Cohen & Co Inc. 10-K

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 is inherent to both derivative and non-derivative financial instruments, and accordingly, the scope of our market risk management procedures extends beyond derivatives to include all market risk sensitive financial instruments. For purposes of analyzing the components of market risk, we have broken out our investment portfolio into three 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 debt securities, CMOs, non-government MBS, corporate bonds, non-redeemable and redeemable preferred stock, municipal bonds, certificates of deposits, SBA loans, 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 by entering into economic hedging transactions, which may include TBAs. The fixed income category can be broadly broken down into two subcategories: fixed rate and floating rate.  Floating rate securities are not in themselves particularly sensitive to interest rate risk. Because they generally accrue interest income at a variable rate, the movement in interest 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. Floating rate 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 in securitizations are not particularly interest rate sensitive. In general, when we acquire interest rate sensitive securities, we enter into an offsetting short position for a similar fixed rate security. Alternatively, we may enter into other interest rate hedging arrangements such as interest rate swaps or Eurodollar futures. We measure our net 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 shift across the entire yield curve. Based on this analysis, as of December 31, 2020 , we would have incurred a loss of $2,784 if the yield curve rose 100 bps across all maturities and a gain of $2,774 if the yield curve fell 100 bps across all maturities. As of December 31, 2019 , we would have incurred a loss of $2,361 if the yield curve rose 100 bps across all maturities and a gain of $2,357 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 changes in 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. We also 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 the equity 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 closely monitoring those security positions or in some cases entering into derivatives trades to hedge this exposure. We also have had equity investments in entities where the investment is denominated in a foreign currency, or where the investment is denominated in U.S. Dollars but the investee primarily makes investments in foreign currencies. 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 functional currency) 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 price sensitivity and foreign currency sensitivity by determining how the net fair value of our equity price sensitive and foreign exchange sensitive assets would change as a result of a 10% adverse change in equity prices or foreign exchange rates. Based on this analysis, as of December 31, 2020 , our equity price sensitivity was $4,441 and our foreign exchange currency sensitivity was $0. As of December 31, 2019 , our equity price sensitivity was $991 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 time based 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 the securitization 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 rating agencies. 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 fixed rates. As of December 31, 2020 , a 100-bps change in the three-month LIBOR 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 $3,501 as of December 31, 2020 .  74 Table 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 statements included 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 statements included 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 obligation to 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 has declined 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. In this 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 date and 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 the counterparty 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 in closing 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 sufficient liquid 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 weekly basis 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 risk officer 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 has sufficient 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 or other 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 between the 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 security declines, 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 haircut serves 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 the case the market value of the underlying TBA 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 will sometimes obtain initial margin or a cash deposit from the counterparty which serves a purpose similar to the haircut as an additional buffer against losses. However, some of 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 after obtaining collateral securities from that counterparty pursuant to a reverse repurchase agreement. We will borrow money from another counterparty using those same collateral securities pursuant to a repurchase agreement. We seek to earn net interest income on these matched transactions.  75 Table 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 matched repurchase agreements. However, in our GCF repo business, we may enter into a reverse repurchase agreement with a longer term than the matched repurchase agreement. When the maturity dates of the matched agreements are not the same, we are exposed to two risks:  1. Interest rate risk: We are taking risk that the interest rate we pay on the repurchase agreement may increase during the term of the reverse repurchase agreement. If this happens, we may make lower net interest income or, in some cases, have a net loss on a matched trade. 2. Funding risk: We are taking risk that the repurchase agreement counterparty may increase the haircut (i.e. demand higher levels of collateral) at the maturity date of the repurchase agreement or cease funding altogether.  We manage these risks in the following ways:  1. We monitor the weighted average maturity of our reverse repurchases agreements as compared to the weighted average maturity of our repurchase agreements on a daily basis. We limit the amount of difference between the weighted average maturities based on market conditions. 2. We obtain a significantly higher haircut on our reverse repurchase agreements as compared to the required haircut on our repurchase agreements. This excess haircut provides a cushion if the repurchase agreement counterparty were to increase its required haircut. 3. We limit the practice of having longer term reverse repurchase agreements as compared to matched repurchase agreements to high quality collateral types that are typically very liquid and have stable funding markets.    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 Public Accounting 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 its consolidated subsidiaries) required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the 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 chief executive officer and chief financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2020 . Based on that evaluation, the chief executive officer and the chief financial officer concluded that our disclosure controls and procedures were effective at December 31, 2020 .  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 the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness 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 the policies or procedures may deteriorate.  Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 . In making this assessment, management used the criteria 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, 2020 , our internal control over financial reporting was effective. 76 Table 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 this Annual 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, 2020 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  ITEM 9B. OTHER INFORMATION.  None. 77 Table 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 available on our website at http://cohenandcompany.com/investor-relations/corporate-governance/code-of-conduct/ and the Company intends to satisfy the disclosure requirements 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 on its website.  The information required by Item 10 is included in the sections entitled “Executive Officers,” “Election of Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” and “Corporate Governance and board of directors Information” in the Company’s definitive Proxy Statement, to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934 in connection with the Company’s 2021 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 Proxy Statement, to be filed pursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2021 Annual Meeting of Stockholders and is incorporated herein 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 Proxy Statement, to be filed pursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2021 Annual Meeting of Stockholders and is incorporated herein by reference.  The following table provides information regarding the 2006 Long-Term Incentive Plan and the 2020 Long-Term Incentive Plan as of December 31, 2020 . (a) (b) (c) Number of securities to be issued upon the exercise of outstanding options, warrants and rights (1) Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders - - 200,000 Equity compensation plans not approved by security holders - - -  (1) See note 22 to our consolidated financial statements included in this Annual Report on Form 10-K for further information regarding the 2006 Long-Term Incentive Plan, the 2009 Equity Award Plan and the Equity Plan Funding Agreement, and the 2010 and the 2020 Long-Term Incentive Plan.  The remainder of the information required by Item 12 is included in the Section entitled “Share Ownership of Certain Beneficial Owners and Management” in the Company’s definitive Proxy Statement, to be filed pursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2021 Annual Meeting of Stockholders 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 board of directors Information — Director Independence” in the Company’s definitive Proxy Statement, to be filed pursuant to Regulation 14A of the Securities Exchange Act of 1934 in connection with the Company’s 2021 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 filed pursuant to Regulation 14A of the Exchange Act in connection with the Company’s 2021 Annual Meeting of Stockholders and is incorporated herein by reference. 78 Table of Contents PART IV  ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.  (a) Documents filed as a part of this Annual Report on Form 10-K:  (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 F-2 (ii) Consolidated Balance Sheets as of December 31, 2020 and 2019 F-3 (iii) Consolidated Statements of Operations and Comprehensive Income / (Loss) for the years ended December 31, 2020, 2019 and 2018 F-4 (iv) Consolidated Statement of Changes in Equity for the years ended December 31, 2020, 2019 and 2018 F-5 (v) Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 F-6 (vi) Notes to Consolidated Financial Statements as of December 31, 2020 F-7 (2) Schedules to Consolidated Financial Statements: I. Condensed Financial Information of Registrant  79 Table 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 (file no. 001-32026) filed with the SEC on February 23, 2009). #   2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of June 1, 2009, by and among Alesco Financial Inc., Fortune Merger Sub, LLC, 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 (file no. 001-32026) filed with the SEC on June 2, 2009). #   2.3 Amendment No. 2 to Agreement and Plan of Merger, dated as of August 20, 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 (file no. 001-32026) filed with the SEC on August 20, 2009). #   2.4 Amendment 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 (file no. 001-32026) filed with the SEC on September 30, 2009).   2.5 Purchase and Contribution Agreement, dated as of September 14, 2010, by and among Cohen & Company Inc., Cohen Brothers, LLC, JVB Financial Holdings, 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 the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on September 14, 2010). #   2.6 Amendment No. 1 to Purchase and Contribution Agreement, dated as of October 29, 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 the Management Employees as defined in the original Purchase and Contribution Agreement, dated as of September 14, 2010 (incorporated by reference to Exhibit 2.6 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 4, 2011).   2.7 Amendment 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 the Management Employees as defined in the original Purchase and Contribution Agreement, dated as of September 14, 2010 (incorporated by reference to Exhibit 2.7 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 4, 2011).   2.8 Amendment No. 3 to Purchase and Contribution Agreement, dated as of January 11, 2011, 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 the Management Employees as defined in the original Purchase and Contribution Agreement, dated as of September 14, 2010 (incorporated by reference to Exhibit 2.8 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 4, 2011). #   2.9 Contribution Agreement, dated as of April 19, 2011, by and among IFMI, LLC, PrinceRidge Partners LLC and PrinceRidge Holdings LP (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on April 25, 2011).   2.1 Securities Purchase Agreement, dated as of February 20, 2014, by and among IFMI, LLC, Cohen Asia Investments Ltd., Dekania Investors, LLC, Star Asia Management 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 Malcolm MacLean, and, for purposes of Section 7.2 thereof only, Institutional Financial Markets, Inc. and Daniel G. Cohen (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 20, 2014). #   3.1 Second Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-11 (file no. 333-111018) filed with the SEC on February 6, 2004).  3.2 Articles of Amendment changing name to Alesco Financial Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-3 (file no. 333-138136) filed with the SEC on October 20, 2006).   3.3 Articles 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 (file no. 001-32026) filed with the SEC on December 17, 2009).   3.4 Articles of Amendment to Set Par Value (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on December 17, 2009).   3.5 Articles Supplementary — Series A Voting Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on December 17, 2009).   3.6 Articles Supplementary — Series B Voting Non-Convertible Preferred Stock (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on December 17, 2009).   3.7 Articles 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-K (file no. 001-32026) filed with the SEC on December 17, 2009).   3.8 Articles Supplementary — Series C Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on December 28, 2009). 80   3.9 Articles of Amendment Changing Name to Institutional Financial Markets, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on January 24, 2011).   3.1 By-laws, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on October 11, 2005).   3.11 Articles Supplementary — Series D Voting Non-Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on December 31, 2012).   3.12 Articles Supplementary — Series E Voting Non-Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on May 13, 2013).   3.13 Articles of Amendment Changing Name to Cohen & Company Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 1, 2017).   3.14 Articles 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 on Form 8-K filed with the SEC on September 1, 2017).   3.15 Cohen & Company Inc. Articles Supplementary Series F Voting Non-Convertible 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 31, 2019).   4.1 Form 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 (file no. 001-32026) filed with the SEC on July 26, 2011).   4.2 Junior Subordinated Indenture, dated as of June 25, 2007, by and between Alesco Financial Inc. and Wells Fargo Bank, N.A. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on June 29, 2007).   4.3 Form of Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 10, 2010).   4.4 Registration Rights Agreement, dated as of May 9, 2013, by and among Institutional Financial Markets, Inc., 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 (file no. 001-32026) filed with the SEC on May 13, 2013).   4.5 Form of Indenture (incorporated by reference to Exhibit 4.18 to the Company’s Registration Statement on Form S-3 (file no. 333-193975) filed with the SEC on February 14, 2014).  4.6 Section 382 Rights Agreement, dated as of August 3, 2016, by and between Institutional Financial Markets, Inc. and Computershare Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 3, 2016).  4.7 Section 382 Rights Agreement, dated as of March 10, 2020, between Cohen & Company Inc. and Computershare Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 10, 2020).  4.8 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.*   10.1 Management Agreement, dated as of January 31, 2006, by and between Alesco Financial Trust and Cohen Brothers Management, LLC (incorporated by reference to Annex E to the Company’s Proxy Statement on Schedule 14A (file no. 001-32026) filed with the SEC on September 8, 2006).   10.2 2006 Long-Term Incentive Plan, as amended (incorporated by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A (file no. 001-32026) filed with the SEC on April 30, 2007). +   10.3 Form of Restricted Share Award Agreement (incorporated by reference to Exhibit 10.7 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 16, 2007).   10.4 Form of Indemnification Agreement by and between Alesco Financial Inc. and each of its directors and officers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on October 20, 2006).   10.5 Employment Agreement between Cohen Brothers, LLC and Joseph W. Pooler, Jr., dated as of May 7, 2008 (incorporated by reference to Exhibit 10.19 to the Company’s Registration Statement on Form S-4 (file no. 333-159661) filed with the SEC on June 2, 2009). +   10.6 Amendment No. 1 to Employment Agreement between Cohen Brothers, LLC and Joseph W. Pooler, Jr., dated as of February 20, 2009 (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-4 (file no. 333-159661) filed with the SEC on June 2, 2009). +   10.7 Amendment No. 2 to Employment Agreement between Joseph W. Pooler, Jr. and Cohen Brothers, LLC, dated as of February 18, 2010 (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 10, 2010). +  10.8 Amendment No. 3 to Employment Agreement, dated February 3, 2021, by and between Cohen & Company, LLC and Joseph W. Pooler, Jr. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 5, 2021).  10.9 Alesco Financial Inc. Cash Bonus Plan (incorporated by reference to Annex B to Alesco Financial Inc.’s Amendment No. 1 to the Registration Statement on Form S-4 (file no. 333-159661) filed with the SEC on August 20, 2009). +   10.10 Amended and Restated Limited Liability Company Agreement of Cohen Brothers, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on December 17, 2009). 81   10.11 Amendment No. 1 to Amended and Restated Limited Liability Company Agreement of IFMI, LLC, dated as of June 20, 2011 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (file no. 001-32026) filed with the SEC on August 11, 2011).   10.12 Amendment No. 2 to Amended and Restated Limited Liability Company Agreement of IFMI, LLC, dated as of May 9, 2013 (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on May 13, 2013).   10.13 Amendment No. 3 to Amended and Restated Limited Liability Company Agreement, dated October 30, 2019, by and among each of the Members set forth on 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 October 30, 2019).  10.14 Amendment No. 4 to Amended and Restated Limited Liability Company Agreement, dated September 25, 2020, by and among each of the Members set forth on 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).  10.15 Amended 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 (file no. 001-32026) filed with the SEC on May 13, 2013).+   10.16 2010 Executive Officers’ Cash Bonus Plan (incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 10, 2010). +   10.17 Form 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 (file no. 001-32026) filed with the SEC on March 10, 2010). + 10.18 Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on December 5, 2013). +  1 0.19 Amendment No. 1 to Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan (incorporated by reference to Appendix A to the Company’s Proxy Statement on Schedule 14A filed with the SEC on November 10, 2016).   10.20 Form of Restricted Stock Award under Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.46 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 4, 2011). +   10.21 Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan Non-Qualified Stock Option Award, dated as of November 30, 2013, by and between Institutional Financial Markets, Inc. and Lester R. Brafman (incorporated by reference to Exhibit 10.73 to the Company’s Annual Report on Form 10-K filed with the SEC on March 7, 2014).   10.22 Second Amended and Restated Institutional Financial Markets, Inc. 2010 Long-Term Incentive Plan Non-Qualified Stock Option Award, dated as of November 30, 2013, by and between Institutional Financial Markets, Inc. and Lester R. Brafman (incorporated by reference to Exhibit 10.74 to the Company’s Annual Report on Form 10-K filed with the SEC on March 7, 2014).   10.23 Securities Purchase Agreement, dated as of May 9, 2013, by and between Institutional Financial Markets, Inc. and Cohen Bros. Financial, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (file no. 001-32026) filed with the SEC on May 13, 2013).   10.24 Preferred 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 (file no. 001-32026) filed with the SEC on May 13, 2013).   10.25 Investment 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 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2016).   10.26 Amendment 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).   10.27 Securities Purchase Agreement, dated March 10, 2017, by and among IFMI, LLC, DGC Family Fintech Trust and Institutional Financial Markets, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 10, 2017).   10.28 Convertible 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).  10.29 Amendment No. 1 to Convertible Senior Secured Promissory Note, dated September 25, 2020, by and between Cohen & Company, LLC and the DGC Family Fintech 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).  10.30 Letter Agreement, dated March 10, 2017, by and between C&Co Europe Acquisition LLC and IFMI, LLC, terminating the Share Purchase Agreement, dated August 19, 2014, by and between IFMI, LLC and C&Co Europe Acquisition LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on March 10, 2017).   10.31 Investment Agreement, dated September 29, 2017, by and between Cohen & Company, LLC and Cohen Bros. Financial LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2017).   10.32 Amendment No. 1 to Investment Agreement, dated as of September 25, 2019 and effective as of October 1, 2019, by and between Cohen & Company, LLC and Cohen Bros. Financial LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2019).  10.33 Amendment No. 2 to Investment Agreement, dated as of December 4, 2019 and effective as of October 1, 2019, by and between Cohen & Company, LLC and Cohen Bros. Financial LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 9, 2019). 82  10.34 Amendment No. 3 to Investment Agreement, dated September 25, 2020, by and between Cohen & Company, LLC and Cohen Bros. Financial LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2020). 10.35 Amendment No. 4 to Investment Agreement, dated October 9, 2020, by and between Cohen & Company, LLC and Cohen Bros. Financial LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 15, 2020).  10.36 Investment Agreement, dated September 29, 2017, by and between Cohen & Company, LLC and the DGC Family Fintech Trust (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2017).   10.37 Amendment No. 1 to Investment Agreement, dated as of September 25, 2019 and effective as of October 1, 2019, by and between Cohen & Company, LLC and the DGC Family Fintech Trust (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2019).   10.38 Amendment No. 2 to Investment Agreement, dated as of December 4, 2019 and effective as of October 1, 2019, by and between Cohen & Company, LLC and the DGC Family Fintech Trust (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 9, 2019).   10.39 Loan Agreement, dated as of April 25, 2018, by and among Cohen & Company Inc., Cohen & Company, LLC, J.V.B. Financial Group, LLC, J.V.B. Financial Group Holdings, LP, C&Co/PrinceRidge Partners LLC and MB Financial Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 27, 2018).   10.40 First Amendment to Loan Agreement, by and among Cohen & Company Inc., Cohen & Company, LLC, J.V.B. Financial Group Holdings, LP, C&Co PrinceRidge Holdings, LP, dated January 29, 2019 (incorporated by reference to Exhibit 10.30 to the Company’s Current Report on Form 10-K filed with the SEC on March 8, 2019).   10.41 Revolving Note and Cash Subordination Agreement, dated as of January 29, 2019, by and among Cohen & Company Inc., Cohen & Company, LLC, J.V.B. Financial Group, LLC, J.V.B. Financial Group Holdings, LP, C&Co/PrinceRidge Partners LLC and MB Financial Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 30, 2019).   10.42 Amendment No. 1 to Convertible Senior Promissory Note, dated September 25, 2018, by and between Cohen & Company Inc. and the Edward E. Cohen IRA (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 25, 2018).   10.43 Amendment No. 1 to Convertible Senior Promissory Note, dated September 25, 2018, by and between Cohen & Company Inc. and the EBC 2013 Family Trust (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 25, 2018).   10.44 Senior Promissory Note, dated September 25, 2019, issued by Cohen & Company Inc. to the EBC 2013 Family Trust in the aggregate principal amount of $2,400,000 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2019).  10.45 Amendment No. 1 to Senior Promissory Note, dated September 25, 2020, by and between Cohen & Company Inc. and the EBC 2013 Family Trust (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 29, 2020).  10.46 Securities Purchase Agreement, dated as of December 30, 2019, by and among Cohen & Company Inc., Cohen & Company, LLC, Daniel G. Cohen and the DGC 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).  10.47 Amendment 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 on September 29, 2020).  10.48 Note 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).   10.49 Senior Promissory Note, dated January 31, 2020, issued by Cohen & Company, LLC to JKD Capital Partners I LTD in the aggregate principal amount of $2,250,000 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 3, 2020).  10.50 Senior Promissory Note, dated January 31, 2020, issued by Cohen & Company, LLC to RN Capital Solutions LLC in the aggregate principal amount of $2,250,000 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on February 3, 2020).   10.51 Cohen & Company Inc. Non-Qualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 12, 2020).  10.52 Cohen & 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 with the SEC on April 7, 2020). 10.53 Form of Restricted Stock Award under Cohen & Company Inc. 2020 Long-Term Incentive Plan.* 83 10.54 U.S. Small Business Association Note, dated May 4, 2020, issued by Cohen & Company, LLC to Fifth Third Bank, National Association, in the aggregate principal amount of $2,165,600 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 7, 2020). 10.55 Loan Agreement, dated October 28, 2020, by and among Cohen & Company Inc., Cohen & Company, LLC, J.V.B. Financial Group Holdings, LP, J.V.B. Financial Group, LLC, C&Co PrinceRidge Holdings, LP and Byline Bank, Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 30, 2020). 10.56 Revolving Note and Cash Subordination Agreement, dated October 28, 2020, by and between J.V.B. Financial Group, LLC and Byline Bank, Inc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on October 30, 2020). 10.57 Subscription Agreement, dated November 24, 2020, by and among INSU Acquisition Corp. II and Cohen & Company LLC, as subscriber (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 30, 2020). 10.58 Sponsor Share Cancellation and Vesting Agreement, dated as of November 24, 2020, by and among INSU Acquisition Corp. II and Sponsor (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 30, 2020). 10.59 Equity Distribution Agreement, dated December 1, 2020, by and between Cohen & Company Inc. and Northland Capital Markets (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 2, 2020).  14.1 Code of Conduct (incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K (file no. 001-32026) filed with the SEC on March 10, 2010).   21.1 List of Subsidiaries. *   23.1 Consent of Grant Thornton, LLP, Independent Registered Public Accounting Firm, regarding the financial statements of Institutional Financial Markets, Inc. *   31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended. *   31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended. *   32.1 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended. *   32.2 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended. *  101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets at December 31, 2020 and December 31, 2019 , (ii) the Consolidated Statements of Operations and Comprehensive Income / (Loss) for the Year Ended December 31, 2020 , 2019 and 2018 , (iii) the Consolidated Statement of Changes in Equity for the Year Ended December 31, 2020 , 2019 and 2018 , (iv) the Consolidated Statements of Cash Flows for Year Ended December 31, 2020 , 2019 and 2018 ; and (v) Notes to Consolidated Financial Statements. *   * 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. Institutional Financial Markets, Inc. hereby undertakes to furnish supplementally copies 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) are included 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 accounting regulations 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, and therefore have been omitted.  ITEM 16. FORM 10-K SUMMARY.  None. 84 Table 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 the undersigned, thereunto duly authorized. DATE: March 5, 2021  COHEN & COMPANY INC. By: /S/ LESTER R. BRAFMAN Lester R. Brafman Chief 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 the capacities and on the dates indicated.  Name Title Date /s/ Daniel G. Cohen Chairman March 5, 2021 Daniel G. Cohen  /s/ G. Steven Dawson Director March 5, 2021 G. Steven Dawson  /s/ Jack J. Dimaio, Jr. Vice Chairman March 5, 2021 Jack J. DiMaio, Jr.  /s/ Jack Haraburda Director March 5, 2021 Jack Haraburda  /s/ Diana L. Liberto Director March 5, 2021 Diana L. Liberto  /s/ Douglas Listman Chief Accounting Officer and Assistant Treasurer March 5, 2021 Douglas Listman (Principal Accounting Officer)  /s/ Joseph W. Pooler, Jr. Executive Vice President, Chief Financial Officer and Treasurer March 5, 2021 Joseph W. Pooler, Jr. (Principal Financial Officer)  85 Table of Contents THIS PAGE INTENTIONALLY LEFT BLANK 86 Table of Contents COHEN & COMPANY INC. INDEX TO FINANCIAL STATEMENTS Table of Contents Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-3 Consolidated Statements of Operations and Comprehensive Income / (Loss) for the years ended December 31, 2020, 2019 and 2018 F-4 Consolidated Statement of Changes in Equity for the years ended December 31, 2020, 2019 and 2018 F-5 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 F-6 Notes to Consolidated Financial Statements as of December 31, 2020 F-7 Schedules to Consolidated Financial Statements: I. Condensed Financial Information of Registrant F-1 Table of Contents Report of Independent Registered Public Accounting Firm   Board of Directors and Shareholders Cohen & 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 of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive income/(loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, 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 statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange 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 assurance about 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 to perform, 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 financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Deferred Tax Asset Valuation Allowance As described in Note 23 to the consolidated financial statements, the Company has net deferred tax assets of $7.4 million, net of a $33.8 million valuation allowance at December 31, 2020. Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgement it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Once established, the valuation allowance is reduced when, based on the weight of all available evidence, management concludes that related deferred tax assets are more likely than not to be realized. For the year ended December 31, 2020, the Company is in a three-year cumulative taxable income position. Additionally, management considered the reversals of taxable temporary differences and projected financial results and concluded that sufficient positive evidence exists to reduce a portion of the valuation allowance related to U.S. deferred tax assets. We identified the estimate of the realizability of the valuation allowance related to U.S. deferred tax assets as a critical audit matter. Auditing management’s analysis of the realizability of the deferred tax assets was complex and judgmental because the assessment process involves significant judgment and subjective evaluation of assumptions that may be affected by future operations of the Company, market or economic conditions. We evaluated the Company's assessment of the realizability of its U.S. deferred tax assets. Our audit procedures included, among others, evaluation of the nature of the Company’s tax attributes, application of the technical tax guidance related to attributes subject to additional limitation, projections of the future reversal of existing taxable temporary differences between book and taxable income and assumptions used by the Company to assess the reliability and reasonableness of its projected future taxable income. We compared the projections of future taxable income with the actual results of prior periods and evaluated management’s assumptions regarding the Company’s projected taxable income. Further, we tested the completeness and accuracy of the underlying data used in the Company’s projections. We involved our tax professionals with specialized skills and knowledge to assist in evaluating the Company’s assessment of the scheduling of the reversal of existing temporary taxable differences over the statutory carryforward period of its deferred tax assets, and whether the estimated future sources of taxable income were of the appropriate character to utilize the deferred tax assets in the relevant time period. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2001. Philadelphia, Pennsylvania March 5, 2021 F-2 Table of Contents  PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. COHEN & COMPANY INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) December 31, 2020 2019 Assets Cash and cash equivalents $ 41,996 $ 8,304 Receivables from brokers, dealers, and clearing agencies 52,917 96,132 Due from related parties 2,812 466 Other receivables 3,929 46,625 Investments-trading 242,961 307,852 Other investments, at fair value 58,540 14,864 Receivables under resale agreements 5,716,343 7,500,002 Investments in equity method affiliates 13,482 3,799 Deferred income taxes 7,397 - Goodwill 109 7,992 Right-of-use asset - operating leases 6,063 7,155 Other assets 2,830 8,433 Total assets $ 6,149,379 $ 8,001,624 Liabilities Payables to brokers, dealers, and clearing agencies $ 156,678 $ 241,261 Accounts payable and other liabilities 46,251 20,295 Accrued compensation 14,359 4,046 Lease liability - operating leases 6,531 7,693 Trading securities sold, not yet purchased 44,439 77,947 Other investments sold, not yet purchased 7,415 - Securities sold under agreement to repurchase 5,713,212 7,534,443 Deferred income taxes - 1,339 Redeemable financial instruments 11,957 16,983 Debt 47,100 48,861 Total liabilities 6,047,942 7,952,868 Commitments and contingencies (See Note 28) Stockholders' Equity: Voting Non-Convertible Preferred Stock, $0.001 par value per share, 60,000,000 shares authorized, 27,413,098 shares issued and outstanding, respectively 27 27 Common Stock, $0.01 par value per share, 100,000,000 shares authorized, 1,325,529 and 1,193,624 shares issued and outstanding, respectively, including 286,566 and 73,715 unvested restricted share awards, respectively 13 12 Additional paid-in capital 65,031 68,714 Accumulated other comprehensive loss (821 ) (915 ) Accumulated deficit (20,341 ) (34,519 ) Total stockholders' equity 43,909 33,319 Non-controlling interest 57,528 15,437 Total equity 101,437 48,756 Total liabilities and equity $ 6,149,379 $ 8,001,624   See accompanying notes to consolidated financial statements. F-3 Table 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, 2020 2019 2018 Revenues Net trading $ 73,611 $ 38,172 $ 29,298 Asset management 8,759 7,560 12,536 New issue and advisory 2,234 1,831 2,979 Principal transactions and other income 45,506 2,103 4,573 Total revenue 130,110 49,666 49,386 Operating expenses Compensation and benefits 59,902 25,972 25,385 Business development, occupancy, equipment 2,708 3,402 2,995 Subscriptions, clearing, and execution 9,887 9,682 8,627 Professional fee and other operating 7,068 6,251 8,459 Depreciation and amortization 334 318 261 Impairment of goodwill 7,883 - - Total operating expenses 87,782 45,625 45,727 Operating income 42,328 4,041 3,659 Non-operating income / (expense) Interest expense, net (9,589 ) (7,584 ) (8,487 ) Loss from equity method affiliates (2,955 ) (553 ) - Income / (loss) before income tax expense / (benefit) 29,784 (4,096 ) (4,828 ) Income tax (benefit) (8,669 ) (523 ) (841 ) Net income / (loss) 38,453 (3,573 ) (3,987 ) Less: Net income / (loss) attributable to the non-controlling interest 24,248 (1,519 ) (1,524 ) Net income / (loss) attributable to Cohen & Company Inc. $ 14,205 $ (2,054 ) $ (2,463 ) Income / (loss) per share data (see Note 26): Income / (loss) per common share-basic: Basic income / (loss) per common share $ 12.56 $ (1.81 ) $ (2.14 ) Weighted average shares outstanding-basic 1,131,085 1,136,574 1,152,073 Income / (loss) per common share-diluted: Diluted Income / (loss) per common share $ 7.66 $ (1.81 ) $ (2.14 ) Weighted average shares outstanding-diluted 5,091,087 1,681,173 1,684,482 Dividends declared per common share $ - $ 0.40 $ 0.80 Comprehensive income / (loss): Net income / (loss) $ 38,453 $ (3,573 ) $ (3,987 ) Other comprehensive income / (loss) item: Foreign currency translation adjustments, net of tax of $0 138 (2 ) (118 ) Other comprehensive income / (loss), net of tax of $0 138 (2 ) (118 ) Comprehensive income / (loss) 38,591 (3,575 ) (4,105 ) Less: comprehensive income / (loss) attributable to the non-controlling interest 24,351 (1,518 ) (1,562 ) Comprehensive income / (loss) attributable to Cohen & Company Inc. $ 14,240 $ (2,057 ) $ (2,543 ) See accompanying notes to consolidated financial statements. F-4 Table of Contents COHEN & COMPANY INC.  Consolidated Statement of Changes in Equity (Dollars in thousands) Cohen & Company Inc. Preferred Stock Common Stock Additional Paid-In Capital Retained Earnings / (Accumulated Deficit) Accumulated Other Comprehensive Income / (Loss) Total Stockholders' Equity Non-controlling Interest Total Equity Balance at December 31, 2017 $ 5 $ 12 $ 69,202 $ (28,497 ) $ (850 ) $ 39,872 $ 8,284 $ 48,156 Net (loss) - - - (2,463 ) - (2,463 ) (1,524 ) (3,987 ) Other comprehensive (loss) - - - - (80 ) (80 ) (38 ) (118 ) Acquisition / (surrender) of additional units in consolidated subsidiary, net - - (217 ) - 22 (195 ) 195 - Equity based compensation - 1 425 - - 426 197 623 Shares withheld for employee taxes - - (51 ) - - (51 ) (24 ) (75 ) Purchase and retirement of common stock - (1 ) (768 ) - - (769 ) - (769 ) Dividends/Distributions - - - (966 ) - (966 ) (426 ) (1,392 ) Balance at December 31, 2018 $ 5 $ 12 $ 68,591 $ (31,926 ) $ (908 ) $ 35,774 $ 6,664 $ 42,438 Net (loss) - - - (2,054 ) - (2,054 ) (1,519 ) (3,573 ) Other comprehensive income (loss) - - - - (3 ) (3 ) 1 (2 ) Cumulative effect adjustment - adoption of ASU 2016-02 - - - (20 ) - (20 ) - (20 ) Acquisition / (surrender) of additional units in consolidated subsidiary, net - - 28 - (4 ) 24 (47 ) (23 ) Equity based compensation - - 481 - - 481 263 744 Shares withheld for employee taxes - - (87 ) - - (87 ) (41 ) (128 ) Purchase and retirement of common stock - - (299 ) - - (299 ) - (299 ) Investment of non-controlling interest of sponsor entities - - - - - - 2,550 2,550 Investment of non-controlling interest of Operating LLC / Issuance of Series F Preferred 22 - - - - 22 7,779 7,801 Dividends/Distributions - - - (519 ) - (519 ) (213 ) (732 ) Balance at December 31, 2019 $ 27 $ 12 $ 68,714 $ (34,519 ) $ (915 ) $ 33,319 $ 15,437 $ 48,756 Net income - - - 14,205 - 14,205 24,248 38,453 Other comprehensive income (loss) - - - - 35 35 103 138 Acquisition / (surrender) of additional units of consolidated subsidiary, net - - (1,765 ) - 59 (1,706 ) 1,706 - Equity based compensation - 1 239 - - 240 12,313 12,553 Shares withheld for employee taxes - - (15 ) - - (15 ) (39 ) (54 ) Purchase and retirement of common stock - - (2,142 ) - - (2,142 ) - (2,142 ) Dividends/Distributions - - - (27 ) - (27 ) (35 ) (62 ) Investment of non-controlling interest of sponsor entities - - - - - - 13,489 13,489 Distributions from non-controlling interest of sponsor entities - - - - - - (9,694 ) (9,694 ) Balance at December 31, 2020 $ 27 $ 13 $ 65,031 $ (20,341 ) $ (821 ) $ 43,909 $ 57,528 $ 101,437    See accompanying notes to consolidated financial statements. F-5 Table of Contents COHEN & COMPANY INC.  Consolidated Statements of Cash Flows (Dollars in thousands) Year Ended December 31, 2020 2019 2018 Operating activities Net income (loss) $ 38,453 $ (3,573 ) $ (3,987 ) Adjustments to reconcile net income / (loss) to net cash provided by (used in) operating activities: Equity-based compensation 12,553 744 623 Accretion of income on other investments, at fair value (124 ) (424 ) (1,423 ) Realized loss / (gain) on other investments, at fair value (7,300 ) 1,033 (490 ) Change in unrealized (gain) loss on other investments, at fair value (36,113 ) (2,113 ) (2,126 ) Realized loss / (gain) on other investments, sold not yet purchased (917 ) - - Change in unrealized (gain) loss on other investments, sold not yet purchased (146 ) - - (Income) / loss from equity method affiliates 2,955 553 - Depreciation and amortization 334 318 261 Impairment of goodwill 7,883 - - Amortization of discount on debt 736 548 820 Deferred tax provision / (benefit) (8,877 ) (678 ) (838 ) Change in operating assets and liabilities, net: Change in receivables from/ payables to brokers, dealers, and clearing agencies (41,368 ) 73,343 44,824 Change in receivables from / payables to related parties, net (2,346 ) 327 2 (Increase) decrease in other receivables 42,696 (34,535 ) (8,559 ) (Increase) decrease in investments-trading 64,891 (6,617 ) (98,978 ) (Increase) decrease in receivables under resale agreement 1,783,659 132,228 (5,577,027 ) (Increase) decrease in other assets 4,340 (3,768 ) (683 ) Increase (decrease) in accounts payable and other liabilities 24,552 7,855 6,334 Increase (decrease) in accrued compensation 10,313 (1,208 ) 848 Increase (decrease) in trading securities sold, not yet purchased (33,508 ) (42,175 ) 28,235 Increase (decrease) in securities sold under agreement to repurchase (1,821,231 ) (137,321 ) 5,605,165 Net cash provided by (used in) operating activities 41,435 (15,463 ) (6,999 ) Investing activities Purchase of investments - other investments, at fair value (62,282 ) (1,927 ) (26,865 ) Purchase of investments - other investments sold, not yet purchased, at fair value (12,519 ) - - Sales and returns of principal - other investments, at fair value 54,748 10,114 30,023 Sales and returns of principal - other investments sold, not yet purchased, at fair value 20,997 - - Investments in equity method affiliates (12,675 ) (4,352 ) - Purchase of furniture, equipment, and leasehold improvements (217 ) (101 ) (1,002 ) Net cash provided by (used in) investing activities (11,948 ) 3,734 2,156 Financing activities Proceeds from PPP loan 2,166 - - Draw from FT LOC 17,500 - - Repayment of FT LOC (17,500 ) - - Proceeds from non-convertible debt 4,500 - - Proceeds (repayment) from debt (9,163 ) 4,777 (1,461 ) Payments for debt issuance costs (24 ) - (525 ) Proceeds from redeemable financial instrument - 1,268 500 Repayment of redeemable financial instrument (4,921 ) (1,500 ) - Cash used to net share settle equity awards (54 ) (128 ) (75 ) Purchase and retirement of Common Stock (2,142 ) (299 ) (769 ) Proceeds from non-controlling interest investment 13,489 2,550 - Non-controlling interest distributions (35 ) (213 ) (426 ) Cohen & Company Inc. dividends (27 ) (519 ) (966 ) Net cash provided by (used in) financing activities 3,789 5,936 (3,722 ) Effect of exchange rate on cash 416 (9 ) (262 ) Net increase (decrease) in cash and cash equivalents 33,692 (5,802 ) (8,827 ) Cash and cash equivalents, beginning of period 8,304 14,106 22,933 Cash and cash equivalents, end of period $ 41,996 $ 8,304 $ 14,106 See accompanying notes to consolidated financial statements. F-6 Table of Contents COHEN & COMPANY INC. Notes to Consolidated Financial Statements December 31, 2020 (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 net assets 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 transactions occurring 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 completed its merger (the “AFN Merger”) with a subsidiary of Alesco Financial Inc. (“AFN”), a publicly traded real estate investment trust.  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 directly from Cohen Brothers. In addition, AFN received additional Cohen Brothers membership interests directly from its members in exchange for AFN common stock. In accordance 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 the acquisition 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 in the 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”) and on September 1, 2017 it was renamed again as Cohen & Company Inc. Effective January 1, 2010, the Company ceased to qualify as a REIT.  On September 1, 2017, the Company (i) changed its name back from Institutional Financial Markets, Inc. to Cohen & Company Inc. and the Company’s trading symbol on the NYSE American Stock Exchange from “IFMI” to “COHN”; (ii) effected a 1 for 10 reverse stock split; and (iii) increased the par value of Common Stock from $0.001 per share to $0.01 per share. All share and per share amounts, and exercise and conversion prices for all periods presented reflect the reverse split as if it had occurred as of the beginning of the first period presented.  The Company  We are a financial services company specializing in fixed income markets and, more recently, the SPAC markets. As of December 31, 2020 , the Company had $2.77 billion in assets under management (“AUM”) of which $2.06 billion, was in collateralized debt obligations (“CDOs”). The remaining portion of AUM is 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 “Operating LLC” refers to the main operating subsidiary of the Company. “Cohen Brothers” refers to the pre-AFN Merger Cohen Brothers, LLC and its subsidiaries. “AFN” refers to 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; “JVB” refers to J.V.B. Financial Group LLC, a broker dealer subsidiary; “CCFL” refers to Cohen & Company Financial Limited (formerly known as EuroDekania Management LTD), a subsidiary formerly regulated by the Financial Conduct Authority (formerly known as Financial Services Authority) in the United Kingdom; “CCFEL” refers to Cohen & Company Financial (Europe) Limited, a subsidiary regulated by the Central Bank of Ireland in Ireland; and “EuroDekania” refers to EuroDekania (Cayman) Ltd., a Cayman Islands exempted company that was externally managed by CCFL.  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, matched book repurchase agreement (“repo”) financing, new issue placements in corporate 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: corporate bonds, 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 other forward agency MBS contracts, Small Business Administration (“SBA”) loans, U.S. government bonds, U.S. government agency securities, brokered deposits and certificates of deposit (“CDs”) for small banks, and hybrid capital of financial institutions including trust preferred securities (“TruPS”), whole loans, residential transition loans ("RTLs"), and other structured financial instruments. The Company also offers execution and brokerage services for equity products. The Company operates its capital markets activities primarily through its subsidiaries: JVB in the United States and CCFEL in Europe.  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 as corporate 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 the assets. 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 its fee-based asset management operations, which include ongoing base and incentive management fees.  F-7 Principal Investing : The Company’s Principal Investing business segment is comprised of investments that the Company holds related to its SPAC franchise and other investments the Company has made for the purpose of earning an investment return rather than investments made to support the Company’s trading, matched book repo, or other Capital Markets business segment activities. These investments are included in the Company’s other investments, at fair value and investments in equity method 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 (unrealized and realized) and income and expense earned on securities and derivatives classified as trading; • Net interest income on the Company’s matched book repo financing activities; and • New issue and advisory revenue comprised primarily of (i) new issue revenue associated with originating, arranging, or placing newly created financial instruments; and (ii) revenue from advisory services.  Asset Management  • Asset management fees for the Company’s on-going asset management services provided to certain Investment Vehicles, which may include fees both senior and subordinate to the securities in the Investment Vehicle, and incentive management fees earned based on the performance of the various Investment Vehicles.  Principal Investing  • Gains and losses (unrealized and realized) and income and expense earned on securities classified as other investments, at fair value. • Income and loss earned on equity method investments.  The activities noted above were carried out through the following main operating subsidiaries of the Company as of December 31, 2020 .  1. Cohen & Company Financial Management, LLC (“CCFM”) is a wholly owned subsidiary of the Operating LLC and acts as asset manager and investment adviser to the Alesco I CDO, and the Alesco III through IX CDOs. Alesco CDOs invest in bank and insurance company TruPS as well as insurance company subordinated debt. CCFM also manages the SPAC Funds and SPAC Series Funds. See note 4. 2. Dekania Capital Management, LLC (“DCM”) is a wholly owned subsidiary of the Operating LLC and acts as asset manager and investment adviser to the Company’s Dekania Europe II CDO and Dekania Europe III CDO. The Dekania Europe II CDO and Dekania Europe III CDO invest primarily in financial institution TruPS and insurance company subordinated 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”) and is a member of the Financial Industry Regulatory Authority (“FINRA”), the Securities Industry Protection Corporation (“SIPC”), and the Fixed Income Clearing Corporation (“FICC”). JVB carries out the Company’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 investment adviser to the Company’s Dekania Europe III CDO. CCFL also carried out certain of the Company’s Capital Markets business segment activities in Europe including brokerage, advisory, and new issue services. During 2020, CCFL reduced its permissions with the FCA and no longer is a regulated UK entity. As a result no capital requirement is necessary in the United Kingdom. The Company is in the process of dissolving CCFL. 5. CCFEL is regulated by Central Bank of Ireland (“CBI”) and performs asset management and capital markets activities in Ireland and the European Union. In April 2019, CCFEL received authorization from the CBI under the European Union Regulations 2017 to provide investment services in respect of certain financial instruments including transferable securities, money-market instruments, units in collective investment undertakings and various option, futures, swaps, forward rate agreements, and other derivative contracts. CCFEL also acts as asset manager to certain separate accounts and Investment Vehicles based in Europe. See note 4. 6. Cohen & Compagnie SAS (formerly Cohen Fréres SAS), the Company’s French subsidiary, acts as a credit research adviser to Dekania Capital Management, LLC, and CCFEL in analyzing the creditworthiness of insurance companies and financial institutions in Europe with respect to all assets included in the Dekania Europe CDOs and certain other Investment Vehicles. 7. SPAC Sponsor Entities: A series of LLC's set up to pool investor funds and invest in private placements of Company sponsored special purpose acquisition companies ("SPACs"). See note 4. F-8 Table 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 period presentation. Effective June 1, 2019, the Company changed its accounting policy regarding the netting of reverse repo and repo transactions and updated prior periods’ balances to be consistent with this new accounting policy. This change resulted in an increase in the repo and reverse repo amounts included in the consolidated balance sheet as of December 31, 2018 of $2,461,177. See note 11.  F-9 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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”). All intercompany accounts and transactions have 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 of the 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’s consolidated balance sheet are owned by the Operating LLC or its consolidated subsidiaries. In addition, with the exception of interest expense related to the junior subordinated notes and corporate tax expense, nearly all revenues, expenses, gains, and losses recognized in the consolidated statement of operations are generated by the Operating LLC or its consolidated subsidiaries.  As of December 31, 2018, the Company owned 67.60% of the economic and voting interests in the Operating LLC. As a result of the issuance of additional equity interests in the Operating LLC during 2019 and the grant of a proxy from the owners of the additional equity interests, effective December 31, 2020 and 2019 , the Company controlled 51.00% of the voting interest and owned 27.04% and 28.75%, respectively, of the economic interest of the Operating LLC. Although the Company’s economic interests declined 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 years ended December 31, 2020, 2019 and 2018, 72.96%, 71.25% and 32.4%, respectively, of the Operating LLC’s income or loss, were treated as a non-controlling interest as the result of the issuance of the additional equity interest in the Operating LLC during 2019. See notes 4, 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 of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  C. Adoption of New Accounting Standards  In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Subsequent to that date, the FASB has issued additional ASUs clarifying certain aspects of ASU 2014-09 but has not changed the core principal of ASU 2014-09. The new guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the new guidance on January 1, 2018 using the retrospective transition method. This ASU excludes from its scope revenue recognition related to items the Company records as a component of net trading and principal transactions within its consolidated statements of operations and therefore this ASU had no impact on these items. In terms of asset management and other revenue, the main impact of Topic 606 related to the timing of the recognition of incentive management fees in certain cases. Prior to the adoption of Topic 606, the Company would recognize incentive fees when they were fixed and determinable. Under Topic 606, the Company is required to recognize incentive fees when they are probable and there is not a significant chance of reversal in the future. For the asset management contracts in place at the time of adoption, this change in policy did not result in any actual change in revenue that had already been recognized and therefore there was no transition adjustment necessary.  In February 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10) . The amendments in ASU 2016-01, among other things, require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; require separate presentation of financial assets and liabilities by measurement category and form of financial asset; and eliminate the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The Company’s adoption of the provisions of ASU 2016-01, effective January 1, 2018 did not have an effect on the Company’s consolidated financial statements.  In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under the new guidance (subsequently updated with ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20, and ASU 2019-01), lessees will be required to recognize the following for all leases with the exception of short-term leases: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. The Company adopted the provisions of the new guidance effective January 1, 2019. The Company recorded the following: (a) a right of use asset of $8,416, (b) a lease commitment liability of $8,860, (c) a reduction in retained earnings from cumulative effect of adoption of $20, (d) an increase in other receivables of $18, and (e) a reduction in other liabilities of $406. See note 15 and 17. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in this ASU provide cash flow statement classification guidance on eight specific cash flow presentation issues with the objective of reducing existing diversity in practice. The Company’s adoption of the provisions of ASU 2016-15, effective January 1, 2018 did not have an effect on the Company’s consolidated financial statements.  In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires that financial instruments recorded as assets and at amortized cost as well as certain securities accounted for as available for sale be presented at the net amount expected to be collected. The ASU requires the recording of a valuation allowance that is deducted from amortized cost and is based on expected credit losses. This ASU does not apply to financial assets carried at fair value. Therefore, this ASU does not apply to any financial asset that the Company classifies as investments-trading; other investments, at fair value; trading securities sold, not yet purchased; and other investments sold, not yet purchased. However, reverse repurchase agreements are not carried at fair value and fall within the scope of this ASU. ASC 326-20-35-6 contains simplifying provisions that apply to reverse repurchase agreements. Because the Company requires its reverse repurchase counterparty to provide liquid collateral at all times (which is continually adjusted based on current market values) at an amount greater than the carrying value of the reverse repurchase agreement, the Company is allowed to assume zero credit losses and no valuation allowance is recorded. If, for some reason, the amount of collateral should fall below the carrying value of the reverse repurchase agreement, the total valuation allowance recorded is limited to that difference. F-10 In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory . The amendments require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments eliminate the exception of an intra-entity transfer of an asset other than inventory. The Company’s adoption of the provisions of ASU 2016-16 effective January 1, 2018 did not have an effect on the Company’s consolidated financial statements.  In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The amendments in this ASU clarify the definition of a business and affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The Company’s adoption of the provisions of ASU 2017-01 effective January 1, 2018 did not have an effect on the Company’s consolidated financial statements.  In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The amendments in this ASU eliminate Step 2 from the goodwill impairment test. The annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company adopted the provisions of ASU 2017-04, effective January 1, 2020. The Company recorded an impairment of goodwill for the twelve months ended December 31, 2020. See note 13. This impairment charge was not the result of the adoption of ASU 2017-04. In February 2017, the FASB issued ASU 2017-05 , Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets . The amendments in this ASU clarify that a financial asset within the scope of this topic may include nonfinancial assets transferred within a legal entity to counterparty. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to counterparty and derecognize each asset when counterparty obtains control of it. The Company’s adoption of the provisions of ASU 2017-05 effective January 1, 2018 did not have an effect on the Company’s consolidated financial statements.  In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs, Premium Amortization on Purchased Callable Debt Securities (Sub-Topic 310-20 ). The amendments in this ASU shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The Company’s adoption of the provisions of ASU 2017-08, effective January 1, 2019 did not have an effect on the Company’s consolidated financial statements.  In May 2017, the FASB issued ASU 2017-09 , Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this ASU provide guidance on determining those changes to the terms and conditions of share-based payment awards that require an entity to apply modification accounting. The Company’s adoption of the provisions of ASU 2017-09 effective January 1, 2018 did not have an effect on the Company’s consolidated financial statements.  In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging – Targeted Improvements to Accounting for Hedging Activities (Topic 815 ). The amendments in this ASU refine and expand hedge accounting for both financial and commodity risks and contain provisions to create more transparency and clarify how economic results are presented. The Company’s adoption of the provisions of ASU 2017-12, effective January 1, 2019 did not have an effect on the Company’s consolidated financial statements.  In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220 ): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The amendments in this ASU provide the option to reclassify stranded tax effects within accumulated other comprehensive income (“AOCI”) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (the “TCJA”) (or portion thereof) is recorded. The Company’s adoption of the provisions of ASU 2018-02, effective January 1, 2019 did not have an effect on the Company’s consolidated financial statements.  In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . The amendments in this ASU expand the scope of Topic 718, which previously only included share-based payments to employees, to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The Company’s adoption of the provisions of ASU 2018-07, effective January 1, 2019 did not have an effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies the disclosure requirements in Topic 820, by removing certain disclosure requirements related to the valuation hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop level 3 fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company’s adoption of the provisions of ASU 2018-13, effective January 1, 2020 did not have an effect on the Company’s consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Target Improvements to Related Party Guidance for Variable Interest Entities . The ASU made targeted changes to the related party consolidation guidance. The new guidance changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity will need to consider indirect interests held through related parties under common control on a proportionate basis under the new guidance, rather than in their entirety, as has been the case under current guidance. The guidance is effective in annual periods beginning after December 15, 2019 and interim periods within those fiscal years. The Company’s adoption of the provisions of ASU 2018-17, effective January 1, 2020 did not have an effect on the Company’s consolidated financial statements.  In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 . The ASU provides more comparability in the presentation of revenue for certain transactions between collaborative arrangement participants. It accomplishes this by allowing organizations to only present units of account in collaborative arrangements that are within the scope of the revenue recognition standard together with revenue accounted for under the revenue recognition standard. The Company’s adoption of the provisions of ASU 2020-04, effective March 12, 2020 did not have an effect on the Company’s consolidated financial statements. The parts of the collaborative arrangement that are not in the scope of the revenue recognition standard should be presented separately from revenue accounted for under the revenue standard. The Company’s adoption of the provisions of ASU 2018-18, effective January 1, 2020 did not have an effect on the Company’s consolidated financial statements. F-11 In November 2019, the FASB issued ASU 2019-08, Compensation – Stock Compensation (Topic (718) and Revenue from Contracts with Customers (Topic 606): Codification Improvements– Share-Based Consideration Payable to a Customer. This ASU requires companies to measure and classify (on the balance sheet) share-based payments to customers by applying the guidance in Topic 718, Compensation—Stock Compensation . As a result, the amount recorded as a reduction in revenue would be measured based on the grant-date fair value of the share-based payment. The Company’s adoption of the provisions of ASU 2019-08, effective January 1, 2020 did not have an effect on the Company’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. This ASU provides temporary optional guidance to ease the burden in accounting for reference rate reform by providing optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The ASU is intended to help stakeholders during the global market-wide reference rate transition period and will be in effect for a limited time through December 31, 2022. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting be applied to derivatives that are affected by the discounting transition. Also, ASU 2021-01 amends the expedients and exceptions in Topic 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The Company’s adoption of the provisions of ASU 2020-04 and ASU 2021-01, effective March 12, 2020 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’s cash and cash equivalents are in the form of short-term investments and are not held in federally insured bank accounts.  E. Financial Instruments  The Company accounts for its investment securities at fair value under various accounting literature including FASB ASC 320, Investments — Debt and Equity Securities (“ASC 320”) , pertaining to investments in debt and equity securities and the fair value option of financial instruments in FASB ASC 825, Financial Instruments (“ASC 825”). The Company also accounts for certain assets at fair value under applicable industry guidance such as: (a) FASB ASC 946 , Financial Services-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 to the fair value measurement provisions included in ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 establishes a single authoritative definition 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, and requires 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 transfer the 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. ASC 820 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. This standard provides companies the option of reporting certain instruments at fair value (with changes in fair value recognized in the statement of operations) that were previously 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 fair value 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. See note 9 for the information regarding the effects of applying the fair value option to the Company’s financial instruments on the Company’s consolidated financial statements.  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 with unrealized 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 FAS 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 available for 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 of operations. For available for sale securities, only realized gains and losses are recognized in the statement of operations while unrealized gains and losses are recognized as a component of other comprehensive income (“OCI”). However, if the reporting entity elects to account for an otherwise available for sale security under the fair value 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 the periods 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 periods presented, all securities owned by the Company were accounted for at fair value with unrealized and realized gains and losses recorded in the consolidated statement of operations.  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, the Company classifies that investment as either other investments, at fair value or other investments sold, not yet purchased in the consolidated balance sheet and unrealized 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 be included as a component of net trading revenue in the in the consolidated statement of operations.  F-12 Table 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 fair value 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 investment will 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 component of 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 for the investment under the equity method. In those cases, the investment will be included as a component of investments in equity method affiliates in the consolidated balance 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 the consolidated 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 prepared by the Company’s management. These models include estimates and the valuations derived from them could differ materially from amounts realizable in an open market exchange.  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 the provisions 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, or held 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 to purchase 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 the amount reflected on the consolidated balance sheets. Unrealized and realized gains and losses on trading securities sold, not yet purchased are recorded in net trading in 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 a component 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 to purchase the security in the market at prevailing prices. These investments differ from investments classified as trading securities sold, not yet purchased as they are either acquired for purposes of earning a return rather than to support the Company’s trading or matched book operations or they acquired as an economic hedge to investments classified as other investments, at fair value. The Company is obligated to acquire the securities sold short at prevailing market prices, which may exceed the amount reflected on the statement of financial condition. Unrealized and realized gains and losses on trading securities sold, not yet purchased are recorded in net trading in the 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 documentation and 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 to OCI 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 in ASC 815.  All of the derivatives that the Company enters into contain master netting arrangements. If certain requirements are met, the offsetting provisions included in FASB ASC 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 the Company’s policy to present the derivative assets and liabilities on a net basis if the conditions of ASC 210 are met. However, in general the Company does not enter in to offsetting derivatives with the same counterparties. Therefore, in all periods presented, no derivatives are presented on a net basis.  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 a component of investments-trading or trading securities sold, not yet purchased. If it is entered into as a hedge for another financial instrument included in other investments, at fair value then the derivative or as a speculative principal investment, it will be included as a component of other investments, at fair value or other investments sold, not yet purchased.  The Company may, from time to time, enter into derivatives to manage its risk exposures arising from (i) fluctuations in foreign currency rates with respect to the Company’s investments in foreign currency denominated investments; (ii) the Company’s investments in interest sensitive investments; (iii) the Company's investments in equities; and (iv) the Company’s facilitation of mortgage-backed trading. Derivatives entered into by the Company, from time to time, may include (a) foreign currency forward contracts; (b) purchase and sale agreements of TBAs and other forward agency MBS contracts; and (c) other extended settlement trades.  TBAs are forward contracts to purchase or sell MBS whose collateral remain “to be announced” until just prior to the trade settlement. In addition to TBAs, the Company sometimes enters into forward purchases or sales of agency MBS where the underlying collateral has been identified. These transactions are referred to as other forward agency MBS contracts. TBAs and other forward agency MBS contracts are accounted for as derivatives by the Company under ASC 815. The settlement of these transactions is not expected to have a material effect on the Company’s consolidated financial statements.  F-13 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 other securities 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 until the 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 forward purchase commitment or forward sale commitment. The Company will classify the related derivative either within investments-trading or other investments, at fair value depending on where it intends to classify the investment once the trade settles.  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 financial instruments 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 of operations 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 accounts held with clearing agencies, and amounts receivable from securities or repo transactions that have failed to deliver. Payables to brokers, dealers, and clearing agencies may include amounts payable from securities or repo transactions that have failed to receive as well as amounts borrowed from clearing agencies under margin loan arrangements. In addition, receivables or payables arising from unsettled regular way trades is reflected on a net basis either as a component of receivables from or payables to brokers, dealers, and clearing agencies. These receivables are subject to the requirements of ASU 2016-13 which potentially may require the recording of credit losses. The Company’s trades and contracts are cleared through a clearing organization and settled daily between the clearing organization and the Company. Because of 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 Company continually reviews the credit quality of its counterparties and has not experienced a default. As a result, the Company has not recorded a credit loss allowance on these 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 assets in the consolidated balance sheets. Furniture and equipment are depreciated on a straight-line basis over their estimated useful life of 3 to 5 years. Leasehold improvements 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 acquisitions completed by the Company. See note 13. In accordance with FASB ASC 350, Intangibles — Goodwill and Other (“ASC 350”), goodwill and intangible assets deemed to have 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 by comparing 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 exceeds the reporting unit's fair value; however, any loss recognized would not exceed the total amount of goodwill, allocated to the reporting unit. Any impairment loss is included 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 have indefinite 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, VIEs are 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 its activities without additional subordinated financial support. The Company has variable interests in VIEs through its management contracts and investments in various securitization entities including CLOs and CDOs.  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 entity has 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 the VIE 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 both of 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 Company has 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 resale agreements”) or sales of securities under agreements to repurchase (“repurchase agreements”). The resulting interest income and expense are included in net trading in the 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, the Company 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, the offsetting provisions included in ASC 210 allow (but do not require) the reporting entity to net the asset and liability on the consolidated balance sheets.  Effective June 1, 2019, the Company changed its accounting policy regarding the netting of reverse repo and repo transactions. ASC 210 provides the option to present reverse repo and repo on a net basis if certain netting conditions are met. Prior to this date, the Company utilized this option and presented repo and reverse repo on a net basis when these conditions were met. As of June 1, 2019, all repo and reverse repo transactions are presented on a gross basis even if the underlying netting conditions are met. See note 2.  F-14 The Company classifies reverse repurchase agreements as a separate line item within the assets section of the Company’s consolidated balance sheets. The Company classifies 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, the Company 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 sustain significant 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 requiring additional 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 sell the 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 sustain significant 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. See 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 on debt 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 under ASC 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 investment return which is variable and is based on the operating results of certain business units of the Company. These investments can be redeemed by the Company under certain circumstances or the holder may require redemption under certain circumstances. However, there are no fixed maturity dates. The Company treats these investments as liabilities and carries these investments at the redemption value plus any accrued and unpaid investment return on its consolidated balance sheets. The redemption value is included in redeemable financial instruments and the accrued and unpaid investment return is included in accounts payable and other liabilities in the consolidated balance sheets. Investment return is recorded on an accrual basis and is included as a component of interest expense in the consolidated statements of operations. See note 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 securities sold, not yet purchased; (ii) interest income and expense from collateralized securities transactions; and (iii) commissions and riskless trading profits. Net trading is reduced by margin interest, which is recorded on an accrual basis. Riskless trades are transacted through the Company’s proprietary account with a customer order in hand, 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 settlement transactions are recognized on a settlement date basis (although in cases of extended settlement trades, the unsettled trade is accounted for as a derivative between trade and settlement date). See note 10. The investments classified as trading are carried at fair value. The determination of fair value is based on 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 prepared by the Company’s management. The models include estimates, and the valuations derived from them could differ materially from amounts realizable in an open market exchange. See note 9.  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 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 certain level 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 the Company’s policy 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, if the Company determines that the subordinated asset management fee will not be paid (which generally occurs on the quarterly payment date), the Company will stop recognizing additional subordinated asset management fees on that particular CDO and will reverse any subordinated asset management fees that are accrued and unpaid. The Company will begin accruing the subordinated asset management fee again if payment resumes and, in management’s estimate, continued payment is reasonably assured. If payment were to resume but the Company was unsure of continued payment, it would recognize the subordinated asset management fee as payments were received and would not accrue such 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 accumulated cash return on investment (“Hurdle Return”) received by the most junior CDO securities holders. It is an incentive for the Company to perform in its role as asset manager by minimizing defaults and maximizing recoveries. The incentive management fee is not ultimately determined or payable until the achievement 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 a significant 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 earns an 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 of each arrangement will determine the Company’s revenue recognition policy for incentive fees in each case. However, in all cases the Company recognizes the incentive fees 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 includes: (i) new issue revenue associated with originating, arranging, or placing newly created financial instruments and (ii) revenue from advisory services. New issue and advisory revenue is recognized when all services have been provided and payment is earned. F-15 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 yet purchased 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 based 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 the Company’s management. 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 the consolidated statements of operations as a separate non-operating expense. See notes 19 and 20.  P. Leases  The Company leases office space, certain computer and related equipment and a vehicle under a noncancelable operating lease. From time to time, the Company sub-leases office space to other tenants. Under the requirements of ASC 842, the company determines if an arrangement is a lease at the inception date of the contract. The Company measures operating lease liabilities using an estimated incremental borrowing rate as there is no rate implicit in the Company’s operating lease arrangements. An incremental borrowing rate was calculated for 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.  The Company adopted the provisions of the new guidance effective January 1, 2019. The Company recorded the following: (a) a right of use asset of $8,416, (b) a lease commitment liability of $8,860, (c) a reduction in retained earnings from cumulative effect of adoption of $20, (d) an increase in other receivables of $18, and (e) a reduction in other liabilities of $406. Subsequent to the adoption of ASU 842, all leases to which the Company was a party remained classified as operating leases and rent expense was recognized on a straight-line basis and included as a component of business development, occupancy, and equipment in the consolidated statements of operations.   Prior to the adoption of ASC 842, the Company classified all the leases to which it was a party as operating leases. The Company recognized rent expense on a straight-line basis as a component of business development, occupancy, and equipment in the consolidated statements of operations. Any difference between cash payments and straight-line rent expense was included as a component of other liabilities in the consolidated balance sheets.  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 has had three different types of grants that fall under ASC 718. First, the Company sometimes grant to employees and directors restricted common stock in Cohen & Company Inc. These grants vest over a period of time and only have service 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 the grant 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 to the extent) the restricted share grant ultimately vests. The Company recognizes the 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 sometimes grants to employees operating units of the Operating LLC. These grants also vest over a period of time and only have service based vesting criteria. 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 by taking 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 the Operating 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. The Company recognizes the expense over the service period on a straight line basis. The Company assumes no forfeitures up front and record forfeitures as they occur by reducing expense. Third, employees sometimes invest in the membership interests of consolidated SPAC sponsor entities. Because these entities are consolidated and the employees are investing in the consolidated company's non-controlling interest, these equity interests fall under ASC 718. Generally, the employee invests a de-minimus amount and receives an allocation of the founders 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 SPAC completes its business combination. Therefore, the Company treats these grants as having a performance condition (i.e. the completion of the SPAC business combination). Further, at the time of the investments, the Company treats this performance condition as being non-probable. The effect of this is that the Company records no expense related to these investments until (and only if) the business combination is completed. Upon completion of the business combination, the Company 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 on the date of the grant adjusted for certain sale restrictions imposed on the shares the employee receives (generally, the shares are restricted for 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 determine the 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 losses accordingly until the applicable sponsor entity is liquidated or otherwise de-consolidated. F-16 Table 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, 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 it does business. However, in the periods presented, the Operating LLC or its subsidiaries have been subject to entity level income taxes in the United Kingdom, Spain, France, New York City, and Philadelphia.  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 future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences 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, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial operations. As shown in note 23 to the consolidated financial statements contained herein, the Company currently has 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 the Company's estimates 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 the Company 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.  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 its consolidated financial statements and footnotes. Basic earnings / (loss) per common share (“Basic EPS”) excludes dilution and is computed by dividing net income or loss allocable to common stockholders or members by the weighted average number of common shares and restricted stock entitled to non-forfeitable dividends outstanding for the period. Diluted earnings per common share (“Diluted EPS”) reflects the potential dilution of common stock equivalents (such as restricted stock and restricted 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 of earnings/(loss) per common share.  V. Business Concentration  A substantial 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, 2020 , the Company earned asset management revenue of $3,407 from CDOs and $5,352 from other investment funds. Other than revenue earned in its matched book repo operations, the Company’s trading revenue is generated from transactions with a diverse set of institutional customers. The Company does not consider its trading revenue, other than revenue earned in its matched book repo operations, to be concentrated from a customer or counterparty perspective. See note 11 for discussion of concentrations within its matched book repo operations.  F-17 Table 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 on available 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 market assumptions 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 hierarchy with respect to investments-trading; other investments, at fair value; and the derivatives held by the Company.  Cash equivalents : Cash is carried at historical cost, which is assumed to approximate fair value. The estimated fair value measurement of cash and cash equivalents 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 market quotations, 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 broker market quotations, or valuation models when quotations are not available. In the case of investments in alternative investment funds, fair value is generally based on the reported 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 repriced frequently or bear market interest rates and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of receivables 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, independent market 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, independent broker 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, have short-term maturities, and are repriced frequently with amounts normally due in one month or less and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of securities sold under agreement to repurchase are based on observations of actual market activity and are generally classified 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 estimated fair 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 debt was assumed in the AFN Merger and recorded at fair value as of that date. As of December 31, 2020 , and 2019 , the fair value of the Company’s debt was estimated to be $62,496 and $58,635, respectively. The estimated fair value measurements of the debt are generally based on discounted cash flow models prepared by the Company’s management primarily using discount rates for similar instruments issued to companies with similar credit risks to the Company and are generally classified within level 3 of the valuation hierarchy.  Derivatives : These amounts are carried at fair value. Derivatives may be included as a component of investments-trading; trading securities sold, not yet purchased; and other 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 derivative instruments such as foreign currency forward contracts and Eurodollar futures. For derivative instruments, such as TBAs and other extended settlement trades, the fair value is generally based on market price quotations from third-party pricing services. F-18 X. Investments in Special Purpose Acquisition Companies ("SPACs") Sponsor Entities The Company invests in the sponsor entities of SPACs. The sponsor entities are limited liability companies (each an "LLC") that pool their members' 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 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 investors must approve any business combination prior to its effectiveness. If a business combination is not completed within the agreed upon time frame, the SPAC will liquidate and return the public investors' investment to them. If there are funds remaining after liquidation, the sponsor entities may receive some portion of their investment back, but likely they will suffer a total loss of their investment. If the business 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 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 cannot replace the managing member. Accordingly, the Company has concluded that the sponsor entities are VIEs and the managing member has the power to direct its most important economic activities. In all cases where the Company is the managing member of a sponsor entity, it has also had a significant economic interest in such sponsor entity and therefore consolidates such sponsor entity. • In all cases where the Company has consolidated a sponsor entity, it has determined that the sponsor entity's private placement investment in the SPAC which it sponsors should be treated as an equity method investment during the SPAC's pre-business combination period. Furthermore, because of the difficulty of determining the fair value of such an investment in the SPAC's pre-business combination period, the Company has chosen to not elect 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 shares in the post-business combination SPAC. At this point (assuming the Company consolidates the sponsor entity), the Company will account for the shares received at fair value. It will reclassify any remaining equity method investment to other investments, at fair value and record principal transactions income for the difference. The Company will record 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 the unrestricted 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 received is adjusted downwards from the public trading price for certain sale restrictions imposed (generally, they are restricted for 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 determine the appropriate discount to place on shares that are subject to hurdle prices. In the case of a SPAC business combination where the Company consolidates the sponsor entity, generally there is also an equity-based compensation entry to be recorded at the date of the business combination. See equity-based compensation section above. The Company will continue to mark the sponsor entity's investment in the SPAC to market and record principal transactions income or loss 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 will hold the SPAC shares directly (rather than through a consolidated subsidiary) and will record principal transaction income and loss until the SPAC shares themselves are liquidated. • The Company will also invest in sponsor entities that it does not consolidate because it is not the managing member of such sponsor entity or otherwise does not have the power to direct the sponsor entity's most important activities. In these cases, the Company treats its investment in the sponsor entity as an equity method investment. Furthermore, because of the difficulty of determining the fair value of such an investment in the applicable SPAC's pre-business combination period, the Company has chosen to not elect fair value option. • If a SPAC completes a business combination and the Company has an equity method investment in the associated sponsor entity, the sponsor entity 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 method investment in the SPAC. The Company will recognize its share of this gain as income from equity method affiliates. The sponsor entity will continue to mark its investment in the SPAC to market after the business combination and the Company will recognize its share of the change in fair value as income or loss from equity method affiliates. Once the sponsor entity distributes the Company's share of the SPAC shares it owns, the Company will reclassify its investment from investment in equity method affiliate to other investments, at fair value as the Company will hold the SPAC shares directly (rather than through an equity method investee). The Company will then record principal transactions income and loss until the SPAC shares themselves are liquidated. • If a SPAC liquidates and the Company has an investment in it (either directly in the case of consolidated sponsor entities or indirectly in the case of equity method sponsor entities), the Company will write off its remaining equity method balance and record loss on equity method investment. In the case of consolidated sponsor entities, the Company will also record an offsetting entry to non-controlling interest.  F-19 Table of Contents Y. Recent Accounting Developments In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to simplify accounting for income taxes. It removes specific exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. This ASU is effective for fiscal years beginning after December 15, 2020 and interim period with those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on its 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), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 . This ASU clarifies certain accounting certain topics impacted by Topic 321 Investments-Equity Securities. These topics include measuring equity securities using the measurement alternative, how the measurement alternative should be applied to equity method accounting, and certain forward contracts and purchased options which would be accounted for under the equity method of accounting upon settlement or exercise. This ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU simplifies accounting for convertible instruments by removing major separation models currently required. The ASU removes certain settlement conditions that are required for equity contracts to 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 fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs. The ASU clarifies that an entity should reevaluate whether a callable debt security is within the scope of ASC paragraph 310-20-35-33 for cash reporting period. This ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.  In October 2020, the FASB issued 2020-10 Codification Improvements. The ASU affects a wide variety of Topics in the Codification. The ASU, among other things, contains amendments that improve consistency of the Codification by including all disclosure guidance in the appropriate Disclosure Section. Many of the amendments 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 statements and that option only was included in the Other Presentation Matters Section of the Codification. The option to disclose information in the notes to financial statements should 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 to disclose in the notes to financial statements appears). The amendments are effective for annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements.  