transactions income or loss and offsetting non-controlling interest income or expense until the sponsor entityitself distributes all of the SPAC shares it owns to its members and liquidates. At that point, we will hold the SPAC shares directly (rather than through aconsolidated subsidiary) and will record principal transaction income and loss until the SPAC shares themselves are liquidated. •We will also invest in sponsor entities that we do not consolidate because we are not the managing member of such sponsor entity or otherwise do not have thepower to direct the sponsor entity's most important activities. In these cases, we treat our investment in the sponsor entity as an equity methodinvestment. Furthermore, due to the difficulty of determining the fair value of such an investment in the applicable SPAC's pre-business combination period, we havechosen to not elect the fair value option.•If a SPAC completes a business combination and we have an equity method investment in the associated sponsor entity, the sponsor entity will record income equalto the difference between the fair value of the restricted and unrestricted shares it will receive and the carrying value of its equity method investment in the SPAC. We will recognize our share of this gain as income from equity method affiliates. The sponsor entity will continue to mark its investment in the SPAC to market afterthe business combination and we will recognize our share of the change in fair value as income or loss from equity method affiliates. Once the sponsor entitydistributes our allocable share of the SPAC shares it owns, we will reclassify our investment from investment in equity method affiliate to other investments, at fairvalue as we will then hold the SPAC shares directly (rather than through an equity method investee). We will then record principal transactions income and loss untilthe SPAC shares themselves are liquidated.•If a SPAC liquidates and we have an investment in it (either directly in the case of consolidated sponsor entities or indirectly in the case of equity method sponsorentities), we will write-off our remaining equity method balance and record a loss on the equity method investment. In the case of consolidated sponsor entities, wewill also record an offsetting entry to non-controlling interest. 77Table of Contents Share Forward Arrangements We have also engaged in several transactions known as “share forward arrangements” (“SFAs”). In a typical SFA transaction, we acquire an interest in a publicly tradedcompany (referred to as the “SFA Counterparty”) through open market purchases, direct acquisitions from the SFA Counterparty, or a combination thereof. Theseinterests can take the form of unrestricted common shares, restricted common shares, equity derivatives, or fair value receivables. Upon acquiring these interests, weenter into an SFA derivative arrangement with the SFA Counterparty. In cases where we acquire our interests in the SFA Counterparty through open market purchases,the SFA generally requires an up-front payment to us from the SFA Counterparty. The amount of this up-front payment equals the cost we paid for our interests in theSFA Counterparty, less a shortfall amount in certain cases. To fund the shortfall portion of the initial investment, we will utilize available cash on hand or availablefinancing. The SFA stipulates that we must make a payment to the SFA Counterparty on a certain maturity date. Depending on the terms of the SFA, this payment maybe made in cash, by returning the interests we acquire in the SFA Counterparty, or through a combination of both. In some cases, the SFA requires the payment to bemade exclusively in cash. Importantly, the SFA does not obligate us to hold the interests which we acquired in the SFA Counterparty. Following the execution of theSFA, we are free to sell the interests we acquired in the SFA Counterparty (assuming the interests themselves are not restricted from transfer). Additionally, SFAsgenerally include a feature whereby if we hold the interests we acquired in the SFA Counterparty until maturity or another agreed-upon date, we become eligible toreceive an additional payment from the SFA Counterparty, either in cash or in additional interests in the SFA Counterparty. Such a payment is known as the “MaturityConsideration.” Furthermore, SFAs usually include a provision allowing us to terminate the SFA, either in whole or in part, before its maturity by making an agreed-uponpayment based on an amount defined in the SFA (the “Reset Price”). The Reset Price may either remain fixed throughout the term of the SFA, or fluctuate based oncertain calculations within the SFA. SFAs also impose various obligations on the SFA Counterparty, which may include registering a predetermined number of theinterests in the SFA Counterparty (subject to the SFA) with the SEC, maintaining the listing of the SFA Counterparty securities on a national exchange, and/or that theclosing price of the SFA Counterparty’s shares on the public exchange does not fall below a predetermined price for a specific period of time. If any of these SFACounterparty obligations are breached or not satisfied, we may have the right to terminate the SFA and accelerate the payment of the Maturity Consideration upontermination. The SFAs provide the right of set off in the case of Maturity Consideration, thereby allowing us to keep the interests we hold in the SFA Counterparty andoffset the Maturity Consideration we are owed following termination of the applicable SFA.We account for SFA transactions as follows: ●The interests in public companies that it owns are carried at fair value. Refer to note 9 for further details on determining the fair value of unrestricted commonshares, restricted common shares, equity derivatives, or fair value receivables. ●The derivative obligation arising from the SFA is also carried at fair value. Fair value represents the amount we would need to pay to settle the SFA obligation at anyreporting period date. If the SFA provides us with multiple methods of settling the obligation, we will choose the most advantageous one to value the derivativeobligation. In performing this calculation, only settlement methods contractually available to us at the reporting date will be considered (i.e., ones available at somefuture date will not be considered). For instance, if we may terminate the SFA early by either returning common shares or making a cash payment based on theReset Price, the liability will be valued at the lower of: (i) the fair value of the common shares and (ii) the cash amount based on the Reset Price. ●We do not recognize any Maturity Consideration as revenue until it is earned under the contract, either by meeting the hold period requirement or due to a breachof obligation by the SFA Counterparty that enables us to terminate the SFA early. ●In cases where we earn Maturity Consideration and the amount we are owed exceeds the fair value of the interest we own that is available to offset, we will considerthe probability of payment of the remaining Maturity Consideration based on the credit quality of the SFA Counterparty and general market conditions. If wedetermine that the collection of the remaining Maturity Consideration owed is not probable, we will not record the unpaid portion. 78Table of Contents Recent Accounting Pronouncements The following is a list of recent accounting pronouncements that, we believe, will have a continuing impact on our financial statements going forward. For a morecomplete list of recent pronouncements, see note 3 to our consolidated financial statements included in this Annual Report on Form 10-K. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts inEntity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU simplifies accounting forconvertible instruments by removing major separation models currently required. The ASU removes certain settlement conditions that are required for equity contractsto qualify for the derivative scope exception. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. This ASU is effective for fiscalyears beginning after December 15, 2023, including interim periods within those fiscal years. We have determined that the adoption of this standard will not have amaterial impact on our consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual SaleRestrictions. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity securityand, therefore, is not considered in measuring fair value. This ASU is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. We havedetermined that the adoption of this standard will not have a material impact on our consolidated financial statements. In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit StructuresUsing the Proportional Amortization Method. These amendments allow reporting entities to elect to account for qualifying tax equity investments using theproportional amortization method, regardless of the program giving rise to the related income tax credits. The ASU responds to stakeholder feedback that theproportional amortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarilyfor the purpose of receiving income tax credits and other income tax benefits. This ASU is effective for fiscal years beginning after December 15, 2023. Early adoption ispermitted. We have determined that the adoption of this standard will not have a material impact on our consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, Business Combinations— Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. The ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting StandardsCodification Master Glossary. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formedjoint venture, upon formation, would initially measure its assets and liabilities at fair value. The ASU is effective on a prospective basis for all joint ventures with aformation date on or after January 1, 2025. Early adoption of ASU No. 2023-05 is permitted in any interim or annual period in which financial statements have not yetbeen issued. We are currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements—Codification Amendments in Response to the Securities and Exchange Commission(“SEC”) Disclosure Update and Simplification Initiative. These amendments clarify or improve disclosure and presentation requirements of a variety of topics andalign the requirements in the FASB accounting standard codification with the SEC’s regulations. The ASU will be effective on the date the related disclosure areremoved from Regulation S-X or Regulation S-K by the SEC and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30,2027. Early adoption in not permitted. We are currently evaluating the new guidance to determine the impact on the consolidated financial statements, which is notexpected to be material. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU aredesigned to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The ASU is effective forfiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currentlyevaluating the new guidance to determine the impact it may have on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). The amendments in this ASU address investor requests for more transparency aboutincome tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments inthis ASU are effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis. Retrospective application is permitted. Weare currently evaluating the new guidance to determine the impact it may have on our consolidated financial statements. 79Table of Contents ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK All amounts in this section are in thousands unless otherwise noted. Market Risk Market risk is the risk of economic loss arising from the adverse impact of market changes to the market value of our trading and investment positions. Market risk isinherent to both derivative and non-derivative financial instruments, and accordingly, the scope of our market risk management procedures extends beyond derivativesto include all market risk sensitive financial instruments. For purposes of analyzing the components of market risk, we have broken out our investment portfolio intothree broad categories, plus debt as described below. Fixed Income Securities: We hold, from time to time, the following securities: U.S. Treasury securities, U.S. government agency MBS, U.S. government agency debtsecurities, CMOs, non-government MBS, corporate bonds, non-redeemable and redeemable preferred stock, municipal bonds, certificates of deposits, residential loans,whole loans, and unconsolidated investments in the middle and senior tiers of securitization entities and TruPS. We attempt to mitigate our exposure to market risk byentering into economic hedging transactions, which may include TBAs. The fixed income category can be broadly broken down into two subcategories: fixed rate andfloating rate. Floating rate securities are not in themselves particularly sensitive to interest rate risk. As they generally accrue interest income at a variable rate, the movement ininterest rates typically does not impact their fair value. Fluctuations in their current income due to variations in interest rates are generally not material to us. Floatingrate securities are subject to other market risks such as: default risk of the underlying issuer, changes in the issuer’s credit spreads, prepayment rates, investor demand,and supply of securities within a particular asset class or industry class of the ultimate obligor. The sensitivity to any individual market risk can be difficult to quantify. The fair value of fixed rate securities is sensitive to changes in interest rates. However, fixed rate securities that have low credit ratings or represent junior interests insecuritizations are not particularly interest rate sensitive. In general, when we acquire interest rate sensitive securities, we enter into an offsetting short position for asimilar fixed rate security. Alternatively, we may enter into other interest rate hedging arrangements such as interest rate swaps or Eurodollar futures. We measure ournet interest rate sensitivity by determining how the fair value of our net interest rate sensitive assets would change as a result of a 100 basis points (“bps”) adverse shiftacross the entire yield curve. Based on this analysis, as of December 31, 2023, we would have incurred a loss of $1,368 if the yield curve rose 100 bps across allmaturities and a gain of $1,364 if the yield curve fell 100 bps across all maturities. As of December 31, 2022, we would have incurred a loss of $1,610 if the yield curve rose100 bps across all maturities and a gain of $1,605 if the yield curve fell 100 bps across all maturities. Equity Securities: We hold equity interests in both public and private entities. These investments are subject to equity price risk. Equity price risk results from changesin the level or volatility of underlying equity prices, which affect the value of equity securities or instruments that in turn derive their value from a particular stock. Wealso hold a significant amount of equity in public companies that recently completed a merger with a SPAC we sponsored or invested in. A significant portion of theequity we hold in these types of entities are subject to sale restrictions. We attempt to reduce the risk of loss inherent in our inventory of equity securities by closelymonitoring those security positions or in some cases entering into derivatives trades to hedge this exposure. We also have had equity investments in entities where theinvestment is denominated in a foreign currency, or where the investment is denominated in U.S. Dollars but the investee primarily makes investments in foreigncurrencies. The fair values of these investments are subject to change as the spot foreign exchange rate between these currencies and the U.S. Dollar (our functionalcurrency) fluctuates. We may, from time to time, enter into foreign exchange rate derivatives to hedge all or a portion of this risk. We measure our net equity pricesensitivity and foreign currency sensitivity by determining how the net fair value of our equity price sensitive and foreign exchange sensitive assets would change as aresult of a 10% adverse change in equity prices or foreign exchange rates. Based on this analysis, as of December 31, 2023, our equity price sensitivity was $1,383 andour foreign exchange currency sensitivity was $0. As of December 31, 2022, our equity price sensitivity was $1,695 and our foreign exchange currency sensitivity was$0. Other Securities: These investments are primarily made up of residual interests in securitization entities. The fair value of these investments will fluctuate over timebased on a number of factors including, but not limited to, liquidity of the investment type, the credit performance of the individual assets and issuers within thesecuritization entity, the asset class of the securitization entity and the relative supply of and demand for investments within that asset class, credit spreads in general,the transparency of valuation of the assets and liabilities of the securitization entity, and investors’ view of the accuracy of ratings prepared by the independent ratingagencies. The sensitivity to any individual market risk cannot be quantified. Debt: In addition to the risks noted above, we incur interest rate risk related to our debt obligations. We have debt that accrues interest at either variable rates or fixedrates. As of December 31, 2023, a 100-bps change in the three-month SOFR would have resulted in a change in our annual cash to be paid for interest in the amount of$481. A 100-bps adverse change in the market yield to maturity would have resulted in an increase in the fair value of the debt in the amount of $2,261 as of December 31,2023. 80Table of Contents Counterparty Risk and Settlement Risk We are subject to counterparty risk primarily in two areas: (1) our collateralized securities transactions described in note 11 to our consolidated financial statementsincluded in this Annual Report on Form 10-K and (2) our TBA and other forward agency MBS activities described in note 10 to our consolidated financial statementsincluded in this Annual Report on Form 10-K. With respect to the matched book repo financing activities, our risk is that the counterparty does not fulfill its obligationto repurchase the underlying security when it is due. In this case, we would typically liquidate the underlying security, which may result in a loss if the security hasdeclined in value in relation to the balance due from the counterparty under the reverse repurchase agreement. With respect to our TBA and other forward agency MBS activities, our risk is that the counterparty does not settle the TBA trade on the scheduled settlement date. Inthis case, we would have to execute the trade, which may result in a loss based on market movement in the value of the underlying trade between its initial trade dateand its settlement date (which in the case of TBAs can be as long as 90 days). If we were to incur a loss under either of these activities, we have recourse to thecounterparty pursuant to the underlying agreements. Finally, we have general settlement risk in all of our regular way fixed income and equity trading activities. If a counterparty fails to settle a trade, we may incur a loss inclosing out the position and would be forced to try to recover this loss from the counterparty. If the counterparty has become insolvent or does not have sufficientliquid assets to reimburse us for the loss, we may not get reimbursed. How we manage these risks Market Risk We seek to manage our market risk by utilizing our underwriting and credit analysis processes that are performed in advance of acquiring any investment. In addition,we continually monitor our investments on a daily basis. We perform an in-depth monthly analysis on all our investments and our risk committee meets on a weeklybasis to review specific issues within our portfolio and to make recommendations for dealing with these issues. In addition, our broker-dealer has an assigned chief riskofficer that reviews the firm’s positions and trading activities on a daily basis. Counterparty Risk We seek to manage our counterparty risk primarily through two processes. First, we perform a credit assessment of each counterparty to ensure the counterparty hassufficient equity, liquidity, and profitability to support the level of trading or lending we plan to do with them. Second, we may require counterparties to post cash orother liquid collateral (“margin”) to support changes in the market value of the underlying securities or trades on an ongoing basis. In the case of collateralized securities financing transactions, we will generally lend less than the market value of the underlying security initially. The difference betweenthe amount lent and the value of the security is referred to as the haircut. We will seek to maintain this haircut while the loan is outstanding. If the value of the securitydeclines, we will require the counterparty to post margin to offset this decline. If the counterparty fails to post margin, we will sell the underlying security. The haircutserves as a buffer against market movements to prevent or minimize a loss. In the case of TBA and other forward agency MBS activities, we sometimes require counterparties to post margin with us in case the market value of the underlyingTBA trade declines. If the counterparty fails to post margin, we will close out the underlying trade. In the case of TBA and other forward agency MBS activities, we willsometimes obtain initial margin or a cash deposit from the counterparty that serves a purpose similar to the haircut as an additional buffer against losses. However, someof our TBA and other forward agency MBS activities are done without initial margin or cash deposits. Risks Related to our Matched Book Repo Business We enter into repurchase and reverse repurchase agreements as part of our matched book repo business. In general, we will lend money to a counterparty afterobtaining collateral securities from that counterparty pursuant to a reverse repurchase agreement. We will borrow money from another counterparty using those samecollateral securities pursuant to a repurchase agreement. We seek to earn net interest income on these matched transactions. 81Table of Contents In our gestation repo business, we will generally ensure that the maturity dates of our reverse repurchase agreements match the maturity dates of the matchedrepurchase agreements. Because our maturities are matched, we can pass along any changes in funding terms imposed upon us by our repurchase agreementcounterparty to our reverse repurchase agreement counterparty. Therefore, we are not exposed to a great deal of interest rate or funding risk. The main risk we areexposed to is credit risk. We manage this risk by obtaining collateral in excess of the contractual repo balance and performing credit reviews of counterparties andupdating them on a routine basis. ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The financial statements of the Company, the related notes and schedules to the financial statements, together with the Report of Independent Registered PublicAccounting Firm thereon, are set forth beginning on page F-1 of this Annual Report on Form 10-K and are incorporated herein by reference. ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. ITEM 9A.CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures We have established and maintain disclosure controls and procedures that are designed to ensure that material information relating to the Company (and itsconsolidated subsidiaries) required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified inthe SEC’s rules and forms, and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer,who certify our financial reports, and to other members of senior management and the board of directors. Under the supervision and with the participation of our chiefexecutive officer and chief financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined inRule 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2023. Based on that evaluation, the chief executive officer and the chief financial officer concludedthat our disclosure controls and procedures were effective at December 31, 2023. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under theExchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation ofeffectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, management used thecriteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as described in the revised (2013) version in Internal Control-Integrated Framework. Based on this assessment, management believed that, as of December 31, 2023, our internal control over financial reporting was effective. 82Table of Contents This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.Management’s report was not subject to attestation by the Company’s auditors pursuant to rules of the SEC that permit us to provide only management’s report in thisAnnual Report. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting during the quarter ended December 31, 2023 that materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting. ITEM 9B.OTHER INFORMATION. Trading Plans During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS. Not applicable. 83Table of Contents PART III ITEM 10.DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE. Our board of directors has adopted the Code of Conduct applicable to all directors, officers, and employees of the Company. The Code of Conduct is free and availableon our website at http://cohenandcompany.com/investor-relations/corporate-governance/code-of-conduct/ and the Company intends to satisfy the disclosurerequirements under Item 5.05 of the SEC’s Current Report on Form 8-K regarding amendments to, or waivers from, the Code of Conduct by posting such information onits website. The information required by Item 10 is included in the sections entitled “Executive Officers,” “Election of Directors,” “Section 16(a) Beneficial Ownership ReportingCompliance,” and “Corporate Governance and Board of Directors Information” in the Company’s definitive Proxy Statement, to be filed pursuant to Regulation 14A ofthe Securities Exchange Act of 1934 in connection with the Company’s 2024 Annual Meeting of Stockholders and is incorporated herein by reference. ITEM 11.EXECUTIVE COMPENSATION. The information required by Item 11 is included in the sections entitled “Executive Compensation” and “Compensation of Directors” in the Company’s definitive ProxyStatement, to be filed pursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2024 Annual Meeting of Stockholders and is incorporatedherein by reference. ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The information required by Item 12 with respect to the “Share Ownership of Certain Beneficial Owners and Management” is included in the Company’s definitive ProxyStatement, to be filed pursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2024 Annual Meeting of Stockholders and is incorporatedherein by reference. The following table provides information regarding the 2020 Long-Term Incentive Plan as of December 31, 2023. (a) (b) (c) Number of securitiesto be issued upon theexercise ofoutstanding options,warrants and rights(1) Weighted-averageexercise price ofoutstanding options,warrants, and rights Number of securitiesremaining availablefor future issuanceunder equitycompensation plans(excluding securitiesreflected in column(a)) Equity compensation plans approved by security holders - - 579,391 Equity compensation plans not approved by security holders - - - Total - - 579,391 (1)See note 22 to our consolidated financial statements included in this Annual Report on Form 10-K for further information regarding the 2020 Long-Term IncentivePlan. The remainder of the information required by Item 12 is included in the Section entitled “Share Ownership of Certain Beneficial Owners and Management” in theCompany’s definitive Proxy Statement, to be filed pursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2024 Annual Meeting ofStockholders and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. The information required by Item 13 is included in the sections entitled “Certain Relationships and Related Party Transactions” and “Corporate Governance and Boardof Directors Information — Director Independence” in the Company’s definitive Proxy Statement, to be filed pursuant to Regulation 14A of the Securities Exchange Actof 1934 in connection with the Company’s 2023 Annual Meeting of Stockholders and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. The information required by Item 14 is included in the sections entitled “Principal Accounting Firm Fees” in the Company’s definitive Proxy Statement, to be filedpursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2024 Annual Meeting of Stockholders and is incorporated herein by reference. 84Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (F) a) Documents filed as a part of this Annual Report on Form 10-K: (F) 1) The following financial statements of the Company are included in Part II, Item 8 of this Annual Report on Form 10-K: (i)Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)F-2(ii)Consolidated Balance Sheets as of December 31, 2023 and 2022F-3(iii)Consolidated Statements of Operations and Comprehensive Income / (Loss) for the years ended December 31, 2023, 2022 and 2021F-4(iv)Consolidated Statement of Changes in Equity for the years ended December 31, 2023, 2022 and 2021F-5(v)Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021F-6(vi)Notes to Consolidated Financial Statements as of December 31, 2023F-7(2)Schedules to Consolidated Financial Statements: I.Condensed Financial Information of RegistrantF-81 85Table of Contents (b) Exhibit List The following exhibits are filed as part of this Annual Report on Form 10-K: Exhibit No.Description 2.1 Agreement and Plan of Merger, dated as of February 20, 2009, by and among Alesco Financial Inc., Fortune Merger Sub, LLC and Cohen Brothers, LLC(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 23, 2009). # 2.2Amendment No. 1 to Agreement and Plan of Merger, dated as of June 1, 2009, by and among Alesco Financial Inc., Fortune Merger Sub, LLC, AlescoFinancial Holdings, LLC, and Cohen Brothers, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SECon June 2, 2009). # 2.3Amendment No. 2 to Agreement and Plan of Merger, dated as of August 20, 2009, by and among Alesco Financial Inc., Alesco Financial Holdings, LLC andCohen Brothers, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 20, 2009). # 2.4Amendment No. 3 to Agreement and Plan of Merger, dated as of September 30, 2009, by and among Alesco Financial Inc., Alesco Financial Holdings, LLC,and Cohen Brothers, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2009). 2.5Purchase and Contribution Agreement, dated as of September 14, 2010, by and among Cohen & Company Inc., Cohen Brothers, LLC, JVB FinancialHoldings, L.L.C., the Sellers Listed on Annex I thereto and the Management Employees, as defined therein (incorporated by reference to Exhibit 2.1 to theCompany’s Current Report on Form 8-K filed with the SEC on September 14, 2010). # 2.6Amendment No. 1 to Purchase and Contribution Agreement, dated as of October 29, 2010, by and among Cohen & Company Inc., Cohen Brothers, LLC, JVBFinancial Holdings, L.L.C., the Sellers listed on Annex I to the original Purchase and Contribution Agreement, dated as of September 14, 2010, and theManagement Employees as defined in the original Purchase and Contribution Agreement, dated as of September 14, 2010 (incorporated by reference toExhibit 2.6 to the Company’s Annual Report on Form 10-K filed with the SEC on March 4, 2011). 2.7Amendment No. 2 to Purchase and Contribution Agreement, dated as of December 27, 2010, by and among Cohen & Company Inc., Cohen Brothers, LLC,JVB Financial Holdings, L.L.C., the Sellers listed on Annex I to the original Purchase and Contribution Agreement, dated as of September 14, 2010, and theManagement Employees as defined in the original Purchase and Contribution Agreement, dated as of September 14, 2010 (incorporated by reference toExhibit 2.7 to the Company’s Annual Report on Form 10-K filed with the SEC on March 4, 2011). 2.8Amendment No. 3 to Purchase and Contribution Agreement, dated as of January 11, 2011, by and among Cohen & Company Inc., Cohen Brothers, LLC, JVBFinancial Holdings, L.L.C., the Sellers listed on Annex I to the original Purchase and Contribution Agreement, dated as of September 14, 2010, and theManagement Employees as defined in the original Purchase and Contribution Agreement, dated as of September 14, 2010 (incorporated by reference toExhibit 2.8 to the Company’s Annual Report on Form 10-K filed with the SEC on March 4, 2011). # 2.9Contribution Agreement, dated as of April 19, 2011, by and among IFMI, LLC, PrinceRidge Partners LLC and PrinceRidge Holdings LP (incorporated byreference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 25, 2011). 2.10Securities Purchase Agreement, dated as of February 20, 2014, by and among IFMI, LLC, Cohen Asia Investments Ltd., Dekania Investors, LLC, Star AsiaManagement Ltd., Star Asia Capital Management, LLC, Star Asia Advisors Ltd., Star Asia Advisors II Ltd., Star Asia Partners Ltd., Star Asia Partners II Ltd.,an investment vehicle managed by Taro Masuyama and Malcolm MacLean, for purposes of Section 7.1 thereof only, Taro Masuyama and MalcolmMacLean, and, for purposes of Section 7.2 thereof only, Institutional Financial Markets, Inc. and Daniel G. Cohen (incorporated by reference to Exhibit 2.1 tothe Company’s Current Report on Form 8-K filed with the SEC on February 20, 2014). # 3.1Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Company’s Registration Statement onForm S-11 filed with the SEC on February 6, 2004). 3.2Articles of Amendment changing name to Alesco Financial Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on FormS-3 filed with the SEC on October 20, 2006). 3.3Articles of Amendment to Effectuate a Reverse Stock Split (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed withthe SEC on December 17, 2009). 3.4Articles of Amendment to Set Par Value (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC onDecember 17, 2009). 3.5Articles Supplementary — Series A Voting Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the SEC on December 17, 2009). 3.6Articles Supplementary — Series B Voting Non-Convertible Preferred Stock (incorporated by reference to Exhibit 3.4 to the Company’s Current Report onForm 8-K filed with the SEC on December 17, 2009). 3.7Articles of Amendment to change Name to Cohen & Company Inc. (incorporated by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-Kfiled with the SEC on December 17, 2009). 3.8Articles Supplementary — Series C Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 28, 2009). 86Table of Contents 3.9Articles of Amendment Changing Name to Institutional Financial Markets, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report onForm 8-K filed with the SEC on January 24, 2011). 3.10By-laws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 11, 2005). 3.11Articles Supplementary — Series D Voting Non-Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report onForm 8-K filed with the SEC on December 31, 2012). 3.12Articles Supplementary — Series E Voting Non-Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report onForm 8-K filed with the SEC on May 13, 2013). 3.13Articles of Amendment Changing Name to Cohen & Company Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-Kfiled with the SEC on September 1, 2017). 3.14Articles of Amendment to Effectuate a Reverse Stock Split and to Set Par Value (incorporated by reference to Exhibit 3.2 to the Company’s Current Report onForm 8-K filed with the SEC on September 1, 2017). 3.15Cohen & Company Inc. Articles Supplementary Series F Voting Non-Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’sCurrent Report on Form 8-K filed with the SEC on December 31, 2019). 4.1Form of 10.50% Contingent Convertible Senior Notes due 2027 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filedwith the SEC on July 26, 2011). 4.2Junior Subordinated Indenture, dated as of June 25, 2007, by and between Alesco Financial Inc. and Wells Fargo Bank, N.A. (incorporated by reference toExhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 29, 2007). 4.3Supplemental Indenture No. 1 to Junior Subordinated Indenture, dated January 26, 2024, by and between Cohen & Company Inc. and Wells Fargo Bank,N.A. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2024). 4.4Form of Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 10,2010). 4.5Registration Rights Agreement, dated as of May 9, 2013, by and among the Company, Cohen Bros. Financial, LLC and Mead Park Capital Partners LLC(incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2013). 4.6Form of Indenture (incorporated by reference to Exhibit 4.18 to the Company’s Registration Statement on Form S-3 filed with the SEC on February 14, 2014). 4.7Section 382 Rights Agreement, dated as of January 2, 2024, between Cohen & Company Inc. and Computershare Inc. (incorporated by reference to Exhibit4.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 2, 2024). 4.8Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.* 10.1Management Agreement, dated as of January 31, 2006, by and between Alesco Financial Trust and Cohen Brothers Management, LLC (incorporated byreference to Annex E to the Company’s Proxy Statement on Schedule 14A filed with the SEC on September 8, 2006). 10.2Form of Restricted Share Award Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed with the SEC onMarch 16, 2007). 10.3Form of Indemnification Agreement by and between Alesco Financial Inc. and each of its directors and officers (incorporated by reference to Exhibit 10.1 tothe Company’s Current Report on Form 8-K filed with the SEC on October 20, 2006). 10.4Employment Agreement between Cohen Brothers, LLC and Joseph W. Pooler, Jr., dated as of May 7, 2008 (incorporated by reference to Exhibit 10.19 to theCompany’s Registration Statement on Form S-4 filed with the SEC on June 2, 2009). + 10.5Amendment No. 1 to Employment Agreement between Cohen Brothers, LLC and Joseph W. Pooler, Jr., dated as of February 20, 2009 (incorporated byreference to Exhibit 10.20 to the Company’s Registration Statement on Form S-4 filed with the SEC on June 2, 2009). + 10.6Amendment No. 2 to Employment Agreement between Joseph W. Pooler, Jr. and Cohen Brothers, LLC, dated as of February 18, 2010 (incorporated byreference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2010). + 10.7Amendment No. 3 to Employment Agreement, dated February 3, 2021, by and between Cohen & Company, LLC and Joseph W. Pooler, Jr. (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 5, 2021). 10.8Alesco Financial Inc. Cash Bonus Plan (incorporated by reference to Annex B to Alesco Financial Inc.’s Amendment No. 1 to the Registration Statement onForm S-4 filed with the SEC on August 20, 2009). + 10.9Amended and Restated Limited Liability Company Agreement of Cohen Brothers, LLC (incorporated by reference to Exhibit 10.1 to the Company’s CurrentReport on Form 8-K filed with the SEC on December 17, 2009). 87Table of Contents 10.10Amendment No. 1 to Amended and Restated Limited Liability Company Agreement of IFMI, LLC, dated as of June 20, 2011 (incorporated by reference toExhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 11, 2011). 10.11Amendment No. 2 to Amended and Restated Limited Liability Company Agreement of IFMI, LLC, dated as of May 9, 2013 (incorporated by reference toExhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2013). 10.12Amendment No. 3 to Amended and Restated Limited Liability Company Agreement, dated October 30, 2019, by and among each of the Members set forth onthe signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 30, 2019). 10.13Amendment No. 4 to Amended and Restated Limited Liability Company Agreement, dated September 25, 2020, by and among each of the Members set forthon the signature pages thereto (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 29,2020). 10.14Amendment No. 5 to Amended and Restated Limited Liability Company Agreement, dated December 20, 2021, by and among each of the Members set forthon the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 21,2021) 10.15Amended and Restated Employment Agreement, dated as of May 9, 2013, by and among IFMI, LLC, Institutional Financial Markets, Inc., Daniel G. Cohen,C&Co/PrinceRidge Holdings LP and C&Co/PrinceRidge Partners LLC (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2013).+ 10.16Amendment No. 1 to Amended and Restated Employment Agreement, dated May 24, 2022, by and among Cohen & Company Inc., Cohen & Company, LLC,Daniel G. Cohen, J.V.B. Financial Group Holdings, LP and C&Co/Prince Ridge Partners LLC (incorporated by reference to Exhibit 10.1 of the Company’sCurrent Report on Form 8-K filed with the SEC on May 25, 2022). + 10.172010 Executive Officers’ Cash Bonus Plan (incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K filed with the SEC onMarch 10, 2010). + 10.18Form of Award for 2010 Executive Officers’ Cash Bonus Plan (incorporated by reference to Exhibit 10.38 to the Company’s Annual Report on Form 10-K filedwith the SEC on March 10, 2010). + 10.19Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8-K filed with the SEC on December 5, 2013). + 10.20Amendment No. 1 to Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan (incorporated by reference toAppendix A to the Company’s Proxy Statement on Schedule 14A filed with the SEC on November 10, 2016). 