F-20 Table of Contents 4. INSURANCE SPAC INVESTMENTS AND OTHER SIGNIFICANT EVENTS Insurance SPAC Investments Insurance Acquisition Corporation (the “Insurance SPAC”)  The Operating LLC is the manager of Insurance Acquisition Sponsor, LLC (“IAS”) and Dioptra Advisors, LLC (“Dioptra,” and, together with IAS, the “Insurance SPAC Sponsor Entities”). The Insurance SPAC Sponsor Entities were sponsors of Insurance Acquisition Corp. ("Insurance SPAC"), a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. On June 29, 2020, Insurance SPAC entered into an Agreement and Plan of Merger (the “Insurance SPAC Merger Agreement”) with IAC Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of Insurance SPAC (“Insurance SPAC Merger Sub”), and Shift Technologies, Inc., a Delaware corporation (“Shift”). On October 13, 2020, Insurance SPAC Merger Sub was merged (the "Insurance SPAC Merger") with and into Shift. In connection with the Insurance SPAC Merger, the Insurance SPAC changed its name from "Insurance Acquisition Corp." to "Shift Technologies, Inc." and, on October 15, 2020, the Insurance SPAC's NASDAQ trading symbol changed from "INSU" to "SFT." The Insurance SPAC Merger was approved by the Insurance SPAC's stockholders at a special meeting of stockholders held on October 13, 2020. Upon the closing of the Insurance SPAC Merger, the Insurance SPAC Sponsor Entities held 375,000 shares of Shift's Class A Common Stock, par value $0.0001 per share (“SFT Class A Common Stock”), and 187,500 warrants (“SFT Warrants”) to purchase an equal number of shares of SFT Class A Common Stock for $11.50 per share (such SFT Class A Common Stock and SFT Warrants, collectively, the “Placement Securities”) as a result of the 375,000 placement units which the Insurance SPAC Sponsor Entities had purchased in a private placement that occurred simultaneously with the Insurance SPAC’s initial public offering on March 22, 2019. Further, upon the closing of the Insurance SPAC Merger, the Insurance SPAC Sponsor Entities collectively held an additional 4,497,525 shares of SFT Class A Common Stock as a result of its previous purchase of founder shares of the Insurance SPAC. In general, when founders shares and placement shares are discussed as a group, the Company refers to them as Sponsor Shares. Of the 375,000 placement units, 122,665 were allocable to the Operating LLC. Of the 4,497,525 founders Shares, 2,019,721 were allocable to the Operating LLC. As of the closing of the Insurance SPAC Merger, the Company continued to consolidate the Insurance SPAC Sponsor Entities. Prior to the closing, the Company treated the consolidated Insurance SPAC Sponsor Entities’ investment in the Insurance SPAC as an equity method investment. Effective upon the closing of the Insurance SPAC Merger: 1. The Company determined the fair value of the Sponsor Shares held by the Insurance SPAC Sponsor Entities. 2. The Company reclassified the equity method investment to other investments, at fair value and recorded principal transactions and other income for the difference between the fair value of the Sponsor Shares held by the Insurance SPAC Sponsor Entities and the equity method investment balance immediately prior to the closing of the Insurance SPAC Merger. 3. The Company then recorded non-controlling interest expense or compensation expense related to the Sponsor Shares distributable to the non-controlling interest holders in the Insurance SPAC Sponsor Entities. If the non-controlling interest holder was an employee, the Company recorded the expense as equity-based compensation expense. Otherwise, the expense was recorded as non-controlling interest expense. Subsequent to the closing of the Insurance SPAC Merger, any change in the fair value of the shares held by the Insurance SPAC Sponsor Entities has been recorded as a component of principal transactions and other income. The Company concurrently records a corresponding non-controlling interest entry related to the Sponsor Shares distributable to the non-controlling interest holders in the Insurance SPAC Sponsor Entities. No adjustment is made to the equity-based compensation expense recorded as of the closing of the Shift merger. Rather, all post-merger changes in value related to Sponsor Shares distributable to the non-controlling interest holders in the Insurance SPAC Sponsor Entities are recorded as non-controlling interest expense. In December 2020, the Insurance SPAC Sponsor Entities distributed a portion of the Sponsor Shares held to the Operating LLC or other wholly owned subsidiaries of the Operating LLC, and the non-controlling interest holders, in a partial liquidating distribution of the Insurance SPAC Sponsor Entities. For the Sponsor Shares the Company holds outside of the Insurance SPAC Sponsor Entities, the Company records principal transactions and other income for any change in their value. In this case, there is no corresponding non-controlling interest income or expense. The Company expects the Insurance SPAC Sponsor Entities to distribute all of their holdings of Sponsor Shares and fully liquidate the Insurance SPAC Sponsor Entities in the first quarter of 2021. Concurrently with the closing of the Insurance SPAC Merger, a subsidiary of the Operating LLC, INSU Pipe Sponsor LLC, purchased 600,000 shares of SFT Class A Common Stock at a purchase price per share of $10.00 pursuant to a subscription agreement that such subsidiary executed at the time of the execution of the Insurance SPAC Merger Agreement. The Company's interest in INSU Pipe Sponsor LLC entitled it to an allocation of 350,000 shares of SFT Class A Common Stock. During 2020, the Company consolidated INSU Pipe Sponsor LLC and recorded principal transactions and other income for the full 600,000 shares and then non-controlling interest expense or income for the 250,000 shares not owned by it. In December 2020, SFT Class A Common Stock were registered for sale and INSU Pipe Sponsor LLC distributed the shares to the non-controlling interest holders resulting in INSU Pipe Sponsor LLC being 100% owned by the Operating LLC. INSU Pipe Sponsor LLC was dissolved in the first quarter of 2021, and the Company's 350,000 shares were transferred to the Operating LLC. The following table details the income statement impact of Insurance SPAC to the Company's operating results during 2020: Year Ended December 31, 2020 Insurance SPAC Sponsor Entities INSU Pipe Sponsor, LLC Operating LLC Total Principal transactions and other income $ 41,035 $ (842 ) $ 426 $ 40,619 Equity-based compensation (11,700 ) - - (11,700 ) Other operating (2 ) - - (2 ) Income / (loss) from equity method affiliates (3,138 ) - - (3,138 ) Net income / (loss) 26,195 (842 ) 426 25,779 Less: Net (loss) income attributable to the non-controlling interest - Operating LLC (9,328 ) 410 - (8,918 ) Net income / (loss) - Operating LLC 16,867 (432 ) 426 16,861 Less: Net income / (loss) attributable to the convertible non-controlling interest 12,205 (313 ) 308 12,200 Net income / (loss) attributable to Cohen & Company Inc. $ 4,662 $ (119 ) $ 118 $ 4,661 F-21 As of December 31, 2020, the Operating LLC's total investment in Shift of $36,395 is included as a component of other investments, at fair value in the consolidated balance sheet. Offsetting this is $1,337 included as other investments sold, not yet purchased and $16,686 of non-controlling interest in the consolidated balance sheet related to shares of Shift held in consolidated entities that are distributable to the non-controlling interest holders. Therefore, the Operating LLC's share of the consolidated investment in Shift as of December 31, 2020 was $18,372. INSU Acquisition Corp II ("Insurance SPAC II") The Operating LLC, is the manager of Insurance Acquisition Sponsor II, LLC (“IAS II”) and Dioptra Advisors II, LLC (“Dioptra II” and, together with IAS II, the “Insurance SPAC II Sponsor Entities”). The Insurance SPAC II Sponsor Entities are sponsors of INSU Acquisition Corp. II (“Insurance SPAC II”), a blank check company that sought to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (each a “Insurance SPAC II Business Combination”). On November 24, 2020, Insurance SPAC II entered into an Agreement and Plan of Merger (the “Insurance SPAC II Merger Agreement”) with INSU II Merger Sub Corp., a Delaware corporation and direct wholly owned subsidiary of Insurance SPAC II (“Insurance SPAC II Merger Sub”), and MetroMile, Inc., a Delaware corporation (currently named MetroMile Operating Company)(“MetroMile”). The Insurance SPAC II Merger Agreement provides for, among other things, the acquisition of MetroMile by Insurance SPAC II pursuant to the proposed merger of Insurance SPAC II Merger Sub with and into MetroMile with MetroMile continuing as the surviving entity and a direct wholly owned subsidiary of Insurance SPAC II (the “Insurance SPAC II Merger”). On February 9, 2021, the Insurance SPAC II Merger was consummated and Insurance SPAC II changed its name to MetroMile. Upon completion of the Insurance SPAC II Merger, the Insurance SPAC II Sponsor Entities received a total of 6,669,667 founder shares and 452,500 placement units. Each placement unit consists of one share of Insurance SPAC II Common Stock and one-third of one warrant (the “Insurance SPAC II Warrant”). Each whole Insurance SPAC II Warrant entitles the holder to purchase one share of Insurance SPAC II Common Stock for $11.50 per share. Of the 6,669,667 founders shares, (i) 1,569,333 founder shares are freely transferable and saleable at the closing as of the Insurance SPAC II Merger, (ii) 2,550,167 founder shares will become transferable and saleable at such time as MetroMile's stock price is greater than $15.00 per share for any period of 20 trading days out of 30 consecutive trading days; (iii) 2,550,167 founder shares will become transferable and saleable at such time as MetroMile's stock price is greater than $17.00 per share for any period of 20 trading days out of 30 consecutive trading days. The Company currently consolidates the Insurance SPAC II Sponsor Entities and prior to the Insurance SPAC II Merger treated its investment in the Insurance SPAC II as an equity method investment. Effective upon the closing of the Insurance SPAC II Merger on February 9, 2021, the Company reclassified its equity method investment in the Insurance SPAC II to other investments, at fair value and adopted fair value accounting for the investment in MetroMile, resulting in an amount of principal transaction revenue derived from the (i) the Sponsor Shares retained by the Insurance SPAC II Sponsor Entities described in the previous paragraph; (ii) the trading share price of MetroMile Common Stock and the MetroMile Warrants; and (iii) fair value discounts related to the share sale restrictions on the Sponsor Shares. Upon recognition of the principal transaction revenue described above, the Company recorded non-controlling interest expense or compensation expense related to the amount of Sponsor Shares distributable to the non-controlling interest holders in the Insurance SPAC II Sponsor Entities. If the non-controlling interest holder is an employee of the Company, the expense is recorded as compensation. Otherwise, the expense is non-controlling interest expense. Of the Sponsor Shares retained by the Insurance SPAC II Sponsor Entities, the amount to be allocable to the Operating LLC is (i) 765,833 founder shares that are transferable and saleable at the closing of the Insurance SPAC II Merger, (ii) 1,244,479 founder shares that will become transferable and saleable at such time as MetroMile's stock price is greater than $15.00 per share for any period of 20 trading days out of 30 consecutive trading days; (iii) 1,244,479 founder shares that will become transferable and saleable at such time as MetroMile's stock price is greater than $17.00 per share for any period of 20 trading days out of 30 consecutive trading days. As of December 31, 2020, the Company had a total equity method investment in Insurance SPAC II of $4,064 which was included as a component of investment in equity method affiliates in the Company's consolidated balance sheet. Offsetting this amount was non-controlling interest of $4,295 which was included as a component of non-controlling interest in the Company's consolidated balance sheet. Therefore, the net carrying value of the Company's investment in Insurance SPAC II was $(231) as of December 31, 2020. F-22 INSU Acquisition Corp III ("Insurance SPAC III") The Operating LLC, is the manager of Insurance Acquisition Sponsor III, LLC (“IAS III”) and Dioptra Advisors III, LLC (together with IAS III, the “Insurance SPAC III Sponsor Entities”). On December 22, 2020, INSU Acquisition Corp III completed the sale of 25,000,000 units (the “Insurance SPAC III Units”) in its initial public offering which included 3,200,000 units issued pursuant to the underwriters’ over-allotment option. Each Insurance SPAC III Unit consists of one share of Class A common stock, par value $0.0001 per share (“Insurance SPAC III Common Stock”), and one-third of one warrant (each, an “Insurance SPAC III Warrant”), where each whole Insurance SPAC III Warrant entitles the holder to purchase one share of Insurance SPAC III Common Stock for $11.50 per share. The Insurance SPAC III Units were sold in the IPO at an offering price of $10.00 per Unit, for gross proceeds of $250,000 (before underwriting discounts and commissions and offering expenses). Pursuant to the underwriting agreement in the IPO, Insurance SPAC III granted the underwriters in the IPO (the “Insurance SPAC III Underwriters”) a 45-day option to purchase up to 3,270,000 additional Insurance SPAC III Units solely to cover over-allotments, if any; and on December 21, 2020, the Insurance SPAC III Underwriters notified the Company that they were partially exercising the over-allotment option for 3,200,000 units and waiving the remainder of the over-allotment option. Immediately following the completion of the IPO, there were an aggregate of 34,100,000 shares of Insurance SPAC III Common Stock issued and outstanding. If the Insurance SPAC III fails to consummate a business combination within the first 24 months following the IPO, its corporate existence will cease except for the purposes of winding up its affairs and liquidating its assets. The Insurance SPAC III Sponsor Entities purchased an aggregate of 575,000 of the placement units in a private placement that occurred simultaneously with the IPO for an aggregate of $5,750 or $10.00 per placement unit. Each placement unit consists of one share of Insurance SPAC III Common Stock and one-third of one warrant (the “Insurance SPAC III Placement Warrant”). The Insurance SPAC III placement units are identical to the Insurance SPAC III Units sold in the IPO except (i) the shares of Insurance SPAC III Common Stock issued as part of the placement units and the Insurance SPAC III Warrants will not be redeemable by Insurance SPAC, III (ii) the Insurance SPAC III Warrants may be exercised by the holders on a cashless basis, and (iii) the shares of Insurance SPAC III Common Stock issued as part of the placement units, together with Insurance SPAC III Warrants, are entitled to certain registration rights. Subject to certain limited exceptions, the placement units (including the underlying Insurance SPAC III Warrants and Insurance SPAC III Common Stock and the shares of Insurance SPAC III Common Stock issuable upon exercise of Insurance SPAC III Warrants) will not be transferable, assignable or salable until 30 days after the completion of the Insurance SPAC III's initial business combination. A total of $250,000 of the net proceeds from the private placement and the IPO (including approximately $10,600 of the deferred underwriting commission from the IPO) were placed in a trust account. Except for the withdrawal of interest to pay taxes (or dissolution expenses if a business combination is not consummated), none of the funds held in the trust account will be released until the earlier of (i) the completion of Insurance SPAC III's initial business combination, (ii) in connection with a stockholder vote to amend Insurance SPAC III's amended and restated certificate of incorporation (A) to modify the substance or timing of the Insurance SPAC III's obligation to redeem 100% of its public shares if it does not complete an initial business combination within 24 months from the completion of the IPO or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity or (iii) the redemption of all of the Insurance SPAC III’s public shares issued in the IPO if Insurance SPAC III is unable to consummate an initial business combination within 24 months from the completion of the IPO. If Insurance SPAC III does not complete a business combination within the first 24 months following the IPO, the placement units will expire worthless. The Insurance SPAC III Sponsor Entities collectively hold 8,525,000 founder shares. Subject to certain limited exceptions, the founder shares will not be transferable or salable except (a) with respect to 25% of such shares, until consummation of a business combination, and (b) with respect to additional 25% tranches of such shares, when the closing price of Insurance SPAC III Common Stock exceeds $12.00, $13.50 and $17.00, respectively, for 20 out of any 30 consecutive trading days following the consummation of a business combination. Certain non-controlling interests in the Insurance SPAC III Sponsor Entities, including executive and key employees of the Operating LLC, purchased membership interests in the Insurance SPAC III Sponsor Entities and, in addition to having an interest in the Insurance SPAC III’s placement units discussed above, have an interest in Insurance SPAC III’s founder shares through such membership interests in the Insurance SPAC III Sponsor Entities. The number of the Insurance SPAC III’s founders shares in which such non-controlling interests in the Insurance SPAC III Sponsor Entities, including such executives and key employees of the Operating LLC, have an interest in through the Insurance SPAC III Sponsor Entities will not be finally and definitively determined until consummation of a business combination. The number of the Insurance SPAC III’s founder shares currently allocated to the Operating LLC is 4,467,500, but such number of founder shares will also not be finally and definitively determined until the consummation of a business combination. 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. Insurance Acquisition Sponsor III and its affiliates, including the Operating LLC, have also committed to loan Insurance SPAC III up to an additional $810 to cover operating and acquisition related expenses following the IPO. These loans will bear no interest and, if the Insurance SPAC III consummates a business combination in the required time frame, the loans are to be repaid from the funds held in Insurance SPAC III’s trust account. If Insurance SPAC III does not consummate a business combination in the required time frame, no funds from Insurance SPAC III's trust account can be used to repay the loans. As of December 31, 2020, the Company had a total equity method investment in Insurance SPAC III of $5,741 which was included as a component of investment in equity method affiliates in the Company's consolidated balance sheet. Partially offsetting this amount was non-controlling interest of $5,416 which was included as a component of non-controlling interest in the Company's consolidated balance sheet. Therefore, the net carrying value of our investment in Insurance SPAC III was $325 as of December 31, 2020. F-23 Other Recent Events COVID-19 / Impairment of Goodwill In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States and worldwide. The spread of COVID-19 has caused significant volatility in domestic and international markets. There is on-going uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies. While the Company cannot fully assess the impact COVID-19 will have on all of its operations at this time, there are certain impacts that the Company has identified: ● The unprecedented volatility of the financial markets experienced since March 2020, has caused the Company to operate JVB at a lower level of leverage than prior to the pandemic. Specifically, JVB has reduced the size of its GCF repo operations and the volume of its TBA trading. The Company determined that at its pre-pandemic levels in these businesses, it was exposed to a higher level of counterparty credit risk and was experiencing too much volatility in its available liquidity to conservatively meet capital requirements and margin calls in these businesses. The Company expects JVB to operate at lower volumes in both these businesses for an indefinite period of time, which could unfavorably impact the operating profitability of JVB. ● The financial market volatility, as well as the reduction in volumes in the GCF repo and TBA businesses, that resulted from COVID-19 required the Company to reassess the goodwill it had recorded related to JVB under the guidance of ASC 350. The Company determined that the fair value of JVB was less than the carrying value (including the goodwill). As a result, the Company recorded an impairment loss of $7,883 for the year ended December 31, 2020. See note 13. ● JVB’s mortgage group’s operations are centered on serving the financial needs of mortgage originators and institutions that invest in mortgage backed securities. Prolonged high unemployment could eventually impact mortgage originations and demand for and supply of mortgage backed securities, which may have a significant unfavorable impact on the revenue earned by JVB’s mortgage group. In 2021, medical professionals developed COVID-19 vaccines and governments began to distribute them globally, which is expected to reduce virus spread and further aid economic recovery. Despite the broad improvements, the Company will likely be impacted by the pandemic in other ways which the Company cannot reliably determine. The Company will continue to monitor market conditions and respond accordingly. The Company applied for and received a $2,166 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 the PPP beyond the applicable statute issued from time to time by government agencies and certain government officials. The Company was eligible for a PPP loan because it had fewer than 100 employees. Further, although the Company is a publicly traded company and is listed on the NYSE American stock exchange, the Company’s market capitalization is small relative to many other publicly traded companies, and the Company believed that it did not have access to the public capital markets at the time we applied for the and received a loan under the PPP. In part due to the PPP loan, the Company does not anticipate any significant workforce reduction or reductions in compensation levels in the near future. However, the Company will continue to carefully monitor revenue levels to assess whether compensatory or other cost-cutting measures might be necessary. On September 23, 2020, the Company applied for forgiveness of the PPP loan. As of the date of this report, the Company has not heard back regarding forgiveness of the PPP loan. See note 20. The 2020 Senior Notes On January 31, 2020, the Operating LLC entered into a note purchase agreement with JKD Capital Partners I LTD, a New York corporation (“JKD Investor”), and RN Capital Solutions LLC, a Delaware limited liability company (“RNCS”). The JKD Investor is owned by Jack DiMaio, the vice chairman of the Company’s board of directors, and his spouse. Pursuant to the note purchase agreement, JKD Investor and RNCS each purchased a senior promissory note in the principal amount of $2,250 (for an aggregate investment of $4,500). The senior promissory notes bear interest at a fixed rate of 12% per annum and mature on January 31, 2022. On February 3, 2020, pursuant to the note purchase agreement, the Operating LLC used the proceeds received from the issuance of the senior promissory notes to the JKD Investor and RNCS to repay in full all amounts outstanding under the senior promissory note, dated September 25, 2019, issued by the Company to Pensco Trust Company, Custodian fbo Edward E. Cohen IRA in the principal amount of $4,386 (the “Cohen IRA Note”). The Cohen IRA Note was included as a portion of the 2019 Senior Notes outstanding as of December 31, 2019. The Cohen IRA Note was fully paid and extinguished on February 3, 2020. Subsequent to this repayment, $2,400 of the 2019 Senior Notes remain outstanding and are held by EBC. On September 25, 2020, the Company amended and restated the 2019 Senior Notes to extend the maturity date of the remaining $2,400 to September 25, 2021. See note 20. DGC Trust/CBF Redeemable Financial Instrument On September 29, 2017, the Operating LLC entered into an investment agreement with CBF (the “CBF Investment Agreement”) and with the DGC Family Fintech Trust (the “DGC Trust”), a trust established by Daniel G. Cohen (the “DGC Trust Investment Agreement”), pursuant to which CBF and the DGC Trust agreed to invest $8,000 and $2,000, respectively, into the Operating LLC. As of September 25, 2020, the Company had outstanding investment balances of $6,500 and $2,000 related to the CBF Investment Agreement and the DGC Trust Investment Agreement, respectively. On September 25, 2020, the Operating LLC and CBF entered into Amendment No. 3 to Investment Agreement, which amended the CBF Investment Agreement (i) to extend the date thereunder pursuant to which the Company or CBF could cause a redemption of the Investment Balance from September 27, 2020 to January 1, 2021, and (ii) to state that no such redemption by the Company could be in violation of any loan agreement to which the Company was then a party. On September 30, 2020, the Company redeemed the DGC Trust Investment Agreement in full by making payment of $2,000 to the DGC Trust. On October 9, 2020 and effective October 15, 2020, the Operating LLC entered into Amendment No. 4 to Investment Agreement, which further amended the CBF Investment Agreement to, among other things, (A) decrease the “Investment Amount” under the CBF Investment Agreement from $6,500 to $4,000 in exchange for a one-time payment of $2,500 from the Operating LLC to CBF; and (B) provide that the term “Investment Return” (as defined in the CBF Investment Agreement) will mean an annual return equal to, (i) for any twelve-month period following September 29, 2020 (each, an “Annual Period”) in which the revenue of the business of JVB (“Revenue of the Business”), is greater than zero, the greater of 20% of the Investment Amount or 9.4% of the Revenue of the Business, or (ii) for any Annual Period in which the Revenue of the Business is zero or less than zero, 3.75% of the Investment Amount. Prior to the Investment Agreement Amendment, the term “Investment Return” under the CBF Investment Agreement was defined as (A) with respect to any Annual Period in which the Revenue of the Business was greater than zero, the greater of 20% of the Investment Amount or 15.2% of the Revenue of the Business, or (ii) for any Annual Period in which the Revenue of the Business was zero or less than zero, 3.75% of the Investment Amount. The Company made the $2,500 payment to CBF on October 15, 2020. Furthermore, subsequent to December 31, 2020, the Company gave notice to CBF that it intends to redeem the remaining $4,000 investment on or around March 31, 2021. See note 19. F-24 ViaNova Capital Group LLC In 2018, the Company formed a wholly-owned subsidiary, ViaNova Capital Group LLC (“ViaNova”), for the purpose of building a residential transition loan (“RTL”) business. RTLs are small balance commercial loans that are secured by first lien mortgages used by professional investors and real estate developers to finance the purchase and rehabilitation of residential properties. On November 20, 2018, ViaNova entered into a Warehousing Credit and Security Agreement with LegacyTexas Bank (the “LegacyTexas Credit Facility”) with an effective date of November 16, 2018. The LegacyTexas Credit Facility was amended on May 4, 2019 and again on September 25, 2019 and October 28, 2019. The LegacyTexas Credit Facility supported the buying, aggregating, and distributing of RTLs performed by the business of ViaNova. On March 19, 2020, ViaNova received a notice of default from LegacyTexas Bank regarding the LegacyTexas Credit Facility, stating that ViaNova’s unrestricted cash balance was less than the amount required. Also, on March 19, 2020, ViaNova received notice from LegacyTexas Bank that it had suspended funding all “alternative” loans for all of their clients, including the RTL loans that are the subject of the LegacyTexas Credit Facility. Since March 19, 2020, ViaNova has repaid all outstanding indebtedness under the LegacyTexas Credit Facility and stopped acquiring new RTLs. On August 22, 2020, the Company sold its investment in ViaNova to the former managing director of ViaNova in exchange for the managing director's assumption of all of ViaNova's liabilities and a potential earn out of up to $500. In conjunction with the sale, the Company transferred one RTL representing a par value of $2,300 and a fair value of $2,243 from ViaNova to JVB with a maturity date of January 1, 2021. The RTL was included in other investments, at fair value in the consolidated balance sheets as of December 31, 2020. The RTL was repaid in full in 2021. CCFEL  In June 2018, in response to the uncertainty surrounding Brexit, the Company formed a new subsidiary, CCFEL in Ireland, for the purpose of seeking to become regulated to perform asset management and capital markets activities in Ireland and the European Union. In April 2019, CCFEL received authorization from the CBI under the European Union (Markets in Financial Instruments) Regulations 2017 to provide investment services in respect of certain financial instruments including transferable securities, money-market instruments, units in collective investment undertakings and various option, futures, swaps, forward rate agreements, and other derivative contracts (“Financial Instruments”). The services for which CCFEL received authorization include the receipt and transmission of orders in relation to Financial Instruments, the execution of orders on behalf of clients, portfolio management, investment advice and investment research, and financial analysis. In addition, CCFEL applied for approval of a French branch, which approval was granted by the CBI and the branch was authorized by the French regulators in April 2019. Following authorization of the French branch of CCFEL, various contracts originally entered into by CCFL were novated to the French branch of CCFEL. The novation of contracts was completed on July 1, 2019.   Investment in CK Capital Partners B.V. and AOI In December 2019, the Company acquired a 45% interest in CK Capital Partners B.V. (“CK Capital”), a private company incorporated in the Netherlands. CK Capital provides asset and investment advisory services relating to real estate holdings. The Company purchased this interest for $18 (of which $17 was purchased from an entity controlled by the Company’s chairman, Daniel G. Cohen). In addition, the Company also acquired a 10% interest in Amersfoot Office Investment I Cooperatief U. A. (“AOI”), a real estate holding company, for $1 and subsequently invested $558 in AOI during 2019. The investments in AOI and CK Capital Partners are included as equity method investments on the consolidated balance sheets. See notes 12 and 31. Securities Purchase Agreement – Purchase of IMXI shares On December 30, 2019, the Company entered into a securities purchase agreement (the “SPA”) with Daniel G. Cohen, the Company’s chairman, and the “DGC Trust. In connection with the SPA, the Company purchased 662,361 shares of International Money Express, Inc. (“IMXI”), an unrelated publicly traded company, in the aggregate from Mr. Cohen and the DGC Trust. Of the 662,361 shares, 134,317 shares were unrestricted and 528,044 were subject to sale restrictions. Of the restricted shares, 264,021 of the restricted shares become freely tradeable once IMXI’s share price equals or exceeds $15.00 per share for 20 out of 30 consecutive trading days or upon a change of control of IMXI. The remaining 264,023 of restricted shares become freely tradeable once IMXI’s share price equals or exceed $17.00 per share for 20 out of 30 consecutive trading days or upon a change of control of IMXI. IMXI’s share price closed at $11.89 on December 30, 2019. In exchange for the IMXI shares, the Operating LLC issued 22,429,541 units of membership interests to Mr. Cohen and the DGC Trust. These units of membership interests represent an equity interest in the Operating LLC. The units of membership interests are redeemable and, if redeemed, Cohen & Company Inc. can determine to have the Operating LLC pay cash in exchange for the units or Cohen & Company Inc. may instead issue additional Common Shares on a 1 for 10 basis in exchange for the units. Therefore, the units may be convertible into 2,242,954 Common Shares. The Company obtained a third-party valuation of the IMXI shares and determined the value of these shares upon closing of the SPA was $7,779. The Company recorded this transaction as an increase in other investments, at fair value of $7,779 and an increase in non-controlling interest of $7,779 in its consolidated financial statements. In connection with the SPA, Cohen & Company Inc. issued 22,429,541 series F preferred shares to Mr. Cohen and the DGC Trust. These preferred shares are non-economic voting only shares and are entitled to vote on matters on a 1 for 10 basis (i.e. the total votes represented by the series F preferred shares are 2,242,954). The series F preferred shares do not participate in earnings or dividends. Immediately prior to the effectiveness of the SPA, Cohen & Company Inc. owned 67.8% of the outstanding units of membership interests of the Operating LLC. Immediately subsequent to the effectiveness of the SPA, Cohen & Company Inc. owned 28.75% of the outstanding units of membership interests of the Operating LLC. As part of the SPA, Mr. Cohen and the DGC Trust agreed to grant to Cohen & Company Inc. a proxy to vote, at any meeting, the number of the units of membership interests owned by Mr. Cohen and the DGC Trust so that Cohen & Company Inc. would have 51.00% of the total votes eligible to vote at such meeting (the “SPA Proxy”). The actual units that are subject to this proxy are determined at any meeting of the Operating LLC that a vote is held as follows: First, the total number of units of membership interests entitled to vote is determined. Second, the total number of units entitled to vote is multiplied by 51% and the total units of membership interests held by Cohen & Company Inc. is subtracted from this amount. The result represents the total number of units of membership interests owned by Mr. Cohen and the DGC Trust that will be subject to the SPA Proxy and that Cohen & Company Inc. will be entitled to vote. The amount of units subject to the proxy is allocated between Mr. Cohen and DGC Trust on a pro rata allocation. Therefore, subsequent to the SPA and taking into account the SPA Proxy, Cohen & Company Inc. owned 28.75% of the economic interests of the Operating LLC and controls 51.00% of the voting interests of the Operating LLC. Because Cohen & Company Inc. continues to maintain voting control of the Operating LLC, Cohen & Company Inc. will continue to consolidate the Operating LLC in its consolidated financial statements. However, earnings shall be allocated to Cohen & Company Inc. and the other members of the Operating LLC based on their respective economic interests. Accordingly, the non-controlling interest percentage reflected in the consolidated statement of operations will change from 32.22% immediately prior to the effectiveness of the SPA to 71.25% immediately subsequent to the effectiveness of the SPA. See notes 3, 21, and 31.  F-25 Table of Contents 5. NET TRADING  Net trading consisted of the following in the periods presented.  NET TRADING (Dollars in Thousands) For the Year Ended December 31, 2020 2019 2018 Net realized gains / (losses)- trading inventory $ 31,269 $ 24,118 $ 20,914 Net unrealized gains / (losses)-trading inventory 2,076 (1,320 ) 1,236 Gains and losses 33,345 22,798 22,150 Interest income-trading inventory 7,759 6,921 5,040 Interest income - RTLs - 236 - Interest income-receivables under resale agreements 98,710 176,336 67,846 Interest income 106,469 183,493 72,886 Interest expense-securities sold under agreement to repurchase (65,030 ) (164,851 ) (63,707 ) Interest expense-LegacyTexas Credit Facility (39 ) (100 ) - Interest expense-margin payable (1,134 ) (3,168 ) (2,031 ) Interest expense (66,203 ) (168,119 ) (65,738 ) Net trading $ 73,611 $ 38,172 $ 29,298  Trading inventory includes investments classified as investments-trading as well as trading securities sold, not yet purchased. During 2019, RTLs were accounted for at lower of cost or market and included as a component of other assets and the interest income related to those loans was shown separately in the table above. Effective January 1, 2020, in connection with the adoption of ASC 326, the Company began accounting for RTLs at fair value and included them as a component of investments-trading. Income earned on RTLs in included in interest income-trading inventory in the table above. In conjunction with the sale of ViaNova, the Company retained one loan, a first mortgage loan on a residential property and transferred the loan to JVB. As of December 31, 2020, this loan is included in other investments, at fair value on the consolidated balance sheets; subsequent income earned on this loan is included in principal transactions and other income in the consolidated statement of operations. See note 6 for discussion of margin payable. See note 11 for discussion of receivables under resale agreements and securities sold under agreements to repurchase. See note 20 for discussion of LegacyTexas Credit Facility. F-26 Table 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) As of December 31, 2020 2019 Deposits with clearing organizations $ 250 $ 250 Unsettled regular way trades, net 2,961 12,170 Receivable from clearing organizations 49,706 83,712 Receivables from brokers, dealers, and clearing agencies $ 52,917 $ 96,132  Amounts payable to brokers, dealers, and clearing agencies consisted of the following.    PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) As of December 31, 2020 2019 Margin payable $ 156,678 $ 208,441 Due to clearing agent - 32,820 Payables to brokers, dealers, and clearing agencies $ 156,678 $ 241,261 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 unsettled securities transactions are recorded net in receivables from or payables to brokers, dealers, and clearing agencies on the Company’s consolidated balance sheets. The related amounts receivable and payable for unsettled securities transactions are recorded net in receivables from or payables to brokers, dealers, and clearing agencies on the Company’s consolidated balance sheets. Receivables from clearing organizations are primarily comprised of (i) cash received by the Company upon execution of short trades that is restricted from withdrawal by the clearing agent; and (ii) cash deposited with the FICC to support the Company’s General Collateral Funding (“GCF”) matched book repo business.  Margin payable represents amounts borrowed from Pershing, LLC to finance the Company’s trading portfolio. Substantially, all of the Company’s investments-trading and deposits with clearing organizations serve as collateral for the margin payable. See note 5 for interest expense incurred on margin payable.  Due to clearing agent represents amounts due to Bank of New York under the Company’s intra-day and overnight lending facility supporting the GCF matched repo business. See note 11. F-27 Table of Contents 7. OTHER RECEIVABLES  Other receivables consisted of the following.    OTHER RECEIVABLES (Dollars in Thousands) As of December 31, 2020 2019 Cash collateral due from counterparties $ 225 $ 41,172 Asset management fees receivable 879 1,159 Accrued interest and dividend receivable 2,275 3,549 Revenue share receivable 125 150 Miscellaneous other receivables 425 595 Other receivables $ 3,929 $ 46,625 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 form of 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 return of a portion of their collateral. In some cases, the Company will return to them cash instead of securities. In that case, the Company includes the cash returned as a component of other receivables (see above). When the Company enters into repo transactions, the Company provides collateral to the Company’s repo counterparties in excess of the principal balance of the repo. 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 Company includes it as a component of other receivables (see above).  Asset management fees receivables are of a routine and short-term nature. These amounts are generally accrued monthly and paid on a monthly or quarterly basis. See note 3-N regarding asset management fees accrued.  Accrued interest and dividends receivable represents interest and dividends accrued on the Company’s investment securities included as a component of investments-trading or other investments, at fair value. Interest payable on securities sold, not yet purchased or other investments 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 revenue generated from an entity in which the Company receives a share of the entity’s revenue. Other receivables represent other miscellaneous receivables that are of a short-term nature.  F-28 Table of Contents 8. FINANCIAL INSTRUMENTS  Investments—Trading  Investments-Trading consisted of the following.  INVESTMENTS - TRADING (Dollars in Thousands) As of December 31, 2020 2019 U.S. government agency MBS and CMOs $ 162,031 $ 196,146 U.S. government agency debt securities 6,904 14,680 RMBS 14 15 U.S. Treasury securities 607 11,105 ABS 1 100 SBA loans 2,742 27,634 Corporate bonds and redeemable preferred stock 36,388 38,503 Foreign government bonds 659 844 Municipal bonds 19,400 13,737 Certificates of deposit 70 841 Derivatives 13,717 3,686 Equity securities 428 561 Investments-trading $ 242,961 $ 307,852 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) As of December 31, 2020 2019 U.S. Treasury securities $ 3,348 $ 16,827 Corporate bonds and redeemable preferred stock 29,206 58,083 Municipal bonds 20 20 Derivatives 11,822 3,017 Equity securities 43 - Trading securities sold, not yet purchased $ 44,439 $ 77,947 The Company tries to manage its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similar fixed rate securities. See note 5 for realized and unrealized gains recognized on investments-trading and trading securities sold, not yet purchased. F-29 Table of Contents Other Investments, at Fair Value  Other investments, at fair value consisted of the following.  OTHER INVESTMENTS, AT FAIR VALUE (Dollars in Thousands) As of December 31, 2020 Cost Carrying Value Unrealized Gain / (Loss) Equity securities $ 15,605 $ 51,593 $ 35,988 Corporate bonds and redeemable preferred stock 479 476 (3 ) Subordinated Notes 1,485 1,519 34 RTLs 2,243 2,300 57 U.S. Insurance JV 1,168 1,564 396 SPAC Funds 779 984 205 Residential loans 119 104 (15 ) Other investments, at fair value $ 21,878 $ 58,540 $ 36,662 OTHER INVESTMENTS SOLD, NOT YET PURCHASED (Dollars in Thousands) As of December 31, 2020 Cost Carrying Value Unrealized Gain / (Loss) Derivatives $ 338 $ 233 105 Equity securities 7,223 7,182 41 Other investments sold, not yet purchased $ 7,561 $ 7,415 $ 146 OTHER INVESTMENTS, AT FAIR VALUE (Dollars in Thousands) As of December 31, 2019 Cost Carrying Value Unrealized Gain / (Loss) Equity securities $ 8,119 $ 8,875 $ 756 Corporate bonds and redeemable preferred stock 479 477 (2 ) CLOs 2,894 2,522 (372 ) U.S. Insurance JV 2,048 2,223 175 SPAC Funds 646 668 22 Residential loans 129 99 (30 ) Other investments, at fair value $ 14,315 $ 14,864 $ 549   F-30 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 for electing 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, previously classified as available for sale securities, including the assessment as to whether the declines are temporary in nature and to further remove an element of management judgment.  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); and • investments in residential 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 in principal transactions and other income in the consolidated statements of operations. All of the investments for which the Company has elected the fair value option are included as a component of other investments, at fair value in the consolidated balance sheets. The Company recognized net gains (losses) of $43,413 , $1,080, and $2,616 related to changes in fair value of investments that are included as a component of other investments, at fair value during the years ended December 31, 2020 , 2019 , and 2018 , respectively. The Company recognized net gains (losses) of $1,063 , $0, and $0 related to changes in fair value of investments that are included as a component of other investments, sold not purchased during the years ended December 31, 2020 , 2019 , and 2018 , respectively.  Fair Value Measurements  In accordance with FASB 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 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the valuation hierarchy under FASB ASC 820 are described below.  Level 1 Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.  Level 2 Financial assets and liabilities whose values 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 whose inputs are derived, other than quoted prices, are observable for substantially the full term of the asset or liability; or  4. Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.  Level 3 Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing 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 within which 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 the asset 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 presented in the tables below may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs.  F-31 Table of Contents The following tables present information about the Company’s assets and liabilities measured at fair value as of December 31, 2020 and 2019 and indicates the valuation hierarchy of the valuation techniques utilized by the Company to determine such fair value.  FAIR VALUE MEASUREMENTS ON A RECURRING BASIS As of December 31, 2020 (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: U.S. government agency MBS and CMOs $ 162,031 $ - $ 162,031 $ - U.S. government agency debt securities 6,904 - 6,904 - RMBS 14 - 14 - U.S. Treasury securities 607 607 - - ABS 1 - 1 - SBA loans 2,742 - 2,742 - Corporate bonds and redeemable preferred stock 36,388 - 36,388 - Foreign government bonds 659 - 659 - Municipal bonds 19,400 - 19,400 - Certificates of deposit 70 - 70 - Derivatives 13,717 - 13,717 - Equity securities 428 - 428 - Total investments - trading $ 242,961 $ 607 $ 242,354 $ - Other investments, at fair value: Equity securities $ 51,593 $ 17,422 $ 34,171 $ - Corporate bonds and redeemable preferred stock 476 - 476 - Subordinated Notes 1,519 - 1,519 - RTLs 2,300 - 2,300 - Residential loans 104 - 104 - 55,992 $ 17,422 $ 38,570 $ - Investments measured at NAV (1) 2,548 Total other investments, at fair value $ 58,540 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 3,348 $ 3,348 $ - $ - Corporate bonds and redeemable preferred stock 29,206 - 29,206 - Municipal bonds 20 - 20 - Derivatives 11,822 - 11,822 - Equity securities 43 43 - - Total trading securities sold, not yet purchased $ 44,439 $ 3,391 $ 41,048 $ -  Other investments, sold not yet purchased: Derivatives $ 233 $ 233 $ - $ - Equity securities 7,182 7,182 - - $ 7,415 $ 7,415 $ - $ - (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 SPAC Fund. The U.S. Insurance JV invests in USD denominated debt issued by small insurance and reinsurance companies. The SPAC Fund invest in equity securities of SPACs. According to ASC 820, these investments are not categorized within the valuation hierarchy.  F-32 Table of Contents  FAIR VALUE MEASUREMENTS ON A RECURRING BASIS As of December 31, 2019 (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: U.S. government agency MBS and CMOs $ 196,146 $ - $ 196,146 $ - U.S. government agency debt securities 14,680 - 14,680 - RMBS 15 - 15 - U.S. Treasury securities 11,105 11,105 - - ABS 100 - 100 - SBA loans 27,634 - 27,634 - Corporate bonds and redeemable preferred stock 38,503 - 38,503 - Foreign government bonds 844 - 844 - Municipal bonds 13,737 - 13,737 - Certificates of deposit 841 - 841 - Derivatives 3,686 - 3,686 - Equity securities 561 - 561 - Total investments - trading $ 307,852 $ 11,105 $ 296,747 $ - Other investments, at fair value: Equity Securities $ 8,875 $ 2,009 $ 6,866 $ - Corporate bonds and redeemable preferred stock 477 - 477 - CLOs 2,522 - - 2,522 Residential loans 99 - 99 - 11,973 $ 2,009 $ 7,442 $ 2,522 Investments measured at NAV (1) 2,891 Total other investments, at fair value $ 14,864 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 16,827 $ 16,827 $ - $ - Corporate bonds and redeemable preferred stock 58,083 - 58,083 - Municipal bonds 20 - 20 - Derivatives 3,017 - 3,017 - Total trading securities sold, not yet purchased $ 77,947 $ 16,827 $ 61,120 $ - (1) As a practical expedient, the Company uses NAV per share (or its equivalent) to measure the fair value of its investments in the U.S. Insurance JV and the SPAC Fund. The U.S. Insurance JV invests in USD denominated debt issued by small insurance and reinsurance companies. The SPAC Fund invests in equity securities of SPACs. According to FASB ASC 820, these investments are not categorized within the valuation hierarchy.  F-33 Table 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 the valuation hierarchy of the estimate. The discussion that follows applies regardless of whether the instrument is included in investments-trading; other investments, at fair value; other investments sold, not yet purchased; or trading securities sold, not yet purchased. 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 market approach. 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 prices obtained from third-party pricing services. Non-callable U.S. government agency debt securities are generally classified within level 1 and callable U.S. government agency debt securities are classified within level 2 of the valuation hierarchy.  RMBS : 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 market approach. The Company generally classifies the fair value of these securities based on third-party quotations 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 or market 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.  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 card receivables, 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 of at least two broker-dealers is used or market price quotations from third-party pricing services is used, these interests in securitizations will generally be classified within level 2 of the valuation hierarchy. These valuations are based on a market approach. The independent market quotations from broker-dealers are generally nonbinding. The Company seeks quotations from broker-dealers that historically have actively traded, monitored, issued, and been knowledgeable about the interests in securitizations. The Company generally believes to the extent that it (i) receives two quotations in a similar range from broker-dealers knowledgeable about these interests in securitizations and (ii) considers the broker-dealers gather and utilize observable market information such as new issue activity in the primary market, trading activity in the secondary market, credit spreads versus historical levels, bid-ask spreads, and price consensus among market participants and sources, then classification within level 2 of the valuation hierarchy is appropriate. In the absence of two broker-dealer market quotations, a single broker-dealer market quotation may be 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 management may be used, which are based on an income approach. These models prepared by the Company’s management include estimates and the valuations derived from them could differ materially from amounts realizable in an open market exchange. Each CLO and CDO position is evaluated independently taking into consideration available comparable market levels, underlying collateral performance and pricing, deal structures, and liquidity. Fair values based on internal valuation models prepared by the Company’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 make a number of assumptions, including assumptions about the future of interest rates, discount rates, and the timing of cash flows. The assumptions the Company applies are specific to each security. Although the Company may rely on internal calculations to compute the fair value of certain interest in securitizations, the Company requests and considers indications of fair value from third-party pricing services to assist in the valuation process.  SBA Loans : SBA loans include loans and SBA interest only strips. In the case of loans, the Company generally values these securities using third-party quotations such as unadjusted broker-dealer quoted prices, internal valuation models using observable inputs, or market price quotations from third-party pricing services. The Company generally classifies these investments within level 2 of the valuation hierarchy. These valuations are based on a market approach. SBA interest only strips do not trade in an active market with readily available prices. Accordingly, the Company generally uses valuation models to determine fair value and classifies the fair value of the SBA interest only strips within level 2 or level 3 of the valuation hierarchy depending on whether the model inputs are observable or not.  Corporate Bonds and Redeemable Preferred Stock : The Company uses recently executed transactions or third-party quotations from independent pricing services to arrive at the fair value of its investments in corporate bonds and redeemable preferred stock. These valuations are based on a market approach. The Company generally classifies 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 active markets (for example with redeemable preferred stock), the Company classifies the fair value of these securities within level 1 of the valuation hierarchy.  Foreign Government Bonds : The fair value of foreign government bonds is estimated using valuations provided by third-party pricing services and classifies the fair value within level 2 of the valuation 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. The Company 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 where the Company is unable to obtain reliable market price quotations from third-party pricing services, the Company will use its own internal valuation models. In these cases, the Company will classify such securities as level 3 within the valuation hierarchy until it is able to obtain third-party pricing.  F-34 Table of Contents Certificates of Deposit : The fair value of certificates of deposit is estimated using valuations provided by third-party pricing services. The Company classifies the fair value of certificates of deposit within level 2 of the valuation hierarchy.  Residential Loans : Management utilizes home price indices or market indications to value the residential loans. The Company classifies the fair value of these loans within level 2 in the valuation hierarchy. Residential transition loans : The Company uses valuation models prepared by management which are based on an income approach. These models include estimates, and the valuations derived from them could differ materially from amounts realizable in an open market exchange. Fair values based on internal valuation models prepared by the Company’s management are generally classified within level 3 of the valuation hierarchy. Equity Securities : The fair value of equity securities that represent unrestricted investments in publicly traded companies and (common or preferred shares, options, warrants, and other equity investments) exchange traded funds are determined using the closing price of the security as of the reporting date. These are securities that are traded on a recognized liquid exchange and the Company classifies their fair value within level 1 of the valuation hierarchy. The fair value of equity securities that represent restricted investments in publicly traded companies are determined using the closing price of the underlying security at the reporting date adjusted for a discount in fair value due to the sale restriction. If the restriction is based on the underlying security trading above certain threshold price for a certain period of time, the Company performs a Monte Carlo simulation to determine the appropriate discount. If the restriction is only time based, the Company will use an internal model to value the shares. These securities are classified within level 2 of the valuation hierarchy. The Company may own an option or warrant where the underlying security is publicly traded but the option or warrant is not. In those cases, the Company may determine fair value using a Black-Scholes model and will generally classify their fair value within level 2 within the valuation hierarchy. The Company may own an equity interest in a private company. In those cases, the Company may determine fair value by preparing a model. The model may be either a market based or income-based model, whichever is considered the most appropriate in each case. The fair value will be classified within level 2 if the inputs to the model are observable. Otherwise, it will be classified within level 3 of the valuation hierarchy.  Subordinated Notes: The Company uses recently executed transactions or third-party quotations from independent pricing services to arrive at the fair value of its investments in subordinated notes. These valuations are based on a market approach. The Company generally classifies the fair value of these bonds within level 2 of the valuation hierarchy. Derivatives: Options The Company may acquire publicly traded options from time to time. These values are based on market prices in active markets and are generally valued as level 2 in the valuation hierarchy.  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 currency forward contracts is based on current quoted market prices. Valuation adjustments are not applied. These are classified within level 1 of the valuation hierarchy. See note 10.  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-party pricing services. TBAs and other forward agency MBS contracts are generally classified within level 2 of the valuation hierarchy. If there is limited transaction activity or less transparency to observe market-based inputs to valuation models, TBAs and other forward agency MBS contracts are classified within level 3 of the valuation hierarchy. U.S. government agency MBS and CMOs include TBAs and other forward agency MBS contracts. Unrealized gains on TBAs and other forward agency MBS contracts are included in investments-trading on the Company’s consolidated balance sheets and unrealized losses on TBAs and other forward agency MBS contracts 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 frame, the Company will account for that purchase or sale on the settlement 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 a purchase commitment or sale commitment). The Company will record an unrealized gain or unrealized loss on the derivative for the difference between the fair value of the underlying financial instrument as of the reporting date and the agreed upon transaction price. The Company will determine the fair value of the financial instrument using the methodologies described above. F-35 Table of Contents Level 3 Financial Assets and Liabilities  Financial Instruments Measured at Fair Value on a Recurring Basis  The following table present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized level 3 inputs to determine fair value.    LEVEL 3 ROLLFORWARD (Dollars in thousands) Year Ended December 31, 2020 2019 Beginning of Period $ 2,522 $ 2,756 Net trading (57 ) - Gains & losses (1) (604 ) (123 ) Accretion of income (1) 124 414 Purchases 638 - Sales and returns of capital (5,601 ) (525 ) Reclassification of RTLs 5,278 - Transfer out of Level 3 (2) (2,300 ) - End of Period $ - $ 2,522 Change in unrealized gains / (losses) (3) $ - $ (4 )  (1) Gains and losses on and accretion of income on other investments, at fair value are recorded as a component of principal transactions and other income in the consolidated statements of operations. (2) RTL was reclassified from level 3 to level 2 due to availability of observable inputs. (3) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period.  The following tables provide the quantitative information about level 3 fair value measurements as December 31, 2019.     QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant December 31, 2019 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 2,522 Discounted Cash Flow Model Yield 17.9 % 16.9% - 19.2% Duration (years) 5.8 5.3 - 6.5 Default rate 2.0 % 2.0% - 2.0%  Sensitivity of Fair Value to Changes in Significant Unobservable Inputs  For recurring fair value measurements categorized within level 3 of the valuation hierarchy, the sensitivity of the fair value measurement to changes in significant unobservable inputs and interrelationships between those unobservable inputs (if any) are described below.  • CLOs: The Company uses a discounted cash flow model to determine the fair value of its investments in CLOs. Changes in the yield, duration, and default rate assumptions would impact the fair value determined. The longer the duration, the lower the fair value of the investment. The higher the yield, the lower the fair value of the investment. The higher the default rate, the lower the fair value of the investment.  F-36 Table 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, 2020 and 2019 . FAIR VALUE MEASUREMENTS OF INVESTMENTS IN CERTAIN ENTITIES THAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT) (Dollars in thousands) December 31, 2020 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value U.S. Insurance JV (a) $ 1,564 $ 1,567 N/A N/A SPAC Funds (b) 984 N/A Quarterly after 1 year lock up 90 days $ 2,548 December 31, 2019 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value U.S. Insurance JV (a) $ 2,223 $ 817 N/A N/A SPAC Funds (b) 668 NA Quarterly after 1 year lock up 90 days $ 2,891 N/A – Not applicable.  (b) The U.S. Insurance JV invests in USD denominated debt issued by small and medium sized insurance and reinsurance companies. (c) The SPAC Funds invest in equity interests of SPACs. F-37 10. DERIVATIVE FINANCIAL INSTRUMENTS  The Company may, from time to time, enter into the following derivative instruments: Options  The Company may acquire publicly traded options from time to time.  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 time to time, hedge such exposure by using foreign currency forward contracts. The Company carries the foreign currency forward contracts at fair value and includes them as a component of other investments, at fair value in the Company’s consolidated balance sheets. As of December 31, 2020 , and 2019 , the Company had no outstanding foreign currency forward contracts.  EuroDollar Futures  The Company invests in floating rate investments that expose it to fluctuations in interest and, therefore, the Company may, from time to time, hedge such exposure using EuroDollar futures. The Company carries the EuroDollar future contracts at fair value and includes them as a component of investments-trading or trading securities sold, not yet purchased in the Company’s consolidated balance sheets. As of December 31, 2020 , and 2019 , the Company had no outstanding EuroDollar future contracts.  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 order to facilitate customer transactions. In order to mitigate exposure to market risk, the Company may enter into the purchase and sale of TBAs and other forward 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 loan originators) 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 securities sold, not yet purchased in the Company’s consolidated balance sheets. At December 31, 2020 , the Company had open TBA and other forward MBS purchase agreements in the notional amount of $1,706,834 and open TBA and other forward MBS sale agreements in the notional amount of $1,809,550 . At December 31, 2019 , the Company had open TBA and other forward agency MBS purchase agreements in the notional amount of $1,773,000 and open TBA and other forward agency MBS sale agreements in the notional amount of $1,874,194.  Other Extended Settlement Trades  When the Company buys or sells a financial instrument that will not settle in the regular time frame, the Company will account for that purchase and sale on the settlement date rather than the trade date. In those cases, the Company accounts for the transaction between trade date and settlement date as either a forward purchase commitment or a forward sale commitment, both considered derivatives. The Company will record an unrealized gain or unrealized loss on the derivative for the difference between the fair value of the underlying financial instrument as of the reporting date and the agreed upon transaction price. At December 31, 2020 , the Company had open forward purchase commitments in the notional amount of $365 . At December 31, 2019 , the Company had open forward purchase commitments in the notional amount of $1,526.  The following table presents the Company’s derivative financial instruments and the amount and location of the fair value (unrealized gain / (loss)) presented in the consolidated balance sheets as of December 31, 2020 and 2019 .   DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION (Dollars in Thousands) As of December 31, Derivative Financial Instruments Not Designated as Hedging Instruments Under ASC 815 Balance Sheet Classification 2020 2019 TBA and other forward agency MBS Investments-trading $ 13,717 $ 3,686 Other extended settlement trades Investments-trading - - TBA and other forward agency MBS Trading securities sold, not yet purchased (11,822 ) (3,017 ) Other extended settlement trades Trading securities sold, not yet purchased - - Derivatives, publicly traded options Other investments sold, not yet purchased (233 ) - $ 1,662 $ 669 F-38 Table 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 statement of operations.   DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) For the Year Ended December 31, Derivative Financial Instruments Not Designated as Hedging Instruments Under ASC 815 Income Statement Classification 2020 2019 2018 Foreign currency forward contracts Revenues-principal transactions and other income $ - $ 51 $ 87 Other extended settlement trades Revenues-net trading - (70 ) 60 TBA and other forward agency MBS Revenues-net trading 5,219 6,545 6,053 Derivatives, publicly traded options Other investments sold, not yet purchased 105 - - $ 5,324 $ 6,526 $ 6,200 F-39 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 obtaining collateral securities from that counterparty pursuant to a reverse repo. The Company will borrow money from another counterparty using the same collateral securities pursuant to a repo. The Company seeks to earn net interest income on these transactions. Currently, the Company categorizes its matched book repo business into two major groups: gestation repo and GCF repo.  