10.21Form of Restricted Stock Award under Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.46 to theCompany’s Annual Report on Form 10-K filed with the SEC on March 4, 2011). + 10.22Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan Non-Qualified Stock Option Award, dated as ofNovember 30, 2013, by and between Institutional Financial Markets, Inc. and Lester R. Brafman (incorporated by reference to Exhibit 10.73 to the Company’sAnnual Report on Form 10-K filed with the SEC on March 6, 2014). 10.23Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan Non-Qualified Stock Option Award, dated as ofNovember 30, 2013, by and between Institutional Financial Markets, Inc. and Lester R. Brafman (incorporated by reference to Exhibit 10.74 to the Company’sAnnual Report on Form 10-K filed with the SEC on March 6, 2014). 10.24Securities Purchase Agreement, dated as of May 9, 2013, by and between Institutional Financial Markets, Inc. and Cohen Bros. Financial, LLC (incorporatedby reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2013). 10.25Preferred Stock Exchange Agreement, dated as of May 9, 2013, by and among Institutional Financial Markets, Inc., Cohen Bros. Financial, LLC and Daniel G.Cohen (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on May 13, 2013). 10.26Investment Agreement, dated as of October 3, 2016, by and between IFMI, LLC and JKD Capital Partners I LTD (incorporated by reference to Exhibit 10.1 tothe Company’s Current Report on Form 8-K filed with the SEC on October 5, 2016). 10.27Amendment No. 1 to Investment Agreement, dated as of March 6, 2019, by and between Cohen & Company, LLC and JKD Capital Partners I LTD(incorporated by reference to Exhibit 10.23 to the Company’s Current Report on Form 10-K filed with the SEC on March 8, 2019). 10.28Amendment No. 2 to Investment Agreement, date February 13, 2023, by and between Cohen and Company, LLC and JKD Capital Partners I LTD.(incorporated by reference to Exhibit 10.28 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March9, 2023 10.29Convertible Senior Secured Promissory Note, dated March 10, 2017, issued by IFMI, LLC to DGC Family Fintech Trust in the aggregate principal amount of$15,000,000 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 10, 2017). 10.30Amendment No. 1 to Convertible Senior Secured Promissory Note, dated September 25, 2020, by and between Cohen & Company, LLC and the DGC FamilyFintech Trust (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2020). 88Table of Contents 10.32Investment Agreement, dated September 29, 2017, by and between Cohen & Company, LLC and the DGC Family Fintech Trust (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2017). 10.31Securities Purchase Agreement, dated as of December 30, 2019, by and among Cohen & Company Inc., Cohen & Company, LLC, Daniel G. Cohen and theDGC Family Fintech Trust (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 31, 2019). 10.32Amendment No. 1 to Securities Purchase Agreement, dated September 25, 2020, by and among Cohen & Company Inc., Cohen & Company, LLC, Daniel G.Cohen and the DGC Family Fintech Trust (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC onSeptember 29, 2020). 10.33Note Purchase Agreement, dated as of January 31, 2020, by and among Cohen & Company, LLC, JKD Capital Partners I LTD and RN Capital Solutions LLC(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 3, 2020). 10.34Amended and Restated Senior Promissory Note, dated January 31, 2022, issued by Cohen & Company, LLC to JKD Capital Partners I LTD in the aggregateprincipal amount of $4,500,000 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on January 31,2022). 10.35Amendment No. 1 to Amended and Restated Senior Promissory Note, dated January 5, 2024, by and between Cohen & Company, LLC and JKD CapitalPartners I LTD. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 5, 2024). 10.36Cohen & Company Inc. Non-Qualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-Kfiled with the SEC on February 12, 2020). 10.37Cohen & Company Inc. 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed withthe SEC on April 7, 2020). 89Table of Contents 10.38Amendment No. 1 to the Cohen & Company Inc. 2020 Long-Term Incentive Plan, dated April 1, 2021, to the original Cohen & Company Inc. 2020 Long-TermIncentive Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 13, 2021). 10.39Amendment No. 2 to the Cohen & Company Inc. 2020 Long-Term Incentive Plan, dated March 29, 2022, to the original Cohen & Company Inc. 2020 Long-Term Incentive Plan (incorporated by reference to Annex A of the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 14,2022). 10.40Form of Restricted Stock Award under Cohen & Company Inc. 2020 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.53 to the Company'sAnnual Report on Form 10-K filed with the SEC on March 5, 2021). 10.41Second Amended and Restated Revolving Note and Cash Agreement, dated December 21, 2022, by and between J.V.B. Financial Group, LLC and BylineBank (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 23, 2022). 10.42Third Amended and Restated Loan Agreement, dated June 9, 2023, by and between J.V.B. Financial Group, LLC and Byline Bank (incorporated by referenceto Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 9, 2023). 10.43First Amendment to Third Amended and Restated Loan Agreement, dated December 22, 2023, by and between J.V.B. Financial Group, LLC and Byline Bank(incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on December 26, 2023). 10.44Equity Distribution Agreement, dated October 5, 2023, by and between Cohen & Company Inc. and Northland Capital Markets (incorporated by reference toExhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2023). 14.1Code of Conduct (incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2010). 21.1List of Subsidiaries. * 23.1Consent of Grant Thornton, LLP, Independent Registered Public Accounting Firm, regarding the financial statements of Cohen & Company, Inc. * 31.1Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended. * 31.2Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended. * 32.1Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended. * 32.2Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended. * 97.1Cohen & Company, Inc. Incentive Compensation Policy. * 101Interactive data files pursuant to Rule 405 of Regulation S-T formatted inline XBRL: (i) the Consolidated Balance Sheets at December 31, 2023 and December31, 2022, (ii) the Consolidated Statements of Operations and Comprehensive Income / (Loss) for the Year Ended December 31, 2023, 2022 and 2021, (iii) theConsolidated Statement of Changes in Equity for the Year Ended December 31, 2023, 2022 and 2021, (iv) the Consolidated Statements of Cash Flows for YearEnded December 31, 2023, 2022 and 2021; and (v) Notes to Consolidated Financial Statements. * 104Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101) *Filed herewith.**Furnished herewith.+Constitutes a management contract or compensatory plan or arrangement.#Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Cohen & Company, Inc. hereby undertakes to furnish supplementallycopies of any of the omitted schedules or exhibits upon request by the SEC.†Confidential treatment has been requested for portions of this document. An unredacted version of this exhibit has been filed separately with SEC. (c) The financial statement schedules listed in the Index to Consolidated Financial Statements and Financial Statement Schedules listed under Item 15.1(a) areincluded under Item 8 and are presented beginning on page F-1 of this Form 10-K. All other schedules for which provision is made in the applicable accountingregulations of the SEC are not required under the related instructions or are inapplicable or is not present in amount sufficient to require submission of the schedule, andtherefore have been omitted. ITEM 16. FORM 10-K SUMMARY. None. 90Table of Contents COHEN & COMPANY INC. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized. DATE: March 6, 2024 COHEN & COMPANY INC. By: /S/ LESTER R. BRAFMAN Lester R. BrafmanChief Executive Officer(Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated. NameTitleDate/s/ DANIEL G. COHENExecutive ChairmanMarch 6, 2024Daniel G. Cohen /S/ G. STEVEN DAWSONDirectorMarch 6, 2024G. Steven Dawson /S/ JACK J. DIMAIO, JR.Vice ChairmanMarch 6, 2024Jack J. DiMaio, Jr. /S/ JACK HARABURDADirectorMarch 6, 2024Jack Haraburda /S/ DIANA L. LIBERTODirectorMarch 6, 2024Diana L. Liberto /S/ DOUGLAS LISTMANChief Accounting Officer and Assistant TreasurerMarch 6, 2024Douglas Listman(Principal Accounting Officer) /S/ JOSEPH W. POOLER, JR.Executive Vice President, Chief Financial Officer and TreasurerMarch 6, 2024Joseph W. Pooler, Jr.(Principal Financial Officer) 91Table of Contents THIS PAGE INTENTIONALLY LEFT BLANK 92Table of Contents COHEN & COMPANY INC. INDEX TO FINANCIAL STATEMENTSTABLE OF CONTENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)F-2Consolidated Balance Sheets as of December 31, 2023 and 2022F-3Consolidated Statements of Operations and Comprehensive Income / (Loss) for the years ended December 31, 2023, 2022 and 2021F-4Consolidated Statement of Changes in Equity for the years ended December 31, 2023, 2022 and 2021F-5Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022 and 2021F-6Notes to Consolidated Financial Statements as of December 31, 2023F-7Schedules to Consolidated Financial Statements: I. Condensed Financial Information of RegistrantF-81 F-1Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and ShareholdersCohen & Company Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Cohen & Company, Inc. (a Maryland corporation) and subsidiaries (the “Company”) as ofDecember 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income / (loss), changes in equity, and cash flows for each of thethree years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statementspresent fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows foreach of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statementsbased on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required tobe independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities andExchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged toperform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financialreporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express nosuch opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the auditcommittee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complexjudgments. We determined that there are no critical audit matters. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2001. Philadelphia, PennsylvaniaMarch 6, 2024 F-2Table of Contents PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. COHEN & COMPANY INC.CONSOLIDATED BALANCE SHEETS(Dollars in thousands) December 31, 2023 2022 Assets Cash and cash equivalents $10,650 $29,101 Receivables from brokers, dealers, and clearing agencies 66,801 140,933 Due from related parties 772 787 Other receivables 5,373 9,527 Investments-trading 181,328 211,828 Other investments, at fair value 72,217 28,022 Receivables under resale agreements 408,408 437,692 Investments in equity method affiliates 14,241 8,929 Deferred income taxes 1,580 6,934 Goodwill 109 109 Right-of-use asset - operating leases 7,541 9,647 Other assets 3,741 3,546 Total assets $772,761 $887,055 Liabilities Payables to brokers, dealers, and clearing agencies $111,085 $134,985 Accounts payable and other liabilities 8,115 11,439 Accrued compensation 17,268 12,434 Lease liability - operating leases 8,216 10,447 Trading securities sold, not yet purchased 65,751 133,957 Other investments sold, not yet purchased 24,742 78 Securities sold under agreement to repurchase 408,203 452,797 Redeemable financial instruments 7,868 7,868 Debt 29,716 29,024 Total liabilities 680,964 793,029 Commitments and contingencies (See note 28) Stockholders' Equity: Voting Non-Convertible Preferred Stock, $0.001 par value per share, 50,000,000 shares authorized, 27,413,098 sharesissued and outstanding, respectively 27 27 Common Stock, $0.01 par value per share, 100,000,000 shares authorized, 1,893,747 and 1,774,342 shares issued andoutstanding, respectively, including 367,491 and 341,059 unvested or restricted share awards, respectively 19 17 Additional paid-in capital 74,594 72,801 Accumulated other comprehensive loss (944) (955)Accumulated deficit (32,014) (25,151)Total stockholders' equity 41,682 46,739 Non-controlling interest 50,115 47,287 Total equity 91,797 94,026 Total liabilities and equity $772,761 $887,055 See accompanying notes to consolidated financial statements. F-3Table of Contents COHEN & COMPANY INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME / (LOSS)(Dollars in thousands, except share or per share information) Year Ended December 31, 2023 2022 2021 Revenues Net trading $30,926 $40,009 $69,385 Asset management 7,337 9,004 10,923 New issue and advisory 28,264 24,721 28,736 Principal transactions and other income 16,454 (29,347) 37,324 Total revenue 82,981 44,387 146,368 Operating expenses Compensation and benefits 52,092 50,290 85,048 Business development, occupancy, equipment 5,204 5,076 3,365 Subscriptions, clearing, and execution 8,965 8,274 10,307 Professional fee and other operating 9,296 8,153 7,684 Depreciation and amortization 563 557 371 Total operating expenses 76,120 72,350 106,775 Operating income / (loss) 6,861 (27,963) 39,593 Non-operating income / (expense) Interest expense, net (6,526) (4,982) (7,233)Income/(loss) from equity method affiliates 15,609 (20,931) 36,010 Other non-operating income - - 2,127 Income / (loss) before income tax expense / (benefit) 15,944 (53,876) 70,497 Income tax expense (benefit) 5,545 4,794 (3,541)Net income / (loss) 10,399 (58,670) 74,038 Less: Net income (loss) attributable to the non-convertible non-controlling interest ofthe Operating LLC 19,590 (23,203) 35,574 Enterprise net income (loss) (9,191) (35,467) 38,464 Less: Net income (loss) attributable to the convertible non-controlling interest of Cohen& Company Inc. (4,078) (22,078) 26,656 Net income / (loss) attributable to Cohen & Company Inc. $(5,113) $(13,389) $11,808 Income / (loss) per share data (see note 26): Income / (loss) per common share-basic: Basic income / (loss) per common share $(3.38) $(9.43) $9.95 Weighted average shares outstanding-basic 1,513,469 1,420,383 1,187,029 Income / (loss) per common share-diluted: Diluted Income / (loss) per common share $(3.38) $(9.43) $7.83 Weighted average shares outstanding-diluted 1,513,469 1,420,383 5,284,925 Comprehensive income / (loss): Net income / (loss) $10,399 $(58,670) $74,038 Other comprehensive income / (loss) item: Foreign currency translation adjustments, net of tax of $0 86 (206) (244)Other comprehensive income / (loss), net of tax of $0 86 (206) (244)Comprehensive income / (loss) 10,485 (58,876) 73,794 Less: comprehensive income / (loss) attributable to the non-controlling interest 15,573 (45,433) 62,060 Comprehensive income / (loss) attributable to Cohen & Company Inc. $(5,088) $(13,443) $11,734 See accompanying notes to consolidated financial statements. F-4Table of Contents COHEN & COMPANY INC. Consolidated Statement of Changes in Equity(Dollars in thousands) Cohen & Company Inc. PreferredStock CommonStock AdditionalPaid-InCapital RetainedEarnings /(AccumulatedDeficit) AccumulatedOtherComprehensiveIncome /(Loss) TotalStockholders'Equity Non-controllingInterest TotalEquity Balance at December 31, 2020 $27 $13 $65,031 $(20,341) $(821) 43,909 $57,528 $101,437 Net income - - - 11,808 - 11,808 62,230 74,038 Other comprehensive (loss) - - - - (74) (74) (170) (244)Common stock issued, net 3 9,073 - - 9,076 - 9,076 Acquisition / (surrender) of additional units inconsolidated subsidiary, net - - (1,929) - (10) (1,939) 1,939 - Equity-based compensation - 1 790 - - 791 14,927 15,718 Shares withheld for employee taxes - - (102) - - (102) (276) (378)Purchase and retirement of common stock - - (857) - - (857) - (857)Dividends/distributions to convertible non-controllinginterest - - - (671) - (671) (2,103) (2,774)Non-convertible non-controlling interest investment - - - - - - 17,095 17,095 Non-convertible non-controlling interest distributions - - - - - - (61,678) (61,678)Balance at December 31, 2021 $27 $17 $72,006 $(9,204) $(905) $61,941 $89,492 $151,433 Net (loss) - - - (13,389) - (13,389) (45,281) (58,670)Other comprehensive (loss) - - - - (54) (54) (152) (206)Acquisition / (surrender) of additional units inconsolidated subsidiary, net - - (338) - 4 (334) 334 - Equity-based compensation - - 1,209 - - 1,209 3,181 4,390 Shares withheld for employee taxes - - (76) - - (76) (158) (234)Dividends/distributions to convertible non-controllinginterest - - - (2,558) - (2,558) (6,485) (9,043)Convertible non-controlling interest investment 15,000 15,000 Non-convertible non-controlling interest investment - - - - - - 9 9 Non-convertible non-controlling interest distributions - - - - - - (8,653) (8,653)Balance at December 31, 2022 $27 $17 $72,801 $(25,151) $(955) $46,739 $47,287 $94,026 Net income (loss) - - - (5,113) - (5,113) 15,512 10,399 Other comprehensive income - - - - 25 25 61 86 Acquisition / (surrender) of additional units ofconsolidated subsidiary, net - - 636 - (14) 622 (622) - Equity-based compensation - 2 1,205 - - 1,207 3,184 4,391 Shares withheld for employee taxes - - (48) - - (48) (127) (175)Investment of non-controlling interest of Operating LLC - Dividends/distributions to convertible non-controllinginterest - - - (1,750) - (1,750) (4,344) (6,094)Redemption of convertible non-controlling interest units - - - - - - (834) (834)Non-convertible non-controlling interest investment - - - - - - 39 39 Non-convertible non-controlling interest distributions - - - - - - (10,041) (10,041)Balance at December 31, 2023 $27 $19 $74,594 $(32,014) $(944) $41,682 $50,115 $91,797 See accompanying notes to consolidated financial statements. F-5Table of Contents COHEN & COMPANY INC. Consolidated Statements of Cash Flows(Dollars in thousands) Year Ended December 31, 2023 2022 2021 Operating activities Net income (loss) $10,399 $(58,670) $74,038 Adjustments to reconcile net income / (loss) to net cash provided by (used in) operating activities: Equity-based compensation 4,391 4,390 15,718 Loss (gain) on other investments, at fair value 92,931 30,914 (35,421)Loss (gain) on other investments, sold not yet purchased (107,816) (307) (830)Noncash advisory fees received (18,248) (7,416) - (Income) / loss from equity method affiliates (15,609) 20,931 (36,010)Depreciation and amortization 563 557 371 Amortization of discount on debt 692 630 860 Deferred tax provision / (benefit) 5,354 4,579 (4,116)Other non-operating income - forgiveness of debt - - (2,127)Change in operating assets and liabilities, net: Change in receivables from/ payables to brokers, dealers, and clearing agencies 118,298 (98,452) (11,257)Change in receivables from / payables to related parties, net 15 3,794 (3,872)(Increase) decrease in other receivables 4,154 (6,324) 726 (Increase) decrease in investments-trading 30,500 12,037 19,096 (Increase) decrease in receivables under resale agreement 29,284 2,737,953 2,540,698 (Increase) decrease in other assets 1,829 981 (4,858)Increase (decrease) in accounts payable and other liabilities (88,431) (11,769) (19,189)Increase (decrease) in accrued compensation 4,834 (10,143) 8,218 Increase (decrease) in trading securities sold, not yet purchased (68,206) 71,445 18,073 Increase (decrease) in securities sold under agreement to repurchase (44,594) (2,718,618) (2,541,797)Net cash provided by (used in) operating activities (39,660) (23,488) 18,321 Investing activities Purchase of investments - other investments, at fair value (86,021) (7,236) (123,098)Purchase of investments - other investments sold, not yet purchased, at fair value (5,512) (6,001) (59,098)Sales and returns of principal - other investments, at fair value 75,906 27,091 112,013 Sales and returns of principal - other investments sold, not yet purchased, at fair value 53,928 3,054 56,820 Investments in equity method affiliates (1,896) (2,614) (8,392)Distribution from equity method affiliate 2,091 77 249 Purchase of furniture, equipment, and leasehold improvements (373) (573) (1,028)Net cash provided by (used in) investing activities 38,123 13,798 (22,534)Financing activities Proceeds from draws on revolving credit facility 15,000 - 17,500 Repayment of draws on revolving credit facility (15,000) - (17,500)Proceeds from debt - 2,250 - Repayment of debt - (2,250) (2,400)Repayment of redeemable financial instrument - - (4,000)Cash used to net share settle equity awards (175) (234) (378)Proceeds from issuance of Common Stock - - 9,076 Purchase and retirement of Common Stock - - (857)Cohen & Company Inc. dividends (1,750) (2,558) (671)Operating LLC non-controlling interest distributions (4,344) (6,485) (1,970)Redemption of convertible non-controlling interest units (834) - - Non-convertible non-controlling interest investment 39 9 17,095 Non-convertible non-controlling interest distributions (10,041) (2,236) (2,734)Net cash provided by (used in) financing activities (17,105) (11,504) 13,161 Effect of exchange rate on cash 191 (272) (377)Net increase (decrease) in cash and cash equivalents (18,451) (21,466) 8,571 Cash and cash equivalents, beginning of period 29,101 50,567 41,996 Cash and cash equivalents, end of period $10,650 $29,101 $50,567 See accompanying notes to consolidated financial statements. F-6Table of Contents COHEN & COMPANY INC. Notes to Consolidated Financial StatementsDecember 31, 2023(Dollars in thousands, except share and per share information) 1. ORGANIZATION AND NATURE OF OPERATIONS Organizational History Cohen Brothers, LLC (“Cohen Brothers”) was formed on October 7, 2004 by Cohen Bros. Financial, LLC (“CBF”). Cohen Brothers was established to acquire the netassets of CBF’s subsidiaries (the “Formation Transaction”): Cohen Bros. & Company, Inc.; Cohen Frères SAS; Dekania Investors, LLC; Emporia Capital Management,LLC; and the majority interest in Cohen Bros. & Toroian Investment Management, Inc. The Formation Transaction was accomplished through a series of transactionsoccurring between March 4, 2005 and May 31, 2005. From its formation until December 16, 2009, Cohen Brothers operated as a privately-owned limited liability company. On December 16, 2009, Cohen Brothers completedits merger (the “AFN Merger”) with a subsidiary of Alesco Financial Inc. (“AFN”), a publicly traded real estate investment trust ("REIT"). As a result of the AFN Merger, AFN contributed substantially all of its assets into Cohen Brothers in exchange for newly issued units of membership interests directlyfrom Cohen Brothers. In addition, AFN received additional Cohen Brothers membership interests directly from its members in exchange for AFN common stock. Inaccordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the AFN Merger was accounted for as a reverse acquisition,and Cohen Brothers was deemed to be the accounting acquirer. As a result, all of AFN’s assets and liabilities were required to be revalued at fair value as of theacquisition date. The remaining units of membership interests of Cohen Brothers that were not held by AFN were included as a component of non-controlling interest inthe consolidated balance sheets. Subsequent to the AFN Merger, AFN was renamed Cohen & Company Inc. In January 2011, it was renamed again as Institutional Financial Markets, Inc. (“IFMI”) andon September 1, 2017 it was renamed again as Cohen & Company Inc. Effective January 1, 2010, the Company ceased to qualify as a REIT. The Company The Company is a financial services company specializing in an expanding range of capital markets and asset management services. As of December 31, 2023, theCompany had $2.4 billion in assets under management (“AUM”) of which $1.0 billion was in collateralized debt obligations (“CDOs”). The remaining portion of AUMwas from a diversified mix of Investment Vehicles (as defined herein). In these financial statements, the “Company” refers to Cohen & Company Inc. and its subsidiaries on a consolidated basis. Cohen & Company, LLC or the “OperatingLLC” refers to the main operating subsidiary of the Company. “Cohen Brothers” refers to the pre-AFN Merger Cohen Brothers, LLC and its subsidiaries. “AFN” refersto the pre-merger Alesco Financial Inc. and its subsidiaries. When the term “Cohen & Company Inc.” is used, it is referring to the parent company itself. “JVB Holdings”refers to J.V.B. Financial Holdings, LP, a wholly owned subsidiary of the Operating LLC; “JVB” refers to J.V.B. Financial Group LLC, a wholly owned broker dealersubsidiary of JVB Holdings; "CCFESA" refers to Cohen & Company Financial (Europe) S.A., a majority owned subsidiary regulated by the Autorité de ContrôlePrudentiel et de Résolution ("ACPR") in France; “CCFEL” refers to Cohen & Company Financial (Europe) Limited, a subsidiary formerly regulated by the Central Bank ofIreland. The Company’s business is organized into the following three business segments. Capital Markets: The Company’s Capital Markets business segment consists primarily of fixed income sales, trading, gestation repo financing, new issue placements incorporate and securitized products, and advisory services. The Company’s fixed income sales and trading group provides trade execution to corporate investors,institutional investors, mortgage originators, and other smaller broker-dealers. The Company specializes in a variety of products, including but not limited to: corporatebonds, asset backed securities (“ABS”), mortgage backed securities (“MBS”), residential mortgage backed securities (“RMBS”), CDOs, collateralized loan obligations(“CLOs”), collateralized bond obligations (“CBOs”), collateralized mortgage obligations (“CMOs”), municipal securities, to-be-announced securities (“TBAs”) and otherforward agency MBS contracts, U.S. government bonds, U.S. government agency securities, brokered deposits and certificates of deposit (“CDs”) for small banks, andhybrid capital of financial institutions including trust preferred securities (“TruPS”), whole loans, and other structured financial instruments. The Company operates itscapital markets activities primarily through its subsidiaries: JVB in the United States, and CCFESA in Europe. A division of JVB, Cohen & Company Capital Markets("CCM") is the Company's full-service boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory. Asset Management: The Company’s Asset Management business segment manages assets within CDOs, managed accounts, joint ventures, and investment funds(collectively referred to as “Investment Vehicles”). A CDO is a form of secured borrowing. The borrowing is secured by different types of fixed income assets such ascorporate or mortgage loans or bonds. The borrowing is in the form of a securitization, which means that the lenders are actually investing in notes backed by theassets. In the event of default, the lenders will have recourse only to the assets securing the loan. The Company’s Asset Management business segment includes itsfee-based asset management operations, which include ongoing base and incentive management fees. F-7Table of Contents Principal Investing: The Company’s Principal Investing business segment is comprised of investments that the Company holds related to its SPAC franchise and otherinvestments the Company has made for the purpose of earning an investment return rather than investments made to support the Company’s trading and other CapitalMarkets business segment activities. In addition, the Company has received securities as consideration for advisory services provided by its Capital Markets businesssegment. These investments are included in the Company’s other investments, at fair value; other investments sold, not yet purchased; and investments in equitymethod affiliates in the Company’s consolidated balance sheets. The Company generates its revenue by business segment primarily through the following activities: Capital Markets •Trading activities of the Company, which include execution and brokerage services, riskless trading activities as well as gains and losses (unrealizedand realized) and income and expense earned on securities and derivatives classified as trading; • Revenue earned from the Company's gestation repo financing program; and •New issue and advisory revenue comprised of (a) origination fees for newly created financial instruments originated by the Company: (b) revenue fromadvisory services, and (c) revenue associated with arranging and placing the issuance of newly created financial instruments. Asset Management •Asset management fees for the Company’s on-going asset management services provided to certain Investment Vehicles, which may include fees bothsenior and subordinate to the securities in the Investment Vehicle, and incentive management fees earned based on the performance of the variousInvestment Vehicles. Principal Investing •Gains and losses (unrealized and realized) and income and expense earned on securities classified as other investments, at fair value and otherinvestments, sold not yet purchased; and •Income and loss earned on equity method investments. The Company carries out certain activities at the Operating LLC (including a material amount of its principal investing activities). The remaining activities noted abovewere carried out through the following main operating subsidiaries of the Company as of December 31, 2023. 1.Cohen & Company Financial Management, LLC (“CCFM”) is a wholly owned subsidiary of the Operating LLC and acts as asset manager and investmentadviser to the Alesco III, Alesco IV, Alesco V, Alesco VI, and Alesco VIII CDOs. Alesco CDOs invest in bank and insurance company TruPS as well asinsurance company subordinated debt. CCFM also manages the SPAC Series Funds and managed the SPAC Fund. 2.Dekania Capital Management, LLC (“DCM”) is a wholly owned subsidiary of the Operating LLC and acts as asset manager and investment adviser to theCompany’s Dekania Europe II and Dekania Europe III CDOs. The Dekania Europe CDOs invest primarily in financial institution TruPS and insurance companysubordinated debt denominated in Euros. DCM also manages the U.S. Insurance JV. 3.JVB is a wholly owned subsidiary of the Operating LLC. JVB is a securities broker-dealer registered with the Securities and Exchange Commission (“SEC”) andis a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Industry Protection Corporation (“SIPC”). JVB carries out theCompany’s Capital Market business segment activities in the U.S. 4.CCFL was previously regulated by the United Kingdom Financial Conduct Authority (“FCA”). CCFL in the past acted as asset manager and investmentadviser to the Company’s Dekania Europe III CDO. CCFL also carried out certain of the Company’s Capital Markets business segment activities in Europeincluding brokerage, advisory, and new issue services. During 2020, CCFL reduced its permissions with the FCA and was no longer a regulated entity. As aresult, no capital requirement is necessary in the United Kingdom. The Company dissolved CCFL in April 2022. 5.CCFESA is regulated by the ACPR, and performs asset management and capital market activities in France and the European Union. 6.CCFEL was regulated by the Central Bank of Ireland (“CBI”), and performed asset management and capital markets activities in Ireland and the EuropeanUnion. In 2021, the Company transferred CCFEL's activities to CCFESA and began the process of withdrawing from regulation under CBI. As of December 31,2023, CCFEL no longer carries out any regulated activity, having received approval of its withdrawal of authorizations from the CBI. 7.Cohen & Compagnie SAS (formerly Cohen Fréres SAS), the Company’s French subsidiary, acts as a credit research adviser to DCM and CCFESA in analyzingthe creditworthiness of insurance companies and financial institutions in Europe with respect to all assets included in the Dekania Europe CDOs and certainother Investment Vehicles. This entity was merged into CCFESA in 2023. 8.SPAC Sponsor Entities: A series of LLCs set up to pool investor funds and invest in private placements of Company sponsored special purpose acquisitioncompanies ("SPACs"). See note 4. 9.Vellar GP is an LLC in which the Operating LLC owns a one-third interest and consolidates. Prior to March 31, 2023, the Vellar GP was the general partner of theSPAC Fund but did not consolidate it. Effective April 1, 2023, the Vellar GP began consolidating the SPAC Fund. The Vellar GP primarily invests in share forwardarrangements. See notes 4 and 10. F-8Table of Contents 2. BASIS OF PRESENTATION The accounting and reporting policies of the Company conform to U.S. GAAP. Certain prior period amounts have been reclassified to conform to the current periodpresentation. CORRECTION OF AN IMMATERIAL ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS During the three months ended March 31, 2022, the Company determined that it had made an error when calculating its December 31, 2021 deferred tax asset and currenttax payable related to its net operating loss carryforwards in certain local jurisdictions. Accordingly, the Company recorded an adjustment in that period and revised theDecember 31, 2021 balances presented herein. The below table shows the line items impacted and compares the amounts as previously stated to the revised amountsincluded in Item 1 of this report. The balance sheet amounts shown below are as of December 31, 2021. The income statement amounts are for the year ended December 31, 2021. Balance Sheet As Stated Revised Change Deferred income taxes $9,468 $11,513 $2,045 Accounts payable and otherliabilities $22,701 $22,819 $118 Accumulated deficit $(9,730) $(9,204) $526 Non-controlling interest $88,091 $89,492 $1,401 Income Statement Income tax expense (benefit) $(1,614) $(3,541) $(1,927)Net Income (loss) $72,111 $74,038 $1,927 Net Income attributable to non-controlling interests $60,829 $62,230 $1,401 Net income (loss) attributable toCohen & Company Inc. $11,282 $11,808 $526 Basic Earnings Per Share $9.50 $9.95 $0.45 Diluted Earnings Per Share $7.48 $7.83 $0.35 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Principles of Consolidation The consolidated financial statements reflect the accounts of Cohen & Company Inc. and its subsidiaries that are required to be consolidated under FinancialAccounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). All intercompany accounts and transactionshave been eliminated in consolidation. The Company consolidates the Operating LLC, which is its main operating subsidiary and through which it carries out nearly all of its activities. With the exception ofthe junior subordinated notes included as a component of debt and the deferred tax liability, nearly all of the assets and liabilities included in the Company’sconsolidated balance sheet are owned by the Operating LLC or its consolidated subsidiaries. In addition, with the exception of interest expense related to the juniorsubordinated notes and corporate tax expense, nearly all revenues, expenses, gains, and losses recognized in the consolidated statement of operations are generated bythe Operating LLC or its consolidated subsidiaries. Effective December 31, 2023 and 2022, the Company controlled 51.00% of the voting interest and owned 27.55% and 26.55%, respectively, of the economic interest of theOperating LLC. Although the Company’s economic interest is below 50%, it continues to consolidate the Operating LLC as it controls over 50% of the voting interests. Earnings and loss are allocated to the Company and other members of the Operating LLC based on their economic interest rather than their voting interest. For the yearsended December 31, 2023, 2022, and 2021, 72.6%. 73.45%, and 70.61%, respectively, of the Operating LLC’s income or loss were treated as a non-controlling interest asthe result of the issuance of the additional equity interest in the Operating LLC during 2019. See notes 21 and 31. B. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make assumptions and estimates that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses duringthe reporting period. Actual results could differ from those estimates. F-9Table of ContentsC. Adoption of New Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to simplifyaccounting for income taxes. It removes specific exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. TheCompany’s adoption of the provisions of ASU 2019-12, effective January 1, 2021, did not have an effect on the Company’s consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), andDerivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. This ASU clarifies certain accounting certain topicsimpacted by Topic 321 Investments-Equity Securities. These topics include measuring equity securities using the measurement alternative, how the measurementalternative should be applied to equity method accounting, and certain forward contracts and purchased options which would be accounted for under the equitymethod of accounting upon settlement or exercise. The Company’s adoption of the provisions of ASU 2020-01, effective January 1, 2021, did not have an effect on theCompany’s consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. Certainaspects of this topic were later enhanced and clarified in January 2021 when the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848). These ASUsprovide temporary optional guidance to ease the burden in accounting for reference rate reform by providing optional expedients and exceptions for applying generallyaccepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offer Rate("LIBOR") or another reference rate expected to be discontinued. These ASUs are intended to help stakeholders during the global market-wide reference rate transitionperiod and were to be in effect for a limited time through December 31, 2022. In December 2022, FASB issued ASU 2022-06 (Topic 848) and deferred the sunset date fromDecember 31, 2022 to December 31, 2024. The Company’s adoption of the provisions of ASU 2020-04 and ASU 2021-01, effective March 12, 2020, was on a prospectivebasis. The adoption of these ASUs did not have a material impact on the Company's consolidated financial statements. See note 20. In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs. The ASUclarifies that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for each reporting period. The Company’sadoption of the provisions of ASU 2020-08, effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements. In October 2020, the FASB issued ASU 2020-10 Codification Improvements. The ASU affects a wide variety of Topics in the Codification. The ASU, among otherthings, contains amendments that improve consistency of the Codification by including all disclosure guidance in the appropriate Disclosure Section. Many of theamendments arose because the FASB provided an option to give certain information either on the face of the financial statements or in the notes to financial statementsand that option only was included in the Other Presentation Matters Section of the Codification. The option to disclose information in the notes to financial statementsshould have been codified in the Disclosure Section as well as the Other Presentation Matters Section (or other Section of the Codification in which the option todisclose in the notes to financial statements appears).The Company’s adoption of the provisions of ASU 2020-10, effective January 1, 2022, did not have an effect on theCompany’s consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation (Topic718), and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Issuer's Accounting for Certain Modifications or Exchanges ofFreestanding Equity-Classified Written Call Options. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written calloption that is not within the scope of another topic. It specifically addresses: (1) how an entity should treat a modification of the terms or conditions or an exchange of afreestanding equity-classified written call option that remains equity classified after modification or exchange; (2) how an entity should measure the effect of amodification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entityshould recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification orexchange. The Company’s adoption of the provisions of ASU 2021-04, effective January 1, 2022, did not have an effect on the Company’s consolidated financialstatements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts withCustomers. This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendmentsin improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquiredin a business combination and revenue contracts with customers not acquired in a business combination. The Company’s adoption of the provisions of ASU 2021-08,effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This ASUincludes amendments that are expected to increase transparency in financial reporting by requiring business entities to disclose information about certain types ofgovernment assistance they receive. The amendments require the following annual disclosures about transactions with a government that are accounted for byapplying a grant or contribution accounting model by analogy to other accounting guidance: (i) information about the nature of the transactions and the relatedaccounting policy used to account for the transactions; (ii) the line items on the balance sheet and income statement that are affected by the transactions, and theamounts applicable to each financial statement line item; and (iii) significant terms and conditions of the transactions, including commitments and contingencies. TheCompany’s adoption of the provisions of ASU 2021-10, effective January 1, 2022, did not have an effect on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings ("TDRs") and Vintage Disclosures. The amendments in this ASU eliminate TDR recognition and measurement guidance and instead, require that an entity evaluate (consistent with the accounting for otherloan modifications) whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosure requirementsand introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The Company's adoption of theprovisions of ASU 2022-02, effective January 1, 2023, did not have an effect on the Company’s consolidated financial statements. D. Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that have original maturities of three months or less. A portion of the Company’scash and cash equivalents are in the form of short-term investments and are not held in federally insured bank accounts. F-10Table of Contents E. Financial Instruments The Company accounts for its investment securities at fair value under various accounting literature including FASB ASC 320, Investments — Debt and EquitySecurities (“ASC 320”), pertaining to investments in debt and equity securities and the fair value option of financial instruments in FASB ASC 825, FinancialInstruments (“ASC 825”). The Company also accounts for certain assets at fair value under applicable industry guidance such as: (a) FASB ASC 946, FinancialServices-Investment Companies (“ASC 946”) and (b) FASB ASC 940-320, Proprietary Trading Securities (“ASC 940-320"). Certain of the Company’s assets and liabilities are required to be measured at fair value. For those assets and liabilities, the Company determines fair value according tothe fair value measurement provisions included in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 establishes a single authoritativedefinition of fair value, sets out a framework for measuring fair value, establishes a valuation hierarchy based on the quality of inputs used to measure fair value, andrequires additional disclosures about fair value measurements. The definition of fair value focuses on the price that would be received to sell the asset or paid to transferthe liability between market participants at the measurement date (an exit price). An exit price valuation will include margins for risk even if they are not observable. ASC820 establishes a valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (level 1, 2, and 3). In addition, the Company has elected to account for certain of its other financial assets at fair value under the fair value option provisions included in ASC 825. Thisstandard provides companies the option of reporting certain instruments at fair value (with changes in fair value recognized in the statement of operations) that werepreviously either carried at cost, not recognized on the financial statements, accounted for as an equity method investment, or carried at fair value with changes in fairvalue recognized as a component of equity rather than in the statement of operations. The election is made on an instrument-by-instrument basis and is irrevocable. Seenote 9 for the information regarding the effects of applying the fair value option to the Company’s financial instruments on the Company’s consolidated financialstatements. For financial instruments held by JVB, the Company accounts for them under ASC 940-320. ASC 940-320 requires all financial instruments be carried at fair value withunrealized and realized gains included recorded in the consolidated statement of operations. The main difference between ASC 940-320 and ASC 320 is that ASC 940-320 does not allow for available for sale or held to maturity treatment. For financial instruments held outside of JVB, the Company accounts for them under ASC 320. ASC 320 requires that the Company classify its investments as either(i) held to maturity, (ii) available for sale, or (iii) trading. This determination is made at the time a security is purchased. ASC 320 requires that both trading and availablefor sale securities are to be carried at fair value. However, in the case of trading assets, both unrealized and realized gains and losses are recorded in the statement ofoperations. For available for sale securities, only realized gains and losses are recognized in the statement of operations while unrealized gains and losses are recognizedas a component of other comprehensive income (“OCI”). However, if the reporting entity elects to account for an otherwise available for sale security under the fairvalue option (ASC 825), then the security is accounted for at fair value with both unrealized and realized gains recorded in the statement of operations. In all theperiods presented, all securities accounted for under ASC 320 were either classified as trading or available for sale. No securities were classified as held to maturity.Furthermore, the Company elected the fair value option, in accordance with ASC 825, for all securities that were classified as available for sale. Therefore, for all periodspresented, all securities owned by the Company were accounted for at fair value with unrealized and realized gains and losses recorded in the consolidated statement ofoperations. When the Company acquires an investment for the purpose of earning a return rather than to support the Company’s trading or matched book repo operations, theCompany classifies that investment as either other investments, at fair value or other investments sold, not yet purchased in the consolidated balance sheet andunrealized and realized gains will be included as a component of principal transactions and other income in the in the consolidated statement of operations. Otherwise,the investment is classified as investments-trading or securities sold, not yet purchased in the consolidated balance sheet and unrealized and realized gains will beincluded as a component of net trading revenue in the in the consolidated statement of operations. F-11Table of Contents When the Company acquires an investment that is required to be accounted for under the equity method, the Company will elect the fair value option when the fairvalue of the investment is either readily determinable or is eligible to be accounted for at NAV under the practical expedient of ASC 946. In those cases, the investmentwill be included as a component of other investments, at fair value in the consolidated balance sheet and unrealized and realized gains will be included as a componentof principal transactions and other income in the in the consolidated statement of operations. If the fair value is not readily determinable, the Company will account forthe investment under the equity method. In those cases, the investment will be included as a component of investments in equity method affiliates in the consolidatedbalance sheet and the Company will recognize its allocable share of the investee’s income or loss as a component of income / (loss) from equity method affiliates in theconsolidated statement of operations. See note 12. The determination of fair value is based on either quoted market prices of an active exchange, independent broker market quotations, market price quotations from third-party pricing services, or, when independent broker quotations or market price quotations from third-party pricing services are unavailable, valuation models preparedby the Company’s management. These models include estimates and the valuations derived from them could differ materially from amounts realizable in an open marketexchange. Also, from time to time, the Company may be deemed to be the primary beneficiary of a VIE and may be required to consolidate it and its investments under theprovisions included in ASC 810. See note 18. In those cases, the Company’s classification of the assets as trading, other investments, at fair value, available for sale, orheld to maturity will depend on the intended use of the investment by the variable interest entity. Investments-Trading Unrealized and realized gains and losses on securities classified as investments-trading are recorded in net trading in the consolidated statements of operations. Trading Securities Sold, Not Yet Purchased Trading securities sold, not yet purchased represent obligations of the Company to deliver the specified security at the contracted price, thereby creating a liability topurchase the security in the market at prevailing prices. The Company is obligated to acquire the securities sold short at prevailing market prices, which may exceed theamount reflected on the consolidated balance sheets. Unrealized and realized gains and losses on trading securities sold, not yet purchased are recorded in net tradingin the consolidated statements of operations. Other Investments, at Fair Value All gains and losses (unrealized and realized) from securities classified as other investments, at fair value in the consolidated balance sheets are recorded as acomponent of principal transactions and other income in the consolidated statements of operations. Other investments sold, not yet purchased Other investments sold, not yet purchased represent obligations of the Company to deliver the specified security at the contracted price, thereby creating a liability topurchase the security in the market at prevailing prices. These investments differ from investments classified as trading securities sold, not yet purchased as they areeither acquired for purposes of earning a return rather than to support the Company’s trading or matched book operations or they are acquired as an economic hedge toinvestments classified as other investments, at fair value. The Company is obligated to acquire the securities sold short at prevailing market prices, which may exceedthe amount reflected on the statement of financial condition. Unrealized and realized gains and losses on other investments sold, not yet purchased are recorded as acomponent of principal transactions and other in the consolidated statement of operations. F. Derivative Financial Instruments FASB ASC 815, Derivatives and Hedging (“ASC 815”), provides for optional hedge accounting. When a derivative is deemed to be a hedge and certain documentationand effectiveness testing requirements are met, reporting entities can record all or a portion of the change in the fair value of a designated hedge as an adjustment toOCI rather than as a gain or loss in the statements of operations. To date, the Company has not designated any derivatives as hedges under the provisions included inASC 815. All of the derivatives that the Company enters into contain master netting arrangements. If certain requirements are met, the offsetting provisions included in FASBASC 210, Balance Sheet (“ASC 210”), allow (but do not require) the reporting entity to net the derivative asset and liability on the consolidated balance sheets. It is theCompany’s policy to present the assets and liabilities on a net basis if the conditions of ASC 210 are met. However, in general the Company does not enter in tooffsetting derivatives with the same counterparties. Derivative financial instruments are recorded at fair value. If the derivative was entered into as part of the Company’s broker-dealer operations, it will be included as acomponent of investments-trading or trading securities sold, not yet purchased. Otherwise, it is included in other investments, at fair value or other investments sold,not yet purchased. The Company may, from time to time, enter into derivatives as investments or to manage its risk exposures arising from (i) fluctuations in foreign currency rates withrespect to the Company’s investments in foreign currency denominated investments; (ii) the Company’s investments in interest sensitive investments; (iii) theCompany's investments in equities; and (iv) the Company’s facilitation of mortgage-backed trading. Derivatives entered into by the Company may include (a) foreigncurrency forward contracts; (b) purchase and sale agreements of TBAs and other forward agency MBS contracts; (c) other extended settlement trades; and (d) shareforward arrangements ("SFAs"). TBAs are forward contracts to purchase or sell MBS with collateral that remains “to be announced” until just prior to the trade settlement. In addition to TBAs, theCompany sometimes enters into forward purchases or sales of agency MBS where the underlying collateral has been identified. These transactions are referred to asother forward agency MBS contracts. TBAs and other forward agency MBS contracts are accounted for as derivatives by the Company under ASC 815. Thesettlement of these transactions is not expected to have a material effect on the Company’s consolidated financial statements. F-12Table of Contents In addition to TBAs and other forward agency MBS contracts as part of the Company’s broker-dealer operations, the Company may from time to time enter into othersecurities or loan trades that do not settle within the normal securities settlement period. In those cases, the purchase or sale of the security or loan is not recorded untilthe settlement date. However, from the trade date until the settlement date, the Company’s interest in the security is accounted for as a derivative as either a forwardpurchase commitment or forward sale commitment. The Company will classify the related derivative either within investments-trading or other investments, at fair valuedepending on where it intends to classify the investment once the trade settles. The Company has engaged in several transactions known as share forward arrangements ("SFAs"). These transactions include the acquisition of financial instrumentsand an offsetting derivative. See note 10. Derivatives involve varying degrees of off-balance sheet risk, whereby changes in the level or volatility of interest rates or market values of the underlying financialinstruments may result in changes in the value of a particular financial instrument in excess of its carrying amount. Depending on the Company’s investment strategy,realized and unrealized gains and losses are recognized in principal transactions and other income or in net trading in the Company’s consolidated statements ofoperations on a trade date basis. See note 10. G. Receivables from and payables to brokers, dealers, and clearing agencies Receivables from brokers, dealers, and clearing agencies may include amounts receivable for deposits placed with clearing agencies, funds in the Company’s accountsheld with clearing agencies, and amounts receivable from securities or repo transactions that have failed to deliver. Payables to brokers, dealers, and clearing agenciesmay include amounts payable from securities or repo transactions that have failed to receive as well as amounts borrowed from clearing agencies under margin loanarrangements. In addition, receivables or payables arising from unsettled regular way trades are reflected on a net basis either as a component of receivables from orpayables to brokers, dealers, and clearing agencies. These receivables are subject to the requirements of ASU 2016-13, which potentially may require the recording ofcredit losses. The Company’s trades and contracts are cleared through a clearing organization and settled daily between the clearing organization and the Company.Due to this daily settlement, the amount of unsettled credit exposures is limited to the amount owed the Company for a very short period of time. The Companycontinually reviews the credit quality of its counterparties and has not incurred a material loss. As a result, the Company has not recorded a credit loss allowance onthese receivables. See note 6. H. Furniture, Equipment, and Leasehold Improvements, Net Furniture, equipment, and leasehold improvements are stated at cost, less accumulated depreciation, and amortization, and are included as a component of other assetsin the consolidated balance sheets. Furniture and equipment are depreciated on a straight-line basis over their estimated useful life of 3 to 5 years. Leaseholdimprovements are amortized over the lesser of their useful life or lease term, which generally ranges from 5 to 10 years. See note 16. I. Goodwill and Intangible Assets with Indefinite Lives Goodwill represents the amount of the purchase price in excess of the fair value assigned to the individual assets acquired and liabilities assumed in various acquisitionscompleted by the Company. See note 13. In accordance with FASB ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill and intangible assets deemed tohave indefinite lives are not amortized to expense but rather are analyzed for impairment. The Company measures its goodwill for impairment on an annual basis or when events indicate that goodwill may be impaired. The impairment test is performed bycomparing the fair value of a reporting unit with its carrying amount. An impairment charge would be recognized for the amount by which the carrying amount exceedsthe reporting unit's fair value; however, any loss recognized could not exceed the total amount of goodwill allocated to the reporting unit. Any impairment loss isincluded in the consolidated statements of operations as impairment of goodwill and is included as a component of operating expense. The Company includes intangible assets comprised primarily of its broker-dealer licenses in other assets on its consolidated balance sheets that it considers to haveindefinite useful lives. The Company reviews these assets for impairment on an annual basis. J. Variable Interest Entities ASC 810 contains the guidance surrounding the definition of a VIE, the definition of variable interests, and the consolidation rules surrounding VIEs. In general, VIEsare entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance itsactivities without additional subordinated financial support. The Company has variable interests in VIEs through its management contracts and investments in varioussecuritization entities including CLOs and CDOs, CREO JV, U.S. Insurance JV, SPAC sponsor entities, the SPAC Fund (prior to its consolidation), and interest in SPVs. Once it is determined that the Company holds a variable interest in a VIE, ASC 810 requires that the Company perform a qualitative analysis to determine (i) which entityhas the power to direct the matters that most significantly impact the VIE’s financial performance and (ii) if the Company has the obligation to absorb the losses of theVIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. The entity that has bothof these characteristics is deemed to be the primary beneficiary and required to consolidate the VIE. This assessment must be done on an ongoing basis. The Companyhas included the required disclosures for VIEs in its consolidated financial statements. See note 18 for further details. K. Collateralized Securities Transactions The Company may enter into transactions involving purchases of securities under agreements to resell (“reverse repurchase agreements” or “receivables under resaleagreements”) or sales of securities under agreements to repurchase (“repurchase agreements”). The resulting interest income and expense are included in net trading inthe consolidated statements of operations. In the case of reverse repurchase agreements, the Company generally takes possession of securities as collateral. Likewise, in the case of repurchase agreements, theCompany is required to provide the counterparty with securities as collateral. In certain cases, a repurchase agreement and a reverse repurchase agreement may be entered into with the same counterparty. If certain requirements are met, theoffsetting provisions included in ASC 210 allow (but do not require) the reporting entity to net the asset and liability on the consolidated balance sheets. ASC 210 provides the option to present reverse repo and repo on a net basis if certain netting conditions are met. The Company's accounting policy is to present repotransactions on a gross basis even if netting thresholds are met. F-13Table of Contents The Company classifies reverse repurchase agreements as a separate line item within the assets section of the Company’s consolidated balance sheets. The Companyclassifies repurchase agreements as a separate line item within the liabilities section of the Company’s consolidated balance sheets. In the case of reverse repurchase agreements, if the counterparty is unable or unwilling to fulfill its obligation to repurchase the collateral securities at maturity, theCompany can sell the collateral securities to repay the obligation. However, the Company is at risk that it may sell at unfavorable market prices and may sustainsignificant losses. The Company’s policy to control this risk is monitoring the market value of securities pledged or used as collateral on a daily basis and requiringadditional collateral in the event the market value of the existing collateral declines. In the case of repurchase agreements, if the counterparty makes a margin call and the Company is unable or unwilling to meet the margin call, the counterparty can sellthe securities to repay the obligation. The Company is at risk that the counterparty may sell the securities at unfavorable market prices and the Company may sustainsignificant losses. The Company controls this risk by monitoring its liquidity position to ensure it has sufficient cash or liquid securities to meet margin calls. In general, reverse repurchase agreements and repurchase agreements allow each counterparty to re-pledge or resell the collateral securities to other counterparties. The Company also receives fees for arranging repo financing for counterparties. See discussion of Agency Repo in note 11. L. Debt Debt is recorded at its face amount, less any discount or plus any premium. Debt issuance costs are included as a component of discount on debt. Any discount ondebt is amortized as a component of interest expense using the effective interest method. The Company has not elected to account for any of its debt at fair value underASC 825. See note 20. M. Redeemable Financial Instruments Redeemable financial instruments are investments made in the Operating LLC or other operating subsidiaries. These investments entitle the holder to an investmentreturn that is variable and is based on the operating results of certain business units of the Company. These investments can be redeemed by the Company undercertain circumstances or the holder may require redemption under certain circumstances. However, there are no fixed maturity dates. The Company treats theseinvestments as liabilities and carries these investments at the redemption value plus any accrued and unpaid investment return on its consolidated balance sheets. Theredemption value is included in redeemable financial instruments and the accrued and unpaid investment return is included in accounts payable and other liabilities inthe consolidated balance sheets. Investment return is recorded on an accrual basis and is included as a component of interest expense in the consolidated statementsof operations. See notes 19 and 31. N. Revenue Recognition Net trading Net trading includes: (i) all gains, losses, interest income, dividend income, and interest expense from securities classified as investments-trading and trading securitiesNet trading includes: (i) all gains, losses, interest income, dividend income, and interest expense from securities classified as investments-trading and trading securitiessold, not yet purchased; (ii) interest income and expense from collateralized securities transactions; and (iii) commissions and riskless trading profits. Net trading isreduced by margin interest, which is recorded on an accrual basis. Riskless trades are transacted through the Company’s proprietary account with a customer order inhand, resulting in little or no market risk to the Company. Transactions that settle in the regular way are recognized on a trade date basis. Extended settlementtransactions are recognized on a settlement date basis (although in cases of extended settlement trades, the unsettled trade is accounted for as a derivative betweentrade and settlement date). See note 10. The investments classified as trading (both investments-trading and trading securities sold, not yet purchased) are carried atfair value. The determination of fair value is based on quoted market prices of an active exchange, independent broker market quotations, market price quotations fromthird-party pricing services or, when independent broker quotations or market price quotations from third-party pricing services are unavailable, valuation modelsprepared by the Company’s management. The models include estimates, and the valuations derived from them could differ materially from amounts realizable in an openmarket exchange. Asset management Asset management revenue consists of management fees earned from Investment Vehicles. In the case of CDOs, the fees earned by the Company generally consist ofsenior, subordinated, and incentive fees. The senior asset management fee is generally senior to all the securities in the CDO capital structure and is recognized on amonthly basis as services are performed. The senior asset management fee is generally paid on a quarterly basis. The subordinated asset management fee is anadditional payment for the same services but has a lower priority in the CDO cash flows. If the CDO experiences a certain level of asset defaults and deferrals, these feesmay not be paid. There is no recovery by the CDO of previously paid subordinated asset management fees. It is the Company’s policy to recognize these fees on amonthly basis as services are performed. The subordinated asset management fee is generally paid on a quarterly basis. However, if the Company determines that thesubordinated asset management fee will not be paid (which generally occurs on the quarterly payment date), the Company will stop recognizing additional subordinatedasset management fees on that particular CDO and will reverse any subordinated asset management fees that are accrued and unpaid. The Company will begin accruingthe subordinated asset management fee again if payment resumes and, in management’s estimate, continued payment is reasonably assured. If payment were to resumebut the Company was unsure of continued payment, it would recognize the subordinated asset management fee as payments were received and would not accrue suchfees on a monthly basis. The incentive management fee is an additional payment, made typically after five to seven years of the life of a CDO, which is based on theclearance of an accumulated cash return on investment (“Hurdle Return”) received by the most junior CDO securities holders. It is an incentive for the Company toperform in its role as asset manager by minimizing defaults and maximizing recoveries. The incentive management fee is not ultimately determined or payable until theachievement of the Hurdle Return by the most junior CDO securities holders. The Company recognizes incentive fee revenue when it is probable and there is not asignificant chance of reversal in the future. In the case of Investment Vehicles other than CDOs, generally the Company earns a base fee and, in some cases, also earnsan incentive fee. Base fees will generally be recognized on a monthly basis as services are performed and will be paid monthly or quarterly. The contractual terms ofeach arrangement will determine the Company’s revenue recognition policy for incentive fees in each case. However, in all cases the Company recognizes the incentivefees when they are probable and there is not a significant chance of reversal in the future. New issue and advisory New issue and advisory revenue is comprised of (a) origination fees for newly created financial instruments originated by the Company: (b) revenue from advisoryservices, and (c) revenue associated with arranging and placing the issuance of newly created financial instruments. F-14Table of Contents Principal transactions and other income Principal transactions include all gains, losses, and income from financial instruments classified as other investments, at fair value and other investments sold, not yetpurchased in the consolidated balance sheets. Investments classified as other investments, at fair value and other investments sold, not yet purchased are carried at fair value. The determination of fair value is basedon quoted market prices of an active exchange, independent broker market quotations, market price quotations or models from third-party pricing services, or, whenindependent broker quotations or market price quotations or models from third-party pricing services are unavailable, valuation models prepared by the Company’smanagement. These models include estimates, and the valuations derived from them could differ materially from amounts realizable in an open market exchange.Dividend income is recognized on the ex-dividend date. Other income/(loss) includes foreign currency gains and losses, interest earned on cash and cash equivalents, interest earned and losses incurred on notes receivable,and other miscellaneous income including revenue from revenue sharing arrangements. O. Interest Expense, net Interest expense incurred, other than interest income and expense included as a component of net trading, is recorded on an accrual basis and presented in theconsolidated statements of operations as a separate non-operating expense. See notes 19 and 20. P. Leases The Company leases office space and certain computer and related equipment. From time to time, the Company sub-leases office space to other tenants. Under therequirements of ASC 842, the Company determines if an arrangement is a lease at the inception date of the contract. The Company measures operating lease liabilitiesusing an estimated incremental borrowing rate as there is no rate implicit in the Company’s operating lease arrangements. An incremental borrowing rate was calculatedfor each operating lease based on the term of the lease, the U.S. Treasury term interest rate, and an estimated spread to borrow on a secured basis. During the periodspresented, all leases to which the Company was a party were classified as operating leases and rent expense was recognized on a straight-line basis and included as acomponent of business development, occupancy, and equipment in the consolidated statements of operations. Q. Non-Controlling Interest The equity interests of any consolidated subsidiary that are not owned by the Company are treated as non-controlling interests. See note 21. R. Equity-Based Compensation The Company accounts for equity-based compensation issued to its employees using the fair value-based methodology prescribed by the provisions related to share-based payments included in FASB ASC 718, Compensation-Stock Compensation (“ASC 718”). In the periods presented herein, the Company had three different typesof grants that fall under ASC 718. First, the Company may grant restricted common stock in Cohen & Company Inc. to employees and directors. These grants vest over a period of time and only haveservice based vesting criteria. In these cases, the Company determines the fair value of the grants by taking the closing stock price of Cohen & Company Inc. on thegrant date and multiplying it by the number of restricted shares granted. The recipient is entitled to dividends during the vesting period but they are paid only if (and tothe extent) the restricted share grant ultimately vests. Any dividends paid for periods prior to vesting are treated as compensation expense. The Company recognizesthe expense over the service period on a straight line basis. The Company assumes no forfeitures up front and records forfeitures as they occur by reducing expense. Second, the Company may grant operating units of the Operating LLC to employees. These grants also vest over a period of time and only have service based vestingcriteria. Because there is a fixed exchange ratio between units of the Operating LLC and shares of Cohen & Company Inc., the fair value of the grant is calculated bytaking the closing stock price of Cohen & Company Inc. on the grant date, adjusting for the exchange ratio, and then multiplying by the number of units of theOperating LLC granted. The recipient is entitled to distributions during the vesting period but they are paid only if (and to the extent) the unit grant ultimately vests. Any distributions paid for periods prior to vesting are treated as compensation expense. The Company recognizes the expense over the service period on a straight linebasis. The Company assumes no forfeitures up front and record forfeitures as they occur by reducing expense. Third, employees may invest in the membership interests of consolidated SPAC sponsor entities. Because these entities are consolidated and the employees areinvesting in the consolidated company's non-controlling interest, these equity interests fall under ASC 718. Generally, the employee invests a de minimis amount andreceives an allocation of the founder shares held by the sponsor entity. The investment generally does not have any explicit vesting criteria associated with it. Generally, the employee's investment will be worthless if the SPAC in which the sponsor entity has invested is liquidated and it will become worth something if the SPACcompletes its business combination. Therefore, the Company treats these grants as having a performance condition (i.e. the completion of the SPAC businesscombination). Further, at the time of the investments, the Company treats this performance condition as being non-probable. The effect of this is that theCompany records no expense related to these investments until (and only if) the business combination is completed. Upon completion of the business combination, theCompany records compensation expense in an amount equal to the fair value of the grant. The fair value of the grant is equal to the public trading price of the SPAC onthe date the business combination is completed adjusted for certain sale restrictions imposed on the shares the employee receives (generally, the shares are restrictedfor sale for some time period and subject to certain hurdle prices before they become freely tradeable). The Company uses a Monte Carlo simulation model to determinethe appropriate discount to place on shares that are subject to hurdle prices. The compensation amount is recorded with an offsetting credit to non-controlling interest. From that point forward, the shares received by the employee are treated as part of the non-controlling interest and allocated income, expense, gains, and lossesaccordingly until the applicable sponsor entity is liquidated or otherwise de-consolidated. F-15Table of Contents S. Accounting for Income Taxes Cohen & Company Inc. is treated as a C corporation for United States federal and state income tax purposes. The Company’s voting-controlled subsidiary, theOperating LLC, is treated as a pass-through entity for U.S. federal income tax purposes and in most of the states in which it does business. However, in the periodspresented, the Operating LLC or its subsidiaries have been subject to entity level income taxes in certain foreign jurisdictions as well as in New York City andPhiladelphia. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected futuretax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on thedifferences between the U.S. GAAP and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such a determination, theCompany considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planningstrategies, and recent financial operations. As shown in note 23 to the consolidated financial statements contained herein, the Company currently has significantrecognized as well as unrecognized deferred tax assets. Deferred tax assets should only be recognized to the extent that the Company determines it can benefit in thefuture from the asset. Generally, this determination is based on the Company's estimates of its ability to generate future taxable income. This determination is complexand subject to judgment. The determination is ongoing and subject to change. If the Company were to change this determination in the future, a significant deferred taxbenefit or deferred tax expense would be recognized as a component of earnings. The Company’s policy is to record penalties and interest as a component of income tax expense (benefit) in the consolidated statements of operations. T. Other Comprehensive Income / (Loss) The Company reports the components of comprehensive income / (loss) within the consolidated statements of operations and comprehensive income / (loss).Comprehensive income / (loss) includes net income / (loss) from foreign translation adjustment. U. Earnings / (Loss) Per Common Share In accordance with FASB ASC 260, Earnings Per Share (“ASC 260”), the Company presents both basic and diluted earnings / (loss) per common share in itsconsolidated financial statements and footnotes. Basic earnings / (loss) per common share (“Basic EPS”) excludes dilution and is computed by dividing net income orloss allocable to common stockholders or members by the weighted average number of common shares and restricted stock entitled to non-forfeitable dividendsoutstanding for the period. Diluted earnings per common share (“Diluted EPS”) reflects the potential dilution of common stock equivalents (such as restricted stock andrestricted units entitled to forfeitable dividends, in-the-money stock options, and convertible debt, if they are not anti-dilutive). See note 26 for the computation ofearnings/(loss) per common share. V. Business Concentration A significant portion of the Company’s asset management revenues in a year may be derived from a small number of transactions. For the year ended December 31, 2023,the Company earned asset management revenue from CDOs of $1,638 and $5,699 from other investment funds. Other than revenue earned in its gestation repo operations, the Company’s trading revenue is generated from transactions with a diverse set of institutionalcustomers. The Company does not consider its trading revenue, other than revenue earned in its gestation repo operations, to be concentrated from a customer orcounterparty perspective. See note 11 for discussion of concentrations within the gestation repo operations. F-16Table of Contents W. Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments. These determinations were based onavailable market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates and,therefore, these estimates may not necessarily be indicative of the amount the Company could realize in a current market exchange. The use of different marketassumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Refer to note 9 for a discussion of the valuation hierarchywith respect to the investments carried by the Company at fair value. Cash equivalents: Cash equivalents are carried at historical cost, which is assumed to approximate fair value. The estimated fair value measurement of cash and cashequivalents is classified within level 1 of the valuation hierarchy. Investments-trading: These amounts are carried at fair value. The fair value is based on either quoted market prices of an active exchange, independent broker marketquotations, market price quotations from third-party pricing services, or valuation models when quotations are not available. Other investments, at fair value: These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent brokermarket quotations, or valuation models when quotations are not available. In the case of investments in alternative investment funds, fair value is generally based on thereported net asset value of the underlying fund. Receivables under resale agreements: Receivables under resale agreements are carried at their contracted resale price, have short-term maturities, and are repricedfrequently or bear market interest rates and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements ofreceivables under resale agreements are based on observations of actual market activity and are generally classified within level 2 of the valuation hierarchy. Trading securities sold, not yet purchased: These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independentmarket quotations, market price quotations from third-party pricing services, or valuation models when quotations are not available. Other investments, sold not purchased: These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independentbroker market quotations, or valuation models when quotations are not available. Securities sold under agreement to repurchase: The liabilities for securities sold under agreement to repurchase are carried at their contracted repurchase price, haveshort-term maturities, and are repriced frequently with amounts normally due in one month or less and, accordingly, these contracts are at amounts that approximate fairvalue. The estimated fair value measurements of securities sold under agreement to repurchase are based on observations of actual market activity and are generallyclassified within level 2 of the valuation hierarchy. Redeemable financial instruments: The liabilities for redeemable financial instruments are carried at their redemption value, which approximates fair value. The estimatedfair value measurement of the redeemable financial instruments is classified within level 3 of the valuation hierarchy. Debt: These amounts are carried at outstanding principal less unamortized discount. However, a substantial portion of the Company's debt was assumed in the AFNMerger and recorded at fair value as of that date. As of December 31, 2023 and 2022, the fair value of the Company’s debt was estimated to be $37,474 and $34,679,respectively. The estimated fair value measurements of the debt are generally based on discounted cash flow models prepared by the Company’s management primarilyusing discount rates for similar instruments issued to companies with similar credit risks to the Company and are generally classified within level 3 of the valuationhierarchy. Derivatives: These amounts are carried at fair value. Derivatives may be included as a component of investments-trading; trading securities sold, not yet purchased; andother investments, at fair value. See notes 10 and 11. The fair value is generally based on quoted market prices on an exchange that is deemed to be active for derivativeinstruments such as foreign currency forward contracts and Eurodollar futures. For derivative instruments, such as TBAs and other extended settlement trades, the fairvalue is generally based on market price quotations from third-party pricing services. F-17Table of Contents X. Investments in Special Purpose Acquisition Companies ("SPACs") Sponsor Entities The Company invested in the sponsor entities of SPACs. Sponsor entities are limited liability companies (each an "LLC") that pool their members' interests and invest inthe private placement of a SPAC. The SPAC will also raise funds in a public offering and seek to complete a business combination within an agreed upon time frame. The SPAC will use the proceeds raised from the private placement to pay transaction and operating expenses during the period it is seeking a business combination. The proceeds of the public offering are placed in an interest bearing trust and can only be used to complete the business combination. Generally, the public investorsmust approve any business combination prior to its effectiveness. If a business combination is not completed within the agreed upon time frame, the SPAC will liquidateand return the public investors' investment to them. If there are funds remaining after liquidation, the sponsor entities may receive some portion of their investmentback, but it is likely they will suffer a total loss of their investment. If the business combination is completed, the sponsor entities' private placement in the SPAC entitlesthem to a combination of unrestricted common stock, restricted common stock, and (in some cases) warrants of the post-business combination SPAC (which is apublicly traded company). The following summarizes the Company's accounting policies related to its investments in these entities: •The sponsor entities are LLCs that give all important decision making rights to their respective managing member. Furthermore, the other members of the LLC cannotreplace the managing member. Accordingly, the Company has concluded that the sponsor entities are VIEs and the managing member has the power to direct itsmost important economic activities. In all cases where the Company was the managing member of a sponsor entity, it also had a significant economic interest in suchsponsor entity and therefore consolidated such sponsor entity. •In all cases where the Company consolidated a sponsor entity, it has determined that the sponsor entity's private placement investment in the SPAC that itsponsored should be treated as an equity method investment during the SPAC's pre-business combination period. Furthermore, due to the difficulty of determiningthe fair value of such an investment in the SPAC's pre-business combination period, the Company has chosen to not elect the fair value option.