Gestation Repo  Gestation repo involves entering into repo and reverse repo where the underlying collateral security represents a pool of newly issued mortgage loans. The borrowers (the reverse repo counterparties) are generally mortgage originators. The lenders (the repo counterparties) are a diverse group of the counterparties comprised of banks, insurance companies, and other financial institutions. The Company self-clears its gestation repo transactions.  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 Company has 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 (the reverse repo counterparties) are a diverse group of financial institutions including hedge funds, registered investment funds, REITs, and other similar counterparties. The lenders (the repo counterparties) are the FICC and other large financial institutions. The Company uses Bank of New York (“BONY”) as its settlement agent for its GCF repo matched book transactions. The Company is considered self-clearing for this business. In connection with the Company’s full netting membership of the FICC, the Company agreed to establish and maintain a committed line of credit in a minimum amount of $25,000, which it entered into with Fifth Third Financial Bank, N.A. (FT Financial) on April 25, 2018. This line of credit was subsequently amended. On October 28, 2020, the Company entered into a replacement credit facility with Byline Bank. See note 20.  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 an investment. Additionally, the Company may enter into repos to finance the Company’s securities positions held in inventory. These repo and reverse repo agreements are generally cleared on a bilateral or triparty basis; no clearing broker is involved. These transactions are not matched.  Repo Information  At December 31, 2020 and 2019 , the Company held reverse repos of $5,716,343 and $7,500,002 , respectively, and the fair value of securities and cash received as collateral under reverse repos was $5,885,656 and $7,769,693, respectively. As of December 31, 2020 , and 2019 , the reverse repo balance was comprised of receivables collateralized by 38 and 41 counterparties, respectively.  At December 31, 2020 and 2019 , the Company had repos of $5,713,212 and $7,534,443 , respectively, and the fair value of securities and cash collateral pledged as collateral under repos was $5,768,018 and $7,561,978, respectively. These amounts include collateral for reverse repos that were re-pledged as collateral for repos. Intraday and Overnight Lending Facility 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 facility allows for BONY to advance funds to JVB in order to facilitate the settlement of GCF repo transactions. The total committed amount at December 31, 2020 was $75,000. The current termination date of this facility is October 15, 2021. It is expected that this facility will be renewed for successive 364-day periods provided that the Company continues its GCF matched book repo business.  The BONY lending facility is structured so that advances are generally repaid before the end of each business day. However, if an advance is not repaid by the end of any business day, the advance is converted to an overnight loan. Intraday loans accrue interest at an annual rate of 0.12%. Interest is charged based on the number of minutes in a day the advance is outstanding. Overnight loans are charged interest at the base rate plus 3% on a daily basis. The base rate is the higher of the federal funds rate plus 0.50% or the prime rate in effect at that time. During the year ended December 31, 2020, the Company received no advances under the intraday lending facility. During the year ended December 31, 2019, advances of $32,818 were made under this facility. This draw plus accrued interest of $2, or $32,820, was outstanding as of December 31, 2019 and was included as a component of payable to brokers, dealers, and clearing agencies in the statement of financial condition. This amount was repaid in full in January 2020.  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 repo counterparty.  On the demand side, the Company does not consider its GCF repo business to be concentrated because the Company’s reverse repo counterparties are comprised of a diverse group of financial institutions.  On the supply side, the Company obtains a significant amount of its funds from the FICC. If the FICC were to reduce its repo lending activities or make significant adverse changes to the cost of such lending, the Company may not be able to replace the FICC funding, or if the Company does so, it may be at a higher cost of funding. Therefore, the Company considers its GCF repo 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 number of reverse repo counterparties. As of December 31, 2020 , and 2019 , the Company’s gestation reverse repos shown in the tables below represented balances from eleven and seven counterparties, respectively. The Company also has a limited number of repo counterparties in the gestation repo business. However, this is primarily a function of the limited number of reverse repo counterparties with whom the Company conducts this business rather than a reflection of a limited supply of funds. Therefore, the Company considers the gestation repo business to be concentrated on the demand side.  F-40 The total net revenue earned by the Company on its matched book repo business (both gestation and GCF repo) was $33,980 , $12,011, and $4,624 for the years ended December 31, 2020 , 2019 , and 2018 , respectively.  Detail Effective June 1, 2019, the Company changed its accounting policy regarding the netting of reverse repo and repo transactions. ASC 210 provides the option to present reverse repo and repo on a net basis if certain netting conditions are met. Prior to this date, the Company utilized this option and presented repo and reverse repo on a net basis when these conditions were met. As of June 1, 2019, the Company changed its policy to present all repo and reverse repo transactions on a gross basis even if the underlying netting conditions are met. The Company believes that the newly adopted accounting principle is preferable in the circumstances because it provides consistency for the accounting of all repo and reverse repos, as well as more information on the face of the financial statements. The amounts in the table below are presented on a gross basis.  As of December 31, 2020 , the Company had outstanding reverse repos of $5,716,343 and repos of $5,713,212 . Included in these amounts are outstanding reverse repos of $99,750 and repos of $2,155,850 where the FICC was the Company’s counterparty to the transaction and which were subject to a master netting arrangement. As of December 31, 2019 , the Company had outstanding reverse repos of $7,500,002 and repos of $7,534,443. Included in these amounts are outstanding reverse repos of $371,025 and repos of $5,138,712, where the FICC was the Company’s counterparty to the transaction and which were subject to a master netting arrangement. The following tables summarize the remaining contractual maturity of the gross obligations under repos accounted for as secured borrowings segregated by the underlying collateral pledged as of each date shown. All amounts as well as counterparty cash collateral (see notes 7 and 17) are subject to master netting arrangements.    Secured Borrowings (Dollars in Thousands) December 31, 2020 Repurchase Agreements Remaining Contractual Maturity of the Agreements Collateral Type: Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. treasury and government agency MBS (GCF repo) $ 1,946,890 $ 1,070,094 $ - $ - $ 3,016,984 MBS (gestation repo) 638,057 2,004,451 51,530 - 2,694,038 SBA loans 2,190 2,190 $ 2,587,137 $ 3,074,545 $ 51,530 $ - $ 5,713,212 Reverse Repurchase Agreements Remaining Contractual Maturity of the Agreements Collateral Type: Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. treasury and government agency MBS (GCF repo) $ 871,805 $ 1,016,446 $ 1,091,609 $ 39,816 $ 3,019,676 MBS (gestation repo) 641,619 2,003,514 51,534 - 2,696,667 $ 1,513,424 $ 3,019,960 $ 1,143,143 $ 39,816 $ 5,716,343       SECURED BORROWINGS (Dollars in Thousands) December 31, 2019 Repurchase Agreements Remaining Contractual Maturity of the Agreements Collateral Type: Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. treasury and government agency MBS (GCF repo) $ 5,117,811 $ 1,546,510 $ - $ - $ 6,664,321 MBS (gestation repo) - 742,035 100,403 - 842,438 SBA loans 27,684 - - - 27,684 $ 5,145,495 $ 2,288,545 $ 100,403 $ - $ 7,534,443 Reverse Repurchase Agreements Remaining Contractual Maturity of the Agreements U.S. treasury and government agency MBS (GCF repo) $ 1,231,027 $ 2,525,188 $ 2,319,079 $ 575,058 $ 6,650,352 MBS (gestation repo) - 747,692 101,958 - 849,650 $ 1,231,027 $ 3,272,880 $ 2,421,037 $ 575,058 $ 7,500,002 F-41 Table 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 of the equity method affiliates’ net income as earnings each reporting period. The Company elected to use the cumulative earnings approach for the distributions it receives from its equity method investments. Under the cumulative earnings approach, any distributions received up to the amount of cumulative earnings are treated as return on investment and classified in operating activities within the cash flows. Any excess distributions would be considered as return of investments and classified in investing 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 are included as a component of other investments, at fair value in the consolidated balance sheets. All gains and losses (unrealized and realized) from securities classified as other investments, at fair value in the consolidated balance sheets are recorded as a component of principal transactions and other income in the consolidated 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) Insurance SPACs SPAC Sponsor Entities AOI CK Capital SPAC Series Funds Total December 31, 2018 $ - $ - $ - $ - $ - $ - Investments / advances 3,775 - 559 18 - 4,352 Distributions / repayments - - - - - - Earnings / (loss) realized (553 ) - - - - (553 ) December 31, 2019 3,222 - 559 18 - 3,799 Investments / advances 10,325 122 2,097 - 178 12,722 Distributions / repayments (84 ) - - - - (84 ) Earnings / (loss) realized (3,656 ) (18 ) 360 278 81 (2,955 ) December 31, 2020 $ 9,807 $ 104 $ 3,016 $ 296 $ 259 $ 13,482  The Insurance SPACs represent the Company's consolidated subsidiaries equity method investments in Insurance SPAC, Insurance SPAC II, and Insurance SPAC III. See note 4. The SPAC Sponsor Entities represent equity method investments in three different sponsor entities for SPACs not sponsored by the Company. The Company's equity method investments in these sponsor entities entitles it to an allocation of 765,000 founders shares in the public company SPACs that these sponsor entities are invested in as of December 31, 2020. See note 3-X for discussion of how these will be accounted for if the underlying SPACs complete a business combination or liquidate. Furthermore, even if a business combination is completed the founders shares allocable to the Company may be adjusted significantly downward based on final negotiation with the business combination counterparty. AOI is a company based in the Netherlands that invests in real estate. CK Capital is a company based in the Netherlands that manages investments in real estate. See note 4 and 31. The SPAC Series Funds each invest in the membership interests of an individual sponsor entity. The Company manages these funds and serves as general partner. The Company invests in the SPAC Series Funds itself and also receives an allocation of the founders shares from each series fund is invested in connection with its role as general partner and manager. Amounts paid by the Company in connection with receiving its allocation of founders shares are included in the table above along with the SPAC Series Funds. As of December 31, 2020, the Company is entitled to receive a total allocation of 1,074,000 founders shares from three different series funds. These allocations will be worthless if the underlying SPACs fail to complete their business combination and liquidate. Furthermore, even if a business combination is completed the founders shares allocable to the Company may be adjusted significantly downward based on final negotiation with the business combination counterparty.  F-42 Table of Contents 13. GOODWILL  Goodwill is comprised of the following.    GOODWILL (Dollars in Thousands) As of December 31, 2020 2019 AFN $ 109 $ 109 JVB - 7,883 Goodwill $ 109 $ 7,992 The Company measures its goodwill impairment on an annual basis or when events indicate that goodwill may be impaired. The Company performs its annual impairment tests of AFN goodwill on October 1 of each year; and JVB goodwill on January 1 of each year. JVB Goodwill The annual impairment testing date for the JVB goodwill is January 1. The first testing date after the acquisition was January 1, 2012. In the first quarter of 2020, the Company determined that the financial market volatility that resulted from the COVID-19 pandemic was a triggering event that required a reassessment of the goodwill related to JVB. See note 4. The Company performed a valuation of JVB as of March 31, 2020 by applying equal weighting to both the income approach and the market approach. Under the guidance of FASB ASC 350, the Company determined that the fair value of JVB was less than the carrying value (including the goodwill). As a result, the Company recognized an impairment loss of $7,883 for the twelve months ended December 31, 2020. The impairment loss is included in the consolidated statements of operations as impairment of goodwill and is reflected as a component of operating expense. The Company determined goodwill was not impaired as of January 1, 2019 and 2018. See note 4. AFN Goodwill  The annual impairment testing date for the AFN goodwill is October 1. The first testing date following the Merger was October 1, 2010. The Company determined the goodwill was not impaired as of 2020 , 2019 , and 2018 .   The Company concluded there was no triggering event for the goodwill related to AFN. F-43 14. LEASES As of December 31, 2020 , all of the leases to which the Company was a party were operating leases. The weighted average remaining term of the leases was 7.9 years. The weighted average discount rate for the leases was 5.43%. Maturities of operating lease liability payments consisted of the following.   FUTURE MATURITY OF LEASE LIABILITIES (Dollars in Thousands) As of December 31, 2020 2021 1,116 2022 941 2023 955 2024 983 2025 983 Thereafter 3,112 Total 8,090 Less imputed interest (1,559 ) Lease obligation $ 6,531 During the twelve months ended December 31, 2020 and 2019, total cash payments of $1,571 and $1,578, respectively, were recorded as a reduction in the operating lease obligation. No cash payments were made to acquire right of use assets. F-44 Table of Contents 15. OTHER ASSETS  Other assets consisted of the following.   OTHER ASSETS (Dollars in Thousands) As of December 31, 2020 2019 Deferred costs $ 248 $ 301 Prepaid expenses 964 796 Deposits 398 656 Miscellaneous other assets 255 275 RTLs - 5,323 Furniture, equipment, and leasehold improvements, net 799 916 Intangible assets 166 166 Other assets $ 2,830 $ 8,433 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 and short-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 contractual arrangement. During 2019, RTLs were accounted for at lower of cost or market and included as a component of other assets. Effective January 1, 2020, in connection with the adoption of ASC 326, the Company began accounting for RTLs at fair value and including them as a component of investments-trading. In conjunction with the sale of ViaNova, the remaining RTL was transferred to other investments at fair value. F-45 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) As of December 31, Estimated Useful Lives (In Years) 2020 2019 Furniture and equipment 3 to 5 $ 1,250 $ 1,042 Leasehold improvements 5 to 10 869 855 2,119 1,897 Accumulated depreciation (1,320 ) (981 ) Furniture, equipment, and leasehold improvements, net $ 799 $ 916 For the year ended December 31, 2020 , the Company wrote-off fully depreciated furniture and equipment and leasehold improvements of $0.  The Company recognized depreciation and amortization expense of $334, $318, and $261 for the years ended December 31, 2020 , 2019 , and 2018 , respectively, as a component of depreciation and amortization on the consolidated statements of operations, all of which represented depreciation of furniture, equipment, and leasehold improvements.  F-46 Table 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) As of December 31, 2020 2019 Accounts payable $ 162 $ 362 Redeemable financial instruments accrued interest 316 403 Accrued income tax 99 - Accrued interest payable 630 711 Accrued interest on securities sold, not yet purchased 435 914 Payroll taxes payable 1,048 729 Counterparty cash collateral 41,119 9,524 Accrued expense and other liabilities 2,442 7,652 Accounts payable and other liabilities $ 46,251 $ 20,295 The redeemable financial instrument accrued interest represents accrued interest on the JKD Capital Partners I LTD and the DGC Trust/CBF redeemable financial instruments. See note 19. 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 form of liquid securities or cash. To the extent the Company receives cash collateral, the Company includes it as a component of other liabilities (counterparty cash collateral) in the table above. See note 11. 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. If the 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 some cases, the repo counterparty will return cash instead of securities. In that case, the Company includes the cash returned as a component of other liabilities (counterparty cash collateral) in the table above. See note 11.   F-47 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) the power 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 information regarding the consolidated VIEs: As of December 31, 2020 2019 Cash and cash equivalents $ 270 $ - Receivables 2,112 - Other investments, at fair value 36,395 - Investment in equity method affiliates 9,805 3,222 Non-controlling interest (27,805 ) (2,262 ) Investment in consolidated VIEs $ 20,777 $ 960  The maximum potential loss the Company could incur related to the consolidated VIEs is the investment in consolidated VIEs shown in the table above plus certain obligations the Company has to fund additional working capital to the equity method investees of certain of the consolidated VIEs. The total amount of working capital commitment was $1,560 and $750 as of December 31, 2020 and 2019 respectively. 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 several VIEs. The maximum potential financial statement loss the Company would incur if the VIEs 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 to make. As of December 31, 2020 , there were $1,567 of unfunded investment commitments to VIEs in which the Company has invested and is not consolidating. Other than its investment in these entities, the Company did not provide financial support to these VIEs during the years ended December 31, 2020 and 2019 and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these VIEs at December 31, 2020 and 2019 . 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 the primary beneficiary. Certain of the Investment Vehicles managed by the Company are VIEs. Under the current guidance of ASU 2015-12, the Company has concluded that its asset management contracts are not variable interests. Currently, the Company has no other interests in entities it manages that are considered variable 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, the Company 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 a primary 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 primary beneficiary for two main reasons: (a) the Company does not usually obtain the power to direct activities that most significantly impact any investee’s financial performance 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 the primary 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 the power 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 be temporary 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 in unconsolidated 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 an interest 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 the Company’s maximum exposure to loss associated with these identified nonconsolidated VIEs in which it holds variable interests at December 31, 2020 and 2019 .   CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands) As of December 31, 2020 2019 Other investments, at fair value $ 2,548 $ 5,413 Investments in equity method affiliates 363 - Maximum Exposure $ 2,911 $ 5,413  F-48 19. REDEEMABLE FINANCIAL INSTRUMENTS  Redeemable financial instruments consisted of the following.  REDEEMABLE FINANCIAL INSTRUMENTS (Dollars in Thousands) As of December 31, 2020 2019 JKD Investor $ 7,957 $ 7,957 DGC Trust / CBF 4,000 8,500 ViaNova Capital Group, LLC - 526 $ 11,957 $ 16,983 JKD Capital Partners I LTD Amendment  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 of the 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 is owned 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 Investment Return”) 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 (as defined in the JKD Investment Agreement, as amended) and (ii) certain expenses incurred by such Institutional Corporate Trading Business (the “Institutional Corporate Trading Business Net Revenue”). This JKD Investment Return is recorded monthly as interest expense or (interest income) with the related accrued interest recorded in accounts 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 JKD Investment 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 (as described below) occurs, unless the JKD Investment Agreement is earlier terminated.  On March 6, 2019, the JKD Investor and the Operating LLC entered into an amendment to the JKD Investment Agreement (the “JKD Investment Agreement Amendment”), 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 of the Institutional Corporate Trading Business Net Revenue, which percentage is based on the JKD Investor’s investment under the JKD Investment Agreement as 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 modify any of their policies or procedures governing the operation of their businesses or change the way they operate their business and such modification has a material adverse 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 if the 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” (as such 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 a redemption 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 day prior 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 or substantially 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 net consideration paid to the Operating LLC in connection with such sale, after deducting certain amounts and certain expenses incurred by the Operating LLC or JVB in connection with such sale.  DGC Trust/ CBF Amendments  Prior to September 30, 2019, the DGC Trust / CBF redeemable financial instruments were comprised of two separate agreements: the CBF Investment Agreement and the DGC Trust Investment Agreement. The CBF Investment Agreement and the DGC Trust Investment Agreement were both amended on September 25, 2019 and again on December 4, 2019, with each amendment becoming effective October 1, 2019. The amendments included the following amendments to each of the CBF Investment Agreement and the DGC Trust Investment Agreement:  (a) The term “Investment Amount” under the CBF Investment Agreement was reduced from $8,000 to $6,500 in exchange for a one-time payment of $1,500 from the Operating LLC to CBF. The payment of $1,500 was made by the Operating LLC to CBF in October 2019. (b) The term “Investment Return” under the CBF Investment Agreement was amended to mean an annual return equal to: F-49 • for the Annual Period ending on September 29, 2020, 3.75% of the Investment Amount, plus (x) 11.47% of any revenue of the GCF repo business (the “Revenue of the Business”) during such period between zero and $11,777 plus (y) 7.65% of any Revenue of the Business during such period in excess of $11,777. Prior to the second amendment, the Investment Return was with respect to any twelve-month period ending on September 29, 2020 (each, an “Annual Period”) was 3.75% of the Investment Amount plus (x) 11.47% of the Revenue of the Business for any Annual Period in which the Revenue of the Business was greater than zero but less than or equal to $5,333, (y) $612 for any Annual Period in which the Revenue of the Business is greater than $5,333 but less than or equal to $8,000, or (z) 7.65% of the Revenue of the Business for any Annual Period in which the Revenue of the Business is greater than $8,000, and • for any Annual Period following September 29, 2020, (x) for any Annual Period in which the Revenue of the Business is greater than zero, the greater of 20% of the Investment Amount or 15.29% of the Revenue of the Business, or (y) for any Annual Period in which the Revenue of the Business is zero or less than zero, 3.75% of the Investment Amount.  (c) The term “Investment Return” under the DGC Trust Investment Agreement was amended to mean an annual return equal to:  • for the twelve-month period ending on September 29, 2020, 3.75% of the Investment Amount plus (x) 3.53% of any Revenue of the Business during such period between zero and $11,177 plus (y) 2.35% of any Revenue of the Business during such period in excess of $11,177. Prior to the second amendment, the Investment Return was 3.75% of the Investment Amount, as defined in the DGC Trust Investment Agreement, plus (x) 3.53% of the Revenue of the Business, for any Annual Period in which the Revenue of the Business is greater than zero but less than or equal to $5,333, (y) $188 for any Annual Period in which the Revenue of the Business is greater than $5,333, but less than or equal to $8,000, or (z) 2.35% of the Revenue of the Business for any Annual Period in which the Revenue of the Business is greater than $8,000, and • for any Annual Period following September 29, 2020, (x) for any Annual Period in which the Revenue of the Business is greater than zero, the greater of 20% of the Investment Amount or 4.71% of the Revenue of the Business, or (y) for any Annual Period in which the Revenue of the Business is zero or less than zero, 3.75% of the Investment Amount.  On September 25, 2020, the Operating LLC and CBF entered into Amendment No. 3 to CBF Investment Agreement, which amended the CBF Investment Agreement (i) to extend the date thereunder pursuant to which the Company or CBF could cause a redemption of the Investment Amount from September 27, 2020 to January 1, 2021, and (ii) to state that no such redemption by the Company could be in violation of any loan agreement to which the Company was then a party. On September 30, 2020, the Company redeemed the DGC Trust Investment Agreement in full by making payment of $2,000. On October 9, 2020 and effective October 15, 2020, the Operating LLC entered into Amendment No. 4 to Investment Agreement, which further amended the CBF Investment Agreement to, among other things, (A) decrease the “Investment Amount” under the CBF Investment Agreement from $6,500 to $4,000 in exchange for a one-time payment of $2,500 from the Operating LLC to CBF; and (B) provide that the term “Investment Return” (as defined in the CBF Investment Agreement) will mean an annual return equal to, (i) for any twelve-month period following September 29, 2020 (each, an “Annual Period”) in which the revenue of the business of JVB (“Revenue of the Business”), is greater than zero, the greater of 20% of the Investment Amount or 9.4% of the Revenue of the Business, or (ii) for any Annual Period in which the Revenue of the Business is zero or less than zero, 3.75% of the Investment Amount. Prior to the Investment Agreement Amendment, the term “Investment Return” under the CBF Investment Agreement was defined as (A) with respect to any Annual Period in which the Revenue of the Business was greater than zero, the greater of 20% of the Investment Amount or 15.2% of the Revenue of the Business, or (ii) for any Annual Period in which the Revenue of the Business was zero or less than zero, 3.75% of the Investment Amount. The Company made the $2,500 payment to CBF on October 15, 2020. Subsequent to December 31, 2020, the Company notified CBF that intends to redeem the remaining balance on or about March 31, 2021.  Via Nova Capital Group, LLC  On November 16, 2018 and effective as of November 19, 2018, the Operating LLC entered into an investment agreement (the “ViaNova Investment Agreement”) by and among Hancock Funding, LLC (“Hancock”), New Avenue Investments LLC (“New Avenue”), JVB, ViaNova, and the Operating LLC. Pursuant to the ViaNova Investment Agreement, Hancock, New Avenue, the Operating LLC, and JVB agreed to invest $500, $250, $500, and $2,750, respectively, into ViaNova (collectively, the “ViaNova Investment”). Pursuant to the ViaNova Investment Agreement, Hancock, the Operating LLC, and JVB invested their respective portions of the ViaNova Investment into ViaNova prior to the effective date of the ViaNova Investment Agreement. In February 2019, New Avenue invested $220 of its portion of the ViaNova Investment (i.e. $250). Hancock is owned by an employee of the Company. New Avenue is owned by a former employee of the Company.  Pursuant to the ViaNova Investment Agreement, in consideration of the ViaNova Investment, once the Operating LLC was repaid $693 of funded operating costs from net revenue (as defined in the ViaNova Investment Agreement) generated directly by the activities of ViaNova’s RTL business, each party to the ViaNova Investment Agreement would be entitled to receive a quarterly payment equal to the net revenue (to the extent positive) generated directly by the activities of ViaNova’s RTL business during such quarter, multiplied by a fraction, the numerator of which is equal to such party’s portion of the ViaNova Investment and the denominator is equal to the entire ViaNova Investment. During the first quarter of 2020, the Company ceased acquiring new RTLs and began an orderly wind down of its RTL business. On August 22, 2020, the Company sold its investment in ViaNova and the remaining redeemable investment balances were paid by the Operating LLC to Hancock and New Avenue in accordance with the ViaNova Investment Agreement. See note 4. See note 20 for interest expense incurred on redeemable financial instruments.  F-50 Table of Contents 20. DEBT DETAIL OF DEBT (Dollars in Thousands) As of December 31, Description 2020 2019 Interest Rate Terms Interest (4) Maturity Non-convertible debt: 12.00% senior notes (the "2020 Senior Notes") $ 4,500 $ - Fixed 12.00% January 2022 12.00% senior notes (the "2019 Senior Notes") 2,400 6,786 Fixed 12.00% September 2021 (1) PPP Loan 2,166 - Fixed 1.00% May 2022 Contingent convertible debt: 8.00% convertible senior note (the "2017 Convertible Note") 15,000 15,000 Fixed 8.00% March 2022 (2) Less unamortized debt issuance costs (401 ) (703 ) 14,599 14,297 Junior subordinated notes (3): Alesco Capital Trust I 28,125 28,125 Variable 4.21% July 2037 Sunset Financial Statutory Trust I 20,000 20,000 Variable 4.37% March 2035 Less unamortized discount (24,690 ) (25,124 ) 23,435 23,001 ByLine Bank - - Variable N/A October 2021 FT Financial Bank, N.A. Credit Facility - - Variable N/A N/A LegacyTexas Credit Facility - 4,777 Variable N/A N/A Total $ 47,100 $ 48,861 (1) On September 25, 2019, the Company amended and restated the previously outstanding 2013 Convertible Notes, which were scheduled to mature on September 25, 2019. The material terms and conditions of the 2013 Convertible Notes remained substantially the same, except that (i) the maturity date changed from September 25, 2019 to September 25, 2020; (ii) the conversion feature in the 2013 Convertible Notes was removed; (iii) the interest rate thereunder changed from 8% per annum (9% in the event of certain events of default) to 12% per annum (13% in the event of certain events of default); and (iv) the restrictions regarding the prepayment were removed. The post amendment notes are referred to herein as the “2019 Senior Notes” and the pre-amendment notes are referred to herein as the “2013 Convertible Notes.” On September 25, 2020, the 2019 Senior Notes were amended again to extend the maturity date from September 25, 2020 until September 25, 2021. (2) The holder of the 2017 Convertible Note may convert all or any part of the outstanding principal amount at any time prior to maturity into units of membership interests of the Operating LLC at a conversion price of $1.45 per unit, subject to customary anti-dilution adjustments. Units of membership interests of the Operating LLC not held by Cohen & Company Inc. may, with certain restrictions, be redeemed and exchanged into shares of the Cohen & Company Inc. common stock, par value $0.01 per share (“Common Stock”) on a ten-for-one basis. Therefore, the 2017 Convertible Note can be converted into Operating LLC units of membership interests and then redeemed and exchanged into Common Stock at an effective conversion price of $14.50. See note 21. (3) 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) to the 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 the common stock held by the Company. These trusts are VIEs and the Company does not consolidate them even though the Company holds the common stock. The Company 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 the discount, the yield to maturity of the junior subordinated notes as of December 31, 2020 on a combined basis was 11.58% assuming the variable rate in effect on the last day of the reporting period remains in effect until maturity. (4) Represents the interest rate in effect as of the last day of the reporting period.  The 2020 Senior Notes On January 31, 2020, the Operating LLC entered into a note purchase agreement with JKD Capital Partners I LTD, a New York corporation (“JKD Investor”), and RN Capital Solutions LLC, a Delaware limited liability company (“RNCS”). The JKD Investor is owned by Jack DiMaio, the vice chairman of the Company’s board of directors and the Operating LLC’s board of managers, and his spouse. Pursuant to the note purchase agreement, JKD Investor and RNCS each purchased a senior promissory note in the principal amount of $2,250 (for an aggregate investment of $4,500). The senior promissory notes bear interest at a fixed rate of 12% per annum and mature on January 31, 2022. On February 3, 2020, pursuant to the note purchase agreement, the Operating LLC used the proceeds received from the issuance of the senior promissory notes to the JKD Investor and RNCS to repay in full all amounts outstanding under the senior promissory note, dated September 25, 2019, issued by the Company to Pensco Trust Company, Custodian fbo Edward E. Cohen IRA in the principal amount of $4,386 (the “Cohen IRA Note”). The Cohen IRA Note was included as a portion of the 2019 Senior Notes outstanding as of December 31, 2019. The Cohen IRA Note was fully paid and extinguished on February 3, 2020. Subsequent to this repayment, $2,400 of the 2019 Senior Notes remain outstanding. F-51 The 2019 Senior Notes On September 25, 2019, the Company amended and restated the previously outstanding 2013 Convertible Notes, which were scheduled to mature on September 25, 2019. The material terms and conditions of the 2013 Convertible Notes remained substantially the same, except that (i) the maturity date thereof was changed from September 25, 2019 to September 25, 2020; (ii) the conversion feature in the 2013 Convertible Notes was removed; (iii) the interest rate thereunder was changed from 8% per annum (9% in the event of certain events of default) to 12% per annum (13% in the event of certain events of default); and (iv) the restrictions regarding prepayment were removed. The post amendment notes are referred to herein as the “2019 Senior Notes” and the pre-amendment notes are referred to herein as the “2013 Convertible Notes.” On September 25,2020, the 2019 Senior Notes were amended again to extend the maturity date from September 25, 2020 until September 25, 2021. All other material terms and conditions of the 2019 Convertible Notes remained substantially the same. The Amendment to the 2017 Convertible Note In connection with the amendment to the 2019 Senior Notes, on September 25, 2020, the Operating LLC and DGC Trust entered into Amendment No. 1 ( the "Amendment to the 2017 Convertible Note") to the 2017 Convertible Note to provide that the voting proxy as defined in the 2017 Convertible Note will be revoked without further action by any party, upon the earliest to occur of the following: (i) a Notice Default (as defined in the 2017 Convertible Note); (ii) and Automatic Default (as defined in the 2017 Convertible Note); and (iii) if Daniel Cohen and/or his affiliates cease to beneficially own (as defined in Rule 13d-3 under the Exchange Act) a majority of the voting securities of the Company pursuant to the terms and conditions of the Amendment to the 2017 Convertible Note. All other material terms and conditions of the 2017 Note remained substantially the same. The 2013 Convertible Notes In connection with the investments by Mead Park Capital and EBC, as assignee of CBF, in September 2013, the Company issued $8,248 in aggregate principal amount of convertible senior promissory notes (the "2013 Convertible Notes"). The 2013 Convertible Notes accrued 8% interest per year, payable quarterly. As required under ASC 470, the Company accounted for the 2013 Convertible Notes as conventional convertible debt and did not allocate any amount of the proceeds to the embedded equity option.  The original maturity date of the 2013 Convertible Notes was September 25, 2018. Immediately prior to maturity, the 2013 Convertible Notes were held by three holders. On September 25, 2018, the Company paid one holder in full in the amount of $1,461. The Company entered into amendments with the remaining two holders: Pensco Trust Company, Custodian fbo Edward E. Cohen and EBC. Pursuant to the amendments to the 2013 Convertible Notes, (i) the maturity date of each of the outstanding 2013 Convertible Notes was extended from September 25, 2018 to September 25, 2019 and (ii) the conversion price under each of the outstanding 2013 Convertible Notes was reduced from $30.00 per share of Common Stock to $12.00 per share of Common Stock. The amendments to the 2013 Convertible Notes provided that, until the Company’s stockholders approved the issuance of the shares of Common Stock issuable upon conversion of the 2013 Convertible Notes for purposes of Section 713 of the NYSE American’s Company Guide, the 2013 Convertible Notes may not be converted if such conversion would result in the Company issuing a number of shares of Common Stock that, when aggregated with any shares of Common Stock previously issued in connection with any conversion under the 2013 Convertible Notes, equals or exceeds, in the aggregate, 19.99% of the outstanding Common Stock as of September 25, 2018. In addition, the amendments to the 2013 Convertible Notes provided that (i) the Company cause its stockholders to vote on a proposal (the “Stockholder Proposal”) regarding the issuance of the shares of Common Stock issuable upon conversion of the 2013 Convertible Notes for purposes of Section 713 of the NYSE American’s Company Guide at the 2019 annual meeting of the Company’s stockholders, (ii) the Company use its reasonable best efforts to solicit proxies for such stockholder approval, and (iii) the Company’s board of directors recommend to the Company’s stockholders that such stockholders approve the Stockholder Proposal. At the Company’s 2019 annual meeting of stockholders held on June 12, 2019, the Company’s stockholders approved the Company’s potential issuances of up to 379,785 shares of Common Stock pursuant to the 2013 Convertible Note held by Pensco Trust Company, Custodian fbo Edward E. Cohen and up to 207,834 shares of Common Stock pursuant to the 2013 Convertible Note held by EBC, in each case, in accordance with Section 713(a) of the NYSE American Company Guide. On September 25, 2019, the 2019 Senior Notes amended and restated the 2013 Convertible Notes as discussed above. PPP Loan On May 1, 2020, the Company qualified for and received a PPP loan pursuant to the PPP under the CARES Act and administered by the U.S. Small Business Association ("SBA"). The PPP loan is evidenced by a promissory note between the Company and FT Financial. The PPP loan bears interest at a fixed rate of 1.0% per year, with the first six months of interest deferred, has a term of two years and may be prepaid at any time without payment of any premium. The PPP loan is unsecured but guaranteed by the SBA. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of the PPP loan, with such forgiveness to be determined, subject to limitations, based on the use of the PPP loan proceeds for payment of payroll costs and payments of mortgage interest, rent, and utilities. The terms of any forgiveness may also be subject to further requirements in any regulations and guidelines the SBA may adopt. In order to obtain forgiveness of the PPP loan, the Company must submit a request and provide satisfactory documentation regarding its compliance with applicable requirements. While the Company currently believes that its use of the PPP loan proceeds will meet the conditions for forgiveness under the PPP, no assurance is provided that the Company will obtain forgiveness of the PPP loan in whole or in part. The Company must repay any unforgiven principal amount of the PPP loan, with interest, on a monthly basis following the deferral period. On September 23, 2020, the Company applied for forgiveness of the PPP loan. As of the date of this report, the Company had not heard back regarding the forgiveness of the PPP loan. The PPP loan contains customary events of default relating to, among other things, payment defaults and breaches of representations, warranties, or covenants. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company. F-52 LegacyTexas Bank  On November 20, 2018, ViaNova, as borrower, entered into a Warehousing Credit and Security Agreement (the “LegacyTexas Credit Facility”) with LegacyTexas Bank, as the lender, with an effective date of November 16, 2018, and amended on May 4, 2019 and September 25, 2019. The LegacyTexas Credit Facility supported the purchasing, aggregating, and distribution of residential transition loans by ViaNova.  Pursuant to the terms of the LegacyTexas Credit Facility, LegacyTexas Bank agreed to make loans at ViaNova’s request from time to time in the aggregate amount of up to $12,500. The loans (both principal and interest) were scheduled to mature and become immediately due and payable in full on November 15, 2019. However, on October 28, 2019, the maturity date was extended to April 15, 2020.  Loans under the LegacyTexas Credit Facility bore interest at a per annum rate equal to LIBOR (with a floor of 1.50%) plus 4.0% (for residential transition loans) or 5.0% (for aged residential transition loans). Commencing February 14, 2019, ViaNova became required to pay an undrawn commitment fee at a per annum rate equal to 0.25% of the undrawn portion of the $12,500 commitment under the LegacyTexas Credit Facility; provided, however, that such fee would be waived for any calendar month (i) in which the used portion for such month is equal to or greater than fifty percent (50%) of the $12,500 commitment amount, or (ii) the aggregate advances funded by LegacyTexas Bank for such calendar month are equal to or greater than the $12,500 commitment amount, as may be in effect from time to time. Loans under the LegacyTexas Credit Facility were required to be used by ViaNova to provide funding for short-term mortgages to developers for the purchase and renovation of residential 1-4 family properties or to purchase such short-term mortgages from correspondents that originate such short-term mortgages. The obligations of ViaNova under the LegacyTexas Credit Facility were secured by a lien on the mortgages financed by the LegacyTexas Credit Facility. Further, pursuant to the terms of the LegacyTexas Credit Facility, ViaNova deposited cash in an amount equal to 2% of the $12,500 commitment amount in a non-interest-bearing account with LegacyTexas Bank as additional collateral. The Company was subject to certain financial covenants in the LegacyTexas Credit Facility. As of December 31, 2019, the Company was in compliance with all of these financial covenants. On March 19, 2020, ViaNova received a notice of default from LegacyTexas Bank regarding the LegacyTexas Credit Facility, stating that ViaNova’s unrestricted cash balance was less than the amount required. Also, on March 19, 2020, ViaNova received notice from LegacyTexas Bank that the Bank had suspended funding all “alternative” loans for all of their clients, including the RTLs that are the subject of the LegacyTexas Credit Facility with LegacyTexas Bank. Since March 19, 2020 ViaNova has repaid all outstanding indebtedness under the LegacyTexas Credit Facility. See note 4. FT Bank Credit Facility  Effective on April 25, 2018, the Company, the Operating LLC, and JVB Holdings, as guarantors, and JVB, as borrower, entered into a loan agreement (the “2018 FT LOC”) with FT Financial as lender. FT Financial was formerly known as MB Financial Bank, N.A. Pursuant to the terms of the 2018 FT LOC, FT Financial agreed to make loans (each a “Loan” and collectively, the “Loans”) at JVB’s request from time to time in the aggregate amount of up to $25,000. The Loans (both principal and interest) were scheduled to mature and become immediately due and payable in full on April 10, 2020. In accordance with the terms of the 2018 FT LOC, JVB paid to FT Financial a commitment fee in the amount of $250. Loans under the 2018 FT LOC bore interest at a per annum rate equal to LIBOR plus 6.0%. The Operating LLC was required to pay an undrawn commitment fee at a per annum rate equal to 0.50% of the undrawn portion of the FT Financial’ s $25,000 commitment under the 2018 FT LOC. Pursuant to the 2018 FT LOC, all Loans must be used by JVB for working capital purposes and general liquidity of JVB. Further, under the 2018 FT LOC, JVB may request a reduction of the $25,000 commitment amount in a minimum amount of $1,000 and multiples of $500 thereafter, upon not less than five days prior notice to FT Financial. On January 29, 2019, the 2018 FT LOC was restructured. The total commitment of the 2018 FT LOC was reduced from $25,000 to $7,500 and the maturity date was extended from April 10, 2020 to April 10, 2021. The other material terms and conditions remained substantially identical. As part of the restructuring, the Company entered into a new subordinated revolving note agreement (the “2019 FT Revolver”). Under the 2019 FT Revolver, the Company could borrow up to $17,500 on a revolving basis in minimum amounts of $1,000 or any higher multiple of $500. The 2019 FT Revolver bore interest at a per annum rate equal to LIBOR plus 6% and the Company was required to pay an undrawn commitment fee at a per annum rate equal to 0.50% per annum on any undrawn amounts. In addition, the Company paid a commitment fee equal to 0.75% (or $131) on April 10, 2020. The maturity date for the 2019 FT Revolver was April 10, 2021. On January 30, 2019, JVB received approval from FINRA to treat draws under the 2019 FT Revolver as qualified subordinated debt. As such, draws under the 2019 FT Revolver are treated as an increase in net capital for purposes of FINRA Rule 15(c) 3-1. Furthermore, JVB is subject to financial covenants including a minimum excess net capital covenant, a debt to tangible net worth covenant, and a minimum tangible net worth covenant. The Company was in compliance with all covenants as of all periods presented. The 2019 FT Revolver did not allow for additional draws after April 20, 2020. During March 2020, the Company drew the full amount of $17,500 under the 2019 FT Revolver. On October 27, 2020, the Company cancelled both revolving lines of credit and fully repaid the $17,500 outstanding balance plus accrued interest. F-53 Byline Bank On October 28, 2020 (the “Effective Date”), the Company entered into a Loan Agreement (the “Loan Agreement”) with Byline Bank, as lender (the “Lender”), by and among the Lender, the Company, as a guarantor, and the Company’s subsidiaries, the Operating LLC and J.V.B. Financial Group Holdings, LP (“Holdings LP”), as guarantors, and JVB as borrower (the “Borrower”), and C&Co PrinceRidge Holdings, LP (“C&Co.”), pursuant to which the Lender agreed to make loans at the Borrower’s request from time to time in the aggregate amount of up to $7.5 million. In addition, on the Effective Date, the Borrower and the Lender entered into a Revolving Note and Cash Subordination Agreement (the “Revolving Note and Cash Subordination Agreement,” and, together with the Loan Agreement, the “Byline Credit Facility”), pursuant to which, among other things, the Lender agreed to make loans at the Borrower’s request from time to time in the aggregate amount of up to $17.5 million. The Byline Credit Facility replaced the previous outstanding facility with FT Bank, the 2019 FT Revolver discussed above. Loans (both principal and interest) made by the Lender to the Borrower under the Loan Agreement and Revolving Note and Cash Subordination Agreement are scheduled to mature and become immediately due and payable in full on October 28, 2022. In addition, loans may be made under the Loan Agreement and the Revolving Note and Cash Subordination Agreement until October 28, 2022 and October 28, 2021, respectively. Loans under the Byline Credit Facility bear interest at a per annum rate equal to LIBOR plus 6.0%, provided that in no event can the interest rate be less than 7.0%. The Borrower is required to pay on a quarterly basis an undrawn commitment fee at a per annum rate equal to 0.50% of the undrawn portion of the Lender’s $25 million commitment under the Byline Credit Facility. The Borrower is also required to pay on each anniversary of the Effective Date a commitment fee at a per annum rate equal to 0.50% of the Lender’s $25 million commitment under the Byline Credit Facility. Pursuant to the terms of the Byline Credit Facility, the Borrower paid to the Lender a commitment fee of $250 on the Effective Date. Loans under the Byline Credit Facility must be used by the Borrower for working capital purposes and general liquidity of the Borrower. The Borrower may request a reduction in the Lender’s $25,000 commitment in a minimum amount of $1 million and multiples of $500 thereafter upon not less than five days’ prior notice to the Lender. The obligations of the Borrower under the Byline Credit Facility are guaranteed by the Company, the Operating LLC and Holdings LP (collectively, the “Guarantors”), and are secured by a lien on all of Holdings LP’s property, including its 100% ownership interest in all of the outstanding membership interests of the Borrower. Pursuant to the Byline Credit Facility, the Borrower and the Guarantors provide customary representations and warranties for a transaction of this type. The Byline Credit Facility also includes customary covenants for a transaction of this type, including covenants limiting the indebtedness that can be incurred by the Borrower and Holdings LP and restricting the Borrower’s ability to make certain loans and investments. Additionally, the Borrower may not permit (i) the Borrower’s tangible net worth to be less than $80,000 at any time from October 29, 2020 through December 31, 2021, and $85,000 at any time thereafter; and (ii) the Borrower’s excess net capital to be less than $40,000 at any time. The Borrower and each Guarantor are also limited in their ability to repay certain of their existing outstanding indebtedness. As of December 31, 2020, the Company was in compliance with all of the financial covenants. The Byline Credit Facility contains customary events of default for a transaction of this type. If an event of default under the Byline Credit Facility occurs and is continuing, then the Lender may declare and cause all or any part of the Loans and all other liabilities outstanding under the Byline Credit Facility to become immediately due and payable. The foregoing description of the Byline Credit Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Loan Agreement and the Revolving Note and Cash Subordination Agreement, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference. As of December 31, 2020, the Company had not drawn on the Byline Credit Facility. Deferred Financing  The Company incurred $1,400 of deferred financing costs associated with the issuance of the 2017 Convertible Note and $670 of deferred financing costs associated with the issuance of the 2013 Convertible Notes. These amounts were initially recorded as a discount on debt and are amortized to interest expense over the life of the notes under the effective interest method. The Company also incurred $272 of deferred financing costs associated with the Byline Credit Facility and $525 of deferred financing costs associated with the 2018 FT LOC. These amounts were initially recorded as a component of other assets and are 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 $626, $509, and $552 for the years ended December 31, 2020 , 2019 , and 2018 , respectively.  Interest Expense, Net  Interest expense incurred is shown in the table below by instrument for the years ended 2020 , 2019 , and 2018 .    INTEREST EXPENSE (Dollars in Thousands) Year Ended December 31, 2020 2019 2018 Junior subordinated notes $ 2,882 $ 3,457 $ 3,499 2020 Senior Notes 496 - 2017 Convertible Note 1,505 1,472 1,445 2013 Convertible Notes / 2019 Senior Notes 336 615 752 2018 FT LOC / 2019 FT Revolver/Byline Credit Facility 1,102 365 270 Redeemable Financial Instrument - DGC Trust / CBF 1,490 1,166 587 Redeemable Financial Instrument - JKD Investor 1,883 699 1,968 Redeemable Financial Instrument - ViaNova Capital Group, LLC (105 ) (190 ) (34 ) $ 9,589 $ 7,584 $ 8,487 The redeemable financial instrument – Via Nova Capital Group, LLC had a negative return during the periods presented. Accordingly, the redemption value of the instrument is reduced, which is recorded as interest income. See note 19.  F-54 Table of Contents 21. EQUITY  Common Stock  The holders of the Common Stock are entitled to one vote per share. These holders are entitled to receive distributions 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 share ratably 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 or adequate 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. The holders of the Common Stock have no preference, conversion, exchange, sinking fund, redemption, or, so long as the Common Stock remains listed on a national exchange, 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 of directors 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 were authorized as of December 31, 2020 and 2019 . The holders of Series C Preferred Stock are entitled to receive, when, as, and if declared by the Company’s board of directors 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 year commencing 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 are cumulative. 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 of Series C Preferred Stock are entitled to receive dividends, distributions or distributions upon liquidation, dissolution, or winding up of the Company in an amount equal to $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 payments made 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 of Series C Preferred Stock issued and outstanding as of December 31, 2020 and 2019 .  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 no economic 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 of Series E Preferred Stock, the holders thereof are entitled to one vote on any such matter. Daniel G. Cohen, the Company’s chairman, is the sole holder of all 4,983,557 shares of Series E Preferred Stock outstanding as of December 31, 2020 . The Series E Preferred Stock held by Daniel G. Cohen gives him the same voting rights he 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 him voting 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 at the Company level). The Series E Preferred Stock effectively enables Daniel G. Cohen to exercise approximately 27.32% of the voting power of the Company’s total shares outstanding that were entitled to vote as of December 31, 2020 (in addition to the voting power he holds through his common share ownership and Series F Preferred Stock (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 LLC units 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 is otherwise perpetual. As of December 31, 2020 , there were 4,983,557 shares of Series E Preferred Stock issued and outstanding. See Non-Controlling Interest — Future Conversion / 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 unissued shares 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 Preferred Stock”). 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 holders of 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 the Corporation is required or permitted. Each outstanding share of Series F Preferred Stock entitles the holder to (1) vote for every ten (10) shares of Series F Preferred Stock 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 rights they 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 gives Daniel 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 Operating LLC do not carry voting rights at the Company level). The Series F Preferred Stock effectively enables Daniel G. Cohen and the DGC Trust to exercise approximately 62.85% of the voting power of the Company’s total shares outstanding that were entitled to vote as of December 31, 2020 (in addition to the voting power held through his common share ownership and Series E Preferred Stock ownership). As of December 31, 2020 , there were 22,429,541 shares of Series F Preferred Stock issued and outstanding . See Non-Controlling Interest/ - Securities Purchase Agreement – Purchase of IMXI shares below.  F-55 Table of Contents Together, the Series E and Series F Preferred Stock enables Daniel G. Cohen and the DGC Trust to exercise approximately 67.41% of the voting power of the Company’s total shares outstanding that were entitled to vote as of December 31, 2020 , in addition to the voting power held through Mr. Cohen’s common share ownership.  Stockholder Rights Plan  On August 3, 2016, the Company adopted a Section 382 Rights Agreement (the “2016 Rights Agreement”) between the Company and Computershare, Inc. The Company’s board of directors adopted the 2016 Rights Agreement in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company’s ability to use its net operating loss and net capital loss carryforwards to reduce potential future federal income tax obligations. This 2016 Rights Agreement expired in accordance with its terms on December 31, 2019. On March 10, 2020, the Company entered into a new Section 382 Rights Agreement (the “Rights Agreement”) with Computershare Inc., as rights agent (the “Rights Agent”). The Rights Agreement provided for a distribution of one preferred stock purchase right (each, a “Right,” and collectively, the “Rights”) for each share of the Company’s common stock outstanding to stockholders of record at the close of business on March 20, 2020 (the “Record Date”). Each Right entitles the registered holder to purchase 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 the Rights are set forth in the Rights Agreement. Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding or, in the case of uncertificated shares of Common Stock registered 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 be certificates 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 “Stock Acquisition 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 an Acquiring Person. Pursuant to the Rights Agreement, an “Acquiring Person” means any person or entity who or which, together with all affiliates and associates of such 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 “Exempted Person” (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 such Common Stock certificates, (ii) new Common Stock certificates after the Record Date will contain a notation incorporating the Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such 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, was or could become, as of March 10, 2020, the beneficial owner of Common Stock and/or other securities exercisable for shares of Common Stock representing 4.95% or more of the shares of Common Stock outstanding as of March 10, 2020. However, any such person or entity will no longer be deemed to be an Exempted Person and shall be deemed an Acquiring Person under the Rights Agreement if such person or entity, together with all affiliates and associates of such person or entity, becomes the beneficial owner (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 of Common Stock, except (x) pursuant to equity compensation awards granted to such person or entity by the Company or options or warrants outstanding and beneficially owned by such person or entity as of March 10, 2020, or as a result of an adjustment to the number of shares of Common Stock represented by such equity compensation 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 all affiliates and associates of such person or entity, becomes the beneficial owner of Common Stock and/or other securities exercisable for shares of Common Stock representing 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 Common Stock 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 if such 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 owner of 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) pursuant to 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 beneficial owner 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 such options or warrants are exercisable pursuant to the terms thereof, or (y) as a result of a stock split, stock dividend or the like. F-56 In addition, the Rights Agreement defines the term “Exempted Person” to also include any person or entity who, together with all affiliates and associates of such person 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 of Common Stock outstanding, and whose beneficial ownership would not, as determined by the Company’s board of directors, jeopardize or endanger the availability of the 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 own 4.95% 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 of such 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 deferred tax 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 an Exempted 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 or inheritance 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 then outstanding 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, 2023, (ii) the time at which the Rights are 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 the Code 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 of certain 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 be carried 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. 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 to receive, upon exercise, Common Stock (or, in certain circumstances, cash, property or other securities of the Company), having a value equal to two times the exercise price 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 its holder 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 value per 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 (the “Flip-In Event”), all Rights that are, or (under certain 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 the Company is not the surviving corporation; (ii) the Company engages in a merger or other business combination transaction in which the Company is the surviving corporation 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 holder of 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 the acquiring 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 forth below. 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 to adjustment 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 the current 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 fractional Units 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 the date 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 Stock at 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 Common Stock 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 outstanding shares 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. Immediately upon 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 to receive 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 receive dividends. While the distribution of the Rights will not be taxable to shareholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable 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 Rights are redeemed.  Net Share Settlement of Restricted Stock  The Company may, from time to time, net share settle equity-based awards for the payment of employees’ tax obligations to taxing authorities related to the vesting of such equity-based awards. 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 closing stock 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 expense to the Company.  F-57 Repurchases of Shares and Retirement of Treasury Stock  On December 21, 2020, August 31, 2020 and March 19, 2018, the Company entered into letter agreements (the “December 2020 Letter Agreement”, the "August 2020 Letter Agreement" and the “2018 Letter Agreement,” respectively and, together, the "10b5-1 Plan"). The December 2020 Letter Agreement and the August 2020 Letter Agreement were entered into with Piper Sandler & Co. and the 2018 Letter Agreement was entered into with Sandler O'Neill & Partners, L.P. (which, following a merger with Piper Jaffray, became Piper Sandler & Co. (the “Agent”)). The agreements authorized the Agent to use reasonable efforts to purchase, on the Company’s behalf, up to an aggregate maximum of $2,000 of Common Stock on any day that the NYSE American Stock Exchange was open for business. The December 2020 Letter Agreement became effective December 23, 2020 and is in effect until December 31, 2021. The August 2020 Letter Agreement was in effect from August 31, 2020 until August 31, 2021 or until an aggregate purchase price of $2,000 shares had been purchased, which occurred on November 19, 2020. The 2018 Letter was in effect from March 19, 2018 until March 19, 2019. Pursuant to the 10b5-1 Plan, purchases of Common Stock may be made in public and private transactions and must comply with Rule 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, 2020, pursuant to the 10b5-1 Plan, the Company repurchased 121,181 shares of Common Stock in the open market for a total purchase price of $2,143.  