•If a SPAC completed its business combination, the sponsor entity's investment in the SPAC was converted to a combination of unrestricted and restricted shares inthe post-business combination SPAC. At this point (assuming the Company consolidated the sponsor entity), the Company accounted for the shares received at fairvalue. The Company reclassified any remaining equity method investment to other investments, at fair value and recorded principal transactions income for thedifference. The Company recorded non-controlling interest expense for the SPAC shares that were distributable to the non-controlling interest holders of thesponsor entity. The fair value of the unrestricted shares received is equal to the public trading price of the SPAC on the date of the business combination. The fairvalue of the restricted shares received was adjusted downwards from the public trading price for certain sale restrictions imposed (generally, they are restricted forsale for some time period and subject to certain hurdle prices before they become freely tradeable). The Company uses a Monte Carlo simulation model to determinethe appropriate discount to place on shares that are subject to hurdle prices. In the case of a SPAC business combination where the Company consolidated thesponsor entity, generally there is also an equity-based compensation entry to be recorded at the date of the business combination. See the equity-basedcompensation section above. The Company will continue to mark the sponsor entity's investment in the SPAC to market and record principal transactions income orloss and offsetting non-controlling interest income or expense until the sponsor entity itself distributes all of the SPAC shares it owns to its members and liquidates. At that point, the Company holds the SPAC shares directly (rather than through a consolidated subsidiary) and records principal transaction income and loss untilthe SPAC shares are liquidated. •The Company also invested in sponsor entities that it does not consolidate because it was not the managing member of such sponsor entity or otherwise did nothave the power to direct the sponsor entity's most important activities. In these cases, the Company treated its investment in the sponsor entity as an equity methodinvestment. Furthermore, because of the difficulty of determining the fair value of such an investment in the applicable SPAC's pre-business combination period, theCompany has chosen to not elect the fair value option.•If a SPAC completed a business combination and the Company had an equity method investment in the associated sponsor entity, upon completing a businesscombination, the sponsor entity recorded income equal to the difference between the fair value of the restricted and unrestricted shares it received and the carryingvalue of its equity method investment in the SPAC. The Company recognized its share of this gain as income from equity method affiliates. The sponsor entitycontinued to mark its investment in the SPAC to market after the business combination and the Company recognized its share of the change in fair value as income orloss from equity method affiliates. Once the sponsor entity distributed the Company's share of the SPAC shares it owned, the Company reclassified its investmentfrom investment in equity method affiliate to other investments, at fair value as the Company held the SPAC shares directly (rather than through an equity methodinvestee). The Company then recorded principal transactions income and loss until the SPAC shares are liquidated.•If a SPAC liquidated and the Company had an investment in it (either directly in the case of consolidated sponsor entities or indirectly in the case of equity methodsponsor entities), the Company wrote off its remaining equity method balance and recorded a loss on its equity method investment. In the case of consolidatedsponsor entities, the Company recorded an offsetting entry to non-controlling interest. F-18Table of Contents Y. Recent Accounting Developments In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts inEntity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU simplifies accounting forconvertible instruments by removing major separation models currently required. The ASU removes certain settlement conditions that are required for equity contractsto qualify for the derivative scope exception. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. This ASU is effective for fiscalyears beginning after December 15, 2023, including interim periods within those fiscal years. The Company has determined the adoption of this standard will not have amaterial impact on its consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual SaleRestrictions. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity securityand, therefore, is not considered in measuring fair value. This ASU is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. TheCompany has determined the adoption of this standard will not have a material impact on its consolidated financial statements. In March 2023, the FASB issued ASU 2023-02, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Usingthe Proportional Amortization Method. These amendments allow reporting entities to elect to account for qualifying tax equity investments using the proportionalamortization method, regardless of the program giving rise to the related income tax credits. The ASU responds to stakeholder feedback that the proportionalamortization method provides investors and other allocators of capital with a better understanding of the returns from investments that are made primarily for thepurpose of receiving income tax credits and other income tax benefits. This ASU is effective for fiscal years beginning after December 15, 2023. Early adoption ispermitted. The Company has determined the adoption of this standard will not have a material impact on its consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, Business Combinations— Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. The ASU applies to the formation of entities that meet the definition of a joint venture (or a corporate joint venture) as defined in the FASB Accounting StandardsCodification Master Glossary. The amendments in the ASU require that a joint venture apply a new basis of accounting upon formation. As a result, a newly formedjoint venture, upon formation, would initially measure its assets and liabilities at fair value. The ASU is effective on a prospective basis for all joint ventures with aformation date on or after January 1, 2025. Early adoption of ASU No. 2023-05 is permitted in any interim or annual period in which financial statements have not yetbeen issued. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements—Codification Amendments in Response to the Securities and Exchange Commission(“SEC’”) Disclosure Update and Simplification Initiative. These amendments clarify or improve disclosure and presentation requirements of a variety of topics andalign the requirements in the FASB accounting standard codification with the SEC’s regulations. The ASU will be effective on the date the related disclosure areremoved from Regulation S-X or Regulation S-K by the SEC and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30,2027. Early adoption in not permitted. The Company is currently evaluating the new guidance to determine the impact it may have on the consolidated financialstatements, which, is not expected to be material. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU aredesigned to improve reportable segment disclosure requirements primarily through enhance disclosures about significant segment expenses. The ASU is effective forfiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company iscurrently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). The amendments in this ASU address investor requests for more transparency aboutincome tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments inthis ASU are effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis. Retrospective application is permitted. TheCompany is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. F-19Table of Contents 4. OTHER RECENT EVENTS Consolidation of the SPAC Fund Prior to March 31, 2023, the Vellar GP had an investment in the SPAC Fund, the potential to earn incentive fees, and did not consolidate the SPAC Fund. Effective April 1,2023, all of the investors in the SPAC Fund, other than the Vellar GP, redeemed all of their interests in the SPAC Fund. As a result, effective April 1, 2023, the Vellar GPbecame the sole owner of the SPAC Fund and began consolidating it. The Company owns an interest in and consolidates the Vellar GP effective April 1, 2023, theCompany began consolidating the SPAC Fund as well. The Company recorded the following entry upon consolidation: Asset/(Liability) Cash and cash equivalents $257 Receivables from brokers, dealers, and clearing agencies 68,066 Other investments, at fair value 40,388 Other assets 108 Accounts payable and other liabilities (82,968)Other investments sold, not yet purchased (25,806)Vellar GP's remaining investment in the SPAC Fund $45 As of December 31, 2023, all amounts due to the redeeming investors in the SPAC Fund were paid in full. The 2020 Senior Notes On January 31, 2020, the Operating LLC entered into a note purchase agreement (the “Original Purchase Agreement”) with JKD Capital Partners I LTD, a New Yorkcorporation (“JKD Investor”), and RN Capital Solutions LLC, a Delaware limited liability company (“RNCS”). The JKD Investor is owned by Jack DiMaio, Jr., the vicechairman of the Company’s board of directors, and his spouse. The note purchased by the JKD Investor is herein referred to as the “JKD Note.” Pursuant to the Original Purchase Agreement, JKD Investor and RNCS each purchased a senior promissory note in the principal amount of $2,250 (for an aggregateinvestment of $4,500). The senior promissory notes bore interest at a fixed rate of 12% per annum and matured on January 31, 2022. On January 31, 2022, the OperatingLLC and JKD Investor entered into a note purchase agreement (the "2022 Purchase Agreement"), pursuant to which, among other things, on such date, (i) JKD Investorpaid to the Operating LLC an additional $2,250 and (ii) in consideration for such funds, the Operating LLC issued to JKD Investor an amended and restated seniorpromissory note in the aggregate principal amount of $4,500 (the “Amended and Restated Note”), which Amended and Restated Note amended and restated the JKDNote in its entirety. The 2022 Purchase Agreement contains customary representations and warranties on the part of each of JKD Investor and the Operating LLC. TheCompany used these proceeds to retire the $2,250 of 2020 Senior Notes held by RNCS. See notes 20 and 31. On January 5, 2024, the Operating LLC and JKD Investor entered into an amendment to the Amended and Restated Note, pursuant to which the Amended and RestatedNote was amended to (a) extend (i) the maturity date thereof from January 31, 2024 to January 31, 2026, (ii) the date following which the Amended and Restated may beredeemed by JKD Investor from January 31, 2023 to January 31, 2025, and (iii) the date following which the Amended and Restated Note may be prepaid by theOperating LLC from January 31, 2023 to January 31, 2025; and (b) increase the interest rate payable under the Amended and Restated Note from 10% per annum to 12%per annum effective as of January 31, 2024. F-20Table of Contents 5. NET TRADING Net trading consisted of the following in the periods presented.NET TRADING(Dollars in Thousands) Year Ended December 31, 2023 2022 2021 Net realized gains / (losses)- trading inventory $18,962 $12,583 $21,103 Net unrealized gains / (losses)-trading inventory (2,087) (2,463) (3,069)Gains and losses 16,875 10,120 18,034 Interest income-trading inventory 4,250 2,888 5,958 Interest income-reverse repos 28,238 47,023 78,064 Interest income 32,488 49,911 84,022 Interest expense-repos (25,072) (31,021) (40,269)Interest expense-margin payable (6,267) (2,680) (706)Interest expense (31,339) (33,701) (40,975) Other trading revenue 12,902 13,679 8,304 Net trading $30,926 $40,009 $69,385 Trading inventory includes investments classified as investments-trading as well as trading securities sold, not yet purchased. For discussion of margin payable, seenote 6. Other trading revenue is primarily comprised of revenue earned on the Company's agency repo business. See note 11. F-21Table of Contents 6. RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES Amounts receivable from brokers, dealers, and clearing agencies consisted of the following. RECEIVABLES FROM BROKERS, DEALERS, AND CLEARING AGENCIES(Dollars in Thousands) December 31, 2023 December 31, 2022 Deposits with clearing organizations $250 $250 Unsettled regular way trades, net 1,527 - Receivable from clearing organizations 65,024 140,683 Receivables from brokers, dealers, and clearing agencies $66,801 $140,933 Amounts payable to brokers, dealers, and clearing agencies consisted of the following. PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES(Dollars in Thousands) December 31, 2023 December 31, 2022 Unsettled regular way trades, net $- $3,238 Margin payable 111,085 131,747 Payables to brokers, dealers, and clearing agencies $111,085 $134,985 Deposits with clearing organizations represent contractual amounts the Company is required to deposit with its clearing agents. Securities transactions that settle in the regular way are recorded on the trade date, as if they had settled. The related amounts receivable and payable for unsettledsecurities transactions are recorded net in receivables from or payables to brokers, dealers, and clearing agencies on the Company’s consolidated balance sheets. Therelated amounts receivable and payable for unsettled securities transactions are recorded net in receivables from or payables to brokers, dealers, and clearing agencieson the Company’s consolidated balance sheets. Receivables from clearing organizations are primarily comprised of cash received by the Company upon execution of short trades that is restricted from withdrawal bythe clearing agent. Margin payable represents amounts borrowed from Pershing, LLC to finance the Company’s trading portfolio. See note 5 for interest expense incurred on marginpayable. All of the Company's securities included in investments-trading and a portion of the Company's securities included in other investments, at fair value serve ascollateral for this margin loan. See note 8. F-22Table of Contents 7. OTHER RECEIVABLES Other receivables consisted of the following. OTHER RECEIVABLES(Dollars in Thousands) December 31, 2023 December 31, 2022 Asset management fees receivable $1,085 $936 New issue and advisory fees receivable 1,181 167 Cash collateral due from repo and/or reverse repo counterparties - 4,301 Accrued interest receivable 1,689 2,561 Revenue share receivable 321 138 Agency repo income receivable 391 806 Miscellaneous other receivables 706 618 Other receivables $5,373 $9,527 Asset management fees receivable are of a routine and short-term nature. These amounts are generally accrued monthly and paid on a monthly or quarterly basis. New issue fees receivable represents fees due for new issue and advisory services. When the Company enters into a reverse repo, the Company obtains collateral in excess of the principal of the reverse repo. The Company accepts collateral in the formof liquid securities or cash. If the value of the securities the Company receives as collateral increases, the Company’s reverse repo counterparties may request a returnof a portion of their collateral with a value of such increases. In some cases, the Company will return to such reverse repo counterparties cash instead of securities. Inthat case, the Company includes the cash returned as a component of other receivables (cash due from counterparties). When the Company enters into repo transactions, the Company provides collateral to the Company’s repo counterparties in excess of the principal balance of therepo. The Company’s counterparties accept collateral in the form of liquid securities or cash. To the extent the Company provides the collateral in cash, the Companyincludes it as a component of other receivables (cash due from counterparties). Accrued interest receivable represents interest and dividends accrued on the Company’s investment securities included as a component of investments-trading or otherinvestments, at fair value. Interest payable on securities sold, not yet purchased is included as a component of accounts payable and other liabilities. See note 17. Revenue share receivable represents the amount due to the Company for the Company’s share of a revenue arrangement generated from an entity in which the Companyreceives a share of the entity’s revenue. Agency repo income receivable represents income receivable on gestation repo trades. See note 11. Miscellaneous other receivables are receivables that are of a short-term nature. F-23Table of Contents 8. FINANCIAL INSTRUMENTS Investments—Trading Investments-trading consisted of the following. INVESTMENTS - TRADING(Dollars in Thousands) December 31, 2023 December 31, 2022 ABS $- $1 Corporate bonds and redeemable preferred stock 53,657 44,572 Derivatives 7,470 4,669 Equity securities 928 220 Municipal bonds 20,572 19,502 Residential mortgage loans 3,113 13,506 RMBS 9 7 U.S. government agency debt securities 6,567 19,683 U.S. government agency MBS and CMOs 88,000 97,276 U.S. Treasury securities 1,012 12,392 Investments-trading $181,328 $211,828 Substantially all of the Company's investments-trading serve as collateral for the Company's margin loan payable. See note 6. Trading Securities Sold, Not Yet Purchased Trading securities sold, not yet purchased consisted of the following. TRADING SECURITIES SOLD, NOT YET PURCHASED(Dollars in Thousands) December 31, 2023 December 31, 2022 Corporate bonds and redeemable preferred stock $24,355 $61,310 Derivatives 6,719 1,177 Equity securities 393 51 U.S. government agency debt securities - 32 U.S. government agency MBS and CMOs - 1 U.S. Treasury securities 34,284 71,386 Trading securities sold, not yet purchased $65,751 $133,957 The Company manages its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similarfixed rate securities. See note 5 for realized and unrealized gains recognized on investments-trading and trading securities sold, not yet purchased. F-24Table of Contents Other Investments, at Fair Value Other investments, at fair value consisted of the following. OTHER INVESTMENTS, AT FAIR VALUE(Dollars in Thousands) December 31, 2023 December 31, 2022 Equity securities $38,038 $13,725 Equity derivatives 1,447 - Restricted equity securities 2,054 3,135 Corporate bonds and redeemable preferred stock 506 476 Fair value receivables 9,541 - Interests in SPVs 12,609 - CREO JV 4,783 6,568 U.S. Insurance JV 3,107 3,459 SPAC Fund - 527 Residential loans 132 132 Other investments, at fair value $72,217 $28,022 As of December 31, 2023, $26,079 of unrestricted equity securities, $1,447 of equity derivatives, and $6,278 of the fair value receivables represented long positionsrelated to share forward arrangements entered into by the Company. As of December 31, 2022, there were no other investments, at fair value related to share forwardarrangements. See description of share forward arrangements in note 10. Fair value receivables represent receivables (including receivables that are convertible into equity shares) from various counterparties in connection with theCompany's advisory business. These receivables are carried at fair value. Interests in SPVs represents interests the Company has received in SPVs as consideration for services provided by CCM, rather than cash. The SPVs hold convertiblenotes receivable interests in the counterparties. The Company does not consolidate the SPVs and carries its interests in the SPVs at fair value. See note 9 fordiscussion of the determination of fair value. Other Investments Sold, Not Yet Purchased A total of $946 and $1,673 of the amounts shown in other investments, at fair value above serve as collateral for the Company's margin loan payable for the years endedDecember 31, 2023 and 2022, respectively. See note 6. OTHER INVESTMENTS SOLD, NOT YET PURCHASED(Dollars in Thousands) December 31, 2023 December 31, 2022 Equity securities $97 $78 Share forward liabilities 24,645 - Other investments sold, not yet purchased $24,742 $78 F-25Table of Contents 9. FAIR VALUE DISCLOSURES Fair Value Option The Company has elected to account for certain of its other financial assets at fair value under the fair value option provisions of ASC 825. The primary reason forelecting the fair value option was to reduce the burden of monitoring the differences between the cost and the fair value of the Company’s investments, previouslyclassified as available for sale securities, including the assessment as to whether the declines are temporary in nature and to further remove an element of managementjudgment. Such financial assets accounted for at fair value include: •securities that would otherwise qualify for available for sale treatment; •investments in equity method affiliates that have the attributes in ASC 946-10-15-2 (commonly referred to as investment companies) or that have fairvalues that are readily determinable; and •investments in residential mortgage loans. The changes in fair value (realized and unrealized gains and losses) of these instruments for which the Company has elected the fair value option are recorded inprincipal transactions and other income in the consolidated statements of operations. All of the investments for which the Company has elected the fair value option areincluded as a component of other investments, at fair value in the consolidated balance sheets. The Company recognized net gains (losses) of ($92,931), ($30,914), and $35,421 related to changes in fair value of investments that were included as a component ofother investments, at fair value during the years ended December 31, 2023, 2022, and 2021, respectively. The Company recognized net gains (losses) of $107,816, $307,and $830 related to changes in fair value of investments that are included as a component of other investments, sold not yet purchased during the years endedDecember 31, 2023, 2022, and 2021, respectively. Fair Value Measurements In accordance with ASC 820, the Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three-level valuation hierarchy. The valuation hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the valuation hierarchy under ASC 820 are described below. Level 1Financial assets and liabilities with values that are based on unadjusted quoted prices in active markets that are accessible at the measurement date foridentical, unrestricted assets or liabilities. Level 2Financial assets and liabilities with values that are based on one or more of the following: 1.Quoted prices for similar assets or liabilities in active markets; 2.Quoted prices for identical or similar assets or liabilities in non-active markets; 3.Pricing models with inputs that are derived, other than quoted prices, and are observable for substantially the full term of the asset or liability; or 4.Pricing models with inputs that are derived principally from or corroborated by observable market data through correlation or other means forsubstantially the full term of the asset or liability. Level 3Financial assets and liabilities with values that are based on prices or valuation techniques that require inputs that are both significant to the fair valuemeasurement and unobservable. These inputs reflect management’s own assumptions about the assumptions a market participant would use inpricing the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the valuation hierarchy. In such cases, the level in the valuation hierarchy withinwhich the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to theasset or liability. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the level 3 category. As a result,the unrealized gains and losses for assets and liabilities within the level 3 category that may be presented in the tables below may include changes in fair value that wereattributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. F-26Table of Contents The following tables present information about the Company’s assets and liabilities measured at fair value as of December 31, 2023 and 2022, and indicates the valuationhierarchy of the valuation techniques utilized by the Company to determine such fair value. FAIR VALUE MEASUREMENTS ON A RECURRING BASISAs of December 31, 2023(Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: Corporate bonds and redeemable preferred stock $53,657 $- $53,657 $- Derivatives 7,470 - 7,470 - Equity securities 928 639 289 - Municipal bonds 20,572 - 20,572 - Residential mortgage loans 3,113 - 3,113 - RMBS 9 - 9 - U.S. government agency debt securities 6,567 - 6,567 - U.S. government agency MBS and CMOs 88,000 - 88,000 - U.S. Treasury securities 1,012 1,012 - - Total investments - trading $181,328 $1,651 $179,677 $- Other investments, at fair value: Equity securities $38,038 38,038 $- $- Equity derivatives 1,447 - 1,447 - Restricted equity securities 2,054 - 2,054 - Corporate bonds and redeemable preferred stock 506 - 506 - Fair value receivables 9,541 - 9,541 - Interests in SPVs 12,609 - 12,609 - Residential loans 132 - 132 - 64,327 $38,038 $26,289 $- Investments measured at NAV (1) 7,890 Total other investments, at fair value $72,217 Liabilities Trading securities sold, not yet purchased: Corporate bonds and redeemable preferred stock $24,355 $- $24,355 $- Derivatives 6,719 - 6,719 - Equity securities 393 393 - - U.S. government agency MBS and CMOs - - - - U.S. Treasury securities 34,284 34,284 - - Total trading securities sold, not yet purchased $65,751 $34,677 $31,074 $- Other investments, sold not yet purchased: Equity securities $97 $97 $- $- Share forward liabilities 24,645 - 24,645 - Total other investments, sold not yet purchased $24,742 $97 $24,645 $- (1)As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in the U.S. Insurance JV and the CREO JV. The U.S.Insurance JV invests in U.S. Dollar ("USD") denominated debt issued by small insurance and reinsurance companies. The CREO JV invests in primarily multi-familycommercial real estate mortgage-backed loans. According to ASC 820, these investments are not categorized within the valuation hierarchy. F-27Table of Contents FAIR VALUE MEASUREMENTS ON A RECURRING BASISAs of December 31, 2022(Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: ABS $1 $- $1 $- Corporate bonds and redeemable preferred stock 44,572 - 44,572 - Derivatives 4,669 - 4,669 - Equity securities 220 220 - - Municipal bonds 19,502 - 19,502 - Residential mortgage loans 13,506 - 13,506 - RMBS 7 - 7 - U.S. government agency debt securities 19,683 - 19,683 - U.S. government agency MBS and CMOs 97,276 - 97,276 - U.S. Treasury securities 12,392 12,392 - - Total investments - trading $211,828 $12,612 $199,216 $- Other investments, at fair value: Equity securities $13,725 $13,725 $- $- Restricted equity securities 3,135 - 3,135 - Corporate bonds and redeemable preferred stock 476 - 476 - Residential loans 132 - 132 - 17,468 $13,725 $3,743 $- Investments measured at NAV (1) 10,554 Total other investments, at fair value $28,022 Liabilities Trading securities sold, not yet purchased: Corporate bonds and redeemable preferred stock $61,310 $- $61,310 $- Derivatives 1,177 - 1,177 - Equity securities 51 51 - U.S. Government Agency debt 32 - 32 U.S. government agency MBS and CMOs 1 - 1 - U.S. Treasury securities 71,386 71,386 - - Total trading securities sold, not yet purchased $133,957 $71,437 $62,520 $- Other investments, sold not yet purchased: Derivatives $78 $78 $- $- Total other investments, sold not yet purchased $78 $78 $- $- (1) As a practical expedient, the Company uses NAV (or its equivalent) to measure the fair value of its investments in the U.S. Insurance JV, the SPAC Fund, and theCREO JV. The U.S. Insurance JV invests in USD denominated debt issued by small insurance and reinsurance companies. The SPAC Fund invested in equitysecurities of SPACs. The CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans. According to ASC 820, these investments arenot categorized within the valuation hierarchy. F-28Table of Contents The following provides a brief description of the types of financial instruments the Company holds, the methodology for estimating fair value, and the level within thevaluation hierarchy of the estimate. The discussion that follows applies regardless of whether the instrument is included in investments-trading; other investments, atfair value; or trading securities sold, not yet purchased. CLOs, CDOs, and ABS: CLOs, CDOs, and ABS are interests in securitizations. ABS may include, but are not limited to, securities backed by auto loans, credit cardreceivables, or student loans. When the Company is able to obtain independent market quotations from at least two broker-dealers and where a price within the range ofat least two broker-dealers is used or market price quotations from third-party pricing services are used, these interests in securitizations will generally be classifiedwithin level 2 of the valuation hierarchy. These valuations are based on a market approach. The independent market quotations from broker-dealers are generallynonbinding. The Company seeks quotations from broker-dealers that historically have actively traded, monitored, issued, and been knowledgeable about the interests insecuritizations. The Company generally believes to the extent that it (i) receives two quotations in a similar range from broker-dealers knowledgeable about theseinterests in securitizations and (ii) considers the broker-dealers gather and utilize observable market information such as new issue activity in the primary market, tradingactivity in the secondary market, credit spreads versus historical levels, bid-ask spreads, and price consensus among market participants and sources, thenclassification within level 2 of the valuation hierarchy is appropriate. In the absence of two broker-dealer market quotations, a single broker-dealer market quotation maybe used without corroboration of the quote, in which case the Company generally classifies the fair value within level 3 of the valuation hierarchy. If quotations are unavailable, prices observed by the Company for recently executed market transactions or valuation models prepared by the Company’s managementmay be used, which are based on an income approach. These models prepared by the Company’s management include estimates and the valuations derived from themcould differ materially from amounts realizable in an open market exchange. Each CLO and CDO position is evaluated independently taking into consideration availablecomparable market levels, underlying collateral performance and pricing, deal structures, and liquidity. Fair values based on internal valuation models prepared by theCompany’s management are generally classified within level 3 of the valuation hierarchy. Establishing fair value is inherently subjective (given the volatile and sometimes illiquid markets for certain interests in securitizations) and requires management to makea number of assumptions, including assumptions about the future of interest rates, discount rates, and the timing of cash flows. The assumptions the Company appliesare specific to each security. Although the Company may rely on internal calculations to compute the fair value of certain interest in securitizations, the Companyrequests and considers indications of fair value from third-party pricing services to assist in the valuation process. Corporate Bonds and Redeemable Preferred Stock: The Company uses recently executed transactions or third-party quotations from independent pricing services toarrive at the fair value of its investments in corporate bonds and redeemable preferred stock. These valuations are based on a market approach. The Company generallyclassifies the fair value of these bonds within level 2 of the valuation hierarchy. In instances where the fair values of securities are based on quoted prices in activemarkets (for example with redeemable preferred stock), the Company classifies the fair value of these securities within level 1 of the valuation hierarchy. Equity Securities: The fair value of equity securities that represent unrestricted investments in publicly traded companies (common or preferred shares, options,warrants, and other equity investments) are determined using the closing price of the security as of the reporting date. These are securities that are traded on arecognized liquid exchange and the Company classifies their fair value within level 1 of the valuation hierarchy. The fair value of equity securities that representinvestments in privately held companies are generally determined either (i) based on a valuation model or (ii) based on recently observed transactions in the sameinstrument or similar instrument that we hold. These valuations are generally classified within either level 2 or level 3 of the valuation hierarchy. Equity Securities Without Readily Determinable Fair Value: From time to time, the Company invests in equity securities that do not have a readily determinable fair valuethat also do not qualify for equity method accounting or the practical expedient for investments in investment companies which are measured at NAV. In those cases,the Company utilizes the measurement alternative of ASC 321-10-35-2. This alternative allows the Company to carry the investment at cost minus impairment. If theCompany observes a market transaction for an identical or similar instrument, it will adjust the carrying value of the equity security. These securities are included as acomponent of other investments, at fair value. When measured at fair value using an orderly observable market transaction, it will generally be classified as level 1 inthe valuation hierarchy. Otherwise, it will be classified as level 2. Restricted Equity Securities: Restricted equity securities are investments in publicly traded companies. However, they are restricted from re-sale until either (a) theshare price trades above a certain threshold for a certain period of time or (b) a certain period of time elapses, or both. The Company determines the fair value by utilizinga model that starts with the publicly traded share price but then applies a discount based on a Monte Carlo simulation. The inputs to this model are observable so theCompany classifies these securities within level 2 of the valuation hierarchy. The Company is not allowed to sell these shares during the restriction period and there isno certainty as to when these hurdles will be met or if they will be met at all. Fair value receivables: The Company values these instruments using a model. The main input is the risk-based cash flow discount rates. In the case where thereceivable is convertible into counterparty equity, additional inputs include the counterparty’s share price, volatility, and the risk free rate of return. The inputs to thismodel are observable so the Company classifies these securities within level 2 of the hierarchy. Foreign Government Bonds: The fair value of foreign government bonds is estimated using valuations provided by third-party pricing services and classifies the fairvalue within level 2 of the valuation hierarchy. Interests in SPVs: The Company values these instruments using a model. The model first determines the value of the SPV's convertible note interest in the counterpartyand then determines what portion of that fair value is allocable to the Company’s interest in the SPV. The Company determines the fair value of the convertible noteusing a model which utilizes a Monte Carlo simulation. The main inputs are the counterparty’s share price, volatility, risk free rate of return, and risk-based cash flowdiscount rates. The inputs to this model are observable so the Company classifies these securities within level 2 of the hierarchy. Municipal Bonds: Municipal bonds, which include obligations of U.S. states, municipalities, and political subdivisions, primarily include bonds or notes issued by U.S.municipalities. The Company generally values these securities using third-party quotations such as market price quotations from third-party pricing services. TheCompany generally classifies the fair value of these bonds within level 2 of the valuation hierarchy. The valuations are based on a market approach. In instances wherethe Company is unable to obtain reliable market price quotations from third-party pricing services, the Company will use its own internal valuation models. In thesecases, the Company will classify such securities as level 3 within the valuation hierarchy until it is able to obtain third-party pricing. F-29Table of Contents Residential Mortgage Loans: The Company generally values these loans using a model. The model’s main inputs are current market quotations for pooled mortgageloan securities with similar characteristics. The Company considers the inputs to be observable and therefore classifies the fair value of these loans within level 2 of thevaluation hierarchy. RMBS: The Company generally values these securities using third-party quotations such as unadjusted broker-dealer quoted prices or market price quotations fromthird-party pricing services. These valuations are based on a market approach. The Company generally classifies the fair value of these securities based on third-partyquotations within level 2 of the valuation hierarchy. U.S. Government Agency MBS and CMOs: These are securities that are generally traded over the counter. The Company generally values these securities using third-party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third-party pricing services. These valuations are based on a marketapproach. The Company classifies the fair value of these securities within level 2 of the valuation hierarchy. U.S. Government Agency Debt Securities: Callable and non-callable U.S. government agency debt securities are measured primarily based on quoted market pricesobtained from third-party pricing services. Non-callable U.S. government agency debt securities are generally classified within level 1 and callable U.S. governmentagency debt securities are classified within level 2 of the valuation hierarchy. U.S. Treasury Securities: U.S. Treasury securities include U.S. Treasury bonds and notes and the fair values of the U.S. Treasury securities are based on quoted prices ormarket activity in active markets. Valuation adjustments are not applied. The Company classifies the fair value of these securities within level 1 of the valuation hierarchy. Derivatives: TBAs and Other Forward Agency MBS Contracts The Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third partypricing services. TBAs and other forward agency MBS contracts are generally classified within level 2 of the valuation hierarchy. If there is limited transaction activity orless transparency to observe market based inputs to valuation models, TBAs and other forward agency MBS contracts are classified within level 3 of the valuationhierarchy. U.S. government agency MBS and CMOs include TBAs and other forward agency MBS contracts. Unrealized gains on TBAs and other forward agencyMBS contracts are included in investments-trading on the Company’s consolidated balance sheets and unrealized losses on TBAs and other forward agency MBScontracts are included in trading securities sold, not yet purchased on the Company’s consolidated balance sheets. See note 10. Other Extended Settlement Trades When the Company buys or sells a financial instrument that will not settle in the regular time period, the Company will account for that purchase or sale on thesettlement date rather than the trade date. In those cases, the Company accounts for the transaction between trade date and settlement date as a derivative (as either apurchase commitment or sale commitment). The Company will record an unrealized gain or unrealized loss on the derivative for the difference between the fair value ofthe underlying financial instrument as of the reporting date and the agreed upon transaction price. The Company will determine the fair value of the financial instrumentusing the methodologies described above. Equity Derivatives The Company may enter into equity derivatives which include listed options as well as other derivative transactions with an equity instrument as the underlying. Listedoptions are traded on a recognized liquid exchange and the Company classifies their fair value within level 1 of the valuation hierarchy. Other equity derivatives (wherethe underlying equity instrument is publicly traded but the derivative itself is not) are classified within level 2 of the valuation hierarchy. See note 10. Foreign Currency Forward Contracts Foreign currency forward contracts are exchange-traded derivatives, which transact on an exchange that is deemed to be active. The fair value of the foreign currencyforward contracts is based on current quoted market prices. Valuation adjustments are not applied. These are classified within level 1 of the valuation hierarchy. Seenote 10. Share Forward Liabilities Share forward liabilities are included as a component of other investments sold, not yet purchased in the Company's balance sheets. The Company utilizes a model tovalue these instruments with observable inputs and considers these derivatives as level 2 within the fair value hierarchy. See note 10. F-30Table of Contents Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent) The following table presents additional information about investments in certain entities that calculate NAV per share (regardless of whether the “practical expedient”provisions of ASC 820 have been applied), which are measured at fair value on a recurring basis as of December 31, 2023 and 2022. FAIR VALUE MEASUREMENTS OF INVESTMENTS IN CERTAIN ENTITIESTHAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT)(Dollars in Thousands) December 31, 2023 Unfunded Commitments Redemption Frequency Redemption NoticePeriod Other investments, at fair value CREO JV (a) $4,783 $10,398 N/A N/A U.S. Insurance JV (b) 3,107 N/A N/A N/A $7,890 December 31, 2022 Unfunded Commitments Redemption Frequency Redemption NoticePeriod Other investments, at fair value CREO JV (a) $6,568 $8,464 N/A N/A U.S. Insurance JV (b) 3,459 N/A N/A N/A SPAC Fund (c) 527 NA Quarterly after 1 yearlock up 30 days $10,554 N/A – Not applicable. (a)The CREO JV invests in primarily multi-family commercial real estate mortgage-backed loans.