During the twelve months ended December 31, 2019, pursuant to the 10b5-1 Plan, the Company repurchased 7,890 shares of Common Stock in the open market for a total purchase price of $65. In addition, in privately negotiated transactions, on October 21, 2019, the Company purchased 23,000 shares from a former member of the board of directors for $230 or $10.00 per share and on November 7, 2019, the Company purchased 1,000 shares from the chief financial officer for $5 or $4.50 per share. See Note 31.  During the twelve months ended December 31, 2018 pursuant to the 10b5-1 Plan, the Company repurchased 57,526 shares of Common Stock in the open market for a total purchase price of $594. In addition, in privately negotiated transactions, on August 29, 2018, the Company purchased 17,555 shares of Common Stock for an aggregate purchase price of $176 or $10.00 per share from a former member of the board of directors who was a director at the time of the purchase. See note 31. 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 Northland Capital 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 Common Stock, par value $0.01 per share, having an aggregate offering price of up to $75,000 (the “Shares”). Sales of the Shares, if any, under the Equity Agreement will be made in sales deemed to be “at-the-market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), as agreed with the Sales Agent. In accordance with the applicable rules of the Securities and Exchange Commission (the “SEC”), the Company is permitted to sell an aggregate of up to $5,108 in Shares under the Agreement, which represents one-third of the value of the Common Stock held by non-affiliates of the Company. The Agreement includes customary representations, warranties and covenants by the Company and customary obligations of the parties and termination provisions. The Company has agreed to indemnify the Sales Agent against certain liabilities, including liabilities under the Securities Act, or to contribute 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 common stock a commission of 2.5% of the gross offering proceeds of the Shares sold through the Sales Agent pursuant to the Equity Agreement. The offering of the Common Stock pursuant to the Agreement will terminate upon the sale of all of the Shares pursuant to the Equity Agreement, unless sooner terminated in accordance with the terms and conditions of the Equity Agreement. As of December 31, 2020, no shares have been sold under the Equity Agreement. F-58 Table of Contents Dividends and Distributions During 2020 , 2019 , and 2018 , the Company paid cash dividends on its outstanding Common Stock in the amount of $27, $519, and $966, respectively. Pro-rata distributions were made to the other members of the Operating LLC upon the payment of dividends to the Company’s stockholders. During 2020 , 2019 , and 2018 , the Company paid cash distributions of $35, $213, and $426, respectively, to the holders of the non-controlling interest (that is, the members of 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 capital restrictions imposed by the SEC and FINRA, which require certain minimum levels of net capital to remain in this subsidiary. In addition, these restrictions could potentially impose notice requirements or limit the Company’s ability to withdraw capital above the required minimum amounts (excess capital) whether through distribution or loan. CCFEL is regulated by the CBI and must maintain certain minimum levels of capital. CCFL reduced its permissions with the FCA and is no longer a regulated entity. See note 25.  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, 2020 , 2019 , and 2018 .   ROLLFORWARD OF SHARES OUTSTANDING OF COHEN & COMPANY INC. Common Stock Restricted Stock Total December 31, 2017 (1) 1,136,090 76,932 1,213,022 Issuance of shares - - - Issuance as equity-based compensation - 73,685 73,685 Vesting of shares 57,138 (57,138 ) - Shares withheld for employee taxes (7,430 ) - (7,430 ) Forfeiture / cancellation of restricted stock - - - Repurchase and retirement of common stock (75,081 ) - (75,081 ) December 31, 2018 (1) 1,110,717 93,479 1,204,196 Issuance of shares - - - Issuance as equity-based compensation - 36,875 36,875 Vesting of shares 56,639 (56,639 ) - Shares withheld for employee taxes (15,557 ) - (15,557 ) Forfeiture / cancellation of restricted stock - - - Repurchase and retirement of common stock (31,890 ) - (31,890 ) December 31, 2019 (1) 1,119,909 73,715 1,193,624 Issuance of shares - - - Issuance as equity-based compensation - 268,129 268,129 Vesting of shares 55,278 (55,278 ) - Shares withheld for employee taxes (15,043 ) - (15,043 ) Forfeiture / cancellation of restricted stock - - Repurchase and retirement of common stock (121,181 ) - (121,181 ) December 31, 2020 (1) 1,038,963 286,566 1,325,529 (1) Excludes remaining restricted units of Cohen & Company Inc. Common Stock. See note 22. F-59 Convertible Non-Controlling Interest  Securities Purchase Agreement – Purchase of IMXI shares  On December 30, 2019 (the “SPA Effective Date”), the Company entered into a Securities Purchase Agreement (the “SPA”), by and among the Company, the Operating LLC, Daniel G. Cohen, and the DGC Trust.  Pursuant to the SPA, Daniel G. Cohen and the DGC Trust purchased (i) an aggregate of 22,429,541 newly issued units of membership interests in the Operating LLC (collectively, the “LLC Units”); and (ii) 22,429,541 newly issued, Series F Preferred Stock.  In consideration for the issuance of the LLC Units and Series F Preferred Stock, Daniel G. Cohen transferred to the Operating LLC 370,881 shares of common stock, par value $.00001 per share (“IMXI Common Stock”), of International Money Express, Inc. (formerly FinTech Acquisition Corp. II) a Delaware corporation (“IMXI”), and the DGC Trust transferred to the Operating LLC an aggregate of 291,480 shares of IMXI common stock. The aggregate number of IMXI shares transferred to the Operating LLC was 662,361, of which (a) 264,021 shares are subject to certain restrictions on transfer until the closing price per share of IMXI Common Stock (as reported by The NASDAQ Capital Market) exceeds $15.00 for any 20 trading days within a consecutive 30 trading day period or immediately upon certain change of control events involving IMXI, as set forth in the letter agreement, dated January 19, 2017 (the “Letter Agreement”), by and among IMXI, Daniel G. Cohen, the DGC Trust and the other parties named therein, and (b) 264,023 shares are subject to certain restrictions on transfer until the closing price per share of IMXI Common Stock (as reported by The NASDAQ Capital Market ("NASDAQ")) exceeds $17.00 for any 20 trading days within a consecutive 30 trading day period or immediately upon certain change of control events involving IMXI, as set forth in the Letter Agreement.  The Company engaged a third-party valuation firm to value the 662,361 shares of IMXI common stock transferred to the Operating LLC. The shares transferred by Daniel Cohen were valued at $4,351 and the shares transferred by the DGC Trust were valued at $3,428. The Company accounted for this transaction by recording an increase of $7,779 in other investments, at fair value and a corresponding increase in the non-controlling interest. The IMXI Common Stock is listed on the NASDAQ under the trading symbol “IMXI.” Prior to the merger of IMXI with and into a special purpose acquisition company in a transaction that resulted in the listing of IMXI on NASDAQ, Mr. Cohen served as the chief executive officer and member of the board of directors of the special purpose acquisition company. The SPA contains customary representations and warranties on the part of each of the Operating LLC, the Company, Daniel G. Cohen, and the DGC Trust. The Operating LLC, the Company, Daniel G. Cohen, and the DGC Trust provide customary indemnifications thereunder. Pursuant to the Amended and Restated Limited Liability Company Agreement of the Operating LLC, dated as of December 16, 2009, as amended (“LLC Agreement”), a holder of units of membership interests in the Operating Agreement, including the LLC Units, may cause the Operating LLC to redeem (each, a “Unit Redemption”) such units at any time for, at the Company’s option, (A) cash or (B) one share of Common Stock for every 10 units of membership interests in the Operating LLC.  However, pursuant to the SPA, Daniel G. Cohen and the DGC Trust agreed that, until the Company’s stockholders approve the Stockholder Proposal (as defined below), they will not cause a Unit Redemption with respect to any portion of the LLC Units if such Unit Redemption would result in the Company issuing a number of shares of Common Stock that, when aggregated with any shares of Common Stock previously issued in connection with any Unit Redemption of the LLC Units equals or exceeds 19.99% of the outstanding Common Stock as of the SPA Effective Date. Pursuant to the SPA, Daniel G. Cohen and the DGC Trust also agreed to not cause a Unit Redemption with respect to any portion of the Cohen LLC Units if the Company’s board of directors determines that the satisfaction of such Unit Redemption by the Company with shares of Common Stock would jeopardize or endanger the availability to the Company of its net operating loss and net capital loss carryforwards and certain other tax benefits under Section 382 of the Internal Revenue Code of 1986, as amended. Pursuant to the SPA, at the 2020 annual meeting of the Company’s stockholders, the Company agreed to cause its stockholders to vote on proposals (collectively, the “Stockholder Proposal”) regarding the issuance of all shares of Common Stock issuable in connection with a redemption of the LLC Units for purposes of Section 713 of the NYSE American’s Company Guide. Further, the Company’s board of directors must recommend to the Company’s stockholders that such stockholders approve the Stockholder Proposal and may not modify or withdraw such resolution. The Stockholder Proposal was approved at the Company's 2020 annual meeting. F-60 Table of Contents In addition, effective as of the SPA Effective Date, if the Company owns a number of units of membership interests 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 votes entitled 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 at any 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 majority of the votes at such Meeting. On September 25, 2020, the SPA was amended to provide that the 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. See notes 3, 4, and 31.  Future Conversion / Redemption of Operating LLC Units  Of the 28,028,631 Operating LLC units of membership interests not held by the Company as of December 31, 2020 , Daniel G. Cohen, the Company’s chairman, individually and through CBF, a single member LLC, held 18,076,275 Operating LLC units of membership interests and the DGC Trust held 9,880,268. Each Operating LLC membership unit is redeemable 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 ten consecutive trading days immediately preceding the date the Company receives the holder’s redemption notice, or (ii) at the Company’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 of additional 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 the outstanding 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, 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 a 1:10 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 issuance of additional units of membership interests of the Operating LLC to Cohen & Company Inc. when the Cohen & Company Inc. issues its Common Stock to employees under existing equity compensation plans. In certain cases, the UIS Agreement calls for Cohen & Company Inc. to surrender units to the Operating LLC when certain restricted shares are forfeited by the employee or repurchased by the Company.  Letter Agreements – Repurchase of Common Stock  Also, in an effort to maintain a 1:10 ratio of Common Stock to the number of units of membership interests Cohen & Company Inc. holds in the Operating LLC, Cohen & Company Inc. and the Operating LLC have entered into a series of letter agreements. These agreements call for Cohen & Company Inc. to surrender units to the Operating LLC when the Company repurchases its Common Stock.  The following table summarizes the transactions that resulted in changes in the unit ownership of the Operating LLC including unit issuances and forfeitures related to the UIS agreement.  ROLLFORWARD OF UNITS OUTSTANDING OF THE OPERATING LLC Cohen & Company Inc. Daniel G. Cohen DGC Trust Others Total December 31, 2017 11,610,854 4,983,557 - 340,533 16,934,944 Issuance of Units under UIS, net 247,120 - - - 247,120 Repurchase and retirement of Common Stock (750,810 ) - - - (750,810 ) December 31, 2018 11,107,164 4,983,557 - 340,533 16,431,254 Issuance of Units under UIS, net 410,820 - - - 410,820 Issuance of Units for purchase of IMXI 12,549,273 9,880,268 22,429,541 Additional units purchased by Daniel G. Cohen 268,445 (268,445 ) - Repurchase and retirement of Common Stock (318,900 ) - - - (318,900 ) December 31, 2019 11,199,084 17,801,275 9,880,268 72,088 38,952,715 Issuance of Units under UIS, net 402,350 - - - 402,350 Issuance of Units as equity compensation - - - - - Additional units purchased by Daniel G. Cohen - 275,000 - - 275,000 Repurchase and retirement of Common Stock (1,211,810 ) - - - (1,211,810 ) December 31, 2020 10,389,624 18,076,275 9,880,268 72,088 38,418,255 F-61 Table 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, 2020 2019 2018 Net income / (loss) attributable to Cohen & Company Inc. $ 14,205 $ (2,054 ) $ (2,463 ) 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 (1,765 ) 28 (217 ) Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to) from non-controlling interest $ 12,440 $ (2,026 ) $ (2,680 ) Other Non-Controlling Interest ROLLFORWARD OF NON-CONTROLLING INTERESTS (Dollars in Thousands) Operating LLC Insurance SPAC Sponsor Entities Insurance SPAC II Sponsor Entities Insurance SPAC III Sponsor Entities INSU SPAC Pipe Sponsor LLC Other Total December 31, 2017 $ 8,284 $ - $ - $ - $ - $ - $ 8,284 Non-controlling interest share of income / (loss) (1,524 ) - - - - - (1,524 ) OCI (38 ) - - - - - (38 ) Acquisition / (surrender) of additional units of consolidated subsidiary 195 - - - - - 195 Equity-based compensation 197 - - - - - 197 Reclass of Net share settlement (24 ) - - - - - (24 ) Distributions (426 ) - - - - - (426 ) December 31, 2018 $ 6,664 $ - $ - $ - $ - $ - $ 6,664 Investment 7,779 2,550 - - - - 10,329 Non-controlling interest share of income / (loss) (1,231 ) (288 ) - - - - (1,519 ) OCI 1 - - - - - 1 Acquisition / (surrender) of additional units of consolidated subsidiary (47 ) - - - - - (47 ) Equity-based compensation 263 - - - - - 263 Reclass of Net share settlement (41 ) - - - - - (41 ) Distributions (213 ) - - - - - (213 ) December 31, 2019 $ 13,175 $ 2,262 $ - $ - $ - $ - $ 15,437 Investment - - 4,557 5,432 3,500 - 13,489 Non-controlling interest share of income / (loss) 14,200 9,328 (262 ) (16 ) (410 ) 1,408 24,248 OCI 103 - - - - - 103 Acquisition / (surrender) of additional units of consolidated subsidiary 1,706 - - - - - 1,706 Equity-based compensation 613 11,700 - - - 12,313 Net share settlement (39 ) - - - - - (39 ) Distributions (35 ) (6,604 ) (3,090 ) - (9,729 ) December 31, 2020 $ 29,723 $ 16,686 $ 4,295 $ 5,416 $ - $ 1,408 $ 57,528 F-62 22. EQUITY-BASED COMPENSATION  The following table summarizes the amounts the Company recognized as equity-based compensation expense including restricted stock, restricted units, membership units of consolidated sponsor entities and stock options. These amounts are included as a component of compensation and benefits in the consolidated statements of operations. The remaining unrecognized compensation expense related to unvested awards at December 31, 2020 was $7,360 and the weighted average period of time over which this expense will be recognized is approximately 3.1 years. The awards assume estimated forfeitures during the vesting period, which were updated to reflect the actual forfeitures that occurred during the relevant periods.     EQUITY-BASED COMPENSATION INCLUDED IN COMPENSATION AND BENEFITS (Dollars in Thousands) For the Year Ended December 31, 2020 2019 2018 Equity based compensation expense $ 12,553 $ 744 $ 623 Non equity-based compensation expense 47,349 25,228 24,762 Total compensation and benefits $ 59,902 $ 25,972 $ 25,385 The following table summarizes the equity-based compensation by plan. Each plan is discussed in detail below. DETAIL OF EQUITY-BASED COMPENSATION BY PLAN For the Year Ended December 31, 2020 2019 2018 Restricted Stock or Units - 2006/2010 Plans $ 635 $ 744 $ 623 Restricted Stock or Units - 2020 Plan 218 - - Membership interests in sponsor entities 11,700 - - Total equity-based compensation expense $ 12,553 $ 744 $ 623 The Company’s 2020 Long-Term Incentive Plan – Restricted Common Stock, Restricted Units and Stock Options  The Company's board of directors adopted the Cohen & Company Inc. 2020 Long-Term Incentive Plan (the“ 2020 Long Term Incentive Plan”) on April 7, 2020, which was approved by the Company’s stockholders at the Company’s annual meeting on June 18, 2020. The 2020 Long-Term Incentive Plan provides for the grant of stock options, restricted Common Stock, stock appreciation rights, and other share-based awards. The 2020 Long Term Incentive Plan is administered by the compensation committee of the Company’s board of directors. The maximum number of equity-based awards of the Company’s Common Stock authorized to be granted pursuant to these plans is limited to 600,000, of which 200,000 shares remain available to be issued as of December 31, 2020. No award may be granted under the 2020 Long Term Incentive Plan 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 are investing in the consolidated company's non-controlling interest, these equity interests fall under ASC 718. Generally, the employee invests a de-minimus amount and receives an allocation of the founders 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 SPAC completes its business combination. Therefore, the Company treats these grants as having a performance condition (i.e. the completion of the SPAC business combination). Further, at the time of the investments, the Company treats this performance condition as being non-probable. The effect of this is that the Company records no expense related to these investments until (and only if) the business combination is completed. Upon completion of the business combination, the Company 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 on the 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 and subject to certain hurdle prices before they become freely tradeable). F-63 Table of Contents RESTRICTED STOCK - SERVICE BASED VESTING Number of Shares of Restricted Stock Weighted Average Grant Date Fair Value Unvested at January 1, 2018 76,932 $ 12.38 Granted 73,685 10.45 Vested (57,138 ) 12.10 Unvested at December 31, 2018 93,479 11.03 Granted 36,875 8.00 Vested (56,639 ) 11.41 Unvested at December 31, 2019 73,715 9.22 Granted 268,129 14.65 Vested (55,278 ) 9.63 Unvested at December 31, 2020 286,566 $ 14.23    OPERATING LLC RESTRICTED UNITS - SERVICE BASED VESTING Number of Restricted Units Weighted Average Grant Date Fair Value Unvested at January 1, 2018 - $ - Granted - - Vested - - Forfeited - - December 31, 2018 - - Granted 550,000 0.80 Vested - - Forfeited - - Unvested at December 31, 2019 550,000 0.80 Granted 2,508,080 1.54 Vested (275,000 ) 0.80 Forfeited - - Unvested at December 31, 2020 2,783,080 $ 1.46 The total fair value of all equity awards vested in each year based on the fair market value of the Common Stock on the vesting date during the years ended December 31, 2020 , 2019 , and 2018 , was $290, $462, and $574, 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 the remaining 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, the performance 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 conditions are present.  STOCK OPTIONS - SERVICE BASED VESTING Number of Options Weighted Average Exercise Price Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (in years) Balance at January 1, 2018 319,286 $ 40.00 $ 7.00 0.9 Granted - - - Exercised - - - Forfeited (300,000 ) 40.00 7.00 Balance at December 31, 2018 19,286 40.00 7.00 0.1 Granted - - - Exercised - - - Forfeited (19,286 ) 40.00 7.00 - Balance at December 31, 2019 - - - Granted - - - Exercised - - - Forfeited - - - Unvested at December 31, 2020 - $ - $ - The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing stock price of the Common Stock. As of December 31, 2020 , no options were exercisable as they had all expired. F-64 SPONSOR ENTITY MEMBERSHIP UNITS - PERFORMANCE BASED VESTING Membership Units Weighted Average Grant Date Fair Value Unvested at January 1, 2018 - $ - Granted - - Vested - - Forfeited - - December 31, 2018 - - Granted 1,263,000 9.95 Vested - - Forfeited - - Unvested at December 31, 2019 1,263,000 9.95 Granted 3,370,500 9.95 Vested (1,175,339 ) 9.95 Forfeited (87,661 ) 9.95 Unvested at December 31, 2020 3,370,500 $ 9.95  The total fair value of all equity awards vested in each year based on the fair market value of the membership units on the vesting date during the years ended December 31, 2020 , 2019 , and 2018 , was $13,361, $0, and $0, respectively. Contingent Issuance of Shares  On March 12, 2012, the Company entered into an agreement with unrelated third parties whereby the Company agreed to assist in the establishment of an international infrastructure finance business (“IIFC”). As consideration for the Company’s assistance in establishing IIFC, the Company receives 8.0% of certain revenues of the manager of IIFC. The IIFC revenue share arrangement expires when the Company has earned a cumulative $20,000 in revenue share payments or with the dissolution of IIFC’s management company. Also, in any particular year, the revenue share earned by the Company cannot exceed $2,000.  In connection with this revenue share arrangement, the Company issued 50,000 restricted units of Common Stock to the managing member of IIFC, which vest 1/3 when the Company receives $6,000 of cumulative revenue share payments, 1/3 when the Company receives $12,000 of cumulative revenue share payments, and 1/3 when the Company receives $18,000 of cumulative revenue share payments. In certain circumstances, the Company retains the right to deliver fixed amounts of cash to the managing member of IIFC as opposed to vested shares of Common Stock. As of December 31, 2020 , the Company had earned $3,178 under the revenue share arrangement. On March 12, 2022, any remaining unvested restricted units expire.  The managing member of IIFC is not an employee of the Company. The grant of these restricted units was to a non-employee and under the guidance of ASU 2018-07, which was adopted January 1, 2019 (the “Adoption Date”), the Company is required to determine the possible outcome of each threshold and record an adjustment to retained earnings based on the restricted units anticipated to vest as of the Adoption Date based on the stock price on the Adoption Date. Currently, the Company considers the vesting of these restricted units to be not probable. The Company will not record any adjustment to retained earnings because it is not probable that these restricted units will vest as of the Adoption Date. If in the future, the Company determines that vesting is probable, the Company will record an expense using the Common Stock price on the Adoption Date.  F-65 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 the consolidated 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, 2020 2019 2018 Current income tax expense (benefit) Federal income tax expense (benefit) $ - $ (1 ) $ (29 ) Foreign income tax expense (benefit) 122 156 26 State and local income tax expense (benefit) 86 - - 208 155 (3 ) Deferred income tax expense (benefit) Federal income tax expense (benefit) (7,430 ) (324 ) (722 ) Foreign income tax expense (benefit) - - - State and local income tax expense (benefit) (1,447 ) (354 ) (116 ) (8,877 ) (678 ) (838 ) Total (8,669 ) (523 ) (841 ) The components of income (loss) before income taxes is shown below.  INCOME (LOSS) BEFORE INCOME TAXES (Dollars in Thousands) For the Year Ended December 31, 2020 2019 2018 Domestic $ 30,317 $ (4,400 ) $ (3,864 ) Foreign (533 ) 304 (964 ) Total $ 29,784 $ (4,096 ) $ (4,828 ) F-66 Table of Contents The Company had no prepaid taxes in the consolidated balance sheet as of December 31, 2020 and 2019, 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 of the following for the years ended December 31, 2020 , 2019 , and 2018 .   INCOME TAX RATE RECONCILIATION (Dollars in Thousands) For the Year Ended December 31, 2020 2019 2018 Federal statutory rate $ 4,145 $ (860 ) $ (1,014 ) Pass thru impact (2,945 ) 319 394 Deferred tax valuation allowance (10,183 ) 153 17 State and local tax 192 (291 ) (263 ) Foreign tax 122 156 25 Total $ (8,669 ) $ (523 ) $ (841 ) 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 the year 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 tax benefits will not be realized.  The components of the net deferred tax asset (liability) are as follows.  DEFERRED TAX ASSET AND LIABILITY (Dollars in Thousands) As of December 31, 2020 As of December 31, 2019 Asset Liability Net Asset Liability Net Federal net operating loss carry-forward $ 20,579 $ - $ 20,579 $ 21,508 $ - $ 21,508 State net operating loss carry-forward 4,238 - 4,238 5,061 - 5,061 Federal capital loss carry-forward 7,311 - 7,311 47,027 - 47,027 Unrealized gain on debt - (5,670 ) (5,670 ) - (7,911 ) (7,911 ) Investment in Operating LLC 14,402 - 14,402 24,569 - 24,569 Other 312 - 312 2,525 - 2,525 Gross deferred tax asset / (liability) 46,842 (5,670 ) 41,172 100,690 (7,911 ) 92,779 Less: valuation allowance (33,775 ) - (33,775 ) (94,118 ) - (94,118 ) Net deferred tax asset / (liability) $ 13,067 $ (5,670 ) $ 7,397 $ 6,572 $ (7,911 ) $ (1,339 ) As of December 31, 2020 , the Company had a federal net operating loss (“NOL”) of approximately $97,995, which will be available to offset future taxable income, subject to limitations described below. If not used, this NOL will begin to expire in 2029. The Company also had net capital losses (“NCLs”) in excess of capital gains of $34,815 as of December 31, 2020 , which can be carried forward to offset future capital gains, subject to the limitations described below. If not used, this carryforward will begin to expire in 2021. 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 in the 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 to an 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 as carryforwards for the remainder of the carryforward period, and such NOLs and NCLs can be used to offset taxable income for years within the carryforward period subject 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 unused portion of that loss would be lost. See discussion of stockholder rights plan in note 21.  F-67 Table of Contents Notwithstanding the facts that the Company has determined that the use of its remaining NOL and NCL carryforwards are not currently limited by Section 382 of the Code, 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, 2020 . The valuation allowance was recorded because the Company determined it is not more likely than not that it will realize these benefits.  During 2020, the Company recognized a significant deferred tax benefit. The deferred tax benefit was a U.S. tax benefit, which was the result of the reduction in the valuation allowance applied against the Company's NOL and NCL tax assets. Prior to 2020, the Company had concluded that due to its recent history of tax losses, it should only recognize its NOL asset to the extent the reversal of its deferred tax liability amounts could be scheduled against it. For the NCL tax asset, it applied a full valuation allowance. In 2020, the Company generated significant taxable income (both ordinary and capital) and expects to generate income going forward. Accordingly, as of December 31, 2020, the Company adjusted the calculation of the valuation allowances applied against its NOL and NCL asset. The Company now applies both the expected reversal of its deferred tax liability as well as an expected level of income based on 2020 actual results projected forward. The recent improvement of the Company's operations was the result of income earned from the sponsorship of and investment in SPACs (mostly capital income) as well as improving operations of its other business lines (mostly operating income). The Company will continue to reevaluate its operations on a quarterly basis and may make further adjustments to its tax valuation allowances going forward as is necessary. These adjustments could be material and could result in additional tax benefit or tax expense. These adjustments will only impact our deferred tax assets, liabilities, and expense or benefit. The Company's current tax expense or benefit will not be impacted by these adjustments.  The Company had no unrecognized tax benefits in the periods presented.  The Company files tax returns in the U.S. federal jurisdiction, various states or local jurisdictions, the United Kingdom, Ireland, and France. With few exceptions, the Company is no longer subject to examination for years prior to 2015.   F-68 Table 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, 2017 $ (850 ) $ - $ (850 ) Change in foreign currency items (80 ) - (80 ) Other comprehensive income / (loss), net (80 ) - (80 ) Acquisition / (surrender) of additional units in consolidated subsidiary, net 22 - 22 December 31, 2018 (908 ) - (908 ) Change in foreign currency items (3 ) - (3 ) Other comprehensive income / (loss), net (3 ) - (3 ) Acquisition / (surrender) of additional units in consolidated subsidiary, net (4 ) - (4 ) December 31, 2019 (915 ) - (915 ) Change in foreign currency items 35 - 35 Other comprehensive income / (loss), net 35 - 35 Acquisition / (surrender) of additional units in consolidated subsidiary, net 59 - 59 December 31, 2020 $ (821 ) $ - $ (821 ) F-69 Table 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.  CCFEL, a subsidiary of the Company regulated by the CBI is subject to certain regulatory capital requirements in accordance with the Capital Requirements Regulation 575/2013 and applicable CBI requirements.  At December 31, 2019 CCFL, a subsidiary of the Company regulated by the FCA, was subject to the net liquid capital provision of the Financial Services and Markets Act 2000, GENPRU 2.140R to 2.1.57R, relating to financial prudence with regards to the European Investment Services Directive and the European Capital Adequacy Directive, which requires the maintenance of minimum liquid capital, as defined therein. CCFL cancelled its FCA license on November 25 2020; therefore it was not subject to maintain a minimum liquid capital as of December 31, 2020.  The following tables shows the actual net capital (in the case of the JVB) and actual net liquid capital (in the case of CCFL and CCFEL) as compared to the required amounts for the periods indicated. STATUTORY NET CAPITAL REQUIREMENTS (Dollars in thousands) As of December 31, 2020 Actual Net Capital or Liquid Capital Amount Required Excess JVB $ 66,803 $ 250 $ 66,553 CCFEL 2,023 707 1,316 Total $ 68,826 $ 957 $ 67,869  As of December 31, 2019 Actual Net Capital or Liquid Capital Amount Required Excess JVB $ 58,821 $ 565 $ 58,256 CCFEL 2,246 948 1,298 CCFL 543 182 361 Total $ 61,610 $ 1,695 $ 59,915 F-70 Table 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, 2020 2019 2018 Net income / (loss) attributable to Cohen & Company Inc. $ 14,205 $ (2,054 ) $ (2,463 ) Add/ (deduct): Income / (loss) attributable to non-controlling interest attributable to Operating LLC membership (1) 14,200 (1,231 ) (1,524 ) Add back: interest expense on 2017 Convertible Note, net of tax 1,162 - - Add / (deduct): Adjustment (2) 9,452 246 390 Net income / (loss) on a fully converted basis $ 39,019 $ (3,039 ) $ (3,597 ) Weighted average common shares outstanding - Basic 1,131,085 1,136,574 1,152,073 Unrestricted Operating LLC units of membership interests exchangeable into Cohen & Company Inc. shares (1) 2,800,597 544,599 532,409 Restricted Units or shares 124,922 - - Contingent shares on the 2017 Convertible Note 1,034,483 - - Weighted average common shares outstanding - Diluted 5,091,087 1,681,173 1,684,482 Net income / (loss) per common share - Basic $ 12.56 $ (1.81 ) $ (2.14 ) Net income / (loss) per common share - Diluted (3) $ 7.66 $ (1.81 ) $ (2.14 ) (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 and exchanged into shares of the Company on a ten-for-one basis. The Operating LLC units of membership interests not held by Cohen & Company Inc. are redeemable, 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 ten consecutive trading days immediately preceding the date the Company receives the member’s redemption notice, or (ii) at the Company’s option, one tenth of a share 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 a dividend or other distribution on the outstanding Common Stock, or a further subdivision or combination of the outstanding shares of the Common Stock. These units 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 when the 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 LLC units 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, 2020 2019 2018 2017 Convertible Note - 1,034,483 1,034,483 2013 Convertible Notes - 414,882 352,292 Restricted Common Stock - 15,101 26,380 Restricted Operating LLC units - 3,752 - - 1,468,218 1,413,155 F-71 Table of Contents 27. RESERVE REQUIREMENTS  As of December 31, 2020 , and 2019 , JVB claims exemptions to the reserve requirements under Rule 15c3-3 of the