(b)The U.S. Insurance JV invests in USD denominated debt issued by small and medium sized insurance and reinsurance companies.(c)The SPAC Fund invested in equity interests of SPACs. F-31Table of Contents 10. DERIVATIVE FINANCIAL INSTRUMENTS The Company may, from time to time, enter into the following derivative instruments: Equity Derivatives A significant portion of the Company’s equity holdings are carried at fair value. The Company hedges a portion of this exposure by entering into equityderivatives such as puts and short call options from time to time. These derivative positions are carried at fair value as a component of other investments, at fair valueand other investments sold, not yet purchased in the Company’s consolidated balance sheets. As of December 31, 2023 and December 31, 2022, the Company had nooptions. From time to time, the Company may also enter into forward purchase commitments for equity securities. In addition, the Company may engage in advisory transactions that result in a receivable that can be paid in cash or a variable number of equity instruments. In suchinstances, the Company would record the receivable as a component of other assets in its consolidated balance sheets and record the equity component as anembedded derivative. All equity derivatives are carried at fair value as a component of other investments, at fair value or other investments sold, not yet purchased inthe Company’s consolidated balance sheets. As of December 31, 2023 and December 31, 2022, the Company had no embedded equity derivatives. The Company also hedges a portion of the exposure from these equity investments by entering into short trades. These short trades are not treated as derivatives andare carried as a component of other investments sold, not yet purchased. See note 8. TBAs and Other Forward Agency MBS Contracts The Company enters into TBAs and other forward agency MBS transactions for three main reasons. (i)The Company trades U.S. government agency obligations. In connection with these activities, the Company may be required to maintain inventory in orderto facilitate customer transactions. In order to mitigate exposure to market risk, the Company may enter into the purchase and sale of TBAs and otherforward agency MBS contracts. (ii)The Company also enters into TBAs and other forward agency MBS contracts in order to assist clients (generally small to mid-size mortgage loanoriginators) in hedging the interest rate risk associated with the mortgages owned by these clients. (iii)Finally, the Company may enter into TBAs and other forward agency MBS contracts on a speculative basis. The Company carries the TBAs and other forward agency MBS contracts at fair value and includes them as a component of investments-trading or trading securitiessold, not yet purchased in the Company’s consolidated balance sheets. At December 31, 2023, the Company had open TBA and other forward MBS purchaseagreements in the notional amount of $592,000 and open TBA and other forward MBS sale agreements in the notional amount of $618,425. At December 31, 2022, theCompany had open TBA and other forward agency MBS purchase agreements in the notional amount of $535,000 and open TBA and other forward agency MBS saleagreements in the notional amount of $556,780. Other Extended Settlement Trades When the Company buys or sells a financial instrument that will not settle in the regular time period, the Company will account for that purchase and sale on thesettlement date rather than the trade date. In those cases, the Company accounts for the transaction between trade date and settlement date as either a forwardpurchase commitment or a forward sale commitment, both considered derivatives. The Company will record an unrealized gain or unrealized loss on the derivative forthe difference between the fair value of the underlying financial instrument as of the reporting date and the agreed upon transaction price. As of December 31,2023 and December 31, 2022, the Company had no open forward purchase or sale commitments. Foreign Currency Forward Contracts The Company invests in foreign currency denominated investments that expose it to fluctuations in foreign currency rates, and, therefore, the Company may, from timeto time, hedge such exposure by using foreign currency forward contracts. The Company carries the foreign currency forward contracts at fair value and includes themas a component of other investments, at fair value in the Company’s consolidated balance sheets. As of December 31, 2023 and 2022, the Company had no outstandingforeign currency forward contracts. The following table presents the Company’s derivative financial instruments and the amount and location of the fair value (unrealized gain / (loss)) presented in theconsolidated balance sheets as of December 31, 2023 and 2022. DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION(Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging InstrumentsUnder ASC 815 Balance Sheet Classification December 31, 2023 December 31, 2022 TBAs and other forward agency MBS Investments-trading $7,470 $4,669 TBAs and other forward agency MBS Trading securities sold, not yet purchased (6,719) (1,177)Equity derivatives Other investments, at fair value 1,447 - Share forward liabilities Other investments sold, not yetpurchased, at fair value (24,645) - $(22,447) $3,492 F-32Table of Contents The following table presents the Company’s derivative financial instruments and the amount and location of the net gain (loss) recognized in the consolidated statementof operations. DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION(Dollars in Thousands) For the Year Ended December 31, Derivative Financial Instruments Not Designated asHedging Instruments Under ASC 815Income Statement Classification 2023 2022 2021 TBAs and other forward agency MBSRevenues-net trading $3,933 $8,883 $7,460 Equity derivativesPrincipal transactions and otherincome (loss) 603 - (233)Share forward liabilitiesPrincipal transactions and otherincome (loss) 108,084 - - $112,620 $8,883 $7,227 The share forward liabilities offset certain long positions included as a component of other investments, at fair value. The offsetting long positions had income / (loss)of ($83,707) and $0 for the twelve months ended December 31, 2023 and 2022, respectively. Share Forward Arrangements The Company has engaged in several transactions known as “share forward arrangements” (“SFAs”). In a typical SFA transaction, the Company acquires an interest ina publicly traded company (referred to as the “SFA Counterparty”) through open market purchases, direct acquisitions from the SFA Counterparty, or a combinationthereof. These interests can take the form of unrestricted common shares, restricted common shares, equity derivatives, or fair value receivables. Upon acquiring theseinterests, the Company enters into an SFA derivative arrangement with the SFA Counterparty. In cases where the Company acquires its interests in the SFACounterparty through open market purchases, the SFA generally requires an up-front payment to the Company from the SFA Counterparty. The amount of this up-frontpayment equals the cost the Company paid for our interests in the SFA Counterparty, less a shortfall amount in certain cases. To fund the shortfall portion of the initialinvestment, the Company will utilize available cash on hand or available financing. The SFA stipulates that the Company must make a payment to the SFA Counterpartyon or subsequent to a certain maturity date. Depending on the terms of the SFA, this payment may be made in cash, by returning the interests the Company acquired inthe SFA Counterparty, or through a combination of both. In some cases, the SFA requires the payment to be made exclusively in cash. Importantly, the SFA does notobligate the Company to hold the interests which it acquired in the SFA Counterparty. Following the execution of the SFA, the Company is free to sell the interestsit acquired in the SFA Counterparty (assuming the interests themselves are not restricted from transfer). Additionally, SFAs generally include a feature whereby if theCompany holds the interests it acquired in the SFA Counterparty until maturity or another agreed-upon date, the Company becomes eligible to receive an additionalpayment from the SFA Counterparty, either in cash or in additional interests in the SFA Counterparty. Such a payment is known as the “Maturity Consideration.”Furthermore, SFAs usually include a provision allowing the Company to terminate the SFA, either in whole or in part, before its maturity by making an agreed-uponpayment based on an amount defined in the SFA (the “Reset Price”). The Reset Price may either remain fixed throughout the term of the SFA, or fluctuate based oncertain calculations within the SFA. SFAs also impose various obligations on the SFA Counterparty, which may include registering a predetermined number of theinterests in the SFA Counterparty (subject to the SFA) with the SEC, maintaining the listing of the SFA Counterparty securities on a national exchange, and/or that theclosing price of the SFA Counterparty’s shares on the public exchange does not fall below a predetermined price for a specific period of time. If any of these SFACounterparty obligations are breached or not satisfied, the Company may have the right to terminate the SFA and accelerate the payment of the Maturity Considerationupon termination. The SFAs provide the right of set off in the case of Maturity Consideration, thereby allowing the Company to keep the interests we hold in the SFACounterparty and offset the Maturity Consideration it is owed following termination of the applicable SFA. The Company accounts for SFA transactions as follows: ●The interests in public companies that it owns are carried at fair value. Refer to note 9 for further details on determining the fair value of unrestricted commonshares, restricted common shares, equity derivatives, or fair value receivables. ●The derivative obligation arising from the SFA is also carried at fair value. Fair value represents the amount the Company would need to pay to settle the SFAobligation at any reporting period date. If the SFA allows the Company multiple methods of settling the obligation, the Company will choose the most advantageousone to value the derivative obligation. In performing this calculation, only settlement methods contractually available to the Company at the reporting date will beconsidered (i.e., ones available at some future date will not be considered). For instance, if the Company may terminate the SFA early by either returning commonshares or making a cash payment based on the Reset Price, the liability will be valued at the lower of: (i) the fair value of the common shares and (ii) the cash amountbased on the Reset Price. ●The Company does not recognize any Maturity Consideration as revenue until it is earned under the contract, either by meeting the hold period requirement or dueto a breach of obligation by the SFA Counterparty that enables the Company to terminate the SFA early. ●In cases where the Company earns Maturity Consideration and the amount it is owed exceeds the fair value of the interest it owns that is available to offset, theCompany will consider the probability of payment of the remaining Maturity Consideration based on the credit quality of the SFA Counterparty and general marketconditions. If the Company determines that the collection of the remaining Maturity Consideration owed is not probable, the Company will not record the unpaidportion. F-33Table of Contents The following table shows the carrying value of the assets and liabilities of SFA transactions as of the reporting period dates. SHARE FORWARD ARRANGEMENTS(Dollars in Thousands) December 31, 2023 December 31, 2022 Equity securities $26,079 $- Equity derivatives 1,447 - Fair value receivables 6,278 - Share forward liabilities (24,645) - Net fair value of share forward arrangements $9,159 $- F-34Table of Contents 11. COLLATERALIZED SECURITIES TRANSACTIONS Matched Book Repo Business The Company enters into repos and reverse repos as part of its matched book repo business. In general, the Company will lend money to a counterparty after obtainingcollateral securities from that counterparty pursuant to a reverse repo. The Company will borrow money from another counterparty using the same collateral securitiespursuant to a repo. The Company seeks to earn net interest income on these transactions. Until the fourth quarter 2021, the Company categorized its matched book repobusiness into two major groups: gestation repo and GCF repo. In the fourth quarter 2021, the Company wound down its GCF repo business. Gestation Repo Gestation repo involves entering into repo and reverse repo transactions where the underlying collateral security represents a pool of newly issued mortgageloans. The borrowers (the reverse repo counterparties) are generally mortgage originators. The lenders (the repo counterparties) are a diverse group of thecounterparties comprised of banks, insurance companies, and other financial institutions. The Company self-clears its gestation repo transactions. Gestation trades can be structured in two ways: On Balance Sheet: The Company executes a reverse repo with the borrower and a matching repo (with the same collateral and maturity date) with the lender. In thiscase, the Company is a principal to each trade and is borrowing from one counterparty and lending to another and earning net interest margin. These transactions arereferred to by the Company as on balance sheet gestation repo trades. Agency Repo: Similar to the on balance sheet repo, the Company first executes a reverse repo with the borrower and a matching repo (with the same collateral andmaturity date) with the lender. However, in this case, all three parties (borrower, lender, and the Company) simultaneously enter into an assignment agreement. Theeffect of this assignment is to remove the Company as principal to the reverse repo and repo and have the lender and borrower directly face each other in a repo trade. The Company receives a fee for its role in arranging the financing. These transactions are referred to by the Company as agency gestation repo trades. Bankruptcy of Gestation Counterparty As of June 30, 2022, the Company had an outstanding reverse repo balance with First Guaranty Mortgage Corporation (“FGMC”) totaling $269,228. Effective June 30,2022, FGMC filed for bankruptcy. Subsequent to June 30, 2022, the Company issued a default notice to FGMC under the reverse repo. The Company took possessionof the collateral and began liquidating it. As of December 31, 2023 and 2022, the Company had liquidated all the collateral with the exception of $3,113 and $13,506, respectively, of residential mortgage loans. These loans are carried at fair value and are included in investments-trading in the consolidated balance sheets. All of the remaining collateral was liquidated in 2024. During the year ended December 31, 2022, the Company recorded a gross loss of $5,454 in connection with the FGMC reverse repo. Of the $5,454 loss, $5,244 wasrecorded as a reduction in net trading revenue and $210 was recorded in professional fees and other operating expenses in the Company's statement of operations. TheCompany has filed an unsecured claim under bankruptcy proceedings related to this loss, but does not expect to receive a material recovery. To the extent any recoveryis received, the Company will recognize it on a cash basis as received, as a component of net trading revenue. In connection with the loss, the Company recorded areversal of accrued incentive compensation of $1,753. During the year ended December 31, 2022, the net impact to earnings was $3,701. During the year endedDecember 31, 2023, the Company recorded an additional loss of $1,752, which was included as a component of net trading revenue related to the decline in fair value ofthe remaining collateral. GCF Repo In October 2017, the Company became a full netting member of the FICC’s Government Securities Division. As a full netting member of the FICC, the Companyhad access to the FICC’s GCF repo service that provides netting and settlement services for repo transactions where the underlying security is general collateral(primarily U.S. Treasuries and U.S. Agency securities). The Company began entering into matched book GCF repo transactions in November 2017. The borrowers (thereverse repo counterparties) were a diverse group of financial institutions including hedge funds, registered investment funds, REITs, and other similarcounterparties. The lenders (the repo counterparties) were the FICC and other large financial institutions. The Company used Bank of New York (“BONY”) as itssettlement agent for its GCF repo matched book transactions. The Company was considered self-clearing for this business. In October 2021, primarily due to reduced spreads in the repo market for GCF collateral, the Company decided to wind down this business, which was completed byDecember 31, 2021. As of December 31, 2022, the carrying value of the Company's GCF reverse repurchase agreements and repurchase agreements were zero. In conjunction with the Company’s GCF repo business, on October 19, 2018, the Company and BONY entered into an intraday lending facility. The lending facilityallowed for BONY to advance funds to JVB in order to facilitate the settlement of GCF repo transactions. In conjunction with the wind down of the GCF repo business,the Company terminated this facility during 2021. Other Repo Transactions In addition to the Company’s matched book repo business, the Company may also enter into reverse repos to acquire securities to cover short positions or as aninvestment. Additionally, the Company may enter into repos to finance the Company’s securities positions held in inventory. These repo and reverse repoagreements are generally cleared on a bilateral or triparty basis; no clearing broker is involved. F-35Table of Contents Repo Information As of December 31, 2023 and 2022, the Company held reverse repos of $408,408 and $437,692, respectively, and the fair value of securities and cash received ascollateral under reverse repos was $415,057 and $440,681, respectively. As of December 31, 2023 and 2022, the Company had repos of $408,203 and $452,797, respectively, and the fair value of securities pledged as collateral under repos was$415,057 and $452,209, respectively. These amounts include collateral for reverse repos that were re-pledged as collateral for repos. The total net revenue earned by the Company on its gestation repo business (net interest and fee revenue) was $16,068, $30,595, and $44,949, for the years endedDecember 31, 2023, 2022, and 2021, respectively. ASC 210 provides the option to present reverse repo and repo on a net basis if certain netting conditions are met. The Company presents all repo and reverse repotransactions as well as counterparty cash collateral (see notes 7 and 17) on a gross basis even if the underlying netting conditions are met. The amounts in the tablebelow are presented on a gross basis. The following tables summarize the remaining contractual maturity of the gross obligations under repos accounted for as secured borrowings segregated by theunderlying collateral pledged as of each date shown. All amounts as well as counterparty cash collateral (see notes 7 and 17) are subject to master nettingarrangements. SECURED BORROWINGS(Dollars in Thousands)December 31, 2023 Repurchase Agreements Remaining Contractual Maturity of the Agreements Collateral Type: Overnight andContinuous Up to 30 days 30 - 90 days Greater than 90days Total MBS (gestation repo) $- $408,203 $- $- $408,203 Reverse Repurchase Agreements Remaining Contractual Maturity of the Agreements Collateral Type: Overnight andContinuous Up to 30 days 30 - 90 days Greater than 90days Total MBS (gestation repo) $- $408,408 $- $- $408,408 The weighted average interest rate of the repurchase agreements outstanding as of December 31, 2023 was 6.10%. The weighted average interest rate of the reverserepurchase agreements outstanding as of December 31, 2023 was 6.92%. SECURED BORROWINGS(Dollars in Thousands)December 31, 2022 Repurchase Agreements Remaining Contractual Maturity of the Agreements Collateral Type: Overnight andContinuous Up to 30 days 30 - 90 days Greater than 90days Total MBS (gestation repo) $- $452,797 $- $- $452,797 Reverse Repurchase Agreements Remaining Contractual Maturity of the Agreements MBS (gestation repo) $- $437,692 $- $- $437,692 The weighted average interest rate of the repurchase agreements outstanding as of December 31, 2023 was 5.03%. The weighted average interest rate of the reverserepurchase agreements outstanding as of December 31, 2023 was 5.55% Concentration In the matched book repo business, the demand for borrowed funds is generated by the reverse repo counterparty and the supply of funds is provided by the repocounterparty. On the demand side, the Company did not consider its GCF repo business to be concentrated because the Company’s reverse repo counterparties were comprised ofa diverse group of financial institutions. On the supply side, the Company obtained a significant amount of its funds from the FICC. Therefore, during the periods theCompany operated a GCF repo business, it considered that business to be concentrated from the supply side of the business. The gestation repo business has been and continues to be concentrated as to reverse repo counterparties. The Company conducts this business with a limited numberof reverse repo counterparties. As of December 31, 2023 and 2022, the Company’s gestation reverse repos shown in the tables below represented balances from 7 and8 counterparties, respectively. The Company also has a limited number of repo counterparties in the gestation repo business. However, this is primarily a function ofthe limited number of reverse repo counterparties with whom the Company conducts this business rather than a reflection of a limited supply of funds. Therefore, theCompany considers the gestation repo business to be concentrated on the demand side. F-36Table of Contents 12. INVESTMENTS IN EQUITY METHOD AFFILIATES Equity method accounting requires that the Company record its investments in equity method affiliates on the consolidated balance sheets and recognize its share ofthe equity method affiliates’ net income as earnings in each reporting period. The Company elected to use the cumulative earnings approach for the distributions itreceives from its equity method investments. Under the cumulative earnings approach, any distributions received up to the amount of cumulative earnings are treated asreturn on investment and classified in operating activities within the cash flows. Any excess distributions would be considered as return of investments and classified ininvesting activities. The Company has certain equity method affiliates for which it has elected the fair value option. Those investees are excluded from the table below. Those investees areincluded as a component of other investments, at fair value in the consolidated balance sheets. All gains and losses (unrealized and realized) from investmentsclassified as other investments, at fair value in the consolidated balance sheets are recorded as a component of principal transactions and other income in theconsolidated statement of operations. The following table summarizes the activities and earnings of the Company’s investments that are accounted for under the equity method. See note 4 and note 31. INVESTMENTS IN EQUITY METHOD AFFILIATES(Dollars in Thousands) InsuranceSPACs Dutch RealEstate Entities SPAC SponsorEntities andOther Total December 31, 2020 $9,807 $3,312 $363 $13,482 Investments / advances - 2,425 5,967 8,392 Distributions / repayments (3,958) - (249) (4,207)Reclasses to (from) (5,439) (5,439)Earnings / (loss) realized (1,306) (137) 37,453 36,010 December 31, 2021 4,543 5,600 38,095 48,238 Investments / advances 1,355 - 1,259 2,614 Distributions / repayments - - (77) (77)Reclasses to (from) - - (20,915) (20,915)Earnings / (loss) realized (5,898) (70) (14,963) (20,931)December 31, 2022 - 5,530 3,399 8,929 Investments / advances - - 1,896 1,896 Distributions / repayments - - (2,091) (2,091)Reclasses to (from) - - (10,102) (10,102)Earnings / (loss) realized - 334 15,275 15,609 December 31, 2023 $- $5,864 $8,377 $14,241 Insurance SPACs represent the Company's consolidated subsidiaries' equity method investments in two sponsored insurance SPACs: (i) INSU Acquisition Corp. II(“Insurance SPAC II”), which completed its $250 million IPO in September 2020 and closed its business combination on February 9, 2021 with Metromile, Inc., a digitalinsurance platform and pay-by-mile auto insurer ("MetroMile") (subsequently, MetroMile was acquired by Lemonade, Inc. (NASDAQ:LMND)), and (ii) INSUAcquisition Corp. III (Insurance SPAC III"), which completed its $218 million IPO in December 2020 and was liquidated in December 2022 without completing a businesscombination within the required time period. Dutch Real Estate Entities includes: (i) Amersfoort Office Investment I Coöperatief U.A. (“AOI”), a company based in the Netherlands that invests in real estate, and (ii)CK Capital Partners B.V. (“CK Capital”), a company based in the Netherlands that manages investments in real estate. The amounts included as SPAC Sponsor Entities and Other represent the Company's investment in SPAC sponsor entities that have not yet completed a businesscombination or from SPAC sponsor entities that have completed business combinations but have not yet distributed shares to sponsor investors and other equitymethod investments. If these SPAC sponsor entities are unsuccessful in completing a business combination and the underlying SPAC liquidates, the Company willlikely receive no distributions in kind or in cash related to these investments and the remaining balances will be recorded as a component of loss from equity methodinvestments in the consolidated statement of operations. F-37Table of Contents The following tables show certain summary financial data of all the Company's equity method investees. These amounts include all equity method investees whetheraccounted for under the equity method or at fair value. All information is presented on a combined basis. December 31, 2023 December 31, 2022 Total Assets $628,495 $849,826 Liabilities $329,661 $350,701 Equity allocable to the controlling interest 298,709 499,000 Noncontrolling interest 125 125 Total Equity 298,834 499,125 Total Liabilities & Equity $628,495 $849,826 Year Ended December 31, 2023 2022 2021 Net income/(loss) $17,858 $(100,481) $221,053 Net income/(loss) attributable to the investee $17,843 $(100,495) $221,053 F-38Table of Contents 13. GOODWILL Goodwill is comprised of the following. GOODWILL(Dollars in Thousands) December 31, 2023 December 31, 2022 AFN $109 $109 Goodwill $109 $109 The annual impairment testing date for AFN goodwill is October 1. The first testing date following the AFN Merger was October 1, 2010. The Company determined thegoodwill was not impaired as of 2023, 2022, and 2021.. The Company concluded there was no triggering event for the goodwill related to AFN. F-39Table of Contents 14. LEASES As of December 31, 2023, all of the leases to which the Company was a party were operating leases. The weighted average remaining term of the leases was5.0 years. The weighted average discount rate for the leases was 4.71%. Maturities of operating lease liability payments consisted of the following. FUTURE MATURITY OF LEASE LIABILITIES(Dollars in Thousands) December 31, 2023 2024 $2,175 2025 1,799 2026 1,511 2027 1,519 2028 1,527 Thereafter 729 Total 9,260 Less imputed interest (1,044)Lease obligation $8,216 During the twelve months ended December 31, 2023 and 2022, total cash payments of $2,700 and $2,285, respectively, were recorded as a reduction in the operating leaseobligation. No cash payments were made to acquire right of use assets. In December 2023, the Company executed a second amendment ("Second Lease Amendment") to its 3 Columbus Circle LLC original lease agreement. The Second LeaseAmendment provides for the Company to lease additional space in the building in conjunction with surrendering certain currently occupied premises. The Second LeaseAmendment provides for the landlord, at its sole cost and expense and without charge to the Company, to perform certain work expressly set forth in the Second LeaseAmendment. The commencement date for the new lease is defined in the Second Lease Amendment as the date the landlord delivers to the Company the additionalspace as defined in the Second Lease Amendment with the landlord's work substantially complete, which is anticipated to be before December 31, 2024. The cash flowpayments and related lease liability pertaining to the Lease Amendment are not included in the table and amounts presented above. See note 28. F-40Table of Contents 15. OTHER ASSETS Other assets consisted of the following. OTHER ASSETS(Dollars in Thousands) December 31, 2023 December 31, 2022 Deferred costs $- $133 Prepaid expenses 1,328 1,325 Prepaid income taxes 235 - Deposits 730 450 Furniture, equipment, and leasehold improvements, net 1,282 1,472 Intangible assets 166 166 Other assets $3,741 $3,546 Deferred costs and prepaid expenses represent amounts paid for services that are being amortized over their expected period of use and benefit. They are all routine andshort-term in nature. Deposits are amounts held by landlords or other parties, which will be returned or offset upon satisfaction of a lease or other contractualarrangement. Intangible assets represent the carrying value of the JVB broker-dealer license. F-41Table of Contents 16. FURNITURE, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS, NET Furniture, equipment, and leasehold improvements, net, which are included as a component of other assets on the consolidated balance sheets, are as follows. FURNITURE, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS, NET(Dollars in Thousands) Estimated Useful Lives(In Years) December 31, 2023 December 31, 2022 Furniture and equipment 3 to 5 $3,448 $3,081 Leasehold improvements 5 to 10 560 553 4,008 3,634 Accumulated depreciation (2,726) (2,162)Furniture, equipment, and leasehold improvements, net $1,282 $1,472 For the year ended December 31, 2023, the Company wrote off fully depreciated furniture, equipment, and leasehold improvements of $0. The Company recognized depreciation and amortization expense of $563, $557, and $371 for the years ended December 31, 2023, 2022, and 2021, respectively, as acomponent of depreciation and amortization on the consolidated statements of operations, all of which represented depreciation of furniture, equipment, and leaseholdimprovements. F-42Table of Contents 17. ACCOUNTS PAYABLE AND OTHER LIABILITIES Accounts payable and other liabilities consisted of the following. ACCOUNTS PAYABLE AND OTHER LIABILITIES(Dollars in Thousands) December 31, 2023 December 31, 2022 Accounts payable $1,180 $891 Redeemable financial instrument accrued interest 90 - Accrued income tax - 70 Accrued interest payable 474 452 Accrued interest on securities sold, not yet purchased 725 1,561 Payroll taxes payable 2,118 1,565 Cash collateral held from repo and or reverse repo counterparties - 4,301 Accrued expense and other liabilities 3,528 2,599 Accounts payable and other liabilities $8,115 $11,439 The redeemable financial instrument accrued interest represents accrued interest on the JKD Capital Partners I LTD redeemable financial instruments. See notes 19 and20. When the Company enters into a reverse repo, the Company obtains collateral in excess of the principal of the reverse repo. The Company accepts collateral in the formof liquid securities or cash. To the extent the Company receives cash collateral, the Company includes it as a component of other liabilities in the table above. See note11. When the Company enters into repo transactions, the Company provides collateral to the Company’s repo counterparty in excess of the principal balance of the repo. Ifthe value of the securities the Company provides as collateral increases, the Company may request a return of its collateral with a value equal to such increase. In somecases, the repo counterparty will return cash instead of securities. In that case, the Company includes the cash returned as a component of other liabilities in the tableabove. See note 11. F-43Table of Contents 18. VARIABLE INTEREST ENTITIES As a general matter, a reporting entity must consolidate a VIE when it is deemed to be the primary beneficiary. The primary beneficiary is the entity that has both (a) thepower to direct the matters that most significantly impact the VIE’s financial performance and (b) a significant variable interest in the VIE. Consolidated VIEs The Company determined it was the primary beneficiary of several VIEs and therefore has consolidated them. The following table provides certain summary informationregarding the consolidated VIEs. December 31, 2023 December 31, 2022 Cash and cash equivalents $27 $19 Due from broker 461 - Other investments, at fair value 34,129 - Investment in equity method affiliates 2,638 23 Other investments sold, not yet purchased (24,396) - Non-controlling interest (9,604) (15)Investment in consolidated VIEs $3,255 $27 The maximum potential loss the Company could incur related to the consolidated VIEs is the investment in the consolidated VIEs shown in the table above. The Company’s Principal Investing Portfolio Included in other investments, at fair value and investment in equity method affiliates in the consolidated balance sheets are unconsolidated investments in severalVIEs. In each case, the Company determined that it was not the primary beneficiary. The maximum potential financial statement loss the Company would incur if theVIEs were to default on all their obligations would be the loss of the carrying value of these investments as well as any future investments the Company were tomake. As of December 31, 2023 and 2022, there were $10,398 and $8,464, respectively, of unfunded investment commitments to VIEs in which the Company hasinvested. Other than its investment in these entities, the Company did not provide financial support to these VIEs during the years ended December 31, 2023 and2022 and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these VIEs at December 31, 2023 and 2022. See table below. For each investment management contract entered into by the Company, the Company assesses whether the entity being managed is a VIE and if the Company is theprimary beneficiary. Certain of the Investment Vehicles managed by the Company are VIEs. Under the current guidance of FASB ASU 2015-12, the Company hasconcluded that its asset management contracts are not variable interests. Currently, the Company has no other interests in entities it manages that are consideredvariable interests and are considered significant. Therefore, the Company is not the primary beneficiary of any VIEs that it manages. The Company’s Trading Portfolio From time to time, the Company may acquire an interest in a VIE through the investments it makes as part of its trading operations, which are included as investments-trading or securities sold, not yet purchased in the consolidated balance sheets. Due to the high volume of trading activity in which the Company engages, theCompany does not perform a formal assessment of each individual investment within its trading portfolio to determine if the investee is a VIE and if the Company is aprimary beneficiary. Even if the Company were to obtain a variable interest in a VIE through its trading portfolio, the Company would not be deemed to be the primarybeneficiary for two main reasons: (a) the Company does not usually obtain the power to direct activities that most significantly impact any investee’s financialperformance and (b) a scope exception exists within the consolidation guidance for cases where the reporting entity is a broker-dealer and any control (either as theprimary beneficiary of a VIE or through a controlling interest in a voting interest entity) was deemed to be temporary. In the unlikely case that the Company obtained thepower to direct activities and obtained a significant variable interest in an investee in its trading portfolio that was a VIE, any such control would be deemed to betemporary due to the rapid turnover of the Company’s trading portfolio. The following table presents the carrying amounts of the assets in the Company’s consolidated balance sheets related to the Company’s variable interests inidentified VIEs with the exception of (i) the two trust VIEs that hold the Company’s junior subordinated notes (see note 20) and (ii) any security that represents aninterest in a VIE that is included in investments-trading or securities sold, not yet purchased in the Company’s consolidated balance sheets. The table below shows theCompany’s maximum exposure to loss associated with these identified nonconsolidated VIEs in which it holds variable interests at December 31, 2023 and 2022. CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES(Dollars in Thousands) December 31, 2023 December 31, 2022 Other investments, at fair value $20,499 $10,554 Investments in equity method affiliates 5,739 3,376 Maximum Exposure $26,238 $13,930 F-44Table of Contents 19. REDEEMABLE FINANCIAL INSTRUMENTS Redeemable financial instruments consisted of the following. REDEEMABLE FINANCIAL INSTRUMENTS(Dollars in Thousands) December 31, 2023 December 31, 2022 JKD Investor $7,868 $7,868 $7,868 $7,868 JKD Capital Partners I LTD Amendments On October 3, 2016, the Operating LLC entered into an investment agreement (the “JKD Investment Agreement”), by and between Operating LLC and JKD Investor,pursuant to which the JKD Investor agreed to invest up to $12,000 in the Operating LLC (the “JKD Investment”), $6,000 of which was invested upon the execution ofthe JKD Investment Agreement, an additional $1,000 was invested in January 2017, and an additional $1,268 was invested on January 9, 2019. The JKD Investor isowned by Jack DiMaio, the vice chairman of the Company’s board of directors, and his spouse. In exchange for the JKD Investment, the Operating LLC agreed to pay to JKD Investor during the term of the JKD Investment Agreement an amount (“JKD InvestmentReturn”) equal to 50% of the difference between (i) the revenues generated during a quarter by the activities of the Institutional Corporate Trading Business of JVB (asdefined in the JKD Investment Agreement, as amended) and (ii) certain expenses incurred by such Institutional Corporate Trading Business (the “Institutional CorporateTrading Business Net Revenue”). This JKD Investment Return is recorded monthly as interest expense or (interest income) with the related accrued interest recorded inaccounts payable and other accrued liabilities. If the return is negative in an individual quarter, it will reduce the balance of the JKD Investment. Payments of the JKDInvestment Return are made on a quarterly basis. The term of the JKD Investment Agreement commenced on October 3, 2016 and will continue until a redemption (asdescribed below) occurs, unless the JKD Investment Agreement is terminated earlier. On March 6, 2019, the JKD Investor and the Operating LLC entered into an amendment to the JKD Investment Agreement (the “JKD Investment AgreementAmendment”), pursuant to which the term “JKD Investment Return” under the JKD Investment Agreement was amended as follows: (a)during the fourth quarter of 2018, an amount equal to 42% of the Institutional Corporate Trading Business Net Revenue, and (b)commencing on January 1, 2019 and for each quarter during the remainder of the term of the JKD Investment Agreement, an amount equal to a percentage ofthe Institutional Corporate Trading Business Net Revenue, which percentage is based on the JKD Investor’s investment under the JKD Investment Agreementas a percentage of the total capital allocated to the Institutional Corporate Trading Business of JVB. The JKD Investor may terminate the JKD Investment Agreement (i) upon 90 days’ prior written notice to the Operating LLC if the Operating LLC or its affiliates modifyany of their policies or procedures governing the operation of their businesses or change the way they operate their business and such modification has a materialadverse effect on the amounts payable to the JKD Investor pursuant to the JKD Investment Agreement or (ii) upon 60 days’ prior written notice to the Operating LLC ifthe employment of Lester Brafman, the Company’s chief executive officer, is terminated. The Operating LLC may terminate the JKD Investment Agreement, as amended,upon 60 days’ prior written notice to the JKD Investor if Mr. DiMaio ceases to control the day-to-day operations of the JKD Investor. Upon a termination of the JKD Investment Agreement, as amended, the Operating LLC will pay to the JKD Investor an amount equal to the “Investment Balance” (assuch term is defined in the JKD Investment Agreement, as amended) as of the day prior to such termination. At any time following October 3, 2019, the JKD Investor or the Operating LLC may, upon two months’ notice to the other party, cause the Operating LLC to pay aredemption to the JKD Investor in an amount equal to the Investment Balance (as such term is defined in the JKD Investment Agreement, as amended) as of the dayprior to such redemption. If the Operating LLC or JVB sells JVB’s Institutional Corporate Trading Business to any unaffiliated third party, and such sale is not part of a larger sale of all orsubstantially all of the assets or equity securities of the Operating LLC or JVB, the Operating LLC will pay to the JKD Investor an amount equal to 25% of the netconsideration paid to the Operating LLC in connection with such sale, after deducting certain amounts and certain expenses incurred by the Operating LLC or JVB inconnection with such sale. On February 13, 2023, the Operating LLC and JKD Investor entered into a second amendment (the “JKD Second Amendment") to the JKD Investment Agreement. As aresult of the JKD Second Amendment, effective as of January 1, 2023, the term “Team Expenses” (which expenses reduce the investment return amount payable to JKDInvestor under the JKD Investment Agreement) in the JKD Investment Agreement was amended to mean an amount equal to (i) $150 per calendar quarter (or $600 peryear), plus (ii) any direct expenses (as described in the JKD Investment Agreement). Prior to the JKD Second Amendment, the term “Team Expenses” in the JKDInvestment Agreement was defined to mean an amount equal to (i) $175 per calendar quarter (or $700 per year), plus (ii) any direct expenses. F-45Table of Contents 20. DEBT DETAIL OF DEBT(Dollars in Thousands) Description December 31,2023 December 31,2022 Interest RateTerms Interest (2) MaturityNon-convertible debt: 10.00% senior note (the "2020 Senior Notes") $4,500 $4,500 Fixed 10.00% January 2026 Junior subordinated notes (1): Alesco Capital Trust I 28,125 28,125 Variable 9.65% July 2037Sunset Financial Statutory Trust I 20,000 20,000 Variable 9.74% March 2035Less unamortized discount (22,909) (23,601) 25,216 24,524 Byline Bank - - Variable N/A June 2024Total $29,716 $29,024 (1)The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount owed by the Company to the trusts is$49,614. However, the Company owns the common stock of the trusts in a total par amount of $1,489. The Company pays interest (and at maturity, principal) tothe trusts on the entire $49,614 junior notes outstanding. However, the Company receives back from the trusts the pro rata share of interest and principal on thecommon stock held by the Company. These trusts are VIEs and the Company does not consolidate them even though the Company holds the common stock. TheCompany carries the common stock on its balance sheet at a value of $0. The junior subordinated notes are recorded at a discount to par. When factoring in thediscount, the yield to maturity of the junior subordinated notes as of December 31, 2023 on a combined basis was 21.66% assuming the variable rate in effect onthe last day of the reporting period remains in effect until maturity. (2)Represents the interest rate in effect as of the last day of the reporting period. F-46Table of Contents The 2020 Senior Notes On January 31, 2020, the Operating LLC entered into the Original Purchase Agreement with the JKD Investor and RNCS. The JKD Investor is owned by Jack DiMaio, thevice chairman of the Company’s board of directors, and his spouse. The note purchased by the JKD Investor is herein referred to as the JKD Note. Pursuant to the Original Purchase Agreement, JKD Investor and RNCS each purchased a senior promissory note in the principal amount of $2,250 (for an aggregateinvestment of $4,500). The senior promissory notes bore interest at a fixed rate of 12% per annum and matured on January 31, 2022. On February 3, 2020, pursuant tothe Original Purchase Agreement, the Operating LLC used the proceeds received from the issuance of the senior promissory notes to the JKD Investor and RNCS torepay in full all amounts outstanding under the senior promissory note, dated September 25, 2019, issued by the Company to Pensco Trust Company, Custodian fboEdward E. Cohen IRA in the principal amount of $4,386 (the “Cohen IRA Note”). The Cohen IRA Note was fully paid and extinguished on February 3, 2020. Subsequentto this repayment, $2,400 of the 2019 Senior Notes remained outstanding. On January 31, 2022, the Operating LLC and JKD Investor entered into 2022 Purchase Agreement, pursuant to which, among other things, on such date, (i) JKD Investorpaid to the Operating LLC an additional $2,250 and (ii) in consideration for such funds, the Operating LLC issued to JKD Investor the Amended and Restated Note inthe aggregate principal amount of $4,500, which Amended and Restated Note amended and restated the JKD Note in its entirety. The 2022 Purchase Agreementcontains customary representations and warranties on the part of each of JKD Investor and the Operating LLC. The Company used these proceeds to retire $2,250 ofexisting 2020 Senior Notes held by RNCS. The Amended and Restated Note evidences Operating LLC’s obligation to repay to JKD Investor (i) the original principal amount of $2,250 paid by JKD Investor to theOperating LLC under the Original Purchase Agreement, plus (ii) the additional $2,250 paid by JKD Investor to the Operating LLC under the 2022 PurchaseAgreement. Pursuant to the Amended and Restated Note, which is substantially identical to the JKD Note, the unpaid principal amount and all accrued but unpaidinterest thereunder would be due and payable in full on January 31, 2024; provided, that, at any time after January 31, 2023 and prior to January 31, 2024, the holder ofthe Amended and Restated Note could, with at least 31 days’ prior written notice from the holder to the Operating LLC, declare the entire unpaid principal amountoutstanding and all interest accrued and unpaid on the Amended and Restated Note to be immediately due and payable. The Amended and Restated Note accrues interest on the unpaid principal amount from January 31, 2022 until maturity at a rate equal to 10% per year. Interest on theAmended and Restated Note is payable in cash quarterly on each January 1, April 1, July 1, and October 1, which commenced on April 1, 2022. Under the Amended andRestated Note, upon the occurrence or existence of any “Event of Default” thereunder, the outstanding principal amount is (or in certain instances, at the option of theholder thereof, may be) immediately accelerated. Further, upon the occurrence of any “Event of Default” under the Amended and Restated Note and for so long as suchEvent of Default continues, all principal, interest and other amounts payable under the Amended and Restated Note will bear interest at a rate equal to 11% per year. The Amended and Restated Note could not be prepaid in whole or in part prior to January 31, 2023. The Amended and Restated Note may, with at least 31 days’ priorwritten notice from the Operating LLC to the holder thereof, be prepaid in whole or in part at any time following January 31, 2023 without the prior written consent of theholder and without penalty or premium. The Amended and Restated Note and the payment of all principal, interest, and any other amounts payable thereunder are senior obligations of the Operating LLC andwill be senior to any Indebtedness (as defined in the Amended and Restated Note) of the Operating LLC outstanding as of and issued following January 30, 2020 (theoriginal issuance date of the JKD Note). Pursuant to the Amended and Restated Note, following January 31, 2022, the Operating Company may not incur indebtednessthat is a senior obligation to the Amended and Restated Note. On January 5, 2024, the Operating LLC and JKD Investor entered into an amendment to the Amended and Restated Note, pursuant to which the Amended and RestatedNote was amended to (a) extend (i) the maturity date thereof from January 31, 2024 to January 31, 2026, (ii) the date following which the Amended and Restated Note maybe redeemed by JKD Investor from January 31, 2023 to January 31, 2025, and (iii) the date following which the Amended and Restated Note may be prepaid by theOperating LLC from January 31, 2023 to January 31, 2025; and (b) increase the interest rate payable under the Amended and Restated Note from 10% per annum to 12%per annum effective as of January 31, 2024. See note 4. The 2017 Convertible Note The 2017 Convertible Note had a par value of $15,000 and bore interest at 8% per annum and was held by the DGC Trust, a trust established by Daniel G. Cohen. DanielG. Cohen is the executive chairman of the Company’s board of directors and executive chairman of the board of managers of the Operating LLC. Pursuant to the DGCTrust’s governing documents, Daniel G. Cohen has the ability to acquire at any time any of the DGC Trust’s assets, including the units of membership interests, bysubstituting other property of an equivalent value without the approval or consent of any person, including any trustee or beneficiary of the DGC Trust. The 2017 Convertible Note was convertible into Operating LLC units at a price of $1.45 per unit (the equivalent of $14.50 per common share). On March 20, 2022, theDGC Trust elected to convert the 2017 Convertible Note into an aggregate of 10,344,827 units of membership interests in the Operating LLC at the conversion ratespecified in the 2017 Convertible Note of $1.45 per unit. See notes 21 and 31. As a result of such conversion, the 2017 Convertible Note was cancelled in its entirety. Pursuant to the terms and conditions of the Operating LLC’s Amended and Restated Limited Liability Company Agreement, dated December 16, 2009, as amended, aholder of LLC units of membership interests may cause the Operating LLC to redeem such units of membership interests at any time for, at the Company’s option, (A)cash or (B) one share of the Company’s common stock, par value $0.01 per share (“Common Stock”), for every ten of such units of membership interests. Accordingly,the units of membership interests may be redeemed at any time by the DGC Trust into an aggregate of 1,034,482 shares of Common Stock. F-47Table of ContentsJunior Subordinated Notes The Company assumed $49,614 aggregate principal amount of junior subordinated notes outstanding at the time of the AFN Merger. The Company recorded the debt atfair value on the acquisition date. Any difference between the fair value of the junior subordinated notes on the AFN Merger date and the principal amount of debt isamortized into earnings over the estimated remaining life of the underlying debt as an adjustment to interest expense. The junior subordinated notes are payable to two special purpose trusts: 1. Alesco Capital Trust I: $28,995 in aggregate principal amount issued in June 2007. The notes mature on July 30, 2037 and may be called by the Company at any time.While LIBOR was still being published, the notes accrued interest payable quarterly at a floating interest rate equal to 90-day LIBOR plus 400 basis points per annum. LIBOR ceased being published effective June 30, 2023. Subsequent to LIBOR no longer being published, the notes accrue interest at 90-day SOFR plus 426.161 basispoints per annum. All principal is due at maturity. Alesco Capital Trust I simultaneously issued 870 shares of Alesco Capital Trust I’s common securities to theCompany for a purchase price of $870, which constitutes all of the issued and outstanding common securities of Alesco Capital Trust I. 2. Sunset Financial Statutory Trust I (“Sunset Financial Trust”): $20,619 in aggregate principal amount issued in March 2005. The notes mature on March 30, 2035.While LIBOR was still being published, the notes accrued interest payable quarterly at a floating rate of interest of 90-day LIBOR plus 415 basis points. LIBOR ceasedbeing published effective June 30, 2023. Subsequent to LIBOR no longer being published, the notes accrue interest at 90-day SOFR plus 441.161 basis points perannum. All principal is due at maturity. Sunset Financial Trust simultaneously issued 619 shares of Sunset Financial Trust’s common securities to the Company for apurchase price of $619, which constitutes all of the issued and outstanding common securities of Sunset Financial Trust. Alesco Capital Trust I and Sunset Financial Trust (collectively, the “Trusts”) described above are VIEs pursuant to variable interest provisions included in FASB ASC810 because the holders of the equity investment at risk do not have adequate decision making ability over the Trusts’ activities. The Company is not the primarybeneficiary of the Trusts as it does not have the power to direct the activities of the Trusts. The Trusts are not consolidated by the Company and, therefore, theCompany’s consolidated financial statements include the junior subordinated notes issued to the Trusts as a liability, and the investment in the Trusts’ commonsecurities as an asset. The common securities were deemed to have a fair value of $0 as of the AFN Merger Date. These are accounted for as cost method investments;therefore, the Company does not adjust the value at each reporting period. Any income generated on the common securities is recorded as interest income, a componentof interest expense, net, in the consolidated statement of operations. The junior subordinated notes have several financial covenants. Since the AFN Merger, Cohen & Company Inc. has been in violation of one covenant of Alesco CapitalTrust I. As a result of this violation, Cohen & Company Inc. is prohibited from issuing additional debt that is either subordinated to or pari passu with Alesco CapitalTrust I debt. This violation does not prohibit Cohen & Company Inc. from issuing senior debt or the Operating LLC from issuing debt of any kind. Cohen & CompanyInc. is in compliance with all other covenants of the junior subordinated notes. The Company does not consider this violation to have a material adverse impact on itsoperations or on its ability to obtain financing in the future. PPP Loan On May 1, 2020, the Company applied for and received a $2,166 loan (the "PPP Loan") under the Paycheck Protection Program ("PPP") of the Coronavirus Aid, Relief,and Economic Security ("CARES") Act. The Company carefully considered the eligibility requirements for PPP loans as well as supplemental guidance regarding thePPP beyond the applicable statute issued from time to time by government agencies and certain government officials. The Company was eligible for a PPP Loan becauseit had fewer than 100 employees at the time of the loan. Further, although the Company is public and listed on the NYSE American stock exchange, the Company’smarket capitalization is small, and the Company believes that it did not have access to the public capital markets at the time. The PPP Loan was evidenced by a promissory note between the Company and FT Financial. The PPP Loan bore interest at a fixed rate of 1% per year, with the first sixmonths of interest deferred, had a term of two years, and could be prepaid at any time without payment of any premium. The PPP Loan was unsecured but guaranteedby the U.S. Small Business Association. On September 23, 2020, the Company applied for forgiveness of the PPP Loan. On June 21, 2021, the Company receivednotification that the U.S. Small Business Administration, as administrator of the PPP, had approved the Company’s PPP Loan forgiveness application for $2,127 and allaccrued interest on the PPP Loan, leaving the Company with a remaining PPP Loan balance of $39. The PPP Loan forgiveness was recorded to other non-operatingincome on the consolidated statements of operations and comprehensive income. The Company repaid the remaining balance, plus accrued interest, on June 25, 2021, atwhich point the PPP Loan balance was reduced to zero. F-48Table of Contents Byline Bank Line of Credit On October 28, 2020, the Company entered into an unsecured line of credit with Byline Bank, as lender, and JVB, as borrower (the "Byline Credit Facility"). FromOctober 28, 2020 to December 31, 2023, the Company and Byline Bank have entered into several amendments that changed the terms such as: (i) interest rate; (ii) totalline of credit; (iii) financial covenants; and (iv) maturity dates. During that period, the Company complied with all financial covenants and all payment terms of the lineof credit. There were no defaults or events of default. Effective as of December 31, 2023, the Byline Credit Facility consists of single $15,000 unsecured line of credit under which JVB is the borrower and which is guaranteedby the Company, the Operating LLC, JVB Holdings, JVB, and C&Co PrinceRidge Holdings, LP. Loans under the Byline Credit Facility will bear interest at a per annum rate equal to the standard overnight financing rate (“SOFR”) plus 6.0%, provided that in no eventcan the interest rate be less than 7.0%. The Company is required to pay on a quarterly basis an undrawn commitment fee at a per annum rate equal to 0.50% of theundrawn portion of Byline Bank’s $15,000 commitment under the Byline Credit Facility. The Company is also required to pay on each anniversary, a commitment fee at a per annum rate equal to 0.50% of the $15,000 commitment under the Byline CreditFacility. Loans under the Byline Credit Facility must be used by the Company for working capital purposes and general liquidity. The Company may request a reductionin Byline Bank’s $15,000 commitment in a minimum amount of $1,000 and multiples of $500 thereafter upon not less than five days’ prior notice to the Lender. TheCompany may draw on the facility until June 18, 2024. Loans (both principal and interest) made by Byline Bank under the amended and restated agreement arescheduled to mature and become immediately due and payable in full on June 18, 2024. The Company is subject to the following financial covenants in the Byline Credit Facility. As of December 31, 2023, the Company is in compliance with all of thesefinancial covenants. 1.JVB’s tangible net worth as defined must exceed $70,000. 2.JVB's excess net capital as defined in Rule 15c3-1 must exceed $40,000. 3.The total amount drawn on the facility must not exceed 25% of JVB's tangible net worth as defined. As of December 31, 2023 and 2022, no amounts were outstanding under the Byline Credit Facility, and the Company was in compliance with all financial covenants. F-49Table of Contents Deferred Financing The Company incurred $1,400 of deferred financing costs associated with the issuance of the 2017 Convertible Note. These amounts were initially recorded as adiscount on debt and were amortized to interest expense over the life of the notes under the effective interest method. The Company also incurred $410 of deferred financing costs associated with the Byline Credit Facility. These costs were initially recorded as a component of otherassets and were amortized to interest expense over the life of the line of credit using the straight-line method. The Company recognized interest expense from deferred financing costs of $222, $185, and $471 for the years ended December 31, 2023, 2022, and 2021, respectively. Interest Expense, Net Interest expense incurred is shown in the table below by instrument for the years ended December 31, 2023, 2022, and 2021. INTEREST EXPENSE(Dollars in Thousands) Year Ended December 31, 2023 2022 2021 Junior subordinated notes $5,247 $3,442 $2,601 2020 Senior Notes 450 458 540 2017 Convertible Note - 327 1,534 2013 Convertible Notes / 2019 Senior Notes - - 211 Byline Bank 338 247 435 Redeemable Financial Instrument - DGC Trust / CBF - - 197 Redeemable Financial Instrument - JKD Capital I LTD 491 508 1,715 $6,526 $4,982 $7,233 F-50Table of Contents 21. EQUITY Common Stock The holders of the Common Stock are entitled to one vote per share on all matters presented to the Company's stockholders. These holders are entitled to receivedistributions on such stock when, as, and if authorized by the Company’s board of directors out of funds legally available and declared by the Company, and to shareratably in the assets legally available for distribution to the Company’s stockholders in the event of its liquidation, dissolution, or winding up after payment of oradequate provision for all of the Company’s known debts and liabilities, including the preferential rights on dissolution of any class or classes of preferred stock. Theholders of the Common Stock have no preference, conversion, exchange, sinking fund, redemption, or, so long as the Common Stock remains listed on a nationalexchange, appraisal rights and have no preemptive rights to subscribe for any of the Company’s securities. Shares of the Common Stock have equal dividend,liquidation, and other rights. Preferred Stock Series C Junior Participating Preferred Stock: Series C Junior Participating Preferred Stock (“Series C Preferred Stock”) was authorized by the Company’s board ofdirectors in connection with the Stockholder Rights Plan discussed below. The Series C Preferred Stock has a par value of $0.001 per share and 10,000 shares wereauthorized as of December 31, 2023 and 2022. The holders of Series C Preferred Stock are entitled to receive, when, as, and if declared by the Company’s board ofdirectors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September, and December in each yearcommencing on the first quarterly dividend payment date after the first issuance of a share or fraction of a share of Series C Preferred Stock. Dividends accrue and arecumulative. The holder of each share of Series C Preferred Stock is entitled to 10,000 votes on all matters submitted to a vote of the Company’s stockholders. Holders ofSeries C Preferred Stock are entitled to receive dividends, distributions or distributions upon liquidation, dissolution, or winding up of the Company in an amount equalto $100,000 per share of Series C Preferred Stock, plus an amount equal to accrued and unpaid dividends and distributions, whether or not declared, prior to paymentsmade to holders of shares of stock ranking junior to the Series C Preferred Stock. The shares of Series C Preferred Stock are not redeemable. There were no shares ofSeries C Preferred Stock issued and outstanding as of December 31, 2023 and 2022. Series E Voting Non-Convertible Preferred Stock: Each share of the Company’s Series E Voting Non-Convertible Preferred Stock (“Series E Preferred Stock”) has noeconomic rights but entitles the holders thereof, to vote the Series E Preferred Stock on all matters presented to the Company’s stockholders. For every 10 shares ofSeries E Preferred Stock, the holders thereof are entitled to one vote on any such matter. Daniel G. Cohen, the Company’s executive chairman, is the sole holder of all4,983,557 shares of Series E Preferred Stock outstanding as of December 31, 2023. The Series E Preferred Stock held by Daniel G. Cohen gives him the same voting rightshe would have if all of the Operating LLC units of membership interests held by him were exchanged for Common Stock on a ten for one basis and effectively gives himvoting rights at the Company in the same proportion as his economic interest (as his units of membership interests of the Operating LLC do not carry voting rights atthe Company level). The Series E Preferred Stock effectively enables Daniel G. Cohen to exercise approximately 10.8% of the voting power of the Company’s total sharesoutstanding that were entitled to vote as of December 31, 2023 (in addition to the voting power he holds through his common share ownership and Series F PreferredStock (defined below). The terms of the Series E Preferred Stock provide that, if the Company causes the redemption of or otherwise acquires any of the Operating LLCunits owned by Daniel G. Cohen as of May 9, 2013, then the Company will redeem an equal number of shares of Series E Preferred Stock. The Series E Preferred Stock isotherwise perpetual. As of December 31, 2023, there were 4,983,557 shares of Series E Preferred Stock issued and outstanding. See Non-Controlling Interest — FutureConversion / Redemption of Operating LLC Units below. Series F Voting Non-Convertible Preferred Stock: On December 23, 2019, the board of directors adopted a resolution that reclassified 25,000,000 authorized but unissuedshares of Preferred Stock, par value $.001 per share, of the Company as a series of Preferred Stock designated as Series F Voting Non-Convertible (“Series F PreferredStock”). In conjunction with SPA, the Company issued 12,549,273 Series F Preferred Stock to Daniel G. Cohen and 9,880,268 Series F Preferred Stock to the DGC Trust. The holders of the Series F Preferred Stock are not entitled to receive any dividends or distributions (whether in cash, stock or property of the Company). The holdersof Series F Preferred Stock and Common Stock are required to vote, together as a single class on all matters with respect to which a vote of the stockholders of theCorporation is required or permitted. Each outstanding share of Series F Preferred Stock entitles the holder to one (1) vote for every ten (10) shares of Series F PreferredStock on each matter submitted to the Holders for their vote. The Series F Preferred Stock held by Daniel G. Cohen and the DGC Trust give them the same voting rightsthey would have if all of the Operating LLC units of membership interests held by each were exchanged for Common Stock on a ten for one basis and effectively givesDaniel G. Cohen and the DGC Trust voting rights at the Company in the same proportion as their economic interest (as units of membership interests of the OperatingLLC do not carry voting rights at the Company level). The Series F Preferred Stock effectively enable Daniel G. Cohen and the DGC Trust to exercise approximately48.4% of the voting power of the Company’s total shares outstanding that were entitled to vote as of December 31, 2023 (in addition to the voting power held throughhis common share ownership and Series E Preferred Stock ownership). As of December 31, 2023, there were 22,429,541 shares of Series F Preferred Stock issued andoutstanding. F-51Table of Contents Together, the Series E and Series F Preferred Stock enables Daniel G. Cohen and the DGC Trust to exercise approximately 59.1% of the voting power of the Company’stotal shares outstanding that were entitled to vote as of December 31, 2023, in addition to the voting power held through Mr. Cohen’s common share ownership. Stockholder Rights Plan On January 2, 2024, the Company entered into a Section 382 Rights Agreement (the “Rights Agreement”) between the Company and Computershare Inc., as rights agent(the “Rights Agent”). The Rights Agreement provides for a distribution of one preferred stock purchase right (each, a “Right,” and collectively, the “Rights”) for each share of the Company’sCommon Stock outstanding to stockholders of record at the close of business on January 16, 2024 (the “Record Date”). Each Right entitles the registered holder topurchase from the Company a unit (a “Unit”) consisting of one ten-thousandth of a share of the Company’s Series C Junior Participating Preferred Stock, par value$0.001 per share (the “Series C Preferred Stock”), at a purchase price of $100.00 per Unit (the “Purchase Price”), subject to adjustment. The description and terms of theRights are set forth in the Rights Agreement. The Company’s board of directors adopted the Rights Agreement in an effort to protect stockholder value by attempting to protect against a possible limitation on theCompany’s ability to use its net operating loss and net capital loss carry forwards (the “deferred tax assets”) to reduce potential future federal income tax obligations.The Company has experienced substantial operating and capital losses, and under the Internal Revenue Code of 1986, as amended (the “Code”), and rules promulgatedby the Internal Revenue Service, the Company may “carry forward” these losses in certain circumstances to offset any current and future earnings and thus reduce theCompany’s federal income tax liability, subject to certain requirements and restrictions. To the extent that the deferred tax assets do not otherwise become limited, theCompany believes that it will be able to carry forward a significant amount of deferred tax assets, and therefore these deferred tax assets could be a substantial asset tothe Company. However, if the Company experiences an “Ownership Change,” as such term is defined in Section 382 of the Code, its ability to use the deferred tax assetswill be substantially limited, and the timing of the usage of the deferred tax assets could be substantially limited and/or delayed, which could therefore significantlyimpair the value of those assets. Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding or, in the case of uncertificated shares of Common Stockregistered in book entry form (“Book Entry Shares”) by notation in book entry (which certificates for Common Stock and Book Entry Shares shall be deemed also to becertificates for Rights), and no separate Rights certificates will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a “Distribution Date” will occur upon the earlier of(i) 10 days following a public announcement that a person or group of affiliated or associated persons has become an “Acquiring Person” (as defined below) (the “StockAcquisition Date”) and (ii) 10 business days following the commencement of a tender offer or exchange offer that would result in a person or group becoming anAcquiring Person. Pursuant to the Rights Agreement, an “Acquiring Person” means any person or entity who or which, together with all affiliates and associates ofsuch person or entity, is the beneficial owner of 4.95% or more of the shares of Common Stock then outstanding, but does not include the Company or any “ExemptedPerson” (as defined below). Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates and will be transferred with and only with suchCommon Stock certificates, (ii) new Common Stock certificates after the Record Date will contain a notation incorporating the Rights Agreement by reference, and (iii) thesurrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented bysuch certificate. Pursuant to the Rights Agreement, an “Exempted Person” is any person or entity who, together with all affiliates and associates of such person or entity, is or maybecome, as of January 2, 2024, the beneficial owner of Common Stock and/or other securities exercisable for shares of Common Stock representing 4.95% or more of theshares of Common Stock outstanding as of January 2, 2024. However, any such person or entity will no longer be deemed to be an Exempted Person and shall be deemedan Acquiring Person under the Rights Agreement if such person or entity, together with all affiliates and associates of such person or entity, becomes the beneficialowner (and so long as such person continues to be the beneficial owner of 4.95% or more of the then outstanding shares of Common Stock) of additional shares ofCommon Stock, except (x) pursuant to equity compensation awards granted to such person or entity by the Company or options or warrants outstanding andbeneficially owned by such person or entity as of January 2, 2024, or as a result of an adjustment to the number of shares of Common Stock represented by such equitycompensation award pursuant to the terms thereof; or (y) as a result of a stock split, stock dividend or the like. In addition, any person or entity who, together with allaffiliates and associates of such person or entity, becomes the beneficial owner of Common Stock and/or other securities exercisable for shares of Common Stockrepresenting 4.95% or more of the shares of Common Stock then outstanding as a result of a purchase by the Company or any of its subsidiaries of shares of CommonStock will also be an “Exempted Person.” However, any such person will no longer be deemed to be an Exempted Person and will be deemed to be an Acquiring Person ifsuch person, together with all affiliates and associates of such person, becomes the beneficial owner, at any time after the date such person became the beneficial ownerof 4.95% or more of the then outstanding shares of Common Stock, of additional shares of Common Stock, except if such additional securities are acquired (x) pursuantto the exercise of options or warrants to purchase Common Stock outstanding and beneficially owned by such person as of the date such person became the beneficialowner of 4.95% or more of the then outstanding shares of Common Stock or as a result of an adjustment to the number of shares of Common Stock for which suchoptions or warrants are exercisable pursuant to the terms thereof, or (y) as a result of a stock split, stock dividend or the like. In addition, the Rights Agreement defined the term “Exempted Person” to also include any person or entity who, together with all affiliates and associates of suchperson or entity, is the beneficial owner of Common Stock and/or other securities exercisable for shares of Common Stock representing 4.95% or more of the shares ofCommon Stock outstanding, and whose beneficial ownership would not, as determined by the Company’s board of directors, jeopardize or endanger the availability ofthe Company of its deferred tax assets. However, any such person or entity will cease to be an Exempted Person if (x) such person or entity ceases to beneficially own4.95% or more of the shares of the then outstanding Common Stock or (y) the Company’s board of directors makes a contrary determination with respect to the effect ofsuch person’s or entity’s beneficial ownership (together with all affiliates and associates of such person) with respect to the availability to the Company of its deferredtax assets. Pursuant to the Rights Agreement, a purchaser, assignee or transferee of the shares of Common Stock (or options or warrants exercisable for Common Stock) from anExempted Person will not be considered an Exempted Person, except that a transferee from the estate of an Exempted Person who receives Common Stock as a bequest orinheritance from an Exempted Person will be an Exempted Person so long as such transferee continues to be the beneficial owner of 4.95% or more of the thenoutstanding shares of Common Stock. The Rights are not exercisable until the Distribution Date and will expire on the earliest of (i) the close of business on December 31, 2026, (ii) the time at which the Rightsare redeemed pursuant to the Rights Agreement, (iii) the time at which the Rights are exchanged pursuant to the Rights Agreement, (iv) the repeal of Section 382 of theCode or any successor statute if the Company’s board of directors determines that the Rights Agreement is no longer necessary or desirable for the preservation ofcertain tax benefits, and (v) the beginning of a taxable year of the Company to which the Company’s board of directors determines that certain tax benefits may not becarried forward. At no time will the Rights have any voting power. Except as otherwise determined by the Company’s board of directors, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.F-52Table of Contents Pursuant to the Rights Agreement, in the event that a person or entity becomes an Acquiring Person, each other holder of a Right will thereafter have the right toreceive, upon exercise, Common Stock (or, in certain circumstances, cash, property or other securities of the Company), having a value equal to two times the exerciseprice of the Right. The exercise price is the Purchase Price times the number of Units associated with each Right (initially, one). For example, at an exercise price of$100.00 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event set forth in the preceding paragraph would entitle itsholder to purchase $200.00 worth of Common Stock (or other consideration, as noted above) for $100.00. If the Common Stock at the time of exercise had a market valueper share of $20.00, the holder of each valid Right would be entitled to purchase ten (10) shares of Common Stock for $100.00. Notwithstanding any of the foregoing, following the occurrence of a person or entity becoming an Acquiring Person (a “Flip-In Event”), all Rights that are, or (undercertain circumstances specified in the Rights Agreement) were, beneficially owned by such Acquiring Person will be null and void. In the event that, at any time following the Stock Acquisition Date, (i) the Company engages in a merger or other business combination transaction in which theCompany is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company is the survivingcorporation and the Common Stock is changed or exchanged; or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold or transferred, each holderof a Right (except Rights which have previously been voided as set forth above) will thereafter have the right to receive, upon exercise of the Right, common stock of theacquiring company having a value equal to two times the exercise price of the Right. However, Rights are not exercisable following the occurrence of a Flip-In Event until such time as the Rights are no longer redeemable by the Company as set forthbelow. The Purchase Price payable, and the number of Units of Series C Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject toadjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Series C Preferred Stock,(ii) if holders of the Series C Preferred Stock are granted certain rights or warrants to subscribe for Series C Preferred Stock or convertible securities at less than thecurrent market price of the Series C Preferred Stock, or (iii) upon the distribution to holders of the Series C Preferred Stock of evidences of indebtedness or assets(excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). With certain exceptions, no adjustments in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price. No fractionalUnits will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Series C Preferred Stock on the last trading date prior to thedate of exercise. At any time after the Stock Acquisition Date, the Company may exchange all or part of the Rights (other than Rights owned by an Acquiring Person) for Common Stockat an exchange ratio equal to (i) a number of shares of Common Stock per Right with a value equal to the spread between the value of the number of shares of CommonStock for which the Rights may then be exercised and the Purchase Price or (ii) if prior to the acquisition by the Acquiring Person of 50% or more of the then outstandingshares of Common Stock, one share of Common Stock per Right (subject to adjustment). At any time until ten days following the Stock Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right. Immediatelyupon the action of the Company’s board of directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be toreceive the $0.001 redemption price. Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receivedividends. While the distribution of the Rights will not be taxable to shareholders or to the Company, stockholders may, depending upon the circumstances, recognizetaxable income in the event that the Rights become exercisable for Common Stock (or other consideration) of the Company as set forth above or in the event the Rightsare redeemed. Other than those provisions relating to the principal economic terms of the Rights, any of the provisions of the Rights Agreement may be amended by the Company’sboard of directors prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Company’s board ofdirectors in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any AcquiringPerson), or to shorten or lengthen any time period under the Rights Agreement; provided, however, that no amendment to adjust the time period governing redemptionshall be made at such time as the Rights are not redeemable. F-53Table of Contents Net Share Settlement of Restricted Stock The Company may net share settle equity-based awards for the payment of employees’ tax obligations to taxing authorities related to the vesting of such equity-basedawards. The total shares withheld and retired are based on the value of the restricted award on the applicable vesting date as determined by the Company’s closingstock price. These net share settlements reduce the number of shares that would have otherwise been issued as a result of the vesting and do not represent an expenseto the Company. Repurchases of Shares and Retirement of Treasury Stock On December 21, 2020, the Company entered into a letter agreement (the" Letter Agreement" ) with Piper Sandler & Co. (the "Agent"). The Letter Agreement authorizedthe Agent to use reasonable efforts to purchase, on the Company's behalf, up to an aggregate maximum amount of $1,000 of Common Stock on any day that the NYSEAmerican Stock Exchange was open for business. The Letter Agreement was effective from December 23, 2020 until July 28, 2021, at which time the aggregate maximumpurchase authorization was reached. Pursuant to the 10b5-1 Plan, purchases of Common Stock may be made in public and private transactions and must comply withRule 10b-18 under the Exchange Act. The 10b5-1 Plan was designed to comply with Rule 10b5-1 under the Exchange Act. During the twelve months ended December 31, 2021, pursuant to the 10b-5 Plan, the Company repurchased 49,544 shares of Common Stock in the open market for a totalpurchase price of $857. All of the repurchases noted above were completed using cash on hand. Equity Distribution Agreement On December 1, 2020, the Company entered into an equity distribution agreement (the “Equity Agreement”) with Northland Securities, Inc. (trade name NorthlandCapital Markets), as sales agent (the “Sales Agent”), relating to the issuance and sale from time to time by the Company (the “ATM Program”), through the Sales Agent,of shares of the Company's Common Stock, having an aggregate offering price of up to $75,000 (collectively the “Shares”). Sales of the Shares, if any, under the EquityAgreement will be made in sales deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act as agreed with the Sales Agent. In accordancewith applicable rules of the SEC, the Company was permitted to sell an aggregate of up to $9,318 in Shares under the Equity Agreement, which represented one-third ofthe value of the Common Stock held by non-affiliates as of March 5, 2021. On June 7, 2021, the Company entered into a letter agreement (the “Equity Distribution Letter Agreement”) with the Sales Agent, pursuant to which the Sales Agentagreed to use its best efforts to, commencing on June 5, 2021, sell on the Company’s behalf up to $7,966 of the shares in the open market pursuant to the terms andconditions of the Equity Agreement and the Equity Distribution Letter Agreement, and the Company agreed not to take any action that would cause the sales of theShares under the Equity Distribution Letter Agreement not to comply with Rule 10b5-1 or Regulation M under the Securities Exchange Act of 1934, as amended (the“Exchange Act”). The Equity Distribution Letter Agreement was entered into in connection with the ATM Program and is designed to comply with Rule 10b5-1 underthe Exchange Act. During the year ended December 31, 2021, the Company sold 300,859 shares in the open market pursuant to the Equity Distribution Agreement for a total net sale priceof $9,076. No shares were sold under the Equity Agreement during the year ended December 31, 2022. On October 5, 2023, the Company entered into an equity distribution agreement (the “2023 Equity Agreement”) with the Sales Agent relating to the ATMProgram, pursuant to which the Company is permitted to sell an aggregate of up to $4,712 in Shares, which represents one-third of the value of the Common Stock heldby non-affiliates of the Company. The Equity Agreement and the 2023 Equity Agreement include customary representations, warranties and covenants by the Company and customary obligations of theparties and termination provisions. The Company has agreed to indemnify the Sales Agent against certain liabilities, including liabilities under the Securities Act, or tocontribute to payments the Sales Agent may be required to make with respect to any of those liabilities. The Company will pay the Sales Agent for sales of its commonstock a commission of 2.5% of the gross offering proceeds of the Shares sold through the Sales Agent pursuant to the Equity Agreement. In connection with the Company's execution of the 2023 Equity Agreement, the Equity Agreement dated December 1, 2020 was terminated. No shares were sold underthe 2023 Equity Agreement during the year ended December 31, 2023. F-54Table of Contents Dividends and Distributions During the year ended December 31, 2023, the Company paid cash dividends of $1.00 per common share. During the year ended December 31, 2022, the Company paidcash dividends of $1.75, which included a special cash dividend of $0.75 per share paid on April 5, 2022. During the year ended December 31, 2021, theCompany declared and paid cash dividends of $0.50 per common share. In the aggregate, during 2023, 2022, and 2021, the Company paid cash dividends on its outstanding Common Stock in the amount of $1,750, $2,558, and$671, respectively. Pro-rata distributions were made to the other members of the Operating LLC upon the payment of dividends to the Company’s stockholders. During2023, 2022, and 2021, the Company paid cash distributions of $4,344, $6,485, and $2,103, respectively, to the holders of the non-controlling interest (that is, the membersof the Operating LLC other than Cohen & Company Inc.). Certain subsidiaries of the Operating LLC have restrictions on the withdrawal of capital and otherwise in making distributions and loans. JVB is subject to net capitalrestrictions imposed by the SEC and FINRA, which require certain minimum levels of net capital to remain in this subsidiary. In addition, these restrictions couldpotentially impose notice requirements or limit the Company’s ability to withdraw capital above the required minimum amounts (excess capital) whether throughdistribution or loan. CCFESA is regulated by the ACPR and subject to certain minimum levels of capital. Shares Outstanding of Stockholders’ Equity of the Company The following table summarizes share transactions that occurred in stockholders’ equity during the years ended December 31, 2023, 2022, and 2021. ROLLFORWARD OF SHARES OUTSTANDING OFCOHEN & COMPANY INC. Common Stock Restricted Stock Total December 31, 2020 1,038,963 286,566 1,325,529 Issuance of shares 300,859 - 300,859 Issuance as equity-based compensation - 142,376 142,376 Vesting of shares 62,649 (62,649) - Shares withheld for employee taxes (21,777) - (21,777)Forfeiture / cancellation of restricted stock - - - Repurchase and retirement of common stock (49,544) - (49,544)December 31, 2021 1,331,150 366,293 1,697,443 Issuance of shares - - - Issuance as equity-based compensation - 92,400 92,400 Vesting of shares 117,634 (117,634) - Shares withheld for employee taxes (15,501) - (15,501)Forfeiture / cancellation of restricted stock - - - Repurchase and retirement of common stock - - - December 31, 2022 1,433,283 341,059 1,774,342 Issuance of shares - - - Issuance as equity-based compensation - 143,900 143,900 Vesting of shares 113,301 (113,301) - Shares withheld for employee taxes (20,328) - (20,328)Forfeiture / cancellation of restricted stock - (4,167) (4,167)Repurchase and retirement of common stock - - - December 31, 2023 1,526,256 367,491 1,893,747 F-55Table of Contents Convertible Non-Controlling Interest Voting Proxy Effective December 30, 2019, the Company, Daniel G. Cohen, and the DGC Trust entered in an agreement whereby if the Company owns a number of units of membershipinterests in the Operating LLC representing less than a majority of the votes entitled to be cast at any meeting or any other circumstances upon which a vote, agreement,consent (including unanimous written consents), or other approval is sought from the holders of units of membership interests in the Operating LLC (each, a“Meeting”), then for so long as the Company owns a number of units of membership interests in the Operating LLC representing less than a majority of the votesentitled to be cast at any Meeting, Daniel G. Cohen and the DGC Trust have agreed to grant a voting proxy to the Company pursuant to which the Company may vote atany Meeting the number of units of membership interests in the Operating LLC owned by Daniel G. Cohen and the DGC Trust necessary to give the Company a majorityof the votes at such Meeting. This agreement gives the Company a controlling vote on all matters of the Operating LLC even though the Company's economic interestin the Operating LLC is less than 50%. On September 25, 2020, the agreement was amended to provide that the voting proxy shall be revoked in the event that Daniel G. Cohen and/or his affiliates cease tobeneficially own a majority of the voting securities of the Company. See notes 21 and 31. Future Conversion / Redemption of Operating LLC Units Each Operating LLC unit of membership interest is redeemable at the member’s option, at any time, for (i) cash in an amount equal to the average of the per share closingprices of the Common Stock for the ten consecutive trading days immediately preceding the date the Company receives the holder’s redemption notice, or (ii) at theCompany’s option, for one share of the Common Stock for every 10 units subject, in each case, to appropriate adjustment upon the occurrence of an issuance ofadditional shares of the Common Stock as a dividend or other distribution on the Company’s outstanding Common Stock, or a further subdivision or combination of theoutstanding shares of the Common Stock. Unit Issuance and Surrender Agreement — Acquisition and Surrender of Additional Units of the Operating LLC, net Effective January 1, 2011 and revised effective May 27, 2021, Cohen & Company Inc. and the Operating LLC entered into a Unit Issuance and Surrender Agreement (the“UIS Agreement”) that was approved by the board of directors of Cohen & Company Inc. and the board of managers of the Operating LLC. In an effort to maintain a1:10 ratio of Common Stock to the number of units of membership interests Cohen & Company Inc. holds in the Operating LLC, the UIS Agreement calls for the issuanceof additional units of membership interests of the Operating LLC to Cohen & Company Inc. when the Cohen & Company Inc. issues its Common Stock to employeesunder existing equity compensation plans or issues its Common Stock in a public or private offering. In certain cases, the UIS Agreement calls for Cohen & CompanyInc. to surrender units to the Operating LLC when certain restricted shares are forfeited by the employee or repurchased by the Company. The following table summarizes the transactions that resulted in changes in the unit ownership of the Operating LLC including unit issuances and forfeitures related tothe UIS Agreement. ROLLFORWARD OF UNITS OUTSTANDING OFTHE OPERATING LLC Cohen &Company Inc. Daniel G. Cohen DGC Trust Others Total December 31, 2020 10,389,624 18,076,275 9,880,268 72,088 38,418,255 Issuance of Units under UIS Agreement, net 3,417,310 - - - 3,417,310 Issuance of Units as equity compensation - - - - - Vesting of units - 529,040 - 10 529,050 Repurchase and retirement of Common Stock (495,440) - - - (495,440)December 31, 2021 13,311,494 18,605,315 9,880,268 72,098 41,869,175 Issuance of Units under UIS Agreement, net 1,021,330 - - - 1,021,330 Issuance of Units as equity compensation - - - - - Vesting of units - 751,540 - - 751,540 Issuance of units under 2017 Convertible Note - - 10,344,827 - 10,344,827 December 31, 2022 14,332,824 19,356,855 20,225,095 72,098 53,986,872 Issuance of Units under UIS Agreement, net 929,730 - - - 929,730 Issuance of Units as equity compensation - - - - - Vesting of units - 967,830 - 470,330 1,438,160 Redemption of convertible non-controlling interest units - (479,380) - (470,330) (949,710)December 31, 2023 15,262,554 19,845,305 20,225,095 72,098 55,405,052 F-56Table of Contents The following table presents the impact to equity from Cohen & Company Inc.’s ownership interest in the Operating LLC. For the Year Ended December 31, 2023 2022 2021 Net income / (loss) attributable to Cohen & Company Inc. $(5,113) $(13,389) $11,808 Transfers (to) from the non-controlling interest: Increase / (decrease) in Cohen & Company Inc.'s paid in capital for the acquisition /(surrender) of additional units in consolidated subsidiary, net 636 (338) (1,929)Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to)from non-controlling interest $(4,477) $(13,727) $9,879 Detail of Non-Controlling Interest ROLLFORWARD OF NON-CONTROLLING INTERESTS(Dollars in Thousands) Operating LLC InsuranceSPACs SponsorEntities OtherConsolidatedSubsidiaries Total December 31, 2020 $29,723 $26,397 $1,408 $57,528 Non-controlling interest share of (loss) 26,656 20,589 14,985 62,230 Other comprehensive income (170) - - (170)Acquisition / (surrender) of additional units of consolidated subsidiary 1,939 - - 1,939 Equity-based compensation 1,859 13,068 - 14,927 Shares withheld for employee taxes (276) - - (276)Dividends/distributions to convertible non-controlling interest (2,103) - - (2,103)Non-convertible non-controlling interest investment - 7 17,088 17,095 Non-convertible non-controlling interest distributions - (55,253) (6,425) (61,678)December 31, 2021 $57,628 $4,808 $27,056 $89,492 Non-controlling interest share of (loss) (22,078) (4,808) (18,395) (45,281)Other comprehensive income (152) - - (152)Acquisition / (surrender) of additional units of consolidated subsidiary 334 - - 334 Equity-based compensation 3,181 - - 3,181 Shares withheld for employee taxes (158) - - (158)Dividends/distributions to convertible non-controlling interest (6,485) - - (6,485)Convertible non-controlling interest investment 15,000 - - 15,000 Non-convertible non-controlling interest investment - - 9 9 Non-convertible non-controlling interest distributions - - (8,653) (8,653)December 31, 2022 $47,270 $- $17 $47,287 Non-controlling interest share of (loss) (4,078) - 19,590 15,512 Other comprehensive income 61 - - 61 Acquisition / (surrender) of additional units of consolidated subsidiary (622) - - (622)Equity-based compensation 3,184 - - 3,184 Shares withheld for employee taxes (127) - - (127)Dividends/distributions to convertible non-controlling interest (4,344) - - (4,344)Redemption of convertible non-controlling interest units (834) - - (834)Non-convertible non-controlling interest investment - - 39 39 Non-convertible non-controlling interest distributions - - (10,041) (10,041)December 31, 2023 $40,510 $- $9,605 $50,115 F-57Table of Contents 22. EQUITY-BASED COMPENSATION The following table summarizes the amounts the Company recognized as equity-based compensation expense including restricted stock, restricted units, membershipunits of consolidated sponsor entities and stock options. These amounts are included as a component of compensation and benefits in the consolidated statements ofoperations. The remaining unrecognized compensation expense related to unvested awards at December 31, 2023 was $10,719 and the weighted average period of timeover which this expense will be recognized is approximately 1.8 years. EQUITY-BASED COMPENSATION INCLUDED IN COMPENSATION AND BENEFITS(Dollars in Thousands) For the Year Ended December 31, 2023 2022 2021 Equity based compensation expense $4,391 $4,390 $15,718 Non equity-based compensation expense 47,701 45,900 69,330 Total compensation and benefits $52,092 $50,290 $85,048 The following table summarizes the equity-based compensation by plan. Each plan is discussed in detail below. DETAIL OF EQUITY-BASED COMPENSATION BY PLAN(Dollars in Thousands) For the Year Ended December 31, 2023 2022 2021 Restricted Stock or Units - 2006/2010 Plans $- $21 $291 Restricted Stock or Units - 2020 Plan 4,391 4,369 2,359 Membership interests in consolidated sponsor entities - - 13,068 Total equity-based compensation expense $4,391 $4,390 $15,718 The Company’s 2020 Long-Term Incentive Plan – Restricted Common Stock, Restricted Units and Stock Options On April 7, 2020, the board of directors of the Company adopted a long-term incentive plan (the “2020 Long Term Incentive Plan”), which was approved by theCompany’s stockholders at the Company’s annual meeting on June 18, 2020. On April 1, 2021 and June 9, 2021, the board of directors and the Company stockholders,respectively, approved Amendment No. 1 to the 2020 Long-Term Incentive Plan, which increased the maximum number of shares of common stock available for issuanceunder the 2020 Long-Term Incentive Plan from 600,000 shares of common stock to 1,200,000 shares of common stock. On March 28, 2022 and June 2, 2022, the board ofdirectors and the Company stockholders, respectively, approved Amendment No. 2, which increased, the maximum number of shares of common stock available forissuance under the 2020 Long-Term Incentive Plan, as amended, from 1,200,000 shares of common stock to 1,900,000 shares of common stock. As of December 31,2023,579,391 shares remain available to be issued under the Company's 2020 Long-term Incentive Plan. No award may be granted under the 2020 Long Term IncentivePlan after April 7, 2030. The Company's 2010 Long- Term-Incentive Plan and the AFN 2006 Equity Plan expired in 2020 and there are no shares available to be issued under these plans. Membership Interests of Consolidated Sponsor Entities Employees sometimes invest in the membership interests of consolidated SPAC sponsor entities. Because these entities are consolidated and the employees areinvesting in the consolidated company's non-controlling interest, these equity interests fall under FASB ASC 718. Generally, the employee invests a de minimis amountand receives an allocation of the founder shares held by the sponsor entity. The investment generally does not have any explicit vesting criteria associated with it. Generally, the employee's investment will be worthless if the SPAC in which the sponsor entity has invested is liquidated and it will become worth something if the SPACcompletes its business combination. Therefore, the Company treats these grants as having a performance condition (i.e. the completion of the SPAC businesscombination). Further, at the time of the investments, the Company treats this performance condition as being non-probable. The effect of this is that theCompany records no expense related to these investments until (and only if) the business combination is completed. Upon completion of the business combination, theCompany records compensation expense in an amount equal to the fair value of the grant. The fair value of the grant is equal to the public trading price of the SPAC onthe grant date adjusted for certain sale restrictions imposed on the shares the employee receives (generally, the shares are restricted for sale for some time period andsubject to certain hurdle prices before they become freely tradeable). F-58Table of Contents RESTRICTED STOCK - SERVICE BASED VESTING Number of Shares ofRestricted Stock Weighted Average Grant DateFair Value Unvested at January 1, 2021 286,566 $14.23 Granted 142,376 17.94 Vested (62,649) 7.59 Unvested at December 31, 2021 366,293 16.80 Granted 92,400 11.13 Vested (117,634) 14.08 Unvested at December 31, 2022 341,059 16.17 Granted 143,900 7.57 Vested (113,301) 17.18 Forfeiture (4,167) (11.65)Unvested at December 31, 2023 367,491 12.54 OPERATING LLC RESTRICTED UNITS - SERVICE BASED VESTING Number of RestrictedUnits Weighted AverageGrant Date Fair Value Unvested at January 1, 2021 2,783,080 $1.46 Granted 4,617,000 2.07 Vested (529,050) 0.62 December 31, 2021 6,871,030 1.46 Granted 422,000 1.93 Vested (751,540) 0.85 Unvested at December 31, 2022 6,541,490 1.35 Granted 422,000 0.68 Vested (1,438,160) 1.97 Unvested at December 31, 2023 5,525,330 $1.82 During the years ended December 31, 2023, 2022, and 2021, the total fair value of all equity awards vested in each year based on the fair market value of the CommonStock on the vesting date was $2,249, $2,899, and $1,999, respectively. The restricted shares and restricted units of Common Stock typically may vest either quarterly, annually, or at the end of a specified term on a straight-line basis over theremaining term of the awards, assuming the recipient is continuing in service to the Company at such date, and, in the case of performance-based equity awards, theperformance thresholds have been attained. In the case of director grants, the equity awards have no performance or service conditions. In the cases of graded vesting,the Company typically expenses the grant on a straight-line basis if only service conditions are present but expenses on a graded basis if performance-based conditionsare present. F-59Table of Contents SPONSOR ENTITY MEMBERSHIP UNITS - PERFORMANCE BASED VESTING Membership Units Weighted AverageGrant Date Fair Value Unvested at January 1, 2021 3,272,500 $9.98 Granted - - Vested (1,309,000) 9.99 Forfeited (231,000) 9.99 December 31, 2021 1,732,500 9.97 Granted - - Vested - - Forfeited (1,732,500) 9.97 Unvested at December 31, 2022 - - Granted - - Vested - - Forfeited - - Unvested at December 31, 2023 - $- During the years ended December 31, 2023, 2022, and 2021, the total fair value of all equity awards vested in each year based on the fair market value of the membershipunits on the vesting date was $0, $0, and $13,361, respectively. F-60Table of Contents 23. INCOME TAXES Cohen & Company Inc. is treated as a C corporation for United States federal income tax purposes. The components of income tax expense (benefit) included in theconsolidated statements of operations for each year presented herein are shown in the table below. INCOME TAX EXPENSE(Dollars in Thousands) For the Year Ended December 31, 2023 2022 2021 Current income tax expense (benefit) Federal income tax expense (benefit) $- $- $- Foreign income tax expense (benefit) 120 198 188 State and local income tax expense (benefit) 71 17 387 191 215 575 Deferred income tax expense (benefit) Federal income tax expense (benefit) 3,205 4,634 (530)Foreign income tax expense (benefit) - - - State and local income tax expense (benefit) 2,149 (55) (3,586) 5,354 4,579 (4,116) Total 5,545 4,794 (3,541) The components of income (loss) before income taxes are shown below. INCOME (LOSS) BEFORE INCOME TAXES(Dollars in Thousands) For the Year Ended December 31, 2023 2022 2021 Domestic $15,705 $(54,749) $69,791 Foreign 239 873 706 Total $15,944 $(53,876) $70,497 F-61Table of Contents The Company had prepaid taxes of $235 and $0 in the consolidated balance sheet as of December 31, 2023 and 2022, respectively. The expected income tax expense /(benefit) using the federal statutory rate differs from income tax expense / (benefit) pertaining to pre-tax income / (loss) as a result ofthe following for the years ended December 31, 2023, 2022, and 2021. INCOME TAX RATE RECONCILIATION(Dollars in Thousands) For the Year Ended December 31, 2023 2022 2021 Federal statutory rate $3,348 $(11,314) $14,804 Pass through impact (3,257) 9,509 (13,068)Deferred tax valuation allowance and other 3,114 6,439 (2,267)State and local tax 2,220 143 (3,197)Foreign tax 120 17 187 Total $5,545 $4,794 $(3,541) Deferred tax assets and liabilities are determined based on the difference between the book basis and tax basis of assets and liabilities using tax rates in effect for theyear in which the differences are expected to reverse. The recognition of deferred tax assets is reduced by a valuation allowance if it is more likely than not that the taxbenefits will not be realized. The components of the net deferred tax asset (liability) are as follows. DEFERRED TAX ASSET AND LIABILITY(Dollars in Thousands) December 31, 2023 December 31, 2022 Asset Liability Net Asset Liability Net Federal net operating loss carry-forward $20,256 $- $20,256 $20,160 $- $20,160 State and local net operating loss carry-forward 3,862 - 3,862 5,460 - 5,460 Federal capital loss carry-forward 12,567 - 12,567 14,796 - 14,796 Disallowed interest expense carryforward 925 - 925 - - - Unrealized gain on debt - (5,716) (5,716) - (6,505) (6,505)Investment in Operating LLC 13,225 - 13,225 13,682 - 13,682 Other 306 252 558 998 (227) 771 Gross deferred tax asset / (liability) 51,141 (5,464) 45,677 55,096 (6,732) 48,364 Less: valuation allowance (44,097) - (44,097) (41,430) - (41,430)Net deferred tax asset / (liability) $7,044 $(5,464) $1,580 $13,666 $(6,732) $6,934 As of December 31, 2023, the Company had a federal net operating loss (“NOL”) of approximately $96,457, which will be available to offset future taxable income, subjectto limitations described below. If not used, this NOL will begin to expire in 2028. The Company also had net capital losses (“NCLs”) in excess of capital gains of$59,844 as of December 31, 2023, which can be carried forward to offset future capital gains, subject to the limitations described below. If not used, this carryforward willbegin to expire in 2024. No assurance can be made that the Company will have future taxable income or future capital gains to benefit from its NOL and NCL carryovers. The Company has determined that its NOL and NCL carryovers are not currently limited by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”).However, the Company may experience an ownership change as defined in that section (“Ownership Change”) in the future. If an Ownership Change were to occur inthe future, the Company’s ability to use its NOLs, NCLs, and certain recognized built-in losses to reduce its taxable income in a future year would generally be limited toan annual amount (the “Section 382 Limitation”) equal to the fair value of the Company immediately prior to the Ownership Change multiplied by the “long term tax-exempt interest rate.” In the event of an Ownership Change, NOLs and NCLs that exceed the Section 382 Limitation in any year will continue to be allowed ascarryforwards for the remainder of the carryforward period, and such NOLs and NCLs can be used to offset taxable income for years within the carryforward periodsubject to the Section 382 Limitation in each year. However, if the carryforward period for any NOL or NCL were to expire before that loss is fully utilized, the unusedportion of that loss would be lost. See discussion of stockholder rights plan in note 21. F-62Table of Contents Notwithstanding the fact that the Company has determined that the use of its remaining NOL and NCL carryforwards are not currently limited by Section 382 of theCode, the Company recorded a valuation allowance for a substantial portion of its NOLs and NCLs when calculating its net deferred tax liability as of December 31,2023. Each reporting period, management determines the expected amount of taxable income it will generate in each jurisdiction where the Company has NOLs. Managementthen schedules this income against each carryforward asset and determines what portion of the asset it believes is more likely than not to be realized. Thisdetermination is subjective and subject to many assumptions and factors including: profitability of the Company's business in the future, the timing of that futureincome as compared to carryforward asset expiration, the character of future income (ordinary or capital), and the jurisdiction the income will be generated in. To theextent management's determination changes, an adjustment will be made to the valuation allowance resulting in deferred tax expense or benefit. The Company recordeddeferred tax benefit in 2021 because expectations of future income increased and the Company reduced the valuation allowance it had applied against carryforwardassets. The Company recorded deferred tax expense in 2022 and 2023 because expectations of future income decreased and the Company increased the valuationallowance it had applied against carryforward assets. Because of magnitude of the Company's carryforward assets as well as the volatility of the Company's operatingresults, significant adjustments to the valuation allowance are likely going forward. These future adjustments will likewise result in material amounts of deferred taxbenefit or expense going forward. The Company files tax returns in the U.S. federal jurisdiction, various states or local jurisdictions, and France. With few exceptions, the Company is no longer subject toexamination for years prior to 2017. The Company applies ASC 740-10 in determining uncertain tax positions. The Company has evaluated its tax positions under this criteria and has determined that as ofDecember 31, 2023 and 2022 it has not taken any material uncertain tax positions that would require adjustment to the financial statements. F-63Table of Contents 24. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) The following table shows the components of other comprehensive income / (loss) and the tax effects allocated to other comprehensive income /(loss). Accumulated OCI consists solely of foreign currency items. ACCUMULATED OTHER COMPREHENSIVE INCOME / (LOSS) AND INCOME TAX EFFECT OF ITEMS ALLOCATED TO OTHER COMPREHENSIVE INCOME /(LOSS)(Dollars in Thousands) OCI Items Tax Effect Total December 31, 2020 $(821) $- $(821)Change in foreign currency items (74) - (74)Other comprehensive income / (loss), net (74) - (74)Acquisition / (surrender) of additional units in consolidated subsidiary, net (10) - (10)December 31, 2021 (905) - (905)Change in foreign currency items (54) - (54)Other comprehensive income / (loss), net (54) - (54)Acquisition / (surrender) of additional units in consolidated subsidiary, net 4 - 4 December 31, 2022 (955) - (955)Change in foreign currency items 25 - 25 Other comprehensive income / (loss), net 25 - 25 Acquisition / (surrender) of additional units in consolidated subsidiary, net (14) - (14)December 31, 2023 $(944) $- $(944) F-64Table of Contents 25. NET CAPITAL REQUIREMENTS JVB is subject to the net capital provision of Rule 15c3-1 under the Exchange Act, which requires the maintenance of minimum net capital, as defined therein. CCFESA, asubsidiary of the Company, is regulated by the ACPR in France. CCFESA is subject to certain regulatory capital requirements in accordance with Articles L.533-2 et seq.of the French Financial and Monetary Code, implementing the new framework set out in the Investment Firm Regulation ("IFR") and the Investment Firm Directive("IFD"). CCFEL cancelled its license with the CBI effective April 7, 2022. The following tables shows the actual net capital (in the case of the JVB) and actual net liquid capital (in the case of CCFESA and CCFEL) as compared to the requiredamounts for the periods indicated. STATUTORY NET CAPITAL REQUIREMENTS(Dollars in thousands) December 31, 2023 Actual Net Capital orLiquid Capital Amount Required Excess JVB $49,878 $250 $49,628 CCFESA 1,761 685 1,076 Total $51,639 $935 $50,704 December 31, 2022 Actual Net Capital orLiquid Capital Amount Required Excess JVB $46,518 $250 $46,268 CCFESA 1,588 512 1,076 Total $48,106 $762 $47,344 F-65Table of Contents 26. EARNINGS / (LOSS) PER COMMON SHARE The following table presents a reconciliation of basic and diluted earnings / (loss) per common share for the periods indicated. EARNINGS / (LOSS) PER COMMON SHARE(Dollars in Thousands, except share or per share information) Year Ended December 31, 2023 2022 2021 Net income / (loss) attributable to Cohen & Company Inc. $(5,113) $(13,389) $11,808 Add/ (deduct): Income / (loss) attributable to non-controlling interest attributable toOperating LLC membership (1) - - 26,656 Add: Interest expense incurred on dilutive convertible notes - - 1,183 Add / (deduct): Adjustment (2) - - 1,719 Net income / (loss) on a fully converted basis $(5,113) $(13,389) $41,366 Weighted average common shares outstanding - Basic 1,513,469 1,420,383 1,187,029 Unrestricted Operating LLC units of membership interests exchangeable into Cohen &Company Inc. shares (1) - - 2,851,358 Restricted Units or shares - - 212,055 Shares issuable upon conversion of dilutive convertible notes - - 1,034,483 Weighted average common shares outstanding - Diluted 1,513,469 1,420,383 5,284,925 Net income / (loss) per common share - Basic $(3.38) $(9.43) $9.95 Net income / (loss) per common share - Diluted (3) $(3.38) $(9.43) $7.83 (1)The Operating LLC units of membership interests not held by Cohen & Company Inc. (that is, those held by the non-controlling interest) may be redeemed andexchanged into shares of the Company on a ten-for-one basis. The Operating LLC units of membership interests not held by Cohen & Company Inc. areredeemable, at the member’s option at any time, for (i) cash in an amount equal to the average of the per share closing prices of the Common Stock for the tenconsecutive trading days immediately preceding the date the Company receives the member’s redemption notice, or (ii) at the Company’s option, one tenth of ashare of the Common Stock, subject, in each case, to appropriate adjustment upon the occurrence of an issuance of additional shares of the Common Stock as adividend or other distribution on the outstanding Common Stock, or a further subdivision or combination of the outstanding shares of the Common Stock. Theseunits are not included in the computation of basic earnings per share. These units enter into the computation of diluted net income (loss) per common share whenthe effect is not anti-dilutive using the if-converted method.(2)An adjustment is included because the Company would have incurred a higher income tax expense or realized a higher income tax benefit if the Operating LLCunits of membership interests had been converted at the beginning of the period.(3)Potentially diluted securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: Year Ended December 31, 2023 2022 2021 2017 Convertible Note - 224,138 - Restricted Common Stock 9,060 18,182 - Restricted Operating LLC units 4,010,179 3,735,004 - 4,019,239 3,977,324 - F-66Table of Contents 27. RESERVE REQUIREMENTS As of December 31, 2023 and 2022, JVB claimed exemptions to the reserve requirements under Rule 15c3-3 of the Securities Exchange Act of 1934 under two separateexemptions. First, JVB does not carry securities accounts for its customers or perform custodial functions relating to customer securities and, therefore, qualifies for anexemption under Rule 15c3-3(k)(2)(ii). Second, JVB qualifies for an exemption under Footnote 74 of the SEC Release No. 34-70073 because it limits its business activitiesto certain activities allowed under this exemption and it does not hold customer funds or securities, carry customer accounts, and does not carry PAB accounts. F-67Table of Contents 28. COMMITMENTS AND CONTINGENCIES Lease Commitments The Company leases office space in several cities under lease agreements. As of December 31, 2023, future minimum commitments under these operating leases are asfollows. FUTURE LEASE COMMITMENTS(Dollars in Thousands) Lease Less: Sublease Net Commitment 2024 $2,588 $(26) $2,562 2025 2,641 - 2,641 2026 2,349 - 2,349 2027 2,357 - 2,357 2028 2,366 - 2,366 2029 and thereafter 6,039 - 6,039 $18,340 $(26) $18,314 Rent expense for the years ended December 31, 2023, 2022, and 2021 was $2,538, $2,522, and $1,639, respectively, and was included in business development, occupancy,equipment expense in the consolidated statements of operations. Rent expense was recorded net of sublease income of $94, $102, and $178, for the years endedDecember 31, 2023, 2022 and 2021, respectively. The lease commitments noted above represent the actual cash commitments and will not necessarily match the amount of rent expense recorded in the consolidatedstatements of operations. In December 2023, the Company executed a lease amendment to its 3 Columbus Circle LLC agreement. The amendment provides for the Company to lease additionalspace in the building in conjunction with surrendering certain currently occupied premises. See note 14. The cash commitment related to the lease amendment isincluded in the table above. Legal and Regulatory Proceedings From time to time, the Company is a party to various routine legal proceedings, claims, and regulatory inquiries arising out of the ordinary course of the Company’sbusiness. Management believes that the results of these routine legal proceedings, claims, and regulatory matters will not have a material adverse effect on theCompany’s financial condition, or on the Company’s operations and cash flows. However, the Company cannot estimate the legal fees and expenses to be incurred inconnection with these routine matters and, therefore, is unable to determine whether these future legal fees and expenses will have a material impact on the Company’soperations and cash flows. It is the Company’s policy to expense legal and other fees as incurred. F-68Table of Contents 29. SEGMENT AND GEOGRAPHIC INFORMATION Segment Information The Company operates within three business segments: Capital Markets, Asset Management, and Principal Investing. See note 1. The Company’s business segment information was prepared using the following methodologies and generally represents the information that is relied upon bymanagement in its decision-making processes. (a) Revenues and expenses directly associated with each business segment are included in determining net income / (loss) by segment.(b) Indirect expenses (such as general and administrative expenses including executive and indirect overhead costs) not directly associated with specific businesssegments are not allocated to the business segments’ statements of operations. Accordingly, the Company presents segment information consistent with internal management reporting. See note (1) in the table below for more detail on unallocateditems. The following tables present the financial information for the Company’s segments for the periods indicated. SEGMENT INFORMATIONStatement of Operations InformationFor the Year Ended December 31, 2023(Dollars in Thousands) Capital Asset Principal Segment Markets Management Investing Total Unallocated (1) Total Net trading $30,926 $- $- $30,926 $- $30,926 Asset management - 7,337 - 7,337 - 7,337 New issue and advisory 28,264 - - 28,264 - 28,264 Principal transactions and other income 1 1,071 15,382 16,454 - 16,454 Total revenues 59,191 8,408 15,382 82,981 - 82,981 Compensation and benefits 31,156 5,883 2,335 39,374 12,718 52,092 Other operating expense 15,746 2,218 1,117 19,081 4,947 24,028 Total operating expenses 46,902 8,101 3,452 58,455 17,665 76,120 Operating income / (loss) 12,289 307 11,930 24,526 (17,665) 6,861 Interest income (expense) (338) - - (338) (6,188) (6,526)Income / (loss) from equity method affiliates - - 15,609 15,609 - 15,609 Other non-operating income - - - - - - Income / (loss) before income taxes 11,951 307 27,539 39,797 (23,853) 15,944 Income tax expense / (benefit) - - - - 5,545 5,545 Net income / (loss) 11,951 307 27,539 39,797 (29,398) 10,399 Less: Net income (loss) attributable to thenon-convertible non-controlling interest ofthe Operating LLC - 17 19,573 19,590 - 19,590 Enterprise net income (loss) 11,951 290 7,966 20,207 (29,398) (9,191)Less: Net income (loss) attributable to theconvertible non-controlling interest of Cohen& Company Inc. - - - - (4,078) (4,078)Net income / (loss) attributable to Cohen &Company Inc. $11,951 $290 $7,966 $20,207 $(25,320) $(5,113) Other statement of operations data Depreciation and amortization (included intotal operating expense) $- $6 $- $6 $557 $563 F-69Table of Contents SEGMENT INFORMATIONStatement of Operations InformationFor the Year Ended December 31, 2022(Dollars in Thousands) Capital Asset Principal Segment Markets Management Investing Total Unallocated (1) Total Net trading $40,009 $- $- $40,009 $- $40,009 Asset management - 9,004 - 9,004 - 9,004 New issue and advisory 24,721 - - 24,721 - 24,721 Principal transactions and other income 2 854 (30,203) (29,347) - (29,347)Total revenues 64,732 9,858 (30,203) 44,387 - 44,387 Compensation and benefits 32,434 7,612 1,086 41,132 9,158 50,290 Other operating expense 14,539 2,173 728 17,440 4,620 22,060 Total operating expenses 46,973 9,785 1,814 58,572 13,778 72,350 Operating income / (loss) 17,759 73 (32,017) (14,185) (13,778) (27,963)Interest income (expense) (247) - - (247) (4,735) (4,982)Income / (loss) from equity method affiliates - - (20,931) (20,931) - (20,931)Other non-operating income - - - - - - Income / (loss) before income taxes 17,512 73 (52,948) (35,363) (18,513) (53,876)Income tax expense / (benefit) - - - - 4,794 4,794 Net income / (loss) 17,512 73 (52,948) (35,363) (23,307) (58,670)Less: Net income (loss) attributable to the non-convertible non-controlling interest of theOperating LLC - - (23,203) (23,203) - (23,203)Enterprise net income (loss) 17,512 73 (29,745) (12,160) (23,307) (35,467)Less: Net income (loss) attributable to theconvertible non-controlling interest of Cohen& Company Inc. - - - - (22,078) (22,078)Net income / (loss) attributable to Cohen &Company Inc. $17,512 $73 $(29,745) $(12,160) $(1,229) $(13,389) Other statement of operations data Depreciation and amortization (included intotal operating expense) $- $5 $- $5 $552 $557 F-70Table of Contents SEGMENT INFORMATIONStatement of Operations InformationFor the Year Ended December 31, 2021(Dollars in Thousands) Capital Asset Principal Segment Markets Management Investing Total Unallocated (1) Total Net trading $69,385 $- $- $69,385 $- $69,385 Asset management - 10,923 - 10,923 - 10,923 New issue and advisory 28,736 - - 28,736 - 28,736 Principal transactions and other income (3) 768 36,559 37,324 - 37,324 Total revenues 98,118 11,691 36,559 146,368 - 146,368 Salaries/Wages 42,064 6,630 16,546 65,240 19,808 85,048 Other Operating Expense 13,914 2,151 387 16,452 5,275 21,727 Total operating expenses 55,978 8,781 16,933 81,692 25,083 106,775 Operating income / (loss) 42,140 2,910 19,626 64,676 (25,083) 39,593 Interest income (expense) (435) - - (435) (6,798) (7,233)Income / (loss) from equity method affiliates - - 36,010 36,010 - 36,010 Other non operating income / (expense) - - - - 2,127 2,127 Income / (loss) before income taxes 41,705 2,910 55,636 100,251 (29,754) 70,497 Income tax expense / (benefit) - - - - (3,541) (3,541)Net income / (loss) 41,705 2,910 55,636 100,251 (26,213) 74,038 Less: Net income (loss) attributable to the non-convertible non-controlling interest of theOperating LLC - 1,878 33,696 35,574 - 35,574 Enterprise net income (loss) 41,705 1,032 21,940 64,677 (26,213) 38,464 Less: Net income (loss) attributable to theconvertible non-controlling interest of Cohen& Company Inc. - - - - 26,656 26,656 Net income / (loss) attributable to Cohen &Company Inc. $41,705 $1,032 $21,940 $64,677 $(52,869) $11,808 Other statement of operations data Depreciation and amortization (included intotal operating expense) $1 $2 $- $3 $368 $371 (1)Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology,human resources, risk, compliance and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such ascash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to supportdepartments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes.Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excludedin business segment reporting to the chief operating decision maker. F-71Table of Contents BALANCESHEET DATAAs of December 31, 2023(Dollars in Thousands) Capital Asset Principal Segment Markets Management Investing Total Unallocated (1) Total Total Assets $665,597 $5,633 $86,946 $758,176 $14,585 $772,761 Included within total assets: Investments in equity method affiliates $- $- $14,241 $14,241 $- $14,241 Goodwill (2) $54 $55 $- $109 $- $109 Intangible assets (2) $166 $- $- $166 $- $166 BALANCE SHEET DATAAs of December 31, 2022(Dollars in Thousands) Capital Asset Principal Segment Markets Management Investing Total Unallocated (1) Total Total Assets $820,238 $5,679 $36,969 $862,886 $24,169 $887,055 Included within total assets: Investments in equity method affiliates $- $- $8,929 $8,929 $- $8,929 Goodwill (2) $54 $55 $- $109 $- $109 Intangible assets (2) $166 $- $- $166 $- $166 (1)Unallocated assets primarily include (1) amounts due from related parties; (2) furniture and equipment, net; and (3) other assets that are not considered necessaryfor an understanding of business segment assets and such amounts are excluded in business segment reporting to the chief operating decision maker.(2)Goodwill and intangible assets are allocated to the Capital Markets and Asset Management business segments as indicated in the table from above. Geographic Information The Company has conducted its business activities through offices in the following locations: (1) United States and (2) Europe and other. Total revenues by geographicarea are summarized as follows. GEOGRAPHIC DATA(Dollars in Thousands) Year Ended December 31, 2023 2022 2021 Total Revenues: United States $77,532 $39,669 $140,420 Europe & Other 5,449 4,718 5,948 Total $82,981 $44,387 $146,368 Long-lived assets attributable to an individual country, other than the United States, are not material. F-72Table of Contents 30. SUPPLEMENTAL CASH FLOW DISCLOSURE Cash flows from investments (including derivatives) classified as investments-trading or trading securities sold, not yet purchased are presented on a net basis as acomponent of cash flows from operations. Cash flows from investments (including derivatives) classified as other investments, at fair value or other investments sold,not yet purchased are presented on a gross basis as a component of cash flows from investing. Interest paid by the Company on its debt and redeemable financial instruments was $5,607, $4,782, and $6,388 for the years ended December 31, 2023, 2022, and 2021,respectively. The Company paid income taxes of $539, $327, and $166 for the years ended December 31, 2023, 2022, and 2021, respectively, and received income tax refunds of $96, $0,and $96 for the years ended December 31, 2023, 2022, and 2021, respectively. In 2023, the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows: •The Company net received units of membership interest in the Operating LLC. The Company recognized a net increase in additional paid-in capital of $636, anet decrease AOCI of $14, and a decrease in non-controlling interest of $622. See note 21. •In conjunction with the consolidation of the SPAC Fund, the Company recorded an increase in receivables from brokers, dealers, and clearing agencies of$68,066, an increase in other investments, at fair value of $40,388, an increase in other assets of $63, an increase in accounts payable of $82,711, and an increasein other investments sold, not yet purchased of $25,806. See note 4. •The Company received equity shares in public companies in exchange for advisory services. The fair market value of the shares received was $18,248. TheCompany included this in new issue and advisory revenue in the statement of operations. •The Company recorded a net decrease in investments in equity method affiliates of $10,102 and a net increase in other investments, at fair value of $10,102resulting from an in-kind distribution from an equity method affiliate. •In connection with several SFA transactions, the Company received equity shares in a public company, recorded a net increase of $58,286 in other investments,at fair value, and a corresponding increase in other investments, sold not yet purchased of $58,286. In 2022, the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows: • The Company net surrendered units of membership interests in the Operating LLC. The Company recognized a net decrease in additional paid-in capital of $338,a net increase of $4 in AOCI, and an increase of $334 in non-controlling interest. See note 21. • The Company recorded a $15,000 increase in convertible non-controlling interest and a $15,000 decrease in debt as a result of the DGC Trust election to convertthe 2017 Convertible Note into units of membership interest of the Operating LLC. • The Company recorded a decrease in equity method affiliates of $20,915 and an increase in other investments, at fair value of $20,915 resulting from an in-kinddistribution from equity method affiliates. • The Company received equity shares in several public companies in exchange for advisory services. The fair market value of the shares received was $7,416. The Company included this in new issue and advisory revenue in the statement of operations. • The Company recorded a decrease in other investments, at fair value of $6,417 and a corresponding decrease in non-controlling interest resulting from in-kinddistributions to the non-controlling interest of certain SPAC sponsor entities. • The Company recorded an increase in other investments, at fair value of $844 and a corresponding decrease in other investment, not yet purchased of $844resulting from an investment reclass. In 2021, the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows: •The Company net surrendered units of membership interests in the Operating LLC. The Company recognized a net decrease in additional paid-in capital of$1,929, a net decrease of $10 in AOCI, and a net increase of $1,939 in non-controlling interest. See note 21. •The Company recorded a decrease of $2,103 in due from related party, a corresponding increase of $701 in other investments, at fair value, and a correspondingdecrease of $1,402 to non-controlling interest, all as a result of an in-kind distribution of incremental LP interests, from the 2020 performance fee earned, to allthe members of Vellar GP, including the Company. •The Company recorded a decrease of $3,958 in investments in equity method affiliates and a $31,049 decrease in other investments, at fair value and acorresponding decrease in non-controlling interest resulting from an in-kind distribution from Insurance SPAC II. •The Company recorded a decrease in other investments, at fair value of $20,119 and a corresponding decrease in non-controlling interest resulting from an in-kind distribution from Insurance SPAC. •The Company recorded a net decrease in investments in equity method affiliates of $5,439 and a net increase in other investments, at fair value of $5,439resulting from an in-kind distribution from an equity method affiliate. •The Company recorded a decrease in other investments, at fair value of $2,415 and a decrease in non-controlling interest of $2,415 resulting from an in-kinddistribution from other consolidated subsidiaries. F-73Table of Contents 31. RELATED PARTY TRANSACTIONS The Company has identified the following related party transactions for the years ended December 31, 2023, 2022, and 2021. The transactions are listed by related partyand, unless otherwise noted in the text of the description, the amounts are disclosed in the tables at the end of this section. A. Daniel G. Cohen/Cohen Bros. Financial, LLC (“CBF”)/ EBC 2013 Family Trust (“EBC”) CBF has been identified as a related party because (i) CBF is a non-controlling interest holder of the Company and (ii) CBF is wholly owned by Daniel G. Cohen. OnSeptember 29, 2017, CBF also invested $8,000 of the initial $10,000 total investment in the Company’s Redeemable Financial Instrument – DGC Trust / CBF pursuant tothe CBF Investment Agreement. The Company incurred interest expense on this instrument, which is disclosed as part of interest expense incurred in the table at theend of this section. In March 2021, October 2020, and October 2019, payments of $4,000, $2,500, and $1,500, respectively, were made by the Company to CBF, whichreduced the redeemable financial instrument balance to zero. See note 20. EBC has been identified as a related party because Daniel G. Cohen is a trustee of EBC and has sole voting power with respect to all shares of the Company held byEBC. In September 2013, EBC, as an assignee of CBF, made a $4,000 investment in the Company. The Company issued $2,400 in principal amount of the 2013 ConvertibleNotes and $1,600 of the Common Stock to EBC. On September 25, 2019, the 2013 Convertible Notes were amended and restated and, subsequent to this amendment, arereferred to as the 2019 Senior Notes. On September 25, 2020 the 2019 Senior Notes were amended again to extend their maturity date until September 25, 2021.The Company fully paid and extinguished the 2019 Senior Notes on September 24, 2021. See note 20. The Company incurred interest expense on this debt, which isdisclosed as part of interest expense incurred in the table at the end of this section. B. JKD Investor The JKD Investor is an entity owned by Jack J. DiMaio, the vice chairman of the board of directors, and his spouse. On October 3, 2016, JKD Investor invested $6,000in the Operating LLC. Additional investments were made in January 2017 and January 2019 in the amounts of $1,000 and $1,268, respectively. See notes 19 and 20. Theinterest expense on this investment is disclosed as part of interest expense incurred in the table at end of this section. On January 31, 2020, JKD Investor purchased $2,250 of the 2020 Senior Notes. On January 31, 2022, the Operating LLC and JKD Investor entered into the 2022 PurchaseAgreement, pursuant to which, among other things, on such date, (i) JKD Investor paid to the Operating LLC an additional $2,250 and (ii) in consideration for suchfunds, the Operating LLC issued to JKD Investor the Amended and Restated Note in the aggregate principal amount of $4,500. See note 20. The Company incurredinterest expense on this debt, which is disclosed as part of interest expense incurred in the tale at the end of this section. On January 5, 2024, the Operating LLC and JKD Investor entered into an amendment to the Amended and Restated Note, pursuant to which the Amended and RestatedNote was amended to (a) extend (i) the maturity date thereof from January 31, 2024 to January 31, 2026, (ii) the date following which the Amended and Restated Note maybe redeemed by JKD Investor from January 31, 2023 to January 31, 2025, and (iii) the date following which the Amended and Restated Note may be prepaid by theOperating LLC from January 31, 2023 to January 31, 2025; and (b) increase the interest rate payable under the Amended and Restated Note from 10% per annum to 12%per annum effective as of January 31, 2024. C. DGC Trust DGC Trust has been identified as a related party because Daniel G. Cohen's children are the beneficiaries of the trust and the trust was established by Daniel G. Cohen,executive chairman of the Company’s board of directors and executive chairman of the Operating LLC’s board of managers. Daniel G. Cohen does not have any voting ordispositive control of securities held in the interest of the trust. Pursuant to the DGC Trust’s governing documents, Daniel G. Cohen has the ability to acquire at anytime any of the DGC Trust’s assets, including the units of membership interests, by substituting other property of an equivalent value without the approval or consentof any person, including any trustee or beneficiary of the DGC Trust. F-74Table of Contents On December 30, 2019, the DGC Trust contributed 291,480 shares of IMXI common stock with a fair value of $3,428 to the Operating LLC. In exchange for these shares,the Operating LLC issued to the DGC Trust 9,880,268 newly issued units of membership interests in the Operating LLC and the Company issued to the DGC Trust9,880,268 shares of newly issued Series F Preferred Stock. See note 21. In March 2017, the 2017 Convertible Note was issued to the DGC Trust. See note 20. TheCompany incurred interest expense on the 2017 Convertible Note, which is disclosed as part of interest expense incurred in the table below. D. Duane Morris, LLP (“Duane Morris”) Duane Morris is an international law firm and serves as legal counsel to the Company. Duane Morris is considered a related party because a partner at Duane Morris isa member of the same household as a director of the Company. Expense incurred by the Company for services provided by Duane Morris is included withinprofessional fees and operating expense in the consolidated statements of operations and comprehensive income and are disclosed in the table below. E. Cohen Circle, LLC ("Cohen Circle"), formerly Fintech Masala, LLC The Company engaged Betsy Cohen, as an agent of Cohen Circle, as a consultant to provide certain services related to the Insurance SPAC II. See note 12. TheCompany agreed to pay a consultant fee of $1 per month, which commenced on October 1, 2020 and continued through February 2021. The expense incurred by theCompany for the consulting services provided by Cohen Circle is included within professional fees and operating expense in the consolidated income statement and aredisclosed in the table below. The Company engaged Betsy Cohen, as an agent of Cohen Circle, as a consultant to provide certain services related to the Insurance SPAC III. See note 12. TheCompany agreed to pay a consultant fee of $1 per month, which commenced on December 1, 2020 and continued through November 18, 2022, the date Insurance SPACIII announced that it would not consummate an initial business combination within the time period required. The expense incurred by the Company for the consultingservices provided by Cohen Circle is included within professional fees and operating expense in the consolidated income statement and are disclosed in the tablebelow. The Company has a sublease agreement as sub-lessor for certain office space with Cohen Circle. The Company received payments under this sublease agreementwhich payments are recorded as a reduction in rent and utility expenses. This sublease agreement commenced on August 1, 2018 and has a term that automaticallyrenews for one year periods if not cancelled by either party upon 90 days’ notice prior to the end of the then-existing term. The income earned pursuant to this subleaseagreement is included as a reduction in rent expense in the consolidated statements of income and is disclosed in the table below. F-75Table of Contents F. Investment Vehicle and Other Stoa USA Inc. / FlipOS Stoa USA Inc. / FlipOS was a private company in which the Company owned common equity. It was considered a related party because Daniel G. Cohen was amember of the board of directors. As of December 31, 2023, the Company had made cumulative investments of $847 in Stoa USA Inc. / FlipOS. During the yearended December 31, 2023, Stoa USA Inc. / FlipOS announced that it had ceased operations. The Company wrote off its investment during the three months endedSeptember 30, 2023 and recorded a principal transactions loss. The Company had no remaining investment in Stoa USA Inc. / FlipOS as of December 31 2023. The fair value of these investments was included in other investments, at fair value on the consolidated balance sheets; any realized and unrealized gains onthese investments was included in principle transactions and other income on the consolidated statements of operations and comprehensive income. All realizedand unrealized gains (losses) are included in the table below. CK Capital and AOI In December 2019, the Company acquired a 45% interest in CK Capital Partners B.V. ("CK Capital"). The Company purchased this interest for $18 (of which $17was paid to an entity controlled by Daniel G. Cohen). CK Capital is a private company incorporated in the Netherlands and provides asset and investmentadvisory services relating to real estate holdings. In addition, the Company also acquired a 10% interest in Amerisfoot Office Investment I Cooperatief U.A.("AOI"), a real estate holding company, for $1 from entities controlled by Daniel G. Cohen. CK Capital and AOI are related parties as they are equity methodinvestments of the Company. Income earned, or loss incurred, by the Company on the equity method investments in CK Capital and AOI is included in the tablesbelow. In accordance with the CK Capital shareholders agreement, the Company may receive fees for consulting services provided by the Company to CKCapital. Any fees earned for such consulting services are included in principal transactions and other income in the table below. See note 12. SPAC Fund The SPAC Fund was considered a related party because it was an equity method investment of the Company prior to its consolidation effective April 1, 2023 (seenote 4). The Company had an investment in and a management contract with the SPAC Fund. Income earned or loss incurred on the investment prior toconsolidation is included as part of principal transactions and other income in the tables below. Revenue earned on the management contract prior toconsolidation is included as part of asset management in the table below. U.S. Insurance JV U.S. Insurance JV is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a managementcontract with the U.S. Insurance JV. Income earned or loss incurred on the investment are included as part of principal transactions and other income. Revenueearned on the management contract are included as part of asset management in the table below. As of December 31, 2023, the Company owned 1.86% of theequity of the U.S. Insurance JV. CREO JV CREO JV is considered a related party because it is an equity method investment of the Company. The Company has an investment in and a servicing agreementwith CREO JV. Income earned or loss incurred on the investment are included as part of principal transactions and other income. Revenue earned on theservicing contract are included as part of asset management in the table below. As of December 31, 2023, the Company owned 7.5% of the equity of CREO JV. Insurance SPAC II Prior to February 9, 2021, the date of the Insurance SPAC II Merger, Insurance SPAC II was considered a related party as it was an equity method investmentof the Company. The Operating LLC was the manager of the Insurance SPAC II Sponsor Entities and the Company consolidated the Insurance SPAC II SponsorEntities. Prior to the Insurance SPAC II Merger, the Company owned 46.1% of the equity in Insurance SPAC II. Income earned, or loss incurred, on the equitymethod investment in Insurance SPAC II is included in the table below. The Operating LLC and the Insurance SPAC II entered into an administrative servicesagreement, dated September 2, 2020, pursuant to which the Operating LLC and the Insurance SPAC II agreed that, commencing on the date that the InsuranceSPAC II’s securities were first listed on the NASDAQ Capital Market through the earlier of the Insurance SPAC II’s consummation of a business combination andits liquidation, the Insurance SPAC II would pay the Operating LLC $20 per month for certain office space, utilities, secretarial support, and administrativeservices. Revenue earned by the Company from such administrative services agreement is included as part of principal transactions and other income in thetables below. The Company also agreed to lend the Insurance SPAC II $750 for operating and acquisition related expenses as a sponsor of Insurance SPAC II; noamount was borrowed from the Company. See notes 12 and 21. Insurance SPAC III Insurance SPAC III is considered a related party because it was an equity method investment of the Company. The Operating LLC was the manager of theInsurance SPAC III Sponsor Entities and the Company consolidated the Insurance SPAC III Sponsor Entities. On November 18, 2022, Insurance SPACIII announced that, as it would not consummate an initial business combination within the time period required, it would dissolve and liquidate, effective as of theclose of business on December 22, 2022. Prior to November 18, 2022, Insurance SPAC III Sponsor Entities owned 47.3% of the equity in Insurance SPAC IIISponsor Entities. Income earned, or loss incurred, on the equity method investment in the Insurance SPAC III is included in the table below. The Operating LLCand the Insurance SPAC III entered into an administrative services agreement, dated December 17, 2020, pursuant to which the Operating LLC and the InsuranceSPAC III agreed that, commencing on the date that the Insurance SPAC III’s securities were first listed on the NASDAQ Capital Market through the earlier of theInsurance SPAC III’s consummation of a business combination and its liquidation, the Insurance SPAC III would pay the Operating LLC $20 per month for certainoffice space, utilities, and shared personnel support as may be requested by Insurance SPAC III. Revenue earned by the Company from the administrativeservices agreement is included as part of principal transactions and other income in the tables below. The Operating LLC loaned to Insurance SPAC III approximately $71 to cover IPO expenses, which was repaid in full at the closing of the IPO. InsuranceAcquisition Sponsor III and its affiliates, including the Operating LLC, also committed to loan Insurance SPAC III up to $1,500 to cover operating and acquisitionrelated expenses following the IPO, of which $960 was borrowed by Insurance SPAC III prior to November 18, 2022. The loans bore no interest and, as theInsurance SPAC III failed to consummate a business combination in the required timeframe, the loans will not be repaid The write-off of the loans is included inequity method loss in 2022. See notes 4 and 12. F-76Table of Contents SPAC Sponsor Entities and Other In general, a SPAC is initially funded by a sponsor and that sponsor invests in and receives private placement and founder shares of the SPAC. The sponsor maybe organized as a single legal entity or multiple entities under common control. In either case, the entity (or entities) is referred in this section as the sponsor ofthe applicable SPAC. The Company had the following transactions with various sponsors of SPACs that are related parties, which the Company does notconsolidate. Fintech Acquisition Corp. IV ("FTAC IV") was a SPAC. The sponsor of FTAC IV ("FTAC IV Sponsor") is a related party as it was an equity methodinvestment of the Company. The Company made a sponsor investment in FTAC IV Sponsor, receiving a final allocation of 81,825 founder shares of FTAVIV stock for $1. In addition, on September 29, 2020, the Operating LLC entered into a letter agreement with FTAC IV Sponsor whereby the Operating LLCwould provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC IV Sponsor for a period notlonger than 24 months. As consideration for these services, the Company received an allocation of an additional 24,547 founder shares of FTAC IV stock tothe Operating LLC and recorded an equity method investment of $40 for the valuation of these services. The revenue earned on this arrangement isdisclosed in principal transactions and other income, other SPAC entities in the tables below. FTAC IV completed a business combination in 2021. Fintech Acquisition Corp. V ("FTAC V") was a SPAC. The sponsor of FTAC V ("FTAC V Sponsor") is a related party as it was an equity methodinvestment of the Company. The Company made a sponsor investment in FTAC V Sponsor, receiving an allocation of 140,000 founder shares. On December14, 2020, the Operating LLC entered into a letter agreement with FTAC V Sponsor whereby the Operating LLC would provide personnel to serve as the chieffinancial officer as well as other accounting and administrative services to FTAC V Sponsor for a period not longer than 24 months. As consideration forthese services, the Company received an allocation of 35,000 founder shares of FTAC V stock to the Operating LLC and recorded an equity methodinvestment of $40 for the valuation of these services. The revenue earned on this arrangement is disclosed in principal transactions and other income, otherSPAC entities in the tables below. FTAC V liquidated in 2022. Fintech Acquisition Corp. VI ("FTAC VI") was a SPAC. The sponsor of FTAC VI ("FTAC VI Sponsor") is a related party as it was an equity methodinvestment of the Company. On June 26, 2021, the Operating LLC entered into a letter agreement with FTAC VI Sponsor whereby the Operating LLC wouldprovide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC VI Sponsor for a period not longerthan 24 months. As consideration for these services, the Company received an allocation of 35,000 founder shares of FTAC VI stock to the Operating LLCand recorded an equity method investment of $40 for the valuation of these services. The revenue earned on this arrangement is disclosed in principaltransactions and other income, other SPAC entities in the tables below. FTAC VI liquidated in 2022. FTAC Olympus Acquisition Corp. ("FTAC Olympus") was a SPAC. The sponsor of FTAC Olympus ("FTAC Olympus Sponsor") is a related party as it wasan equity method investment of the Company. The Company made a sponsor investment in FTAC Olympus Sponsor, receiving a final allocation of 399,741founder shares of FTAC Olympus stock. In addition, on September 8, 2020, the Operating LLC entered into a letter agreement with FTAC Olympus Sponsorwhereby the Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTACOlympus Sponsor for a period not longer than 24 months. As consideration for these services, the Company received an allocation of an additional 19,987founder shares of FTAC Olympus stock to the Operating LLC and recorded an equity method investment of $40 for the valuation of these services. Therevenue earned on this arrangement is disclosed in principal transactions and other income, other SPAC entities in the tables below. FTAC Olympuscompleted a business combination in 2021. FTAC Athena Acquisition Corp. ("FTAC Athena") was a SPAC. The sponsor of FTAC Athena ("FTAC Athena Sponsor") is a related party as it was anequity method investment of the Company. On February 26, 2021, the Operating LLC entered into a letter agreement with FTAC Athena Sponsor wherebythe Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC OlympusSponsor for a period not longer than 24 months. As consideration for these services, the Company received an allocation of 35,000 founder shares of FTACAthena stock to the Operating LLC and recorded an equity method investment of $40 for the valuation of these services. The revenue earned on thisarrangement is disclosed in principal transactions and other income, other SPAC entities in the tables below. FTAC Athena liquidated in 2023. FTAC Hera Acquisition Corp. ("FTAC Hera") was a SPAC. The sponsor of FTAC Hera ("FTAC Hera Sponsor") is a related party as it was an equity methodinvestment of the Company. On March 5, 2021, the Operating LLC entered into a letter agreement with FTAC Hera Sponsor whereby the Operating LLCwould provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTAC Hera Sponsor for a periodnot longer than 24 months. As consideration for these services, the Company received an allocation of 35,000 founder shares of FTAC Hera stock to theOperating LLC and recorded an equity method investment of $40 for the valuation of these services. The revenue earned on this arrangement is disclosed inprincipal transactions and other income, other SPAC entities in the tables below. FTAC Hera liquidated in 2022. FTAC Parnassus Acquisition Corp. ("FTAC Parnassus") was a SPAC. The sponsor of FTAC Parnassus ("FTAC Parnassus Sponsor") is a related party as itwas an equity method investment of the Company. On March 15, 2021, the Operating LLC entered into a letter agreement with FTACParnassus Sponsor whereby the Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting andadministrative services to FTAC Parnassus Sponsor for a period not longer than 24 months. As consideration for these services, the Company received anallocation of 35,000 founder shares of FTAC Parnassus stock to the Operating LLC and recorded an equity method investment of $40 for the valuation ofthese services. The revenue earned on this arrangement is disclosed in principal transactions and other income, other SPAC entities in the tables below.FTAC Parnassus liquidated in 2022. F-77Table of Contents FTAC Zeus Acquisition Corp. ("FTAC Zeus") was a SPAC. The sponsor of FTAC Zeus ("FTAC Zeus Sponsor") is a related party as it was an equitymethod investment of the Company. On November 24, 2021, the Operating LLC entered into a letter agreement with FTAC Zeus Sponsor whereby theOperating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTACZeus Sponsor for a period not longer than 24 months. As consideration for these services, the Company received an allocation of 35,000 founders shares ofFTAC Zeus stock to the Operating LLC and recorded an equity method investment of $40 for the valuation of these services. The revenue earned on thisarrangement is disclosed in principal transactions and other income, other SPAC entities in the tables below. FTAC Zeus liquidated in 2023. FTAC Emerald Acquisition Corp. ("FTAC Emerald") is a SPAC. The sponsor of FTAC Emerald ("FTAC Emerald Sponsor") is a related party as it is anequity method investment of the Company. On December 20, 2021, the Operating LLC entered into a letter agreement with FTAC Emerald Sponsor wherebythe Operating LLC would provide personnel to serve as the chief financial officer as well as other accounting and administrative services to FTACEmerald Sponsor for a period not longer than 24 months. As consideration for these services, the Company received an allocation of 35,000 foundersshares of FTAC Emerald stock to the Operating LLC and recorded an equity method investment of $40 for the valuation of these services. The revenueearned on this arrangement is disclosed in principal transactions and other income, other SPAC entities in the tables below. Other The Company invests in sponsor entities of SPACS, either directly or through its interest in the SPAC Series Funds, which are not otherwise affiliated withthe Company, but are considered related parties because they are accounted for under the equity method. As of December 31, 2023, the Company owned13.6% of these entities in the aggregate. Income earned or loss incurred on the equity method investment in these other SPAC sponsor entities is includedin the tables below. F-78Table of Contents The following tables display the routine transactions recognized in the statements of operations from identified related parties that are described above. RELATED PARTY TRANSACTIONS (Dollars in Thousands) For the Years Ended December 31, 2023 2022 2021 Asset management Other SPAC Entities $- $- $319 CREO JV 113 - - SPAC Fund 173 954 4,327 U.S. Insurance JV 1,201 1,069 525 $1,487 $2,023 $5,171 Principal transactions and other income CREO JV 901 $32 $- Dutch Real Estate Entities - - 137 Insurance SPAC II - - 40 Insurance SPAC III - 220 240 Other SPAC Entities 50 160 132 SPAC Fund 28 (43) 474 Stoa USA Inc./FlipOS (6,847) 4,196 1,805 U.S. Insurance JV 463 11 142 $(5,405) $4,576 $2,970 Income (loss) from equity method affiliates Dutch Real Estate Entities $334 $(71) $(137)Insurance SPAC II - - (107)Insurance SPAC III - (5,896) (1,200)Other SPAC Entities 15,275 (14,962) 37,453 $15,609 $(20,929) $36,009 Operating expense (income) Duane Morris $432 $621 $925 Cohen Circle (103) (66) (39) $329 $555 $886 Interest expense (income) CBF $- $- $197 DGC Trust - 327 1,534 EBC - - 211 JKD Investor 941 943 1,985 $941 $1,270 $3,927 The following related party transactions are non-routine and are not included in the tables above. H. Directors and Employees The Company has entered into employment agreements with Daniel G. Cohen, its executive chairman, and Joseph W. Pooler, Jr., its chief financial officer. The Companyhas entered into its standard indemnification agreement with each of its directors and executive officers. The Company maintains a 401(k)-savings plan covering substantially all its employees. The Company matches 50% of employee contributions for all participants not toexceed 3% of their salary. Contributions made to the plan on behalf of the Company were $396, $377, and $287, for the years ended December 31, 2023, 2022, and 2021,respectively. The Company leased office space from Zucker and Moore, LLC. Zucker and Moore, LLC is partially owned by Jack DiMaio, Jr., the vice chairman of the Company'sboard of directors. The lease terminated June 20, 2022. The Company recorded $0, $48, and $96 of rent expense related to this agreement for each of the three yearsended December 31, 2023, 2022, and 2021, respectively, which is included as a component of business development, occupancy, and equipment in the statement ofoperations. F-79Table of Contents 32. DUE FROM / DUE TO RELATED PARTIES Amounts due to related parties related to redeemable financial instruments and outstanding debt are included as components of those balances in the consolidatedbalance sheets. Also, interest or investment return owed on those balances are included as a component of accounts payable and other liabilities in the consolidatedbalance sheets. Any investment made in an equity method affiliate for which the Company does not elect the fair value option is included as a component ofinvestments in equity method affiliates in the consolidated balance sheets. Any investment made in an equity method affiliate for which the Company elected the fairvalue option is included as a component of other investments, at fair value in the consolidated balance sheets. The following table summarizes the outstanding due from /due to related parties. These amounts may result from normal operating advances, employee advances, orfrom timing differences between the transactions disclosed in note 31 and final settlement of those transactions in cash. All amounts are primarily non-interest bearing. DUE FROM/DUE TO RELATED PARTIES(Dollars in Thousands) December 31, 2023 December 31, 2022 Employee & other $319 $232 SPAC Fund - other receivable 15 294 U.S. Insurance JV 438 261 Due from Related Parties $772 $787 On February 1, 2023, Daniel G. Cohen, the Company’s executive chairman, in accordance with the Operating LLC operating agreement, redeemed 479,380 LLC Units forwhich the Company paid to Mr. Cohen an aggregate of $421, or $0.878 per LLC Unit. The LLC Units were so redeemed by Mr. Cohen in order to fund certain tax liabilitiesincurred by Mr. Cohen in connection with the vesting, on January 31, 2023, of 967,830 restricted LLC Units that had been previously granted to Mr. Cohen under the2020 Long-Term Incentive Plan. On February 1, 2023, Lester Brafman, the Company’s chief executive officer, in accordance with the Operating LLC operating agreement, redeemed 470,330 LLC Units forwhich the Company paid to Mr. Brafman an aggregate of $413, or $0.878 per LLC Unit. The LLC Units were so redeemed by Mr. Brafman in order to fund certain taxliabilities incurred by Mr. Brafman in connection with the vesting, on January 31, 2023, of 470,330 restricted LLC Units and 49,750 restricted shares of the Company’sCommon Stock, all of which had been previously granted to Mr. Brafman under the 2020 Long-Term Incentive Plan. F-80Table of Contents SCHEDULE I COHEN & COMPANY INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANTCOHEN & COMPANY INC. (PARENT COMPANY)Balance Sheets(Dollars in Thousands) December 31, 2023 December 31, 2022 Assets Cash $- $- Investment in Cohen & Company, LLC 67,670 68,331 Prepaid income taxes 38 146 Deferred income taxes (468) 3,093 Total assets $67,240 $71,570 Liabilities Accrued interest and other liabilities $342 $307 Debt 25,216 24,524 Total liabilities 25,558 24,831 Stockholders’ Equity Preferred Stock 27 27 Common Stock 19 17 Additional paid-in capital 74,594 72,801 Accumulated deficit (32,014) (25,151)Accumulated other comprehensive loss (944) (955)Total stockholders’ equity 41,682 46,739 Total liabilities and stockholders’ equity $67,240 $71,570 See accompanying notes to condensed financial statements. F-81Table of Contents COHEN & COMPANY INC.CONDENSED FINANCIAL INFORMATION OF REGISTRANTCOHEN & COMPANY INC. (PARENT COMPANY)Statements of Operations(Dollars in Thousands) For the Year Ended December 31, 2023 2022 2021 Revenues Equity in undistributed earnings / (loss) from Cohen & Company, LLC $3,708 $(4,953) $13,908 Total revenues 3,708 (4,953) 13,908 Operating income / (loss) 3,708 (4,953) 13,908 Non-operating expense Interest expense (5,247) (3,443) (2,812)Income / (loss) before income taxes (1,539) (8,396) 11,096 Income tax (benefit) / expense 3,574 4,993 (712)Net income / (loss) $(5,113) $(13,389) $11,808 See accompanying notes to condensed financial statements. F-82Table of Contents COHEN & COMPANY INC.CONDENSED FINANCIAL INFORMATION OF REGISTRANTCOHEN & COMPANY INC. (PARENT COMPANY)Statements of Cash Flows(Dollars in Thousands) For the Year Ended December 31, 2023 2022 2021 Operating activities Net income / (loss) $(5,113) $(13,389) $11,808 Adjustments to reconcile net income / (loss) to net cash provided by / (used) in operatingactivities: Equity in undistributed earnings / (loss) from Cohen & Company, LLC (3,708) 4,953 (13,908)Distributions from / (contributions to) Cohen & Company, LLC 6,223 5,433 (2,662)Amortization of discount of debt 692 563 526 (Increase) / decrease in other assets 108 (166) - Increase / (decrease) in accounts payable and other liabilities 35 199 (74)Increase / (decrease) in deferred income taxes 3,561 5,041 (736)Net cash provided by / (used in) operating activities 1,798 2,634 (5,046)Financing activities Repurchase and repayment of debt - - - Proceeds from issuance of Common Stock - - 9,076 Cash used to net share settle equity awards (48) (76) (102)Principal payments on debt - - (2,400)Repurchase of stock - - (857)Dividends paid to stockholders (1,750) (2,558) (671)Net cash provided by / (used in) financing activities (1,798) (2,634) 5,046 Net increase (decrease) in cash and cash equivalents - - - Cash and cash equivalents, beginning of period - - - Cash and cash equivalents, end of period $- $- $- See accompanying notes to condensed financial statements. F-83Table of Contents COHEN & COMPANY INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANTCOHEN & COMPANY INC. (PARENT COMPANY)NOTES TO CONDENSED FINANCIAL STATEMENTS(Dollars in thousands) The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements and related notes of Cohen & CompanyInc. Certain prior period amounts have been reclassified to conform to the current period presentation. The Company paid or received cash distributions to / fromCohen & Company, LLC as disclosed above in the statements of cash flow. F-84

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